Congress approves delegation, but for 90 days only

2 October 2016

On 29 September, following nine hours of parliamentary debate, Congress approved by substantial majorities the proposals put to it by the Kuczynski administration giving the latter the power to legislate on a number of areas. But rather than the 120 days originally requested, the measures will have to be enacted within 90days.

This clearly represents a victory for the new cabinet and its head, Fernando Zavala. Zavala is quoted as saying that it will greatly facilitate the tasks of government, and that the 90-day limit should not represent a problem.

It also represents an important pointer for the future of relations between the executive and the opposition-dominated Congress; a refusal to permit delegated powers would have set the two powers on a dangerous collision course from the very start.

At the request of members of Congress from the Frente Amplio (FA), voting took place separately for the five areas on which delegated powers were presented, namely (i) economic reactivation and formalisation (of the informal sector); (ii) citizen security; (iii) the struggle against corruption; (iv) water and public health; and (v) the reorganisation of Petroperú.

The FA managed to receive assurances that the delegate powers would not be used to privatise water or Petroperú. It voted against the economic measures proposed, but not as to prevent their approval.

Two issues had remained in doubt until the very end.

The first was the opposition by fujimorista members of Congress (Fuerza Popular) to allowing the executive to lower VAT by a percentage point. This was approved.

The second was over the controversial issue that sought to beef up the Unidad de Inteligencia Financiera (IUF). This resulted in a compromise. While the IUF will be empowered to lift banking secrecy with the approval of a judge, it will be blocked from sharing information with the electoral authorities, the Jurado Nacional de Elecciones (JNE) and the Organización Nacional de Procesos Electorales (ONPE). The FP bloc in Congress had bitterly opposed this. Several of their members are believed to have received funding from suspicious sources.

At the same time, the European Commission has just placed Peru on an initial blacklist of 44 countries because of the prevalence of money laundering and other non-transparent financial activities.


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