Financial Crime World

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Financial Crime and Its Impact on Society in Chile: A Growing Concern

Chile has been grappling with a surge in financial crimes, which has significant consequences not only for the individuals and companies involved but also for society as a whole.

Key Financial Crime Offenses in Chile

• Fraud • Money laundering • False accounting • Tax evasion • Market abuse • Corruption • Sanctions

These offenses have become increasingly prevalent in the country, with companies and their directors and officers facing criminal liability under Chilean law.

Governing Laws and Regulations

  • Ley General de Sociedades (General Corporations Law)
  • Ley N°20.393 sobre Prevención del Lavado y Financiamiento del Terrorismo (Law 20,393 on Prevention of Money Laundering and Financing of Terrorism)

Lead Prosecuting Authorities

• Dirección de Seguridad de la Propiedad Intelectual (DSPI) • Fiscalía Nacional Económica (FNE)

These agencies have a range of powers to conduct investigations, including:

  • Conducting raids
  • Seizing documents
  • Interviewing witnesses

Individual Liability

Company directors and officers can be prosecuted personally for their role in committing financial crimes. Commonly prosecuted offenses include:

• Fraud • Money laundering • Tax evasion

Courts and Trials

Trials are typically held without a jury, with the Tribunal Oral Penal (Penal Court) and Corte de Apelaciones en lo Penal (Criminal Appeals Court) hearing cases of financial crime.

Investigation Powers

Authorities initiate investigations through:

  • Compulsory document production
  • Evidence taking powers
  • Interviews with witnesses

Individuals have the right to be represented by a lawyer during these interviews, but there is no absolute right to silence in Chile. Interviews may be recorded or transcribed.

Extraterritorial Effect and International Cooperation

Chile’s financial crime laws also apply to conduct committed by nationals or companies operating overseas. The authorities commonly cooperate with foreign authorities under various agreements and treaties.

Communications between lawyers and clients are protected from being produced or seized by financial crime authorities, but there may be exceptions in certain circumstances.

Rights During a Financial Crime Investigation

Companies and individuals have rights to:

  • Privacy
  • Data protection

However, these rights may be limited in certain circumstances.

Successor Criminal Liability

There is no doctrine of successor criminal liability in Chile, but companies can still face liability for the actions of their directors and officers.

Charging Decisions

Prosecutors must consider various factors when deciding whether to charge, including:

  • Seriousness of the offense
  • Level of culpability

The evidential standard required to secure conviction is beyond reasonable doubt.

Statute of Limitations

Chile has a statute of limitations for criminal matters, although there are some exceptions.

Alternative Resolution Mechanisms

In addition to prosecution, there are mechanisms available to resolve financial crime issues short of a prosecution, including:

  • Deferred prosecution agreements
  • Civil recovery orders
  • Plea bargaining (in certain circumstances)

Penalties Imposed

The courts impose penalties on individuals and corporates that vary depending on the offense and the individual’s or company’s level of culpability. Fines, imprisonment, and asset confiscation are some of the common penalties imposed.

Appeals and Ongoing Efforts to Combat Financial Crime

Appeals are available against criminal convictions, and the authorities are active in tackling financial crime through a range of measures, including education and awareness campaigns.

Planned Developments

Planned developments to the legal, regulatory, and enforcement framework are expected in the coming years, aimed at strengthening Chile’s response to financial crime and improving public trust in the financial system. However, there are still areas for improvement in the country’s financial crime legal framework.