André Castillo
Israel Pérez
“In Peru, the adoption of crypto assets can no longer be seen as a technological curiosity or a fringe phenomenon”.
According to a Lemon report cited by Gestión (03/31/2026), the country ranks among the fastest-growing markets for crypto users in Latin America: by 2024, more than one million Peruvians held crypto assets (SBS), transaction volumes grew 20% year-over-year, and adoption doubled within a single year. In 2025, crypto app downloads reached nearly three million, and the active user base doubled compared to 2024. But perhaps the most telling insight is not just how fast the market is growing, but how it is being used in Peru: unlike other countries in the region, where adoption is primarily linked to saving or investment, here it is more closely tied to payments, transfers, and practical, everyday use cases.
This distinction is not trivial. It reflects a deeply Peruvian trait: the ability to adapt to adversity, to find practical solutions even in uncertain environments, and to keep daily life moving despite instability or limited predictability. Peruvians operate within a context shaped by recurring crises, systemic informality, slow traditional channels, and a constant need to rethink how to work, pay, save, or do business. In that setting, technology is not adopted for trendiness, but for utility. And this is where crypto assets—particularly so-called “digital dollars,” which account for roughly 30% of holdings in the country and around 80% of purchase activity—emerge not just as a financial alternative, but as a tool for adaptation.
This reality raises a natural question in the corporate sphere: if crypto assets are already part of everyday economic activity, can they also be used to incorporate or capitalize a company? In Peru, the answer is yes.
Capital companies remain the primary vehicle for doing business, and share capital plays a central role in corporate activity. Traditionally, contributions are associated with cash or tangible assets, but corporate law has long recognized non-cash contributions, including intangible assets. Within this framework, crypto assets may be contributed to share capital, provided certain legal and registry requirements are met.
A simple clarification is helpful here. “Crypto asset” is the broader category, encompassing various digital assets based on distributed ledger technologies such as blockchain. Cryptocurrencies fall within this category, but so do other types of tokens. Not all serve the same function: some operate as a medium of exchange, others grant access to services or platforms, and others resemble investment instruments. In short, every cryptocurrency is a crypto asset, but not every crypto asset is a cryptocurrency.
The Central Reserve Bank of Peru has stated that cryptocurrencies are unregulated digital assets that do not qualify as legal tender and do not fully perform the traditional functions of money. Accordingly, when contributed to a company, they are not treated as cash, but as non-cash (in-kind) contributions.
Under Peruvian corporate law, in-kind contributions may consist of either registrable or non-registrable assets. Cryptocurrencies fall into the latter category, as they are not subject to a specific registry within the national legal system. As a result, two key requirements must be met for their contribution: (i) a valuation report of the asset, and (ii) a receipt certification issued by the company’s manager or authorized representative, confirming that the asset has been effectively transferred to the company. This framework is set out in Article 35 of the Companies Registry Regulations.
This position has been confirmed by the Peruvian Registry Tribunal in Resolution No. 4920-2024-SUNARP-TR, which recognizes that cryptocurrencies may be classified as movable property under subsection 10 of Article 886 of the Civil Code and, therefore, may be contributed as capital. The significance of this decision is substantial: this is no longer merely a doctrinal or comparative discussion, but a concrete registry-level precedent that opens a practical pathway within Peruvian corporate practice.
The ruling also clarifies a common concern. The requirement that share capital be expressed in Peruvian soles does not prevent contributions in cryptocurrencies. What the corporate system requires is that the contributed asset be valued in local currency for corporate and registry purposes. In other words, the cryptocurrency does not replace the sol as the unit of account; it is simply translated into soles for legal incorporation into share capital.
This reasoning aligns with the broader Peruvian legal framework. Although cryptocurrencies are not legal tender, their possession and circulation are not prohibited. As such, they may be treated as assets with economic value. From a corporate standpoint, any asset with economic value may be contributed to share capital, provided it can be valued, identified, and effectively transferred to the company.
While the aforementioned resolution refers specifically to cryptocurrencies, its reasoning supports the view that other crypto assets could also be contributed under similar conditions. This raises an important policy question: whether there is a need for a specific regulatory framework for these assets and, if so, whether it would be appropriate to subject them to regulatory sandbox environments. Such mechanisms could allow for the development of a more precise legal treatment, taking into account factors such as volatility, technological traceability, digital custody arrangements, and associated risks, including anti-money laundering concerns.
The key takeaway for the corporate sector is clear: crypto assets can already form part of share capital in Peru, provided their contribution is properly structured from both a corporate and registry perspective.
This is where economic reality and Peruvian business culture intersect once again. If, as the data shows, crypto assets in Peru have expanded not only as investment vehicles but also as practical tools for payments, transfers, savings, and everyday economic organization, it is only natural that corporate law begins to recognize them as part of the toolkit for doing business. Peruvian resilience is not merely about endurance; it is, above all, about creative adaptation—finding pathways where others see obstacles and leveraging available tools to keep moving forward.
For that reason, rather than approaching crypto assets with distance or automatic skepticism, Peruvian entrepreneurs, investors, and companies would do well to seriously explore this possibility. Not as a speculative trend or a passing fad, but as a legal and economic tool that is already grounded in market reality and supported by the registry system. In a country where everyday ingenuity often compensates for a lack of certainty, understanding these new forms of capitalization can unlock real opportunities to build businesses with greater flexibility, speed, and forward-looking vision.
After almost 30 years with a framework that was already stagnant, a promising model of Economic Zones is created that bet on private investments initiative. Its implementation will be after the issuance of the regulation. Below is a description of the Law.
October 06, 2025
Eduardo García-Godos
PARTNER
Peru is adjusting its strategies to weather major forces that have been shifting the global trade environment such as logistics disruptions, protectionism, US-China trade war, and emerging technologies (+AI). In fact, foreign trade has been one of the most stables policies of the current Peruvian government, shielded by a predictable Central Bank. The economy closed 2024 with a 3.3% GDP growth, however, due to ongoing global uncertainty, growth projections for 2025 have been revised downward to 2.8%.
Inflation expectations have remained within the Central Bank’s target range of 1–3%, with it standing at 2.3% in May 2025, the third lowest inflation rate in the Latin American region (or the first, if excluded dollar-pegged Ecuador and Panama). This reflects greater macroeconomic stability compared to the regional context. Moreover, in 2024, Peru’s exports soared to an unprecedented USD 77 billion and, notably, from January to May 2025, exports reached USD 33 billion, marking a record high for that period.
Despite global disruptions, Peru has steadfastly maintained its commitment to multilateralism and an open trade agenda, currently supported by 25 Regional or Free Trade Agreements (FTA). In addition, US trade policy measures have posed significant challenges for Peru, prompting the following strategic actions: (i) advocating for multilateralism and a rules-based system; (ii) adopting a neutral stance in relations with its two largest trading partners, the US and China, to maximize the advantages of both relationships; (iii) implementing a comprehensive trade diplomacy strategy to secure access to the US market; and (iv) advancing FTA negotiations with other economies while engaging in discussions related to fourth-generation agreements, such as the Digital Economy Partnership Agreement (DEPA).
Regarding FTA negotiations, in 2024, Peru signed a Protocol of Optimization to its FTA with China (yet to be implemented), aimed at enhancing and modernising the existing agreement. New chapters were added, including those on electronic commerce and global supply chains. Additionally, in the last year, the FTA between the Pacific Alliance member countries and Singapore entered into force, following the completion of internal procedures by all parties. Peru also signed a protocol to its FTA with Guatemala (which has not yet entered into effect), updating the interpretative notes on specific rules of origin, the list of non-conforming measures, and the tariff schedule.
Moreover, in 2024, a working group was established to oversee Peru’s accession to the DEPA, marking a key milestone in its digital trade agenda. DEPA aims to set new global standards for digital commerce, promoting the adoption of the Model Law on Electronic Transferable Records (MLETR) and prohibits the imposition of customs duties on electronic transmissions. It also seeks to encourage key enablers of the digital economy, such as paperless trade, trusted data flows, digital payments, and emerging technologies like artificial intelligence and fintech. This initiative reflects Peru’s significant strides in advancing digitalisation through international cooperation.
Probably one of the most promising areas is Trade Facilitation. This area becomes critical as it intends to offset trade barriers by improving cross-border trade processes and infrastructure. According to the UN Global Survey on Digital and Sustainable Trade Facilitation 2025, which analyzes 62 trade facilitation measures across 170 countries, Peru ranked first in Latin America.
Similarly, the OECD Trade Facilitation Indicators 2025 ranked Peru as a leading performer in 2024, placing it 7th among 29 economies in the Americas. Notably, Peru scored above the best practice benchmarks in key areas such as internal border agency cooperation, information availability, and formalities related to procedures.
In this context, two major developments in foreign trade support infrastructure stand out: the inauguration of Chancay Port in November 2024 and the opening of the new Jorge Chávez International Airport in June 2025. Operated by the Chinese company COSCO Shipping, Chancay Port not only reduces travel time between Chancay and Shanghai from 40 to 23 days but also managed to mobilise over USD777 million in trade by May 2025.
Peru has also advanced in promoting multimodal transport integration. In September 2024, Law No. 32129 was enacted to broaden the scope of the foreign trade community systems incorporated into the Peruvian Foreign Trade Single Window (VUCE). Initially focused solely on the maritime sector through the Port Community System, these systems now also encompass land and air transport ecosystems. The objective is to enhance information exchange and coordination among operators across all modes of transport. A draft version of its statute was published in March 2025.
Regarding Special Economic Zones (Free Zones), progress was made this year regarding the adoption of a new framework for privately managed SEZ. Although initially introduced in Congress in 2021, the bill was passed by Congress in April 2025 and sent to the Executive Branch. The law aims to establish a new regime that allows private companies to create and operate SEZ, offering a range of tax and customs benefits. These include a reduced income tax rate, exemptions from VAT and the selective consumption tax. It also introduces a special customs regime and simplified procedures for the entry, stay, and exit of non-health-restricted goods into and out of the SEZ. Although the bill was observed by the Executive, Congress has nonetheless insisted on its approval, and the law is expected to be enacted later this year.
As protectionism rises and multilateral trade systems weaken, Peru has demonstrated resilience by maintaining a commitment to open trade policies and leveraging its strategic relationships with major economies like the US and China. The country has achieved economic stability, with a steady GDP growth rate and manageable inflation, largely driven by robust domestic demand and export performance. Trade facilitation measures and advancements in digital trade have positioned Peru as a top performer in Latin America, enhancing its competitiveness and efficiency in cross-border trade. Furthermore, the strategic integration of robust port and airport infrastructure and progressive legislation has the potential to transform the country into a prominent regional logistics hub, enhancing its connectivity and competitiveness in foreign trade.
Eduardo García-Godos
PARTNER
“Trade theory tells us that barriers to trade facilitation can have an impact equivalent to tariffs. It’s time to reduce that impact—by at least 10%”
The tariffs imposed by the U.S. underscore the fragility of the international trade rules system (WTO and FTAs). Although the GATT has existed since 1947, the WTO remains (or remained?) still a young organization. More clearly, since the U.S. positioned itself as a commercial (19th century) and a military power (after WWII), trade rules have largely been shaped by them. Third-generation FTAs, in many cases, were not negotiations between equals.
Escape clauses, national security provisions, and other exceptions were bound to be used more frequently in today’s heightened global conflict environment — the most intense in decades. Today, the U.S. went further, applying differentiated tariffs in a discretionary manner.
Regardless of the timing, legitimacy, or tactical motivations behind US decisions, Peru must renew its efforts to enhance national competitiveness. This must happen in parallel with our commercial diplomacy initiatives in Washington, where we are represented by a skilled ambassador. The “domestic agenda” intended to maximize the benefits of trade liberalization has lost momentum amid the political turbulence we’ve experienced in recent years.
Peruvian businesses have developed internationalization capabilities; there are countless success stories. With their level of maturity and resilience, the Government will not teach them how or where to export. Instead, it must facilitate the sustainability of conditions that allow for efficient transactions. There are still gaps in trade facilitation processes — gaps that fall within the responsibilities of ministries and public agencies.
To be practical, we must move forward with implementing the National Competitiveness and Productivity Plan launched last year. In addition, the National Strategic Export Plan will expire this year and must therefore be revised in light of these evolving circumstances.
Trade theory tells us that barriers to trade facilitation can have an impact equivalent to tariffs. It’s time to reduce that impact—by at least 10%.
Eduardo García-Godos
PARTNER
Introduction
Advanced or disruptive technology is now reconfiguring the paradigm of knowledge and its application by supplying innovative techniques that benefit the operations of border control agencies. This article outlines the benefits of leveraging artificial intelligence (AI) in risk management for the importation of medical products based on an IT system being implemented in Peru within the Single Window for Foreign Trade (‘SW’) platform.
The government has decided to gradually implement this system, starting with select controlled products, before expanding to encompass health regulatory bodies. Thus, this risk management system (RMS) is expected to incorporate premarket approvals for medical products at a later stage.
This analysis addresses the current Peruvian regulatory model for medical products and the legal framework for trade facilitation measures, as well as the available technological systems that would enable greater safety, effectiveness and quality in medical product import control.
Authorisation for trade and importation
Medical products require premarket approval for their import and commercialisation. Like most Latin American countries, in Peru, the medical products’ regulatory model evaluates supply chain requirements and standards, as well as the product. Supply chain assessment involves the manufacture, storage and delivery processes, whereas the product’s evaluation involves an analysis of supporting documents regarding its quality, safety and effectiveness. The approval timelines for the latter vary depending on the volume and complexity of information to be reviewed, ranging from 30 days to one year.
The National Regulatory Authority (NRA) [1] verifies the product requirements’ compliance; however, applications for premarket approval are processed through the SW managed by the Ministry of Foreign Trade. The SW has incorporated the product-approval procedures (Sanitary Registry) of the health authority, including those for domestic trade, whereas procedures related to the supply chain (eg, Good Manufacturing or Storage Practices standards) are processed through the NRA’s system.
The inclusion of procedures for domestic trade has become a significant feature of the SW that distinguishes it from other models in the Latin American region, embracing a broader approach to the supply chain control of these products.
Unlike the authorisation of cosmetics or personal care products, which are automatically approved, the authorisation of medical products requires prior evaluation. However, the implementation of AI can now lead to the automatic approval of certain applications, effectively streamlining the process.
There is a significant delay in the submissions’ approval and a lack of predictability regarding the NRA, which affects product availability in the market. For many years, the absence of structured data on applicants’ risk profiles has limited the authority’s ability to organise and expedite approval mechanisms based on the probabilities of whether the applicant could meet the requirements outlined in the legal framework.
Because the SW interoperates[2] with Customs, details of the product offered for the import’s authorisation are provided to the latter through data incorporated into the Customs Declaration. Leveraging this integration, risk patterns detected by the NRA are recorded by Customs, facilitating the synchronisation of the control operations of both authorities.
Risk management in international trade
Pre-market controls are expected to employ risk management criteria. Under a whole-of-government approach, the World Trade Organization (WTO) Trade Facilitation Agreement (2013) extends risk management to non-customs entities by stating that ‘each Member shall concentrate customs control and, to the extent possible other relevant border controls, on high-risk consignments and expedite the release of low-risk consignments. A Member also may select, on a random basis, consignments for such controls as part of its risk management’.[3]
There are multiple applications and manifestations of risk management applications arising from the agreement (eg, the Second Test and Authorised Economic Operator, which occur in the early stage of implementation). Furthermore, the necessity for coordinated management fosters the creation of a more integrated environment with enhanced controls.
Over the years, customs authorities have been refining their risk management techniques based on the Revised Kyoto Convention and ISO 31000:2018 guidelines, supported by increasingly sophisticated IT solutions. However, the growth of global trade, including in health products, and heightened oversight arising from a post-pandemic context, have led to improvements in risk management techniques. As such, trade facilitation measures have promoted the use of risk management in non-customs control entities.
The so-called RMS for the evaluation of border controlling agencies procedures, as well as for inspection and surveillance in imports and exports,[6] provides techniques to calibrate the type of assessments needed for each product; for example, a sanitary registration application deemed as low risk will have a less detailed evaluation, whereas a high-risk one will undergo a more thorough documentary review.
AI applied to risk management
Use of advanced technology for risk management
Over half of the world´s customs authorities employ advanced analytical technology, such as big data, data analytics, AI and machine learning,[7] considering that one of its main benefits is the improvement of risk management. Such technology facilitates the detection of prohibited products or anomalies in medical products, as well as helping to identify low or high-risk applicants based on a risk score according to their commercial history. The technique employed by customs authorities is largely transferrable to health authorities’ oversight, with the only necessary adjustment being the substitution of risk criteria.
AI in the Single Window
As mentioned, the SW legal framework not only enables the application of risk management for granting premarket approvals and (later on) conducting inspections but also establishes a system tailored for this purpose. In October 2023, a pilot project incorporating the RMS and an AI component was initiated. This IT solution allows, through machine learning techniques, the identification of risks during the SW procedures’ evaluation. Consequently, authorities receive a risk-level notification advising them to adjust the level of scrutiny applied to the supporting documentation. The risk level, according to ‘business rules’, refers to the applicant’s conditions and records, as well as the product’s characteristics, such as its origin and source, and use. For this purpose, the RMS analyses multiple sources of information, applying deterministic, analytical and random models.
As mentioned, the SW legal framework not only enables the application of risk management for granting premarket approvals and (later on) conducting inspections but also establishes a system tailored for this purpose. In October 2023, a pilot project incorporating the RMS and an AI component was initiated. This IT solution allows, through machine learning techniques, the identification of risks during the SW procedures’ evaluation. Consequently, authorities receive a risk-level notification advising them to adjust the level of scrutiny applied to the supporting documentation. The risk level, according to ‘business rules’, refers to the applicant’s conditions and records, as well as the product’s characteristics, such as its origin and source, and use. For this purpose, the RMS analyses multiple sources of information, applying deterministic, analytical and random models.
It is important to mention that the system can build analytical rules based on the supplied data. This leads to two important implications. First, it allows for the progressive improvement of analytical rules as new transactions are included. Second, it enables users knowledgeable about the business to define, build and test different analytical rules according to need and without further development effort.
This solution simplifies the internal tasks of the NRA. Assessment simplification implies that, based on sophisticated analytical rules, the system will choose applications requiring a thorough or in-depth evaluation, whereas other less complex applications can be processed more expeditiously. In some cases, premarket approvals may be granted automatically as AI-collected risk patterns render the review of submitted information unnecessary.
However, as selectivity in control is inherent to risk management, the application of the RMS does not weaken the effective controls exerted by the NRA; rather, it strengthens good regulatory oversight by providing a rigorous solution capable of analysing information and establishing relations that escape traditional methods. Nor does the NRA decline its oversight powers because it can conduct ex post controls, in which the AI provides rules to identify transactions with a higher probability of non-compliance.
Potential benefits
The RMS does not fully replace human judgement (official evaluation), but rather exponentially improves available tools for the better control of the medical product supply chain. AI provides tools for efficient risk management that must be implemented gradually. Analytical rules can be further enhanced by incorporating a greater number of transactions and collecting more cases to refine predictions. RMS will help to expedite processing, transaction transparency, improved targeting and easier access to importers. RMS can not only ease the granting of permissions but also the selection of merchandise to be inspected on entry into the country, and of course, pharmacovigilance when the product is on the market.
The sophistication of the RMS will foster the creation of a trade facilitation environment based on predictability and transparency, reinforcing health surveillance and control. It will also facilitate the identification of high-healthcare-standard compliant companies (authorised operators) and, as a result, streamline the efforts of the NRA for the effective control of the international trade of medical products.
Notes
Eduardo García-Godos
PARTNER
Open Trade for Development
Systemic post-COVID-19 disruptions have stressed the world trading system, asymmetrically affecting emerging economies. The eruption of the war in Ukraine has brought about a resurgence of economic and trade implications. Inflation has become a global concern, and the conflict has provoked an increase in energy costs, amidst long-standing tension between the US and China.
Latin American policies have consistently shifted towards centralised approaches, resulting in the election of left-wing governments in several nations, including Brazil, Argentina, Mexico, Chile, Colombia and Peru. Many of these governments, including Peru’s former administration, proclaimed a revision of trade policies by threatening to enact outdated development models that are not only incompatible with WTO agreements and Regional Preferential Agreements (RPAs), but also dysfunctional and driven by populist ideals.
Peru endured a tumultuous political crisis that led to the ousting of the recently elected president. The Vice President took office shortly afterwards (until 2026), alleviating some of the political and economic uncertainty. Principal indicators suggested a modest GDP growth in 2023 (2.5% compared to 2022), and the “El Niño” climate phenomenon threatened to slow down economic expansion. Nevertheless, exports and imports are expected to attain their best performance in the last decade, and the trade openness ratio – which compares exports and imports to GDP – yielded 51%, representing the highest score since 2014.
Looking at the 2023 Logistics Index Performance Report (LPI), Peru has achieved the best result since the 2012 Report, becoming the second-best performer (alongside Panama and Chile) in Latin America after Brazil. Peru improved in five of the six indicator criteria, in both score and ranking; its International Shipments and Traceability (Tracking & Tracing) scores are the best results obtained since 2007.
Even amidst global turbulence, Peru steadfastly adheres to orthodox macroeconomic policies. Unlike other Latin American countries, it intends to set an amicable environment towards private investment and regional economic integration. Some relevant facts endorse this trend. Firstly, Chinese investment significantly expanded in Peru in 2022, by acquiring large energy projects, and Cosco is currently building the largest port development in Latin America, the Chancay Port. Secondly, the US “friend-shoring” policy aims to enhance the ability of Latin American countries to become suppliers of inputs and raw materials to the US.
Peru has been compliant with rules-based open trade commitments. Trade policy is now fully aligned with open market fundamentals, removing any trace of protectionism. Peru has signed more than 20 preferential trade agreements, becoming the third most integrated economy in the region, after Mexico and Chile. Moreover, the current Minister of Trade, who is a renowned trade policy expert, is encouraging businesses to harness trade agreement benefits and has initiated negotiations of a Free Trade Agreement with Hong Kong.
In the past two years, the government has persistently dismantled efforts to take safeguards to protect domestic industries, showcasing its unwavering resolve against illegitimate trade remedies. A similar stance has been exhibited regarding technical barriers to trade, where an import-restrictive regulation on food labelling was amended in compliance with the WTO Technical Barriers to Trade provisions.
Moreover, technical requirements and regulatory practices are being scrutinised as Peru is a prospective candidate to join the Organisation for Economic Co-operation and Development (OECD). To this end, an unprecedented project of co-operation and inter-institutional co-ordination has been undertaken to benchmark as many as 240 OECD legal instruments, from Declarations to International Agreements, to adopt best practices and policies.
Peru has not only substantially implemented the WTO Trade Facilitation Agreement (TFA), excluding some standards related to border co-ordination and second-test procedures, but it has also applied further measures towards removing red tape and procedural digitisation, thereby going “beyond” the TFA stipulations. Key initiatives include the optimisation of the Single Window, which embraces an innovative design and services coverage, the sanitary Authorised Economic Operator, and other trade transparency-related tools.
Regarding cross-border e-commerce, further promotion and development policies must be fostered, directed at instructing and training companies on the advantages of transactions of this nature, subsequently optimising border control procedures. Customs has already streamlined its border processes, but refinements are required in other non-customs controlling agencies, as well as the postal service operator. Within the framework of the Pacific Alliance Trade Agreement (constituted by Peru, Colombia, Mexico and Chile), some endeavours are in progress, with the objective of removing the obstacles impairing efficient cross-border e-commerce development and harmonising border controls.
Domestic Trade Policy also encompasses Free Zones (so-called Special Economic Zones), which provide tax and regulatory benefits for particular industries. Four Free Zones are fully operating; they harbour manufacturing and logistics businesses. Despite the fact that the available facilities and spaces in these zones are almost fully occupied, the expected advantages have hardly been achieved. Several attempts to overhaul the legislation to redesign the Free Zones model have failed, but discussions seem to be included on this administration’s agenda.
International trade efficiency heavily depends on logistics and transport infrastructure. The recently published National Transportation Services and Logistics Infrastructure Plan 2032 provides the basis for the national infrastructure and logistics services to support trade facilitation measures. The plan also focuses on attracting foreign direct investment and improving national logistics performance, which is expected to enhance Peru’s market competitiveness. Regarding border controls, the Customs authority has optimised its processes by digitising procedures as well as documents; however, additional adjustments are needed in other border controlling agencies, especially those related to foods, medicines and medical devices.
In conclusion, Peru has experienced one of the deepest political crises in decades and continues to struggle to overcome structural constraints to increase productivity and competitiveness. However, the country is on track to achieve economic stabilisation. Legal and economic policies currently in place rely on international trade for development. The forthcoming agenda must boost and calibrate transport infrastructure, logistics services and trade facilitation that embraces a supply chain approach. This systemic approach will encourage other border controlling agencies to incorporate efficient processes, resulting in reduced transaction costs and enhanced transparency and predictability.