Corporate Compliance Alert – July 2019

ALERT – CORPORATE COMPLIANCE

Regulation of Lobbying Act

On Monday, July 1, 2019, Regulation of Lobbying in Public Administration Act (Supreme Executive Order No. 120-2019-PCM) was published in the Official Gazette “El Peruano”.

In this sense, lobbying guidance and procedures in Peru are set forth therein. Lobby is defined as a legal activity which allows to communicate—in a transparent manner—the private sector’s positions to be taken into account in public decisions to decision-making authorities.

I. Are all kind of interaction with public administration entities regulated?

No. The provided regulation does not apply to legal representation in proceedings before the Judiciary, functions of the autonomous constitutional entities (e.g., Constitutional Court, Government Attorney General’s Office, National Electoral Board), and proceedings before administrative courts (e.g., Tax Court, Public Records Administrative Court, Peruvian Administrative Court of Appeals for Free Competition and Intellectual Property Matters, Administrative Court of Appeals for Public Procurement and Contracting, etc.)

Guidelines set forth in the Regulation apply to any activity intended to communicate the private sector’s positions to officers with authority to adopt public policies or make decisions with economic, social or political impact on an individual or collective basis. Officers being enforced in compliance therewith are those being part of:

• Executive Branch, including Ministries and Decentralized Public Entities
• Regional Governments
• Local Governments
• Other State’s entities and organizations, projects and programs regarding the adoption of public policies and decision-making with economic, social or political impact
• Companies from the State business activity (e.g., Petroperú, Banco de la Nación, etc.)

II. What should those who are engaged in lobbying activities take into account?

Upon eliminating the obligation to register a lobbyist in the Public Records, the new regulation imposes the following obligations to those performing said activity:

• Notify the pertinent entities of lobbying actions being performed.
• Report any violation or infringement of law to the pertinent authority.
• Maintain discretion in confidential information being accessed thereto by their activities.
• Provide details on the scope of the lobbying action being performed for its registration in the records kept for such purpose by the public entity concerned by giving the following details:

1. Date of visit to the public officer
2. Identification of the visiting person
3. Identification of the individual or legal entity representing thereto or being part thereof
4. Lobbying purpose
5. Position of the officer or government employee being lobbied
6. Place where lobbying activity is taking place
7. Starting and ending time

III. Which ethical guidelines are applicable to lobbying activities?

Lobbyist are obliged to comply with the following ethical guidelines while on duty:

– Know and comply with any and all obligations provided by this Act and its Regulation.

– Provide at all times true and current information to the officers with public decision-making authority, and besides give explanatory or additional information as required.

– Refrain to make demands causing the officers with public decision-making authority fail to comply any duties customary for his position.For complying herewith it is essential that, before making any kind of demand, it shall be verified whether such demand is duly justified and the claim meets legal requirements.

– Refrain to promote or grant benefits of any kind, provide services or grant property of any kind to officers with public decision-making authority, as well as their spousal or partner, or relatives up to fourth degree of consanguinity or second degree of affinity. This obligation is applied to even before or after lobbying action.

The duly compliance of this guideline is critical to avoid criminal contingencies.

– Refrain to lobby officers with public decision-making authority which relationship is up to fourth degree of consanguinity or second degree of affinity.

– Act in a loyal and diligent manner towards such who requires lobbying services.

– Meet officers with public decision-making authority within working hours and in the respective institutional premises for lobbying activities.

Exceptionally, lobbying acts can be committed outside institutional premises provided that they will be previously scheduled in the official agenda, and provisions of registration set forth in the regulation are would be comply therewith.

IV. Which situations should be taken into account to avoid impediments and conflict of interests?

Lobbying activities may not be performed by:

1. Those suspended from the exercising of citizenship
2. Public administration officers—while on duties and up to twelve (12) months after termination—in matters they would have functional competence
3. Individuals and private-law legal entities’ representatives participating on a fee basis in the regulatory collective bodies of public administration
4. Owners and directives of Peruvian or foreign mass media or their companies, except for lobbying activities that are in their own interest
5. Spousal or relatives up to fourth degree of consanguinity or second degree of affinity of those set forth in Item (b) only in matters they have direct functional competence of the public officer or are under their exclusive decision-making responsibility

V. Which sanctions are provided for non-compliance of provisions set forth in this Act and its Regulation?

The Regulation provides for that the non-compliance of the ethical guidelines set forth therein will result in civil and/or criminal liability depending on the particular case.