Has more than 45 days passed?
Have more than 60 days passed?
If over 45 days, he can't open an Item Not Received Dispute. Nor can you open a Dispute since that deadline has passed.
Good.
Refund him and put him on your Blocked Bidder List.
Yes, you are out the shipping cost. Life will go on.
If over 60 days, he cannot leave feedback or the more important Detailed Seller Ratings. Yay!!
If either of you had already left feedback, either can leave a Response. Like the most effective feedback, the best Responses are calm and factual. "Parcel returned due to Peruvian postal strike. Refunded." would cover it.
When you refund you should get your fees back, but unless it is a very substantial amount of money, your feedback and DSRs are more important.
I'm not sure what reason you can choose for the refund that helps you to avoid 'Defects'. I'm doing my best to ignore that whole schmozzle.
In hindsight, your first mistake was to chase an unwilling buyer for payment. Opening an Unpaid Item Dispute on Day Four and closing it without comment on Day Eight would have been cheaper and less stressful. But 20-20 and all that.