Anti-Corruption

Last verified on Monday 12th November 2018

Chile

Daniel Praetorius and Jorge Bofill
Bofill Escobar Silva Abogados

    Laws

  1. 1.

    What laws or regulations in your jurisdiction prohibit the offering, payment or receipt of bribes by: domestic government officials; foreign government officials; or other individuals, such as commercial counterparties?

  2. Bribery in connection with domestic and foreign government officials is considered a criminal offence under Chilean law and is regulated in the Criminal Code (articles 248 to 251-ter).

    Such conducts are also prohibited under laws that regulate the activity of domestic public officials and are considered infringements of the probity and impartiality principles to which public officials are subject (eg, Law No. 18,575 on Public Administration and Law No. 18,834, which establishes the statute applicable to public officials), which provide administrative sanctions for such conduct.

    Law No. 20,393, on Criminal Liability of Legal Entities establishes, in certain circumstances, penalties for legal entities involved in bribery cases.

    In Chile there is no specific legal regulation on commercial bribery. In certain circumstances, bribery acts may allow to claim damages under general tort law or under Law No. 20,169 on Unfair Competition (eg, bribes to suppliers of a competitor to stop providing services, or to an employee of a competitor). However, a bill was passed recently in Congress that expressly punishes commercial bribery. This new legislation (subsequently referred to as the New Law) also amends other important anti-corruption regulations. As it is not in force as of the drafting of the answers to this questionnaire (October 2018) but is expected to enter into force before the end of the year, we will make reference to the approved changes, where relevant.

  3. 2.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to corporate entities, whether based principally in your jurisdiction or elsewhere?

  4. Traditionally, criminal law did not make legal entities liable for crimes. Instead, individuals involved in crimes on behalf of the legal entity would be responsible. This principle is still the general rule in Chilean criminal law. However, pursuant to the Law on Criminal Liability of Legal Entities, enacted in 2009, corporate entities may be criminally liable for some crimes, among them bribery conducts carried out in the interest or for the benefit of such entity by owners, controllers, representatives, key officers or any person conducting managing or supervising functions in such company or by individuals working under the direct supervision of any of the aforementioned persons. Criminal liability may arise in such cases for the legal entity provided the execution of such crime has been a result of the failure of such entity’s direction and supervision duties (for example, if no suitable compliance programme in order to prevent such crime has been implemented).

    The rules on criminal liability of corporate entities − as the vast majority of the criminal laws in Chile − are governed by the principle of territoriality (ie, they are only applicable when the offences were committed in Chile). However, since Chilean courts have jurisdiction in cases of bribery of a foreign public official committed abroad by a Chilean national or a foreigner with residence in Chile, if the bribe was committed in the interest or for the benefit of the legal entity, criminal liability of the latter may also be pursued in Chile.

  5. 3.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to individuals, whether resident in your jurisdiction or elsewhere?

  6. Any individual who offers or consents to offer within the territory of Chile higher fees than those to which public officials are entitled according to their position or an economic benefit to a public official in consideration for (i) performing or for having performed an action to which they are obliged to pursuant to their duties; (ii) not performing or not having performed or performing or having performed an action infringing their duties; or (iii) for committing certain corruption crimes, should be punished pursuant to the Criminal Code. Chilean law does not make a distinction based on nationality or country of residence for these purposes, except in the case of a bribe of a foreign public official that, as described above, creates jurisdiction for Chilean courts only if the crime was committed by a Chilean national or a foreigner with residence in Chile.

    The New Law extends the punishment for bribery to cases where a non-economic benefit is offered and also to cases of commercial bribery (ie, cases where an employee or representative of a company requests or accepts a bribe to favour one offeror over another one).  

  7. 4.

    How do the anti-corruption laws in your jurisdiction define foreign government officials?

  8. The Criminal Code defines foreign government official as any person that holds a legislative, administrative or judicial office of a foreign country, whether appointed or elected, as well as any person that exercises public authority for a foreign country, either on a public organism or a stated-owned company. Officers or agents of a public international organisation are also considered for these purposes as foreign government officials.

  9. 5.

    What level of knowledge or intent is required to prove a violation of the anti-corruption laws in your jurisdiction?

  10. Generally, anticorruption violations that constitute a crime have to be carried out wilfully to be punished. Hence, the law does not punish negligent conducts.

    However, according to the Law on Criminal Liability of Legal Entities, companies can be held criminally liable when a bribery offence has been committed in their interest as a consequence of failure to comply with their direction and supervision duties. In other words, criminal liability of legal entities is not based on the commission of a wilful act, but rather on a defect of organisation.

  11. 6.

    Do the anti-corruption laws in your jurisdiction prohibit facilitating payments? (That is, small payments to expedite or to secure the performance of a routine government action to which a company is entitled, such as obtaining permits, processing visas, utility services, customs clearance, police protection.)

  12. This type of behaviour is punished under the Criminal Code and under administrative laws. In fact, Chilean law prohibits public officials to receive or request greater fees or rights than those corresponding according to their offices, or an economic benefit in consideration of performing an act inherent to their position for which no payment is due.

  13. 7.

    What affirmative defences are available with respect to the anti-corruption laws in your jurisdiction?

  14. There are no special defences available for individuals who are subject to a criminal proceeding in connection with prohibited corruption conducts, which means that the same defences available for other criminal offences in general are also applicable to these cases (for example, mitigating circumstances such as not having prior convictions, material collaboration with the investigation, self-indictment, etc).

    In connection with legal entities, they may get exempted from criminal liability, inter alia concerning bribery cases, if, before the criminal offence has been executed, they had adopted an appropriate compliance programme aimed to avoid the occurrence of such particular crime. Such prevention programme may be certified by external entities registered for such purposes before the Securities Authority.

    On the other hand, the Law on Criminal Liability of Legal Entities expressly makes certain mitigating circumstances available, such as to repair with extreme diligence 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 relevant trial begins. Also, the self-reporting of the offence by the legal representatives of the company to the authorities before they are aware that a legal proceeding has been initiated against the company may also be argued as a mitigating circumstance.

    The New Law introduces the effective cooperation with the investigation as a special mitigating circumstance in bribery cases. Such cooperation has to effectively serve to the purpose of clarifying the investigated case, identifying the offenders, prevent the perpetration of the crime or to facilitate the confiscation of goods or assets deriving from the offence. Such mitigating circumstance is not available for high rank and for elected public officer, and also not for judges and public prosecutors.

  15. 8.

    What are the maximum potential fines or other penalties for violating the anti-corruption laws in your jurisdiction?

  16. Penalties to which individuals and legal persons are exposed for bribery are very diverse and depend on the particular offence and if it is performed by a public official or a private individual. Persons convicted for bribery risk effective imprisonment of up to five years in the most severe cases (ie, bribery of foreign public officials in international commercial transactions), disqualifications (in some cases for a life time) and fines (usually calculated in relation to the amount of the bribe, reaching in some cases up to triple the offered / obtained benefit). Certain corruption offences, other than bribery, committed by public officers have even higher penalties. For example, misappropriation of public funds can be punished with imprisonment of up to 15 years if the misappropriated sum exceeds approximately US$3,000.

    According to the Law on Criminal Liability of Legal Entities, the available penalties for corporate entities, in case of bribery acts, include the imposition of fines (up to approximately US$750,000), temporary prohibition to enter into contracts with governmental bodies and/or the temporary loss of right to receive governmental benefits.

    The New Law has increased penalties for corruption cases. In the most severe cases of bribery (ie, bribery of foreign public officials and payments received by public officials to commit a criminal offence) offenders may now risk imprisonment of up to 15 years and fines of up to the quadruple of the obtained or offered benefit.

    Also, the penalties for legal entities will be more severe after the New Law enters into force. Fines for criminal liability derived from severe bribery conducts, including bribery of foreign public officers, might go up to approximately US$21,000,000 and even include the dissolution of the company.

    Public officials may also be subject to penalties imposed by the General Comptroller for administrative infringements, which may consist in a written warning, a fine, employment suspension from 30 days to three months, and even dismissal from the post.

  17. 9.

    Is there any pending legislation related to anti-corruption in your jurisdiction?

  18. Legislation on punishment of criminal offences related to bribery and other prohibited corruption conducts has been subject to important amendments over the past decade. The most important amendments entered into force in 2002 and 2009. In 2009 the Criminal Code was amended to incorporate the bribery of foreign public officials in the context of international business transactions as a criminal offence. Also in 2009, the Law on 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. Such amendments were a consequence of the adoption by Chilean law of the standards required by the OECD, of which Chile is a full member since 2010. 

    In October 2018, after years of discussion, the Chilean Congress approved important amendments to the anti-corruption regulations, including the increase of penalties for bribery and other corruption crimes. This new legislation also includes amendments to provisions related to bribery of foreign governmental officials, following recent recommendations issued by the OECD. However, the most relevant change is the regulation and punishment of commercial bribery, which so far was not considered a crime under Chilean law.

    In recent years there have been several attempts to introduce a new criminal code that replaces the current code, which was enacted in 1874. A draft of this new criminal code was prepared by a committee of experts in criminal law and handed over recently to the Ministry of Justice. It is expected that such new proposed legislation will be presented to Congress for its discussion next year. The new proposed code includes amendments in connection with anticorruption regulation, as it does with almost all offences. As this new code completely revamps the existing criminal statute, it is likely that it will take some years before it is fully approved by Congress.

    Enforcement

  19. 10.

    Are corporate entities and individuals that violate the anti-corruption laws in your jurisdiction subject to criminal, administrative or civil liability, or a combination thereof?

  20. Corporate entities may be subject to criminal prosecution as a consequence of bribery committed by their agents.

    This kind of action can be initiated by any individual or by the Public Prosecutor's Office. In both cases, the success of the action is determined by the identification of a corporation’s agent committing bribery for the benefit of the company and the failure of such corporate entity to comply with its direction and supervision duties.

    Penalties for such offences include fines of up to approximately the equivalent to US$700, forfeiture of governmental benefits or prohibition of contracting with governmental bodies. The New Law introduces higher penalties, including fines of up to approximately US$21 million and the dissolution of the company.

    In general, Chilean law does not foresee administrative sanctions for corporate entities in case of violation of anti-corruption laws. However, they may face administrative penalties in cases of violation of specific administrative provisions that indirectly aim to avoid potential corruption or conflicts of interest. This is the case, for example, with violations to 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 to exercise a public office or 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 it is the case of 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 financing of political campaigns.

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

    If violation of anti-corruption laws also results in unfair competition, a claim for contravening the Law on Unfair Competition may be filed before civil courts and, if the courts determine the effectiveness of the unfair competition conducts, civil enforcement may be sought for such reason by the Anti-Trust Authority.

  21. 11.

    Which prosecutors or other government agencies may bring enforcement actions under your jurisdiction’s anti-corruption laws?

  22. Criminal prosecution is in charge of the Public Prosecutor's Office (which in Chile is an autonomous entity, distinct from the government). In such proceedings the State Defence Council may act as complainant, defending the interests of the state.

    In connection with enforcement of anti-corruption regulations contained in administrative laws, that do not constitute a criminal offence, the General Comptroller’s Office carries out enforcement of penalties against public officials.

  23. 12.

    Have any multinational corporations or their domestic subsidiaries been subject to enforcement actions in your jurisdiction for domestic or foreign bribery violations?

  24. Since the enactment in December 2009 of the law that established the possibility that corporations are subject to criminal anti-corruption laws, there have been very few cases of enforcement actions against local subsidiaries of multinational companies.

    However, none of these cases has to date ended in a conviction.

    Even enforcement actions against local companies are still rare to date, although there has been an increase in the number of investigations being carried out against companies in recent years, with some of them ending with criminal sanctions.

  25. 13.

    Have the employees of any multinational corporations or their domestic subsidiaries been subject to enforcement actions by the authorities in your jurisdiction for domestic or foreign bribery violations?

  26. The implementation of a new criminal procedure system as of 2000 in some parts of the country and in the whole territory since 2005 has been a turning point in the intensity of the prosecution of bribery violations. The number of cases have increased steadily and the public attention on high-profile criminal cases as well. Since Chile is a very open economy and many multinational corporations have relevant investments in the country, it is not unusual for this type of case to involve local employees of foreign companies. As a general rule, it is fair to say that the prosecution agency does not make a distinction on the basis of the nationality of the company, which, of course, works both ways.

  27. 14.

    Have resolutions of anti-corruption enforcement actions with corporate entities resulted in settlements, such as deferred prosecution or non-prosecution agreements or leniency agreements?

  28. There are only a few relevant records of this kind. One is related to an investigation against a local company engaged in a painting production branch, which as a condition for a deferred prosecution accepted to perform various mitigation actions to the community – currently valuated at approximately US$2.5 million.

    The other recent relevant proceeding where settlements were reached, was in the context of the “CNA case”, which involved enforcement actions against three universities. One of the universities was convicted in an abbreviated proceeding, which usually is a result of a previous negotiation with the Public Prosecutor’s Office. The other two universities, entered into deferred prosecution agreements with the Public Prosecutor’s Office, whereby one of them should pay to the state approximately US$40,000 and set up a scholarship programme worth approximately US$80,000, and the other one should pay to the state approximately US$80,000 and set up a scholarship programme for 100 students for five years.

    The most recent and notable case to date is a deferred prosecution agreement reached between the Public Prosecutor's Office and SQM, one of the world leading companies in the lithium and potassium nitrate markets. The case involved alleged responsibility of SQM and two of its subsidiaries for the lack of supervision with respect to the payments to suppliers and entities that may have had links with the politically exposed persons between 2008 and 2015. The agreement implies payments by the companies in an aggregate amount of CLP$900,000,000 to the Chilean State, and CLP$1,650,000,000 to various charitable organisations, that is, an amount equivalent to approximately US$3.7 million. In addition, the companies must provide the Public Prosecutor’s Office with a report on the enhancements to their compliance programme, implemented in recent years, with special emphasis on the incorporation of best practices in various jurisdictions.

    In connection with the same case, SQM, whose shares are traded also in the US, had entered earlier, in January 2017, into a deferred prosecution agreement with the Department of Justice for breaching FCPA provisions. Pursuant to its agreement with the department, SQM agreed to pay a criminal penalty of US$15,487,500.

    Deferred prosecution is generally available in proceedings against legal entities. As regards a settlement between the victim of the offence (the state) and the defendant, the instruction of the National Public Prosecutor's Office is to oppose to such agreements, except in very limited cases, as there is a public interest involved in the prosecution of such crime.

    There are several other judicial proceedings involving bribery against legal entities that are currently pending. Their result is not foreseeable.

  29. 15.

    In recent years, have there been trials or other proceedings in which an individual or corporate entity has contested alleged violations of anti-corruption laws in your jurisdiction?

  30. Chile is not an exception in the sense that trials are conducted in a limited number of cases and the vast majority of the criminal investigations are finished before trial. As criminal liability in respect of legal entities exists only as of the end of 2009, almost all the investigations carried out so far which ended in trials have targeted individuals, not legal entities.

    Having said that, one can find numerous cases of investigations related to anti-corruption laws and all types of results (ie, convictions, guilty pleadings, acquittals, deferred prosecutions, etc), the vast majority is against individuals, but in the past few years proceedings have been directed against corporate entities as well. For example, there are convictions reached in the context of an abbreviated proceeding against a fishing company and a university, and a case where a company was acquitted in a trial in connection with alleged illegal payments to a municipality.

  31. 16.

    To what extent do the enforcement authorities provide incentives for companies to self-report known or suspected violations?

  32. Companies are not subject to the supervision by regulatory entities for the compliance with anti-corruption laws. The Prosecutor's Office is in charge of the criminal enforcement of such actions and it is not within its scope to issue regulations or measures to create incentives to self-report a known or suspected violation. 

    According to the Law on 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. 

  33. 17.

    To what extent do the enforcement authorities take into account a company’s level of cooperation with the government’s investigation or the strength of its compliance programme when considering whether to bring enforcement actions or when assessing penalties?

  34. Pursuant to the Law on 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.

    On the other hand, substantial cooperation with the investigation is considered as a mitigating circumstance that may lower the applicable penalty. In practice, cooperation may also play a role in the willingness of the prosecutor to offer an alternative resolution for the case and not go to trial.

  35. 18.

    To what extent and under what circumstances do the enforcement authorities provide incentives for whistle-blowers to report known or suspected anti-corruption violations?

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

    The New Law, in an effort to create incentives to get information that can boost and strengthen anticorruption investigations, recognises the effective cooperation with the investigation as a special mitigating circumstance in bribery cases, which can significantly reduce the applicable penalty. Such cooperation has to effectively serve to the purpose of clarifying the investigated case, identifying the offenders, prevent the perpetration of the crime or to facilitate the confiscation of goods or assets deriving from the offence.

    In connection with administrative sanctions, there are certain provisions aiming to protect whistle-blowers that 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 provides have to be kept confidential if requested by the person that provides the information.

  37. 19.

    What has been the most significant fine or monetary penalty to date under the anti-corruption laws of your jurisdiction? 

  38. In connection with corporate entities, there have been only a few cases that ended in convictions. For example, we can mention a conviction against a university in which a fine of approximately US$145,000 was imposed.

    However, as said above, so far there have been very few cases, since the entering into force of the Law on Criminal Liability of Legal Entities, which have been taken to trial and ended in convictions. 

    In cases of deferred prosecution agreements, it is common to establish as a condition of such agreement that a sum is paid, which, however, has not the nature of a penalty. In such cases companies have agreed to pay more relevant sums. In such context, the biggest sum paid so far as a condition to enter into a deferred prosecution agreement in Chile reached the equivalent to US$3.7 million (SQM case).

    In the context of individuals, the fines related to bribery cases are often defined as a percentage of the benefits received owing to the unlawful behaviour. However, there is no public statistical record of the imposition of this kind of penalty.

  39. 20.

    Do the enforcement authorities use any other statutes to prosecute conduct related to bribery and corruption?

  40. As bribery under Chilean law constitutes an underlying crime for money laundering, it has become common for public prosecutors to also file charges for such crime in the context of anti-corruption investigations. Some cases of payments of alleged bribes, which have been used by companies as tax-deductible costs, have also been prosecuted as tax offences.  

    International cooperation

  41. 21.

    Have the enforcement authorities issued general guidance regarding compliance with and enforcement of the anti-corruption laws?

  42. General instructions addressed to public prosecutors on the enforcement of corruption criminal offences were issued on September of 2014 by the National Prosecutor's Office by means of Oficio FN No. 699/2014, which updated prior regulations on this topic. 

    In August 2010, the National Prosecutors Office also issued general instructions on the prosecution of criminal liability of legal entities (which may arise, among others, from bribery crimes) by means of Oficio FN No. 440/2010.

    Such documents can be found at: www.fiscaliadechile.cl/Fiscalia/instructivos/index.do.

    There is also a Manual on Transparency and Probity issued by the central government aimed at guiding public officials in the fulfilment of their transparency and probity duties.

    Such document can be found at: www.serviciocivil.cl/wp-content/uploads/2017/07/141009_Manual_transparencia.pdf.

  43. 22.

    To what extent do authorities in your jurisdiction cooperate with foreign authorities in enforcing applicable anti-corruption laws?

  44. Chile has entered into several international agreements relating anti-corruption (eg, the UN Anti-Corruption Convention, the Inter-American Convention against Corruption and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions). According to the latter, the following Chilean authorities have been appointed as relevant authorities for coordination purposes: the Department of Legal Affairs of the Ministry of Foreign Affairs in regard to legal assistance and extradition requests, the International Relationships and Cooperation Unit of the Ministry of Justice in connection with consultations related to jurisdiction and the Anti-Corruption Specialised Unit of the National Prosecutor’s Office in connection with reporting and monitoring of these offences.

    In 2017, a new law was enacted, which aims to facilitate the exchange of information by local authorities with foreign authorities. The law establishes that certain organs of the State of Chile may provide information to organs of foreign states and to international organisations. The delivery of information must be carried out within the framework of the international treaties ratified by Chile and subject to strict compliance with the rules of domestic law (particularly personal data protection laws).

  45. 23.

    Is there a formal understanding with authorities in other jurisdictions to share information and provide reciprocal assistance in enforcement matters?

  46. The Chilean Prosecutor’s Office has signed several international cooperation agreements with Public Prosecutor’s Offices of different jurisdictions, which include provisions regarding information exchange.

    Investigations

  47. 24.

    Has the sharing of information with foreign authorities contributed to any enforcement actions in your jurisdiction?

  48. Cooperation has been more common in the prosecution of other crimes, such as drug trafficking, human trafficking, sexual offences and money laundering. However, in the context of recent cases of illegal funding of political campaigns, information has been requested by the Public Prosecutor’s Office to regulators in other jurisdictions, such as the SEC in the United States and the judicial authority in Brazil investigating the Lava Jato case.

    In connection with the Lava Jato case, the Chilean and Brazilian Public Prosecutor’s Office have been cooperating. In such context, the Chilean Prosecutor’s Office has executed investigation actions in Brazil, particularly in connection with alleged irregular funding of political campaigns in Chile by OAS. The Chilean National Public Prosecutor was among the 11 Public Prosecutor’s Offices of Latin America that took part of a coordination meeting summoned by the Brazilian Prosecutor General in February 2017.

  49. 25.

    To what extent do the enforcement authorities consider principles of international double jeopardy in deciding whether to charge an individual or corporate entity with a local anti-corruption violation based on conduct underlying a foreign anti-corruption conviction?

  50. Chile is a party to international conventions, which recognise the double jeopardy principle. Such principle is also expressly recognised in connection with criminal enforcement actions taken in Chile. 

    In the case of criminal convictions or acquittals issued by foreign courts, the Chilean Criminal Procedure Code expressly prohibits the person who was convicted or acquitted from facing new criminal prosecutions in Chile for the same offences, unless the trial in that country is aimed at depriving the individual of his or her criminal responsibility in Chile or, if the accused expressly requests to be judged in Chile, because the respective process abroad has not been instructed in accordance with the guarantees of due process of law or has been carried out in a way that reveals a lack of intention to judge him or her seriously.

    Risk areas

  51. 26.

    To what extent and under what circumstances do the applicable laws in your jurisdiction allow for extradition of your country’s nationals or foreign nationals charged or convicted of wrongdoing under anti-corruption laws in other jurisdictions?

  52. The extradition procedure is enforceable in respect of any country’s national or a foreign national – without distinction – who has been convicted to a sanction of more than one year of imprisonment or charged with a felony that deserves a penalty of more than one year of imprisonment. Additionally, it should be a crime in respect of which extradition is permitted, in accordance with international extradition conventions or, in the absence of such convention, in accordance with international law principles.

  53. 27.

    Must publicly traded companies in your jurisdiction disclose pending investigations in their regulatory filings, or is such disclosure typical, even if not required?

  54. According to Chilean regulations on securities, there is no specific requirement to disclose pending investigations. However, publicly traded companies are subject to the general duty to disclose truthfully, sufficiently and promptly any material or essential information about themselves, their business or the securities they offer. Material information means for these purposes any information that a person of good judgement would consider important for investment decisions.

    If a given investigation is to be considered material under such criteria, particularly if the result of such an investigation may affect significantly the assets or equity of the company, it would have to be disclosed, unless such investigation is subject to confidentiality according to law. However, it is not common for companies to disclose pending investigations.

    Compliance best practices

  55. 28.

    Have any companies publicly disclosed investigations relating to bribery or corruption issues within the past five years?

  56. There are only very few cases. For example, in the context of an investigation on illegal funding of political campaigns, a Chilean world-leading producer of potassium nitrate, iodine and lithium, informed in 2016 the results of an internal investigation carried out by a US law firm in connection with irregular payments made by their former CEO. However, this report was requested to the company after the case was publicly known and the company stated that according to such report, no evidence was found that these payments wereaimed at committing bribery to benefit the company.

    Also in 2016, a publicly traded fishing company announced that in the context of a bribery case the State Defence Council filed a criminal action against such company. 

  57. 29.

    Which industries or business sectors in your jurisdiction are most vulnerable to public corruption?

  58. A significant group of corruption cases are related to public procurement, particularly involving municipal authorities.

  59. 30.

    Is it common in your jurisdiction for companies to engage third parties to assist in interacting with government officials, whether in connection with sales and marketing or with obtaining permits, licences or other government approval?

  60. It is not a general practice (a new Law on Lobbying entered into force at the end of 2014); there may be a grey area in which information is not available.

    Other

  61. 31.

    Is it common for companies in your jurisdiction to have an internal hotline or other mechanisms by which anonymous reports or other compliance questions or concerns may be raised?

  62. It is not common in general. However, particularly since the enactment of the Law on Criminal Liability of Legal Entities, these and other compliance measures have been increasingly implemented, particularly by multinational and/or publicly traded companies and also by entities that are vulnerable to corruption of public officials.

  63. 32.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence before engaging third parties, such as agents, consultants and distributors?

  64. Traditionally it has not been a common practice. But in recent years, awareness in this regard has also increased. From our point of view, from a legal standpoint, there is no doubt that due diligence should cover anti-corruption and also be extended at least to agents and consultants, including lawyers.

  65. 33.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence in the course of mergers, acquisitions or joint ventures? 

  66. Since the enactment of the Law on Criminal Liability of Legal Entities it has been rendered more common because criminal liability of a company for bribery is a contingency that remains in case of a merger or an acquisition by a third party of such company.

  67. 34.

    Have shareholders of publicly traded companies in your jurisdiction initiated civil actions related to any company’s violation of anti-corruption laws?

  68. No. It should be borne in mind that in Chile commercial corruption will only be expressly prohibited after the New Law enters into force and that criminal liability of legal entities only exists since 2009. 

  69. 35.

    In the past three years, what do you view as the most notable legislative, regulatory or enforcement developments with respect to the anti-corruption landscape in your jurisdiction?

  70. Over the past decade, Chile’s legislation has been in a constant reformation process. This process has included anti-corruption legislation and adjusting it to international best practices. We can highlight, for example, the inclusion as a crime of bribery related to foreign public officials and the approval of the law that establishes the criminal responsibility of legal entities.

    There has been also progress in transparency of the information held by government agencies, particularly with the creation of the Council for the Transparency.

    Some alleged corruption scandals related to high-ranking government officials and disclosure of massive cases of irregular funding of politic campaigns have emphasised the importance of further improving anticorruption regulations. For these purposes the government entrusted a special commission with the task of proposing new legislation on this topic. As a result of the work of this commission, different bills were presented to Congress to address these issues. As a consequence of these initiatives, in April 2016, a new law on financing of political campaigns was enacted. Such law prohibits contributions of corporate entities to political parties and campaigns and establishes further restrictions for permitted expenses for political campaigns, among other regulations.

    Another of these bills, which seeks to strengthen anti-corruption regulations, was approved in Congress in October 2018, and is expected to enter into force before the end of the year. Such law increases penalties for corruption cases, as a consequence of the general perception that the current sanctions are too low given the impact and seriousness of these offences. It also sanctions commercial bribery as a crime, which so far has not been expressly prohibited. The new law also foresees incentives for cooperation in the form of a relevant reduction of applicable penalties, when useful information about the perpetration of a crime or the responsible persons is delivered to the Public Prosecutor’s Office. All these amendments are expected to boost and strengthen anti-corruption investigations.

  71. 36.

    Describe any other significant challenges (eg, legal or cultural issues) that impact anti-corruption compliance, due diligence or internal investigations in your jurisdiction.

  72. The amendments to anti-corruption legislation in recent years, particularly the improvement of the description of offences sanctioned under the Criminal Code and the inclusion of new prohibitions, together with the entering into force of the Law on Criminal Liability of Legal Entities, has had an important impact on the perception of the relevance of compliance in companies, particularly in such entities engaged in activities where there is a potential risk of this kind of conduct.

    However, since the enactment of the law in December 2009, there have not been many cases to date where anti-corruption laws have been enforced against legal entities. No relevant case has so far faced a real trial nor have compliance programmes implemented by companies, which may exempt from liability if they are adequate, been tested in such context. Over the coming years, as more cases arise it will be interesting to follow the outcome of such trials and the capability of the public prosecutors to verify the suitability of a compliance programme, as there is limited experience in such matters.

    Recent legislation on political funding is having and will have an important impact on the traditional way that political parties and candidates raise funds and is an effort to further improve the independence and transparency of the activity of elected authorities.

    The important amendments recently approved by Congress to anti-corruption regulations will have an impact in anti-corruption investigations, particularly with the incentives created for cooperation by defendants in exchange of lower penalties, which in other jurisdictions has proved to be an important mechanism in unveiling corrupt practices.

    This new legislation will also require that compliance programmes of companies have to be revised and updated, particularly considering the inclusion of commercial corruption as a crime.

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Questions

    Laws

  1. 1.

    What laws or regulations in your jurisdiction prohibit the offering, payment or receipt of bribes by: domestic government officials; foreign government officials; or other individuals, such as commercial counterparties?


  2. 2.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to corporate entities, whether based principally in your jurisdiction or elsewhere?


  3. 3.

    To what extent, and under what circumstances, do the anti-corruption laws in your jurisdiction apply to individuals, whether resident in your jurisdiction or elsewhere?


  4. 4.

    How do the anti-corruption laws in your jurisdiction define foreign government officials?


  5. 5.

    What level of knowledge or intent is required to prove a violation of the anti-corruption laws in your jurisdiction?


  6. 6.

    Do the anti-corruption laws in your jurisdiction prohibit facilitating payments? (That is, small payments to expedite or to secure the performance of a routine government action to which a company is entitled, such as obtaining permits, processing visas, utility services, customs clearance, police protection.)


  7. 7.

    What affirmative defences are available with respect to the anti-corruption laws in your jurisdiction?


  8. 8.

    What are the maximum potential fines or other penalties for violating the anti-corruption laws in your jurisdiction?


  9. 9.

    Is there any pending legislation related to anti-corruption in your jurisdiction?


  10. Enforcement

  11. 10.

    Are corporate entities and individuals that violate the anti-corruption laws in your jurisdiction subject to criminal, administrative or civil liability, or a combination thereof?


  12. 11.

    Which prosecutors or other government agencies may bring enforcement actions under your jurisdiction’s anti-corruption laws?


  13. 12.

    Have any multinational corporations or their domestic subsidiaries been subject to enforcement actions in your jurisdiction for domestic or foreign bribery violations?


  14. 13.

    Have the employees of any multinational corporations or their domestic subsidiaries been subject to enforcement actions by the authorities in your jurisdiction for domestic or foreign bribery violations?


  15. 14.

    Have resolutions of anti-corruption enforcement actions with corporate entities resulted in settlements, such as deferred prosecution or non-prosecution agreements or leniency agreements?


  16. 15.

    In recent years, have there been trials or other proceedings in which an individual or corporate entity has contested alleged violations of anti-corruption laws in your jurisdiction?


  17. 16.

    To what extent do the enforcement authorities provide incentives for companies to self-report known or suspected violations?


  18. 17.

    To what extent do the enforcement authorities take into account a company’s level of cooperation with the government’s investigation or the strength of its compliance programme when considering whether to bring enforcement actions or when assessing penalties?


  19. 18.

    To what extent and under what circumstances do the enforcement authorities provide incentives for whistle-blowers to report known or suspected anti-corruption violations?


  20. 19.

    What has been the most significant fine or monetary penalty to date under the anti-corruption laws of your jurisdiction? 


  21. 20.

    Do the enforcement authorities use any other statutes to prosecute conduct related to bribery and corruption?


  22. International cooperation

  23. 21.

    Have the enforcement authorities issued general guidance regarding compliance with and enforcement of the anti-corruption laws?


  24. 22.

    To what extent do authorities in your jurisdiction cooperate with foreign authorities in enforcing applicable anti-corruption laws?


  25. 23.

    Is there a formal understanding with authorities in other jurisdictions to share information and provide reciprocal assistance in enforcement matters?


  26. Investigations

  27. 24.

    Has the sharing of information with foreign authorities contributed to any enforcement actions in your jurisdiction?


  28. 25.

    To what extent do the enforcement authorities consider principles of international double jeopardy in deciding whether to charge an individual or corporate entity with a local anti-corruption violation based on conduct underlying a foreign anti-corruption conviction?


  29. Risk areas

  30. 26.

    To what extent and under what circumstances do the applicable laws in your jurisdiction allow for extradition of your country’s nationals or foreign nationals charged or convicted of wrongdoing under anti-corruption laws in other jurisdictions?


  31. 27.

    Must publicly traded companies in your jurisdiction disclose pending investigations in their regulatory filings, or is such disclosure typical, even if not required?


  32. Compliance best practices

  33. 28.

    Have any companies publicly disclosed investigations relating to bribery or corruption issues within the past five years?


  34. 29.

    Which industries or business sectors in your jurisdiction are most vulnerable to public corruption?


  35. 30.

    Is it common in your jurisdiction for companies to engage third parties to assist in interacting with government officials, whether in connection with sales and marketing or with obtaining permits, licences or other government approval?


  36. Other

  37. 31.

    Is it common for companies in your jurisdiction to have an internal hotline or other mechanisms by which anonymous reports or other compliance questions or concerns may be raised?


  38. 32.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence before engaging third parties, such as agents, consultants and distributors?


  39. 33.

    Is it common practice for companies in your jurisdiction to conduct anti-corruption due diligence in the course of mergers, acquisitions or joint ventures? 


  40. 34.

    Have shareholders of publicly traded companies in your jurisdiction initiated civil actions related to any company’s violation of anti-corruption laws?


  41. 35.

    In the past three years, what do you view as the most notable legislative, regulatory or enforcement developments with respect to the anti-corruption landscape in your jurisdiction?


  42. 36.

    Describe any other significant challenges (eg, legal or cultural issues) that impact anti-corruption compliance, due diligence or internal investigations in your jurisdiction.


Other chapters in Anti-Corruption