Jacob Ogles
Diplomats at the Department of State say they will press Peru on the payment of agrarian bonds.
A spokesperson for Western Hemisphere Affairs said the U.S. has raised the importance of a “swift and fair resolution.”
Florida’s members of Congress, led by state delegation co-chair Alcee Hastings, have demanded action on the matter.
“We fear that thousands of Florida workers, among them our constituents, and many more Americans across the country, will be placed at financial risk if the government of Peru continues to default on these bonds,” Hastings wrote in a letter to the State Department in May.
Some 50,000 Florida workers could be impacted by the dereliction in debt payment on agrarian bonds. Investments, many dating back to the 1970s and ‘80s, came as compensation for land expropriation. Now, many public unions in Florida have investments as well.
Pension funds for municipal workers, firefighters, police and port workers in Florida suffer exposure of more than $20 million in eight separate pension funds, according to the group Protect Our Pensions Now.
The state department spokesperson noted the U.S. entered into the U.S.-Peru Trade Promotion Agreement in 2009. Through that deal, Peru consented to arbitration for certain investment disputes with U.S. Nationals.
And there have been challenged pushed forward by U.S. entities.
Gramercy Funds Management commenced arbitration against Peru in 2016 under the 2009 Agreement, related to the agrarian bonds.
The Peruvian embassy called that an attempt to undermine the duly established bondholder procedure.
“Rather than recover value through the bondholder procedure, Gramercy launched a negative campaign against Peru and notified an arbitration under the U.S.-Peru Trade Promotion Agreement seeking to force Peru to make exorbitant and unlawful payments to Gramercy,” reads a statement released by Peruvian diplomats in January.
Sources say any arbitration on those bonds in particular may not occur until next year.
The Peruvian embassy said the Peruvian Constitutional Tribunal mandated an administrative procedure and methodology for valuation for bonds. A process was established in 2017 for verification, valuation and payment.
But while numerous bondholders have participated in this solution, the deadline to submit bonds for verification passed Jan. 19
For now, state officials say they continue to closely monitor all developments in Peru related to the agrarian bonds issue.
A bipartisan group of Florida politicians signed onto the Hastings letter this spring, including Vern Buchanan, Brian Mast, Bill Posey, Ross Spano, Matt Gaetz, Neal Dunn, Stephanie Murphy, Val Demings, Darren Soto, Debbie Wasserman Schultz and Charlie Crist.
U.S. Sen. Marco Rubio’s office has also said it will closely monitor discussions.
But the fresh push for Peru to make good on payments comes as the South American nation undergoes tremendous turmoil.
Former Peru President Alan Garcia killed himself earlier this year while in the midst of what The New Yorker this week called a “dizzyingly complex transnational corruption scandal.”
Since that time, new Preisdent Martin Vizcarra has advanced anti-corruption reforms, as reported by TimesNowNews.
But the government still has failed to report to international bodies on the agrarian bonds.
