Peru’s Development: What More Can Enable the Country to Flourish?
The Peruvian economy is growing stronger alongside its legal sector and government, however, speaking with Oscar Mago, Partner at OMC Abogados & Consultores, he states if certain threats imposed are ignored, it can cause serious economic damage and damage to the reputation of a company. He states: “Peru needs to develop greater mechanisms and elements in the legal, institutional or governmental framework for fighting against these crimes and greater concern on the issue; if controls are not implemented the crimes are not detected.”
We speak with Oscar who reveals ways in which Peru is working towards this change for the country’s economic development.
When dealing with disputes involving international parties, what do you think is the main misconceptions outside jurisdictions have on Peruvian law?
In China, trademarks must be registered so that the holder can enjoy the exclusive rights thereof. China is a jurisdiction that applies the first-to-file system for the protection of trademark rights; the first registrant has the right in China. In that sense, the “foreign priority right” is not applicable, a legal concept allowed and regulated by our Andean legislation, whereby the owner of a trademark registered / applied for abroad has a priority right against third parties to register its trademark in Peru.
Another common concern regards the classification of goods or services. In China, trademark protection does not cover complete classes, but it is necessary to submit a detailed description of the goods or services sought to be protected. However, the Chinese Trademark Office accepts the goods detailed in the different classes, but still manages its own classification criteria. This situation is contrary to what happens in Peru (and in most countries) since we are governed by the International Classification of Nice to determine the class to which the goods or services, sought to be protected, belong to.
How has economic crime changed over the years in Peru; how has the legal sphere adapted to this and what more do you think can be done to ensure it is dealt with in the best way?
Surveys show that, over the years in Peru, companies have been victims of economic crimes, such as: accounting fraud, false documents, illicit appropriation, embezzlement, bribery, corruption, purchases and acquisition frauds.
Economic crimes are more common than they seem, but in Peru, there is a lack of information and a lack of courage to react against these crimes.
With the opening of markets for international trade and new technologies, the space for criminal modalities has expanded. Our country definitely has the great challenge of taking measures to promote complaints for these types of crimes.
It is very important and extremely necessary for companies and/or interested parties in economic activities to take preventive measures also on their own account. Some alternatives would be as follows:
- Evaluate the risks of fraud, allocate company resources to fight against threats of economic crimes.
- Invest in prevention and timely detection of fraud by internal audits.
- Keep accurate and detailed information, in addition to keeping it updated and to cross-refer information from different databases with state institutions to detect these crimes.
In legal terms, it is necessary to know the regulatory framework in the Peruvian legislation of these crimes. In addition, implement complaint channels on suspicious activities and the respective investigation. Faced with these latent risks, these actions must be taken to detect these crimes. These must be early so as to minimise the impact of damage on companies.
As technology advances, cases of economic crime have increased, for example, internet fraud which is prevalent, as it does not only cause economic loss, but also affects the image and reputation of a company. The impact of all these crimes is reflected in large losses in both internal and external damages. Among the crimes, accounting fraud is the most common.
Regarding competition law, where do you think Peru stands in comparison to its neighbouring jurisdictions?
We can indicate that Peru is improving compared to the jurisdictions of the member countries of the Andean Community, not only by amending Legislative Decree No. 1033, which modernised the free competition regime of the National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI) and Legislative Decree No. 1034, which approves the Law of Repression of Anti-competitive Behaviors; the improvements can be seen in the Logistics Performance Index (LPI), which was published by the World Bank in The year 2010 which helps to compare the challenges and opportunities faced by countries in their performance at the commercial level. It is necessary to point out that member countries enjoy exceptions, which are stipulated in the General Agreement on Customs Tariffs and Trade and in the General Agreement on Trade in Services. The purpose of the exceptions mentioned above is to allow for greater trade in goods and services and to accelerate the economic growth of member countries.
On the other hand, Peru ranked 67th in the Logistics Performance Index (LPI) because five important sectors were verified:
a) Customs efficiency;
- b) The International Competitive Freight Transport;
- c) The infrastructure quality;
- d) Competition and Quality of logistics services and,
- e) Shipment Tracking Capacity.
