March 9, 2018 / 12:20 AM / 15 days ago

Peru's Congress approves new anti-graft rules

LIMA (Reuters) - Peru’s opposition-ruled Congress unanimously approved a bill on Thursday that aims to keep a massive corruption probe from paralyzing Peru’s construction sector.

FILE PHOTO - Peru's President Pedro Pablo Kuczynski attends an event for Christmas in Lima, Peru, December 19, 2016. REUTERS/Mariana Bazo/File Photo

The legislation, proposed by President Pedro Pablo Kuczynski last month, will replace anti-graft rules that restrict the financial movements of companies that have acknowledged or been convicted of corruption.

Critics have blamed the current rules, passed a year ago, for slowing economic growth and discouraging companies from telling prosecutors about bribes they may have taken part in or known about.

The finance ministry said last month that the new rules will allow companies that broker a plea deal with the attorney general’s office to receive an entire or partial exemption from the restrictions.

Earlier this week, the Banking Association of Peru warned the economy could face its worst crisis in decades unless the new rules were passed urgently.

The current rules were passed to ensure that Brazilian builder Odebrecht [ODBES.UL], which has admitted paying $29 million in bribes to secure contracts, pays eventual fines for corruption.

Kuczynski’s center-right government has not yet proposed a figure for the fine Odebrecht must pay or approved the sale of its local businesses and projects.

Some 30 construction companies, including Peru’s largest, Grana y Montero, are now under investigation by public prosecutors.

Reporting by Mitra Taj and Marco Aquino; Editing by Lisa Shumaker

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