Financial Crime World

Financial Crimes Definition Takes Center Stage in Chile: What You Need to Know

Chile has recently implemented a new Economic Crimes Law, which consolidates over 200 criminal offenses into a single legal framework. The law aims to tackle financial crimes by assigning different levels of severity based on their seriousness.

The new legislation has significantly impacted tax-related crimes in Chile. According to experts, three key changes are worth noting:

  • Increased penalties for business-related tax crimes: Tax crimes committed within a business context will now be considered second-category economic crimes, resulting in more severe penalties.
  • Corporate criminal liability: These offenses will also fall under the jurisdiction of corporate criminal liability, meaning that not only individuals who directly participated in the crime but also legal persons and those holding positions of power or influence within companies can be held accountable.
  • No change to current ownership of criminal action: The current ownership of criminal action in tax matters remains unchanged, with prosecution initiated through complaints filed by the Internal Revenue Service director or lawsuits brought forth by the State Defense Council at the request of the former.

Other Criminal Offenses Covered by the Law

The new law includes a range of criminal offenses, including:

  • Tax evasion via false or incomplete returns
  • Facilitation of false information inclusion
  • Use of fake invoices

Exemptions

Micro and small companies will not be affected by this legislation, with their criminal acts remaining under the purview of the Tax Code.

Recommendations for Businesses in Chile

In light of these changes, businesses in Chile are advised to:

  • Review their tax processes
  • Implement or update risk prevention models as soon as possible

This law marks a significant shift in Chile’s approach to financial crimes and emphasizes the need for companies to take proactive steps to ensure compliance.