It was intended to settle the two nations' remaining territorial differences at the conclusion of their involvement in the War of the Pacific and to stabilise post-bellum relations between them.

Chile was also to retain the conquered provinces of Tacna and Arica for ten years, after which their fate was to be decided by a plebiscite, which was never held.

Article 3 of the treaty proved to be the most controversial, as it stipulated that the territory of the provinces of Arica and Tacna were to continue under Chilean administration for 10 years, after which a plebiscite would decide which country the inhabitants wanted to belong to.

[1] Chilean historians claim that this article was a covert transfer of both provinces to Chile and intended to be handed over to Bolivia when peace was signed there.

Article 12 established arbitral tribunals that determined the compensation to be paid to Chilean citizens expelled from Peru whose assets had been seized at the beginning of the war.

In exchange, the creditors recognized that the debt transferred to Chile for the occupation of the mortgaged deposits was limited to that indicated in the Treaty of Ancón.

[7] The Tacna–Arica situation began the Chilean–Peruvian territorial dispute, which would only be solved in 1929 with the Treaty of Lima, with Tacna returning to Peru and Arica being ceded to Chile.