June 1973

OBR 73-20

Foreign Trade Regulations of Peru

JUL 1 7 1973

Prepared by Martin F, Smith and
MBRARY
Herbert A. Lindow CALIFORNIA

Latin America Division

Office of International Marketing Bureau of International Commerce

Trade Policy

The Peruvian Government's foreign trade goals are greater economic growth and independence, optimum use of foreign exchange reserves, and promotion of regional and sub-regional integration. To achieve these goals, the Government has increased and centralized control of imports, exports, and production. A large number of goods are prohibited importation as "non-essentials" or as goods which compete with Peruvian production. Import and export monopolies have been established in some sectors. The government exercises complete control over the foreign exchange market with the aim of assuring an adequate supply of foreign exchange for priority imports. Incentives in the form of import duty exonerations and tax reductions are employed to channel trade and investment into high priority economic sectors.

Peru maintains membership in the General Agreement on Tariffs and Trade (GATT), the Latin American Free Trade Association (LAFTA), and the Andean Subregional Group. It has bilateral import tariff agreements with

Colombia and Chile. It has trade relations with most countries and recently signed trade agreements with the U.S.S.R., Cuba, The Peoples Republic of China, and countries of Eastern Europe.

Import Tariff System

Tariff Structure

On December 31, 1972, the Government of Peru put into effect a new tariff schedule, The Arancel de Aduanas Del Peru. While based on the Brussels Tariff Nomenclature (BTN), it contains nomenclature adaptations which are designed to conform with the Common Import Tariff Nomenclature (NABANDINA) of the other Andean Pact countries (Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela).

Peru's tariff rates are specific, assessed in terms of soles1 per unit of weight or measure and ad valorem levied as a percentage of the c.i.f. value.

In the new schedule, the ad valorem rates in most cases have been increased by 12 percentage points. This is because a 10% ad valorem surcharge2 and a 2% ad valorem statistical tax3 which were previously collected separately, now have been consolidated with the previous ad valorem rates.

138.70 Soles

=

US$1 at the certificate rate of exchange in April 1973. Exemptions from the 10% surcharge apply to: Imports from LAFTA countries; raw material imports for the pharmaceutical industry; and a few "essential goods"; also, exempt are capital goods not available in Peru if financed externally at terms of at least 4 years with interest rates of not more than 3% above the prime rate in the lender's country, subject to authorization by the Ministry of Economy and Finance.

Imports from LAFTA are exempt from the 2% statistical tax; in the case of imports exempted from duties, however, this tax is 3% of the c.i.f. value.

Consolidated ad valorem rates range generally from 22% to 92%. Most machinery and equipment items are dutiable at rates of 32%, 42% or 52%. Some luxury items carry rates as high as 112% to 122%, with a few manufactured iron and steel articles at 192%. In addition, specific duties are levied on textiles, textile manufactures, and various luxury or non essential goods.

A special tax of 4% of ocean freight charges must be paid:

As a member of LAFTA, Peru has also granted substantial tariff reductions on approximately 500 items imported from all other member countries, and further reductions to imports from the lesser developed members (Bolivia, Ecuador and Paraguay), mostly on agricultural products. Peru is a signatory to LAFTA Complementation Agreements No. 5, the Chemical Industry and No. 6, the Petro-chemical Industry.

As a member of the Andean Group, Peru is participating in a broader trade liberalization program with all members, with additional special concessions to Bolivia and Ecuador. It also is a signatory to the Andean Sectoral Agreement to develop metalworking industries.

Partial exoneration from import duties is given on approved imports under the Peruvian General Law of Industries (GIL) according to the importance to Peruvian economic growth of the specific imported commodities. Under the GIL, all firms within the jurisdiction of the Ministry of

Industry and Commerce are assigned to one of four priority categories with firms in basic industries considered first priority and firms producing luxury goods considered fourth or last. First priority firms pay 10% of regular duty on capital goods imports, and 20% on non-capital goods; second priority firms pay 30% and 50%, respectively; third priority firms pay 60% and 80%, respectively; other firms pay full duty.

The President of Peru is authorized to adopt measures deemed necessary in order to protect the domestic industry from dumping or the competition of merchandise imported at artificially low prices. The Executive is empowered to raise import duties or to detain or order the return of such merchandise to its port or origin.

The Arancel de Aduanas del Peru is sold for 250.00 soles by the Printing Office of the Ministry of Economy and Finance (Imprenta del Ministerio de Economia y Finanzas), Lima, Peru.

Information on duty rates applicable to individual items is available through the Department of Commerce District Offices or from the Latin America Division, Office of International Marketing, Bureau of International Commerce, U. S. Department of Commerce, Washington, D. C. 20230. Inquiries should contain a complete product description, including BTN, SITC, or U. S. Schedule B Export Commodity numbers, if known.

Basis of Duty Assessment

Specific duties are assessed per unit of weight or measure. Gross weight is the weight of the goods plus that of all containers, excluding those metal crates known as "containers" or "lift-vans”. Legal weight includes the weight of the goods together with the inner container or wrapping, while net weight includes only the weight of the unwrapped or unpackaged goods.

The metric system of weights and measures is used in Peru. One metric ton equals 1,000 kilogram; 1 kilogram equals 2.2046 pounds; 1 meter equals 39.37 inches; 1 liter equals 1.0567 liquid quarts.

Although ad valorem duties theoretically are computed on the c.i.f. (cost, insurance, freight) value, for tariff computation purposes the "c.i.f. value" is determined by increasing by 20% the f.o.b. value port of embarkation, except that in the case of precious stones, semi-precious stones, pearls, fine jewelry, coins (except for coin collections), and gold or platinum watches for personal use, the f.o.b. value is increased by 5%.

The import declaration is presented together with the consular invoice, which must be forwarded by the exporter. The statements appearing on the import declaration should agree with those made on the consular invoice, but slight changes in description of merchandise are permitted if made in order to make the description conform with that found in the tariff classification.

For goods dutiable ad valorem, the original or a legalized copy of the consular invoice or, in certain circumstances, the original copy of the commercial invoice must accompany the import declaration for clearance through customs.

Import duties and other customs charges must be paid within a period of 3 working days after the goods have been appraised and the customs account has been totaled. Merchandise must be withdrawn from the customs area within 3 working days after liquidation of duties and other customs charges. If not withdrawn within this time limit, storage charges accrue at the rate of 2% of the import duties per month for the first 3 months, and thereafter at the rate of 4% of the import duties per month.

Merchandise may be deposited in special customs warehouses at the request of the consignee for a longer storage period. Such "merchandise in deposit" must be cleared or re-embarked within 6 months of the date of deposit or it will be adjudged abandoned. Bulky or dangerous cargo (Forzoso Despacho goods) may be placed in customs yards for prompt, obligatory clearance. Such

goods may be withdrawn immediately after arrival upon presentation of an "Application and Permit for Immediate Delivery of Merchandise through Payment of Advanced Duties" (Solicitud y Permiso para Entrega Immediata de Mercaderias Mediante el Pago de Derechos Anticipados). If not cleared within 2 months of unloading from sea, river, or lake vessels, such Forzoso Despacho merchandise will be considered legally abandoned and subject to public auction. Air and land Forzoso Despacho cargo must be cleared within 30 days.

Merchandise entered for warehousing is subject to the same fines and penalties as are applicable to goods declared for immediate clearance. Any fines or penalties imposed must be paid before the goods will be permitted to be warehoused. Warehousing of foodstuffs and other goods subject to deterioration is limited to 90 days. In special circumstance an additional 90 days may be allowed.

Peru has no free trade zones or ports, but there are entrepots at Matarani and Mollendo for shipments in transit to Bolivia.

Imported merchandise must be declared either for consumption or for warehousing within 15 days after arrival or it will be stored temporarily. If clearance is not applied for within 15 days after initial storage, goods will be sent to a "reception warehouse," without an inventory.

Ocean, river, and lake cargo must be cleared from customs warehouses within 4 months of the date of unloading or be considered abandoned and subject to sale at public auction. Air and land cargo must be cleared within 60 days.

A drawback of duties paid on imported raw or semi-finished materials is available when goods produced from these are reexported, provided the raw materials used were not available in Peru.

Samples and Advertising Matter

Samples of no commercial value are admitted into Peru free of duty. Salable samples having commercial value are admitted as ordinary commercial shipments, subject to regular duties. Such samples may be mutilated to render them unsalable and then admitted duty-free. Samples of all kinds, with the exception of some jewelry, may be imported temporarily free of duty upon receipt of a bond equal to the full amount of the import duties and other applicable charges. Upon presentation of proof of exportation of the samples within 6 months, the bond will be cancelled. Consular fees collected on temporary imports of samples are not reimbursable.

Consular invoices are not required on samples brought in by commercial travelers as part of their baggage, but they are required when the samples are shipped separately. All samples, except when sent by parcel post, must be accompanied by a customs declaration tag and a commercial invoice. Regular customs charges will be imposed on samples marked with a fictitious value for insurance-in-transit purposes.

Advertising matter is dutiable.

Advance Rulings on Customs Classifications

Advanced rulings may be obtained from the Administrator of Customs at the Peruvian port of entry. An application for a ruling can be submitted directly or, preferably, by a customs broker or local attorney. Any appeal of the classification ruling must be presented within 3 days after notification through the Administrator of Customs to the Customs Board (Comision Consultiva de Aranceles de Aduana). Decisions by the Customs Board apply to all subsequent imports of identical goods.

Internal Taxes

Sales taxes are applied to a broad range of goods and services. They are levied, in the case of importers, upon entry into the country. The tax base is the c.i.f. value of the import or the value of the merchandise sold by the producer.

With respect to imports, sales taxes are applied at rates of 3%, 15%, and 25%. The 3% rate must be paid on imports for most industries within the first priority industries as defined by the General Industries Law (Decree Law 18350) as well as on imports by "industries of social support" within the second priority category. The rate of 25% is levied on goods considered luxuries. Goods not subject to the above rates are taxed at 15%. However, exemptions from the tax apply to certain foodstuffs, tobacco, and unrefined minerals. In certain cases such as the assembly of automotive vehicles and naval vessel construction, the tax is applied to only 50% of the base.

Shipping Documents and Fees

Documents requiring consular legalization or certification must be presented at least 24 hours

*First priority industries broadly include iron and steel, and products; basic nonferrous metals and products; basic chemicals; fertilizers; cement; paper, construction of machine tools and parts; construction of motors; electric and steam generators; heat exchangers; pumps and compressors, parts for these items; machinery for mining, fuels; fishing; agriculture; transportation; communications; construction; or basic industries, among others.

prior to the sailing of the vessel. The late fee for documents presented on the day of sailing is a 50% surcharge on consular fees. Any documents presented after goods have departed will not be legalized and heavy fines will be imposed on the consignee in Peru. Errors, omissions, and incorrect or untrue statements in documents are punishable by fines of up to 200% of the amount of duty payable. Statements or omissions with intent to defraud are punishable under the Peruvian penal code.

Although in general where the Consulate with jurisdiction over the port of shipment is more than 50 miles away, certification of documents by a Chamber of Commerce will be accepted in lieu of Consular approval, this is not always true. For example, shippers in Philadelphia must present documents to the Consulate in New York. Shippers are advised to inquire at the nearest Consulate about requirements in their area (see Peruvian Government Representation).

Goods destined for Chiclayo should show both Pimental and Eten as possible ports of entry. Consular invoices covering direct surface shipments on through bills of lading (TBL) to Iquitos must show "Iquitos via Belem do Para." For surface shipments unloaded at Belem (not shipped on a TBL) and then trans-shipped, the consular invoice must read "Con Transbordo en Belem do Para."

Consular Invoice

Four copies of the consular invoice are required for surface freight shipments; five copies for drugs, pharmaceuticals, foodstuffs, and medicinal preparations. The original is The original is legalized and returned for forwarding to the consignee. Consular invoices should be prepared in Spanish, showing the value of goods f.o.b. port of exportation. Charges for ocean transportation and marine insurance should be indicated separately, and f.o.b., c.i.f. or c. and f. values clearly indicated to avoid confusing one with the other. Peruvian ad valorem duties are assessed on c.i.f. value. To determine this value, Peruvian authorities increase the f.o.b. value on the Consular Invoice by 20%.

Importers of all agricultural products (including farm tractors) must be registered as either industrial or commercial importers with the Ministry of Agriculture. The registration number assigned to the importer must appear on consular invoices covering such shipments, or the invoices will be rejected by Peruvian customs.

The shipper must sign the invoice, and should insert the number "54" after the word "Tarifa" at

the bottom right-hand corner. In the bottom right corner after the words "derecho percibido" (fee collected), the shipper should enter total consular fees but not bill of lading fees, even though these are paid to a Consulate.

Extreme care should be taken in preparing the consular invoice, because arithmetic errors, erasures, or erroneous declarations will subject the consignee in Peru to heavy fines.

Commercial Invoice

Two copies of the commercial invoice should accompany the consular invoice for imports of drugs, pharmaceuticals, and medicinal preparations (which must show the Registry of Inscription number issued by the Peruvian Ministry of Public Health). Two copies are also required for merchandise having such characteristics as brand name, model, or serial number, for all shipments to Iquitos, and for foodstuffs and automobiles. These commercial invoices must be certified by a Peruvian consulate. The invoices must also be certified as to prices, origin, and identifying marks by a U.S. Chamber of Commerce, which will generally retain a third notarized copy for its files. The certifying Chamber must stamp the date opposite the signature of the Chamber's stamp, in the same ink used for certification.

Imports of assembled automobiles and station wagons require four copies of the commercial invoice, issued by the manufacturer or exporter, certified by a U. S. Chamber of Commerce, and legalized by the Peruvian consulate.

Invoices must either indicate that payment has been made or show, over the seller's signature and seal, the invoice number, the amount payable and the name of the drawee of the draft or bill of exchange as proof of the purchaser's obligation to pay. Only net prices should be shown for goods dutiable in Peru at ad valorem rates, and any discounts indicated on the invoice must be written in the same type, style, and ink as the invoice itself. No erasures or amendments are permitted. For c.i.f. or c. and f. sales, commercial invoices should be itemized, showing f.o.b. value, freight, etc. The invoice must be dated at least 24 hours prior to the date of shipment.

Bill of Lading

Two copies of the bill of lading, in Spanish or in English, with a Spanish translation, showing gross weight and measurements in metric units, as well as freight charges must be presented to the Peruvian Consul at the port of shipment. One copy, legalized and stamped "original,”

is returned to the shipper for his signature as "accepted", and for forwarding to the consignee in Peru. "To order" bills of lading are permitted. According to Peruvian law, the 4% maritime freight tax on imports into Peru should be shown on the duplicate copy of the bill of lading, which is forwarded by the Consul to the Peruvian customs within 8 days of shipment. As a matter of practice, the steamship company usually forwards this copy.

Sanitary and Purity Certificates

Plants and Animals.-Imports of livestock, hatching eggs, plants, cuttings, and other plant parts require a sanitary certificate issued by a competent sanitary or agricultural authority in the country of origin and must be legalized by a Peruvian Consul. Prior authorization must be obtained from the Peruvian Ministry of Agriculture in order to import livestock, plants, cuttings or seeds, with the authorization presented to a Peruvian Consul by the shipper.

A phytosanitary certificate from the U.S. Department of Agriculture is required for shipments of seed and grain. Notarization is not required; the certificate is legalized and returned by the Consulate.

Cattle must have have a certificate of tubercularization; horses, mules, and asses, a certificate of mallenization. Cattle, goats, and hogs must be accompanied by a sanitary certificate, attesting that they are free from Bang's disease, Malta fever, or Melitococcia. Certificates of tubercularization and mallenization, if not issued by, must be certified or attested by, an official veterinary in the country of export, and certificates covering Bang's disease and Melitococcia must be issued by a licensed bacteriological laboratory or by a laboratory under the control of a licensed veterinarian.

Poultry must be covered by a certificate attesting that they are free of tuberculosis and pullorum. Food for animals during travel must also be certified free of germs. In each instance the certificate must be legalized by the Peruvian consul.

A health certificate (two copies) issued by a veterinarian, legalized by the Consulate, is required for shipments of raw or salted bovine leather.

Food and Beverages.-Certificates of purity issued by competent sanitary authorities in the country of origin and legalized by the Peruvian consul are required on all shipments of hog lard, butter, and milk. Certificates issued by the