Jan. 11, 2015


Herbert Tassano Velaochaga

Peru

Herbert Tassano Velaochaga

President of the Executive Council, INDECOPI

"An important factor for Peru’s position in this ranking has undoubtedly been the performance of INDECOPI."

BIO

Herbert Tassano Velaochaga studied Law at the Pontifical Catholic University of Peru and has over 22 years of professional experience in the public sector. He has experience in providing legal advice to the private sector and, in particular, the public sector in the areas of energy, competition, consumer protection, sanitation, infrastructure, and administrative Law.

What inspired INDECOPI's establishment?

In 1993, the Peruvian constitution was amended, establishing the economic model for the social market economy in which a free market is guaranteed. To do this, the government established, as part of one of its main goals to strengthen institutions, establishing a better framework of guidelines for state action regarding respect for property rights and contracts. These reforms resulted in a significant increase in private investment in our country, making indispensable the existence of an efficient system of promotion and defense of free competition, consumer protection, and protection of intellectual property rights. In this context, the government created the National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPI), which is an entity key to maintaining respect for the constitutional economic framework of the country. It has several roles, including: facilitating the opening of new businesses by eliminating bureaucratic barriers to market access; protecting loan value by administrating the bankruptcy system; promoting free and fair competition, sanctioning anti-competitive behavior generated in the market; protecting intellectual property in all its forms by protecting the creations of the mind, such as inventions and literary and artistic works, symbols, names, images, and designs and models used in commerce; protecting the consumer; and promoting international trade by removing non-tariff trade barriers and oversight of dumping and subsidies.

What are the main challenges to INDECOPI realizing its main activity in such varied fields?

In fact, INDECOPI is an institution that is responsible for various matters related to the following topics: (i) competition, (ii) protection of intellectual property, and (iii) consumer protection. INDECOPI has independent and specialized functional bodies that are responsible for the investigation and resolution of cases on matters within their competence. One such body is the Commission for Defense of Free Competition, which deals with the defense and promotion of competition, and the Commission for Consumer Protection, which deals with consumer issues. Additionally, we have offices responsible for matters related to intellectual property. It must not be forgotten that all disciplines at the institution have a common, ultimate goal toward the welfare of consumers and the functioning of the economic model of the social market economy.

“An important factor for Peru's position in this ranking has undoubtedly been the performance of INDECOPI."

Peru ranked as the second best place to do business in Latin America in the World Bank's 2014 Doing Business Report. What factors in recent improvements in Peru's regional position underpin this ranking?

An important factor for Peru's position in this ranking has undoubtedly been the performance of INDECOPI in strengthening the country's institutions through the exercise of its powers. Indeed, our institution has done crucial work in eliminating illegal and/or irrational bureaucratic barriers to market access. In this regard, INDECOPI made an estimate of the costs of barriers unapplied in 2013, concluding that the costs that the complainants' traders would have had to assume if the entity had not declared their complaints would be approximately $44 million, which is more than considerable, confirming the importance of eliminating barriers. Another important factor has been the promotion and defense of competition, which has allowed the Peruvian market to become more dynamic and efficient. Indeed, punishing anti-competitive practices means that there are more operators in the market and, thus, they compete when it comes to investing in the quality of their products and services, which benefits citizens. It is important to note that, between 2006 and 2014, INDECOPI solved a total of 79 cases related to competition. In Peru, the investor has the guarantee that INDECOPI is a strong and active competition agency, the actions of which are technical and independent. That contributes to the country's ranking as the second best place to do business in Latin America.

What are INDECOPI's plans for the upcoming years?

In recent years, INDECOPI has implemented a series of improvements that have strengthened the capacity of the institution from an administrative perspective. For example, we have opened offices in all regions of the country and have strengthened the capacities of the functional bodies to perform better investigations. This is reflected in the results obtained regarding the elimination of bureaucratic barriers and initiating investigations into anti-competitive conduct. This has also resulted in further competition advocacy and the activation of the leniency program as an important key to detecting cartels. However, we aim to further strengthen our capabilities to better serve businesses and citizens in general. To do this, we plan to implement technological tools to improve internal processes and thus serve users more efficiently and in less time. We are also presenting a series of legislative proposals to strengthen the powers of INDECOPI, including a proposal to improve the defense of the free competition system, which is looking to enhance research capacity and the time it takes to solve cases, as well as improving the bankruptcy system, which is very important for companies to exit the market in an orderly manner. Also, in the field of intellectual property, we are presenting a proposal to strengthen the protection of biodiversity and collective knowledge of indigenous communities, which represent a major source of business. Finally, considering the importance of INDECOPI for the economy, we expect, over the coming years, to propose a series of public policy related to matters that can serve as a roadmap for action via our institution and harmonize the needs and objectives of each of the actors operating in the market: the state, businesses, and citizens in general.

© The Business Year - January 2015

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