White-Collar Crime 2024 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.

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.

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.

Regarding international co-operation, Chile has signed several agreements and treaties, such as the Agreement for the Prevention and Combating of Serious Crimes with the US and the Advanced Framework Agreement with the EU, that are meant to facilitate cross-border co-operation. Chile also has signed extradition treaties with many countries, such as the US, Canada, UK, Spain, France, Germany, Argentina, Brasil, Perú, Australia and South Korea. Furthermore, Chile also has signed the UN Convention against Corruption and the UN Convention Transnational Organized Crime, both of which help facilitate the extradition process with other signing countries.

Extradition for white-collar offences has not been specially regulated; therefore, it is ruled by the general legislation. Chilean law on this matter states that, firstly, the extradition treaty will regulate extradition circumstances and process. If there is no applicable treaty, the rule of reciprocity should be followed. And lastly, if the rule of reciprocity cannot be followed, the rules of the Code of Private International Law should be applied.

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. Before Law No 21,595, companies were 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.

However, Law No 21,595 on Economic and Environmental Crimes introduced profound changes into Law No 20,393, applicable to any crimes committed after 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 offences, 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.

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

• the illegal conduct consists of the specific crimes listed by the law, which has been 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.

After the enactment of Law No 21,595, according to Article 4° of Law No 20,393, compliance programmes will be considered appropriate for having the aforementioned exemption effect, provided that – taking into account the company’s corporate purpose, line of business, size, complexity, resources and activities – the compliance programme seriously and reasonably considers the following aspects:

• identification of the activities or processes of the legal entity that involve the risk of criminal conduct;
• the establishment of protocols and procedures to prevent and detect criminal conduct in the context of the activities referred to in the previous point, which must necessarily consider safe reporting channels and internal sanctions in the event of non-compliance;
• assignment of one or more persons as responsible for the application of the protocols (provided with independence, effective management and supervision powers, direct access to the administration, and the material and immaterial resources and means necessary to adequately carry out their tasks); and
• the provision of periodic evaluations by independent third parties and mechanisms for improvement or updating.

In these cases, 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.

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.

Besides this general rule, 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 has 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. 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.

Deferred prosecution agreements, non-prosecution agreements and plea agreements are possible, as will be explained in 2.6 Deferred Prosecution and 4.3 Plea Agreements, Co-operation, Self-Disclosure and Leniency.

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.

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, Law No 21,595 mentioned above introduced 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.

However, since the changes implemented by Law No 21,595, companies may be exempt of criminal liability if they have effectively implemented a suitable crime-prevention model, and one of the minimum requirements is establishing protocols to prevent, detect and sanction infringements to the crime-prevention model. This could potentially extend the practice of internal investigations in the future.

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.

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.

Non-prosecution agreements are new to Chilean Criminal Law. Recently enacted Law No 21,694, established qualified effective co-operation, that in some cases can be equivalent to a non-prosecution agreement, as explained in 4.3 Plea Agreements, Co-operation, Self-Disclosure and Leniency.

As mentioned in 1.5 Corporate 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, including the offences 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, Law No 21,595, fully in force since August 2024, considerably expanded 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 catalogue of crimes is extensive, this chapter will only analyse the offences previously recognised in Law No 20,393, which are the most paradigmatic white-collar crimes.

• 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 a 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. 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 ranging from two months to ten years and fines related to the circumstances 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 ranging 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 ranging from two to 18 months, and fines ranging from 50 to 500 UTM.

Chilean legislation does not include a specific obligation to prevent bribery, influence peddling or any other corporate crime, nor does it oblige companies to maintain compliance programmes. Nonetheless, Law No 20,393 acknowledges the importance of compliance programmes; a suitable and effectively implemented crime-prevention model may be an exculpatory factor for the legal entity, as mentioned in 1.5 Corporate and Personal Liability.

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 penalties for these crimes generally range from three to ten years of imprisonment, but the circumstances in which the crime is committed can alter these timeframes.

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 their 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 penalties for these crimes generally range from 18 months to five years of imprisonment, but, again, the specific circumstances can alter these timeframes.

Law No 21,595 slightly modified 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, by limiting the substitution of the imprisonment for penalties with no privation of liberty.

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 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.

The penalties for tax fraud generally range from 61 days to ten years of imprisonment, depending on the type of fraud and its circumstances. However, some cases involve higher penalties, such as fraudulently obtaining tax refunds, which is sanctioned with three to 15 years of imprisonment.

As mentioned in 3.3 Anti-bribery Regulation, Chilean legislation does not include a specific obligation to prevent bribery, tax evasion or any other corporate crime, nor does it oblige companies to maintain compliance programmes. Nonetheless, the effective implementation of a suitable crime-prevention model may be an exculpatory factor for the legal entity.

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.

The penalties for these crimes are established in Law No 18,045, and have been mentioned previously in 3.4 Insider Dealing, Market Abuse and Criminal Banking Law.

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 for a term ranging from three to ten years.

Law No 21,595 established 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, by limiting the substitution of the imprisonment for penalties with no privation of liberty.

The Consumer Protection Act (Law No 19,496) does not contain criminal offences as such, but rather 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.

Outside Consumer Law, Law No 21,595 sanctioned a few crimes regarding consumers, such as fraudulently altering prices of goods and services. The penalty for this crime ranges from 18 months to ten years of imprisonment, depending on the necessity of the goods or service.

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 Procedure Code and introduced eight new offences, including unauthorised access to a computer system, attacks on the integrity of a computer system, handling stolen computer data and cyber fraud. The penalty for these crimes ranges from 61 days to five years of imprisonment, depending on the type of conduct and the damages caused.

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.

The penalties vary greatly considering the price of the goods and the recidivism of the perpetrator. Lesser cases are sanctioned with a fine of twice the price of the goods, and major cases are sanctioned with three to ten years of imprisonment.

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.

Money laundering offences are committed by concealing or dissimulating the illicit origin of the products of certain crimes, or even possessing the products for personal enrichment if they were received knowing their illicit origin. It is also possible to commit these crimes without knowing the illicit origin for inexcusable negligence.

Therefore, a constituent element of money laundering is the commission of a base crime, which has been established by law. Therefore, in principle, no one can be convicted of money laundering without the existence of a base crime, for example drug dealing, arms trafficking, sex trafficking, terrorism, tax fraud, financial crimes, fraud, illicit association, etc.

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. 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.

As mentioned in 3.3 Anti-bribery Regulation, Chilean legislation does not include a specific obligation to prevent any kind of crime, nor does it oblige companies to maintain compliance programmes. Nonetheless, the effective implementation of a suitable crime-prevention model may be an exculpatory factor for the legal entity.

However, regarding money laundering, some institutions, such as banks, stock markets, jewellers and casinos, are legally obligated to report suspicious operations to the Financial Analysis Unit (UAF), and the infringement of their legal obligations can generate administrative sanctions. Failing to report can lead to a fine of up to USD200,000.

Furthermore, 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, by limiting the substitution of the imprisonment for penalties with no privation of liberty.

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.

As mentioned in 1.5 Corporate and Personal Liability, Law No 20,393 considers the effective implementation of a suitable crime-prevention model 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.

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

There are no other guidelines that judges and/or prosecutors should follow in any of these situations.

It is worth mentioning that if the crime is considered an economic crime according to Law No 21,595, the mitigating and aggravating circumstances available will change, as mentioned in 1.6 Sentencing and Penalties.

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.

The recently enacted Law No 21,694 severely modified co-operation in criminal procedures, establishing a new legislation regarding effective co-operation, qualified effective co-operation and co-operation agreements.

Effective co-operation is a reinforced substantial co-operation, requiring the administration of precise, truthful and verifiable information that allows clarification of the facts under investigation, the identification of the perpetrators, the prevention or impediment of other crimes, or facilitates any confiscation. This kind of co-operation is only available in cases of illicit associations, drug dealing, arms trafficking, terrorism, economic crimes, money laundering and other especially severe crimes. The court must recognise the effective co-operation established in a co-operation agreement with the Public Prosecutor, but can also recognise it without one, reducing the penalty of the crime.

Qualified effective co-operation requires the administration of precise, truthful and verifiable information that allows one to: i) identify the leaders, criminal bosses or financiers of illicit associations, presuming their intervention in crimes, ii) identify products, money or source of income of illicit associations and facilitate their confiscation, or iii) identify the place of the victim of kidnap, child abduction, human trafficking or murder. This kind of co-operation is available in the same cases as non-qualified co-operation, but it can only be recognised through a co-operation agreement with the public prosecutor. Qualified effective co-operation can severely reduce the penalty of a crime, or even stop the prosecution entirely, through a final dismissal of the criminal facts (sobreseimiento definitivo). A condemned person can also enter this type of agreement to significantly shorten their sentence.

Regarding legal entities, 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.

In the case of collusion, Law Decree No 211 sets out 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 verification 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.

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

The recently enacted Law 21,694, established effective co-operation, qualified effective co-operation and co-operation agreements, as explained in 4.3 Plea Agreements, Co-operation, Self-Disclosure and Leniency. Co-operation agreements can involve protection measures such as the concealment of their identity, advanced deposition, remote deposition, police protection, identity change or any other suitable protective measure. Whether this new legislation is effective at promoting and protecting whistle-blowers is yet to be determined.

There is no regulation of the above in the private sector, so the treatment of 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.