Anti-corruption and Bribery in Peru - Lexology

In September 2017, Sandra Orihuela contributed to Lexology with an analysis of the law and regulation on Anti-Corruption and Bribery in Peru. Trends and climate Trends Have there been any recent changes in the enforcement of anti-corruption regulations? Peru has seen some important anti-corruption legal developments in 2016. Decree-Law 1243 (October 22 2016) modified the Criminal Code to broaden the civil disqualification penalty for public officials by introducing definitive civil disqualification measures following corruption. The so-called ‘civil death by corruption’ bars public officials convicted of corruption from holding a position in state or federal governments or agencies. Further, Law 30424 (April 21 2016) introduced the concept of corporate administrative liability for entities involved in the crime of transnational active bribery, and Legislative Decree 1352 (enacted January 6 2017) extended it to active bribery of domestic public officials or servants, as set out in the Criminal Code. Both offences will become effective and enforceable beginning January 1 2018. Further, in December 2014 the government and the Organisation for Economic Cooperation and Development (OECD) launched the Peru Country Programme, under which Peru aimed to complete its accession process to OECD membership during the course of 2017. This required the amendment of Peruvian legislation to comply with the OECD's standards in several areas, including anti-corruption. In October 2016 the newly elected Kuczynski government declared that the OECD accession process was at least 70% complete. Shortly after taking office, the new administration announced a five-point anti-corruption programme to fight endemic corruption, including:

• civil death by corruption;
• establishing a council of state to focus on confronting corruption;
• the new Presidential Integrity Commission; and
• the review and reorganisation of executive branch staff and advisers, with each cabinet minister being responsible for officials in their departments.

In addition, some major anti-corruption legal advances took place in 2013 and 2014:

• Law 30111 (November 26 2013) introduced economic fines for corruption in addition to imprisonment;
• Law 30124 (December 13 2013) amended the criminal definition of ‘public official’; and
• Law 30161 (January 28 2014) and its regulations require public officials to submit sworn declarations of earned income and assets.

Legislative activity Are there plans for any changes to the law in this area? The Single Registry of Convicted Persons Disqualified for Crimes against the Public Administration is pending approval pursuant to Legislative Decree 1243. The approval of regulations for the corporate prevention programme under Law 30424 is also pending. The compliance programme has been identified as a mitigating factor under the corporate administrative liability law when adopted by entities within a certain timeframe. Further, completion of the OECD Peru Country Programme may involve more changes to the anti-corruption legislation. Legal framework Authorities Which authorities are responsible for investigating bribery and corruption in your jurisdiction? The local authorities responsible for investigating bribery and corruption are:

• the Prosecutor´s Office Specialised in Corruption Crimes at the Ministry of Justice;
• the Public Ministry;
• the courts; and
• the Office of the Comptroller General.

Since 2010 the High-Level Anti-corruption Commission (CAN) of the Ministry of Justice has been in charge of proposing and executing the National Anti-corruption Plan, coordinating actions relating to anti-corruption matters with other government entities. Further, the Presidential Integrity Commission was created in October 2016 as part of the new government’s anti-corruption efforts to reinforce CAN's outreach and propose new policies to prevent corruption. Domestic law What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction? Under the Criminal Code, the bribery of foreign and domestic public officials or servants is a crime as it is an offence against the public administration. The Criminal Code was approved by Decree-Law 635 in April 1991. Domestic bribery The crimes of corrupting public officials or servants are divided into:

• passive bribery, where the offender is a public official or servant; and
• active bribery, where the offender is a civilian.

The active bribery of domestic public officials or servants is regulated in Article 397 of the Criminal Code, and the bribery of certain domestic officials (eg, a public prosecutor, arbitrator or magistrate) is regulated in Article 398. The penalties for bribery are generally higher when the public official takes action or omits to take action in violation of his or her obligations, compared to when he or she takes action in furtherance of his or her public functions. Legislative Decree 1352 (enacted January 6 2017) imposes corporate administrative liability on entities involved in the crime of active bribery of domestic public officials or servants (including the bribery of certain domestic officials regulated in Article 398 of the Criminal Code), which will come into force as of January 1 2018. Foreign bribery Law 29316 (published on January 14 2009) was enacted to incorporate various provisions into several different laws in order to implement the Peru-United States Trade Promotion Agreement (in force since February 2009). As a result, Article 397-A incorporated into the Criminal Code the offence of transnational active bribery, which regulates the bribery of public officials or servants from other states, as well as officials of international public organisations. Consequently, Law 30424 (April 21 2016) approved administrative responsibility of legal companies for transnational active bribery, which will come into force as of January 1 2018. Finally, Article 393-A prohibits passive bribery for foreign public officials and officials of public international organisations. International conventions What international anti-corruption conventions apply in your jurisdiction? Peru has signed and ratified the following international conventions:

• the Inter-American Convention against Corruption, ratified in 1997;
• the United Nations Convention against Corruption, ratified in 2004; and
• the United Nations Convention against Transnational Organised Crime and its Protocols (Trafficking in Persons, Smuggling of Migrants and Trafficking of Firearms), ratified in 2002.

Peru intends to become a party to the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and to this end has taken significant steps to amend its legislation in order to meet OECD standards. The Peru Country Programme, launched by Peru and the OECD in 2014, aims to improve public policies and services that Peru offers its citizens in areas including decentralisation, governance, anti-corruption, health, education, labour, environmental management, competence, investments and tax policies. Specific offences and restrictions Offences What are the key corruption and bribery offences in your jurisdiction? Corruption and bribery offences are regulated in Title XVIII – Crimes against the Public Administration of the Criminal Code, which contains both passive and active bribery offences (where the offender is a public official or a civilian, respectively). Passive bribery offences include:

• acceptance of a bribe by a public official to take or omit to take an action that may or may not infringe on the duties of his or her office (this also applies to foreign public officials);
• acceptance of a bribe by a judge, arbitrator, prosecutor, expert witness or member of an administrative court (higher penalty);
• request of a bribe by a public official;
• the illegal increase of the assets of a public official resulting from the abuse of his or her position; and
• an unlawful interest in contracts or transactions in which the public official takes part as a result of his or her position.

Active bribery offences include:

• the offer, delivery or promise of a bribe to a public official for him or her to take or omit to take an action that may or may not violate the duties of his or her office (this is also applicable to bribes made to foreign public officials, in which case the offender can also be an entity);
• the offer, delivery or promise of a bribe to a judge, arbitrator, prosecutor, expert witness or a member of an administrative court (higher penalty); and
• influence peddling involving a judicial or administrative case.

Hospitality restrictions Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details? Articles 397, 397-A and 398 of the Criminal Code prohibit the offering, giving or promising of a gift, donation or wrongful benefit in general to a domestic or foreign public official in exchange for the performance or omission of an act by the public official. There are no specific guidelines in addition to these general prohibitions. Similarly, Law 28024 (July 12 2003), which regulates domestic and foreign lobbyists, companies and individuals, prohibits the direct or indirect receipt of a “generosity” by a public official from a lobbyist or his or her representative. The prohibition applies to gifts, donations, free services, employment and hiring offers, and also applies to the public official’s spouse and relatives. Finally, Article 8 of the Law of Ethics in Civil Service (Law 27815, August 13 2002) regulates ethical prohibitions in the civil service by providing that a public official is prohibited from obtaining or seeking benefits or undue advantage for him or herself or others, resulting from his or her use of authority, position or influence. Facilitation payments What are the rules relating to facilitation payments? The Criminal Code does not specifically address facilitating payments. However, the code prohibits the offering, giving or promising of a donation, promise, advantage or benefit to a public official; thus, no exception applies to facilitating payments. Liability Scope of liability Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction? Yes. With the approval of Law 30424 and Legislative Decree 1352, legal entities can be held liable for the crimes of transnational active bribery and active bribery of domestic public officials or servants, with liability independent from the individual agent's liability. Both offences will become effective and enforceable as of January 1 2018. An entity may be deemed a third-party obligor and subject to civil damages arising from a crime. In addition, companies may be subject to certain administrative penalties when a crime is perpetrated in the interest of the entity or using its body corporate to help or conceal criminal activity, provided that an individual connected to the entity is found guilty of the crime. In these cases, the criminal judge may apply any or all of the following administrative penalties:

• the temporary or permanent closure of the corporate headquarters;
• dissolution and liquidation of the entity;
• suspension of corporate activities for up to two years; and
• a temporary or permanent prohibition on carrying out the corporate mission deemed to have helped or concealed criminal activity.

In addition, both individuals and companies may be held liable in civil court for negligent or tortious actions filed by a plaintiff seeking monetary compensation for damage caused in connection with bribery-related crimes, as the case may be. Only the person suffering the relevant damage has standing to file a claim involving such actions. Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances? Yes, they can be held liable for the crime of influence peddling, regulated by Article 400 of the Criminal Code. This crime punishes any person who, by invoking or having real or simulated influences, receives, makes or promises a gift or other advantage or benefit by offering to intercede with a public official. In addition, Article 397-A of the Criminal Code punishes the direct or indirect bribery of foreign public officials or servants, thereby prohibiting bribery through intermediaries or third parties. Foreign companies Can foreign companies be prosecuted for corruption in your jurisdiction? With the approval of Law 30424 (April 21 2016) and Legislative Decree 1352 (January 6 2017), effective as of January 1 2018 companies (both local and foreign) can be prosecuted for corruption, either for the crime of transnational active bribery (the bribery of public officials or servants from other states and officials of international public organisations) or for the crime of active bribery of domestic public officials or servants. Whistleblowing and self-reporting Whistleblowing Are whistleblowers protected in your jurisdiction? No, no specific legislation protects whistleblowers. Self-reporting Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed? Law 30424 (April 21 2016) and Legislative Decree 1352 (January 6 2017) approved imposing administrative liability on entities for the crimes of transnational active bribery and active bribery of domestic public officials or servants provided for in the Criminal Code, respectively, effective as of January 1 2018. The circumstances in which an entity found guilty of any of these crimes can mitigate its responsibility include:

• confessing to the crime before the internal investigation is formalised; and
• collaborating with the authorities to clarify the criminal act.

Dispute resolution and risk management Pre-court settlements Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements? All criminal offences, including crimes of corruption, are subject to a criminal trial and cannot be resolved by way of a settlement or similar arrangement. Defences Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction? The Criminal Code makes no specific provision for permissible gifts and gratuities. All bribes, both foreign and domestic, constitute a crime under the Criminal Code. However, Law 28024, which applies to domestic and foreign lobbyists, permits the following:

• legal contributions from non-prohibited origins in favour of electoral campaigns, pursuant to applicable legislation;
• donations and bequests in favour of government entities;
• informational materials relating to the party for which the lobbying is being undertaken and delivered to the offices of public officials (eg, books, magazines, documents or similar);
• training, including transport, lodging and meals, supported and approved by the public institution;
• recognition or awards conferred in contests or events open to the public, as well as commemorative plaques, trophies or other articles of only commemorative value;
• nominal value samples distributed for informational purposes; and
• any other activity under the law.

The law does not specify a referential or maximum monetary amount. What other defences are available and who can qualify? Valid defences for an entity being prosecuted for corruption are prescription and res judicata. However, if the entity is found guilty, it can mitigate its responsibility as follows:

• objective, substantial and decisive collaboration in the clarification of the criminal act before the beginning of the intermediate stage of the process;
• impairing the harmful consequences of the illicit act;
• total or partial repair of the damage caused by the illicit act; and
• adoption and implementation of a prevention model or a compliance programme after the commission of the crime, but before the beginning of the oral phase of the trial.

Risk management What compliance procedures and policies can a company put in place to assist in the creation of safe harbours? All companies should be proactive in improving and implementing their compliance programmes by:

• taking into account international and local anti-corruption legislation;
• conducting preventive and ongoing compliance training on-site and in Spanish (or other native language) by knowledgeable legal counsel capable of understanding the international anti-corruption context;
• educating employees and third parties at all levels – especially high-level management, community and social relations teams, security personnel, local partners (including peasant community leaders), vendors and agents;
• conducting enhanced due diligence of its local partners, suppliers and agents;
• carrying out country and cultural risk assessments;
• designing and implementing adequate, specific internal controls to satisfy the needs, operations and culture of each company;
• allocating sufficient resources and attention to designing, implementing, monitoring and reviewing internal policies and controls; and
• continually educating all project stakeholders about the evils of bribery and corruption and the worthiness of doing business freely and competitively.

Record keeping and reporting Record keeping and accounting What legislation governs the requirements for record keeping and accounting in your jurisdiction? The Superintendence of the Stock Market audits all companies listed on the Lima Stock Exchange. What are the requirements for record keeping? Until 2013 only companies that were listed on the Lima Stock Exchange and supervised by the stock exchange’s regulatory body were required to keep books and records in compliance with the International Financial Reporting Standards (IFRS). In 2013 this requirement was broadened to include companies reporting significant income that were not listed on the Lima Stock Exchange. However, as of April 2016, the Constitutional Court declared that only companies listed on the Lima Stock Exchange were required to keep books and records in compliance with the IFRS. Reporting What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations? Peruvian legislation has no specific disclosure mechanism for potential violations of anti-corruption regulations. Penalties Individuals What penalties are available to the courts for violations of corruption laws by individuals? The Criminal Code punishes the active bribery of domestic public officials with:

• imprisonment of between three and six years;
• from 365 to 700 ‘penalty days’; and
• debarment (ie, deprivation of office, prohibition from holding public office, suspension of political rights, prohibition from exercising a profession (attorneys and others) and removal of honorary titles).

The prison sentence for transnational active bribery is between five and eight years. Fines and penalties force the convicted felon to pay the state a monetary amount expressed in terms of penalty days. One penalty day is equal to the average daily income of the convicted felon and is determined pursuant to his or her assets, rents, remuneration, expenditure level and other external signs of wealth. In addition, both individuals and companies may be held liable in civil court for negligent or tort actions filed by a plaintiff seeking monetary compensation for damage caused in connection with bribery-related crimes. Only the person suffering the relevant damage has standing to file a claim involving such actions. Companies or organisations What penalties are available to the courts for violations of corruption laws by companies or organisations? With the approval of Law 30424 (April 21 2016) and Legislative Decree 1352 (January 6 2017), as of January 1 2018 companies will bear administrative liability for the crimes of transnational active bribery and active bribery of domestic public officials or servants. If a company is found guilty of any of these crimes, the court can order the following administrative penalties:

• a fine of up to six times the benefit obtained or expected through the crime;
• debarment in any of the following ways:
  • suspension of company activities for up to two years;
  • prohibition on future activities of the same class or nature as those in which the crime was committed, favoured or concealed. The prohibition may be temporary (up to five years) or final; and
  • suspension from contracting with the state for up to five years;
• the cancellation of licences, concessions, rights and other administrative or municipal authorisations;
• the closure of business premises or establishments temporarily (up to five years) or permanently;
• dissolution; and
• intervention into the company to safeguard the rights of workers and creditors for up to two years.

In addition, companies may be considered third-party obligors and subjected to civil damages arising from a crime. Companies may also be subject to certain administrative penalties when a crime is perpetrated by carrying out the business purpose of an entity or using its body corporate to help or conceal criminal activity, provided that an individual connected to the corporation is found guilty of the crime. In these cases, the criminal judge may apply any or all of the following administrative penalties:

• temporary or permanent closure of the corporate headquarters;
• dissolution and liquidation;
• suspension of corporate activities for up to two years; and
• a temporary or permanent prohibition on carrying out the corporate purpose deemed to have helped or concealed the criminal activity.

Law stated date Correct as of Date as of which the law stated here is accurate. January 19 2017.