Legislative Decree No. 1565, General Law on the Improvement of Regulatory Quality

(ii) Prepare a report identifying potential States or State that may comply with what is required by the Peruvian State. (iii) In the case of investment projects or investment programs within the framework of the National System of Multiannual Programming and Investment Management, it must have: (a) the opinion of the Multiannual Investment Programming Office (OPMI) of the functionally responsible Sector regarding alignment with prioritized objectives and goals regarding the closing of infrastructure gaps or access to services established in the Multiannual Investment Programming and regarding compliance with the prioritization criteria approved by the Sector when the investment project or investment program is the competence of a regional or local government; and, (b) the report of the Formulating Unit and/or Investment Executing Unit, as applicable, regarding compliance with specific sectoral methodologies and technical standards applicable to it. These documents must be registered in the computer application of the Investment Bank. (iv) Report from the Budget Office or the one acting on behalf of the corresponding entity, which states that the entity has budgetary viability for the necessary financing for said contracting, as well as for investment projects or investment programs, unless it requires to negotiate a debt operation, in which case, it must be contemplated in the Annual Debt Program of the respective year. To this end, it must substantiate that the required budget is part of the current Multiannual Budget Assignment and/or resources to be incorporated through other financing sources in the institutional budget. The aforementioned report must be sent in copy to the General Directorate of Public Budget (DGPP) of the Ministry of Economy and Finance (MEF). 4. In the case of Public Entities, Special Programs or Projects, the requirements mentioned in the preceding paragraph must be presented through the corresponding Ministry, for the purposes of processing the supreme decree referred to in paragraph 2. 5. The Agreement to be signed, at a minimum, includes clauses that contemplate the following obligations: 5.1 By the other State: i) Plan for the transfer of knowledge related to the object of the Agreement ii) Plan for the country legacy, if applicable. iii) The obligation to send the documentation regarding the execution of the Agreement and the contracts derived from it. iv) The automatic termination of the contracts derived from the Agreements, due to acts of corruption. 5.2 By the Ministry, Attached Public Entity, Program or Special Project: The obligation to send the documentation regarding the execution of the Agreement and the contracts derived from it to the Comptroller General of the Republic, when requested. 5.3 By both parties: Commitment to evaluate the need to create a project management instance in the Ministry, Attached Public Entity, Program or Special Project, when the object includes project management. 6. The execution of the contracts derived from the State-to-State Agreement signed is subject to government control. The control is simultaneous and is under the responsibility of the Comptroller General of the Republic. 7. In case the cost of the investment project or investment program exceeds 40% with respect to the amount considered in the contract or the contracts derived from the State-to-State Agreement, the Budget Office or the one acting on behalf of the corresponding entity must substantiate the budgetary availability and sustainability for the financing of the investment project or investment program before the MEF. Article 3. Endorsement This Legislative Decree is endorsed by the President of the Council of Ministers and by the Minister of Economy and Finance. THEREFORE: I order it to be published and complied with, giving account to the Congress of the Republic. Given in the Government House, in Lima, on the twenty-seventh day of the month of May of the year two thousand twenty-three. DINA ERCILIA BOLUARTE ZEGARRA President of the Republic LUIS ALBERTO OTÁROLA PEÑARANDA President of the Council of Ministers ALEX ALONSO CONTRERAS MIRANDA Minister of Economy and Finance 2181939-2 LEGISLATIVE DECREE No. 1565 THE PRESIDENT OF THE REPUBLIC WHEREAS: That, through Law No. 31696, Law that delegates to the Executive Branch the power to legislate in matters of economic reactivation and modernization of State management, the Congress of the Republic has delegated to the Executive Branch the power to legislate in matters of economic impulse for economic reactivation and modernization of State management, for a period of ninety (90) calendar days; That, through letter c) of paragraph 2.2 of article 2 of the aforementioned Law, the power to legislate in matters of modernization of State management is delegated in order to establish the regulatory framework for the strengthening of the improvement of regulatory quality applicable to normative proposals of the Executive Branch; That, within the scope obtained during the last years in matters of improvement of regulatory quality, the approval in the year 2016 of Legislative Decree No. 1310, Legislative Decree that approves additional measures of administrative simplification, stands out, whose article 2, modified by Legislative Decree No. 1448, Legislative Decree that approves additional measures of administrative simplification and perfects the institutional framework and the instruments that govern the process of improvement of regulatory quality, issued in the year 2018, disposed of the obligation of the entities of the Executive Branch to carry out a Regulatory Quality Analysis of administrative procedures established in normative provisions of a general nature, in order to identify, eliminate and/or simplify those that are unnecessary, ineffective, unjustified, disproportionate, redundant or do not comply with Law No. 27444, Law of the General Administrative Procedure or to the norms with rank of law that serve as their support. Likewise, the aforementioned Legislative Decree No. 1448 establishes, among others, that the improvement of regulatory quality is an ordered, integral, coordinated, gradual and continuous process oriented to promote efficiency, effectiveness, transparency and neutrality in the exercise of the normative function of the State; That, in front of these two legislative decrees, it is necessary to have a special law in the matter that unifies and regulates in an integral way the improvement of regulatory quality, with emphasis not only on the Regulatory Quality Analysis of administrative procedures, but that it comprises the set of instruments of improvement of regulatory quality; highlights the mandatory nature of the Regulatory Impact Analysis - AIR for the entities of the Executive Branch; promotes progressively the Ex Post Regulatory Impact Analysis, among other instruments of improvement of regulatory quality; strengthens the direction of the Secretariat of Public Management as the director of the Administrative System of Modernization of Public Management which comprises the improvement of regulatory quality as one of its means, as well as highlights the importance of transparency and participation of the various public and private actors in the process of improvement of the quality of regulations; That, in virtue of paragraph 6 of inciso 28.1 of article 28 of the Regulation that develops the Institutional Framework that governs the Process of Improvement of Regulatory Quality and establishes the General Guidelines for the application of Ex Ante Regulatory Impact Analysis, approved by Supreme Decree No. 063-2021-PCM, the present Legislative Decree is considered excluded from the scope of the Ex Ante AIR, since it contains rules to improve the functioning of the Administrative System of Modernization of Public Management, being one of the means of this System the quality in the regulations; In accordance with what is established in article 104 of the Political Constitution of Peru; and, in letter c) of paragraph 2.2 of article 2 of Law No. 31696, Law that delegates to the Executive Branch the power to legislate in matters of economic reactivation and modernization of State management; With the approving vote of the Council of Ministers; and, With the obligation to give account to the Congress of the Republic; Has issued the following Legislative Decree: LEGISLATIVE DECREE THAT APPROVES THE GENERAL LAW ON THE IMPROVEMENT OF REGULATORY QUALITY CHAPTER I GENERAL PROVISIONS Article 1.- Object This Legislative Decree aims to strengthen and harmonize the process of improvement of regulatory quality, as well as the institutional framework and instruments that govern it as part of an ordered, integral, coordinated, gradual and continuous process to guarantee the effective compliance of public policies. Article 2.- Purpose This Legislative Decree aims to promote efficiency, effectiveness, transparency, coherence, neutrality and participation of stakeholders, in the exercise of the normative function of the State, promoting the competitiveness and sustainable and inclusive economic and social growth of the country, as well as good governance, using regulation as a means to achieve a public policy objective based on evidence and the principles that govern the open State. Article 3.- Scope of application This Legislative Decree applies to the entities of the Executive Branch that have the power to approve and/or propose normative provisions of a general nature. The other entities included in article I of the Preliminary Title of Law No. 27444, Law of the General Administrative Procedure may, within the framework of their competencies and the autonomies that have been conferred upon them, incorporate actions of improvement of regulatory quality in the exercise of their power to approve and/or propose normative provisions of a general nature. The scope of application of the Legislative Decree excludes general normative provisions related to the functioning and operability of the Consular Offices of Peru abroad. Article 4.- Principles of the improvement of regulatory quality The improvement of regulatory quality is based, fundamentally, on the following principles, without prejudice to the application of others that may be established in the Regulation of this Legislative Decree: a. Orientation to people: Regulations are designed and implemented from the identification of the needs and expectations of people, seeking their satisfaction and guaranteeing their fundamental rights. b. Transparency and participation: Entities of the public administration in the exercise of their normative powers promote transparency and early and continuous participation of the citizenry, the private sector, academia, civil society and, in general, all stakeholders, as a mechanism to achieve public trust and strengthening of democracy. c. Use of evidence: Entities of the public administration use available information from reliable and objective sources, taking into account quantitative and qualitative data, analysis and scientific experience, among others, as a necessary condition to justify regulatory intervention. d. Accountability: Entities of the public administration establish effective mechanisms to inform and respond about the results achieved with regulatory measures. e. Simplicity: Regulations are simple, clear, precise and oriented to their compliance; they do not contain any unnecessary complexity, seeking the understanding of the general citizenry for their effective comprehension and application. f. Necessity: The regulation has prior evidence that demonstrates that the selected alternative is the most beneficial. It contributes to the objective of resolving, reducing risks or mitigating a public problem identified based on evidence. In the process of generating evidence and designing the regulation, all rational alternatives are analyzed in order to choose the best regulatory option. g. Legality: Administrative authorities act with respect for the Political Constitution of Peru and other norms with constitutional rank, the law and the law, within the faculties or competencies attributed to them and in accordance with the purposes and obligations for which they were conferred.

El Peruano /Domingo 28 de mayo de 2023 NORMAS LEGALES 9 h. Effectiveness: It is ensured that the objective of the regulation is clearly defined and aligned with public policy objectives. Normative provisions must be measured and evaluated by the achievement of the identified results and impacts under a risk approach, establishing mechanisms for monitoring and compliance with the regulation. i. Proportionality and reasonableness: Decisions of the administrative authority must maintain due proportion between the means to be employed and the public ends to be protected, so that they respond to what is strictly necessary to resolve the public problem. In this sense, the costs, benefits and risks of the solution alternatives to the problem that contribute to the selection of the regulatory alternative as the best option must be described and analyzed. j. Integrity and neutrality: The conduct of all persons involved in any stage of the regulatory process must be upright, honest and impartial, avoiding any improper practice or conflict of interest. k. Subsidiarity: The use of regulatory options corresponds when there is no other non-regulatory solution superior in terms of cost-effectiveness to solve a public problem. In case of doubt about the need to issue a regulation, it will be opted not to issue it. l. Coordination and articulation: Entities of the public administration guarantee, in their actions for the improvement of regulatory quality, intergovernmental, intersectoral, intrasectoral and multisectoral articulation, as well as active coordination with the various actors of the regulatory environment. m. Coherence and consistency: Regulations issued require coherence and harmony with the legal system and public policies. n. Environmental sustainability: When public entities promote the approval of regulations that could have an impact on the environment, they must consider actions and conduct that contribute to its protection, the rational and sustainable use of natural resources to guarantee the sustainable satisfaction of people's needs and expectations. CHAPTER II ON THE INSTRUMENTS FOR THE IMPROVEMENT OF REGULATORY QUALITY Article 5.- Instruments for the improvement of regulatory quality 5.1 The instruments for the improvement of regulatory quality are public policy tools that allow public entities to adopt duly substantiated decisions on the need to issue, modify or repeal a norm, for the benefit of society. 5.2 By way of example and not limitatively, the following are instruments for the improvement of regulatory quality:

1. Early Agenda It allows a public entity to identify, schedule and publish its public problems in an early phase to the adoption of possible regulatory and non-regulatory interventions, in order to achieve greater predictability, participation and transparency in the regulatory or non-regulatory production process. It serves as input and starting point to evaluate and/or implement regulatory innovations.
2. Ex Ante Regulatory Impact Analysis - Ex Ante AIR Its object is the prior, systematic and integral analysis to identify, evaluate and measure the probable results, benefits and costs of different regulatory and non-regulatory solution alternatives to a public problem, considering the identification and analysis of risks, in order to adopt the best intervention alternative based on evidence. If the resulting alternative from the corresponding evaluation is a regulation, its development must be coherent and consistent with the current legal system, as well as establish the mechanisms for its compliance and permanent monitoring as well as the performance of the regulation.
3. Regulatory Impact Analysis – Ex Post AIR Its object is to determine the consequences produced by the validity of a regulation, with the purpose of determining if the public problem remains and if it has been effectively addressed, if the proposed objectives have been met, and/or if there were unforeseen effects and/or impacts. It also allows identifying opportunities for improvement, modification and/or repeal of regulations. In addition, the Regulatory Impact Analysis – Ex Post AIR considers the current regulatory stock, on which sectors and matters are prioritized according to the criteria determined in the Regulation of this Legislative Decree.
4. Regulatory quality analysis of administrative procedures Ex Ante, Ex Post and Stock Its purpose is to identify, eliminate and/or simplify those administrative procedures that are unnecessary, ineffective, unjustified, disproportionate, redundant or do not comply with Law No. 27444, Law of the General Administrative Procedure or to the norms with rank of law that serve as their support. It determines and reduces the administrative burdens generated to the administrators as a consequence of the processing of the administrative procedure. The ACR Ex Post considers the current regulatory stock. This analysis is not applicable to administrative procedures of a tax nature.
5. Public consultation through its various modalities It allows a public entity to provide and receive information from the citizen, companies or any affected actor or group (feedback) in order to evaluate the impacts that a possible regulatory intervention may generate. Among other things, it provides knowledge, perspectives and ideas about the public problem, providing solution alternatives and giving legitimacy to the decision taken.
6. Implementation of cost-effective innovations It allows public entities and/or civil society to address public problems through the generation and analysis of regulatory and non-regulatory solution alternatives, from the production of evidence, the identification, design, implementation and continuous monitoring of cost-effective innovations, among them novel regulatory models, regulatory laboratories and others.
7. Review and repeal of norms of the legal system It is an ex post regulatory quality improvement instrument whose purpose is to identify regulations that have lost their validity in order to keep the regulatory framework updated. The purpose is that the public administration has an ordered and systematized legal system that leads to an effective application of regulations by authorities and better access and understanding by the citizenry. 5.3 To address a public problem, public entities may use more than one instrument of improvement of regulatory quality,

10 NORMAS LEGALES Domingo 28 de mayo de 2023 / El Peruano whenever there is interrelation or complementarity between them. The other aspects of their regulation are established in the Regulation of this Legislative Decree. 5.4 The creation of new instruments of improvement of regulatory quality under implementation of the Executive Branch is approved by Supreme Decree endorsed by the President of the Council of Ministers. 5.5 Administrative simplification constitutes a means of the Administrative System of Modernization of Public Management that complements and strengthens the process of improvement of regulatory quality. It comprises the implementation of Standardized Administrative Procedures (SAP). Article 6.- Mandatory nature of Ex Ante Regulatory Impact Analysis and Ex Post Regulatory Impact Analysis 6.1 Ex Ante Regulatory Impact Analysis is mandatory for all projects of general normative provisions of the entities of the Executive Branch that are within the scope of application of this instrument, provided for in the Regulation of this Legislative Decree. The approval of regulations that are not within the exceptions and that are published without the validation of the Multisectoral Commission for Regulatory Quality, are communicated by it, to the responsible entity to proceed with the repeal of the respective norm, under the responsibility of its holder. The Presidency of the Council of Ministers brings this fact to the attention of the institutional control body of the entity, as well as to the Comptroller General of the Republic. 6.2 Ex Post Regulatory Impact Analysis is mandatory and progressive for general norms issued by the entities of the Executive Branch, in accordance with the criteria established by the Presidency of the Council of Ministers. In the application of Ex Post AIR, the degree of impact generated and effects produced during the validity of the norm is determined. From the result of the evaluation, the existence of net negative effects and/or impacts is accredited, corresponding to the modification, repeal of the norm or of some of its provision(s) by the entity of the public administration that issued it or other measures, under responsibility. The gradualness of the other effects derived from the evaluation is established in the Regulation of this Legislative Decree. 6.3 The exceptions referred to in paragraph 6.1 of this article are regulated in the Regulation of this Legislative Decree. 6.4 What is established in this article is not applicable to normative provisions and administrative procedures of a tax nature. CHAPTER III REGULATORY GOVERNANCE Article 7.- Regulatory governance Regulatory governance focuses on generating the conditions that ensure the adequate treatment of public problems, for which instruments of improvement of regulatory quality based on evidence are used, which are developed in a framework of predictability, collaboration and co-responsibility that have the State, the citizenry, the private sector, academia and civil society, who interact with transparency, cooperation and good faith. Article 8.- Direction The Presidency of the Council of Ministers, through the

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