Exhibit E
[LETTERHEAD OF THE MINISTRY OF ECONOMY AND FINANCE OF PERU]
LEGAL OPINION
Lima, January 22, 2003
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
In my capacity as Chief of the General Office of Legal Counseling of the
Ministry of Economy and Finance of the Republic of Peru (the "Republic" or
"Peru") and in connection with the Registration Statement under Schedule B of
the United States Securities Act of 1933, as amended, filed on January 22, 2003
with the Securities and Exchange Commission (the "Registration Statement"),
pursuant to which the Republic proposes to issue and sell from time to time up
to U.S.$1,000,000,000 of its debt securities (the "Debt Securities"), warrants
(the "Warrants"), or units (the "Units"), I have reviewed the following
documents:
i) the Registration Statement;
ii) the form of Fiscal Agency Agreement filed as an exhibit to
Registration Statement defined term;
iii) the form of the Debt Securities included as an exhibit to the Fiscal
Agency Agreement, and;
iv) all relevant provisions of the Constitution of the Republic and all
relevant laws and orders of Peru including but not limited to the
following (copies and translations of which are attached as exhibits
hereto);
1. the Politic Constitution of the Republic of Peru of 1993, in
particular the Article 75, and
2. the Annual Indebtedness Law of the Public Sector for the Fiscal
Year 2003, Law No 27881; and
3. all such documents, instruments and rules as I have deemed
necessary as a basis for the opinion hereinafter expressed.
It is my opinion that under and with respect to the present laws of
Peru, the Debt Securities, the Warrants and the Units, when executed and
delivered by Peru and authenticated pursuant to the Fiscal Agency Agreement or
the warrant agreement, as the case may be, and delivered to and paid for by the
purchasers as contemplated by the Registration Statement, such Debt Securities,
such Warrants and such Units will constitute valid and legally binding
obligations of Peru, provided that each specific issue of Debt Securities,
Warrants or Units to be made by Peru will require the prior promulgation of a
Supreme Decree issued by the President and the Economy and Finance Minister in
accordance with the laws listed in subparagraph (iv).
I hereby consent to the filing of this opinion with the Registration
Statement and the use of the name of the Chief of the General Office of Legal
Counseling of the Ministry of Economy and Finance of Peru, under the caption
"Validity of the Securities" in the prospectus constituting a part of the
Registration Statement and in any prospectus supplement relating thereto. In
giving such consent, I do not thereby admit that I am an expert with respect to
any part of the Registration Statement, including this exhibit, within the
meaning of the term "expert" as used in the Securities Act of 1933, as amended,
or the rules end regulations of the Securities and Exchange Commission issued
thereunder.
Very truly yours,
/s/ ROCIO DEL PILAR MONTERO LAZO
- --------------------------------------
ROCIO DEL PILAR MONTERO LAZO
Chief of the General Office of Legal Counseling
of the Ministry of Economy and Finance of Peru
TITLE III
ECONOMIC REGIME
CHAPTER I
GENERAL PRINCIPLES
Article 58: Private initiate is free. It is exercised within a
market economy. Under this regime, the State guides the development of the
country, and acts mainly in the areas for the promotion of employment, health,
education, security, public services and infrastructure.
Article 59: The State encourages the creation of wealth and
guarantees freedom of work and freedom of company, trade and industry. The
exercise of these freedoms must not be damaging to morality, health or public
safety. The State provides opportunities for improvement to any sectors
suffering from inequality; thus, it promotes small enterprise in all its
modalities.
Article 60: The State recognizes economic plurality. The national
economy is sustained by the coexistence of different types of ownership and
enterprise.
Only authorized by express law, the State may perform on a
subsidiary basis direct or indirect business activities for reasons of great
public interest or manifest national convenience.
Business activity, whether public or not, receives the same legal
treatment.
Article 61: The State facilitates and invigilates free
competition. It combats any practice limiting this and the abuse of dominant or
monopolistic positions. No law or agreement may authorize or establish
monopolies.
The press, radio, television and other means of expression and
social communication, and generally, companies, goods and services connected
with the freedom of expression and communication may not be the object of
exclusiveness, monopoly, or hoarding, whether directly or indirectly, by the
State or private individuals.
Article 62: Freedom to contract guarantees that the parties may
enter into valid agreements according to the regulations in force at the time of
the contract. Contractual terms may not be altered by laws or other provisions
of any kind. Disputes arising from the contractual relationships may only be
resolved by arbitration or in the courts, under the protection mechanisms set
forth in the contract or contemplated by law.
By contract or law, the State may establish guarantees and grant
securities. These may not be legally modified without prejudice to the
protection referred to in the preceding paragraph.
Article 63: National and foreign investment are subject to the
same conditions. The production of goods and services and foreign trade are
free. If another country or countries adopt(s) protectionist or discriminatory
measures damaging to the national interest, the State may in defense thereof,
adopt similar measures.
In any contract entered into by the State and public law persons
with domiciled foreigners must be recorded their subjection to the laws and
jurisdictional organs of the Republic and their waiver of any diplomatic claims.
Contracts of a financial nature may be exempted from national jurisdiction.
The State and other public law persons may submit controversies
deriving from the contractual relationship to tribunals constituted pursuant to
existing treaties. They may also submit them to national or international
arbitration, or as established by law.
Article 64: The State guarantees the free holding and disposal of
foreign currency.
Article 65: The State defends the interests of consumers and
users. For such effect, it guarantees the right to information on the goods and
services at its disposal in the market. It also oversees in particular the
health and security of the people.
CHAPTER II
ENVIRONMENT AND NATURAL RESOURCES
Article 66: Natural resources, both renewable and non-renewable,
are the property of the Nation. The State is sovereign as to their use.
The conditions for their use and granting to private individuals
are determined by organic law. Any such concession grants to the holder a real
right, subject to the said legal regulation.
Article 67: The State determines national environment policy. It
promotes the sustainable use of its natural resources.
Article 68: The State is obligated to promote the conservation of
biological diversity and the natural areas protected.
Article 69: The State promoted the sustainable development of the
Amazon region with appropriate legislation.
CHAPTER III
OWNERSHIP
Article 70: The right of ownership is inviolable. The State
guarantees this. It is exercised in harmony with the common good and within the
limits of the law. No one may be deprived of his or her property except
exclusively for reasons of national security or public need, declared by law,
and after the payment in cash of fair indemnification including compensation for
any possible prejudice. Action may be brought before the Judiciary in order to
contest the property value set by the State in the expropriation procedure.
Article 71: With respect to property, foreigners, whether natural
persons or legal entities, have the same rights as Peruvians, without in any
case, being able to claim exceptions or diplomatic protection.
However, within fifty kilometers of the national boundaries,
foreigners may not acquire or possess under any title whatsoever, mines, land,
woods, waters, fuel or energy sources, either directly or indirectly,
individually or in company, under penalty of losing, to the State, the right
thus acquired. Excepted is the case of public necessity expressly declared in a
supreme decree approved by the Council of Ministers pursuant to law.
Article 72: The law may, only by reasons of national security,
temporally establish specific restrictions and prohibitions for the acquisition,
possession, exploitation and transfer of given property.
Article 73: Property in the public domain is unalienable and
imprescriptible. Property of public use may be granted to private individuals in
accordance with the law for its economic use.
CHAPTER IV
TAX AND BUDGET REGIME
Article 74: Taxes are created, amended or repealed, or exemptions
are established, exclusively by law or legislative decree in the event of the
delegation of powers, except for tariffs and rates, which are regulated by
supreme decree.
Local governments may create, amend or repeal contributions and
rates, or make exemptions, within their jurisdictions with the limits
established by law. The State, when exercising its taxation powers, must respect
the legal reserves principles, the principles of equality and respect for the
fundamental rights of the person. No tax may have a confiscatory effect.
Emergency decrees may not contain tax matters. The laws
concerning annual taxes govern as from January first of the year following their
promulgation. Budget laws may not contain regulations on tax matters.
Tax regulations passed in violation of the provisions hereof
shall not be of effect.
Article 75: The State only guarantees the payment of the public
debt entered into by constitutional governments in accordance with the
Constitution and the law.
The State's domestic and foreign debt operations must be approved
according to the law.
Municipalities may enter into credit operations charged to their
own resources and property without requiring legal authorization.
Article 76: Works and the acquisition of supplies with the use of
public funds and resources must be obligatorily executed by contract and public
bidding, as must also the acquisition or alienation of property.
The contracting of services and projects whose importance and
worth indicated by the Budget Law shall be public contest. The law establishes
the procedure, exceptions and the respective responsibilities.
Article 77: The State's economic and financial management is
governed by the budget annually approved by Congress. The structure of the
public sector budget contains two sections: central government and decentralized
bodies.
Thee budget assign public resources on a fair basis. Their
programming and execution respond to the criteria of efficiency, basic social
needs and decentralization.
Each respective area, pursuant to law, will receive a fair share
of the income tax received through the exploitation of natural resources, as its
canon.
Article 78: The President of the Republic sends to Congress the
Budget Law draft within a period ending on August 30, each year.
On the same date, he also sends the debt and financial
equilibrium bills.
The budget draft must be truly in balance.
Loans form the Central Reserve Bank or Banco de la Nacion are not
accounted as fiscal income.
Permanent expenditure may not be covered by loans.
The budget may not be approved without an entry for servicing the
public debt.
Article 79: The representatives to Congress are not entitled to
create or increase public expenditure, except with reference to their budget.
The Congress may not approve tributes with predetermined
purposes, except at the request of the Executive Power.
In all other cases, the tax laws referring to benefits or
exemptions required the prior report of the Ministry for the Economy and
Finance.
Only by an express law, approved by two thirds of the members of
Congress, may special taxation treatment for a given area of the country be
selectable and temporarily established.
Article 80: The Minister for the Economy and Finance submits the
claim to the Congress in Plenary. Each Minister shall defend the expenses for
his sector. The President of the Supreme Court, the Attorney General and the
President of the National Elections Board shall defend the corresponding demands
of each institution.
If the original signed Budget Law is not sent to the Executive by
November thirtieth, the Draft of the Executive Power will come into force, same
which is promulgated by Legislative Decree.
Supplementary credits, payments and entry transfers shall be
processed through Congress as determined by the Budget Law. During the recess of
Parliament they will be processed by the Permanent Commission. In order to them
be approved, they require the votes of three fifths of the legal number of
members.
Article 81: The General Account of the Republic, accompanied by
the Comptroller General's Office Audit Report is sent by the President of the
Republic to the Congress within a period terminating at the latest on November
fifteenth of the year following the execution of the budget.
The General Account is examined and determined by a review
commission within the ninety days following its submission. Congress shall issue
its verdict within thirty days. If Congress does not issue a verdict within the
period indicated, the report of the Review Commission shall be sent to the
Executive Power so that the Executive Power may promulgate a legislative decree
containing the General Account.
Article 82: The Comptroller General's Office of the Republic is a
public law decentralized entity with autonomy pursuant to its organic law. It is
the senior organ of the National Control System. It supervises the legality of
the execution of the State Budget, public debt operations and the acts of
institutions subject to control.
The Comptroller General is appointed by Congress on the proposal
of the Executive for seven years. He may be removed by Congress for serious
offense.
CHAPTER V
CURRENCY AND BANKING
Article 83: The law determines the monetary system of the
Republic. The issue of bills and coins is the exclusive power of the State. This
is exercised through the Central Reserve Bank of Peru.
Article 84: The Central Bank is a public law artificial person.
It is autonomous within the framework of its Organic Law.
The purpose of the Central Bank is to preserve monetary
stability. Its functions are: to regulate the currency and credit in the
financial system, manage the international reserves under its charge, and the
other functions indicated by its organic law.
The Bank informs the country, with exactitude and periodically,
regarding the state of the national finances under the responsibility of its
Board.
The Bank is prohibited from granting financing to the Treasury,
except for the purchase in the secondary market of securities issued by the
Public Treasury, within the limits indicated by its Organic Law.
Article 85: The Bank may carry out operations and make credit
agreements in order to cover temporary imbalances in the position of
international reserves.
It requires authorization by law when the amount of such
operations or agreements exceeds the limit indicated by the Public Sector Budget
with the obligation to report to Congress.
Article 86: The Bank is governed by a Board of seven members. The
Executive Power appoints four, among them the Chairman. Congress ratifies the
Chairman and appoints the other three, with an absolute majority of the legal
number of its members.
All Bank members are appointed for the constitutional period
corresponding to the President of the Republic. They do not represent any
particular entity or private interest. Congress may remove them for serious
offenses. In the event of a removal, the new directors shall complete the
corresponding constitutional period.
Article 87: The State encourages and guarantees saving. The law
establishes the obligations and limits of companies receiving savings from the
public, as well as the mode and scope of such guarantee.
The Superintendency of Banking and Insurance exercises control
over banking and insurance companies, and others receiving deposits from the
public and others which, carrying out similar or related operations, are
determined by law.
The law establishes the organization and functional autonomy of
the Superintendency of Banking and Insurance.
The Executive appoints the Superintendent of Banking and
Insurance for the period corresponding to its constitutional period. This is
ratified by Congress.
CHAPTER VI
AGRARIAN REGIME AND PEASANT AND NATIVE COMMUNITIES
Article 88: The State preferentially supports agrarian
development. It guarantees land property rights, both private or communal, or
any other form of association. The law may fix the limits and extension of the
land according to the peculiarities of each area.
Abandoned land, as provided by law, passes into the ownership of
the State for subsequent sale.
Article 89: The Peasant and Native Communities are of legal
existence and legal persons.
They are autonomous in their organization, communal work and in
the use and free disposal of their land as well as with respect to economic and
administrative matters, within the framework established by law. The ownership
of their land is imprescriptible, except in the case of abandonment set forth in
the previous article.
The State respects the cultural identity of Peasant and Native
Communities.
HILTON TRANSLATIONS S.A. 20722-5833/03
TRADUCCIONES OFICIALES Y
NO OFICIALES
Psje. Acuna 127 - Ofic. 803 Lima
(Cdra. A Miroquesoda)
Telfs: 427-2300-426-1646
Fax: 428-9770
Lima, Sunday, December 15, 2002
GOVERNMENT LEGISLATION
OFFICIAL GAZETTE EL PERUANO
LAW No. 27881
THE PRESIDENT OF THE REPUBLIC
WHEREAS:
The Congress of the Republic has passed the following Law:
THE CONGRESS OF THE REPUBLIC; Has passed the following Law:
PUBLIC SECTOR INDEBTEDNESS LAW
FOR 2003 FISCAL
Article 1: Purpose of the Law
1.1. This Law shall determine the maximum amounts, conditions and
requirements for foreign and domestic indebtedness operations, which
the National Government may agree or guarantee for the public sector
during 2003.
1.2. This Law shall also regulate fees paid and contributions made to
international financial organizations to which Peru belongs.
1.3. Foreign Indebtedness shall be any financing operation which is
subject to reimbursement, including credit line guaranties and
allocations contracted for the purchase of goods and services and in
support of the Balance of Payment, in excess of one year, agreed
upon with individuals or legal entities not domiciled in the
country.
1.4. Domestic Indebtedness shall be any transaction subject to
reimbursement, including line of credit guaranties and allocations,
contracted for the purchase of goods and services and in support of
the Balance of Payment, in excess of one year, agreed upon with
individuals or legal entities domiciled in the country.
1.5. For the purposes of this Law, references made to "Indebtedness" will
imply Foreign and Domestic Indebtedness.
TITLE I
GENERAL PROVISIONS
Article 2: Approval and Change in Indebtedness Operations
2.1. The Indebtedness operations included in this Law shall be approved
by Supreme Decree with the favorable vote of the Council of
Ministers and countersigned by the Minister for the Economy and
Finance and the Minister of the corresponding sector.
2.2. Changes in Indebtedness operations authorized hereunder and under
previous indebtedness laws shall be approved by Supreme decree with
the favorable vote of the Council of Ministers, and countersigned by
the Minister for the Economy and Finance and the Minister of the
corresponding sector.
2.3. Any changes concerning the utilization period, reallocation or
recomposition of expenditures or change of entity or body
responsible for the execution of the project, whose procedures are
not contemplated in the corresponding loan contracts, shall be
approved by Supreme Decree countersigned by the Minister for the
Economy and Finance and the Minister of the corresponding sector.
2.4. Approvals or amendments of public investment projects financed with
indebtedness are subject to the National Public Investment System.
Article 3: Approval of Credit Lines
3.1 Any credit lines agreed to or guaranteed by the National Government
during the 2003 fiscal year shall be approved by Supreme Decree with
the favorable vote of the Council of Ministers and countersigned by
the Minister for the Economy and Finance.
3.2 The Ministry for the Economy and Finance shall assign resources from
the credit lines in accordance with the requirements set forth in
Article 6 hereof.
Article 4: Financial Conditions for Indebtedness Operations
The Ministry for the Economy and Finance shall ensure that any
Indebtedness obtained under this Law shall as a priority be concessional.
Article 5: State's Financial Agent and Loan Agreement Negotiations
5.1 The Ministry for the Economy and Finance through the General
Directorate for Public Credit shall act as the State's financial
agent in any Indebtedness operation agreed to or guaranteed by the
National Government, although the financial agent may be changed
through ministerial resolution from the Ministry for the Economy and
Finance with the favorable opinion of the General Directorate of
Public Credit.
5.2 All Loan Agreement negotiations related to Indebtedness transactions
will be carried out by the State's Financial Agent or official
appointed through Resolution of the Ministry for the Economy and
Finance. Anyone with opposing interests will not be able to
participate in the Indebtedness process.
Article 6: Requirement for approval of Indebtedness transactions
agreed to or guaranteed by National Government
Indebtedness transactions agreed to or guaranteed by the National
Government must be previously approved, with the following requirements:
a) An application by the Head of the Sector to which the entity or body
responsible for the implementation of the project belongs together
with the favorable technical and economic report.
With respect to Indebtedness operations of Regional Governments or
Local Governments guaranteed by the National Government, in the
first case, there must be an application by the President of the
region accompanied by the minutes recording approval by the Regional
Council and in the second case,, the application by the Mayor,
accompanied by the minutes recording the approval of the Municipal
Council. In each case, the application must also be accompanied by
the favorable opinion of the sector involved in the project, where
required, and a favorable technical and economic report which must
include an analysis of the payment capacity of the corresponding
entity to pay the debt service of the indebtedness operation
involved.
b) Feasibility study in the case of an investment project.
c) Draft loan agreement.
The entity or organization responsible for the project will be responsible
for ensuring compliance with requirements a) and b) of this article.
Article 7: Requirements for calling Public Tenders with Financing
7.1 Entities which must call public tenders for the implementation of a
project involving Indebtedness must previously a ministerial
resolution from the Ministry for the Economy and Finance approving
the financial conditions to be considered in the said public bidding
process.
7.2 For the issuing of the ministerial resolution referred to in the
previous paragraph, is required an application by the Head of the
Sector to which the entity or body responsible for the
implementation of the project belongs together with the
corresponding feasibility study and the favorable technical and
economic report based on the said study.
7.3 In bids by Regional Government and Local Governments in the first
case is required an application of the President of the Region
accompanied by the minutes reporting the approval of the Regional
Council and in the case of local governments, an application of the
Mayor accompanied by the minutes recording the approval of the
Municipal Council. In both cases, the application must also be
accompanied by the favorable opinion of the sector connected with
the project, where appropriate, the project feasibility study and
the favorable economic and technical report based on the said study.
Article 8: Disbursement Reconciliation
8.1 Entities or bodies administrating Indebtedness operations shall be
obliged to reconciliate each half-year with the General Directorate
for Public Credit of the Ministry for the Economy and Finance, any
disbursements received as of June 30, and December 31 of the 2003
fiscal year, proceeding from such operations.
8.2 The above-mentioned reconciliations must be effected at the latest
on July 31 of the 2003 fiscal year, and January 31 of the 2004
fiscal year, under the responsibility of the head of the entity or
corresponding body.
Article 9: Quarterly Information regarding Amounts Owed
All Public Sector entities having undertaken Indebtedness operations,
including those not having the National Government guaranty, must report to the
General Directorate for Public Credit of the Ministry for the Economy and
Finance, the balances owed at the close of each calendar quarter, within fifteen
(15) days subsequent thereto.
Article 10: Payment of Debt Service
For the payment of Indebtedness operations service:
a) Corresponding to the National Government, is made by the General
Directorate for Public Credit of the Ministry for the Economy and
Finance, and for this purpose, the accounts being financed with
resources other than ordinary resources must transfer to the
Ministry for the Economy and Finance the financial resources to
provide such service, pursuant to the terms of respective the Loan
Agreements and/or the Transfer of Resources Contracts, in due case.
b) The entities which do not belong to the National Government and
coordinate Indebtedness operations with its guaranty, are obliged to
pay directly the service of such operations, under the
responsibility of their Board or equivalent body, Regional Council
or Municipal Council, as the case may be, pursuant to the terms of
the Loan Agreements and existing regulations. Also, they must submit
to the General Directorate for Public Credit of the Ministry for the
Economy and Finance, the information on the service within a period
of eight (8) business days after it is effected.
Article 11: Management Commission
It is herein authorized the collection in favor of the Ministry for the
Economy and Finance of an annual management commission equivalent to 0.1% of the
total of the balance owed from Indebtedness operations agreed to or guaranteed
by the National Government, which are the subject of a Resource Transfer
Contract or a Counterguaranty Agreement, where appropriate, except in the case
that the final destination of resources be the National, Regional or Local
Government.
Article 12: Public Debt Renegotiation
12.1 The Indebtedness renegotiation operations shall be approved by
Supreme Decree, with the approving vote of the Council of Ministers,
countersigned by the Minister for the Economy and Finance.
12.2 The corresponding information must be submitted to the Congress of
the Republic Budget and General Accounts Commission of the Republic
within a period of forty-five (45) business days following the
execution of each obligation.
Article 13: Custody of Documentation
The custody of the originals of the contracts of Indebtedness operations
agreed to or guaranteed by the National Government and the renegotiation of the
foreign debt shall be the responsibility of the General Directorate for Public
Credit of the Ministry for the Economy and Finance.
Article 14: Risk coverage operations
14.1 The General Directorate for Public Debt of the Ministry for the
Economy and Finance is authorized to enter into risk coverage
operations, including those relating to the exchange rate and the
interest rate for the National Government Debt. Risk coverage
operations shall be approved by a Ministerial Resolution of the
Ministry for the Economy and Finance.
14.2 The corresponding information shall be sent to the Congress of the
Republic Budget and General Accounts Commission of the Republic
within forty-five (45) business days following the execution of each
operation.
Article 14: Contributions and so forth to Multilateral Credit
Organisms
The Ministry for the Economy and Finance, through the General Directorate
for Public Credit, provides contributions, makes share subscriptions, transfers
and the respective payments to the multilateral credit organisms.
Article 16: Prior Report by the General Comptroller's Office
The prior report of the General Comptroller's Office of the Republic cited
in paragraph 1 of article 22 of Law number 27785, the Organic Law for the
National Control System and General Accounts of the Republic, shall be issued
within five (5) business days following the receipt of the file by such control
body, under its responsibility.
TITLE II
MAXIMUM AUTHORIZED AMOUNTS OF
FOREIGN INDEBTEDNESS
Article 17: Maximum Foreign Indebtedness Amount
The National Government is hereby authorized to grant or guarantee Foreign
Indebtedness operations for up to an amount equivalent to US$2,200,000,000.00
(TWO THOUSAND TWO HUNDRED MILLION AMERICAN DOLLARS ONLY) for:
a) Investments for the production and the support of production of goods and
the rendering of services up to US$ 400,000,000.00
b) Social sectors up to US$ 275,000.000.00 c) National Defense up to US$
25,000.000.00
d) Support to Balance of Payments up to US$ 1,500,000.000.00
When the financial conditions are favorable to the Republic, the
Ministry for the Economy and Finance may agree to debt operations
for amounts in excess of the sum mentioned in paragraph d) of this
article. Indebtedness operations for amounts above the amount set
forth herein may not exceed the indebtedness limit set forth in
the Multi-annual Macroeconomic Framework corresponding to the 2004
fiscal year.
TITLE III
MAXIMUM AUTHORIZED AMOUNTS OF
DOMESTIC INDEBTEDNESS
Article 18: Maximum Domestic Indebtedness Amount
The National Government is hereby authorized to agree to or guarantee
Domestic Indebtedness operations for up to an amount not exceeding
S/.2,400,000,000.00 (TWO THOUSAND FOUR HUNDRED MILLION NEW SOLS) which includes
the issue of bonds for up to S/.2,100,000,000.00 (TWO THOUSAND ONE HUNDRED
MILLION NEW SOLS).
SUPPLEMENTARY PROVISIONS
TEMPORARY PROVISIONS
ONE: The Ministry for the Economy and Finance, through the General
Directorate for Public Credit, is authorized to execute, with private sector
companies, the rescheduling of debt agreements arising from the guaranty of the
Republic or a state company, included in the agreements made by the Peruvian
Government with external creditors and which have not been deposited pursuant to
Supreme Decree No. 175-83-EFC, published on May 15, 1983, and Supreme Decree
No.260-86-EF, published on August 8, 1986; the said Ministry is also authorized
to retain the legal counselor required for that purpose.
The said rescheduling agreements will be approved by Supreme Decree
countersigned by the Minister for the Economy and Finance.
TWO: The State enterprises included in the promotion process of private
investment, pursuant to Legislative Decree No. 674, its amendments and other
regulating norms, and which, by express agreement of the Promotion Agency of
Investment -PROINVERSION- are subject to the private activity regime, as well as
those which have been transferred to the Private Sector and where the State
still owns shares, must submit to the General Directorate for Public Credit of
the Ministry for the Economy and Finance and to the Congress of the Republic
Budget and General Accounts Commission of the Republic, information on all the
Foreign Indebtedness operations they undertake, within a period of eight (8)
days after their execution.
THREE: The assumption of indebtedness by state companies subject to the
promotion process of private investment, pursuant to Legislative Decree No. 674,
their amendments and other regulating norms, are approved under the proposal of
the Promotion Agency of Investment -PROINVERSION- previous the favorable report
of the General Directorate for Public Credit and the Juridical Advice Office of
the Ministry for the Economy and Finance, as well as the National Financing Fund
of State Business Activity - FONAFE- by Supreme Decree countersigned by the
Ministry for the Economy and Finance.
FOUR: Of application are the provisions set forth in Article 33 of Supreme
Decree No. 070-92-PCM, published on July 17, 1992, which has been amended by
Article 1 of Supreme Decree No. 033-93-PCM, published on May 15, 1993, in the
sense that expenses imputable, directly or indirectly to the private investment
promotion process, include obligations assumed by the State in order to help
privatized companies.
Likewise, the provisions set forth in the previous paragraph shall apply
in the case of concession processes effected within the framework of the Sole
Ordered Text for Regulations Ranking as Law and Regulating the Granting of
Concessions to the Private Sector of Public Infrastructure Works and Public
Services, approved by Supreme Decree No. 059-96-PCM, published on December 27,
1996.
FIVE: During the effect period of this Law, the use of resources
originating in the process regulated by Legislative Decree No. 674 and its
amendments corresponding to the Public Treasury pursuant to Law No. 27783, Law
of Decentralization Bases shall be extended, so that they may also be used by
the Ministry of the Economy and Finance to serve Foreign Public Debt.
SIX: The Ministry for the Economy and Finance is herein authorized to
undertake operations for the Conversion of Foreign Indebtedness into Donations,
in support of social sectors, environmental protection and relieve of extreme
poverty situations, as well as operations for the Foreign Indebtedness
Conversion into Investment. The bilateral frames applicable to these operations,
as well as those not susceptible to be considered within the referred frames,
will be approved by Supreme Decree, countersigned by the Minister for the
Economy and Finance.
The Ministry for the Economy ad Finance, within a term of forty-five (45)
business days following the signing of each operation, shall submit a report on
those operations to the Congress of the Republic Budget and General Accounts
Commission of the Republic.
SEVEN: Transactions pertaining to the Indebtedness of Decentralized
Entities and State Corporations not bearing a guaranty from the National
Government are authorized by supreme resolution, countersigned by the Minister
for the Economy and Finance and the Minister of the corresponding sector, after
the express agreement of their respective directories or equivalent bodies.
Once Indebtedness transactions are made, they must be reported to the
General Directorate of Public Debt of the Ministry for the Economy and Finance,
within fifteen (15) business days after they are consummated.
EIGHT: Indebtedness transactions carried out by the regional governments
not bearing guaranty by the National Government will be governed by the
provisions set forth in Article 37 of Law No. 27783, Law of Decentralization
Bases. In the case of local governments, such operations are carried out in
accordance with the regulations set forth in the third paragraph of article 75
of the Political Constitution of Peru and article 46 of Law No. 27783. In both
cases, specific mention shall be made in the respective contracts.
NINE: The National Government is hereby authorized to guarantee
Indebtedness transactions to finance regional and local governments development
and community service investments, which as a whole, will not exceed
US$150,000,000 (ONE HUNDRED AND FIFTY MILLION AMERICAN DOLLARS ONLY), out of the
amount approved in paragraph b) in Article 17 of this Law, for which the
requirements set forth in article 6 hereof shall be complied with.
TEN: The Ministry for the Economy and Finance is hereby authorized to
apply the Ninth Final Provision of the Legislative Decree 674 and amendments
regulations, with respect to the debt of public corporations under liquidation
excluded from the process for the private investment promotion process which may
have been assumed by the State.
ELEVEN: In order to facilitate the hiring of the services related to the
processes required for carry out risk hedge transactions as well as for the
issuing of domestic and foreign obligations, including the corresponding
registration, the Ministry for the Economy and Finance is exempted from the
prescriptions of the Consolidated Law of the Government Purchasing and
Contracting Law, approved by Supreme Decree 012-2001-PCM, published on February
13, 2001, and the Regulations thereof, approved by Supreme Decree 013-2001-PCM,
published on February 13, 2001, and amended by Supreme Decree No. 079-2001-PCM,
published on July 3, 2001, authorizing it to directly hire such services.
Within twenty-five (25) business days following the date when such
contracts were entered into, the Ministry for the Economy and Finance must
submit the corresponding information to the Congress of the Republic General
Budget and Accounts Commission of Congress of the Republic.
TWELVE: Hereby approved the authorized capital increase of Andean
Development Corporation (Corporacion Andina de Fomento - CAF) from THREE
THOUSAND MILLION AMERICAN DOLLARS ONLY (US$ 3,000,000,000.00) to FIVE THOUSAND
MILLION AMERICAN DOLLARS ONLY (US$5,000,000,000.00) and the corresponding
amendment of article 5 of the Constitutive Agreement of the said entity,
approved by Decision No. 149/2002, adopted at the IX Extraordinary Shareholders
Meeting.
THIRTEEN: The subscription is approved by the Republic of Peru of 6466
Ordinary Capital Shares (Series B) of the Andean Development Corporation
(Corporacion Andina de Fomento - CAF) for a total of SEVENTY MILLION ONE HUNDRED
AND FIFTY-SIX THOUSAND ONE HUNDRED AMERICAN DOLLARS ONLY (US$70,156,100.00) at
the equity value of TEN THOUSAND EIGHT HUNDRED AND FIFTY AMERICAN DOLLARS ONLY
(US$10,850.00) per share, in accordance with Resolution No. 1458/2002, adopted
at the CIX Meeting of the Board of the said entity.
FOURTEEN: The external credit disbursement operations which pursuant to
the respective agreements are to cover or reimburse expenses paid with ordinary
resources prior to the first disbursement of the loan, shall be deposited in the
Main Account of the Public Treasury within 24 hours of receipt of notification
from the financial organism with respect to its accreditation in the accounts of
the corresponding Executive Unit, under the responsibility of the Head of the
Project Executive Unit and/or the General Director of Administration or the
person acting is his place.
FIFTEEN: State universities, with the support or guarantee of the National
Government and charged to the source of financing resources directly received,
may agree to and carry out debt operations for the execution of investment
projects and the acquisition of investigation and teaching equipment. Such debt
operations must be subject to the procedures and rules set forth in the Public
Sector Annual Laws, the Public Investment National Law, the limits set forth in
the Prudence and Fiscal Transparence Law and other applicable regulations.
FINAL PROVISION
SOLE PROVISION. This law shall enter into effect on January 1,
2002.
Notify the President of the Republic for its promulgation.
In Lima on the thirtieth day of the month of November, year two thousand
and two.
CARLOS FERRERO
President of the Congress of the Republic
JESUS ALVARADO HIDALGO
First Vice President of the Congress of the Republic
THE CONSTITUTIONAL PRESIDENT OF THE REPUBLIC
NOW THEREFORE:
I order its publication and execution.
Given in the Government House in Lima on the thirteenth day of the month
of December, year two thousand and two.
ALEJANDRO TOLEDO
Constitutional President of the Republic
LUIS SOLARI DE LA FUENTE
President of the Council of Ministers
JAVIER SILVA RUETE
Minister for the Economy and Finance