Anti-Corruption 2024 Comparisons

Chile has signed up to several anti-bribery and anti-corruption international conventions. Most relevant are the Inter-American Convention Against Corruption of the Organization of American States (OAS), the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and the United Nations Convention Against Corruption.

The main legislation against corruption and bribery is set forth in the Código Penal (Criminal Code), Law No 18,575 on Public Administration, and Law No 18,834 on the Statute Applicable to Public Officials. All offences are laid down in legal texts.

For example, bribery is considered a crime in the Criminal Code (Articles 248 to 251 sexies), but the same conduct is also prohibited under laws which regulate the activity of domestic public officials (especially Law No 18,575 and Law No 18,834) and is considered an infringement of the probity and impartiality principles to which public officials are subject, which provide administrative sanctions for such conduct.

In addition, Law No 20,393, on the Criminal Liability of Legal Entities, is applicable to a specific group of offences, including among many others, the crimes of bribery, unlawful negotiation and commercial bribery.

Finally, it is also worth mentioning that the recently enacted Law No 21,595 on Economic Crimes, includes commercial bribery within the first category of economic crimes, which under all circumstances will be considered economic crimes. Under the third category of economic crimes, this law contemplates crimes committed by public officials, such as bribery, when a member within a company has also intervened or a benefit has been reported for the company. The fact that these crimes are considered economic crimes is extremely relevant, as it entails the application of the special regime contemplated by this legislation.

There are no general guidelines for the interpretation and enforcement of national legislation in Chile. Judgments are a source of interpretation of the law, but do not constitute precedent. Judgments are only binding in the case in which they are issued and only for the parties involved in that case.

The National Public Prosecutor, which is the entity entrusted with the investigation and enforcement of criminal offences, recently issued new instructions to which public prosecutors are subject in the context of anti-corruption investigations (Oficio Fiscalía Nacional No 278-2022, 8 April 2022).

These instructions aim to achieve the effective, coherent and co-ordinated performance of the function of public prosecution. Therefore, they are binding for prosecutors only.

The new instructions refer to relevant matters regarding corruption crimes, such as the concept of public officer, mitigating and aggravating circumstances of criminal liability, whistle-blowing, and several procedural matters, for instance, the possibility of reaching an agreement in order to finish investigations without a trial (ie, through a monetary settlement or deferred prosecution agreement). It also modifies the previous instruction (Oficio Fiscalía Nacional No 472-2020, 29 July 2020), specifically with respect to corruption crimes related to other criminal phenomena, to the effects produced by the accusation with respect to certain public officials, and the application of some procedures, among others.

Legislation on corruption-related crimes has been subject to important amendments over the past decade. The most noteworthy occurred in 2009 and 2018, which were the modifications of the Criminal Code and the enactment of Laws No 19,913, No 20,393 and No 21,121.

Law No 20,393 on the Criminal Liability of Legal Entities

In 2009, the Criminal Code was amended to include the bribery of foreign public officials in the context of international business transactions as a criminal offence. During the same year, Law No 20,393 on the Criminal Liability of Legal Entities was enacted, which considers bribery as one of the crimes that may give rise to criminal penalties for such entities. These amendments were a consequence of the adoption by Chilean law of the standards required by the OECD, of which Chile has been a full member since 2010.

Law No 21,121 Amending the Criminal Code and the Law on Money Laundering

On 20 November 2018, Law No 21,121 was published, amending the Criminal Code, Law No 20,393, and Law No 19,913 on money laundering. It incorporated several changes regarding bribery, bribery of foreign public officials (following recommendations issued by the OECD), unlawful negotiation and money laundering, including an increase in applicable penalties. However, the most relevant change was the introduction of commercial bribery and disloyal administration as new punishable crimes. Also, Law No 21,121 established the crime of bribery without counter-performance, which solved a common probatory difficulty regarding the connection of the payment with the act performed by the public official.

Law No 21,227 Regulating Access to Unemployment Benefits and Law No 21,240 Establishing More Severe Penalties for Non-compliance With Sanitary Measures

Additionally, Laws No 21,227 and No 21,240, which were recently passed as a response to the COVID-19 pandemic, established criminal offences that could carry criminal liability for legal entities.

Law No 21,227 (6 April 2020) regulates access to unemployment insurance benefits. Article 14 punishes those who, through simulation or deceit, obtain a greater economic benefit, such as unemployment insurance, than that to which they are entitled. If the crime is committed in the interests of or for the benefit of a company, the legal person may be criminally liable, provided that the commission of the crime is a consequence of a breach, by the company, of its duties of direction and supervision over its workers.

Law No 21,240 (20 June 2020) amended the Criminal Code, establishing new and more severe penalties for those who fail to comply with sanitary measures in the event of an epidemic or pandemic. This new regulation incorporated Article 318 ter into the Criminal Code, which penalises companies that order workers under their supervision to attend their workplace when those workers are in quarantine or in mandatory isolation ordered by the health authority. The commission of this crime could also make the legal person criminally liable.

Law No 21,459 Introducing New Informatic Crimes

Law No 21,459 (20 June 2022), in effect from December 2022, introduced new informatic crimes to the catalogue of offences for which legal entities can be criminally liable, contained in Article 1 of Law No 20,393. Among the new punishable crimes, this legislation includes different varieties of hacking and other offences, such as the illegal accessing of computer systems, interference with the transmission of information, attacking the integrity of data, informatic falsehoods, informatic receiving, informatic fraud, and the abuse of devices.

Law No 21,595 Systematising Economic Crimes and Offences Against the Environment

Law No 21,595 (17 August 2023) systematises economic crimes and offences against the environment. Based on the diagnosis of the general inadequacy of the current system for the economic crimes defined in Articles 1, 2, 3 and 4 of that Law, this law created a differentiated set of rules for sentencing, by restricting the effect of mitigating and aggravating factors, mostly unrelated to business crime, and replacing them with a specific catalogue. In addition to this, it limits the applicability of alternatives to imprisonment, such as probation, and introduces the general confiscation of profits, reforms the system of fines and introduces relevant changes to the statute of liability of legal persons, eliminating the requirement of the benefit of the company, and extending both the catalogue of crimes and of persons whose intervention generates the liability of the legal person. Finally, it also introduces new economic and environmental crimes and modifies several crimes currently in force in order to improve their wording and solve the difficulties of interpretation and application that have arisen in practice. As an example of these modifications, with this new law the recipients of commercial bribes are expanded to include directors and administrators.

Law No 21,592 Establishing a Statute of Protection for Whistle-Blowers

Law No 21,592 (21 August 2023) establishes a statute of protection in favour of whistle-blowers who report acts of corruption or breaches of probity in the public sector, providing a reporting channel, protection measures, and mechanisms to address possible retaliation. In addition, it expands its scope to certain non-profit entities and companies with state participation and makes the complaint applicable, under certain conditions, to private individuals and institutions that receive tax funds through permanent laws, as a subsidy or contribution from the state.

The Chilean legal system contemplates a long list of crimes related to corruption and bribery, for which the main and most relevant are embezzlement of public funds, grant fraud, unlawful negotiation, bribery, commercial bribery and influence-peddling.

The Criminal Code

All these crimes are defined in the Criminal Code and follow the general rules of punishability. In this respect, for an act of this kind to be punishable, it must have been carried out with intent (the Criminal Code only punishes acts that have been carried out recklessly in specific cases, almost none of which are related to corruption and bribery, although there is an exception in the case of embezzlement – see 2.4 Public Officials). In crimes related to corruption and bribery, the Chilean criminal system does not require any kind of motive to be ascribed to the offender in order to impose a sanction.

There is no general legal definition of bribery (or at least not just one). Bribery is punished in different provisions of the Criminal Code (Articles 248, 248 bis, 249 and 250). Criminal conduct is defined as giving, offering or consenting to give an economic benefit or a benefit of any other nature. From the public officer’s perspective, it is receiving, offering to receive, or accepting receipt of that benefit, be it in favour of the employee or a third person. All these types of conduct must be related, in the original conception of the Criminal Code, to the performance or lack of performance by a public officer of an act according to their duties, against their duties, or a specific crime. However, Law No 21,121 includes as a new provision a basic form of bribery consisting of the act of giving, offering, or consenting to a benefit by reason of the position of the public employee, without requesting any conduct by the public officer as a counter-performance for the benefit. In other words, the mere fact of granting/consenting to a benefit is sanctioned as bribery.

With respect to the benefit, it can be an economic benefit or any other kind of benefit (ie, social or sexual).

An exception is stated in Article 251 sexies, according to which, some conduct – such as giving or offering protocol donations, or those of little economic value that are customarily given as manifestations of courtesy and good education – will not be considered as an offence.

Compliance Programmes

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

Public Officials

Article 260 of the Criminal Code contains a broad definition of public official, which applies to all offences committed by them. This concept extends to all those who exercise a “public function”, applying to all bodies created or dependent on the state. In this respect, it includes situations that clearly go beyond the restricted technical notion that administrative legislation confers to the term “public official”.

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 offering or promising a benefit, of economic or any other nature, to a foreign public official in return for the foreign public official’s performance or omission of an act, thereby providing an unfair advantage in an international transaction (or business deal) to the offeror of the bribe.

Commercial Bribery

One of the main novelties brought about by Law No 21,121 was the criminalisation of commercial bribery. It punishes an employee or mandatary who requests or accepts an economic or other benefit, for themselves or for a third party, in order to favour or be favoured in the contracting of one bidder over another.

Influence-peddling is punished in Article 240 bis of the Criminal Code. This rule sanctions the public employee who, being directly or indirectly interested in any kind of contract or operation in which another public employee must intervene, exercises influence over them to obtain a favourable decision for their interests.

In Chilean legislation, it is not considered an offence for a private person to seek to influence the decisions of a foreign public official.

Criminal Sanctions

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

There are criminal sanctions, however, regarding partners of external auditing companies that maliciously issue an opinion or provide false information on a financial situation or other matters by issuing a certification or report. In addition, those who provide services in an external auditing firm and alter, conceal or destroy information about an audited entity in order to issue a false opinion about its financial situation are committing a criminal offence.

The Financial Market Commission (Comisión para el Mercado Financiero) is the public entity that supervises corporations in these matters.

The Securities Market Law

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 Market Commission) in connection with publicly traded securities. 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.

Stock market abuse

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

Insider trading

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

In addition to the different types of bribery, Chilean legislation contemplates a wide catalogue of crimes regarding public officials; the most relevant related to corruption are embezzlement of public funds, grant fraud and unlawful negotiation.

• Embezzlement of public funds includes:
1. embezzlement by subtraction, which is a crime committed by a public employee who subtracts, or consents to the subtraction by another, from the funds or effects for which they are responsible (Article 233 of the Criminal Code);
2. reckless embezzlement, which is a crime committed by a public employee who, through inexcusable negligence or abandonment, provides an opportunity for another person to subtract the public or private funds or effects under their charge (Article 234 of the Criminal Code); and
3. embezzlement by distraction, which is a crime committed by a public employee who applies the proceeds or effects in their charge to their own use (Article 235 of the Criminal Code).
• Grant fraud: a crime committed by a public employee who defrauds or consents to the defrauding of the state, municipalities or public educational or charitable institutions, whether by causing them loss or depriving them of legitimate profit, in operations in which they intervene by reason of their position (Article 239 of the Criminal Code).
• Unlawful negotiation: this offence punishes public employees who directly or indirectly take an interest in any negotiation, action, contract, operation or management in which they may intervene because of their position. According to the prevailing doctrine, this provision establishes a crime of abstract danger, which is consummated by the mere execution of the conduct, without requiring verification of a result or damage to the fiscal patrimony (Article 240 No 1 of the Criminal Code).

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 part directly in the execution of the crime; and (ii) the accomplice in the strict legal sense.

The co-perpetrator is someone who conspires with another and provides the means for the commission of the crime. The accomplice, conversely, is someone 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. In the case of the co-perpetrator, they are punished with the same penalty as the perpetrator, while the accomplice is punished with a lesser penalty.

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 other cases;
• misdemeanours (simples delitos) have a limitation period of five years; and
• offences (faltas) have a limitation period of six months.

The limitation period is suspended once the defendant is charged with a crime.

Law No 21,212 introduced certain common rules for crimes committed by public officials, one of these being the suspension of the statute of limitations of the crime while the respective official is in office, in order to prevent impunity with the passage of time.

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 day for the purposes of calculating the limitation period.

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

In addition, most of 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 occur in another country, or if the execution of a crime begins abroad, but it has consequences in Chile.

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 the enactment of Law No 21,595 companies could only be criminally liable for bribery, money laundering, financing of terrorism, receipt of stolen goods, disloyal administration, commercial bribery, unlawful negotiation, misappropriation, certain conduct related to water pollution and illegal fishing activities and, from December 2022 onwards, computer crimes. As mentioned previously in 1.4 Recent Key Amendments to National Legislation, Laws No 21,227 and No 21,240 established new crimes in the context of the COVID-19 pandemic, and Law No 21,459 incorporated new offences related to computer crimes, all of which are conduct for which legal entities can be criminally liable.

Law No 21,595 on Economic and Environmental Crimes

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, whether or not they are considered economic crimes by that law. This translates into more than 200 offences, exponentially expanding the list of imputable offences. Among these, it is worth highlighting fraud, collusion, corruption between individuals, crimes related to insolvency, and environmental crimes, which are all crimes created by the same law.

Regarding all the above-mentioned offences, the public prosecutor may seek both the individual responsibility of those who performed the conduct and the criminal responsibility of the company. However, the Public Prosecutor’s Office has no institutional guidelines that state that either individuals or companies must be preferentially prosecuted. Moreover, managers are not criminally responsible for the mere fact that the company is convicted of a 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 responsibility for such acts is transmitted to the successor.

Mitigating Factors for Individuals

There are no special defences available for individuals charged in connection with bribery or corruption offences. In that respect, offenders have the same defences available as for other crimes (ie, mitigating circumstances such as not having prior convictions, material collaboration with the investigation, self-indictment, etc). Defendants have ample rights of defence – they are granted access to the file from the beginning of the investigation and have broad access to an attorney, including the Public Criminal Defence.

Mitigating Factors for Legal Entities

Compliance programme

In connection with legal entities, they may be exempted from criminal liability, inter alia concerning bribery cases, if, before the criminal offence was executed, they adopted an appropriate compliance programme aimed at preventing the occurrence of that particular crime. Since the enactment of Law No 21,595, such prevention programmes must be subjected to periodic evaluations by independent third parties that generate improvements or updates.

Repair, avoidance, self-reporting

Law No 20,393 on the Criminal Liability of Legal Entities expressly makes certain mitigating circumstances available, such as the repair with extreme diligence of the damage caused by the offence, or the adoption of measures to avoid the reiteration of the offence after the offence has been committed, but before the beginning of the trial. In addition, self-reporting of the offence by the legal representatives of the company to the authorities before the latter become aware that a legal proceeding has been initiated against the company, may also be argued as a mitigating circumstance.

Mitigating Factors in Bribery Cases

Effective co-operation with the investigation is a special mitigating circumstance in bribery cases. The co-operation must effectively serve the purpose of clarifying the investigated case, identifying the offenders, preventing the perpetration of the crime or facilitating the confiscation of goods or assets derived from the offence. This mitigating circumstance is not available for high-ranking and elected public officers, judges and public prosecutors.

Mitigating Factors in Economic Crimes

In addition, even though effective co-operation will remain as a mitigating factor, other available defences will vary if the offence is considered an economic crime. According to Law 21,595, in those cases the mitigating factors of diminished culpability (such as absence of seeking economic benefit for oneself or a third party or omission to prevent the crime while being in an intermediate or superior position), limited harm (more than 40 and less than 400 monthly tax units or UTM), greatly diminished culpability (such as acting in the interest of needy people, or due to pressing personal need, among others) and trifle (harm of less than 40 UTM) will apply.

In general, the Chilean criminal system does not contemplate exceptions of any kind regarding bribery or corruption offences. However, Article 251 sexies of the Criminal Code presents a special case.

Article 251 sexies of the Criminal Code incorporates the logic of de minimis exception into the Chilean system. The provision allows conduct that could constitute crimes of bribery or corruption, except these are in respect of official or protocolary donations of little economic value that are customary as manifestations of courtesy and good manners.

Foreign officials or public servants are, however, explicitly left out of the scope of this provision.

The Chilean criminal system does not contemplate exemptions with respect to bribery or corruption offences within the scope of a specific sector or industry.

Companies are not subject to supervision by regulatory entities for compliance with anti-corruption laws. It is beyond the scope of the Prosecutor’s Office to issue regulations or measures to create incentives to self-report a known or suspected violation.

According to Law No 20,393 on the Criminal Liability of Legal Entities, self-reporting may constitute a mitigating circumstance if it is performed by the legal representatives of the company before the applicable proceeding is initiated.

For individuals, penalties for bribery, embezzlement, grant fraud and unlawful negotiation are as follows.

• Bribery – the penalty for the briber will mainly depend on the kind of bribery and the amount of economic benefit:
1. For “bribery without counter-performance”, ie, a crime that consists of the mere fact of giving, offering, or consenting to a benefit by reason of the position of the public employee, the penalty for the briber is 541 days to three years of imprisonment, where the benefit is offered or given; and 61 to 540 days, where the benefit is consented to. In addition, a fine equal to the benefit must be imposed (where the benefit is not an economic one, the fine is from 25 UTM to 250 UTM) and restriction from working as a public employee for a period of three years and one day up to five years.
2. For bribery that consists of giving, offering or consenting to a benefit for a public official to perform or for having performed an act proper to their office, the briber will be punished with 541 days to five years of imprisonment, in the case where the benefit is offered or given; and 61 days to three years, in the case where the benefit is consented to. In addition, a fine from 100% to 200% of the benefit (where the benefit is not an economic one, the fine is from 50 UTM to 500 UTM) and restriction from working as a public employee for a period of five years and one day up to seven years will also be imposed.
3. For bribery that consists of omitting or having omitted an act proper to the office of the public employee, or to perform or for having performed an act in breach of the duties of their office, including exercising influence over another public employee in order to obtain a decision that may generate a profit for a third party, penalties range from three years and one day to ten years of imprisonment, if the benefit is offered or given; and 541 days to five years, if the benefit is consented to. In addition, a fine of between 200% and 400% of the benefit (where the benefit is not an economic one, the fine is from 100 UTM to 1,000 UTM) and restriction from working as a public employee for a period of seven years and one day up to ten years will be imposed.
4. For bribery that consists of offering or consenting to a benefit for the public official to commit some specific offences (referred to in Article 249), penalties range from three years and one day to ten years of imprisonment, if the benefit is offered or given; and 541 days to five years, if the benefit is consented to. In addition, a fine must be imposed, equal to 400% of the benefit (where the benefit is not an economic one, the fine is from 150 UTM to 1,500 UTM) and restriction from working as a public employee for life.
5. Bribery of foreign officials is sanctionable with imprisonment from three years and one day to ten years, restriction from working as a public employee for a period of seven years and one day to ten years, and a fine from 200% to 400% of the amount of the bribe. Where the benefit offered is not an economic one, the fine will range from 100 UTM to 1,000 UTM.
6. According to Article 251 quater of the Criminal Code, any person convicted of the aforementioned crimes will be barred from working in companies that have entered into contracts with the state, or in companies where the state has a majority holding, or in companies that grant a service to the state or provide a public service.
• Embezzlement of public funds:
1. Embezzlement by subtraction – penalties depend on the amount of the subtraction. If it is less than USD270, the penalty of imprisonment ranges from 541 days to five years; if it exceeds USD270 but is less than USD2,700, the penalty is imprisonment of three years and one day to ten years; and if it exceeds USD27,000, the penalty is imprisonment of five years and one day to 15 years. In all cases, a fine of 200% of the amount subtracted and restriction from working as a public employee for a period of five years and one day up to seven years must be imposed.
2. Reckless embezzlement – there is an obligation to return the amount or effects misappropriated and restriction from working as a public employee for a period of 61 days up to three years.
3. Embezzlement by distraction – this carries a fine of 50% to 100% of the amount of the damage caused and restriction from working as a public employee for a period of five years and one day up to seven years. If the refund has not been verified, the penalties indicated in “embezzlement by subtraction” will be applied.
• Grant fraud: the penalty will depend on the amount involved. The default penalty is from 541 days to five years of imprisonment, but if the damage exceeds USD2,700, the penalty is from three years and one day to ten years; and if the damage exceeds USD27,000, the penalty is from five years and one day to 15 years. In any event, it carries a fine of half of the total amount of the damage caused and restriction from working as a public employee for a period of five years and one day up to ten years.
• Unlawful negotiation: the penalty associated with this crime is imprisonment from 541 days to five years, a fine of half of the total amount of the damage caused and restriction from working as a public employee for a period of five years and one day up to ten years.

It is worth saying that all sentences of more than five years and one day are effectively served in jail (no benefits or agreements with the prosecutor are allowed). However, when the offence is considered an economic crime, according to Law 21,595, a differentiated and stricter regime of substitutive penalties applies, which limits the possibility of serving the sentence without imprisonment.

In addition, when the offence is considered an economic crime, additional consequences to the penalty include:

• fines, according to the “days-fine” (días-multa) system of Article 27;
• prohibition of holding public, managerial or executive positions and contracting with the state; and
• confiscation of profits, including 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.

Finally, with respect to legal entities, according to Law No 20,393 on the Criminal Liability of Legal Entities, the available penalties for corporate entities, in the case of acts of bribery, include the imposition of fines (of up to approximately USD20 million for the worst cases), temporary prohibition to enter into contracts with government bodies and/or temporary loss of the right to receive government benefits, and even in some cases dissolution of the company. Law No 21,595 introduces the supervision of the legal entity and the confiscation of assets as available penalties.

As previously stated, each crime has a specific penalty established by law. The Criminal Code contemplates general rules for penalty assessment, including mitigating and aggravating factors, such as recidivism. In that respect, the penalty is determined applying the following factors: the penalty assigned by law to the crime, the degree of completion of the crime (attempted crimes have a lower penalty), the kind of criminal intervention (perpetrator, co-operator or accomplice), mitigating and aggravating circumstances, and the extent of the damage caused by the crime.

The law contemplates the possibility of reaching an agreement in order to terminate the case without going to trial, either through a monetary settlement or deferred prosecution agreements.

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, once again, 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 1.4 Recent Key Amendments to National Legislation, this law introduced a differentiated system of aggravating and mitigating factors more appropriate to business crime, which is based on two elements:

• culpability, according to the position held by the person in the organisation (the higher up the hierarchy, the greater the penalty; the lower down the hierarchy, the lower the penalty) and the way in which that position is enacted (the greater the intervention, the greater the penalty; the less the intervention, the lower the penalty); and
• 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 circumstances will have in determining the applicable penalty).

Pursuant to Law No 20,393 on the Criminal Liability of Legal Entities, the existence of a compliance programme may exempt a company from criminal liability to the extent it fulfils the requirements stated by law.

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 said 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.

Lobbying activities are regulated by Law No 20,730 (since 2014), which concerns all the steps taken to promote private interests before public servants and authorities. The basic principles of this regulation are to give publicity to and create the obligation of keeping a registry of the following:

• meetings and audiences requested by lobbyists and particular interest managers that seek to influence public decision-making processes;
• travel undertaken by the authorities and public servants in that capacity; and
• gifts received by virtue of their position.

The Law prescribes administrative sanctions for public officials who violate the obligation of registry or publicity as the law requires, providing sanctions such as fines, making the offender’s identity known on the official website of the service in question, and giving account of the infraction in the public account rendered by the service, among others.

Lastly, the law explicitly indicates that its provisions do not preclude the eventual criminal liability that the conduct in question may lead to, that is, in cases of bribery and incompatible negotiation.

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 on the Criminal Liability of Legal Entities provides incentive mechanisms for companies to self-denounce. 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.

When considered an economic crime, according to Law No 21,595 in the absence of special regulation, effective co-operation will be a mitigating circumstance for criminal liability. This is stricter than the general substantial co-operation, demanding the provision of precise, truthful and verifiable information that contributes to the clarification of the facts or allows the identification of those responsible, or serves to prevent the perpetration of these crimes, or facilitates the confiscation of assets, instruments, effects or products of the crime.

In the absence of legal regulation, whistle-blowing is not a widespread practice. 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.

Private Sector

There is no regulation of the foregoing in the private sector, so individuals who report suspicious or illegal conduct within a company will depend on the 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.

Public Officials

Nevertheless, as mentioned in 1.4 Recent Key Amendments to National Legislation, Law No 21,592 provides protection to public officials who report acts of corruption or breaches of probity in state agencies, aiming to supply new tools to confront acts of corruption in the public administration. Besides recognising the right of every public servant to be protected when reporting, one of the main innovations introduced by this law is the creation of a new digital channel that will be managed by the Comptroller’s Office, an independent and impartial body, with the option of keeping the whistle-blower’s identity confidential and with specific protection measures against possible retaliation.

Reporting Corruption

There are no protocols or regulations issued by enforcement authorities granting incentives for whistle-blowers specifically in connection with anti-corruption violations. As is the case in all kinds of criminal investigation (and not only anti-corruption cases), individuals or corporate entities may decide to co-operate with the prosecutor to obtain more lenient treatment by entering, for example, into agreements with the Public Prosecutor’s Office, which may imply deferred prosecution or a reduced penalty in the context of a plea agreement. The only limitation on these settlements is determined by law for cases where the possible sanction on the defendant exceeds three years’ imprisonment in the case of deferred prosecution agreements, and five years’ imprisonment in the case of a plea agreement.

To create incentives to obtain information that can boost and strengthen anti-corruption investigations, Law No 21,121 recognises effective co-operation with the investigation as a special mitigating circumstance in bribery cases, which can significantly reduce the applicable penalty. Such co-operation must effectively serve the purpose of clarifying the investigated case, identifying the offenders, preventing the perpetration of the crime, or facilitating the confiscation of goods or assets derived from the offence.

Reporting Administrative Infringements

In connection with administrative sanctions, there are certain provisions aimed at protecting whistle-blowers who hold a public office when reporting crimes or administrative infringements to the competent authorities. However, this protection is very limited, as it only applies to public officers and only considers the suspension of the ability to apply certain disciplinary measures against such persons for a period of up to 90 days after the investigation initiated by the report of the whistle-blower has finished. The identity and the information that the whistle-blower provide have to be kept confidential if requested by the person who provides the information.

However, substantial co-operation with the investigation is considered as a mitigating circumstance that may lower the applicable penalty. In practice, co-operation may also play a role in the willingness of the prosecutor to offer an alternative resolution for the case rather than going to trial.

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 be kept confidential. These provisions are regulated in Law No 18,834 on the Statute Applicable to Public Officials.

In general, Chilean law does not provide for administrative sanctions for corporate entities in the case of violation of anti-corruption laws. However, they may face administrative penalties in cases of violation of specific administrative provisions which indirectly aim to avoid potential corruption or conflicts of interest. This is the case, for example, with violations of the recently introduced provision that prohibits corporate entities from financing political campaigns or parties, which may be punished with monetary fines.

Individuals may also face criminal prosecution, risking penalties that include fines, prohibition from exercising a public office, and imprisonment.

Administrative liability in the case of individuals is in general only applicable for anti-corruption violations committed by public servants and is enforced by the General Comptroller’s Office. However, as is the case for corporate entities, there are certain special administrative penalties that may be applicable to individuals in general in the context of violations to limits applicable to the financing of political campaigns.

The law does not contemplate civil enforcement by government agencies. However, anyone who suffers damage by an act – whether committed by entities or individuals – that contravenes anti-corruption laws may file a civil action against that entity, pursuant to general tort law.

The public bodies in charge of the prosecution of the crimes and administrative infractions previously mentioned are the Public Prosecutor’s Office and the Comptroller General of the Republic, respectively. The interaction between these two public bodies is not expressly regulated, but each of them falls within its exclusive sphere of competence: the public prosecutor investigates and pursues the punishment of the conduct that constitutes a crime, and the comptroller general investigates and sanctions the conduct that constitutes an administrative fault.

The process to acquire information or documentation is relatively similar, whether it comes from the Comptroller General of the Republic or the Public Prosecutor’s Office. Both agencies direct a request for information to the person or legal entity, stipulating a deadline for delivery of the information. As stated previously, in the case of the Public Prosecutor’s Office, if the person denies or delays the delivery of a record, the prosecutor may request the competent tribunal to authorise the seizure of these records, which entails public force.

The administrative body – the Comptroller General of the Republic – has little discretion to mitigate the fulfilment of its powers; that is, it must investigate and punish any cases of corruption that may arise, in accordance with the law. However, as has been described in previous sections, the Public Prosecutor’s Office is entitled to mitigate the enforcement of criminal law through different mechanisms (see 1.3 Guidelines for the Interpretation and Enforcement of National Legislation, 5.2 Guidelines Applicable to the Assessment of Penalties, and 6.5 Incentives for Whistle-Blowers).

As previously mentioned, the area of jurisdiction of each public agency depends on whether the acts of corruption constitute only administrative offences (in which case only the Comptroller General of the Republic is involved) or also constitute criminal offences (in which case, the Public Prosecutor’s Office is involved and litigates before the courts with criminal jurisdiction).

The Corpesca Case

As far as landmark decisions go, in 2021 the Corpesca case ended, leaving many lessons. The case was about the illegal financing of politics and resulted in convictions for the crimes of bribery of public officials and tax fraud.

It was a landmark case because it changed the way in which bribery is understood, to the extent that legal reform followed, in order to adjust the conduct sanctioned, as well as shift the way in which compliance policies are understood. The tribunal convicted a legal entity (Corpesca) for its lack of commitment to the prevention of crimes within its structure, which was determined by a deficient compliance policy. This latter circumstance was found to be determinant in the analysis of the crimes for which the executives were convicted (although one such executive, Francisco Mujica, entered into a plea agreement and did not face jail time).

The Itelecom Case

Regarding landmark investigations, the Itelecom case has generated interest regarding investigation of the bribery of several public servants by the executives of a legal entity, involving various municipalities. In this case, the mitigating circumstance of Article 260 quater of the Criminal Code (substantial collaboration with the clarification of the facts) was recognised for the first time since the enactment of the anti-corruption law. This circumstance is a qualified version of the general mitigating circumstance consisting of collaboration in the clarification of the facts, which has to be explicitly recognised by the prosecutor. Itelecom has become a model for the recognition of this circumstance in future cases.

The “Caso Convenios”

Another landmark investigation, the “Caso Convenios” case, has recently sparked an arduous debate in the public arena, as it involves the transfer of public money to 30 private foundations throughout the country. The Public Prosecutor’s Office is now investigating different aspects of the case, which exploded on 16 June 2023 in Antofagasta, in the north of Chile, with the transfer of resources from the Ministry of Housing to the Democracia Viva foundation, linked to the Revolución Democrática party, of President Gabriel Boric’s coalition. This case has generated a strong reaction from the authorities, who have condemned the events and have committed to promoting improvements to safeguard transparency and probity in the administration, as well as to impose the appropriate sanctions.

Many of the recent cases of bribery or corruption have ended with plea agreements and those convicted were not sentenced to jail, but severe penalties of fines and restrictions were imposed.

Many of the modifications enacted by Law No 21,121 were adopted with the purpose of fulfilling international commitments in the matter of corruption, and as a reaction to certain cases of corruption that have occurred in recent times in Chile.

The current legislation deals severely with corruption and bribery and is expected to be more effective, but it is still too early to determine its efficacy.

As previously noted, changes in corruption and bribery legislation have been made in Chile only recently. In addition, there are three relevant projects in progress, which seek to improve the persecution of corruption.

Bill No 15975-25 on Economic Intelligence Against Crime

The first one is Bill No 15975-25 on Economic Intelligence Against Crime, which aims to strengthen the investigation of illicit money by, among other measures, creating intelligence units within the National Customs Service and the SII and regulating their co-ordination with the financial analysis unit and the state intelligence system. Although the project focuses on crimes such as money laundering, terrorist financing and other offences linked to organised crime, the authorities have argued that “controlling the money is also controlling corruption”, because it entails supervision of the way in which organised crime gangs, due to their great economic power, manage to get into decision networks, corrupting them and in this way restricting the state’s capacity to react.

Bills No 14594 and 15523 on Issues Linked to Municipal Probity and Transparency

The second one is Bills No 14594 and 15523, on issues linked to municipal probity and transparency. This legal initiative seeks to establish transparency and accountability requirements for all private institutions (both for profit and non-profit), specifically, all those that receive contributions, subsidies, direct transfers, tenders or public funds of any type – from municipalities and regional governments to powers of the state. This is so that the Comptroller General of the Republic can supervise all public funds delivered to these entities. In addition, it is proposed to incorporate regulations for the prevention of corruption and expand citizen participation mechanisms. Likewise, the project seeks to raise the levels of probity and transparency in municipal management and municipal participation corporations and foundations, which have been involved in public corruption scandals.

Bill No 14795-07 Seeking to Establish a New Criminal Code

Finally, Bill No 14795-07 seeks to establish a new criminal code. The current Criminal Code was enacted in 1875 and, although it has undergone constant modification and is complemented by multiple laws that deal with new crimes, there is consensus among all actors in Chile on the need for a modern criminal code. Consequently, since 2013, three drafts of a new criminal code have been presented as part of an initiative driven by the Ministry of Justice, the latest of which was submitted in October 2018.