U.S. Warns Peru’s Control Over Chancay Port Is at Risk

Washington has signalled concern after a Peruvian judge issued an order that limits some supervisory and sanctioning powers exercised by national regulators over the Chinese-backed Chancay deepwater port. Built with substantial Chinese financing and operated with major Chinese shareholder involvement, Chancay can handle ultra-large vessels and occupies a strategic position on the Pacific Asia–South America trade corridor—features that make any governance gap particularly consequential. The contested ruling directed authorities to refrain from certain enforcement actions at the site; Peru’s primary port regulator filed an appeal, creating an immediate legal impasse between judicial and administrative bodies. The U.S. State Department framed the episode as an example of how foreign-financed projects can complicate state control of critical infrastructure, elevating the dispute from an administrative legal fight to a geopolitical flashpoint. COSCO, a major Chinese shareholder, rejected the U.S. characterisation and pointed to an ongoing Peruvian regulatory presence at the facility; Peru’s foreign ministry declined to offer public comment. Observers note that the case will test Peru’s administrative-jurisdictional boundaries and could set a precedent constraining future regulators’ ability to enforce safety, customs and environmental rules. Similar episodes elsewhere in the region — notably recent judicial and audit actions affecting port concessions in Panama and high-stakes economic moves tied to Venezuela — illustrate a pattern in which domestic legal and financial reviews can quickly acquire international and diplomatic dimensions. In Panama, a top court decision and a comptroller’s audit prompted questions about concession accountability, triggered potential arbitration and drove Beijing to reassess bilateral engagement; in Venezuela, U.S. policymakers have used economic levers and diplomatic pressure as part of a broader campaign to limit foreign footholds. Those parallel developments underscore likely pathways here: administrative appeals, possible arbitration or contract disputes, bilateral consultations, and scrutiny from insurers and lenders reassessing sovereign and counterparty risk. Financially, the outcome at Chancay could affect borrowing costs for similar projects and reshape investor appetite for long-term concessions in the region. For Lima, the dilemma is immediate and structural: balancing the need for capital and infrastructure development with the imperative to retain clear regulatory authority over strategically vital assets. More broadly, the case highlights how judicial decisions, audit findings, and geopolitical contestation can combine to produce operational uncertainty, diplomatic friction and potential renegotiations of large-scale infrastructure contracts.