RESTRICTED
WORLD TRADE G/STR/N/1/PER
25July1995
ORGANIZATION(95-2146)
Original: Spanish
STATE TRADING
Notification Pursuant toArticle XVII:4(a) oftheGATT 1994 andParagraph 1
oftheUnderstanding ontheInterpretation ofArticle XVII
PERU
Thefollowingcommunication,dated3July1995,hasbeenreceivedfromthePermanentMission
ofPeru.
_______________
ThePermanent Mission ofPeru totheUnited Nations Office andOther International
Organizations atGeneva presents itscompliments totheSecretariat oftheWorld Trade Organization
(WTO) andhasthehonour torefer toArticle XVII:4(a) oftheGATT 1994 andparagraph 1ofthe
Understanding ontheInterpretation ofArticle XVII oftheGATT 1994, onState Trading.
Inthisconnection, thePermanent Mission ofPeruwishes tostatethatinaccordance withthe
legalprovisions inforce inPeruanytypeofsoleright, limitation orother monopolistic restriction
orpractice intheproduction ormarketing ofgoods anditsservices hasbeeneliminated. Accordingly,
thePermanent Mission ofPeruwishes todraw attention toLegislative Decree 668,notified earlier
totheGATT on24May1993 (document L/7161/Add.5), which isfullyinforce.
Only onemeasure hasbeenmaintained, concerning ammonium nitrate andthesubstances
necessaryformakingit.Forthisproduct,PerumaintainsthespecialimportrightsfortheStateenterprise
Fertilizantes Sintéticos S.A.(FERTISA). These faculties aregranted forreasons ofinternal security
andhence arefullyjustified under Article XXIoftheGeneral Agreement andinprinciple donotneed
tobenotified under Article XVII. Nevertheless, Peruismaking thisnotification exclusively inthe
interests oftransparency, andincludes information onenterprises previously notified under Article XVII
butwhich noweither havebeenprivatized ornolonger haveexclusive marketing rights.G/STR/N/1/PER
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NOTIFICATION PURSUANT TOARTICLE XVII:4(a) OFTHE GATT 1994 AND
PARAGRAPH 1OFTHE UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII, ONSTATE TRADING
InPeru, anytypeofsoleright, limitation orother monopolistic restriction orpractice inthe
productionandmarketingofgoodsandservicesofanykind,includingonthepartofCentralGovernment
agencies, public entities, enterprises andanyStatebody, havebeeneliminated andprohibited. Aprocess
ofprivatization ofStateenterprises hasaccordingly beencarried out,promoting thefreeparticipation
ofeconomic agents inthemarket. Asanexception, forreasons ofnational security ,thesoleenterprise
thatenjoys special faculties forthemarketing ofammonium nitrate andthenecessary substances used
inmaking itistheenterprise Fertilizantes Sintéticos S.A.(FERTISA S.A.).
Forreasons oftransparency ,thisnotification contains ageneral reference tothesituation of
FERTISA S.A., whose special faculties areconsidered asfalling within theexceptions ofArticle XXI
oftheGeneral Agreement. Italsocontains abriefmention ofother enterprises thatwerenotified in
earlier years pursuant toArticle XVII oftheGATT, butwhich havebeenprivatized ornolonger have
exclusive marketing rights.
I. RESTRICTIONS ONTHEFREE IMPORTATION AND MARKETING OFAMMONIUM
NITRATE
Decree LawNo.25643, published inJuly1992, prohibits thefreeimportation andmarketing
ofammonium nitrate andthesubstances usedinitsmanufacture under anyofitsformulas, presentations
ordenominations. Accordingly, special import faculties aregranted totheStateenterprise Fertilizantes
Sintéticos S.A.
Thespecial powers ofFertilizantes Sintéticos S.A.havebeensignificantly curtailed byDecree
Law25942, published inDecember 1992. Mining enterprises withaninstalled capacity ofover1,000
metrictonnesofmineraloreperdayareallowedtoimporttheabove-mentionedproductsinthenecessary
quantities tocover theirapproved annual production programmes. These enterprises mustfirstobtain
thenecessary authorization inaccordance withthesecurity procedures laiddown intheLaw.
Product subject toprohibition: Ammonium nitrate
Substances usedinitsmanufacture:
Agricultural ammonium nitrate;
Technical ammonium nitrate;
ANFO grade ammonium nitrate;
Concentrated ordiluted nitric acid;
Anhydrous ammonia;
Ammoniacal solutions.
Therestrictions onthefreeimportation ofammonium nitrate andthespecial marketing powers
granted toFertisa S.A.areprompted byreasons ofinternal security. Thismeasure isessential for
Peru'songoing struggle against terrorism. Consequently, itmaintains strict controls overtheimport
andmarketing ofexplosive substances orchemical inputs having anexplosive potential.G/STR/N/1/PER
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II. SUPPLEMENTARY INFORMATION
ThePeruvian Government iscarrying outanambitious process ofprivatization ofState
enterprises. Many enterprises havebeensoldorarebeing privatized. Among those notified under
Article XVII inearlier years wemaymention thatMinero PeruComercial hasbeensoldtotheBrazilian
Ingàenterprise, which belongs totheKIBO group. Empresa Comercial delArroz ECASA, has
transferred itswarehouses, which were itsprincipal asset. Petróleos delPeru(PETROPERU), has
soldoffitsnetwork ofpetrol stations bypublic auction aspartofitsprivatization plan. PescaPeru S.A.,
afish-meal andfish-oil producer andprocessor, hasindependently solditsChicama, Chimbote Centro,
Moliendo, LaPlanchada andAtico processing plants aswellas80percentofitsfishing fleet. The
steelcompany, SIDERPERU, isbeing privatized.
With regard tothemarketing ofstaple foodstuffs formass consumption, Supreme
Decree 66-91-EF eliminated theexclusive food marketing rights oftheEmpresa Nacional de
Comercialización deInsumos (ENCI S.A.). Atpresent, ENCI S.A.markets foodstuffs buthasno
reserved ormonopoly rights ofanykind, andissubject totheprivate-sector competition regime.