SECTION 1

CHAPTER 1 CONTENT AND SCOPE

Article 1.

This Regulation contains the rules and procedures for inspection and control to be adopted for the manufacture, processing, packaging and/or repackaging, import, export, sale, stocking, utilization and transport of the chemical products and inputs referred to in Article 2 of Decree Law No. 25623 and in additional rules, in whatever form and presentation.

Its provisions apply to all natural and/or legal persons carrying out any of the foregoing activities.

CHAPTER II DEFINITIONS

Article 2.

Wherever the word "law" is mentioned in this Regulation, this is understood to refer to Decree Law No. 25623.

Article 3.

A "user" is understood to be a natural or legal person who requires any of the chemical products or inputs subject to inspection and control in order to carry out any lawful activity involving their use, production or sale, or the provision of services. This concept does not include domestic users.

Article 4.

For the purposes of the Law, "commercial domicile" is the place where economic activities involving production, selling or the provision of services are carried on. "Actual domicile" means the place in which the administrative offices or legal services of the firm normally operate.

CHAPTER III INSPECTION AND CONTROL

Article 5.

The Division of Chemical Inputs and Controlled Products (DIQPF) of the Ministry of Tourism, Integration and International Trade (MITINCI), in the department of Lima and the Constitutional Province of Callao, or the regional administrative authorities for the places where national firms are located, are the administrative technical and regulatory bodies responsible for the inspection and control of the administrative documentation containing information about the use of the chemical products and inputs which can be diverted to make basic coca paste, washed paste and cocaine hydrochlorate, and for imposing administrative penalties for breaches of Decree Law No. 25623 and this Regulation.

Article 6.

The Ministry of the Interior (MIN), through the Department for Investigation and Inspection of Chemical Inputs (DICIQ) of the Drug Control Directorate (DIRANDRO), police drug control units and other operational units of the National Police of Peru (PNP) at the national level, where the former are absent, will be responsible for the inspection and control of the chemical products and inputs used in all or any of the stages concerned, from manufacture to final consumption, which may involve illegal use in the preparation of drugs.

Items confiscated as a result of police action will be handed over, in accordance with the law, to the Executive Office for Drug Control (OFECOD) for disposal.

SECTION II

CHAPTER I REGISTERS

Article 7.

Manufacturers, processors, packagers and/or repackagers, importers, exporters, wholesalers and retailers of the controlled chemical products and inputs shall be required to maintain a Special Sales Register in which the following information is recorded on a daily basis:

1. Date of sale

2. Invoice number

3. Technical and commercial number of the chemical product or input sold, and the degree of concentration.

4. Quantity, expressed in kilograms and/or litres.

5. First name and surname or company address of the purchaser, whether a natural or a legal person.

6. Code number allocated by DIQPF-MITINCI or by the regional administrative authorities.

7. Tax record or replacement document.

8. Commercial and actual domicile.

9. Place where the goods were handed over.

10. First name and surname of the person receiving the chemical product or input.

11. Details of the transport used (vehicle registration number), name and number of driver's licence)

12. Further details as specified by MITINCI.

The Special Sales Register referred to in article 5 of the Law is the same as that required by article 3.

Article 8.

The consumption of chemical products and inputs subject to control which are intended for the manufacture of goods, whether intermediate or final, and for the provision of services, is to be entered daily in the Special Register of Use Description, as provided in article 3 of the Law, in accordance with the following:

1. Date

2. Quantity of inputs, raw materials or products used (whether controlled or uncontrolled)

3. Result of the in-plant process, specifying:

   - the product manufactured

   - other products

   - by-products from waste

4. In-plant movement of the controlled chemical products and inputs:

   - Incoming items

   - Items subtracted

   - Items remaining

Article 9.

Persons manufacturing, processing, packaging and/or repackaging chemical products and inputs subject to control shall, in addition to the Special Sales Register, keep a Special Production Register as specified in article 5 of the Law, listing the following:

1. Tax record or replacement document

2. Company address

3. Code number allocated by DIQPF-MITINCI or by the regional administrative authorities

4. Record of activity

5. Product obtained

6. Maximum installed plant capacity

7. Chemical products and inputs used and/or raw materials used (controlled and uncontrolled)

   - name, grade, unit of measurement (UM) and volume

8. Origin or source of the chemical products and inputs used and/or the raw materials used

9. Result of the in-plant process- Controlled chemical products

   - Other products

   - by-products and/or waste products

10. Further details as specified by MITINCI.

Article 10.

Firms providing goods transport services for third parties shall maintain a Special Transport Register, with correlative pagination showing the services provided to transfer the controlled chemical products and inputs, whether in their own vehicles or in hired vehicles, with a daily record of the following:

1. Date

2. Company address, name of the sender

3. Location and address of the sender

4. Number of bill of lading or invoice

5. Name of the controlled chemical product or input

6. Volume expressed in kilos or litres g. Number and type of packaging

7. Particulars of the vehicle and registration number

8. Surname, first name and licence number of the driver

9. Surname, first name and address of the addressee

10. Surname, first name and electoral roll number of the recipient

11. The code number of the transporting agent, sender, addressee and/or recipient must also be stated.

12. The information given in this Special Register will be entered in the consignment note to be given to the transport agent, and included in the waybill.

Article 11.

Individual transport agents who receive consignments from third parties and are not covered by the foregoing article shall keep a Goods Manifest with correlative pagination showing in chronological order, for each transport service effected for controlled chemical products and inputs, the information specified in the foregoing article.

Article 12.

The registers to which articles 7, 8, 9 and 10 refer must, before use, be authorized by the DIQPF or by the regional administrative body for the area in which the firm is located.

CHAPTER II THE SWORN STATEMENT

Article 13.

Firms or persons carrying out the manufacture, processing, utilization, sale, import, export, transport, stocking, distribution, packaging and/or repackaging of controlled chemical inputs or products shall submit the following information on a monthly basis in duplicate and in the form of a sworn statement:

a. Manufacturers, processors, packers and/or repackers. The movements shown in the Special Production Register and the Special Sales Register, adding a summary sheet for stock balances.

b. Users and/or manufacturers. The movement shown in the Special Use Description Register, adding the summary sheet for stock balances. In the case of users who are also manufacturers, the movement shown in the Special Production Register must also be recorded.

c. The importers, exporters and wholesalers and retailers. The movement recorded in the Special Sales Register, adding the summary sheet for stock balances together with a copy of the import or export contract, the sales invoice and the bill of lading or waybill where commercial transactions have been made with a foreign country. Exemption from providing this information is granted in the case of establishments retailing display samples and which keep special invoices with correlative numbering, or special codes by which the product can be identified.

d. Firms providing transport services for third parties in their own or hired vehicles, and individual transport agents. The movement shown in the Special Transport Register with correlative pagination and/or a copy of the corresponding waybill.

A special entry will be made for losses or reductions caused in handling these inputs, either by intermediaries or in the production process.

The information specified in paragraphs a), b) and c) of this article, and that specified in article 14, must be submitted within the first ten (10) working days of the end of each month, directly to DIQPF-MITINCI in Lima and Callao, or to the regional administrative body for the place where the firm is located, with a copy to the operational drug control units of the National Police of Peru. In the case of the information referred to in subparagraph d), it must be submitted within the same period, directly to DICIQ-DIRANDRO-PNP in the capital of the Republic, and to the drug control units elsewhere in the country.

Article 14.

Firms providing storage services for third parties must submit the following information:

Incoming items: Date, receipt number, name of the chemical input, degree of purity and/or type, manner of presentation, weight and/or volume in kilos and/or litres, origin, surnames and first names or company address of the depositor, registration number and description of the transport vehicle.

Outgoing items: Date, despatch note number, name of the chemical input, grade of purity, surnames and first names or company or the depositor or the person receiving the goods, manner of presentation, weight and/or volume in kilos and/or litres, final destination with full address, surname and first name of the recipient, registration number and particulars of the transport vehicle.

In the case of chemical inputs originating from abroad, these firms shall also request from the depositor the import permit issued.

Article 15.

Firms engaged in the manufacture, preparation, processing, packaging and/or repackaging and sale, and the users of chemical products and inputs subject to inspection and control, must report any loss, irregular reduction, excessive consumption, or change of weight and/or volume.

These reports will be received in Lima and Callao directly by DIQPF and in the rest of the national territory by the operational drug control units of the National Police of Peru. The acceptable percentages for reductions in chemical products and inputs will be determined by a ministerial decision of MITINCI on the basis of a technical report from the National Industry Directorate.

SECTION III

CHAPTER I ADMINISTRATIVE PROCEDURES

Article 16.

The verification procedure referred to in article 4 of the Law applies to firms starting operations from its coming into force, and comprises findings on the following aspects:

1. The external and internal security of the premises.

2. Security in the immediate vicinity.

3. The installed capacity of the proposed production line, expressed in terms of monthly production volume for the producing firms.

4. Storage (capacity, atmospheric conditions and safety).

5. Other aspects as decided by MITINCI.

In Lima and Callao the verification procedure will be carried out by the DIQPF; the regional administrative authorities will carry it out within their jurisdiction, and the drug control and operational units of the PNP will do so in the rest of the country.

Article 17.

Controlled chemical products and inputs which are packaged and/or repackaged in any of their forms and denominations and are intended for the market must carry a security seal and be labelled to show the name of the product, the degree of purity expressed as a percentage, the unit of measurement and the company address of the packer and/or repacker.

Article 18.

The United Registry offices of MITINCI throughout Peru will require firms to complete the form for "use of controlled chemical products and inputs". These offices will submit each month to the DIQPF a list of the firms registered with this designation, with a copy to the regional administrative sub-offices within their jurisdiction.

Article 19.

Importers and exporters of the chemical products and inputs specified in article 20 of the Law, and their amplifiers and modifiers, must before each operation submit to the DIQPF in Lima and Callao, or to the regional administrative bodies in the rest of the country according to the location of the parties concerned, a request in the form of a sworn statement, adding a copy of the contract, sales invoice and waybill or bill of lading, when applying for the relevant authorization.

Article 20.

The National Customs Authority (SUNAD), on presentation of the authorization referred to in the foregoing article, will satisfy itself that the import or export operations are being carried out according to its terms. SUNAD will submit each month to the DIQPF the information contained in the Register specified in article 14 of the Law, giving an account of all the imports and exports registered by the customs authorities at the national level, with a copy to DICIQ, DIRANDRO and the PNP.

Article 21.

Imports and exports of controlled chemical products and inputs will be effected only through the customs points authorized by the National Customs Authority.

SECTION IV TECHNICAL OPERATIONAL PROCEDURES

Article 22.

All users acquiring controlled chemical products and inputs must request the appropriate Verification Report from the DICIQ-DIRANDRO-PNP in Lima and Callao, and from the police drug control units in the rest of the Republic, attaching to each request a legalised copy of the following documents:

1. A copy of the Articles of Association of the company (in the case of legal persons),

2. The names of the current directors of the company.

3. The tax record or replacement document.

4. The code number allocated by the DIQPF-MITINCI to the user, producer and importer, as applicable,

5. The municipal operating licence

6. The commercial or industrial registration, or combined registration,

7. The electoral roll entry (for natural persons)

8. The technical report on the use of the chemical product and input.

The verification reports will be sent exclusively by the DICIOQ-DIRANDRO, for firms acquiring inputs from the producers and importers.

In the case of natural persons who are users, and retail traders, the verification reports will last for one (1) year, and for the others six (6) months; at the end of this period they will be assessed for renewal.

Article 23.

In order to comply with the Law, the DICIQ-DIRANDRO-PNP in Lima and Callao, and the police drug control and operational units of the National Police of Peru in the rest of the Republic, with the documentation specified in the foregoing article and the assistance of a representative of the Public Ministry, will make a physical inspection of the firm, of the documents supporting its operations, and of the criminal, political and court records of the members of its governing board dealing with the controlled chemical product or input, with a view to issuing the appropriate verification report.

Article 24.

Manufacturers, processors, importers, exporters and wholesale and retail traders in the controlled chemical products and inputs shall require their customers, before the first sale, to submit a legalised copy of the following documents:

1. A copy of the Acts of Association of the company, in the case of legal persons, or a copy of the electoral roll entry in the case of natural persons.

2. The tax record or its replacement

3. The commercial, industrial or combined registration.

4. The municipal operating licence.

5. The verification report.

6. The technical report on the use of the controlled chemical product or input, in the case of users. In addition, prior to each transfer the original will be required of the current police verificationrecord, indicating the date, the numbner of the bill of lading or the invoice number, the controlled chemical product or import, the quantity, the supplier and the signature of the vendor.

Article 25.

The information supplied on a monthly basis by the natural and/or legal persons specified in article 70 of the Law, to the DIQPF in Lima and Callao or to the regional administrative bodies, depending on the location of the firms at the national level, must be verified, assessed and analysed by the DIQPF and compared with the information held in its database, and forwarded to the DIRANDRO-PNP and/or the police drug control authorities within 20 days of the specified term, by means of technical reports, where any presumed offences or breaches are identified as stipulated in this Regulation.

Article 26.

In compliance with article 15 of the Law, the DIQPF and SUNAD will transmit the second copy of the information, within five working days of the term fixed in article 7 of the Law, to the DICIQ-DIRANDRO-PNP and to the drug control units in the provinces, which shall, with the assistance of a representative of the Public Ministry, assess the information and make an appropriate check on firms engaged in production, processing, packaging and/or repackaging, sales, import, export, stocking, possession and transport, and on users presumed to have committed an breach and/or an offence, so that charges can be brought.

Article 27.

Agents effecting transport between provinces of controlled chemical products and inputs must obtain in advance the transport document specified in article 16 of the Law. This document will be issued by the DICIQ-DIRANDRO-PNP in Lima and Callao, and the drug control and/or police units in the rest of the country, for checking at the final destination. Different units in the same firm which are covered by the same office may be registered in the same document.

SECTION IV BREACHES AND PENALTIES

Article 28.

In addition to those defined in article 10 of the Law, punishable offences according to article 11 shall comprise the following:

1. Failure to comply with the rules on safety seals, labels and other methods of identifying the product.

2. Omitting to enter the information, or doing so in an inaccurate or incomplete manner, in the Special Production Register, the Special Register of Use Description, the Special Transport Register or the waybills on which individual transport agents are numbered correlatively..

3. Failure to keep the special registers prescribed by the Law or this Regulation, or doing so without having received the necessary prior authorization.

4. Omitting to submit information about losses, reductions and excessive consumption referred to in article 15 of this Regulation.

5. Evasion of the requirements for control documentation on the part of firms importing controlled chemical products and inputs, by receiving or combining a mixture of chemical products.

6. Effecting imports, exports and/or sales of controlled chemical products and inputs in excess of the relevant authorization.

7. Any other failure to comply with the provisions of the Law or of this Regulation.

Article 29.

The following penalties will apply to the breaches defined in the foregoing article:

a) For the breaches defined in subparagraphs a), b), c) and d): the penalty stipulated in article 11 b) of the Law.

b) For the breaches defined in subparagraphs e), f) and g): the penalty stipulated in subparagraph a) of article 11 of the Law.

These penalties will apply irrespective of the commission of any criminal act.

Article 30.

DIRANDRO-PNP will transmit information concerning breaches by firms providing freight services and by the transport agents involved to the DIQPF in Lima and Callao, or to the regional administrative authorities for the place in which the offending firms are located, with a view to applying the appropriate administrative sanctions.

Article 31.

The second and final administrative authority for awarding administrative penalties is the National Industry Director in Lima and Callao, or the hierarchical superior of the regional authority which imposed the initial penalty, depending on the location of the offending firm.

Article 32.

The fines referred to in article 11 of the Law are understood to refer to the penalty fine authority holding office on the date when the breach was committed, or to another tax authority as determined by the Revenue Administration in accordance with the relevant law.

Article 33.

The expressions "granted or executory" in article 13 of the Law mean that no appeal has been made in time against the decision to award a penalty, or the exhaustion of the administrative remedy by a second instance decision.

Article 34.

The sanction of definitive closure of the establishment will be a applied at the national level by the DIQPF when the administrative procedure has been concluded or exhausted.

Article 35.

The sanction of dismissal referred to in article 11 c) of the Law, and criminal charges against members of the National Police of Peru, the Public Ministry and the National Customs Authority, will be executed by their respective institutions.

Article 36.

In accordance with article 13 of the Law, unpaid fines will be recovered through the coercive procedure established in Decree Law no. 17355.

Article 37.

In accordance with the final paragraph of article 13 of the Law, the percentage of the income generated by fines assigned to MITINCI will be used wholly and exclusively for the maintenance, equipment and operating costs of the DIQPF-MITINCI, for the purpose of keeping it operational, and the percentage assigned to the Ministry of the Interior will be used for the maintenance, equipment and operating costs of the DICIQ-DIRANDRO-PNP. In both cases, a report must be given to the relevant authorities in each sector.

SECTION V CONFISCATED INPUTS

Article 38.

When chemical products and inputs are confiscated in Lima and Callao DIRANDRO, as the central authority for the PNP, will place them at the disposal of OFECOD as provided by law.

Article 39.

Where chemical products and inputs have been confiscated outside the jurisdiction of Lima and Callao, the drug control or police operational units will make them available for recording purposes to OFECOD or the Area Directors of OFECOD in the jurisdiction, according to law, and will ensure they are kept in a safe place.

Article 40.

OFECOD will provide the necessary means for transporting the packages containing the chemical inputs, and the unit acting in the matter must provide appropriate security.

Article 41.

The operational police drug control units of the PNP active in the case will hand over the confiscated chemical products and inputs to the representative of OFECOD, together with the following documentation and information:

1. A copy of the preliminary chemical analysis

2. A copy of the record of seizure

3. The police unit in charge of the case

4. The prosecuting authority in charge of the case

5. The number and date of the police certificate.

Article 42.

The confiscated chemical inputs will be opened, weighed and analysed in the official depository of the Ministry of the Interior, in the presence of representatives of the Public Ministry, DIRANDRO, OFECOD and the expert from the Crime Division Laboratory (DIVCRI).

When the analysis has been completed, the appropriate chemical analysis certificate will be made out, and the packages containing the chemical products and inputs will be secured and sealed, and an identifying label placed on them displaying the following information: place, date of confiscation, type and quantity of the product, unit in charge, date of confiscation and any other information considered necessary.

Article 43.

The Office of Drugs and Chemical Inputs of OFECOD will take steps for the handling, security, storage and preservation of the chemical inputs until they have been neutralized, destroyed, transferred and/or sold in accordance with the provisions in force.

Article 44.

The destruction or neutralization of immobilised chemical inputs which cannot be transferred to the OFECOD depositories will be carried out subject to the appropriate decision of the Ministry and under its responsibility, avoiding damage to the ecology of the area concerned.

This procedure will be carried out in the presence of the representative of the Public Ministry and of the National Police, chemical experts, and the area director of OFECOD for the jurisdiction. A record will be made of the destruction or neutralization, and a legible copy given to OFECOD.

Article 45.

DICIQ-DIRANDRO-PNP will keep a Register of Confiscated Chemical Products and Inputs in its various drug control units, and will submit the information on a monthly basis, according to an established format, to the OFECOD of the Ministry of the Interior.

Article 46.

Confiscated chemical products and inputs which are in usable condition may be sold or transferred by OFECOD at the request of the interested parties and for use by national industries, following appraisal and verification by the DIQPF of MITINCI.

Authorizations will be given by a ministerial decision drafted and executed by OFECOD.

Article 47.

OFECOD will organize a monitoring system for checking incoming and outgoing chemical products and inputs which have been confiscated and which are to be sold, transferred, neutralized or destroyed.

Article 48.

The income generated by the sale of the confiscated chemical products and inputs will be distributed as follows: 50% as an incentive payment to the staff involved, and the remaining 50% to implement the monitoring system of the Ministry of the Interior for chemical products and inputss.

SECTION VI COORDINATION DEPARTMENT

Article 49.

The Coordination Department for the Control of Chemical Inputs and Supervised Products consists of representatives of the Ministry for Industry, Tourism, Integration and International Trade (Department of Supervised Chemical Inputs and Products) and of the Public Ministry. In a support capacity and to coordinate matters for which it is responsible, it also has a representative of the National Customs Authority. This Division has its headquarters at the premises of MITINCI.

Article 50.

Article 51.

Representatives on the Coordination Department for the Control of Chemical Inputs and Supervised Products will be appointed by a decision of the head of the appropriate sector.

SECTION VII TRANSITIONAL PROVISIONS

FIRST. This Regulation must be adopted within sixty (60) working days of its date of publication.

SECOND. On purchase of controlled chemical inputs as defined in the Law and this Regulation, vendors must provide purchasers will the basic information and necessary requirements during the adaptation process.