White-Collar Crime 2023 Comparisons

The Chilean Criminal Code classifies criminal offences according to the severity with which they are punished. Crimes (crímenes) are the most serious types of law-breaking, with penalties ranging from five to 20 years of imprisonment; in a few cases, life imprisonment may be considered. Misdemeanours (simples delitos) are punished with 61 days to five years of imprisonment. Offences (faltas) are those acts punished with one to 60 days of imprisonment and fines, and very rarely lead to jail time.

For an act to be punishable, it must have been done with intent. However, certain acts are punishable precisely for their recklessness. The Chilean criminal system does not require any kind of motive to be ascribed to the offender in order to impose a sanction.

Individuals may also be held responsible for attempting to commit a criminal offence without actually having completed the criminal act. However, in such cases, the offender will face a reduced penalty.

Under Chilean criminal law, limitation periods are established in consideration of the nature of the criminal offence. Crimes (crímenes) have a limitation period of 15 years in cases where the law imposes a penalty of life imprisonment, or ten years in the other cases; misdemeanours (simples delitos) are limited to five years; and offences (faltas) are limited to six months. The limitation period is suspended once a criminal procedure is directed against the defendant.

This term is counted from the day on which the criminal offence was committed. If the offence consists of a continuing act, the limitation period starts to run once the defendant performs the last action.

If the accused leaves the country at any time during the limitation period, the limitation period runs at half the speed – ie, two days abroad count as one for the purposes of calculating the limitation period.

There are some crimes that, as an exception, are not subjected to the statute of limitations. Such is the case, for example, for sexual crimes against minors.

In principle, only crimes committed in Chile can be prosecuted before Chilean courts. There are only a few exceptions to this. The extraterritorial reach of Chilean criminal law is specifically regulated in the Code of Organisation of Courts (Código Orgánico de Tribunales), v gr. Instances include crimes committed abroad by Chileans against Chileans, if the offender returns to Chile without having been prosecuted abroad, and cases where bribes are accepted by Chilean public officials abroad or a Chilean bribes a foreign public official.

In addition, most of the Chilean legal literature and jurisprudence understands that the Chilean state can prosecute crimes if the execution of a criminal act begins in Chile, even though its effects are felt in another country, or if the execution of a crime begins abroad but the consequences are felt in Chile.

Traditionally, criminal liability in Chile has been conceived as a category applicable only to individuals as opposed to legal entities. However, in the context of Chile’s application to become a permanent member of the OECD, a political decision was made with Law No 20,393, which was enacted in 2009, introducing into the Chilean legal system the concept of corporate criminal liability. Hence, as of 2009, legal entities may be investigated by the public prosecutor and be criminally sanctioned in cases where:

• the illegal conduct consists of certain specific crimes defined by law;
• the illegal act is carried out by an owner, controller, representative, key officer or any person conducting managerial or supervisory functions in the company or by individuals working under the direct supervision of any of the aforementioned persons;
• the act has been performed for the direct benefit or interests of the company; and
• the behaviour of the agent or representative occurred because of a defect or failure in the company’s mechanisms of control and supervision.

Since the enactment of Law No 20,393, the list of offences for which a company can be held criminally liable has been extended several times. Today, companies are criminally liable for the following crimes: bribery, money laundering, financing of terrorism, receipt of stolen goods, disloyal management, commercial bribery, unlawful negotiation, misappropriation, instructing a worker to attend the workplace during a quarantine, and certain conducts that are related to water pollution and illegal fishing activities.

Regarding all the above-mentioned offences, the public prosecutor may seek both the individual responsibility of the persons who performed the conduct and the criminal responsibility of the company. However, the Public Prosecutor’s Office has no institutional guidelines that preferentially prosecute either individuals or companies. Moreover, managers are not criminally responsible for the mere fact that the company is convicted of the crime.

There is no special provision dealing with the possibility of the same lawyers representing the legal entities and the natural persons involved, and joint representation is common, except where the defence strategies are incompatible (the Bar Code of Ethics and the Criminal Procedure Code are applicable).

In the case of a reorganisation, merger, acquisition, division or dissolution of a company where one of the sanctioned crimes was committed, Law No 20,393 provides that the responsibility for such acts is transmitted to the successor.

Despite the above, the recently approved Law No 21,595 on Economic and Environmental Crimes introduces profound changes into Law No 20,393, which will begin to take effect in August 2024. According to this new law, companies will be criminally liable for every “economic crime” listed in Law No 21,595, which translates into more than 200 offenses, exponentially expanding the list of imputable offences. Amongst them, it is worth noting fraud, collusion, corruption between individuals, crimes related to insolvency, and environmental crimes, which are created by the same Law.

Also, the responsibility of legal entities will be expanded to cases where:

• the illegal conduct consists of the specific crimes defined by law, which are relevantly expanded;
• the illegal act is carried out by a person who holds a charge, function or position in the legal entity, a person who provides services to the company managing their affairs before third parties, with or without representation, a person related in the previous terms with a different legal entity, that provides services to the company managing their affairs before third parties, with or without representation or that lacks operational autonomy with regard to it, when there are ownership or participation relationships between them;
• the act has not been exclusively committed against the legal entity; and
• the perpetration of the criminal act was favoured or facilitated by the lack of effective implementation of a suitable crime-prevention model by the legal entity.

Victims of a crime may file for damage compensation before the criminal courts or directly before the civil courts. Nevertheless, once the civil action has been declared admissible before the criminal court, the right to do so in the civil court is precluded.

Such a right is exclusive to the victim. If third parties want to seek civil compensation derived from a crime, they must bring it before the civil courts.

On the other hand, the action to obtain the return of the specific assets that were taken from the victim of the crime may only be filed before the criminal court.

In a criminal proceeding, plaintiffs have the option of requesting that the judge order precautionary measures upon the property of the accused to ensure the fulfilment of possible future civil liabilities – ie, through the retention of certain assets and the prohibition on performing acts or contracts regarding certain assets. In the event that these measures are imposed upon the defendant, the victim must file a civil action during the criminal trial, in order to seek damage compensation.

Class actions are not contemplated in Chilean legislation. The nearest equivalent is the common solicitor, by which it is ordered that within a short period of time the plaintiffs designate a common representative to act on behalf of all of them. However, it is not a widely used practice.

Over the past decade, Chile’s legislation has undergone significant reformation, with special emphasis on anti-corruption legislation, adjusting it to fit the best international practices.

The most relevant recent legislative activity was the enactment of Law 21,595 on Economic and Environmental Crimes, which systematises economic crimes and incorporates new rules regarding corporate and legal entities’ criminality.

This Law entails several changes, some of them already mentioned in 1.4 Corporate Liability and Personal Liability. It introduces modifications to the criminal liability of legal entities and updates Chilean criminal law to current corporate criminality. In this regard, it introduces the category of “economic crimes” and establishes new general rules for it, such as modifications in the determination of penalties and the alternatives to imprisonment, and modifications to the pecuniary consequences of the crime.

Regarding alternative penalties, this Law increases probability of imprisonment, limiting the applicable penalties to partial home confinement, partial confinement in a public establishment and effective imprisonment.

Lastly, regarding pecuniary consequences, and as an exception to the general system, this Law introduces the income of a person as a criterion to determine the amount of the fine. In this way, the fine is intended to be adapted to the economic capacity of the defendant which, in cases of high-income persons, implies a considerable increase in the amount of the fines by comparison.

Although this Law represents a significant improvement in this matter, solving some of the gaps in Chilean regulation by introducing new crimes that are up to date with current phenomena (for example, crimes against the environment and the illicit disclosure of business secrets, amongst others) and by improving various offences currently in force, solving the difficulties of interpretation and application that have arisen in practice (for example, fraud, unfair administration, and private corruption), these modifications are not enough.

Furthermore, the need for a new criminal code has been acknowledged by different governments in recent years. The current Criminal Code was enacted in 1875 and although it has undergone constant modification and has had to be complemented by multiple laws that incorporate new crimes, there is consensus among all actors on the need for a modern code, that systematises all the efforts carried out through previous years. Consequently, since 2013, three drafts of a new criminal code have been worked out by commissions of academics, by request of the Ministry of Justice, in which Bofill Escobar Silva Abogados’ founding partner, Jorge Bofill, fulfilled the role of chairman, the latest of which was submitted to the Ministry of Justice in October 2018 and to Congress in January 2022.

The Public Prosecutor’s Office is the agency in charge of investigation and prosecution before criminal courts. Other special agencies may enforce a range of non-criminal sanctions under different statutes and proceedings. In some cases, these special agencies are entrusted not only to investigate, but also to impose sanctions. This is the case for the Financial Market Commission, the Internal Revenue Service (the national tax authority), the National Economic Prosecutor (along with the Court for the Defence of Free Competition in antitrust matters), and the Environment Agency and environmental courts.

In recent years different courts have dealt with the discussion on whether the same facts can be prosecuted at the same time under criminal and administrative proceedings without affecting the double jeopardy principle. The judicial trend has been to permit prosecution in both venues, but there have been some exceptions.

There are no specialised courts for white-collar offences in Chile. However, the Public Prosecutor’s Office has attorneys specialised in the prosecution of certain types of crimes, including prosecutors dedicated to investigating economic crimes. In addition, the Public Prosecutor’s Office has units specialised in certain crimes, which advise the national prosecutor’s office, regional prosecutor’s offices, and collaborate with the specialised prosecutors who handle the investigation of crimes within their jurisdiction. One of these units is the Specialised Unit on Money Laundering, Economic Crime and Organised Crime (Unidad Especializada en Lavado de dinero, Delitos Económicos y Crimen Organizado, ULDDECO). Moreover, there are specialised police squads in charge of carrying out the investigations requested by the Public Prosecutor’s Office, such as the Economic Crimes Brigade (Brigada Investigadora de Delitos Económicos, BRIDEC) and the Money Laundering Investigative Brigade (Brigada Investigadora de Lavado de Activos, BRILAC).

The Chilean Criminal Procedure Code establishes that investigations may be initiated by means of a complaint, the filing of criminal action by the victim of the offence and other legally authorised individuals and bodies or by the sua sponte decision of the Public Prosecutor’s Office. If the victim files a criminal action, the court conducts an admissibility assessment of the complaint, in order to verify that the facts constitute a criminal offence, prior to the initiation of the investigation.

The law does not allow much discretion to the prosecutor. Therefore, in principle, all crimes that come to its knowledge should be investigated.

Regarding corporate liability, the recently enacted Law No 21,595 mentioned above introduces new ways to initiate the investigation for cases regulated by Law 20,393. Specifically, it no longer reduces it to a prosecutor’s decision after becoming aware of the crime, but rather adds the possibility of initiation by filing a criminal action by the victim of the offence or other legally authorised individuals and bodies.

There is practically no threshold that the prosecutor needs to meet in order to request the voluntary production of documents by a company under investigation, or even a third party. The same applies to subpoenas to individuals, related to either the company under investigation or a third party. If the documents are not produced or the individual does not appear before the prosecutor, the latter lacks powers to enforce its instructions and will file a request before the courts. Depending on the type of information requested, the legal threshold varies slightly. As a rule, courts rely on the good faith of the prosecutors and deny these requests only exceptionally.

The prosecutor will be granted permission to perform raids and seizures if it shows the court that there is a reasonable case for them.

In general terms, the reasonability or correctness of the police and/or prosecutor’s conduct will be discussed ex post facto, upon a request by the defendant with regard to motions to exclude evidence.

The conduct of internal investigations has not become a widespread practice in Chile. As a consequence of this, and of the lack of a legal culture that considers such investigations as protected by privilege, prosecutors have seized evidence produced in the context of internal investigations.

Because of this, and until case law clarifies the extent of privilege in Chile, internal investigations should be conducted by external lawyers to help protect the confidentiality of the investigation and its findings.

Companies are not obliged to grant prosecution agencies access to the results of their internal investigations. However, under the Corporate Criminal Liability Act (Law No 20,393), the surrender of such documents could be considered a mitigating factor.

Transnational co-operation is carried out by the National Prosecutor and the courts, which formulate requests and provide information to foreign prosecutors, through various international treaties and co-operation agreements.

Within the Public Prosecutor’s Office, the International Cooperation and Extraditions Unit (Unidad de Cooperación Internacional y Extradiciones, UCIEX) is the unit in charge of international relations. UCIEX supports investigations and prosecutions of crimes whose scope extends beyond the national territory and all those in which prosecutors require the co-operation of other states, of an international organisation or that require an extradition procedure. The UCIEX is responsible for carrying out the various international co-operation agreements signed by Chile, such as the Convention against Organised Crime of the United Nations and extradition treaties with several countries, including the USA and the UK.

Such co-operation is also common between state agencies, such as the Financial Market Commission and the National Economic Prosecutor’s Office. In order for an extradition request to be granted, the crime must be sanctioned by both countries and attract a penalty of more than one year and the request must be limited to the crime for which it is being requested. Such requests are submitted before the Supreme Court. There are no specific provisions dealing with white-collar crimes.

White-collar prosecutions are frequently initiated upon the filing of a criminal complaint by the victim, who has the right to have an active role in the proceedings. Once the complaint is admitted by the judge, the prosecutor is obliged to investigate. But even if the case is opened by the prosecutor themselves, the law does not grant them discretion, other than the analysis of the merits. In other words, if there is enough evidence of the alleged crime, the prosecutor should file charges and pursue the case. Unfortunately, there are no guidelines issued by the higher authorities of the Public Prosecutor’s Office regarding white-collar crimes in general, and the handling of the case will often depend on the decisions made by each prosecutor. There is no judicial control over the decision of the prosecutor to file or not file charges.

Nevertheless, regarding the prosecution of corruption cases, the National Prosecutor’s Office issued Official Letter No 278 in 2022, providing general guidelines in this regard.

The Chilean Criminal Procedure Code provides mechanisms to resolve a criminal proceeding without a trial. Parties may settle a dispute with a direct agreement between the plaintiff and the defendant. This is especially applicable in white-collar cases. The judge may dismiss the agreement only if the public interest requires further criminal prosecution.

On a related note, the defendant may reach a deferred prosecution agreement with the Public Prosecutor’s Office consisting of the fulfilment of certain conditions for a certain period, after which the proceedings are terminated, if the estimated penalty to be applied in the particular case does not exceed three years of imprisonment and if the accused has no previous criminal record.

Defendants may voluntarily acknowledge charges in exchange for a conviction on reduced charges or penalties, or in exchange for an agreed-upon sentence.

To this end, the accused must accept the facts of the charges and the background information on which they are based. In that sense, this is not a guilty plea, but rather a plea accepting the facts as true. This is only possible if the penalty requested by the Public Prosecutor’s Office does not exceed five years of imprisonment.

As mentioned in 1.4 Corporate Liability and Personal Liability, Law No 20,393, which governs the criminal liability of legal entities, contains the offences that may give rise to criminal liability of companies. When enacted, the law applied only to three predicate offences: bribery of a public official, money laundering and financing of terrorism. This rather limited list has been expanded over time, and now includes the offence of receipt of stolen goods, disloyal management, commercial bribery, unlawful negotiation, misappropriation, instructing a worker to attend the workplace during a quarantine and certain water pollution and illegal fishing-related crimes.

In addition, recently approved Law No 21,595, which will begin to take effect in August 2024, considerably expands the list of imputable offences for which companies can be criminally liable. As mentioned, they could be responsible for every “economic crime” listed in Law No 21,595, which translates into more than 200 offences, amongst which the authors highlight fraud, collusion, corruption between individuals, crimes related to insolvency, and environmental crimes. Given that the effects of this law are not yet in force and the catalogue of crimes is extensive, this chapter will only analyse the offenses previously recognised in Law No 20,393.

• Bribery of public officials – consists of offering or consenting to offer any kind of benefit different to those to which public officials are entitled according to their position (basic bribery). If the benefit is granted in consideration of the performance of an action that they are obliged to do pursuant to their duties, of either not performing or not having performed an action or for performing or having performed an action, in infraction of a particular duty or of committing certain corruption crimes, the punishment increases (aggravated bribery).
• Money laundering – is committed by anyone who in any way hides or conceals the illicit source of certain assets knowing that they proceed, directly or indirectly, from the perpetration of conduct that constitutes any of the predicate crimes listed by law, or who, knowing the origin of these assets, hides or disguises them.
• Financing of terrorism legislation – punishes those who in any way, directly or indirectly, request, collect or supply funds for those who intend to commit terrorist offences.
• Receipt of stolen goods – is committed when one person transports, sells or possess any good knowing that it is the result of the commission of other specific offences.
• Disloyal administration – penalises the person in charge of the management of a foreign interest who abuses their powers of attorney or executes or omits in a way manifestly contrary to the interest of the holder of the affected interest, causing damage to them.
• Commercial bribery legislation – sanctions an employee or agent who, in the exercise of their duties, requests or accepts an economic or other benefit for the purpose of favouring or for having favoured the contracting of one offeror over another. Whoever gives, offers or consents to give that benefit to that employee or agent for the same purpose is also sanctioned.
• Unlawful negotiation – consists of taking a personal interest in any negotiation, action, contract or operations by public officials, liquidators and administrators, in which they take an interest by reason of their position or functions.
• Misappropriation – is a crime against property consisting of the retention of goods belonging to somebody else, when those goods were legally in their possession through a title different to ownership.
• It is also punishable to instruct a worker to go to the place where they perform their work when this is different from their residence, and the worker is under quarantine or mandatory sanitary isolation decreed by the health authority.

Finally, new offences included in the catalogue are: the introduction into the sea, rivers or lakes of chemical, biological or physical contaminants that cause damage to hydro-biological resources; the processing, transformation, commercialisation and storage of banned hydro-biological resources or products derived therefrom; the performance of extractive activities in areas of management and exploitation of deep-sea resources, without being the holder of the rights; and being in possession of, producing or storing hydro-biological resources which are in q state of collapse or over-exploitation without being able to prove their legal origin.

Usually, sanctions against corporations consist of a monetary fine. However, applicable penalties may include: dissolution of the legal entity and cancellation of its legal status; a temporary or permanent ban on entering into contracts with state entities; total or partial loss of tax benefits or an absolute ban on receiving these for a certain period, among others.

The Chilean Criminal Code sanctions bribery of domestic and foreign officials. As stated in 1.6 Recent Case Law and Latest Developments, the enactment of Law No 21,121 in 2019 introduced the offence of commercial bribery. Companies are also subject to criminal liability regarding these offences.

Bribery of domestic public officials – as described in 3.1 Criminal Company Law and Corporate Fraud – is punished with imprisonment for a period from two months to ten years and fines related to the size of the bribe.

Bribery of foreign officials constitutes an exception to the principle of territoriality generally applicable in Chile. In that sense, Chilean courts may have jurisdiction regarding the bribery of a foreign official committed abroad, either by a Chilean national or a foreigner with residence in Chile. The offence consists of the offering or promising of an economic or any other benefit to a foreign public official in return for the foreign public official’s performance or omission of an act that would provide an unfair advantage in an international transaction (or business deal) to the offeror of the bribe. Similar to the case of domestic officials, this conduct is sanctionable with imprisonment for a period ranging from three to ten years, restrictions on holding public office and a fine from 200% to 400% of the amount of the bribe. If the benefit offered is not of a financial nature, the fines will range from 100 to 1,000 monthly tax units (UTM).

Commercial bribery consists of requesting, accepting, offering or giving bribes of any kind in order to favour, within the authority of their duties, the engagement of one party over another. In the case of receiving a bribe, the employee that seeks or accepts it faces up to 18 months to three years of imprisonment and, in the case of an economic benefit, a fine of 100% to 200% of the bribe, whereas of any other nature, a fine ranging from 50 to 500 UTM. On the other hand, those that offer commercial bribes face 18 months to three years imprisonment, whereas those who agree to offer a bribe privately face imprisonment for periods from two to 18 months, and fines ranging from 50 to 500 UTM.

Chilean legislation does not include a specific obligation to prevent bribery and influence peddling, nor does it oblige companies to maintain compliance programmes. Nonetheless, Law No 20,393 acknowledges the importance of compliance programmes, as it assumes that management and supervisory duties of the legal entity have been met if, prior to the commission of the offence, the legal entity has implemented a crime prevention model. A well-functioning compliance programme may be an exculpatory factor for the legal entity.

The relevance of information in stock transactions is recognised in several provisions of the Securities Market Law (Law No 18,045). This law includes several offences that violate the protection of information in transactions of securities, including adulteration, misuse and concealment or improper disclosure of information to be considered in sales decisions or in the terms of commercial acts involving publicly traded securities.

Articles 59 and 60 of Law No 18,045 contain a catalogue of crimes related to abuse of the stock market. Article 59 punishes providing false information to the market. Article 60 contains a series of offences involving the fraudulent acquisition of shares without making a tender offer in those cases in which it is mandatory to do so, the use or disclosure of privileged information to obtain benefits or avoiding a loss in transactions of public offer values, the improper use of values in custody and the deliberate concealment or elimination of accounting records or custody of securities.

The Chilean legal system defines privileged information as any information – related to one or more issuers of shares, to their businesses or to one or more shares issued by them – not disclosed to the market and whose knowledge, by its nature, is capable of influencing the quotation of the issued shares, as well as the information held on the acquisition or disposal operations to be carried out by an institutional investor in the stock market. It is also worth mentioning that Law No 18,045 assumes that the directors, managers, administrators, principal executives and liquidators of an issuer of securities or institutional investor are in the possession of privileged information.

The General Banking Act provides some specific offences that affect banking activity and bank staff. The most common crime covered by this law is related to the fraudulent obtainment of loans, where a person who, by providing false data about his or her situation or assets, causes damage to the bank or financial institution. It is also worth mentioning that the General Banking Act provides for a specific criminal offence that sanctions unauthorised banking activity.

The recently enacted Law No 21,595 slightly modifies some of the offences contemplated in Law No 18,045 and introduces a new offence, consisting of the maintenance or artificial alteration of prices.

In addition, this new law establishes that the offences contemplated in Articles 59, 60, 61 and 62 of Law No 18,045 will always be considered “economic crimes”, and the modifications introduced by the law will be applicable regarding the determination of the penalty, considerably increasing the severity of their sanction.

The Chilean Tax Code, in its Article 97 No 4, sets out various hypotheses of tax fraud punishable under Chilean legislation. The system does not distinguish between tax fraud and mere tax evasion, however, it requires the use of fraudulent procedures or machinations. This means that Chilean legislation combines the criminalisation of mere tax evasion with a fraud model that is oriented according to the offence of fraud.

Article 97 No 4 contains three different forms of tax fraud:

• providing maliciously incomplete or false statements that may lead to a tax burden lower than the correct one, malicious omission in the accounting books, the use of commercial documentation already used in previous transactions, and the use of other fraudulent procedures aimed at hiding or distorting the true amount of the transactions carried out or to circumvent tax;
• the malicious performance, by taxpayers subject to sales and services tax or other taxes subject to withholding or surcharge, of any manoeuvre aimed at increasing the amount of credits to which they are entitled in relation to the amounts they must pay; and
• obtaining tax refunds that do not correspond to the taxpayer’s actual situation, by simulating a tax operation or any other fraudulent manoeuvre.

The same provision provides a penalty to any person who maliciously forges any commercial document or title, with the purpose of committing or enabling the commission of the crimes just described.

Faced with a fraudulent conduct, the Chilean Internal Revenue Service (the national tax authority) has the option of choosing whether to pursue an administrative or a criminal sanction. The Internal Revenue Service has the exclusive power to sue or denounce this type of crime in order to allow the Public Prosecutor’s Office to initiate a criminal investigation of the events.

In the Chilean legal system, there is no specific criminal sanction related to financial record-keeping. However, there are many rules that impose on corporations an obligation to maintain correct accounts and a duty to provide reliable financial information.

Likewise, the partners of external auditing companies that maliciously issue an opinion or provide false information on the financial situation or other matters on which they have expressed their opinion, certification or report are criminally sanctioned. In addition, those who provide services in an external auditing firm and alter, conceal or destroy information of an audited entity in order to obtain a false opinion about its financial situation commit a criminal offence.

The Financial Market Commission is the public entity that supervises corporations.

There are, nevertheless, specific criminal sanctions for acts that consist of providing false or misleading information to the market (including false information contained in financials delivered to the Financial Markets Commission) in connection with publicly traded securities.

Competition law identifies two stages of prosecution in cases of collusion: (i) an administrative phase, where the National Economic Prosecutor files a lawsuit against the identified offenders before the Court of Defence of Free Competition; and (ii) when, and only if convicted in the administrative phase, the National Economic Prosecutor, in severe cases, decides also to file a criminal action before criminal courts.

The National Economic Prosecutor is forced to initiate the criminal prosecution of collusion cases when the facts under investigation “seriously jeopardise free competition”.

If convicted in the administrative phase, offenders are exposed to sanctions of up to 30% of the revenue derived from the product or service associated with the offence. If the amount is indeterminable, companies are subject to a maximum fine of 60,000 Annual Tax Units (UTA). Additionally, executives may be disqualified for a period of five to ten years from serving as directors of certain enterprises, and the company will be banned from contracting with any state authority or institution.

During the subsequent criminal procedure, individuals risk imprisonment ranging from a term of three to ten years.

The recently enacted Law No 21,595 establishes that the cases of collusion will always be considered “economic crimes”, and the modifications introduced by the law will be applicable to them regarding the determination of the penalty, considerably increasing the severity of their sanction.

The Consumer Protection Act (Law No 19,496) does not contain criminal offences as such, but a catalogue of offences isolated from criminal law, such as unjustified refusal to sell or misleading advertising. Therefore, there is no consumer criminal law as such, and the generic crime of fraud or injuries (for sale of defective products) will be applied in cases that seek to establish criminal responsibility for an act against consumers.

Sanctions under the Consumer Protection Act are regulated by Article 24, which establishes that, where the provisions of this law do not state otherwise, infringements will be punished with a fine of up to 300 UTM.

Law No 19,223 regulates cybercrimes, particularly computer sabotage and espionage. However, this law, enacted in 1993 after a specific event, has not been modernised and is therefore no longer an adequate response to new technological crimes. Faced with this difficulty, most cybercrimes have been prosecuted through the figure of fraud.

To comply with the Budapest Convention, an international instrument that seeks to homogenise the regulation of computer crimes at the international level, Law No 21,459 introduced new cybercrime-related offences and investigations. The new law amends the Chilean Criminal Code, introducing eight new offences, including attacks on the integrity of a computer system, handling stolen computer data and cyber fraud. This law contemplates special investigative measures for asset recovery, including wiretapping and the use of undercover agents. Furthermore, authorities must seize the instruments used to commit the offences and the effects derived therefrom, including any profit. If seizure is not possible, a sum of money equivalent to the value of the instruments may be confiscated. However, if the nature of the information resulting from the offence “may not be sold to third parties”, Law No 24,459 authorises the destruction of the instruments used to perform the punishable conduct and any effects derived therefrom.

This issue has been previously covered in different sections, except for customs sanctions (in 3.4 Insider Dealing, Market Abuse and Criminal Banking Law and 3.6 Financial Record-Keeping). Customs offences cover two forms of smuggling. Smuggling, in its proper sense, consists of introducing into or extracting from the national territory goods whose import or export is prohibited. Contraband offences in the improper sense, on the other hand, are types of customs fraud – ie, introducing or exporting a good while defrauding the public treasury by avoiding the payment of taxes on that good.

According to the Chilean Criminal Code, concealers are those who, with knowledge of the perpetration of a crime or of the acts carried out to commit it, and without having participated in it as perpetrators or as accomplices, intervene after its execution. The concealers are sanctioned with a penalty two degrees lower than that indicated by law for the perpetrator of the crime. In principle, if the defendant is convicted for an offence, they cannot be also convicted for concealment, with the exception of the case of money laundering, where the defendant can be convicted for a specific offence and for self-laundering their own money, which can be understood as a way of concealing the product of a crime.

The Chilean Criminal Code distinguishes between two classes of co-operators: (i) the co-perpetrator, legally equated with the perpetrator, although they do not take direct part in the execution of the crime; and (ii) the accomplice in the strict legal sense.

The co-perpetrator is the one who conspires with another and provides the means for the commission of the crime. The accomplice, on the other hand, is one who is not included in the definition of co-perpetrator, but who also assists in the execution of the act with previous or simultaneous actions. The co-perpetrator is punished with the same penalty as the perpetrator, while the accomplice is punished with a lower penalty.

In force since 2003, Law No 19,913 – that created the Financial Analysis Unit (Unidad de Análisis Financiero, UAF) – contains the main money-laundering regulation in Chile, under which both natural and legal entities may be prosecuted. Criminal prosecution for the crime requires the pre-existence of another predicate offence listed in Law No 19,913. Those offences have been subject to a progressive expansion and now include crimes such as:

• terrorism;
• securities fraud;
• insider trading;
• banking fraud;
• misappropriation of public funds;
• arms trafficking;
• smuggling;
• crimes against intellectual property;
• perversion of the course of justice;
• bribery of a public official or a foreign public official;
• illicit association;
• kidnapping;
• child abduction;
• production of pornographic material and child prostitution;
• trafficking of migrants; and
• scams.

Sanctions for individuals include fines of up to USD80,000 and the confiscation of the laundered assets as well as up to 15 years of imprisonment. Legal entities may face penalties such as the dissolution of the legal entity, a temporary or permanent ban on entering into contract with state entities, loss of tax benefits, seizure of goods and monetary fines.

Law No 19,913 also contemplates the obligation of certain individuals to report suspicious transactions in the exercise of their functions. In the event of a failure to inform the UAF or having instead informed those involved or third parties about the suspicious transaction, the same law contemplates a sanction of three to five years of imprisonment and a fine of 100 to 400 UTM.

However, the recently enacted Law No 21,595 establishes in Article 4 that money laundering will also be considered an “economic crime”, when the pre-existent offences, in addition to being constitutive of the crimes referred above, are:

• considered as economic crimes in accordance with Article 1, 2 or 3; or
• constitutive of any of the crimes indicated in Articles 2 and 3, provided that the reception of goods or the money laundering were perpetrated in the exercise of a charge, function, or position in a company, or when they were for the benefit of a company.

Thus, the modifications introduced by the law will be applicable in these cases regarding the determination of the penalty, considerably increasing the severity of their sanction.

There are no special defences available for individuals charged in connection with white-collar offences. In that sense, those offenders have the same defences available to them as for other crimes. Defendants in the Chilean criminal system have ample rights of defence; they are granted access to the file as of the beginning of the investigation and have broad access to an attorney, including the Public Criminal Defence.

Law No 20,393 considers the existence of an effective compliance programme as a circumstance which may exempt companies from criminal liability. Even when it does not meet the requirements for exemption from criminal liability, it may be accepted as a mitigating factor.

The Chilean criminal system does not contemplate de minimis exceptions of any kind regarding white-collar offences.

Regarding individuals, self-reporting or substantial co-operation in the context of a criminal investigation may be considered as mitigating factors when considering the extent of criminal responsibility.

Law No 20,393 establishes an incentive mechanism for self-denunciation for companies. Thus, if the managers of a company report their own misconduct before the start of a criminal prosecution, they will have the right to a reduced sentence.

Law No 21,121, which modifies the rules on corruption and creates new criminal offences, such as disloyal management, considers substantial and efficient collaboration as a mitigating factor when considering criminal responsibility, provided that it is considered to be so by the prosecutor.

Self-reporting is particularly relevant in the field of antitrust. Leniency measures have been used in an increasingly successful manner to prosecute collusion cases. The antitrust law contemplates an exemption from criminal liability and the reduction of fines for self-reporters. The Financial Market Commission uses a similar mechanism, incentivising self-denunciation with exemptions from fines and criminal sanctions.

Finally, the recently enacted Law No 21,595 replaces the “substantial co-operation” with the “clarification of the facts” as a mitigation factor, which is stricter. The latter requires the provision of precise, truthful and verifiable data or information, which contributes to the clarification of the facts investigated or allows the identification of those responsible or serves to prevent the perpetration or consummation of these crimes or facilitates the confiscation of the assets, instruments, effects or products of the crime. The benefit this circumstance will provide also consists in a lesser sentence, since it will determine the greatly diminished guilt of the convicted, being able to lower the criminal framework to an additional degree.

In the absence of legal regulation, whistle-blowing is not a widespread practice in the Chilean system. The Chilean criminal procedural system allows the prosecutor to enter into agreements with individuals, generally approved by the judge or court, but this is more of a general rule than a direct regulation to protect whistle-blowers.

There is no regulation of the above in the private sector, so individuals who report suspicious or illegal conduct within a company will depend on that company’s internal policies. Due to the increased application of compliance programmes in recent years, it has become more common for companies to have systems which protect whistle-blowers.

There have been attempts to include whistle-blower protection in legislation. However, these protections have had a rather limited effect, as they only refer to certain public officers and only consider a suspension of the ability to apply certain disciplinary measures against these persons for a period of up to 90 days after the investigation initiated by the report of the whistle-blower has ended. The whistle-blower may request that their identity and the information that they provide are kept confidential.

Chilean criminal procedure considers the presumption of innocence of the accused to be a fundamental principle. In view of the foregoing, the burden of proof falls on the plaintiff or the Public Prosecutor’s Office.

To convict, judges must be persuaded, beyond a reasonable doubt, by the evidence presented before them, that the accused committed the relevant crimes.

Each crime has a specific penalty established by law. Chile has a system in which general rules for penalty assessment are established, but in which the penalty may change depending on the mitigating or aggravating factors of the penalty, such as recidivism. In that sense, the penalty is calculated with attention to the following factors: the penalty assigned by law to the crime, the degree of development of the crime, criminal participation, mitigating and aggravating circumstances, and the extent of the damage caused.

For example, the Criminal Code considers as a mitigating circumstance for individuals the substantial collaboration with the clarification of the facts. This mitigating circumstance can also be found as a special circumstance with heightened effect in Article 260 quáter of the Criminal Code, which applies to individuals in the case of crimes such as embezzlement of public funds, fraud and bribery, with the added requisite of having to be explicitly recognised by the prosecutor of the case. The benefit it provides will consist in a lesser sentence, with different effectiveness depending on the circumstances.

In the case of collusion, Law Decree No 211 consecrates another manifestation of this figure known as “compensated disclosure” (delación compensada), which can operate as a mitigating and/or an exonerating circumstance when, having participated in a collusion cartel, the defendant provides information that leads to the accreditation of the facts or of those liable. In this context there are high incentives for rapid co-operation. Law Decree No 211 only allows the collaboration to act as an exonerating circumstance for the first defendant to disclose relevant information, and as a mitigating circumstance for the second one to disclose relevant information, that must be additional to that provided by the first.

As mentioned in 2.7 Deferred Prosecution, the law contemplates the possibility of reaching an agreement in order to terminate the case without going to trial, either through monetary settlement or deferred prosecution agreements.

Plea agreements, on the other hand, are available when the conviction sought by the Prosecutor’s Office does not reach five years of imprisonment. When defendants acknowledge the facts for which they are being prosecuted, they may apply for a reduced conviction, with the authorisation of the judge.

Besides this general rule, the recently enacted Law No 21,595 introduced a new system regarding economic crimes. Based on a diagnosis of general inadequacy of the current system for the economic crimes defined in Articles 1, 2, 3 and 4 of that Law, creating a differentiated set of rules for sentencing, with aggravating and mitigating factors more appropriate to business crime, it is based on two elements: (i) culpability, according to the position held by the person in the organisation (the higher the hierarchy, the greater the penalty; the lower the hierarchy, the lesser the penalty) and the way in which that position is acted (greater intervention, greater penalty; less intervention, lesser penalty); and (ii) magnitude of harm, specifically  the generation of harm or damage and the efforts to mitigate them. Also, as mentioned in 4.3 Co-operation, Self-Disclosure and Leniency, this new law replaces the general “substantial co-operation” with the “clarification of the facts” as a mitigation factor, which is stricter. Additionally in this regard, Law No 21,595 establishes a special regime to determine the effect that the concurrence of the circumstances will have to determine the applicable penalty.

Finally, this new law contemplates a differentiated and stricter regime for the application of substitutive penalties regulated in Law No 18,216 and regulates additional consequences for the penalty, such as (i) fines, according to the “days-fine” (días-multa) system of Article 27; (ii) prohibition of holding public, managerial, or executive positions and contracting with the state; and (iii) confiscation of profits, comprehending the possibility of confiscation of everything obtained as a consequence of the crime and its imposition even when there is no conviction against those responsible.