Peru - Market ChallengesPeru - Market Challenges
One of the main challenges expressed to the U.S. Embassy in Lima from the private sector is Peru’s cumbersome and inefficient government procurement processes. The Embassy continues to work with the government of Peru to encourage government contracting procedures that are in accordance with international procurement standards. One persistent challenge is the use of a government-to-government procurement mechanism that restricts the ability of U.S. companies to participate in certain areas. Other challenges include the reluctance of some government officials to make final contracting decisions for fear of legal liabilities and oversight investigations and the tendency to base awards on lowest cost rather than value for money. Further detail can be found in the “Selling to the Government” Section. U.S. exporters interested in pursuing public tenders in Peru are strongly encouraged to apply for support from the U.S. Department of Commerce’s Advocacy Center so that the U.S. Commercial Service office at Embassy Lima can provide support via government-to-government communication channels.
Business owners often find it difficult to resolve disputes with the government, and therefore it is recommended to include an arbitration clause in commercial agreements. In 2004, the Peruvian government established commercial courts to rule on business disputes. With specialized judges, these courts reduced the amount of time to resolve a case from an average of two years to just two months. However, with the exception of the commercial courts, the judicial system is often extremely slow to hear cases and to issue decisions. A large backlog of cases further complicates businesses’ operations. Court rulings and the degree of enforcement are often inconsistent and unpredictable. Allegations of political corruption and outside interference in the judicial system are common, a situation analysts believe results in the judiciary system receiving low approval rates in public opinion polls. Also, frequent use of the appellate processes as a delay tactic leads to the belief among foreign investors that contracts can be difficult to enforce in Peru. Firms operating in Peru also note difficulties in securing legal solutions to commercial disputes or enforcing arbitration awards.
While the legal framework for protection of intellectual property (IP) in Peru has improved over the past decade, enforcement mechanisms remain weak. Despite the Peru Trade Promotion Agreement (PTPA) implementation and recent changes in laws, which created stricter penalties for some types of IP theft, certain PTPA obligations remain unimplemented and the judicial branch has yet to vigorously pursue investigations, convictions, and stiff penalties for IP violations. In response, the U.S. Embassy in Peru established a regional IP attaché office in 2016 to support U.S. exporters facing issues and to provide capacity building for the Peruvian government.
Both domestic and foreign firms continue to identify cumbersome bureaucratic procedures as impediments to doing business in Peru. For example, shipments are regularly held up for various reasons, including typographical errors on shipping documents.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Business owners often find it difficult to resolve disputes with the government, and therefore it is recommended to include an arbitration clause in commercial agreements. In 2004, the Peruvian government established commercial courts to rule on business disputes. With specialized judges, these courts reduced the amount of time to resolve a case from an average of two years to just two months. However, with the exception of the commercial courts, the judicial system is often extremely slow to hear cases and to issue decisions. A large backlog of cases further complicates businesses’ operations. Court rulings and the degree of enforcement are often inconsistent and unpredictable. Allegations of political corruption and outside interference in the judicial system are common, a situation analysts believe results in the judiciary system receiving low approval rates in public opinion polls. Also, frequent use of the appellate processes as a delay tactic leads to the belief among foreign investors that contracts can be difficult to enforce in Peru. Firms operating in Peru also note difficulties in securing legal solutions to commercial disputes or enforcing arbitration awards.
While the legal framework for protection of intellectual property (IP) in Peru has improved over the past decade, enforcement mechanisms remain weak. Despite the Peru Trade Promotion Agreement (PTPA) implementation and recent changes in laws, which created stricter penalties for some types of IP theft, certain PTPA obligations remain unimplemented and the judicial branch has yet to vigorously pursue investigations, convictions, and stiff penalties for IP violations. In response, the U.S. Embassy in Peru established a regional IP attaché office in 2016 to support U.S. exporters facing issues and to provide capacity building for the Peruvian government.
Both domestic and foreign firms continue to identify cumbersome bureaucratic procedures as impediments to doing business in Peru. For example, shipments are regularly held up for various reasons, including typographical errors on shipping documents.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.