Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
+1 212 909 6000
November 26, 2019
BY HAND AND BY EMAIL
Dirección General de Asuntos de Economía Internacional,
Competencia e Inversión Privada
Ministerio de Economía y Finanzas
Jirón Lampa 277, piso 5
Lima, Perú
[email protected]
MINISTERIO DE ECONOMÍA Y FINANZAS
Oficina de Gestión Documental
y Atención a [illegible]
27 NOV 2019
R E C I B I D O
Hora: 10.32 N° H.R. 180514
Attn: Pedro Paul Herrera Catalán, Director General de Asuntos de Economía
Internacional, Competencia y Productividad
Notice of Intent to Submit Claims to Arbitration under the United States-
Peru Trade Promotion Agreement of 2006
Dear Mr. Herrera Catalán:
We write on behalf of Freeport-McMoRan Inc. (“Freeport”) and Sociedad Minera
Cerro Verde S.A.A. (“SMCV” or collectively with Freeport “Claimants”).
As you know, in 1998, the Republic of Peru entered into a Stability Agreement
with SMCV to ensure that SMCV and its majority owner, Freeport, could
confidently invest hundreds of millions of dollars in two concessions at
Cerro Verde—one of the world’s most productive copper mines—without the risk
that the prevailing tax or royalty regime would change.
As the Government intended, Freeport and SMCV relied on the
Stability Agreement and invested hundreds of millions of dollars to develop the
Cerro Verde mine. Peru has derived massive benefits from those investments.
A 2018 study of Cerro Verde’s economic impact over the course of the previous
decade found that Cerro Verde’s operations and investments generated an average
impact amounting to a remarkable 2% of Peru’s entire GDP and 29% of
Arequipa’s GDP in 2018. Further, SMCV’s investments have created employment
for thousands of workers in Peru.
www.debevoise.com
[Page 2]
Pedro Paul Herrera Catalán
November 26, 2019
Yet, despite these clear benefits, the Government has for many years consistently
and relentlessly breached the Stability Agreement by imposing on SMCV the very
royalties and taxes from which SMCV was exempted from under the terms of the
Stability Agreement.
The Government also has consistently breached the United States-Peru Trade
Promotion Agreement (“TPA”), including by (i) arbitrarily refusing to waive
hundreds of millions of dollars of punitive penalties and interest even though under
Peruvian law, the Government must waive penalties and interest where, as here, a
taxpayer has “reasonable doubt” as to the proper interpretation of the applicable legal
provision; (ii) denying Claimants a fair hearing before the Tax Tribunal; and
(iii) arbitrarily refusing to fully repay SMCV certain overpayments under President
Humala’s GEM Program. These actions have caused, and continue to cause,
Claimants significant loss.
In these circumstances, Claimants regrettably have no choice but to provide the
Government with the enclosed Notice of Claimants’ intent to submit the dispute to
arbitration pursuant to Article 10.16.1(a) (b) and 10.16.2 of the TPA. Electronic
copies of the supporting documents cited in the Notice will be provided via a
secure file sharing platform and through an encrypted USB drive (the password for
which is D&P47813$).
Claimants remain committed to resolving the ongoing dispute through constructive
dialogue with the Government. They firmly hope that a mutually agreeable way
forward can be found. Claimants look forward to constructive consultations and
negotiations with the Government, without prejudice to their legal rights to have
their dispute resolved through international arbitration under the TPA.
We thank you for your consideration and look forward to hearing from you.
Yours sincerely,
Signature
Donald Francis Donovan
C.C. Mr. Ricardo Ampuero Llerena
Comisión Especial Controversias Internacionales de Inversión
Ministerio de Economía y Finanzas
[email protected]
Enclosures
FREEPORT-MCMORAN INC.
On its Own Behalf and on Behalf of
SOCIEDAD MINERA CERRO VERDE S.A.A.
Claimants
— v. —
THE REPUBLIC OF PERU
Respondent
CLAIMANTS’ NOTICE OF INTENT TO COMMENCE ARBITRATION
UNDER THE UNITED STATES–PERU TRADE PROMOTION AGREEMENT
26 November 2019
[Page i]
[Page 1]
Pursuant to Article 10.16.1(a) (b) and 10.16.2 of the United States–Peru Trade Promotion
Agreement of 2006 (the “TPA”), Freeport-McMoRan Inc. (“Freeport”) and Freeport on behalf
of Sociedad Minera Cerro Verde S.A.A. (“SMCV” or collectively “Claimants”), hereby serve
notice (“Notice”) to the Republic of Peru (“Peru” or the “Government”) of their intention to
submit to international arbitration claims arising out of their investments in Cerro Verde, an
open-pit copper and molybdenum mining complex located in the Arequipa Province of Peru.
1. This Notice arises from Peru’s violations of the contractual commitments it
made more than 20 years ago to induce Freeport and SMCV to invest billions of dollars into the
Peruvian economy, and from Peru’s efforts to sanitize its breaches through tainted proceedings
before the Tax Tribunal that have trampled Claimants’ due process rights.
2. Having successfully induced Freeport and SMCV to invest, and having long
reaped the benefits of those investments, Peru now refuses to provide the fiscal and
administrative stability that it promised in return. Instead, it has compounded its contractual
breaches by disregarding its legal obligation to waive SUNAT’s extraordinarily punitive
penalties and interest; by failing to grant Claimants due process in its proceedings before the
Tax Tribunal; and by failing to fully refund GEM payments that SMCV made in the good faith
belief that it was exempted from paying royalties while the Stability Agreement remained in
force. Peru’s conduct violates Claimants’ rights under Peruvian law, international law, and the
TPA.
3. Claimants accordingly hereby serve Notice of their intent to submit to
international arbitration the claims that:
a) Peru has violated the 1998 Stability Agreement by confirming SUNAT’s unlawful
assessment of the very royalties and taxes that it promised it would not assess;b) Peru has violated Articles 10.4 and 10.5 of the TPA by arbitrarily refusing to waive
SUNAT’s extraordinarily punitive penalties and interest, as required by law;c) Peru has violated Articles 10.4 and 10.5 of the TPA by denying Claimants a fair
hearing before the Tax Tribunal; andd) Peru has violated Articles 10.4 and 10.5 of the TPA by arbitrarily refusing to fully
repay SMCV the GEM overpayments, as required by law.
4. In 1998, the Republic of Peru entered into a Stability Agreement with SMCV
to ensure SMCV and its majority owner, Freeport, that they could confidently invest hundreds
[Page 2]
of millions of dollars in two concessions at Cerro Verde—one of the world’s most productive
copper mines—without the risk that the prevailing tax or royalty regime would change.
5. That assurance is the very reason that stability agreements exist and are
commonplace in international investing: “to promote investment and facilitate the financing of
mining projects” by providing investors the predictability and certainty needed to make
immense, long-term investments without fear that a changing tax or administrative regime will
destroy the value of their investments. Stability agreements are especially crucial in the mining
industry, which is exceptionally capital-intensive, often requiring billions of dollars of
investments before the revenues from those investments can be recovered, typically many
years, or even decades, into the future.
6. Stability agreements are thus equally critical to host countries like Peru to
encourage foreign investment, and thereby stimulate economic activity and revenue. Without a
predictable and stable regulatory environment—and without a government that can be trusted
to stand by its commitments and treat foreign investors fairly—no foreign investor would be
willing to pour into the Peruvian economy the enormous amounts of foreign capital that
Freeport through SMCV has put to work at Cerro Verde.
7. As the Government intended, Freeport and SMCV relied on the Stability
Agreement and invested hundreds of millions of dollars to develop the Cerro Verde Mining
Concession and its Beneficiation Concession. Specifically, in reliance on the Government’s
commitments set forth in the 1998 Stability Agreement, SMCV first invested US$240 million
to expand leaching operations and subsequently invested a further US$850 million in a new
flotation plant. These were precisely the types of investments the Stability Agreement was
meant to induce.
8. Peru has derived massive benefits from those investments. In 2018,
Cerro Verde generated an average impact amounting to a remarkable 2% of Peru’s entire Gross
Domestic Product and 29% of Arequipa’s GDP. SMCV’s investments have created
employment for thousands of workers—11,500 employees on the flotation plant expansion
alone—and in the Arequipa province, SMCV’s tax contributions accounted for over two-thirds
of all tariffs and nearly half of all income taxes collected between 2005 and 2010.
9. Moreover, since 2004, SMCV has gone above and beyond its legal obligations
by participating at the request of the Government in President Garcia’s Voluntary Contribution
Program, pursuant to which SMCV contributed more than US$130 million directly for the
[Page 3]
benefit of the communities in which it operates, and in President Humala’s Special Tax (GEM)
Program, pursuant to which it ultimately paid more than US$100 million based on profits from
its mining activities that were supposed to be subject to stabilization. In both Programs, SMCV
calculated its payments based on the good faith understanding that it was stabilized and not
subject to royalties.
10. Not satisfied with the enormous benefits to the country’s economy or even
with SMCV’s additional voluntary contributions and GEM payments, the Government, acting
through SUNAT, the Tax Tribunal, and its contentious administrative courts, has since 2009
consistently and relentlessly breached the Stability Agreement by imposing new royalties and
taxes on SMCV based on the 2004 Royalty Law and other “modifications or new rules” that the
Government issued while the Stability Agreement remained in force.
11. The Government’s only justification for its reversal is the baseless argument
that the Stability Agreement applies only to SMCV’s leaching facility, and not to its US$850
million flotation plant that is located in and processes minerals from the very same mining and
beneficiation concessions at Cerro Verde. The Stability Agreement makes no such distinction.
To the contrary, it expressly notes that the Agreement arises from SMCV’s request for
stabilization benefits “in relation with the investment in its concession”—not any subpart of the
concession—and expressly provides further that the stabilization benefits apply “to the
concessions [listed] in Annex I”—namely, the Mining Concession and the Beneficiation
Concession, which include both the leaching facility and the flotation plant.
12. The Government’s new position is equally inconsistent with Peruvian
law. Neither the Royalty Law nor the Mining Law and Regulations make any distinction
between processing facilities within a single concession. Rather, under the Royalty Law,
royalties are imposed on the extraction of minerals regardless of how they are processed, and
under the Mining Law and Regulations, stabilization benefits apply to all activities within the
relevant “concessions or Economic Administrative Units.” Nothing in these laws (or in the
Stability Agreement) suggests that a company is meant to split its activities within the same
mining concessions—indeed, with respect to ore mined from the same pit—into stabilized and
unstabilized investments, let alone explains how such a split would be administered.
13. The Government’s position also defies economic common sense. A mining
concession is financed and operated as a single integrated enterprise. To provide the confidence
and predictability required to induce initial and continued investment, stabilization benefits
must likewise apply to the mining concession as a whole, not to any particular project within
[Page 4]
that concession. That is the only interpretation consistent with the text and purpose of the
Stability Agreement. Freeport and SMCV would not have invested nearly US$1 billion in the
Cerro Verde Concessions without the Government’s promises that SMCV’s investments would
be stabilized in their entirety.
14. For all these reasons, SUNAT and the Tax Tribunal illegally imposed the
royalties and taxes at issue here in violation of the Stability Agreement and Peruvian law. But,
the Government’s arbitrary and appropriative conduct does not end there. The Government
now seeks to more than double its windfall by failing to waive hundreds of millions of dollars
of punitive penalties and interest that SUNAT imposed on SMCV, even though waiver of those
penalties and interest was mandatory in the circumstances of this case. As a result of the
usurious interest rate applied, penalties and interest now account for more than 60% of the
US$1 billion that SUNAT claims in total. The arbitrary failure to waive those penalties and
interest constitutes an independent violation of international law and the TPA.
15. Under Peruvian law, the Government must waive penalties and interest where,
as here, a taxpayer has “reasonable doubt” as to the proper interpretation of the applicable legal
provision.
16. Plainly, such reasonable doubt exists here: the Government based its Royalty
Assessments on a completely novel and restrictive interpretation of the scope of stabilization
benefits that finds no support in law or contract, is without precedent, and is contrary to both
prevailing industry practice and the purpose of the stability regime itself. Moreover, prior to
the Government’s about-face, both the Ministry of Energy and Mines and SUNAT had publicly
stated that SMCV did not have to pay royalties as a result of a stability agreement. And in
2014, the first instance Contentious Administrative Court agreed with SMCV’s interpretation
and annulled SUNAT’s 2008 Royalty Assessments. Although other courts subsequently
reversed that decision, the divergent decisions of Peru’s own courts clearly illustrate that the
Government position is—at a bare minimum—subject to reasonable doubt.
17. The Government has further violated the TPA through its gross failure to
afford a fair and impartial Tax Tribunal to Claimants. At every turn, Claimants’ rights to due
process have been trampled:
[Page 5]
18. The due process violations did not end there. In one particularly stunning
instance, SMCV’s challenge was heard—and rejected—by a judge who had just joined the Tax
Tribunal from SUNAT, and in fact had represented SUNAT as its advocate against SMCV in a
prior appeal before the contentious administrative courts. Despite that obviously disqualifying
conflict of interest, the full bench of the Tax Tribunal rejected SMCV’s application to remove
the judge.
19. Serious questions about the Republic’s system of justice are not new. In July
2018, the Government declared a 90-day state of emergency for the judicial branch noting that
the press had revealed “a series of grave and reprehensible acts that hurt the image and
autonomy of the Judiciary” and that there was a need to “adopt urgent administrative measures
to correct and overcome the critical situation of the judicial system.” Also in July 2018, Peru’s
Congress similarly declared a nine-month state of emergency for Peru’s National Magistrates
Council, which appoints judges and prosecutors. Following these declarations, Peru’s
President Martín Vizcarra admitted publicly that the Peruvian “system for administering justice
has collapsed” and that “this problem is not of today, it is structural.”
20. As a result of the SUNAT and Tax Tribunal decisions, SMCV has effectively
been triple-taxed. As noted, SMCV has been assessed over US$1 billion: more than $400
million in taxes and royalties that it should not have to pay under the 1998 Stability Agreement
and Peruvian law, and over $600 million more in unlawful and arbitrary penalties and interest,
[Page 6]
which is effectively double-taxation. In addition, SMCV would have been entitled to offset
64.4% of the payments it made under the Voluntary Contribution Program and 100% of the
payments under the Special Tax (GEM) Program if it was deemed subject to royalties. The
Government cannot have it both ways: if its purported taxes and royalties are not barred by the
Stability Agreement, then SMCV is entitled under Peruvian law to offset those against the
contributions it has made through these Programs. Yet, when SMCV requested SUNAT to
reimburse it for the excess payments under the GEM Program, SUNAT arbitrarily approved
only a partial reimbursement of these overpayments. This effectively constitutes a third tax on
SMCV’s legitimate mining activities at Cerro Verde.
21. Peru’s handling of this controversy reflects precisely the kind of broken
promises and dubious justice that makes investors think twice before investing capital in cross-
border projects—and precisely the kind of unjust treatment that the TPA and the Parties’
Stability Agreement were meant to preclude. Freeport and SMCV took the Government of
Peru at its word, and on the basis of its promises invested massively, to the clear benefit of
Peru.
22. The Parties set up in 1998 the framework for many years of a successful,
mutually beneficial partnership—which they renewed in 2012 by signing a new stability
agreement. But the Government’s conduct in this case, which it has thus far lacked the will to
remedy, has driven a wedge into that collaboration and now threatens to derail the decades of
mutual benefit that can and should result for both Claimants and Peru.
23. Claimants have long sought and would welcome the opportunity to resolve this
matter amicably, with an eye towards future success rather than to past grievances, but in the
absence of such resolution cannot permit their rights under Peruvian law and international law
to be violated.
24. Freeport and SMCV demand nothing more than the stability that they were
promised, and on which they relied in investing hundreds of millions of dollars into the
Peruvian economy. The Government of Peru has richly benefited from those investments. It
must now uphold its side of the bargain.
[Page 7]
25. Claimant Freeport-McMoRan Inc. is an entity incorporated in the State of
Delaware. Freeport’s address is:
Freeport-McMoRan Inc.
c/o General Counsel
333 N Central Ave
Phoenix, AZ 85004-2121
United States of America
26. Freeport indirectly owns 53.56% of the shares of SMCV and controls the
company. SMCV is incorporated in Peru and operates the mining complex at Cerro Verde,
which is located 30 km southwest of Arequipa, Peru. SMCV’s address is:
Sociedad Minera Cerro Verde
c/o General Counsel
Calle Jacinto Ibañez 315 (segundo piso)
Parque Industrial - Cercado
Arequipa, Perú
27. Correspondence with Claimants relating to this matter should be sent to the
undersigned counsel of record at the address below.
28. Peru is a Party to the TPA. Pursuant to Annex 10-C of the TPA, Peru is to be
notified of claims arising under the TPA at the following address:
Dirección General de Asuntos de Economía Internacional, Competencia
e Inversión Privada
Ministerio de Economía y Finanzas
Jirón Lampa 277, piso 5
Lima, Perú
29. Cerro Verde is an open-pit copper and molybdenum mining complex located
about 30 km south of Arequipa, Peru.1 Mining at Cerro Verde dates back as far as the mid-
1880s, but output from the mining complex greatly increased after the Peruvian Government
privatized the mine in the 1990s.2
1 Ex. CE-133, https://www.fcx.com/operations/south-america#cerro_verde_link. ↩
2 Id. (noting that, “[i]n the eight years after privatization, copper production increased by about 350% ↩
and costs were reduced by more than 40%”).
[Page 8]
30. As a result of several large capital investments and expansions by Freeport and
SMCV’s other shareholders, including a multi-billion dollar investment completed in
December 2016, the Cerro Verde mine now has an annual output of approximately one billion
pounds of copper and 30 million pounds of molybdenum,3 making it one of the most productive
and technologically advanced copper mines in the world.
31. SMCV currently employs around 5,000 Peruvian nationals at Cerro Verde,
including full time employees and contractors. But SMCV’s contribution to the local and
national economy goes well beyond employment. A 2018 study of Cerro Verde’s economic
impact over the course of the previous decade found that Cerro Verde’s operations and
investments generated an average impact (direct and indirect) of 2% of Peru’s national GDP
and 29% of Arequipa’s GDP in 2018.
32. SMCV has made other significant contributions to the region. For example, in
2012, SMCV completed the design, construction, and management of a much-needed potable
water treatment plant for the Municipality of Arequipa.4 This US$120 million facility currently
provides water to over 350,000 people, but will be able to serve 750,000 people as Arequipa
continues to grow.5 SMCV has likewise contributed over US$30 million to the construction
and operation of regional dams, including Pillones, Bamputañe, and San José de Uzuña,
preventing water loss to the ocean and ensuring increased availability of water year-round.6
SMCV also makes ongoing contributions to support community development activities,
including support for local nurseries, small business employment, women and community
trainings, communications, and other sustainable development activities.7
3 Ex. CE-129, Jan. 2019 “Boletín Estadístico Minero,” 31 ed., Annex 2, p. 16; Ex. CE-136, Aug. ↩
2019 “Boletín Estadístico Minero,” 31 ed., Annex 2, p. 15.
4 Ex. CE-134, “Expanding Resources, 2012 Working Toward Sustainable Development Report”, ↩
Freeport-McMoRan Copper & Gold, June 24, 2019.
6 See Ex. CE-049, 30 May 2011 Empresa de Generación Eléctrica de Arequipa S.A., Liquidación ↩
Final de Obra — Presa Pillones Egasa - SMCV (documenting SMCV’s agreement to finance the
construction of the Pillones dam); Ex. CE-029, 2006 Audited Financial Statement (documenting
SMCV’s agreement to finance the construction of the San José de Uzuña dam); Ex. CE-036,
23 May 2007 Contrato para la Construcción de la Presa Bamputañe, 1-4 Adendas (documenting
SMCV’s agreement to finance the construction of the San José de Uzuña dam).
7 See Ex. CE-131, 28 May 2019 Apoyo Consultoria, “Análisis del impacto de Sociedad Minera ↩
Cerro Verde en la economía de Arequipa y Perú (2005-2018),” slides 32-33.
[Page 9]
33. SMCV holds two types of concessions at Cerro Verde: (i) a concession to
explore and extract mineral resources in an area called “Cerro Verde No. 1, No. 2, and No. 3”
(the “Mining Concession”);8 and (ii) a concession to process the minerals extracted under the
Mining Concession called “Planta de Beneficio Cerro Verde” (the “Beneficiation
Concession”).9 Together, these two concessions form SMCV’s sole Economic Administrative
Unit (“EAU”).10
34. SMCV has employed two different metallurgical processes to refine the Cerro
Verde minerals in its Beneficiation Concession: leaching and flotation. In simple terms,
leaching is a process through which metals are separated from waste rock using an aqueous
reagent. Flotation is a chemical process through which sulfide minerals are separated from
each other and from waste rock. SMCV extracts all of the Cerro Verde minerals under its only
Mining Concession, and processes all of the minerals either through leaching or flotation under
its only Beneficiation Concession.
35. The Government created SMCV more than two decades ago. Specifically, in
August 1993, as part of a broader privatization process in Peru, the state-owned company
Empresa Minera del Perú S.A. (“Minero Perú”), which had operated Cerro Verde for the
previous two decades, created SMCV and transferred its Mining and Beneficiation Concessions
to SMCV, and offered SMCV for sale.11 In March 1994, Minero Perú sold 91.65% of its
SMCV shares to Cyprus Climax Metals Company (the “1994 Share Purchase Agreement”),
which then assigned its rights under the 1994 Share Purchase Agreement to Cyprus Amax
Mineral Company (together with Cyprus Climax Metals, “Cyprus”).12 In 1999, Freeport’s
predecessor Phelps Dodge Corporation acquired Cyprus and, with it, a majority of SMCV and
the Cerro Verde mining operations.13
36. In the 1994 Share Purchase Agreement, Cyprus agreed with the Peruvian
Government that it would invest in the Cerro Verde mining facilities, including by
8 See Ex. CE-001, 1976 Mining Concession, Supreme Decree No. 027-76-EM/DGM. ↩
9 See Ex. CE-011, 1996 Beneficiation Concession, Resolution No. 339-96-EM/DGM. ↩
10 See Ex. CE-002, 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 44. ↩
11 Ex. CE-011, 1996 Beneficiation Concession, Resolution No. 339-96-EM/DGM. ↩
12 See Ex. CE-004, 17 Mar. 1994 Share Purchase Agreement. ↩
13 See Ex. CE-135, 1 Jul. 2019 Freeport-McMoRan Inc., Sociedad Minera Cerro Verde S.A.A. ↩
Corporate Organizational Chart.
[Page 10]
(i) expanding and modernizing the existing leaching facilities; and (ii) installing new mill and
flotation facilities for processing primary sulfides.14 At the time, SMCV processed mostly
leachable ore, but the Mining Concession contained significant primary sulfide deposits that
could not be processed through leaching. The potential for processing the primary sulfides had
been studied since 1972, including in a 1985 feasibility study commissioned by Minero Perú.15
Processing Cerro Verde’s primary sulfides was of crucial importance to prolong the life of the
mine because the leachable reserves were expected to be exhausted by 2014.16
37. In compliance with the 1994 Share Purchase Agreement, SMCV prepared a
series of studies exploring the possibility of further expanding the leaching facilities. In early
1996, SMCV completed a feasibility study for a US$237 million investment program to expand
the existing leaching plant and improve the associated infrastructure using the latest
technology, thereby increasing Cerro Verde’s annual production capacity from 72 million
pounds to 105 million pounds (the “1996 Feasibility Study”).17
38. SMCV also completed studies exploring the feasibility of installing the new
mill and flotation facilities for processing primary sulfides.18 At the time, the studies concluded
that installing a mill would not be economically feasible,19 among other reasons because of the
high cost of power in the Arequipa region and the absence of an economic water source.20
SMCV nonetheless committed to conducting additional studies and testing to establish whether
it could be economically feasible to process Cerro Verde’s primary sulfides.21
14 Ex. CE-004, 17 Mar. 1994 Share Purchase Agreement, Background (Antecedentes), p. 8 (stating ↩
that Cerro Verde was privatized, among other reasons, to expand its mining operations); id.,
pp. 145-148 (requiring that Cyprus construct and put in service “un circuito de molienda y flotación
convencional de cobre/molibdeno con una capacidad para tratar aproximadamente 28,000 toneladas
por día de sulfuros primarios.”).
15 Ex. CE-023, 2004, Fluor Cerro Verde Primary Sulfide Project Feasibility Study, Executive ↩
Summary, p. 4.
17 See Ex. CE-008, 1996 Feasibility Study, Executive Summary, Section 2. ↩
18 See Ex. CE-014, 1998 Cerro Verde Mill Feasibility Study, Section 1. ↩
19 See Ex. CE-014, 1998 Cerro Verde Mill Feasibility Study, Section 2, pp. 2-7 (stating that “[t]he ↩
project’s economics do not support a prudent investment for construction and operation of a copper
sulfide ore concentrator”).
20 Ex. CE-012, 16 Sep. 1996 Letter from Cyprus to Empresa Minera del Peru, p. 2. See also ↩
Ex. CE-023, 2004 Fluor Cerro Verde Primary Sulfide Project Feasibility Study, Executive
Summary, pp. 9-11 (stating that “[t]he scale of operations and estimated financial performance of
these early studies were constrained by the deposit grade and the availability of economic water and
power supply sources”).
21 Ex. CE-020, 30 Mar. 2001 Escritura de Transacción Extrajudicial, p. [9]. ↩
[Page 11]
39. As set forth in the 1994 Share Purchase Agreement, on 25 January 1996,
SMCV filed an application with the Ministry of Energy and Mines requesting fiscal and
administrative stability for its Mining Concession pursuant to Article 82 of the Mining Law.22
The Mining Law provides that a mining company that has committed to making a large capital
investment either to build a new mining project or expand an existing one can request “tax
stability which shall be guaranteed by contract subscribed with the State for a period of fifteen
years, starting from the year in which [the applicant company] prove[s] the implementation of
the investment or expansion, as appropriate.”23
40. The purpose of these stability agreements is “to promote investment and
facilitate the financing of mining projects.”24 The stability agreements provide investors with
certainty and predictability by, among other benefits, freezing applicable fiscal laws and
regulations. Such stabilization benefits are a common feature in the mining industry. Mining is
extremely capital-intensive, often requiring hundreds of millions of dollars of investment
before any revenue is generated. Investors are thus more likely to obtain financing and commit
significant amounts of capital if they are protected from unforeseen changes in the law and can
predict with reasonable certainty what their fiscal burden will be years into the future.
41. As evidence of their commitment to make an investment, the Mining Law
requires investors to “submit a technical and economic feasibility study” for approval by the
General Directorate of Mining.25 SMCV accordingly supported its application for a stability
agreement by submitting its 1996 Feasibility Study, which the General Directorate of Mining
approved on 6 May 1996.26
42. On 26 February 1998, SMCV and the Government executed the 1998 Stability
Agreement.27 The 1998 Stability Agreement stabilized the fiscal regime (including taxes and
other administrative obligations) applicable to Cerro Verde for a period of fifteen years from
1 January 1999 to 31 December 2013. Specifically, the Agreement provided that “the
modifications or new rules that may be issued” during the 15-year period of stabilization “will
22 Ex. CE-009, 25 January 1996 Solicitud Convenio de Estabilidad, p. [3]. ↩
23 Ex. CE-002, 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 82. See also id., ↩
Art. 83 (“Holders of mining activities who submit investment programs of national currency
equivalent to US$ 20,000,000 for the start of any activity of the mining industry shall have the right
to sign contracts referred to in the preceding article.”).
25 Ex. CE-002, 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 85. ↩
26 See Ex. CE-010, 6 May 1996 Feasibility Study Approval, No. 043-96-EM-DGM-DFM/DFAE. ↩
27 See Ex. CE-013, 1998 Stability Agreement. ↩
[Page 12]
not affect [SMCV] in any way,” including any changes to the income tax rate, custom duties or
municipal taxes.28 The 1998 Stability Agreement moreover excluded the application of any law
passed after 6 May 1996 that “directly or indirectly, denaturalizes the guarantees provided” by
the Agreement.29
43. Clause 1 of the 1998 Stability Agreement referred to SMCV’s Concessions as
the “Cerro Verde Leaching Project,” but expressly stated that SMCV had requested
stabilization benefits “in relation with the investment in its concession: Cerro Verde No. 1,
No. 2, and No. 3.”30 Clause 3 further provided that the stabilization benefits were
“circumscribed to the concessions [listed] in Annex I.”31 Annex I expressly listed both of
SMCV’s concessions, namely the Mining Concession and the Beneficiation Concession.32
44. On 3 December 1999, the Government confirmed that SMCV had successfully
completed construction of the modernized and expanded leaching facilities as set forth in the
1996 Feasibility Study.33
45. As required under the terms of the 1994 Share Purchase Agreement with the
Government and a March 2001 settlement agreement with Minero Perú, SMCV continued
exploring the possibility of processing Cerro Verde’s primary sulfides.34
46. Specifically, in July 2003, SMCV engaged Fluor Canada Ltd. (“Fluor”) to
evaluate further the addition of a “concentrator to treat primary sulfide ore from the existing
mining operation at Cerro Verde.”35 Fluor evaluated two main technology options for treating
the primary sulfide ore, milling and pebble crushing (known as “SABC”) and high pressure
grinding rolls and ball mills (known as “HPGR”) followed by flotation concentration.36 The
28 See Ex. CE-013, 1998 Stability Agreement, Clause 9.5. ↩
33 See Ex. CE-015, 1998 Dictamen Auditec, Fiscal and Accounting Report of SMCV Investments; ↩
Ex. CE-017, 22 Nov. 1999 Minuta de Ejecución de Estudio de Factibilidad; Ex. CE-018,
3 Dec. 1999 Escritura Declarativa de Ejecución de Estudio de Factibilidad.
34 See Ex. CE-004, 17 Mar. 1994 Share Purchase Agreement, Appendix G – Description of Project ↩
Phases, pp. 145-51; Ex. CE-020, 30 March 2001 Escritura de Transacción Extrajudicial, p. [9].
35 Ex. CE-023, 2004 Fluor Cerro Verde Primary Sulfide Project Feasibility Study, Executive ↩
Summary, p. 1.
[Page 13]
new HPGR technology presented “financial advantages due to lower operating costs.”37 Prior
constraints regarding the absence of economic power and water sources were resolved through
upgrades in power lines and SMCV’s participation in a reservoir project that secured water
rights for Cerro Verde.38 Fluor thus concluded that “[t]he project as currently conceived
appears to have sound investment potential”39 and that the expected cost of the new facilities
for treating the Cerro Verde primary sulfides would exceed US$800 million.40
47. On 30 January 2004, SMCV submitted a proposal to the Government to invest
the US$800 million needed to construct the new facilities (the “Flotation Plant”), which the
Government approved on 9 December 2004.41 During the two-year construction of the
Flotation Plant, SMCV ultimately invested a total of US$850 million and employed 11,500
people.42
48. In late 2006, SMCV started the test period for extracting the Cerro Verde
primary sulfides and started operating the Flotation Plant.43 On 26 February 2007, the
Government issued a Resolution approving the extension of SMCV’s Beneficiation Concession
to include the Flotation Plant.44 Since the Stability Agreement expressly covered the
Beneficiation Concession, the Government’s Resolution extending the Beneficiation
Concession to include the Flotation Plant confirmed that the Government itself understood that
the stabilization benefits also covered the Flotation Plant.45
39 Ex. CE-023, 2004 Fluor Cerro Verde Primary Sulfide Project Feasibility Study, Report Cover ↩
Letter, p. [2].
41 Ex. CE-028, 9 Dec. 2004 Ministry of Energy and Mines, Ministerial Resolution No. 510-2004- ↩
MEM/DM (approving SMCV’s proposal). See Ex. CE-026, 3 Dec. 2004 Ministry of Economy and
Finance, Oficio No. 942-2004-EF/10; Ex. CE-027, 3 Dec. 2004 Ministry of Economy and Finance,
Report No. 209-2004-EF/66.01.
42 See Ex. CE-028, 9 Dec. 2004 Ministry of Energy and Mines, Resolution No. 510-2004-MEM/DM; ↩
Ex. CE-040, 30 Oct. 2009 Ministry of Energy and Mines, Resolution No. 213-2009-MEM/DM.
43 Ex. CE-035, 26 Feb. 2007 Ministry of Energy and Mines, Directorial Resolution No. 056-2007- ↩
MEM/DGM, p. 23.
44 See Ex. C-035, 26 Feb. 2007 Ministry of Energy and Mines, Directorial Resolution No. 056-2007- ↩
MEM/DGM.
45 See Ex. CE-013, 1998 Stability Agreement, Annex 1. ↩
[Page 14]
49. In March 2007, Phelps Dodge merged with Freeport, which became the
indirect majority owner of SMCV.46
50. On 24 June 2004, Peru passed the Royalty Law, which defines royalties as “the
economic consideration that the title holder of the mining concession pays to the State for the
exploitation of metallic and non-metallic mineral resources.”47
51. When the Government passed the Royalty Law, senior Peruvian Government
officials acknowledged publicly that SMCV and other mining companies would be exempted
from royalty payments while their stability agreements remained in force.
52. In March 2004, for instance, the then-Vice-Minister of Energy and Mines
Mr. César Polo stated in a presentation to the Peruvian Congress that “the royalty regime would
apply only to a percentage of national mine production” “because of the tax stability
agreements entered into by the Peruvian State.”48 Mr. Polo’s presentation specifically
identified SMCV as one of the companies benefitting from stabilization and noted that SMCV’s
relevant “mining unit” for stabilization purposes was “Cerro Verde No. 1, No. 2, and No. 3.”49
53. Similarly, in May 2006, SUNAT’s then-National Intendent, Ms. Nahil Hirsh,
and the then-Minister of Economy and Finance, Mr. Fernando Zavala, also stated in a
presentation to the Peruvian Congress that SMCV and other mining companies were not subject
to the Royalty Law because of stability agreements with the Government.50 The El Comercio
newspaper quoted Ms. Hirsh as stating that SMCV was among “10 companies that were not
paying royalties” because of “administrative stabilization contracts, agreements with contract-
law status that guarantee exchange rate, tax and administrative stability, and that shield these
companies against the Royalties Act and other obligations created after their contracts.”51
46 See Ex. CE-135, 1 Jul. 2019 Freeport-McMoRan Inc., Sociedad Minera Cerro Verde S.A.A. ↩
Corporate Organizational Chart.
47 Ex. CE-024, Royalty Law, Law No. 28258, Art. 2. ↩
48 Ex. CE-022, 11 Mar. 2004 “Evaluación de Applicación de Regalías, Presentación al Congreso ↩
Ministerio de Energía y Minas,” slide 11. See also id., Slide 13 (“El impacto de la regalía en la
recaudación no sería el esperado, como consecuencia de los contratos de estabilidad tributaria.”).
50 See Ex. CE-031, 4 May 2006 “Congresistas critican contratos de estabilidad y mineras los ↩
defienden,” EL COMERCIO.
51 Ex. CE-031, 4 May 2006 “Congresistas critican contratos de estabilidad y mineras los defienden,” ↩
EL COMERCIO (“[A]ccording to MEM, these companies do not pay because they are under the
umbrella of administrative stability.”).
[Page 15]
54. In the good-faith belief that it was fully exempted from paying any royalties
under the Royalty Law until the 1998 Stability Agreement expired at the end of
December 2013, SMCV made no royalty payments for any of the minerals extracted in the
Cerro Verde Mining Concessions. The Government nonetheless received significant revenues
from the Cerro Verde mine, particularly after SMCV had expanded its leaching facilities and
constructed the Flotation Plant. During the period between 2005 and 2010, SMCV’s tax
contributions represented approximately 82% of all tariffs and 47% of all income taxes
collected in the Arequipa Province.52
55. Moreover, because SMCV was fully exempted from paying royalties, the
Government demanded a higher rate of contribution when SMCV agreed to participate in
President Alan Garcia’s Voluntary Contribution Program, which sought to encourage mining
companies to dedicate a larger portion of their proceeds to projects promoting social welfare
and development in the communities where their mining projects were located. Specifically, on
28 January 2007, SMCV signed a Voluntary Contribution Agreement with the Government by
which SMCV agreed to contribute 3.75% of its annual net profits to local and regional mining
funds.53 SMCV ultimately contributed over US$130 million to the funds for projects
supporting childhood nutrition, primary education, health, and other social goals.
56. After the Voluntary Contribution Agreement expired, SMCV participated in
President Humala’s Special Tax (GEM) Program, which sought additional payments to the
Government based on profits accruing from mining activities subject to stabilization. On
28 February 2012, SMCV signed a GEM Agreement54 with the Government and once again,
the Government demanded a higher rate of contribution because SMCV was fully exempted
from paying royalties. Ultimately, SMCV paid more than US$100 million in GEM payments.55
The Government received those payments in full, thereby ratifying SMCV’s understanding that
52 See Ex. CE-047, Mar. 2011, Apoyo Consultoria, “Estudio del Impacto de las Actividades de ↩
Sociedad Minera Cerro Verde en la Economía de Arequipa y del Perú (2005-2010),” Slide 26.
53 See Ex. CE-033, 18 Jan. 2007 SMCV Voluntary Contribution Agreement, Arts. 2.2, 2.4, 3.1. ↩
54 See Ex. CE-056, 28 Feb. 2012 Gravamen Especial a la Minería (GEM Agreement), approved by ↩
Law No. 29790.
55 See Ex. CE-057, 29 Feb. 2012 SMCV GEM Payment, 4Q 2011; Ex. CE-058, 31 May 2012 ↩
SMCV Gem Payment, 1Q 2012; Ex. CE-059, 31 Aug. 2012 SMCV Gem Payment, 2Q 2012; Ex.
CE-061, 30 Nov. 2012 SMCV Gem Payment, 3Q 2012; Ex. CE-062, 28 Feb. 2013 SMCV GEM
Payment, 4Q 2012; Ex. CE-070, 30 May 2013 SMCV Gem Payment, 1Q 2013; Ex. CE-077, 28
Aug. 2013 SMCV Gem Payment, 2Q 2013; Ex. CE-081, 28 Nov. 2013 SMCV Gem Payment, 3Q
2013; Ex. CE-084, 27 Feb. 2014 SMCV GEM Payment, 4Q 2013.
[Page 16]
it was exempted from paying royalties and that it was not entitled to any deductions on account
of royalty payments.56
57. Yet, after receiving these hundreds of millions of dollars from SMCV in
investments, taxes and voluntary contributions, the Government reneged on its contractual
obligation to provide SMCV with the fiscal and administrative stability it had promised. On 17
August 2009, SUNAT assessed royalties under the Royalty Law against SMCV in the amount
of US$28.8 million57 for the minerals processed in the Flotation Plant between December 2006
and December 2007 (the “2006/07 Royalty Assessments”).58 In addition, SUNAT also
imposed on SMCV penalties and interest accruing at a punitive rate of 14.4% per year, which
as of 31 October 2019 accumulated to around US$77 million, more than twice the value of the
2006/07 Royalty Assessments.59
58. SUNAT’s 2006/07 Royalty Assessments reflected a complete about-face by
the Government and were based on an entirely novel and restrictive interpretation of the
Mining Law and Regulations. Although SMCV extracted all of the Cerro Verde minerals
under its sole Mining Concession and processed all of those minerals under its sole
Beneficiation Concession, both of which were covered by the 1998 Stabilization Agreement,
SUNAT now took the baseless position that only the minerals processed by the leaching facility
were covered by the 1998 Stability Agreement, whereas the minerals processed by the flotation
plant within the same Beneficiation Concession were not.60
59. SUNAT attempted to justify this artificial distinction by claiming that
stabilization benefits were limited to the investments set forth in the feasibility study submitted
to the Government for purposes of obtaining stabilization benefits.61 Under SUNAT’s novel
interpretation, the scope of the 1998 Stability Agreement was therefore allegedly limited to the
investments set forth in the 1996 Feasibility Study.62
57 All Assessment values in this Notice are based on an exchange rate of 3.321 Soles to 1 U.S. dollar. ↩
58 See Ex. CE-037, 17 Aug. 2009 SUNAT Royalty Assessment, 2006-07 Case. ↩
59 On 10 October 2013, SMCV signed (under protest) an installment plan with SUNAT for the ↩
payment of the royalties and penalties and interest due to the Government. Under the installment
payment plan, the applicable interest from 10 October 2013 until SMCV fully pays all amounts due
is 11.52%. See Ex. CE-080, 10 Oct. 2013 SUNAT Arequipa Regional Office Administrative
Decision No. 0510170003363.
60 See Ex. CE-037, 17 Aug. 2009 SUNAT Royalty Assessment, 2006-07 Case, folio 1/2. ↩
[Page 17]
60. SUNAT’s position violated the plain terms of the Royalty Law, which imposes
royalties on the extraction of mineral resources, irrespective of whether the minerals are
leached, processed in a flotation plant, or sold without any processing.63 Moreover, neither the
Mining Law nor the Regulations limit stabilization benefits to the specific investments set forth
in the feasibility study. On the contrary, they expressly provide that stabilization benefits
attach to all activities performed by the “title holder of the mining activity”64 within either a
particular concession or a particular EAU consisting of multiple related concessions.65 For
instance, Article 83 of the Mining Law provides that stability benefits “extend exclusively to
the activities of the mining company in whose favor the investment is made,”66 without any
limitation to the investments set forth in the feasibility study. Likewise, Article 22 of the
Regulations provides that stability benefits apply to a mining company “exclusively for
investments it makes in the concessions or Economic Administrative Units,”67 also without any
limitation.
61. In addition to being inconsistent with the Royalty Law, the Mining Law, and
the Regulations, SUNAT’s novel and restrictive position also ran counter to prevailing industry
practice and commercial sense. SUNAT’s positon results in a single mining concession having
multiple fiscal and administrative regimes, even though stability agreements (including the
Stability Agreement at issue here) and Peruvian law and regulations provide no guidance
whatsoever about how a mining company is meant to split its activities within a single
concession into stabilized and unstabilized investments for accounting and tax (or any other)
purposes. At the same time, SUNAT’s position contradicts the very purpose of the stability
regime—to provide mining companies like Freeport and SMCV with the clarity and
predictability they need to invest and attract financing for their capital-intensive investments.
62. Accordingly, on 15 September 2009, SMCV requested that SUNAT reconsider
the 2006/07 Royalty Assessments.68 A few months later, on 31 March 2010, SUNAT rejected
SMCV’s reconsideration request.69
63 See Ex. CE-025, 15 Nov. 2004 Royalty Law Regulations, Supreme Decree No. 157-2004-EF, ↩
Art. 4; Ex. CE-002, 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 8.
64 See Ex. CE-003, 1993 Mining Regulations, Supreme Decree No. 024-93-EM, Arts. 1, 2.; ↩
Ex. CE-002, 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 72.
68 See Ex. CE-038, 15 Sep. 2009 SMCV Request for Reconsideration, 2006/07 Royalty Assessment. ↩
[Page 18]
63. After the initial 2006/07 Royalty Assessments, SUNAT continued to issue
further Royalty and Tax Assessments against SMCV, all of which were premised on the same
novel and restrictive interpretation of the scope of stabilization benefits. For each assessment,
SMCV requested that SUNAT reconsider its position, but SUNAT rejected each request:
69 See Ex. CE-042, 31 Mar. 2010 SUNAT Rejects SMCV Request, 2006/07 Royalty Assessment, ↩
notified to SMCV on 22 April 2010.
70 See Ex. CE-043, 1 Jun. 2010 SUNAT Royalty Assessment, 2008 Royalty Assessment. ↩
71 See Ex. CE-046, 31 Jan. 2011 SUNAT Rejects SMCV Request, 2008 Royalty Assessment, notified ↩
to SMCV on 17 February 2011.
72 See Ex. CE-050, 27 June 2011 SUNAT Royalty Assessment, 2009 Royalty Assessment. ↩
73 See Ex. CE-051, 9 Aug. 2011 SMCV Request for Reconsideration, 2009 Royalty Assessment; ↩
Ex. CE-054, 21 Dec. 2011 SUNAT Rejects SMCV Request, 2009 Royalty Assessment, notified to
SMCV on 26 December 2011.
74 See Ex. CE-091, 13 Apr. 2016 SUNAT Royalty Assessment, 2010/11 Royalty Assessment. ↩
75 See Ex.CE-094, 11 May 2016 SMCV Request for Reconsideration 2010/11 Royalty Assessment; ↩
Ex. CE-096, 29 Dec. 2016 SUNAT Rejects SMCV Request 2010/11 Royalty Assessment, notified
to SMCV on 1 Mar. 2017.
[Page 19]
64. In addition to the Royalty Assessments, the Government also imposed on
SMCV several Tax Assessments in violation of the 1998 Stability Agreement. For instance,
SUNAT and the Tax Tribunal have (i) applied the then current 19% sales tax rate, instead of
the stabilized 18% rate; (ii) imposed additional dividend taxes beyond what the Stability
Agreement requires; (iii) penalized SMCV for depreciating assets according to the terms of the
1998 Stability Agreement; (iv) imposed a Special Mining Tax that under the 1998 Stability
Agreement did not apply to SMCV; and (v) contrary to Article 22 of the Regulations, penalized
76 See Ex. CE-099, 29 Dec. 2019 SUNAT 4Q 2011 Royalty Assessments. ↩
77 See Ex. CE-100, 15 Feb. 2018 SMCV Request for Reconsideration 4Q 2011; Ex. CE-116, ↩
12 Oct. 2018 SUNAT Rejects SMCV Request 4Q 2011, notified to SMCV on 30 Oct. 2018.
78 See Ex. CE-101, 28 Mar. 2018 SUNAT Royalty Assessment, 2012 Royalty Assessment. ↩
79 See Ex. CE-103, 17 May 2018 SMCV Request for Reconsideration, 2012 Royalty Assessment; ↩
Ex. CE-126, 11 Jan. 2019 SUNAT Rejects SMCV Request, 2012 Royalty Assessment, notified to
SMCV on 23 January 2019.
80 See Ex. CE-115, 28 Sep. 2018 SUNAT Royalty Assessment, 2013 Royalty Assessment. ↩
81 See Ex. CE-117, 7 Nov. 2018 SMCV Request for Reconsideration, 2013 Royalty Assessment; ↩
Ex. CE-132, 28 May 2019 SUNAT Rejects SMCV Request, 2013 Royalty Assessment, notified to
SMCV on 28 May 2019.
[Page 20]
SMCV for not keeping separate accounts for the minerals processed in the two different
facilities, despite SMCV extracting all minerals under its one and only Mining Concession.82
The various Tax Assessments that violated the 1998 Stability Agreement and the Mining Law
and Regulations are listed in Annex A hereto.
65. After SUNAT denied SMCV’s reconsideration requests of the 2006/07 and
2008 Royalty Assessments, SMCV appealed SUNAT’s Assessments to the Tax Tribunal. In
Peru, the Tax Tribunal forms part of the Ministry of Economy and Finance (the “MEF”) within
the Executive Branch of the Peruvian Government and is the “last administrative instance in tax
and custom matters.”83
66. Tax Tribunal judges are supposed to be independent and impartial, but in
practice have perverse incentives to decide cases involving significant monetary value amounts
in favor of SUNAT and the judges’ employer, the MEF. The MEF appoints and employs the
Tax Tribunal judges, and by law 2.3% of the total tax funds and 1.2% of the total custom funds
raised by SUNAT are assigned to the Tax Tribunal’s yearly budget.84 Therefore, the higher the
Government’s tax and custom revenues, the higher the budget for the Tax Tribunal.
67. In SMCV’s case, the Tax Tribunal was neither independent nor impartial and
instead worked closely with SUNAT to uphold the 2006/07, 2008, 2009 and 2010/11 Royalty
Assessments in violation of SMCV’s due process rights.
82 See Ex. CE-013, 1998 Stability Agreement, Annex 1. ↩
83 See Ex. CE-016, 19 Aug. 1999 Peruvian Tax Code, Supreme Decree No. 135-99-EF, Art. 101(1); ↩
Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 101(1);
Ex. CE-086, 23 May 2014 Regulation of the Organization and Functions of the Ministry of
Economy and Finance, Supreme Decree No. 117-2014-EF, Art. 18 (“El Tribunal Fiscal es el órgano
resolutivo del Ministerio que constituye la ultima instancia administrativa en materia tributaria y
aduanera, a nivel nacional.”).
84 See Ex. CE-073, Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 99° (“El Vocal ↩
Presidente, Vocal Administrativo y los demás Vocales del Tribunal Fiscal son nombrados mediante
Resolución Suprema refrendada por el Ministro de Economía y Finanzas.”); Ex. CE-016, Peruvian
Tax Code, Supreme Decree No. 135-99-EF, Art. 98°(4); see also Ex. CE-019, 7 Dec. 2000
Urgency Decree No. 112-2000, Article 1 (covering 2000-2003); 19 Dec. 2003 Law No. 28129
(covering 2004); 21 Dec. 2004 Law No. 28426 (covering 2005); 22 Dec. 2005 Law No.28653
(covering 2006); 12 Dec. 2006 Law No. 28929 (covering 2007); 10 Dec. 2007 Law No. 29144
(covering 2008); 11 Dec. 2008 Law No. 29291 (covering 2009); 8 Dec. 2009 Law No. 29467
(covering 2010); 9 Dec. 2010 Law No. 29628 (covering 2011); 9 Dec. 2011 Law No. 29813
(covering 2012); 4 Dec. 2012 Law No.29952 (covering 2013); 2 Dec. 2013 Law No. 30115
(covering 2014); 4 Dec. 2014 Law No. 30282 (covering 2015); 6 Dec. 2015 Law No. 30373
(covering 2016); 2 Dec. 2016 Law No. 30519 (covering 2017); 7 Dec. 2017 Law No. 30694
(covering 2018).
[Page 21]
68. SMCV appealed the 2006/07 Royalty Assessments to the Tax Tribunal on
22 June 2010, and the 2008 Royalty Assessments on 10 March 2011.85 It has been the Tax
Tribunal’s long-standing practice to decide cases in the order in which they are filed.86
Accordingly, the Tax Tribunal should have first resolved SMCV’s appeal on the 2006/07
Royalty Assessments. But following a series of grave irregularities, the Tax Tribunal first
issued a decision regarding SMCV’s appeal of the 2008 Royalty Assessments.87
69. Specifically, on 5 April 2013, Chamber No. 10 of the Tax Tribunal, which was
assigned the first-filed appeal of the 2006/07 Royalty Assessments, held an oral hearing.88
Before Chamber No. 10 could render its decision, however, Chamber No. 1, which was
assigned the later-filed appeal of the 2008 Royalty Assessments, suddenly and unexpectedly
scheduled an oral hearing for 2 May 2013.89 This was highly unusual since SMCV filed its
appeal of the 2008 Royalty Assessments almost nine months after filing the appeal of the
2006/07 Assessments.90
70. As a review of the Tax Tribunal case files revealed, on 24 April 2013, the Tax
Tribunal President’s assistant, Ms. Ursula Villanueva, sent an ex parte communication to
SUNAT Arequipa requesting a copy of SMCV’s first Stability Agreement of 1994, which
SUNAT promptly provided her that same day.91 According to the Tax Tribunal’s rules of
85 See Ex. CE-044, 22 June 2010 SMCV Appeal to Tax Tribunal, 2006/07 Royalty Assessments; ↩
Ex. CE-048, 10 Mar. 2011 SMCV Appeal to Tax Tribunal, 2008 Royalty Assessment.
86 See Ex. CE-128, Law of Administrative Procedure, No. 27444, Article 159(1) (“En el impulso y ↩
tramitación de casos de una misma naturaleza, se sigue rigurosamente el orden de ingreso.”).
87 See Ex. CE-066, 21 May 2013 Tax Tribunal Decision, No. 08252-1-2013 (confirming SUNAT’s ↩
rejection of SMCV’s reconsideration request over the 2008 Royalty Assessments); Ex. CE-071,
30 May 2013 Tax Tribunal Decision, No. 08997-10-2013 (confirming SUNAT’s rejection of
SMCV’s reconsideration request over the 2006/07 Royalty Assessments).
88 See Ex. CE-063, 5 Apr. 2013, Record of Oral Hearing No. 0286-2013-EF/TF. ↩
89 See Ex. CE-064, 9 Apr. 2013, Notification of Oral Hearing No. 0411-2013-EF/TF (scheduling an ↩
oral hearing for the 2008 Royalty Assessment appeal for 2 May 2013).
90 See Ex. CE-044, 22 June 2010 SMCV Appeal of 2006/07 Royalty Assessments to Tax Tribunal; ↩
Ex. CE-048, 10 Mar. 2011 SMCV Appeal of 2008 Royalty Assessments to Tax Tribunal. See also
Ex. CE-128, Law of Administrative Procedure, No. 27444, Article 159(1) (establishing the practice
that cases should be determined in the order filed).
91 See Ex. CE-065, 24 Apr. 2013 2:37 P.M. Email sent by Ursula Villanueva to Gabriela Bedoya at ↩
SUNAT (“Escribo en relación al ... Cerro Verde ... a fin que nos puedan hacer llegar [illegible]
esta vía el primer convenio de estabilidad suscrito por la empresa el año 1994.”); 24 Apr. 2013 2:55
P.M. Email sent by Gabriela Bedoya at SUNAT to Ursula Villanueva (attaches “Contrato de
Garantias y Medidas de Promocion a la Inversion Resolucion Ministerial No. 011-94-EM/VMM.”).
See also Ex. CE-004, 1994 Share Purchase Agreement, Appendix H, p. 154.
[Page 22]
procedure, the Tax Tribunal may request parties to provide additional documents but only if the
request is signed by the judge presiding over the case (“vocal ponente”), not by the assistant to
the Tax Tribunal President, as was the case here.92 The request also must be made through a
formal written communication and not by ex parte emails, both of which rules the assistant to
the Tax Tribunal President violated.93
71. On 21 May 2013, within just weeks of holding an oral hearing and before
Chamber No. 10 rendered its decision on the first-filed appeal of the 2006/07 Assessments,
Chamber No. 1 rendered its decision confirming the 2008 Royalty Assessments and rejecting
all of SMCV’s claims.94
72. The Chamber No. 1 decision confirming the 2008 Royalty Assessments bears
the initials of Ms. Villanueva in the signature page, which strongly suggests that she, and not a
judge or clerk of Chamber No. 1, drafted the decision.95 According to the Tax Tribunal’s rules
of procedure, the Tax Tribunal President and her assistant have no role in drafting decisions or
deliberating on cases.96 That role falls exclusively to the judges and clerks of the presiding
Chambers.97 Indeed, Ms. Villanueva was not even present when Chamber No. 1 heard oral
argument on the appeal to the 2008 Royalty Assessment.98
73. The Tax Tribunal’s case files further show that in violation of its internal rules
of procedure and basic due process, on 27 May 2013, the Tax Tribunal notified SUNAT of its
92 See Ex. CE-016, 19 Aug. 1999 Peruvian Tax Code, Art. 126, Supreme Decree No. 135-99-EF ↩
(“Para mejor resolver el órgano encargado podrá, en cualquier estado del procedimiento, ordenar de
oficio las pruebas que juzgue necesarias y solicitar los informes necesarios para el mejor
esclarecimiento de la cuestión a resolver.”); Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code,
Supreme Decree No. 133-2013-EF, Art. 126 (“Para mejor resolver el órgano encargado podrá, en
cualquier estado del procedimiento, ordenar de oficio las pruebas que juzgue necesarias y solicitar
los informes necesarios para el mejor esclarecimiento de la cuestión a resolver.”); Ex. CE-045,
Manual of Organization and Institutional Functions of the Ministry of Economy and Finance,
General Secretariat Resolution No. 002-2011-EF/13 (“Funciones especificas ... j) Solicitar a quien
corresponda las informaciones que requiera para el correcto cumplimiento de sus funciones.”)
93 See Ex. CE-016, 19 Aug. 1999 Peruvian Tax Code, Art. 126, Supreme Decree No. 135-99-EF ↩
(“Para la presentación de medios probatorios, el requerimiento del órgano encargado de resolver
será formulado por escrito, otorgando un plazo no menor de dos (2) días hábiles.”).
94 See Ex. CE-066, 21 May 2013 Tax Tribunal Decision, No. 08252-1-2013. ↩
95 See Ex. CE-066, 21 May 2013 Tax Tribunal Decision, No. 08252-1-2013, p. 24. ↩
96 See Ex. CE-062, 31 Oct. 2012 Manual of Tax Tribunal Procedures, General Secretariat Resolution ↩
No. 017-2012-EF/13, pp. 10-14, 17-18; Ex. CE-086, 23 May 2014 Regulation of the Organization
and Functions of the Ministry of Economy and Finance, Supreme Decree No. 117-2014-EF,
Art. 22.
97 See Ex. CE-062, 31 Oct. 2012 Manual of Tax Tribunal Procedures, General Secretariat Resolution ↩
No. 017-2012-EF/13, pp. 10-14, 17-18.
98 See Ex. CE-064, 2 May 2013 Record of Oral Hearing No. 0411-2013-EF/TF. ↩
[Page 23]
decision confirming SUNAT’s 2008 Royalty Assessments and rejecting SMCV’s appeal.99
The following day, without notifying SMCV of the Tax Tribunal’s decision and without
copying SMCV on its communication, SUNAT submitted a copy of the decision to
Chamber No. 10, which had not yet issued its decision.100
74. On 30 May 2013, a mere two days after SUNAT provided a copy of the
Chamber No. 1 decision confirming the 2008 Royalty Assessments to Chamber No. 10,
Chamber No. 10 issued its decision confirming SUNAT’s 2006/07 Assessments and rejecting
all of SMCV’s claims.101 Chamber No. 10 did not draft its own decision or articulate its own
analysis as to why SMCV’s Stability Agreement should be arbitrarily restricted to the
investments set forth in the 1996 Feasibility Study. Instead, Chamber No. 10 copied the
Chamber No. 1 decision almost verbatim.102 What is more, Chamber No. 10’s copy-and-paste
decision did not contain the initials of any clerk who worked on the case or who should have
assisted the judges with the drafting.103 This is highly unusual and strongly suggests that
Chamber No. 10 played no role in preparing the decision.
75. It was not until 20 June 2013, several weeks after both decisions were
rendered, that SMCV was finally notified of the decisions.104
76. On 26 June 2013, promptly after receiving the two almost identically worded
decisions, SMCV requested that the Tax Tribunal exempt it from paying penalties and interest
on the 2006/07 and 2008 Royalty Assessments.105 Pursuant to Article 170 of the Peruvian Tax
Code and Article 12 of Law 28969, penalties and interest are not applicable and must be
waived when a taxpayer has “reasonable doubt” about the proper interpretation of the
applicable legal provision.106 SMCV clearly had such reasonable doubt: the Government
99 See Ex. CE-068, 27 May 2013 Tax Tribunal Notice No. 007270-2013-EF/40.01. ↩
100 See Ex. CE-069, 28 May 2013 SUNAT Letter to Chamber No. 10. ↩
101 See Ex. CE-071, 30 May 2013 Tax Tribunal Decision No. 08997-10-2013. ↩
102 Compare Ex. CE-071, 30 May 2013 Tax Tribunal Decision No. 08997-10-2013, with Ex. CE-066, ↩
21 May 2013 Tax Tribunal Decision, No. 08252-1-2013.
103 Compare Ex. CE-067, Tax Tribunal Decision No. 18397-10-2013; Tax Tribunal Decision ↩
No. 01590-1-2018; Tax Tribunal Decision No. 01699-2-2016; Tax Tribunal Decision No. 003-83-
10-2017 (last pages of Tax Tribunal Decisions containing initials of judges and clerks who worked
on the case); with Tax Tribunal Decision No. 08252-1-2013, p. 28 (last page of the Tax Tribunal
Decision containing initials of the vocal ponente, secretario realtor, secretaria de la Sala, but not the
asesor de la Sala).
104 See Ex. CE-072, 20 Jun. 2013 Acknowledgement of Receipt, Resolution 08252-1-2013. ↩
105 See Ex. CE-074, 26 Jun. 2013 SMCV Letter to the President of Chamber No. 1. ↩
106 See Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 170; ↩
Ex. CE-034, 25 Jan. 2007 Law 28969, Article 12 (“No procede la aplicación de intereses ni
[Page 24]
based its Royalty Assessments on a completely novel and restrictive interpretation of the scope
of stabilization benefits that found no support in law or contract, was without precedent, and
was contrary both to prevailing industry practice and the purpose of the stability regime itself.
Moreover, both the Ministry of Energy and Mines and SUNAT had publicly included SMCV
among the companies that did not have to pay royalties as a result of a stability agreement.107
77. On 15 July 2013, the Tax Tribunal nevertheless denied SMCV’s waiver
requests.108 It did so on the pretextual and arbitrary ground that SMCV should have requested a
waiver of penalties and interest in its appeals to the Tax Tribunal,109 even though the Tax
Tribunal has accepted waiver requests from other tax payers that were submitted after their
corresponding appeal decisions had been issued and under Peruvian law the Tax Tribunal
should have waived the penalties and interest on its own, without a prior application by
SMCV.110
78. On 18 September 2013, SMCV appealed the Tax Tribunal decision confirming
SUNAT’s 2008 Royalty Assessments to the Peruvian contentious administrative courts.111
79. On 17 December 2014, the first instance Contentious Administrative Court
annulled SUNAT’s 2008 Royalty Assessments.112 The Court agreed with SMCV that the
Mining Law and Regulations grant “legal stability . . . to the title holder of the mining activity
. . . to exercise its activities, specifically to those that exercise mining activities in one
concession or several concessions grouped in one Economic-Administrative Unit”113 and that
“the benefits are granted to the title holder for the activities it performs within its concessions
or Economic Administrative Units.”114 The Court accordingly concluded that SMCV’s
sanciones, tratándose de obligaciones relacionadas a la regalía minera, en los mismos casos y plazo
señalado en el Art. 170° del Código Tributario.”)
107 See Ex. CE-022, 11 Mar. 2004 “Evaluación de Applicación de Regalías, Presentación al Congreso ↩
Ministerio de Energía y Minas;” Ex. CE-031, 4 May 2006 “Congresistas critican contratos de
estabilidad y mineras los defienden,” EL COMERCIO.
108 See Ex. CE-075, 15 July 2013 Tax Tribunal Decision No. 11667-10-2013; Ex. CE-076, ↩
15 July 2013 Tax Tribunal Decision No. 11669-1-2013.
109 See Ex. CE-075, 15 July 2013 Tax Tribunal Decision No. 11667-10-2013, p. 5; Ex. CE-076, ↩
15 July 2013 Tax Tribunal Decision No. 11669-1-2013, p. 5.
110 See Ex. CE-032, 26 July 2006 Tax Tribunal Decision No. 04123-1-2006. ↩
111 See Ex. CE-078, 18 Sep. 2013 SMCV Administrative Court Appeal of the Tax Tribunal Decision, ↩
2008 Royalty Assessment.
112 See Ex. CE-087, 17 Dec. 2014 Administrative Court Decision, No. 07650-2013-CA, 2008 Royalty ↩
Assessment.
114 See Ex. CE-087, id., p. 5. ↩
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“activities related to the flotation of primary sulfides are being performed within the stability
time period granted to [SMCV]” and that, as a result, SMCV did not owe any Royalty
payments.115
80. On 29 January 2016, the Appellate Court reversed the first instance Court’s
decision and also denied SMCV’s entitlement to a waiver of penalties and interest on the same
arbitrary ground as the Tax Tribunal.116 The Appellate Court thus denied SMCV’s entitlement
to a waiver without considering its arguments on the merits or that under Peruvian law
inconsistent court decisions constitute proof of “reasonable doubt” about the proper
interpretation of the legal provisions at issue.117
81. On 23 February 2016, SMCV appealed the Appellate Court’s decision before
the Supreme Court, in a last attempt to allow the Peruvian courts to vindicate SMCV’s rights.118
On 18 August 2017, the Supreme Court dismissed all of SMCV’s claims and upheld the
Government’s position that SMCV’s stabilization rights under the 1998 Stability Agreement
were limited to the minerals processed in the leaching facilities.119 The Supreme Court also
upheld the Appellate Court’s decision to deny SMCV’s entitlement to a waiver of penalties and
interest, once again without even considering SMCV’s arguments on the merits.120
82. SMCV similarly appealed the Tax Tribunal decision confirming the 2006/07
Royalty Assessments to the contentious administrative courts, including up to the Supreme
Court.121 All courts to date have upheld SUNAT’s arbitrary position. As of the date of this
Notice, the Supreme Court has not yet published its decision with respect to the 2006/07
Royalty Assessments, even though the hearing was held one year ago on 20 November 2018.
115 See Ex. CE-087, id., p. 25. ↩
116 See Ex. CE-089, 29 Jan. 2016 Appellate Court Decision, No. 7650-2013, 2008 Royalty ↩
Assessment.
117 See id., pp. 4, 15; Ex. CE-006, 15 Aug. 1995 Tax Tribunal Decision, No. 4363-2; Ex. CE-007, ↩
3 Nov. 1995 Tax Tribunal Decision, No. 5208-1.
118 See Ex. CE-090, 23 Feb. 2016 SMCV Supreme Court Appeal of the Appellate Court Decision ↩
No. 7650-2013, 2008 Royalty Assessment.
119 See Ex. CE-098, 18 Aug. 2017 Supreme Court Decision, No. 5212-2016, 2008 Royalty ↩
Assessment.
120 See id., pp. 4-5, 18, 36-37, 40. ↩
121 See Ex. CE-079, 27 Sept. 2013 SMCV Administrative Court Appeal of the Tax Tribunal’s ↩
Decision, 2006/07 Royalty Assessment; Ex. CE-092, 2 May 2016 SMCV Appellate Court Appeal
of the Administrative Court Decision.
[Page 26]
83. SMCV’s appeals of the 2009 and 2010/11 Royalty Assessments to the Tax
Tribunal followed a similar pattern to the appeals of the 2006/07 and 2008 Royalty
Assessments.
84. On 12 January 2012, SMCV appealed SUNAT’s 2009 Royalty Assessments to
the Tax Tribunal.122 That appeal remained pending for over six years. Several years later, on
22 March 2017, SMCV appealed SUNAT’s 2010/11 Royalty Assessments.123
85. The Tax Tribunal assigned Chamber No. 1 to hear SMCV’s appeal of the
2010/11 Royalty Assessments—the same Chamber that had committed grave irregularities in
upholding the 2008 Royalty Assessments.124 Two of the three judges in Chamber No. 1
remained the same. The third judge, Victor Mejia Ninacondor, had joined the Tax Tribunal in
around May 2018, just in time for the hearing on the 2010/11 Royalty Assessments.125 He had
previously worked for SUNAT for almost 18 years, including in the SUNAT division that
confirmed the 2010/11 Royalty Assessments on which he was now slated to rule.126 What is
more, Judge Mejía Ninacondor had also represented SUNAT in litigating against SMCV before
the Appeals Court, specifically in the contentious administrative proceedings regarding the
2006/07 Royalty Assessments.127
86. On 20 June 2018, SMCV filed a submission requesting that the Tax Tribunal
remove Judge Mejía Ninacondor from hearing the case on the 2010/11 Royalty Assessments.
122 See Ex. CE-055, 12 Jan. 2012 SMCV Appeal of SUNAT’s 2009 Royalty Assessment. ↩
123 See Ex. CE-097, 22 Mar. 2017 SMCV Appeal of SUNAT’s 2010/2011 Royalty Assessments. ↩
124 See Ex. CE-105, 20 Jun. 2018 SMCV Submission Requesting Removal of Judge Victor Mejía ↩
Ninacondor.
125 See Ex. CE-102, 4 May 2018 Supreme Resolution, No. 013-2018-EF, Article 1. ↩
126 See Ex. CE-137, M. Victor Mieja Ninacondor LinkedIn Profile, also available at ↩
https://pe.linkedin.com/in/m-victor-mejia-ninacondor-853b43109. See also Ex. CE-021, 27 Dec.
2001 SUNAT Resolution No. 143-2001 (Victor Mieja Ninacondor held the position of Ejecutor
Coactivo, Intendencia Regional Lambayeque); Ex. CE-039, 6 Oct. 2009 SUNAT Resolution No.
212-2009 (Victor Mieja Ninacondor held the position of Fedatario Titulare de la Intendencia
Regional Ica); Ex. CE-085, 18 Mar. 2014 SUNAT Resolution No. 080-2014 (Victor Mieja
Ninacondor held the position of Ejecutor Coactivo, Intendencia Lima); Ex. CE-088, 18 Mar. 2015
SUNAT Resolution No. 011-2016-SUNAT/600000 (Victor Mieja Ninacondor held the position of
Supervisor de la Seccion de Cobranza de Oficina y Soporte II (e), División de Cobranza de Oficina
y Soporte, Gerencia de Cobranza, Intendencia Lima and Jefe de la Sección de Cobranza de Campo
II, División de Cobranza de Camp, Gerencia de Cobranza, Intendencia Lima); Ex. CE-127, 14 Jan.
2019, 12:45 P.M., Tax Tribunal Minutes No. 2019-03 (listing Victor Mieja Ninacondor holding the
position of Auditor Resolutor de la División de Reclamaciones II de la Intendencia de Principales
Contribuyentes Nacionales de la SUNAT).
127 See Ex. CE-095, 27 Oct. 2016 Fiscal Opinion No. 1368-2016. ↩
[Page 27]
In its submission, SMCV emphasized that Judge Mejía Ninacondor failed to meet the most
basic requirements of independence and impartiality.128 But despite the obviously disqualifying
conflict of interest, the Tax Tribunal nevertheless denied SMCV’s application in a plenary
vote.129
87. As with the appeal of the 2008 Royalty Assessments, Chamber No. 1
scheduled a hearing on the appeal of the 2010/11 Royalty Assessments in record time when
compared to other Tax Tribunal Chambers. Although the case involving the 2009 Royalty
Assessments had been pending for over six years before Chamber No. 2, Chamber No. 1
quickly scheduled a hearing on the 2010/11 Royalty Assessments within a month of having
received SMCV’s appeal.130
88. SMCV was concerned that, as with the appeal of the 2008 Royalty
Assessments, Chamber No. 1 would again render a decision first, which Chamber No. 2 would
then simply copy-paste. On 20 June 2018, SMCV accordingly requested that the Tax Tribunal
decide the appeal of the 2009 Royalty Assessments first since it had been filed first, in
accordance with its well-established practice.131 On 18 July 2018, the Tax Tribunal also denied
this request and rescheduled the hearing for the 2010/11 Royalty Case to 9 August 2018, the
same day that Chamber No. 2 had scheduled the hearing for the 2009 Royalty Case.132
89. On 15 August 2018, Chamber No. 2 issued a decision confirming SUNAT’s
2009 Assessments and rejecting SMCV’s request for a waiver of penalties and interest.133 On
28 August 2018, Chamber No. 1 also confirmed SUNAT’s 2010/11 Royalty Assessments and
rejected SMCV’s waiver request.134 Both decisions followed the same reasoning when
128 See Ex. CE-105, 20 Jun. 2018 SMCV Submission Requesting Removal of Judge Victor Mejía ↩
Ninacondor.
129 See Ex. CE-106, 21 Jun. 2018 Tax Tribunal Rejection of SMCV’s Request for Removal, Minutes ↩
of Plenary Council Meeting No. 2018-20, pp. 4-10.
130 See Ex. CE-109, 18 Jul. 2018 Tax Tribunal Notice of Oral Hearing No. 1170-2018-EF/TF ↩
(scheduling the oral hearing in the 2010/11 Royalty Proceedings for 21 May 2018).
131 See Ex. CE-104, 20 Jun. 2018 SMCV Submission Requesting Suspension of Procedure. ↩
132 See Ex. CE-109, 18 Jul. 2018 Tax Tribunal Notice of Oral Hearing, No. 1170-2018-EF/TF (hearing ↩
on the 2010/11 Royalty Assessments scheduled for 9 Aug. 2018 in Chamber 1); Ex. CE-107,
6 Jul. 2018 Tax Tribunal Notice of Oral Hearing, No. 1065-2018-EF/TF (hearing on the
2009 Royalty Assessments scheduled for 9 Aug. 2018 in Chamber 2).
133 See Ex. CE-112, 15 Aug. 2018 Tax Court Decision, No. 06141-2-2018, notified to SMCV on ↩
28 Sept. 2018.
134 See Ex. CE-114, 28 Aug. 2018 Tax Court Decision, No. 06575-1-2018, notified to SMCV on ↩
18 Sept. 2018.
[Page 28]
confirming SUNAT’s Assessments and both copied nearly verbatim the Chamber No. 1
decision confirming the 2008 Royalty Assessments.135
90. Both decisions also followed the same reasoning when confirming that SMCV
was not entitled to a waiver of penalties and interest.136 Despite there clearly being reasonable
doubt about the scope of SMCV’s stabilization benefits—particularly after a contentious
administrative court had agreed with SMCV that the Stability Agreement encompassed the
Flotation Plant—and despite the manifest unfairness of charging extraordinarily punitive
penalties and interest when SMCV had always acted in good faith in its interpretation of the
Mining Law and Regulations, both Chambers arbitrarily determined that SMCV’s “reasonable
doubt” was not about the Mining Law and Regulations as required under Article 170 of the Tax
Code but simply about the scope of its contractual rights under the 1998 Stability Agreement
and ruled on this basis that the penalties and interest could not be waived.137
91. Shortly after Chamber No. 1, including Judge Mejía Ninacondor, confirmed
the 2010/11 Royalty Assessments and rejected all of SMCV’s claims, the Government
implicitly recognized that Judge Mejía Ninacondor should never have heard SMCV’s appeal.
On 13 September 2018—that is, only 16 days after Chamber No. 1 issued its decision—the
Government amended the Tax Code to require Tax Tribunal judges to abstain from
participating in proceedings if they worked for SUNAT within the last 12 months and “directly
and actively” participated in the SUNAT proceedings at issue before the Tax Tribunal.138 The
Legislative Decree effectively concedes that SMCV’s appeal was not heard by independent and
impartial Tax Tribunal judges.
92. On 28 December 2018 and 3 January 2019, SMCV requested that the Tax
Tribunal order SUNAT to recalculate the interest owed by SMCV on the 2009 and 2010/11
Royalty Assessments (Recursos de Queja).139 Pursuant to the Tax Code and decisions by the
Peruvian Constitutional Tribunal, in calculating the interest owed by a taxpayer, SUNAT must
135 Compare Ex. CE-112, 15 Aug. 2018 Tax Court Decision, No. 06141-2-2018 pp. 1-33 and Ex. CE- ↩
114, 28 Aug. 2018 Tax Court Decision, No. 06575-1-2018, pp. 15-40, with Ex. CE-066, 21 May
2013 Tax Court Decision, No. 08252-1-2013, pp. 1-21.
136 Ex. CE-112, 15 Aug. 2018 Tax Court Decision, No. 06141-2-2018, pp. 33-38; Ex. CE-114, ↩
28 Aug. 2018 Tax Court Decision, No. 06575-1-2018, pp. 40-42.
137 See Ex. CE-112, 15 Aug. 2018 Tax Court Decision, No. 06141-2-2018, pp. 37-38; Ex. CE-114, ↩
28 Aug. 2018 Tax Court Decision, No. 06575-1-2018, p. 38.
138 See Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 100. ↩
139 See Ex. CE-118, 28 Dec. 2018 SMCV Submission Requesting Recalculation of Interest, 2009 ↩
Royalty Assessment; Ex. CE-123, 3 Jan. 2019 SMCV Submission Requesting Recalculation of
Interest, 2010-11 Royalty Assessments.
[Page 29]
take account of any delays of more than 12 months in the taxpayer’s proceedings before the
Tax Tribunal.140 After the 12-month threshold, SUNAT must apply the Consumer Price Index
(“CPI”) instead of the exorbitant penalty interest rate of 14.4% per year.141 Despite the years-
long delays in SMCV’s cases, SUNAT nonetheless applied the 14.4% penalty interest rate,
rather than the CIP, to the 2009 and 2010/11 Royalty Assessments.142
93. Within just a few days of receiving SMCV’s requests, the Tax Tribunal
dismissed them both on the arbitrary and pretextual ground that the Tax Tribunal did not have
to consider the merits of SMCV’s claims because SMCV had signed (under protest) an
installment plan with SUNAT for the payment of the royalties and penalties and interest due to
the Government.143
94. Peru has breached both the 1998 Stability Agreement and the TPA.
First, Peru breached the 1998 Stability Agreement and its contractual obligation to provide
SMCV with fiscal and administrative stability when it imposed royalties and taxes against
SMCV based on the Royalty Law and other “modifications or new rules”144 that the
Government issued while the 1998 Stability Agreement remained in force. Second, Peru
breached the TPA by failing to grant SMCV a fair hearing before the Tax Tribunal and by
arbitrarily refusing to waive SUNAT’s extraordinarily punitive penalties and interest and fully
repay SMCV the GEM overpayments.
95. Article 10.16.1 of the TPA permits an “investor of a Party” to submit to
arbitration a claim that the other Party has breached an “investment agreement” with an
enterprise that the investor “owns or controls directly or indirectly.”145 Freeport is an investor
of the United States and the 1998 Stability Agreement is an “investment agreement” as defined
140 See Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 33; ↩
Ex. CE-093, 10 May 2016 Constitutional Tribunal Judgment, Docket No. 04082-2012-PA/TC;
Ex. CE-113, 16 Aug. 2018 Constitutional Tribunal Judgment, Docket No. 04532-2013-PA/TC.
141 See Ex. CE-073, 22 Jun. 2013 Peruvian Tax Code, Supreme Decree No. 133-2013-EF, Art. 33. ↩
142 See Ex. CE-124, 4 Jan. 2019 [sic] Tax Tribunal Decision, No. 00019-Q-2019; Ex. CE-125, ↩
7 Jan. 2019 Tax Tribunal Decision, No. 00036-Q-2019.
143 See Ex. CE-124, 4 Jan. 2019 Tax Tribunal Complaint Office Decision, No. 00019-Q-2019, 2009 ↩
Royalty Assessment; Ex. CE-125, 7 Jan. 2019 Tax Tribunal Complaint Office Decision, No.
00036-Q-2019, 2010/11 Royalty Assessment.
144 Ex. CE-013, 1998 Stability Agreement, Clause 9.5. ↩
145 Ex. CE-030, TPA, Arts. 10.16 and 10.28 (defining the terms “Claimant” and “Respondent” used in ↩
Art. 10.16).
[Page 30]
in Article 10.28 of the TPA because it grants rights to SMCV, a “covered investment” of
Freeport, with respect to “the exploration, extraction, refining, transportation, distribution, or
sale” of “natural resources.”146 In turn, Freeport indirectly “owns or controls” SMCV,
a Peruvian entity that is party to an investment agreement with the Peruvian Government.147
Freeport is thus entitled to submit to arbitration Peru’s breaches of the 1998 Stability
Agreement both on its own behalf and that of SMCV.148
96. Peru breached the 1998 Stability Agreement and its contractual obligation to
(i) provide fiscal and administrative stability to SMCV;149 (ii) exempt SMCV from the
application of any laws or regulations that “directly or indirectly, denaturalize[d] the guarantees
provided” by the Stability Agreement;150 and (iii) protect SMCV from “any encumbrance or
obligation that could represent reduction of its availability of cash”151 through the Supreme
Court’s and Appellate Court’s confirmation of the 2006/07 and 2008 Royalty Assessments, the
Tax Tribunal’s confirmation of the 2009 and 2010/11 Royalty Assessments, SUNAT’s
rejection of SMCV’s reconsideration requests of the 4Q 2011, 2012, and 2013 Royalty
Assessments, and the Tax Tribunal’s and SUNAT’s decisions regarding the Tax Assessments
listed in Annex A.
97. Peru’s position that stabilization benefits are limited to the investments set
forth in the feasibility study submitted to the Government for purposes of obtaining
stabilization benefits and that Clause 1 of the 1998 Stability Agreement, which refers to
SMCV’s concessions as the “Cerro Verde Leaching Project,” limits the scope of SMCV’s
stabilization benefits to the minerals processed through leaching finds no support in Peru’s own
laws and practice or the plain terms of the 1998 Stability Agreement.
98. First, the Royalty Law provides that mining companies shall pay royalties as
consideration for the “exploitation of metallic and non-metallic mineral resources.”152 In turn,
Article 8 of the Mining Law states that “exploitation is the activity of extracting minerals”153
146 Ex. CE-030, TPA, Art. 10.28. ↩
147 Ex. CE-030, TPA Art. 10.16. ↩
148 Ex. CE-030, TPA, Art. 10.16. ↩
149 Ex. CE-013, 1998 Stability Agreement, Clause 9.5 (tax stability) and Clause 9.6 (administrative ↩
stability).
152 Ex. CE-024, Royalty Law, Law No. 28258, Art. 2 (emphasis added). ↩
153 See Ex. CE-002, 3 Jun. 1992 General Mining Law, which was approved by Supreme Decree ↩
No. 014-92-EM, Art. 8 (emphasis added).
[Page 31]
and Article 4 of the Royalty Law Regulations states that “payment of the mining royalty” shall
be calculated based on “the mineral extracted while operating mining concessions.”154 The
Royalty Law thus imposes royalties on the extraction of minerals. How such minerals are then
processed is entirely irrelevant for purposes of calculating any royalties due to the Government.
99. Second, the Mining Law and Regulations provide that stabilization benefits
attach to all activities performed by the “title holder of the mining activity” either within a
particular concession or within a particular EAU, without any distinction between different
types of processing techniques.155 For instance, Article 83 of the Mining Law provides that
stability benefits “extend exclusively to the activities of the mining company in whose favor the
investment is made.”156 And Article 22 of the Mining Regulation on Guarantees and
Investment Protection Measures provides that stability benefits apply to a mining company
“exclusively for investments it makes in the concessions or Economic Administrative Units.”157
100. Third, under the 1998 Stability Agreement, the scope of the stabilization
benefits likewise extended to all of SMCV’s activities within its Mining and Beneficiation
Concessions without any limitations. Pursuant to Article 86 of the Mining Law, the Stability
Agreement was a form contract drafted by the Government that incorporated all the
stabilization benefits granted by the Mining Law and Regulations.
101. Clause 1.1 of the 1998 Stability Agreement accordingly provided that SMCV
requested stabilization benefits “in relation with the investment in its concession Cerro Verde
No. 1, No. 2, and No. 3,”158 and Clause 3 and Annex I provided that the stabilization benefits
were “circumscribed” to SMCV’s Mining and Beneficiation Concessions.159 In turn, Clauses 9
and 10, which define and describe the stabilization benefits, provide that those benefits are
154 See Ex. CE-025, 15 Nov. 2004 Royalty Law Regulations, Supreme Decree No. 157-2004-EF, ↩
Art. 4.
155 See Ex. CE-002, 3 Jun. 1992 General Mining Law, Supreme Decree No. 014-92-EM, Chapter IV; ↩
Ex. CE-003, 1993 Mining Regulation, Chapter 9 on Guarantees and Investment Protection
Measures, Supreme Decree No. 024-93-EM, Art. 22.
156 See Ex. CE-002, 3 Jun. 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 83. ↩
157 See Ex. CE-003, 1993 Mining Regulation, Chapter 9 on Guarantees and Investment Protection ↩
Measures, Supreme Decree No. 024-93-EM, Art. 22. See also id., Article 2 (stating that “[d]entro
del Reglamento que se aprueba por el presente Decreto Supremo están comprendidos los alcances a
que se refiere la Sétima Disposición Final del Texto Único Ordenado de la Ley General de
Minería.”)
158 See Ex. CE-013, 1998 Stability Agreement, Clause 1.1. ↩
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granted to “the owner” (i.e., SMCV) without any limitations based on how the minerals would
be processed.160
102. Moreover, when entering into the Agreement, the Government was fully aware
that (i) Cerro Verde’s leachable reserves would be exhausted by 2014 and it would thus be
necessary to build processing facilities for processing the primary sulfides;161 and (ii) in the
1994 Share Purchase Agreement, the Government imposed on SMCV the obligation to install
new mill and flotation facilities for processing primary sulfides.162
103. Fourth, Peru’s position is inconsistent with its own earlier statements and
practice, including in presentations to the Peruvian Congress by high Government officials
confirming that SMCV and other mining companies with stability agreements would be
exempted from paying royalties under the Royalty Law.163
104. Finally, Peru’s position simply makes no commercial sense. It results in a
single mining concession having multiple fiscal regimes and also flouts the stabilization
regime’s purpose, which the Mining Law expressly defines as “promot[ing] investment and
facilitat[ing] the financing of mining projects.”164 That purpose can be achieved only if, as the
Mining Law provides, stabilization benefits extend to all investments and activities within the
covered concessions during the life of the stability agreement. Stabilization benefits that are
not artificially limited to specific investments as set forth in the feasibility study better reflect
the nature of the industry and better provide mining companies with the clarity and
predictability they need to invest and attract financing for their investments. Peru’s novel and
restrictive interpretation of the scope of stabilization benefits strongly discourages investors
from making additional capital investments to increase the mine’s productivity or to exploit
minerals that cannot be processed in the existing facilities.
160 See id., Clause 9 (“The State hereby guarantees to the owner in accordance with [the Mining Law ↩
and Mining Regulations] . . . the following . . . .” (emphasis added)); Id., Clause 10 (providing that
“any law or regulation issued after the date of approval of the feasibility study that, directly or
indirectly, denaturalizes the guarantees provided for in the ninth clause shall not apply to the
owner.” (emphasis added)).
161 See Ex. CE-023, 2004 Fluor Cerro Verde Primary Sulfide Project Feasibility Study, Executive ↩
Summary, p. 4.
162 See Ex. CE-004, 1994 Share Purchase Agreement, Appendix G, p. 148. ↩
163 See Ex. CE-022, 11 Mar. 2004 “Evaluación de Aplicación de Regalías, Presentación al Congreso ↩
Ministerio de Energía y Minas;” Ex. CE-031, 4 May 2006 “Congresistas critican contratos de
estabilidad y mineras los defienden,” EL COMERCIO.
164 Ex. CE-002, 3 Jun. 1992 General Mining Law, Supreme Decree No. 014-92-EM, Art. 82. ↩
[Page 33]
105. Peru breached Articles 10.5 and 10.4 of the TPA when the Tax Tribunal
collaborated with SUNAT to uphold SUNAT’s Royalty and Tax Assessments in violation of
SMCV’s due process rights, including by arbitrarily failing to waive extraordinarily punitive
penalties and interest despite SMCV being entitled under Peruvian law to such a waiver. Peru
also breached Articles 10.5 and 10.4 of the TPA when SUNAT arbitrarily refused to fully repay
SMCV GEM overpayments even though SMCV was entitled to those repayments under the
GEM Agreement and Peruvian law.
106. Article 10.5 of the TPA (Minimum Standard of Treatment) provides in
pertinent part:
1. Each Party shall accord to covered investments treatment in
accordance with customary international law, including fair
and equitable treatment and full protection and security.2. For greater certainty, paragraph 1 prescribes the customary
international law minimum standard of treatment of aliens as
the minimum standard of treatment to be afforded to covered
investments. The concepts of “fair and equitable treatment”
and “full protection and security” do not require treatment in
addition to or beyond that which is required by that standard,
and do not create additional substantive rights. The obligation
in paragraph 1 to provide . . . “fair and equitable treatment”
includes the obligation not to deny justice in criminal, civil, or
administrative adjudicatory proceedings in accordance with the
principle of due process embodied in the legal systems of the
world […].165
107. But Claimants here are entitled to an even more protective standard, through
the operation of the TPA’s “Most Favored Nation Treatment” Clause. That clause—
Article 10.4 of the TPA—ensures that U.S. investors will be treated no less favorably than
investors of any other state, and provides:
1. Each Party shall accord to investors of another Party
treatment no less favorable than that it accords, in like
circumstances, to investors of any other Party or of any non-
Party with respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition
of investments in its territory.
165 Ex. CE-030, TPA Art. 10.5. ↩
[Page 34]
2. Each Party shall accord to covered investments treatment
no less favorable than that it accords, in like circumstances, to
investments in its territory of investors of any other Party or of
any non-Party with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other
disposition of investments.166
108. By operation of that provision, Claimants are entitled to the more favorable
standard set forth in the Peru-Italy Treaty on the Promotion and Protection of Investments of
1994, in which Peru agreed to provide Italian investors “effective means of asserting claims and
enforcing rights with respect to investments and authorizations related to them and investment
agreements.”167 Accordingly, pursuant to Article 10.4 of the TPA, Peru must provide
Claimants with “effective means” to enforce their rights.168 The obligation to provide effective
means consists both of a negative obligation to avoid interfering with the investor’s exercise of
rights, and a positive obligation to provide effective means to assert and enforce those rights.169
109. Peru grossly violated SMCV’s due process rights in breach of the minimum
standard of treatment and effective means clause when the Tax Tribunal collaborated with
SUNAT to confirm the 2006/07, 2008, 2009, and 2010/11 Royalty Assessments, as well several
of the Tax Assessments listed in Annex A.
110. While SMCV was afforded the opportunity to present written and oral
submissions to the Tax Tribunal in its appeals of the Royalty Assessments and the Tax
Assessments listed in Annex A, it never had a fair chance to persuade the Tax Tribunal judges
of its position. As the facts set forth in paragraphs 65-93 above show, the Tax Tribunal judges
did not decide SMCV’s cases independently and impartially but rather collaborated with
SUNAT to ensure the Government would prevail. This is demonstrated by, among other
things, the fact that:
166 Ex. CE-030, TPA, Art. 10.4. ↩
167 Ex. CE-005, Peru-Italy Treaty on the Promotion and Protection of Investments, 5 May 1994, ↩
Protocol ¶ 2(c) (unofficial translation).
168 Ex. CE-052, White Industries Australia Ltd. v. India, UNCITRAL, Final Award of 30 November ↩
2011, ¶ 11.2.1 (importing the effective means clause from a third-party treaty through the MFN
provision).
169 Ex. CE-041, Chevron v. Ecuador, UNCITRAL, Partial Award on the Merits of 30 Mar. 2010, ↩
¶ 248. See also Ex. CE-052, White Industries Australia Ltd. v. India, UNCITRAL, Final Award of
30 November 2011, ¶ 11.3.2(b) (Effective means require “both that the host State establish a proper
system of laws and institutions and that those systems work effectively in any given case.”).
[Page 35]
111. Given that the Tax Tribunal has consistently failed to act independently and impartially with regard to SMCV's claims, it was entirely futile for SMCV to appeal the 2012 and 2013 Royalty Assessments to the Tax Tribunal, and it is all-but-certain that the Tax Tribunal will reject SMCV's pending appeal to the 4Q 2011 Royalty Assessments. As a result of the Tax Tribunal's consistent disregard for the most basic norms of due process, Claimants lacked any effective means to enforce their rights before the Tax Tribunal with regard to the 4Q 2011, 2012, and 2013 Royalty Assessments (or any of the other Royalty and Tax Assessments).
112. The Tax Tribunal's violations of SMCV's due process rights carry significant weight in light of the Government's own recognition that the Peruvian judicial system is permeated by corruption problems. On 16 July 2018, the Government declared a 90-day state of emergency for the judicial branch noting that the press had revealed “a series of grave and reprehensible acts that hurt the image and autonomy of the Judiciary" and that there was a need to "adopt urgent administrative measures to correct and overcome the critical situation of the judicial system.”170 On 28 July 2018, Peru's Congress similarly declared a nine-month state of emergency for Peru's National Magistrates Council, the body that appoints judges and prosecutors.171 Following these state-of-emergency declarations, Peru's current President, Martín Vizcarra, stated publicly that the Peruvian “system for administering justice has collapsed" and that “this problem is not of today, it is structural.”172
170 Ex. CE-108, 16 Jul. 2018 Administrative Resolution No. 203-2018-CE-PJ. ↩
171 Ex. CE-110, 28 Jul. 2018 Law No. 30833. ↩
172 Ex. CE-111, 3 Aug. 2018, "Peru: This is what you need to know about the referendum that was announced by Martín Vizcarra,” LATIN AMERICAN POST. ↩
[Page 36]
113. Peru also violated its obligations under the minimum standard of treatment and effective-means clauses when the contentious administrative courts (specifically, the Appellate Court and the Supreme Court) arbitrarily refused to waive SUNAT's extraordinarily punitive penalties and interest on the 2006/07 and 2008 Royalty Assessments, when the Tax Tribunal arbitrarily refused to waive SUNAT's extraordinarily punitive penalties and interest on the 2009 and 2010/11 Royalty Assessments, and when SUNAT arbitrarily refused to waive its extraordinarily punitive penalties and interest on the 4Q 2011, 2012, and 2013 Royalty Assessments.
114. Under the Peruvian Tax Code and other applicable laws, Cerro Verde was entitled to such a waiver because SMCV's failure to pay royalties was unquestionably made in good faith and based on a “reasonable doubt" about the proper interpretation of the scope of stabilization benefits under the Mining Law and Regulations.
115. The Government has never once disputed that SMCV's decision not to pay royalties was made in good faith. The Government also cannot seriously deny that Cerro Verde had reasonable doubt: (i) the contentious-administrative courts hearing SMCV's appeals reached conflicting results, with the first instance Court hearing the appeal of the 2008 Royalty Assessment upholding SMCV's position that the 1998 Stability Agreement covers the entirety of SMCV's activities in its Mining Concessions;173 (ii) several Government officials confirmed that SMCV and other mining companies were exempted from paying royalties under the Royalty Law because of stability agreements with the Government;174 (iii) the Tax Tribunal issued a Resolution acknowledging that stabilization benefits extend to all investments within an EAU;175 and (iv) the Government accepted, or at the very least acquiesced, in SMCV's interpretation of the scope of the stabilization benefits when it accepted full GEM payments in lieu of royalty payments.176
173 Ex. CE-087, 17 Dec. 2014 Administrative Court Decision, No. 07650-2013-CA, 2008 Royalty Assessment. ↩
174 See Ex. CE-022, 11 Mar. 2004 “Evaluación de Applicación de Regalías, Presentación al Congreso Ministerio de Energía y Minas;" Ex. CE-031, 4 May 2006 “Congresistas critican contratos de estabilidad y mineras los defienden," EL COMERCIO. ↩
175 Ex. CE-053, 6 Dec. 2011 Tax Tribunal Decision No. 20290-1-2011. ↩
176 See Ex. CE-056, 28 Feb. 2012 Gravamen Especial a la Minería (GEM Agreement), Law No. 29790, Art. 2.2; Ex. CE-057, 29 Feb. 2012 SMCV GEM Payment, 4Q 2011; Ex. CE-058, 31 May 2012 SMCV Gem Payment, 1Q 2012; Ex. CE-059, 31 Aug. 2012 SMCV Gem Payment, 2Q 2012; Ex. CE-061, 30 Nov. 2012 SMCV Gem Payment, 3Q 2012; Ex. CE-119, 28 Dec. 2018 SMCV Reimbursement Request, 4Q 2011; Ex. CE-120, 28 Dec. 2018 SMCV Reimbursement Request, GEM 1Q 2012; Ex. CE-121, 28 Dec. 2018 SMCV Reimbursement Request, GEM 2Q ↩
[Page 37]
116. Nor can the Government's position that “reasonable doubt” only existed over the scope of the Stability Agreement withstand scrutiny, given that the Supreme Court itself based its decision upholding the Assessments, in part, on its interpretation of the Mining Law. Thus, it is arbitrary and grossly unfair for Peru to recover royalties based on SUNAT's novel and restrictive interpretation of the Mining Law and Regulations, in addition to extraordinarily punitive penalties and interest that have exceeded the amounts due in royalties, simply because SMCV rightfully exercised its right to challenge SUNAT's Assessments before the Tax Tribunal and contentious administrative courts. Moreover, given that SMCV paid millions of dollars in voluntary contributions and GEM assessments in the good faith belief that it was exempted from the Royalty Law, Peru's imposition of royalties and penalties and interest essentially gives the Government double—or even triple-recovery.
117. Peru further violated SMCV's due process rights in breach of the minimum standard of treatment and effective-means clauses when SUNAT arbitrarily refused to reimburse GEM overpayments for the time period 4Q 2011 to 3Q 2012.
118. Under the GEM Agreement and Peruvian law, SMCV was entitled to make certain deductions from the GEM payments to account for any mining royalty payments.177 However, since the 1998 Stability Agreement exempted SMCV from royalty payments, SMCV paid the GEM in full to the Government for the time period 4Q 2011 to 4Q 2013, without making any deductions to account for royalty payments.178 Shortly after the Supreme Court dismissed SMCV's appeal on the 2008 Royalty Assessments, SMCV submitted reimbursement requests to SUNAT claiming that SMCV cannot be subject to paying both GEM in full and the royalties.179 SMCV submitted these requests while fully reserving its rights under the 1998 Stability Agreement, the TPA and international law. SUNAT agreed with SMCV and repaid US$76.1 million, but then arbitrarily refused to repay the remaining overpayments amounting
2012; Ex. CE-122, 28 Dec. 2018 SMCV Reimbursement Request, GEM 3Q 2012; Ex. CE-130, 4 Mar. 2019 SUNAT Resolution No. 012-180-0018640/SUNAT.
177 Ex. CE-056, 28 Feb. 2012 Gravamen Especial a la Minería (GEM Agreement), Law No. 29790, Art. 2.2. ↩
178 Ex. CE-057, 29 Feb. 2012 SMCV GEM Payment, 4Q 2011; Ex. CE-58, 31 May 2012 SMCV Gem Payment, 1Q 2012; Ex. CE-059, 31 Aug. 2012 SMCV Gem Payment, 2Q 2012; Ex. CE-061, 30 Nov. 2012 SMCV Gem Payment, 3Q 2012. ↩
179 Ex. CE-119, 28 Dec. 2018 SMCV Reimbursement Request, GEM 4Q 2011; Ex. CE-120, 28 Dec. 2018 SMCV Reimbursement Request, GEM 1Q 2012; Ex. CE-121, 28 Dec. 2018 SMCV Reimbursement Request, GEM 2Q 2012; Ex. CE-122, 28 Dec. 2018 SMCV Reimbursement Request, GEM 3Q 2012. ↩
[Page 38]
to over US$45 million plus interest effectively imposing both full GEM payments and royalties on SMCV.180
119. Peru's conduct has caused, and is continuing to cause, Claimants significant loss and damage. Accordingly, as compensation for the harm resulting from Peru's breaches of the 1998 Stability Agreement and the TPA, Claimants intend to seek damages presently estimated to be in excess of US$1 billion, plus applicable interest.
* * *
120. Claimants send this Notice reluctantly. Claimants have at all times preferred an amicable solution with the Government and have made considerable efforts to fairly resolve the dispute with the Government, including in numerous meetings with former Presidents, former and current Ministers of Economy and Finance and Ministers of Energy and Mines, as well as other high level Government officials.
121. Claimants remain ready to meet with Government representatives to explore solutions and accordingly request consultations with the Government in accordance with Article 10.15 of the TPA. Claimants look forward to promptly receiving from the Government a proposed date and time for an initial consultation meeting.
122. However, should the Parties prove unable to find an amicable, mutually agreeable solution to the dispute, Claimants will have no choice but to initiate arbitration against Peru alleging breaches of the 1998 Stability Agreement and the TPA. Claimants reserve their rights to amend or supplement this Notice, including the requested relief and the amount claimed, and to seek relief for additional breaches arising from Peru's past, current, or future conduct.
180 Ex. CE-130, 4 Mar. 2019 SUNAT Resolution No. 012-180-0018640/SUNAT. ↩
[Page 39]
Signature
Donald Francis Donovan
Dietmar W. Prager
Laura Sinisterra
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
(212) 909-6000
[email protected]
[email protected]
[email protected]
New York, 26 November 2019
[Page 40]
| Government's Violations of the Stability Agreement | Amount (USD) | Procedural Status |
|---|---|---|
| Income Tax 2006 | ||
|
In the Assessment dated 27 May 2011, SUNAT determined that:
In the Fine Resolutions dated 26 May 2011, SUNAT determined that:
|
Principal amounts to US$6.48 million. As of 31 October 2019, penalties and interest accumulated to around US$6.9 million. |
On 22 August 2018, the Tax Tribunal confirmed SUNAT's Assessment and Fine Resolutions.vi |
|
In the Resolution dated 22 August 2018, the Tax Tribunal determined that:
|
||
| Income Tax 2007 | ||
|
In the Assessment dated 28 March 2012, SUNAT determined that:
In the Fine Resolutions dated 28 March 2012, SUNAT determined that: |
Principal amounts to US$2.4 million. As of 31 October 2019, penalties and interest accumulated to around US$776,242. |
On 22 August 2018, the Tax Tribunal confirmed SUNAT's Assessment and Fine Resolutions.xiii |
In the Resolution dated 22 August 2018, the Tax Tribunal determined that:
|
||
| Income Tax 2008 | ||
|
In the Assessment dated 21 August 2013, SUNAT determined that:
In the Fine Resolutions dated 19 August 19 2013, SUNAT determined that:
|
Principal amounts to US$6.45 million. As of 31 October 2019, penalties and interest accumulated to around US$1.44 million. |
On 1 July 2014, SMCV appealed SUNAT's Assessment and Fine Resolutions before the Tax Tribunal. SMCV's appeal remains pending.xviii |
| Income Tax 2009 | ||
|
In the Assessment dated 30 October 2014, SUNAT determined that:
|
Principal amounts to US$37.7 million. As of 31 October 2019, penalties and interest accumulated to around US$23 million. |
On 28 August 2015, SMCV appealed SUNAT's Assessments and Fine Resolutions before the Tax Tribunal. SMCV's appeal remains pending.xxix |
In the Fine Resolutions dated 26 November 2014, SUNAT determined that:
In the Assessment dated 26 November 2014, SUNAT determined that:
|
||
| Income Tax 2010 | ||
|
In the Assessments dated 13 February 2015, SUNAT determined that:
In the Fine Resolutions dated 18 February 2015, SUNAT determined that:
|
Principal amounts to US$42 million. As of 31 October 2019, penalties and interest accumulated to around US$40.3 million. |
On 27 November 2015, SMCV appealed SUNAT's Assessments and Fine Resolutions before the Tax Tribunal. SMCV's appeal remains pending.xxxvii |
|
SMCV was authorized to keep its accounting in US dollars.xxxv
|
||
| Income Tax 2011 | ||
|
In the Assessments dated 31 October 2017, SUNAT determined that:
In the Fine Resolutions dated 31 October 2017, SUNAT determined that:
|
Principal amounts to US$31.3 million. As of 31 October 2019, penalties and interest accumulated to around US$22 million. |
On 12 September 2018, SMCV appealed SUNAT's Assessments and Fine Resolutions before the Tax Tribunal. SMCV's appeal remains pending.xliii |
|
dollars.xli
|
||
| General Sales Tax 2005 | ||
|
In the Assessment dated 28 December 2009, SUNAT determined that:
|
Principal amounts to US$400. As of 31 October 2019, penalties and interest accumulated to around US$53,900. |
On 22 August 2018, the Tax Tribunal confirmed SUNAT's Assessment.xlv |
| General Sales Tax on Non-Residents 2005 | ||
|
In the Assessment dated 28 December 2009, SUNAT determined that:
|
Principal amounts to US$687,419. As of 31 October 2019, penalties and interest accumulated to around US$644,132. |
On 15 November 2010, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.xlvii |
| General Sales Tax 2006 | ||
|
In the Assessment dated 29 December 2010, SUNAT determined that:
In the Resolution dated 22 August 2018, the Tax Tribunal determined that:
|
As of 31 October 2019, penalties and interest accumulated to around US$38,000. |
On 22 August 2018, the Tax Tribunal confirmed SUNAT's Assessment.l |
| General Sales Tax on Non-Residents 2006 | ||
|
In the Assessment dated 29 December 2010, SUNAT determined that:
|
Principal amounts to US$188,630. As of 31 October 2019, penalties and interest accumulated to around US$157,671. |
On 21 November 2011, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lii |
| General Sales and Additional Income Tax 2007 | ||
|
In the Assessment dated 27 December 2011, SUNAT determined that:
In the Resolution dated 30 October 2018, the Tax Tribunal determined that:
|
Principal amounts to US$930,672. As of 31 October 2019, penalties and interest accumulated to around US$696,794. |
On 30 October 2018, the Tax Tribunal confirmed SUNAT's Assessment.lvi |
| General Sales and Additional Income Tax 2008 | ||
|
In the Assessment dated 20 December 2012, SUNAT determined that:
|
Principal amounts to US$701,409. As of 31 October 2019, penalties and interest accumulated to around US$638,290. |
On 25 November 2013, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lix |
|
Flotation Plant dividends. Under the 1998 Stability Agreement, this additional tax rate did not apply.lviii |
||
| General Sales Tax 2009 | ||
|
In the Assessment dated 27 December 2013, SUNAT determined that:
|
As of 31 October 2019, penalties and interest accumulated to around US$24,400. |
On 4 December 2014, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lxi |
| General Sales Tax 2010 | ||
|
In the Assessment dated 24 June 2014, SUNAT determined that:
In the Fine Resolutions dated 24 June 2014, SUNAT determined that:
|
As of 31 October 2019, penalties and interest accumulated to around US$172,200. |
On 1 July 2015, SMCV appealed SUNAT's Assessment and Fine Resolutions before the Tax Tribunal. SMCV's appeal remains pending.lxv |
| Temporary Tax on Net Assets 2009 | ||
|
In the Assessment dated 27 December 2013, SUNAT determined that:
|
Principal amounts to US$6.3 million. As of 31 October 2019, penalties and interest accumulated to around US$2.3 million. |
On 6 October 2014, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lxvii |
| Temporary Tax on Net Assets 2010 | ||
|
In the Assessment dated 14 August 2015, SUNAT determined that:
|
Principal amounts to US$5.6 million. As of 31 October 2019, penalties and interest accumulated to around US$3.75 million. |
On 8 April 2016, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lxix |
| Temporary Tax on Net Assets 2011 | ||
|
In the Assessment dated 27 July 2016, SUNAT determined that:
|
Principal amounts to US$6.4 million. As of 31 October 2019, penalties and interest accumulated to around US$4.4 million. |
On 27 June 2017, SMCV appealed SUNAT's Assessment before the Tax Tribunal. SMCV's appeal remains pending.lxxi |
| Temporary Tax on Net Assets 2012 | ||
|
On 21 December 2017, SMCV submitted and paid its tax return for Temporary Taxes on Net Assets related to the Flotation Plant fixed assets with reservation of rights to avoid incurring penalties and interest. Under the 1998 Stability Agreement, SMCV was exempt from the Temporary Tax on Net Assets.lxxii |
Principal amounts to US$7.5 million. As of 31 October 2019, penalties and interest accumulated to around US$3.1 million. |
SUNAT accepted SMCV's tax return and payment. |
| Temporary Tax on Net Assets 2013 | ||
|
In the Assessment dated 3 October 2017, SUNAT determined that:
|
As of 31 October 2019, penalties and interest accumulated to around US$2,067. |
On 14 December 2018, the Tax Tribunal confirmed SUNAT's Assessment.lxxiv |
| Special Mining Tax 4Q 2011-4Q 2012 | ||
|
In the Assessment dated 29 December 2017, SUNAT determined that:
In the Resolution dated 12 October 2018, SUNAT determined that:
|
Principal amounts to US$36.5 million. As of 31 October 2019, penalties and interest accumulated to around US$39 million. |
On 20 June 2019, the Tax Tribunal confirmed SUNAT's Assessment and Resolution.lxxvii |
|
required under Article 170 of the Tax Code.lxxvi However, SMCV clearly was entitled to such a waiver because SMCV had "reasonable doubt” about the proper interpretation of the applicable legal provisions, as set forth in paras. 15-16 and 113-116 of the Notice Letter. |
||
| Special Mining Tax 2013 | ||
|
In the Assessment dated 28 September 2018, SUNAT determined that:
In the Resolution dated 28 May 2019, SUNAT determined that:
|
Principal amounts to US$23.4 million. As of 31 October 2019, penalties and interest accumulated to around US$21 million. |
On 28 May 2019, SUNAT confirmed its prior Assessment and Resolution.lxxx |
i 27 May 2011 SUNAT Assessment No. 052-003-0007147, Annex 2, p. 3; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, pp. 25-26; 30 Mar. 2012 SUNAT Report on Record No. 0550140001556 - No. 326-P-2012-SUNAT/2J0500, pp. 114-15.
ii 30 Mar. 2012 SUNAT Report on Record No. 0550140001556 - No. 326-P-2012-SUNAT/2J0500, p. 118.
[Page 55]
iii 26 May 2011 SUNAT Fine Resolution No. 052-002-0004614, p. [1]; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 31.
iv 26 May 2011 SUNAT Fine Resolution No. 052-002-0004616, p. [2]; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 33.
v 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 27.
vi 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, notified to SMCV on 16 Nov. 2018.
vii 28 Mar. 2012 SUNAT Assessment No. 052-003-0008345, Annex 2, p. 4; 25 Jan. 2013 SUNAT Resolution No. 055-014-0001701, p. 97; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 24.
viii 28 Mar. 2012 SUNAT Assessment No. 052-003-0008345, Annex 2; 25 Jan. 2013 SUNAT Resolution No. 055-014-0001701, p. 110; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 33.
ix 28 Mar. 2012 SUNAT Assessment No. 052-003-0008345, Annex 2; 25 Jan. 2013 SUNAT Resolution No. 055-014-0001701, p. 105; 22 Aug. 2018 Tax Tribunal Resolution No. 06367-2-2018, p. 36.
x 28 Mar. 2012 SUNAT Fine Resolution No. 052-002-0005168; 22 Aug. 2018 Tax Tribunal Resolution No. 06369-2-2018, p. 50.
xi 28 Mar. 2012 SUNAT Fine Resolution No. 052-002-0005167; 22 Aug. 2018 Tax Tribunal Resolution No. 06369-2-2018, p. 48.
xii 22 Aug. 2018 Tax Tribunal Resolution No. 06369-2-2018, p. 50.
xiii 22 Aug. 2018 Tax Tribunal Resolution No. 06369-2-2018, notified to SMCV on 16 Nov. 2018.
xiv 21 Aug. 2013 SUNAT Assessment No. 052-003-0010790, Annex 2, p. [3]; 30 May 2014 SUNAT Resolution No. 0550140001907, p. 93.
xv 21 Aug. 2013 SUNAT Assessment No. 052-003-0010790, Annex 2, p. [3]; 30 May 2014, SUNAT Resolution No. 0550140001907, p. 97.
xvi 19 Aug. 2013 SUNAT Fine Resolution No. 052-002-0005882, p. [2].
xvii 19 Aug. 2013 SUNAT Fine Resolution No. 052-002-0005883, p. [3].
xviii MEF File Case Access, Docket Number 2633-2016.
xix 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 3, p. [4]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, p. 220.
[Page 56]
xx 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 3, p. [4]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, pp. 226-27.
xxi 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 3, p. [4]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, p. 233.
xxii 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 3, p. [4]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, p. 263.
xxiii 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 3 and 4, pp. [4-5]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, p. 267.
xxiv 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 4, p. [5]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, pp. 269-75.
xxv 30 Oct. 2014 SUNAT Assessment No. 052-003-00011921, Annex 4, p. [5]; 23 Jun. 2015 SUNAT Resolution No. 055-014-0002145, p. 224-25.
xxvi 26 Nov. 2014 SUNAT Fine Resolution No. 052-002-000672.
xxvii 26 Nov. 2014 SUNAT Fine Resolution No. 052-002-0006260, p. [1].
xxviii 26 Nov. 2014 SUNAT Assessment No. 052-003-0012000, p. [2]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012001, p. [5]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012002, p. [6]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012008, p. [10]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012009, p. [11]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012010, p. [12]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012013, p. [4]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012014, p. [7]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012015, p. [8]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012016, p. [9]; 26 Nov. 2014 SUNAT Assessment No. 052-003-0012018, p. [3].
xxix MEF File Case Access, Docket Number 16697-2015.
xxx 13 Feb. 2015 SUNAT Assessment No. 052-003-0012411, Annex 2, p. [3]; 4 Nov. 2015 SUNAT Resolution No. 0550140002255, p. 211, 215.
xxxi 13 Feb. 2015 SUNAT Assessment No. 052-003-0012411, Annex 2, p. [3]; 4 Nov. 2015 SUNAT Resolution No. 0550140002255, p. 218.
xxxii 13 Feb. 2015 SUNAT Assessment No. 052-003-0012411, Annex 2, p. [3]; 4 Nov. 2015 SUNAT Resolution No. 0550140002255, p. 276.
xxxiii 13 Feb. 2015 SUNAT Assessment No. 052-003-0012411, Annex 2, p. [3]; 4 Nov. 2015 SUNAT Resolution No. 0550140002255, p. 215.
xxxiv 13 Feb. 2015 SUNAT Assessment No. 052-003-0012396, p. [4]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012400, p. [1]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012401, p. [8]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012402, p. [9]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012403, p. [12]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012408, p. [6]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012409, p. [7]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012410, p. [10]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012415, p. [2]; 13 Feb. 2015 SUNAT
[Page 57]
Assessment No. 052-003-0012416, p. [3]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012417, p. [5]; 13 Feb. 2015 SUNAT Assessment No. 052-003-0012418, p. [14].
xxxv 18 Feb. 2015 SUNAT Fine Resolution No. 052-002-0006356, p. [1].
xxxvi 18 Feb. 2015 SUNAT Fine Resolution No. 052-002-0006355, p. [2].
xxxvii MEF File Case Access, Docket Number 3201-2016.
xxxviii 31 Oct. 2017 SUNAT Assessment No. 012-003-0090355, Annex 4, p. 188; 10 Aug. 2018 SUNAT Resolution No. 0550140014311, pp. 65, 81.
xxxix 31 Oct. 2015 SUNAT Assessment No. 012-003-0090355, Annex 4, p. 196; 10 Aug. 2018 SUNAT Resolution No. 055-014-0014311, p. 64.
xl 31 Oct. 2017 SUNAT Assessment No. 012-003-0090368, p. [1]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090369, p. [2]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090370, p. [3]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090371, p. [4]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090372, p. [5]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090373, p. [6]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090374, p. [7]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090375, p. [8]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090376, p. [9]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090377, p. [10]; 31 Oct. 2017 SUNAT Assessment No. 012-003-0090378, p. [11].
xli 31 Oct. 2017 SUNAT Fine Resolution No. 012-002-0030893, p. [3].
xlii 31 Oct. 2017 SUNAT Fine Resolution No. 012-002-0030892, p. [1].
xliii MEF File Case Access, Docket Number 13393-2018.
xliv 28 Dec. 2009 SUNAT Assessment No. 052-003-0005626, Annex 2, p. [1]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005627, Annex 2, p. [2]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005628, Annex 2, p. [3]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005629, Annex 2, p. [4]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005630, Annex 2, p. [5]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005631, Annex 2, p. [6]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005632, Annex 2, p. [7]; 28 Dec. 2009 SUNAT Assessments No. 052-003-0005633, Annex 2, p. [8]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005634, Annex 2, p. [9]; 28 Dec. 2009 SUNAT Assessments No. 052-003-0005635, Annex 2, p. [10]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005636, Annex 2, p. [11]; 28 Dec. 2009 SUNAT Assessments No. 052-003-0005637, Annex 2, p. [12]; 25 Oct. 2010 SUNAT Resolution No. 055-014-0001369, p. 216; 22 Aug. 2018 Tax Tribunal Resolution No. 06365-2-2018, pp. 49-50.
xlv 22 Aug. 2018 Tax Tribunal Resolution No. 06365-2-2018, notified to SMCV on 16 Nov. 2018.
xlvi 28 Dec. 2009 SUNAT Assessment No. 052-003-0005642, Annex 2, p. [1]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005643, Annex 2, p. [2]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005644, Annex 2, p. [3]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005645, Annex 2, p. [4]; 28 Dec. 2009
[Page 58]
SUNAT Assessment No. 052-003-0005646, Annex 2, p. [5]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005647, Annex 2, p. [6]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005648, Annex 2, p. [7]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005649, Annex 2, p. [8]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005650, Annex 2, p. [9]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005651, Annex 2, p. [10]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005652, Annex 2, p. [11]; 28 Dec. 2009 SUNAT Assessment No. 052-003-0005653, Annex 2, p. [12]; 30 Sept. 2010 SUNAT Resolution No. 055-014-0001358, p. 40.
xlvii MEF File Case Access, Docket Number 2382-2011.
xlviii 29 Dec. 2010 SUNAT Assessment No. 052-003-006737, p. [1]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006738, p. [2]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006739, p. [3]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006740, p. [4]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006741, p. [5]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006742, p. [6]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006743, p. [7]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006744, p. [15]; 29 December 2010 SUNAT Assessment No. 052-003-006777, p. [11]; 29 Dec. 2010 SUNAT Assessment No. 052-003-00678, p. [12]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006779, p. [13]; 29 Dec. 2010 SUNAT Assessment No. 052-003-006780, p. [14]; 27 Jul. 2011 SUNAT Report on Record No. 0550140001556-No. 326-P-2012-SUNAT/2J0500, p. 70; 22 Aug. 2018 Tax Tribunal Resolution No. 06366-2-2018, p. 9.
xlix 22 Aug. 2018 Tax Tribunal Resolution No. 06366-2-2018, p. 10.
l 22 Aug. 2018 Tax Tribunal Resolution No. 06366-2-2018, notified to SMCV on 16 Nov. 2018.
li 22 Dec. 2018 SUNAT Assessment No. 052-003-0006753, p. [1]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006754, p. [2]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006755, p. [3]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006756, p. [4]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006757, p. [5]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006758, p. [6]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006753 to 052-003-0006759, Annex 1, p. [7]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006753 to 052-003-0006759, Annex 2, p. [8]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006760, p. [9]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006761, p. [10]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006762, p. [11]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006763, p. [12]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006764, p. [13]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006760 to 052-003-0006764, Annex 1, p. [15]; 22 Dec. 2018 SUNAT Assessment No. 052-003-0006760 to 052-003-0006764, Annex 2, p. [14]; 10 Sep. 2011 SUNAT Resolution No 055-014-0001444, pp. 51-52.
lii MEF File Case Access, Docket Number 1891-2012.
liii 27 Dec. 2011 SUNAT Assessment No. 052-003-0008024, Annex 3, p. [1]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008025, Annex 3, p. [3]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008026, Annex 3, p. [4]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008027, Annex 3, p. [5]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008028, Annex 3, p. [6]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008029, Annex 3, p. [7]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008030, Annex 3, p. [8]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008031, Annex 3, p. [9]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008032, Annex 3, p. [10]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008033, Annex 3, p. [11]; 27 Dec. 2011 SUNAT
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Assessments No. 052-003-0008034, Annex 3, p. [12]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008035, Annex 3, p. [13]; 27 Sept. 2012 SUNAT Resolution No. 055-014-0001662, pp. 55-56; 30 Oct. 2018 Tax Tribunal Resolution No. 08470-2-2018, p. 4.
liv 27 Dec. 2011 SUNAT Assessment No. 052-003-0008036, Annex 1, p. [1]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008037, Annex 1, p. [3]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008038, Annex 1, p. [4]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008039, Annex 1, p. [5]; 27 Dec. 2011 SUNAT Assessments No. 052-003-0008040, Annex 1, p. [5]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008041, Annex 1, p. [7]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008042, Annex 1, p. [8]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008043, Annex 1, p. [9]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008044, Annex 1, p. [10]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008045, Annex 1, p. [11]; 27 Dec. 2011 SUNAT Assessment No. 052-003-0008046, Annex 1, p. [12]; 30 Oct. 2018 Tax Tribunal Resolution No. 08470-2-2018, p. 36.
lv 30 Oct. 2018 Tax Tribunal Resolution No. 08470-2-2018, p. 40.
lvi 30 Oct. 2018 Tax Tribunal Resolution No. 08470-2-2018, notified to SMCV on 20 Nov. 2018.
lvii 20 Dec. 2012 SUNAT Assessment No. 052-003-0009549, p. [1]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009591, p. [2]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009592, p. [3]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009593, p. [4]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009595, p. [5]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009596, p. [6]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009597, p. [7]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009598, p. [8]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009599, p. [9]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009600, p. [10]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009601, p. [11]; 20 Dec. 2012 SUNAT Assessment No. 052-003-0009602, p. [12]; 20 Dec. 2012 SUNAT Assessment, Annex 2, p. [14]; 24 Oct. 2013 SUNAT Resolution No. 055-014-0001810, pp. 100-02.
lviii 20 Dec. 2012 SUNAT Assessment No. 052-003-009550, p. [4]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009551, p. [5]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009552, p. [6]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009553, p. [7]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009554, p. [8]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009562, p. [1]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009563, p. [3]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009564, p. [10]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009580, p. [9]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009581, p. [11]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009589, p. [2]; 20 Dec. 2012 SUNAT Assessment No. 052-003-009594, p. [12]; 24 Oct. 2013 SUNAT Resolution No. 055-014-0001810, pp. 196-97.
lix MEF File Case Access, Docket Number 4457-2014.
lx 27 Dec. 2013 SUNAT Assessment No. 052-003-0011235, p. [1]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011236, p. [2]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011237, p. [3]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011238, p. [4]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011239, p. [5]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011240, p. [6]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011241, p. [7]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011242, p. [8]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011243, p. [9]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011244, p. [10]; 27 Dec. 2013 SUNAT Assessment No. 052-003-0011245, p. [11]; 27 Oct. 2014 SUNAT Resolution No. 055-014-0001988, pp. 103-05.
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lxi MEF File Case Access, Docket Number 2929-2015.
lxii 24 Jun. 2014 SUNAT Assessment No. 052-003-0011478, p. [1]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011479, p. [2]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011480, p. [3]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011481, p. [4]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011482, p. [5]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011482, p. [6]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011485, p. [7]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011486, p. [8]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011487, p. [9]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011488, p. [10]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011489, p. [11]; 24 Jun. 2014 SUNAT Assessment No. 052-003-0011490, p. [12]; 24 Jun. 2014 SUNAT Assessment, Annex 2, p. [14]; 27 Apr. 2015 SUNAT Resolution No. 055-014-0002103, p. 96.
lxiii 24 Jun. 2014 SUNAT Fine Resolution No. 052-002-0006091, p. [1]; 24 Jun. 2014 SUNAT Fine Resolution No. 052-002-0006101, p. [3].
lxiv 24 Jun. 2014 SUNAT Fine Resolution No. 052-002-0006102, p. [5]; 24 Jun. 2014 SUNAT Fine Resolution No. 052-002-0006090, p. [7].
lxv MEF File Case Access, Docket Number 16744-2015.
lxvi 27 Dec. 2013 SUNAT Assessment No. 052-003-0011208, Annex 1, p. [2]; 27 Dec. 2013 SUNAT Assessment No .052-003-0011208, Annex 3, p. [3]; 27 Aug. 2014 SUNAT Resolution No. 055-014-0001946, p. 79.
lxvii MEF File Case Access, Docket Number 18065-2014.
lxviii 14 Aug. 2015 SUNAT Assessment No. 052-003-0012908, Annex 1, p. [2]; 14 Aug. 2015 SUNAT Assessment No. 052-003-0012908, Annex 2, p. [3]; 29 Feb. 2016 SUNAT Resolution No. 055-014-0002356, p. 83.
lxix MEF File Case Access, Docket Number 5721-2016].
lxx 14 Aug. 2015 SUNAT Assessment No. 052-003-0014319, Annex 1, p. [2]; 14 Aug. 2015 SUNAT Assessment No. 052-003-0014319, Annex 2, p. [3].
lxxi MEF File Case Access, Docket Number 8937-2017.
lxxii 21 Dec. 2017 Tax Return for Temporary Taxes on Net Assets and Payment Receipt; 12 Jan. 2018 Reservation of Rights Letter to SUNAT; 2018_01_12 2012 ITAN Assessment SMCV Request for reconsideration.
lxxiii 03 Oct.2017 Fine Resolution No. 011-002-0022011.
lxxiv 14 Dec. 2018 Tax Tribunal Resolution No. 10372-9-2018, p. 7, notified to SMCV on 4 Jan. 2019.
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lxxv 29 Dec. 2017 Assessment No. 012-003-0092658, p. [1]; 29 Dec. 2017 Assessment No. 012-003-0092961, p. [1]; 29 Dec. 2017 Assessment No. 012-003-0092962, p. [1]; 29 Dec. 2017 Assessment No. 012-003-0092963, p. [1]; 29 Dec. 2017 Assessment No. 012-003-0092964, p. [1].
lxxvi 12 October 2018 SUNAT Resolution No. 0150140014441, pp. 39-42; 29 Dec. 2017 Fine Resolution No. 012-002-0031072, p. [1]; 29 Dec. 2017 Fine Resolution No. 012-002-0031093, p. [1]; 29 Dec. 2017 Fine Resolution No. 012-002-0031094, p. [1]; 29 Dec. 2017 Fine Resolution No. 012-002-0031095, p. [1]; 29 Dec. 2017 Fine Resolution No. 012-002-0031096, p. [1].
lxxvii 20 June 2019 Tax Tribunal Resolution No. 05634-4-2019, notified to SMCV on 31 July 2019.
lxxviii 28 Sept. 2018 Assessments No. 012-003-0099078; 28 Sept. 2018 Assessments No. 012-003-0099079; 28 Sept. 2018 Assessments No. 012-003-0099080; 28 Sept. 2018 Assessments No. 012-003-0099081.
lxxix 28 May 2019 SUNAT Resolution No. 0150140014815, pp. 39-41.
lxxx 28 May 2019 SUNAT Resolution No. 0150140014815, p. 42.