PERU Law and Practice Contributed by: Alvaro Echeandía, Alfred Kossuth Wieland, Pilar Santillán Meza and Rodrigo Varillas Cueto, Thorne, Echeandia & Lema Abogados
1. Legal System 1.1 Legal System and Judicial Order Peru has adopted a civil law legal system, which means that the law and regulations are the main source to administer justice in the country. For that purpose, the current regulations are divided in order of relevance from the most important to the least, providing a subordinated legal system. In the first place, there is the Political Constitu - tion, which establishes the most basic aspects of the Republic, such as fundamental rights and the structure of the government. The cur - rent document was created and enacted in 1993 with a social market economy approach. Given its importance, the Constitutional Court was established as an autonomous institution with the sole responsibility of resolving conflicts related to constitutional content, as well as being responsible for the interpretation and control of constitutionality. Following on from the Political Constitution, there are the International Treaties that Peru has entered into with other countries, laws created by Congress, laws created by the Executive Power with prior authorisation, and other regu - lations. Peru, as a democratic republic, divides its gov - ernment organisation into three branches with equal hierarchy. Although they have different responsibilities, the government structure is designed to provide checks and balances to pre - vent any branch from overusing its power. The Executive Power is elected every five years and is represented by the President of the Republic, who selects its own team of ministers. • The executive has one minister designated to lead each ministry, who is responsible for
issuing regulations and has the exceptional power to submit bills to the legislature. • The legislative power is composed of 130 members of congress who represent the nation in government, with the primary aim of creating laws. Their term lasts for five years, and they are elected simultaneously with the President of the Republic. • The judicial power is the institution that administers justice in accordance with the laws already enacted. However, it can also establish mandatory guidelines such as jurisprudence and binding precedents. The judicial power, adhering to the right to mul - tiple instances in a judicial process, has the following structure: (a) a Superior Court judge resolves in the first instance; (b) the Superior Tribunal resolves the appeal in the second instance; and (c) the Supreme Court will resolve the cas - sation, that is not a third instance, but an exceptional instance used to correct a misinterpretation of the law. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments In general terms, foreign investments do not require any approval or authorisation by any Peruvian authority. This is because the Peru - vian Constitution provides that local and foreign investments are subject to the same conditions. Peruvian law assures equal treatment before the law to foreign investors and investments; hence, equality of rights and obligations between for - eign and national investors is guaranteed.
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