CHILE: An Introduction to Dispute Resolution: White-Collar Crime

Introduction to the New Law on Economic Crimes and Environmental Violations in Chile 

Main idea 

On 17 August 2023, a pivotal legislative amendment concerning white-collar, economic, and environmental crimes in Chile was officially published and subsequently enacted. This significant modification profoundly impacted criminal statutes and provisions dating back to the late 19th century. The changes were extensive, involving the reformulation of certain crimes, innovative systematisation of others and, more broadly, the introduction of specific circumstances that fundamentally alter the standard of liability for both natural and legal entities.

The comprehensive parliamentary motion leading to the enactment of the new Law No 21.595, titled Economic Crimes (referred to as “LDE” henceforth), outlined four fundamental objectives:

• to develop a system for determining custodial sentences specifically tailored to this type of criminality, emphasising a more stringent approach;

• to revise the framework governing pecuniary consequences and disqualification associated with economic crimes;

• to enhance the framework for the criminal liability of legal entities; and

• to enhance and supplement substantive economic criminal law by introducing and organising new offences related to environmental violations (which may or may not fall under the category of economic crimes, as discussed below).

Economic crime categories 

During the legislative process, it was decided not to define “economic crime”. Instead, four categories were established, each with certain conditions of application, outlining a series of offences that are referenced across various legal frameworks. The first category comprises ten numerals; the second category includes 32; the third category encompasses five; and the fourth category comprises only three.

The first category lists crimes that are considered “economic crimes, in all circumstances”, or economic crimes per se. This means that if the offence is found in article 1º, regardless of the circumstances of commission, it will always be considered an economic crime. This includes, among others, the most severe violations against the securities market (Articles 59, 60, 61 and 62 of Law No 18.045 of the Securities Market Law) and free competition (Articles 39 literal h, 39 bis, sixth paragraph, and 62 of Decree Law No 211). Additionally, it encompasses offences affecting the banking sector (Articles 39, 141, 142, 154, 157, 158, 159 and 161 of the General Banking Law, merged in DFL No 3 of 1997), and broader phenomena such as corruption between individuals (Articles 240, 251 bis, 285, 286, 287 bis, 287 ter and 464 of the Penal Code).

The second category encompasses a wider range of offences, including the new environmental crimes and others outlined in the Penal Code, such as disloyal administration or bankruptcy fraud, customs violations, tax evasion, computer crimes, intellectual property offences and fishing and aquaculture offences, among others. Qualification as an economic crime in this category requires that “the act was perpetrated in the exercise of an office, function or position in a company, or when it is for the economic or other benefit of a company”. As scholars have noted, the key element lies in “corporative involvement”.

Economic crimes in the third category are primarily linked to crimes against the public function for the benefit (economic or otherwise) of a company. These crimes are characterised by their connection to the company – due to the involvement of a person belonging to the company – and are verified through one of the forms provided in Article 15 or 16 of the Criminal Code (ie, participation without authorship).

The fourth category mainly pertains to scenarios involving receiving money and money laundering, where the actions from which the funds originate, in addition to constituting the specified crimes, are considered economic crimes of the first, second or third category. This includes cases where the receiving or laundering of assets occurred in the exercise of a position or function in a company, or for the economic or other benefit of the company.

Relevance of the categories 

The relevance of the categories is twofold: (i) positively, the classification of a crime as economic determines the form and implementation of primary and accessory penalties upon conviction, whether for a natural person or legal entity; and (ii) negatively, any offence not listed in these categories will not be considered as such, even if it occurs within the framework of a company (eg, human trafficking).

Regarding the punishment of natural persons (including managers, chief executives, etc) involved in economic crimes, the new law introduces a special regime for the judicial determination of custodial sentences and their substitution with other types of penalties – special mitigating or aggravating circumstances may be established alongside a catalogue of disqualifications and a special regime for calculating fine penalties.

It is noteworthy that the new system of mitigating and aggravating factors may impact alternative penalties (which are only conditional remission and partial confinement, either at home or in a special facility). Conversely, if the offence cannot be categorised as an economic crime, the previous alternative penalties of Law No 18.216, which has a broader catalogue and less demanding requirements, will apply. However, in cases of concurrence, where economic crimes and crimes of another class (ie, those not listed in any of the four categories) overlap, the LDE expressly dictates that the penal rules of this new (stricter) legal framework will be enforced.

Furthermore, a new catalogue of special disqualifications (eg, holding a managerial position as a director or chief executive) has been introduced, alongside a special regime for calculating the fine penalty associated with all economic crimes (eg, the day-fine model, based on the income of the offender). A novel regulation has also been introduced for profit confiscation, with provisions for both convictions (in all cases) and without prior convictions (under certain rather lax assumptions, such as temporary dismissal due to default or mental derangement; definitive dismissal due to lack of participation; and even acquittal due to lack of conviction).

Regarding the criminal liability of legal entities, the main aspects of the reform include:

• The entirety of economic crimes imposes criminal liability on legal entities, broadening the scope of affected parties. Consequently, the criteria leading to such liability are simplified, along with the necessary design for the crime prevention model.

• The introduction of supervision of legal entities as both a penalty and a precautionary measure.

• The establishment of a new fine penalty regime, aligned with the day-fine model, and a revised framework for judicial determination of penalties.

• The implementation of new regulations for penalty enforcement, encompassing scenarios such as mergers or dissolution of legal entities, as well as asset transfers.

New crimes of attacks against the environment 

Furthermore, Law No 21.595 introduces significant innovations with the addition of Paragraph XIII of Title Six of Book Two of the Criminal Code, which addresses attacks against the environment (Sections 305 to 312).

The new catalogue of environmental offences distinguishes between “contamination crimes” and “crimes of serious environmental damage”, incorporating specific guidelines for penalty determination and fine regulation.

It is important to note that while an environmental offence may – or may not – be classified as an economic crime (eg, of the second category), depending on the criteria previously analysed, there may be cases where an environmental offence cannot be categorised as an economic crime.