Peru: Is it necessary to amend the law prohibiting arbitrary closures of commercial establishments?

In brief

Following the recent tragedy in a shopping mall in Trujillo, Law No. 31914 has faced significant criticism. Enacted in May 2023, this law aimed to prevent abuses and arbitrariness by restricting the grounds on which municipalities could temporarily close commercial establishments.


Contents

The criticisms against Law No. 31914 are excessive. The law allows municipalities to order the temporary closure of any establishments only in cases of imminent risk, defined as potential damage of natural or human origin that could cause death, serious physical injury, or serious damage to life, health, property or safety.
Contrary to claims by critics of the law, Law No. 31914 does not diminish the municipal authority to supervise or close establishments. Instead, it establishes clear grounds and procedures to prevent arbitrary actions, such as the arbitrary closure of a well-known grilled chicken restaurant by the municipality of Ate or the attempted closure of the airport by the municipality of Callao for not having anti-discrimination signs.

Law No. 31914 specifies five grounds for the immediate temporary closure of establishments: 

  • Lack of an operating license
  • Conducting unauthorized activities
  • Absence of a valid ITSE building safety certificate
  • Generating odors, fumes, noise, or other disturbances above legal limits 
  • Imminent danger to life, health, property, or safety that cannot be remedied during inspection

Therefore, it is incorrect to claim that municipalities have been restricted in their authority to supervise or immediately close commercial establishments when there is a risk to safety, lives or health. The law simply mandates adherence to specific requirements to curb abuses. For instance, closures must be ordered by a municipal inspector and signed by the respective manager of the establishment. The law also prohibits imposing fines simultaneously with closures to prevent the practice of making the lifting of the closure contingent on the payment of fines. Fines can be imposed after the closure order is lifted if the necessary corrections have not been made.

Despite Law No. 31914, some municipalities have attempted to apply the law to situations beyond its intended scope, resulting in the closures of establishments for minor infractions unrelated to safety. For instance, municipalities have closed many establishments, particularly industrial ones, by arguing that their operating licenses do not expressly permit administrative offices, treating it as a separate activity or business as required by law. Similarly, closures have been ordered for minor formal infractions, such as failing to submit formal reports regularly, which are not related to safety. The law specifies that such cases should necessitate the commencement of administrative procedures, reserving temporary closures as preventive measures only for the most serious and truly risky situations to the safety, life or health of persons, or those that cannot be remedied.
Moreover, it has become evident that many municipalities impose fines in addition to closures to pressure establishment owners into paying the fines before they can contest the closure reasons. Inspectors often claim to act on behalf of inspection managers or carry closure minutes that were already signed by the municipal officials.
In conclusion, municipalities retain the authority to inspect and close establishments for safety compliance. The proposal to modify Law No. 31914 is unnecessary and unjustified, as it could lead to the very municipal excesses the law was designed to prevent

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We hope this information is of benefit to you and your company. Please do not hesitate to contact us if you require any advice in this regard.

Click here to read the Spanish version.

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