Peru needs international insolvency regulations like the SOS model.

The acronym SOS has been used since the early 20th century as a distress signal in emergency situations, both in maritime and aerial contexts, due to its simplicity in Morse code radio communications. However, in the realm of international insolvency, mechanisms akin to SOS are also required for companies in bankruptcy with assets in different jurisdictions, in order to prevent a depletion of the debtor's assets and enable a successful international restructuring. In 1997, the United Nations Commission on International Trade Law (UNCITRAL) established the Model Law on Cross-Border Insolvency, with the aim of providing a legal framework for handling international insolvency situations and promoting cooperation between courts or authorities of different countries. Although more than 60 countries have adopted this law in their domestic legislation, including neighboring nations such as Colombia and Chile, Peru has not yet followed suit. The United States, on the other hand, has extensive experience in managing SOS mechanisms in cases of international insolvency. Since adopting the Model Law in 2005, it incorporated Chapter 15 into its Bankruptcy Code, which allows for the recognition of foreign insolvency proceedings and promotes cooperation between courts to ensure an orderly and equitable restructuring process among international creditors. In Peru, a bill amending the General Insolvency System Law is currently pending approval by the Congress, which includes the incorporation of a chapter on cross-border insolvency based on the Model Law. This proposal aims to establish the requirements for other countries to request Peru's assistance in implementing SOS mechanisms in cases of international insolvency, thereby fostering greater cooperation and facilitating the restructuring process for companies with assets in the country. The lack of an international SOS regulation in Peru places the country outside the global context regarding international insolvency, negatively impacting competitiveness and foreign investor confidence. It is crucial for the regulatory project to be approved as soon as possible to establish a legal framework that enables international cooperation and contributes to a conducive environment for the restructuring of crisis-ridden companies. When evaluating the possibility of investing in Peru, investors consider not only the regulatory regimes in regular situations but also the legal framework in times of crisis. In this regard, the approval of cross-border insolvency regulations would be a significant step towards strengthening confidence in the country and promoting a favorable environment for foreign investment. In conclusion, it is imperative for Peru to implement SOS mechanisms in international insolvency situations, following the example of other countries that have adopted the Model Law. The approval of the bill amending the General Insolvency System Law would be a significant advancement in this regard, allowing the country to provide international cooperation and contribute to an orderly and equitable restructuring process for crisis-affected companies.