LEGISLATIVE DECREE No APPROVAL OF FRAMEWORK LAW FOR INCREASED PRIVATE INVESTMENT

LEGISLATIVE DECREE No. 757 - APPROVAL OF FRAMEWORK LAW FOR INCREASED PRIVATE INVESTMENT Legislative Decree published on November 13, 1991. Modified by Act No. 25541 published on June 11, 1992, Decree Act No. 25596 published on July 4, 1992, Act No. 26092 published on December 28, 1992, Act No. 26724 published on December 29, 1996, Act No. 26734 published on December 21, 1996, and Act No. 26786 published on May 13, 1997. PRESIDENT OF THE REPUBLIC WHEREAS: The Congress of the Republic, in accordance with the provisions of article 188 of the Constitution of Peru, through Act No. 25327, delegated to the Executive Branch, among other powers, the ability to issue Legislative Decrees aimed at creating the necessary conditions for private investment in different productive sectors; That it is necessary to consolidate the Structural Reform program of the economy that was undertaken by the Government, the reason for which it is now relevant to issue a Framework Law that contains all of the provisions required for increased private investment in all sectors of the economy; That to meet this goal, eliminating all of the legal and administrative obstacles that delay the development of economic activity and restrict free private initiative is imperative, in order to allow private companies to compete, which is essential for successful entry into the international market; That furthermore, is it necessary to issue provisions that grant legal stability to investors and incentivize a developmental model that harmonizes productive investment with environmental conservation; In accordance with the provisions of paragraph 10 from article 211 of the Constitution of Peru; and, With the approving vote of the Ministry Council; the following Legislative Decree is hereby issued: FRAMEWORK LAW FOR INCREASED PRIVATE INVESTMENT TITLE I THE SCOPE OF THE LAW Article 1. - The purpose of this Law is to guarantee free initiative and private investment, already made or to be made, in all sectors of the economy and in any of the managerial or contractual forms allowed by the Constitution and Law. Establish rights, guarantees, and responsibilities that are applied to all individuals or corporations, national or foreign, who are investors in the country. Their

regulations must be followed by all State organizations, whether they are the central, regional, or local governments, at all levels. TITLE II LEGAL STABILITY OF THE ECONOMIC SYSTEM Article 2. - The State guarantees free private initiative. The Social Economic Market develops based on free competition and free access to economic activity. Article 3. - Free private initiative is understood as the right that all individuals or corporations have to perform the economic activity of their preference, which includes the production or sale of goods or the offering of services, pursuant to the provisions of the Constitution, international treaties signed by Peru, and Law. Article 4. - Free competition implies that prices in the economy are the result of supply and demand, in accordance with the provisions of the Constitution and Law. The only prices that can be administratively set are the fees for public services, in accordance with that expressly stipulated by Congressional Act. Article 5. - The State guarantees economic pluralism. All companies have the right to be organized under any managerial form in the national legislation. Investors or companies direct or indirect access to participating in specific economic activities may not be limited based on the type of business they form. The financial system is excluded from this provision pursuant to the Law that regulates it, and future exceptions established by an Act of Congress. Any statutory provision that contradicts the provisions of this Article is repealed. In the event that the Law establishes that the mining of natural resources or the offering of public services must be made through concessions or other forms of grants to private companies, the provisions of this Legislative Decree shall be respected in that the Law shall not contradict sectoral legislation. Article 6. - Any reserve held by the State, whether it is full or partial, for carrying out economic activities or exploiting natural resources is hereby repealed, with the exception of those referring to protected natural areas. These reserves may only be used due to public interest or national security, and must be expressly stipulated by an Act of Congress or in accordance with the provisions of Article 54 of this Legislative Decree. Pursuant to article 285 of the Constitution, the manufacture of weapons of war can be done by private companies only under agreements held with the State for this purpose. Article 7. - When the same economic activity is performed by the State and by private companies, the same conditions apply to both. In no event shall companies of the State be awarded public administrative powers with the exception of the powers delegated to them by the State in order to enforce tax collection. Article 8. The State guarantees private property without greater limits than those established in the Constitution.

In application of Article 31 of the Constitution, which recognizes freedom of business, and in accordance with the provisions discussed in this chapter, the State shall not expropriate shares or participation in them from companies, except in cases of national interest duly supported by an Act of Congress. Article 9. - In accordance with the stipulations of Articles 130 and 131 of the Constitution, all companies have the right to organize and develop their activities in the manner in which they deem appropriate. Any legal provision which sets production models or productivity indices, prohibits or imposes the use of consumable or technological processes, and, in general, which intervenes in companies production processes with regard to the type of economic activity they perform, their installed capabilities, or any other similar economic factor, with the exception of the legal provisions referring to industrial hygiene and safety, environmental conservation, and health, are hereby repealed. Article 10.- The State guarantees the right to companies, regardless of the type of corporation, to freely agree upon the distribution of all of the assets or dividends generated and the right of the investors to receive all of the distributions due to them, including those corresponding to the current fiscal year in accordance with periodical balance sheets, notwithstanding responsibilities concerning worker participation, legal reserves, and case liability in accordance with the stipulations of the General Corporations Act, as long as the relevant tax obligations are met. The distribution of profits of financial companies is governed by the relevant Act. Article 11.- The State guarantees the offering of basic public services promoting participation from the private sector, with the goal of improving the quality of these services. Article 12.- The State does not establish discriminatory or different treatment with regard to currency exchange, prices, tariffs, or non-tariff fees, between investors and the companies in which they participate, nor based on sectors or types of economic activity, nor on the geographic location of companies. The State may not establish discriminatory or different treatment among national or foreign individuals. No authority, government official, or employee of the central, regional, or local governments at any level, nor companies of the State, may establish or apply discriminatory or different treatment, in accordance with the stipulations of this Article, subject to penalty. Article 13.- In accordance with the terms set forth in the last paragraph of Article 126 of the Constitution, domestic and foreign private investment in productive activities performed or to be performed in the border areas of the country is hereby decreed a national necessity. Therefore, foreign corporations or individuals shall be able to acquire concessions and rights to mines, land, forests, bodies of water, fuels, energy sources, and other resources that may be necessary for the development of their productive activities within fifty kilometers of the country s borders, with prior authorization granted through Supreme Decree countersigned by the Prime Minister and the Minister of the Corresponding Sector. Said Supreme Decree can establish the conditions to which the acquisition or exploitation is subject. The competent sectoral authorities shall award concessions and other forms of authorization for the exploitation of natural resources located with fifty kilometers of the country s

borders to foreign corporations or individuals that request it, assuming they have met the applicable legal provisions and after it has been verified that the Supreme Decree referenced in the previous paragraph has been issued. TITLE III LEGAL STABILITY OF INVESTMENTS WITH REGARD TO TAX LEGISLATION Article 14.- The constitutional principle of legality in tax legislation implies that the creation, modification, and abolition of taxes, as well as the awarding of exonerations and other tax benefits, determination of the taxable event, the taxpayers, recipients and retainers, and of the corresponding rates and the taxable base, should be made by an Act of Congress, in accordance with the stipulations set forth in this Article. The principle of legality is also met in the following cases: a) When legislative decrees are issued under the protection and within the limits established by an Act of delegation of legislative powers, which should expressly determine the tax legislation to be dealt with, the scope of the delegation of powers, and the term for exercising said powers; b) When the regional governments create, modify, or eliminate taxes, or exonerate them under the protection of the powers awarded to them by an Act of Congress, as long as the Act of delegation of powers meets the following requirements: 1. That the specific legislation which is the subject of the delegation, the scope of the delegation and the term for exercising said powers is determined; and 2. In the event of tax creation, that the taxable subject-matter, the tax-generating event, the taxpayers, the exonerations and the corresponding rates, as well as the effective term of the tax authorized to be created, and, if necessary, tax collection or withholding agents, as well as requirements for the tax modification when applicable, are expressly established. In using the taxation powers to which this paragraph refers, the taxes created by the regional governments may not contradict the provisions of national legislation. Regional governments may not create taxes whose taxable matter is subject to national taxation. c) When local governments create, modify, or eliminate taxes, or exonerate them under the protection of the powers awarded to them by an Act of Congress, as long as the Act of delegation of powers meets the following requirements: 1. That the specific law which is the subject of the delegation, the scope of the law and the term for exercising said powers is determined; and 2. In the event of tax creation, that the taxable subject-matter, the tax-generating event, the taxpayers, the exonerations and the corresponding rates, as well as the effective term of the tax authorized to be created, and, if necessary, tax collection or withholding agents, as well as requirements for the tax modification, when applicable, are expressly established.

Contributions, excise taxes, and fees are approved by Municipal Edict, pursuant to that established in this paragraph and within the following limits: 2.1. Improvement contributions are the obligatory payments that taxpayers must make to the municipalities for verifiable individual benefits they get from public works. Return on contributions shall only be used to recover the investment made in said public works or to finance their maintenance, 2.2. Excise taxes are those that must be paid by the taxpayer to the municipality for the public service offered. The amount charged for this service shall not exceed the total cost of the public service and its yield shall only be used for financing the same; 2.3. Fees are the taxes that the taxpayer must pay to the municipality for the administrative services it offers. The amount charged for this service shall not except the total cost of the public service and its yield shall only be used for financing the same. In using the taxation powers to which this paragraph refers, contributions, excise taxes, and fees created by local governments cannot tax the entrance, exit, or transportation of goods, merchandise, products and animals; the road or bridge toll fees established by local governments can only tax the vehicle s use of the public road or bridges built or maintained by the municipality, as long as said routes are not part of the national highway network: d) When tariffs are regulated by Supreme Decree; and, e) When the amount of the tributes marked as fees by Supreme Decree is modified. Article 15.- The principle of publicity regarding tax legislation assumes that all tax regulations must be published in the Official Gazette within no fewer than five (05) calendar days from the expiration date of the formal or substantial tax payments due, with the purpose of allowing taxpayers to make payment. Regarding Legislative Decrees, they must be published within the term issued for carrying out the delegated powers and in advance, as indicated in the previous paragraph. Article 16. - Companies and their investments [sic] shall have the right to appeal before the Tax Court or Customs Court, where appropriate, in matters relating to taxes, contributions, fees, excise taxes, registration fees, duties, fees[sic], and other amounts charged for the processing of administrative procedures, which is subject to legal procedure. The Tax Court or Customs Court, as applicable, is the final administrative stage of proceedings.

TITLE IV LEGAL STABILITY OF INVESTMENTS REGARDING ADMINISTRATIVE LEGISLATION 1 Article 17.- This title applies to all administrative procedures and steps that companies and investments [sic] follow before State authorities. Said procedures must grant certainty regarding the course of applications, and should be simple. All processes and their corresponding requirements should be transparent. Article 18. - For the purpose of easing the responsibilities and obligations imposed on companies and investors regarding Public Administration and starting an effective process of debureaucratization in the country, administrative steps or requirements may only be established through Supreme Decree, Executive Regional Decree, or Municipal Ordinance, depending on whether the matter relates to the central government, regional governments, or local governments. Article 19.- Supreme Decree No. 006-67 SC General Standards of Administrative Procedures Regulation and Act No. 25035, Administrative Simplification Act, govern everything that does not conflict with the requirements of this title. CHAPTER II ELIMINATION OF ADMINISTRATIVE RESTRICTIONS FOR INVESTMENT Article 20.- Ministries, institutions, and public organizations, and other public administration entities of any nature, regardless of whether they fall under the central governments, regional governments, or local governments, are required to pass legal standards with the purpose of drastically unifying, reducing, and simplifying all administrative procedures and steps that are pursued before the respective entity, in accordance with the stipulations of this title. Article 21. - The entities referred to in the previous Article must approve their own Unified Text of Administrative Processes (TUPA), in which the following must appear: a) All administrative procedures carried out before the entity; b) A clear and detailed description of the requirements for each administrative procedure; c) The rating of each step as it applies to: a. If it is automatically approved, pursuant to the stipulations of Article 24 of this Legislative Decree; 2. If an evaluation is required prior to Public Administration, in this case the following should also be determined: 1 Through Supreme Decree No. 094-92-PCM published on January 2, 1993 and included in this Compendium, the standards regarding legal stability of administrative legislation were regulated according to the provisions set forth in Title IV of Legislative Decree No. 757.

2.1 If once the corresponding term expires, positive or negative administrative silence takes place, pursuant to the provisions of Articles 25 and 26 of this Legislative Decree; or, 2.2 If term expiration does not occur and administrative silence does not take place, since Article 27 of this Legislative Decree deals with administrative procedures: d) The cases in which fee payment and the amount of the same takes place; e) The office before which the applications must be filed; f) The competent authority for approval of each step; and, g) The competent authorities or entities to resolve administrative appeals. Article 22.- The TUPAs to which the previous Article refers shall be passed by Supreme Decree from the corresponding sector in the event that the entities are governed by the central government; by Executive Regional Decree if the entities are governed by regional governments, and by Municipal Ordinance if the government is local. The legal standards referred to in the first paragraph of this Article must be approved and published in the Official Gazette before June 30, 1992, under liability of the relevant entity or sector holder; once this term has expired, these requirements will not be enforceable upon the involved parties for carrying out economic activities, all administrative procedures, their requirements, and payment of the corresponding fees that may not have been included in the TUPA. All modifications regarding administrative procedures processed before these entities, to which Article 20 of this Legislative Decree refers, which involve the creation of new processes, their prior evaluation, the origin of failure to respond or the increase in requirements, shall refer to the corresponding TUPA and shall be required to be approved by Supreme Decree, by Executive Regional decree, and by Municipal Ordinance, depending on whether it is falls under the jurisdiction of the central government, regional governments, or local governments, respectively. Notwithstanding the provisions of the previous paragraph, the provisions regarding the elimination of processes or requirements shall be approved by Ministerial Resolution, Regional Executive Resolution, or Municipal Agreement, depending on whether they relate to entities governed by the central government, regional governments, or local governments, respectively. They should also refer to the corresponding TUPA. The TUPAs should be updated annually and published in the Official Gazette no later than June 30th of each year, under the liability of the sector holder or entity with which it regards, unless the current TUPA has not undergone any modifications, in which case interested parties should be notified through publication in the Official Gazette. Otherwise, the provisions of the second paragraph of this Article shall be applicable. Article 23.- Only interested parties may be required to comply with the administrative procedures; no other information, documentation, or payment may be required that does not appear in the same, under liability of the government official who requires it. Article 24.- Applications filed before different Public Administration entities, as referenced in

Article 20 of this Legislative Decree, shall be considered automatically approved on the same day of filing of the corresponding format or appeal, as long as the requirements have been met and the complete documentation as required by the TUPA has been submitted for each case. For the purposes of the provisions of the previous paragraph, automatic approval of the application, a copy of the appeal or form presented by the interested party containing the official seal of receipt shall be sufficient as proof. Article 25.- In exceptional cases, it may be established that the administrative procedures require prior evaluation, which should be stated in the TUPA. In these cases, the relevant entity shall have a maximum term of 30 calendar days to issue a corresponding ruling, counting from the date the application or form was filed. Once this term has expired and no definitive ruling has been issued, the step is considered approved. Article 26.- Only in duly marked cases may it be established that the request or form is considered denied once the above-referenced term has expired, for the purposes of allowing the interested party to file the relevant administrative appeals, which should be included in the TUPA. Article 27.- They are not mandatory for tax procedures, administrative procedures to resolve contentious issues between two or more participants, the procedures for the sale or purchase of goods and services by or for the State, or to those relating to the granting of concessions for infrastructure, the provisions of which are found in Articles 24, 25, 26, 28, and 32 of this Legislative Decree. Article 28.- Applications or forms for administrative procedures that are filed before different Public Administration entities that do not meet the following requirements must be received under the condition of the error or omission being remedied within 48 hours, making note of the issue in both the letter and the copy. Once the referenced term has expired without the error or omission having been rectified, the document shall be considered not filed and shall be returned to the interested party. Article 29.- All documents, applications, or information filed with entities referred to in Article 22 of this Legislative Decree for administrative procedures shall be considered an affidavit and shall be countersigned by the applicant or his representative, who will be responsible for the accuracy of the information and the authenticity of the documents submitted, under penalty of crimes against the public trust established under Title XIX of the Penal Code, as applicable, without prejudice to subsequent administrative tax control. Article 30.- The entities referred to in Article 22 of this Legislative Decree may only charge the fees listed in the TUPA for administrative procedures. Charging these fees may take place only once said procedures are filed at the request of the party, as long as the corresponding procedures involve the entity offering a service inherent to said procedure. The fee amount may not exceed the true cost of the service, maintained by the administrative office of the competent entity, under liability. When the TUPA requires the filing of forms, Public Administration shall accept the filing of simple copies of the corresponding forms in place of the originals, unless the originals are freely distributed and are available to the interested parties.

Article 31.- The entities referred to in Article 20 of this Legislative Decree may request copies of the documents that have been issued by the same entity, [sic] nor documentation that has previously been filed before said entity that has not expired, as established in the same document. Article 32.- Document copies, regardless of whether or not they are certified by notaries, government officials, or public servants in their capacity as such, shall have the same value as the original for meeting the requirements corresponding to the administrative procedures followed before any Public Administration entity referred to in Article 20 of this Legislative Decree. Said entities do not require official translations, filing of unofficial translations is sufficient under the joint liability of the translator and the interested party. Article 33.- Filing of documents or appeals, withdrawal of notifications, certificates, rulings or discounts, information required by interested parties, as well as any other administrative step, shall be made during public service hours. Under no circumstances shall Public Administration entities divide their schedule to spend part of their time only on specific matters. Article 34.- The Public Administration entities to which Article 20 of this Legislative Decree refers must establish only one document processing office, through which interested parties may carry out all procedures and obtain the information they require for administrative procedures. CHAPTER III TRANSPARENCY IN ADMINISTRATIVE PROCEDURES Article 35.- Documents, records, studies, reports, opinions, statistical information, and all other information held by public sector entities must be provided to parties that request it. In the event that the issuing of copies becomes necessary, interested parties must pay the corresponding costs. Documentation and information that may affect national security and foreign relations, information whose scope and circulation is solely internal to public administration, and documentation and information regarding confidential matters pursuant to current legal provisions or referring to commercial or technological secrets are not included. Article 36.- Government officials and public servants that fail to meet the provisions outlined in Article 24 of this Legislative Decree shall incur disciplinary offenses punishable in accordance with the provisions of Article 26 of Legislative Decree No. 276. Interested parties may file, indistinctly or jointly, a complaint appeal referred to in Article 108 of Supreme Decree No. 006-67 - SC, addressed to the internal control body of the respective entity, or file a complaint appeal before the Attorney General referred to in Article 67 Decree No. 52, notwithstanding applicable civil or criminal actions. Article 37.- Persons from whom government officials or public servants or request a donation, promise or any undue advantage to promote, perform or omit a procedure, either in compliance or in violation of their duties, may report such acts, indistinctly or jointly, to the internal control body of the respective entity or the Attorney General under the provisions of Articles 11, 12 and 13 of Legislative Decree No. 52, notwithstanding applicable civil or criminal actions.

TITLE V LEGAL STABILITY OF INVESTMENTS CHAPTER ONE LEGAL STABILITY AGREEMENTS Article 38.- This chapter grants equal treatment to domestic investors and the companies in which they participate, as established by Title II of Legislative Decree No. 662, such that the indicated provisions and those contained in this chapter apply to domestic and foreign investors and the companies in which they participate to the same extent. Article 39.- Legal stability agreements are held under Article 1357 of the Civil Code and have the quality of contracts with the force of law, such that they cannot be modified or rendered null unilaterally by the State. Such contracts are civil and not administrative, and may only be modified or annulled by agreement between the parties. Article 40.- Agreements held under Article 12 of Legislative Decree No. 662 may also have the purpose of guaranteeing the stability of the tax system applicable to companies receiving investments, solely in terms of taxes whose tax base is based on corporate income, as long as the total amount of new investments received by the company is greater than 50% of its capital and reserves and is intended for the expansion of productive capacity or technological improvements. Furthermore, such agreements may be signed when they deal with a transfer of more than 50% of the shares of the companies that make up the business activity of the State. Article 41.- Stability agreements signed under title II of Legislative Decree No. 662 may have the purpose of guaranteeing the stability of the tax system applicable to financial lease agreements, as long as the value of the property which is the subject of the contract is not less than U.S. $2,000,000; if it is less, with a minimum of no less than U.S. $500,000, the acquisition of assets to determine the direct or indirect creation of more than twenty permanent job positions, or no less than $2,000,000 of foreign exchange capital from exports over the course of three years following the signing of the agreement, without any capital contribution obligation or minimum terms. Article 42.-. The State may approve the transfer of a contractual position made by an investor on behalf of another investor with regard to the legal stability agreement that had been signed. Article 43.- All processes and procedures regarding legal stability agreements made by domestic investors shall be filed before the office designated by the Minister of the corresponding sector. Article 44.- Regional and local Governments may enter into legal stability agreements with investors to make investments in their respective jurisdictions, and with the companies established or to be established therein, solely with regard to matters within their jurisdiction. Article 45.- The rights, guarantees and securities discussed in this chapter do not in any way limit the ability of investors or companies to also benefit from systems provided for in other legal provisions.

SECOND CHAPTER PRIVATE INVESTMENT INSURANCE Article 46.- All investors have the ability to contract, within and outside the country, insurance that covers their investments against commercial and non-commercial risk. Article 47.- The State assists investors in covering their investments through the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, or other similar entities of which Peru is a part. Consequently, the State shall take action and file documents required for this purpose in the event that the investors are foreigners. The State agrees to the coverage requested by investors. THIRD CHAPTER DISPUTE RESOLUTION REGARDING INVESTMENTS Article 48.- In relationships with private individuals, the State, is offices, the central governments, regional governments, and municipalities and other persons of public office, as well as companies involved in the business activities of the State, may be subject to national or international arbitration, in accordance with national and international legislation, of which Peru is a part; any disputes regarding its assets and responsibilities, as long are they arise from a legal relationship under private law equity or of a contractual nature. TITLE VI LEGAL STABILITY IN ENVIRONMENTAL CONSERVATION Article 49.- The State promotes a rational balance between socio-economic development, preservation of the environment and sustainable use of natural resources, guaranteeing due LEGAL STABILITY to investors by establishing clear regulations for environmental protection. Consequently, the State supports the participation of private companies or institutions in activities geared towards protecting the environment and reducing environmental contamination. Article 50.- The competent sectoral authorities to preside over the matters related to the application of the provisions of the Environmental and Natural Resources Code are the Ministries or tax organizations, depending on the case, of the sectors corresponding to the activities that the companies perform notwithstanding the powers held by the regional and local governments according to the stipulations of the Constitution.(Text according to the modifications made by the Ninth Additional Provision of Act No.26734). In the event that the company carries out two or more activities with jurisdiction under different sectors, the competent sectoral authority shall be that which corresponds to the activity that generates greater brut or annual revenue for the company. Article 51.- The competent sectoral authority shall communicate with the National Environmental Council (CONAM) regarding activities to be performed in its sector, which due to their environmental risk, could exceed the tolerable contamination or environmental deterioration levels or standards; these companies must present environmental impact studies prior to executing these activities regarding the cumulative maximum allowable limits of environmental impact. Furthermore, the National Environmental Council (CONAM) shall propose:

a) The requirements for the creation of Environmental Impact Studies and Environmental Compliance and Management Programs; b) The process for the approval of said studies, as well as the corresponding supervisions; and c) the other standards regarding Environmental Impact. With a favorable decision from CONAM, the activities and allowable maximum limits of the cumulative Environmental Impact, as well as the proposals mentioned in the preceding paragraph, shall be approved by the Ministry Council by Supreme Decree. Environmental Impact Studies and Environmental Compliance and Management Programs shall be carried out by companies or institutions that are duly qualified and registered under the registry to be opened for this purpose by the competent sectoral authority. (Text according to the modification set forth in Article 1 of Act No. 26786). Article 52.- In cases of grave or imminent danger to the environment, the competent sectoral authority, with an understanding of the CONAM, may order the adoption of one of the following security measures on behalf of the activity holder: (Text according to the modification set forth in Article 2 of Act No. 26786). a) Procedures that eliminate or decrease risk to permissible levels, establishing an appropriate period for said purpose based on its seriousness and imminence; or b) Measures that limit the performance of activities which cause grave and imminent danger to the environment. In the event that carrying out the activities could cause severe, potentially irreversible damage to the environment, life or health of the population, the competent sectoral authority may suspend the permits, licenses or authorizations had been granted for such purposes. Article 53.- Companies that provide water supply services and sewerage must have the appropriate certification that they meet physical-chemical and bacteriological quality standards of drinking water and wastewater treatment conditions for disposal. The directors of these companies, in the event that they do not have the quality certificates with the frequency required by the Ministry of Health, shall be guilty of the crime set forth in Article 305 of the Criminal Code. Quality control of drinking water is the responsibility of companies or public or private institutions specialized in environmental sanitation, which will be duly qualified and registered in a special registry that the Ministry of Health will open for said purposes, which will establish the requirements to be met for said purposes and supervise the activities of the aforementioned companies or institutions. Article 54.- The quality of protected natural area can be granted only by Supreme Decree that meets the approval of the Ministry Council. Protected natural areas may be national, regional or local, according to the government managing them, which shall be determined in the decree of its creation. Management policies of such areas shall be set by the national government. The establishment of protected areas is not retroactive and does not affect rights acquired before creating them.

Article 55.- It is prohibited to bury trash or waste, regardless of its origin or material state, which due to its nature, use, or purpose may be dangerous or radioactive, within national territory. The list of said goods shall be established by Supreme Decree supported by approving vote from the Council of Ministers. Burying any type of trash or waste may only be for the purposes of recycling, reuse, or transformation of said waste. Article 56.- The State may allocate land specifically for the purpose of eco-tourism to private individuals, as property or for use, prior to filing the corresponding complaint. ADDITIONAL PROVISIONS FIRST. - Exceptional measures of national interest that must be taken through corporate restructuring to make companies competitive on a global level, and the actions needed to become competitive against international producers, especially as a result international agreements in Latin America and among the countries that make up the Andean Pact, are governed by the following principles: - Economic system foundations of the Republic, set forth in Article 110 of the Constitution; - Fulfillment of treaties, particularly those regarding the integration referred to in Article 100, 101, and 106 of the Constitution; and, - The duty of all Peruvians to contribute to the common good. SECOND. - Price and tariff increases or improvements in remuneration shall be subject to the following regulations: a) Price and tariffs that, by legal mandate, are administratively set, shall be readjusted taking economic factors into consideration, and not automatic readjustment systems or methods based on price variation indices; and, b) Pacts [and] collective bargaining agreements may not contain fixed automatic wage adjustment systems based on price variation indices, or be agreed upon or related to foreign currency. Workers in the private sector system regulated wholly or partially by standards, pacts, or clauses of this kind are entitled to apply for adjustment of their wages and improving working conditions through the collective bargaining process, as other workers of the common system of private activity; increased production and productivity, among other factors, should be considered. (Text according to the modification set forth in Article 2 of Act No. 25541). THIRD. - With the purpose of promoting private investment in collective fund administration systems and guaranteeing its proper working, the Registry of the Personal Property of the Collective Fund Administration Systems is hereby created, which shall be the responsibility of the National Supervisory Committee of Companies and Securities. By Supreme Decree, countersigned by the Minister of Economy and Finance, the Registry Regulation referred to in the above paragraph shall be approved within a period not exceeding 60 calendar days.

For purposes of calculating the fees referred to in Article 4 of Decree Law No. 23186, the capital shares of the collective fund management companies shall not be taken into account since they are not actual revenue for these companies. FOURTH. - In civil associations, for registration in the relevant Registry of Board Members, filing a copy of the General Board Assembly in which said agreement is stated shall be sufficient. Furthermore, with regard to managers and other legal agents, filing a copy of the certificate from the competent organization shall be sufficient. This provision applies to all entries made after the effective date of this Legislative Decree, even if agreements or appointments have previously been made. FIFTH. - It is hereby specified that foreign entities may conduct business in the country by proxy with special or general powers, for which they may hire staff and obtain work records and other documentation necessary for conducting their activities. The appointment of the representatives of these entities is recorded in the Business Registry, which shall open special certificates in each case. SIXTH.- It shall hereby be understood that all references to minimum monthly living wage made in Articles 1623, 1624, and 1625 of the Civil Code, shall be understood as referring to Tax Units (ITU). SEVENTH.- Paragraph 3 of Article 359 of the General Corporations Act, the consolidated text of which was approved by Supreme Decree No. 003-85-JUS, shall be substituted with the following: "3. Losses which, at the close of the fiscal year, reduce the amount of equity to less than one third of the capital, unless it is reintegrated or reduced, or the shareholders directly or through third-party intermediaries award a guarantee in favor of the company creditors, which includes their acceptance, for an amount equivalent to the equity reduction. EIGHT. - Provision superseded by paragraph a of Article 2 from Decree Act No. 26092. NINTH.- All references made in Legislative Decree No. 613 Environmental and Natural Resource Code to authorities, competent authority, or environmental authority shall be understood as referring to the competent sectoral authority, in other words, the Ministry of the sector corresponding to the activity being performed. Furthermore, all prohibitions made in this legal standard of environmental pollution, shall be understood as exceeding the tolerable pollution levels for each effluent by the competent sectoral authority, taking accumulative degradation into account. TENTH. - Article 137 of Legislative Decree No. 613 shall hereby be substituted with the following: Article 137.- Actions filed in defense of the environment or whose primary legislation has this purpose, are exercised before the judge where the right is affected or where the defendant is domiciled. ELEVENTH. - The person who brings an action before the Judicial Branch under the provisions of the second paragraph of Article 3 of the preliminary title of Legislative Decree No. 613 and which is dismissed, shall be held liable for the damages caused.

TWELFTH.- Legal standards through which the Selective Consumption Tax that affects fuels is set shall be excluded from the terms set forth in Article 15 of this Legislative Decree. THIRTEENTH. - Commercial advertising produced or created outside of Peru that is broadcast through any means of communication in the country must first meet the corresponding tax requirements. For the purposes of valuation and the application of tariffs, said advertising shall receive the same treatment as films to be shown in Peru, where applicable. Media outlets that broadcast commercial advertising produced or created outside of Peru shall require proof of corresponding tax payment. TRANSITORY PROVISIONS FIRST. - Provision superseded by the Second Final Provision of Decree Act No. 25596. SECOND. - The stipulations set forth in the last paragraph of Article 169, in the second paragraph of Article 222, and in section 3 of Article 359 of the Unified Text of the General Corporations Act, approved by Supreme Decree No. 003-85-JUS are hereby suspended until December 31, 1997: (Text according to the modification set forth by Article 1 of Act No. 26724). THIRD. - The provisions found in Acts or Legislative Decrees that establish or regulate systems for setting public tariffs which are valid on the date on which this Legislative Decree takes effect, shall remain in effect until they are adjusted to that stipulated in the first paragraph of Article 4 of this legal regulation by Supreme Decree. FOURTH. - As long as the respective TUPAs referred to in Chapter II of Title IV of this Legislative Decree are not approved, public administration offices, whether they be part of the central government, regional, or local governments, may not raise fees for conducting administrative procedures in effect at the date of entry into force of this Legislative Decree. FIFTH. - It is hereby specified that the provisions set forth in Articles 5 and 29 of Legislative Decree No. 662 mean that the fees or administrative tariffs charges to foreign investors must be reduced to the levels charged to Peruvian nationals once Legislative Decree No. 662 takes effect. FINAL PROVISIONS FIRST. The following legal provisions are hereby superseded: a) Article V of the preliminary title, Articles 8, 17, 56, 57, 58, 89, 107, and 115, and chapters XXI and XXII of Legislative Decree No. 613. b) Act No. 25200, Article 19 of Act No. 25185, and Supreme Decree No. 014-89-PE. c) Paragraph 1 of Article 1599 and paragraph 2 of Article 1913 of the Civil Code. d) Supreme Decrees Nos. 020-90-TR, 021-90-TR, and paragraph c from Article 1 of Supreme Decree No. 034-90-T.

e) Supreme Decrees Nos. 399-86-EF, 400-86-EF, 226-90-EF, 254-90-EF and other additional, modifying, and regulatory provisions; and f) All other legal standards that contradict the provisions of this Legislative Decree. SECOND.- Maintain the stipulations of the fifteenth additional provision of Legislative Decree No. 653 in force. The provisions of Article 12 of this Legislative Decree do not include the provisions in force in defense of agricultural producers, including specific rights, surcharges and safeguard clauses. THIRD. - This Legislative Decree shall take effect thirty days after its publication in the Official Gazette El Peruano.