CHILE: An introduction

Economic and Legal Landscape

Chile’s regulatory framework is evolving rapidly, driven by significant reforms such as the new Economic Crimes Law (Ley de Delitos Económicos) enacted in August 2023. This legislation introduces over 200 new economic crimes, setting stringent compliance standards across a wide range of industries including mining, energy and retail. A particular emphasis is placed on environmental crimes, holding companies in high-impact sectors to higher levels of accountability. Businesses now face not only significant financial penalties but also potential imprisonment for executives who fail to comply with these regulations.

In tandem, the approval of the Data Protection Law marks another regulatory shift. This Law, aligned closely with the General Data Protection Regulation (GDPR) framework, created the Data Protection Agency in Chile and imposes new obligations on businesses handling sensitive data, including biometric and geolocation information. Furthermore, this Law increases scrutiny on data security, transparency and confidentiality measures. Non-compliance can lead to severe financial sanctions and reputational damage, with fines reaching up to UTM20,000 (approximately USD1.4 million).

Together, these reforms reflect Chile’s broader push towards stronger corporate governance, sustainability and transparency. In this evolving landscape, companies must adopt proactive strategies to navigate the complex web of regulatory requirements. Comprehensive compliance programs that address environmental, data protection, and antitrust obligations are no longer a matter of regulatory compliance alone but are essential for safeguarding businesses against significant financial and reputational risks.

Integrated Compliance and Prevention Models

With the introduction of the new Economic Crimes Law, many Chilean businesses are restructuring their compliance frameworks to mitigate the risks of non-compliance. This Law has particular relevance for high-risk sectors, such as mining and energy, where environmental compliance is paramount. Companies are increasingly adopting integrated crime-prevention models that address both operational and environmental compliance challenges. 

For example, recent developments in Chile’s mining sector have demonstrated the importance of proactive compliance programs. A leading mining company recently implemented a comprehensive compliance model that not only ensured adherence to environmental regulations but also incorporated international best practices in sustainability. This approach significantly reduced the company’s exposure to potential fines and operational disruptions.

Moreover, the focus on environmental compliance is mirrored in other industries, such as retail and agriculture. In these sectors, the implementation of robust compliance programs helps businesses navigate the complexities of the evolving legal framework while also addressing broader sustainability goals.

Antitrust Enforcement and Compliance – The Linde Case

Chile’s antitrust enforcement landscape has also seen significant developments, with regulators taking an aggressive stance on anti-competitive behaviour. One of the most prominent examples is the investigation into Linde Gas Chile, a landmark cartel case initiated by the National Economic Prosecutor’s Office (FNE by its Spanish acronym). This case highlights the increasing importance of antitrust compliance for businesses operating in Chile.

By co-operating early with regulators, Linde Gas Chile was able to secure leniency, avoiding all penalties that would have resulted from noncooperation. This case underscores the critical role that well-structured compliance programs play in mitigating antitrust risks. It also demonstrates how businesses in Chile can benefit from aligning internal controls with the FNE's stringent requirements.

The Linde case is a reflection of a broader regulatory trend, as antitrust enforcement becomes a priority for Chilean authorities. Companies in all sectors must ensure that their compliance programs are robust enough to detect and mitigate risks related to collusion and market abuse.

The Impact of the “Audio Case”: From Corporate Governance to the Redesign of the Judicial Branch Structure

The Audio Case exposed significant governance vulnerabilities within both the private and public sector. This case is having a major impact on corporate governance practices and governmental decision-making processes. In the private sector, the Audio Case prompted a widespread re-evaluation of governance structures across various industries. In response, many companies have adopted stronger governance frameworks, designed to promote transparency and accountability.

A prominent example comes from the retail sector, where businesses have introduced governance models that emphasise transparency in decision-making and provide advanced whistle-blower protections. These measures are not only concerned with meeting regulatory requirements but are also seen as a way to enhance trust and accountability within companies.

The shift towards stronger corporate governance is a clear indication that businesses in Chile are beginning to view compliance not just as a legal requirement but as a strategic tool for enhancing long-term sustainability and growth.

In the public sector, the Audio Case has exposed the fragility of the legal mechanisms that are designed to protect the judicial branch from the influence of political and private interests. The mechanism through which judges are appointed has shown several vulnerabilities that have allowed for political and private meddling with the functioning of the judicial branch. In this regard, it is widely anticipated that, to tackle the deficiencies, a complete overhaul of the judicial system will take place in the coming months and years.

Challenges for High-Risk Industries

The new Economic Crimes Law and the Data Protection Law present unique challenges for high-risk industries like mining, energy and agriculture. With environmental crimes now classified as serious offenses, companies operating in these sectors must reassess their internal controls and compliance strategies. Failure to meet these evolving standards can result in heavy fines, reputational damage and even imprisonment for senior executives.

In addition to environmental concerns, the handling of sensitive data has emerged as another critical area of risk. Companies that mishandle personal data face substantial penalties under the Data Protection Law. This is particularly relevant for sectors like retail, where large amounts of customer data are processed regularly. By implementing advanced compliance models, companies can reduce their risk exposure and ensure they remain compliant with both environmental and data-protection regulations.

One energy sector client facing potential sanctions for non-compliance with environmental regulations worked swiftly to implement a compliance program. This initiative not only addressed the immediate regulatory concern but also provided a long-term strategy for mitigating future risks. Such proactive measures illustrate the growing recognition among businesses that strong compliance frameworks can serve as a safeguard against liability.

Strategic Positioning and Future Outlook

As Chile’s regulatory environment continues to evolve, companies that prioritise compliance and corporate governance will be best positioned to succeed in this new landscape. Looking ahead, we expect the new Economic Crimes Law to drive further changes in corporate governance and compliance standards. Companies that fail to adapt to these new realities will face significant legal and financial risks. By contrast, those that invest in comprehensive, forward-thinking compliance programs will not only mitigate risks but also enhance their competitiveness in the market.