General context, key principles and hot topics
1Identify the highest-profile corporate investigation under way in your country, describing and commenting on its most noteworthy aspects.
The highest-profile corporate investigation currently under way in Chile is Corpesca, a criminal case against a Chilean fishing company (Corpesca), loss of privilege senator Jaime Orpis and former congresswoman Marta Isasi.
The investigation relates to a scandal that affected the entire political spectrum in 2015 with regard to the illegal financing of electoral campaigns by large businesses. It involves charges such as illegal financing of electoral campaigns, bribery and tax fraud, among others. It also involved important Chilean companies, such as Penta and SQM (one of the country’s largest privately owned mining companies), and several politicians from all sides of the political spectrum.
However, Chilean prosecutors have only pressed charges in criminal court against Corpesca, Senator Orpis and former congresswoman Isasi. Therefore, and notwithstanding that the political scandal affected several politicians and businesses, currently Corpesca is the only Chilean company that could face criminal sanctions arising from the 2015 scandal, and Senator Orpis could be the first Chilean politician to face criminal sanctions, risking a jail term.
2Outline the legal framework for corporate liability in your country.
Law 20,393 (enacted in 2009) provides that corporations are criminally liable for certain criminal offences carried out by their owners, managers and employees acting in the interests of the corporation when this is a consequence of breaching duties of supervision (Article 3, Law 20,393). In practice, this means that a company might be liable if it failed to develop and implement an effective compliance programme with the aim of preventing such offences from being carried out.
The legal framework operates under some express offences established in Law 20,393. In its original form, the law limited the offences to those under which Chile had international duties of criminal enforcement (i.e., terrorism funding, foreign bribery). However, the scope has expanded to certain general offences such as bribery, several environmental crimes and, lately, some forms of corporate fraud.
3Which law enforcement authorities regulate corporations? How is jurisdiction between the authorities allocated? Do the authorities have policies or protocols relating to the prosecution of corporations?
The primary enforcement authorities relating to corporations are: the Tax Authority (SII), the Financial Market Commission (equivalent to the US Securities and Exchange Commission) and the Antitrust Prosecution Office. The Criminal Prosecution Office (Ministerio Público (MP)) centralises all criminal enforcement competences. Each office has jurisdiction over its own subject matter.
In general, there are no normative rules or protocols to coordinate and distribute activities between the different offices. The MP has some limitations in its jurisdiction, but these are rare.
4What grounds must the authorities have to initiate an investigation? Is a certain threshold of suspicion necessary to trigger an investigation?
Chilean law does not generally provide for limitations of this kind. Discretionary decision-making by prosecutors and officials in the different agencies, acting under the traditional sources of motivation and constraint found in institutions of this kind, determines these outcomes. In some cases, the agencies have internal guidelines regarding the decision-making process. In the case of the MP, two General Instructions provide some guidance about the content of the law, but it does not go beyond the formal text of the statute in establishing certain criteria to prosecute a corporation.
5How can the lawfulness or scope of a notice or subpoena from an authority be challenged in your country?
The legal regulation of criminal enforcement does not provide for subpoenas requesting documentary information from private parties. In practice, a private party that receives a subpoena requesting documents from the authority can refuse to comply. Prosecutors are then likely to ask a judge to grant them seizure powers of those documents, according to Article 217 of the Criminal Procedure Code.
Subpoenas to give testimony in the context of a criminal investigation are mandatory. All witnesses must comply with at least answering the summons. They can only refuse to testify on a given question under privileges against self-incrimination or professional secrecy.
6Does your country make use of co-operative agreements giving immunity or leniency to individuals who assist or co-operate with authorities?
Leniency agreements have started to appear in different areas of Chilean law. While there is no general criminal law provision regulating immunity and leniency, a prosecutor may offer to ask for diversion or other benefits in the context of a plea bargain or in the case of minor felonies.
The particular areas that provide for leniency agreements include antitrust regulation, financial market regulation, criminal law dealing with corruption, and some forms of organised crime.
In the case of corporate criminal liability, a defendant can also receive some benefits if he or she makes significant contributions to the process.
7What are the top priorities for your country’s law enforcement authorities?
The scale of national attention on the Penta Group and SQM cases are indicative of the interest in incidents relating to tax evasion. Nevertheless, in the past few years, the SII has become reluctant to allow the MP to prosecute tax evasion offences in high-profile cases. Law enforcement officials seem to prefer to prioritise corruption and corporate frauds. This focus was given a boost with the enactment of Law 21,121 in November 2018, which considerably expanded the scope of these types of offences.
Law enforcement agencies are also focusing on antitrust behaviour. During the past decade, the work of antitrust enforcement agencies and the Antitrust Tribunal in Chile has become increasingly relevant.
8Does your country regulate cybersecurity? Describe the approach of local law enforcement authorities to cybersecurity-related failings.
Entities that receive personal data must ensure that the rights of the data subject are safeguarded and transmission of information is related to the tasks and purposes of the participating organisations. Also, if there is a request for personal data via an electronic network, the following information must be recorded: (1) the enquirer’s identity, (2) the motivation and purpose of the request, and (3) specifics of the personal data being transferred.
9Does your country regulate cybercrime? What is the approach of law enforcement authorities in your country to cybercrime?
Although cybercrime regulation in Chile is old and incomplete, some law enforcement authorities do have departments that specialise in cybercrime matters, such as the Chilean Investigations Police. The National Prosecution’s Specialised Office on Economic Crimes includes cybercrime as part of its remit. However, few specific cybercrime offences are included in criminal legislation. Cybercrime is instead prosecuted under general offences (such as fraud) that are committed through the internet (e.g., phishing).
Cross-border issues and foreign authorities
10Does local criminal law have general extraterritorial effect? To the extent that extraterritorial effect is limited to specific offences, give details.
Criminal laws operate under the principle of territoriality established in Chile’s Constitution. Extraterritorial liability is only allowed by law in some specific cases. There are some regulations of extraterritorial effects relating to offences between Chilean parties, conspiracies that affect the Chilean market, several types of sexual offences, offences perpetrated by Chilean officials overseas against the state, and foreign bribery.
11Describe the principal challenges that arise in your country in cross-border investigations, and explain whether and how such challenges depend on the other countries involved.
Whereas coordination with foreign offices was virtually non-existent 15 years ago, some law enforcement agencies have units that are responsible for international co-operation. Lack of regulation and similarity with the regulations of other countries create difficulties in cross-national cases. For example, Chilean law has a fragile framework for asset freezing and forfeiting, which has created problems in attempts to recover assets overseas and to comply with asset recovery demands.
12Does double jeopardy, or a similar concept, apply to prevent a corporation from facing criminal exposure in your country after it resolves charges on the same core set of facts in another? Is there anything analogous in your jurisdiction to the ‘anti-piling on’ policy as exists in the United States (the Policy on Coordination of Corporate Resolution Penalties) to prevent multiple authorities seeking to penalise companies for the same conduct?
Chilean criminal law recognises double jeopardy as a general principle. Article 13 of the Criminal Procedural Code (CPP) recognises the effects of criminal judgments made by a foreign court. Thus, criminal law impedes double jeopardy. The only exception provided for is in cases that the Chilean judge deem to be mock trials.
In the past few years, anti-piling on has been on a hot topic of debate. Since its judgment STC 244 of 1996, the Chilean Constitutional Court explicitly acknowledges that the general principles of criminal law also apply to the sanctioning powers of other agencies, including the protection against double jeopardy. The exact conditions under which such provisions apply is obscure, however. In its judgment STC 496 of 2006, the Chilean Constitutional Court declared that the principles of criminal law apply only with ‘nuances’, without specifying them. In the past few years, both the Constitutional Court and the Supreme Court have discussed several cases of double jeopardy, in particular regarding securities offences: both criminal law and administrative law provide for sanctioning powers for such offences. The general conditions under which the anti-piling on rule works are unclear.
13Are ‘global’ settlements common in your country? What are the practical considerations?
Global settlements are not common in Chile.
14What bearing do the decisions of foreign authorities have on an investigation of the same matter in your country?
Authorities are likely consider them and weight them depending on the ruling by the foreign authority. However, there is no legal regulation on this issue.
Economic sanctions enforcement
15Describe your country’s sanctions programme and any recent sanctions imposed by your jurisdiction.
Criminal law provides for the traditional types of sanctions that can be found in any penal regime, imprisonment and fines being the most common. Under Chilean law, people can go to prison if the nominal penalty goes beyond three years’ imprisonment (in some cases, five years) and the defendant has not been convicted of a crime in the past 10 years or of a simple felony in the past five years.
In cases of white-collar crime, defendants are unlikely to serve time in prison as they will not generally have prior convictions, and penalties rarely go beyond three or five years in these cases. This situation may change with the enforcement of Law 21,121, as the nominal penalty for bribery offences has been increased. Although Law 21,121 is already applicable in Chile, there are been no convictions since November 2018, when it was published.
Criminal fines have been traditionally low. However, this has changed regarding a corporate’s liability because fines can now be as much as 300,000 unidades de fomento.
Individuals may also face several prohibitions to exercise public duties and to serve as directors or managers in open corporations. Corporations may also be punished by being prohibited from negotiating contracts with the state and losing benefits obtained from such contracts. The most severe punishment for corporations is dissolution.
16What is your country’s approach to sanctions enforcement? Has there been an increase in sanctions enforcement activity in recent years, for example?
Criminal and administrative enforcement has increased in the past decade as a result of different scandals and a general change in public opinion. The general approach in criminal enforcement has also become more professional, taking into account the number of specialist departments that now exist. However, in certain areas (asset forfeiture, for example), it still remains ineffective.
17Do the authorities responsible for sanctions compliance and enforcement in your country co-operate with their counterparts in other countries for the purposes of enforcement?
Several institutions, including the MP, have international co-operation departments.
18Has your country enacted any blocking legislation in relation to the sanctions measures of third countries? Describe how such legislation operates.
Not that we are aware of.
19To the extent that your country has enacted any sanctions blocking legislation, how is compliance enforced by local authorities in practice?
This does not apply.
Before an internal investigation
20How do allegations of misconduct most often come to light in companies in your country?
Although local authorities claim that their screening and reporting mechanisms are robust, most major corporate scandals have been initiated by media reports, self-reporting in the context of an investigation and whistleblowing.
Perhaps the best illustration of this is the Penta case, which started with an investigation into possible tax evasion, in which an internal official had collaborated. It gained ground when one of the individuals involved confessed to being part of the scheme, alongside a senior manager within the Penta Group. Feeling betrayed by his employers after being fired, that individual co-operated with the authorities and provided critical information.
21Does your country have a data protection regime?
Law 19,628 provides a general regulation on the matter. As the regulation stems from before the data revolution of the last few decades, it is generally considered obsolete.
22To the extent not dealt with above at question 8, how is the data protection regime enforced?
Chile does not have an agency that is responsible for the surveillance of compliance of the enforcement of personal data protection regimes. Instead, general courts of justice oversee the protection of data under the Data Privacy Law in the following circumstances: (1) a particular procedure before civil courts is considered in the Data Privacy Law for breaches to said Law, and (2) a constitutional protection action can be filed if a breach affects the constitutional right to the protection of personal data, which must be used in accordance with the law.
Bill No. 11,144-07, which amends the Data Privacy Law and is currently being reviewed in the Senate, states, among other things, the creation of a Personal Data Protection Agency, which must certify that the breach prevention model and the compliance programme that the Bill also sets forth, meet the requirements provided in the new law and its regulations, and shall monitor compliance therewith.
23Are there any data protection issues that cause particular concern in internal investigations in your country?
Lack of regulation is the most pressing issue. The status of basic information, including employees’ email, is unclear and has been the subject of discussions about their legal and constitutional status when used both to prevent and to prosecute criminal offences. Discussions are generally based simply on the general rules of criminal law (necessity or less heinous defences) or of constitutional law (intimacy rights).
24Does your country regulate or otherwise restrict the interception of employees’ communications? What are its features and how is the regime enforced?
See question 23. Employers tend to give consent for the use of communications for such purposes in employment contracts, but the validity of such clauses is arguable.
Dawn raids and search warrants
25Are search warrants or dawn raids on companies a feature of law enforcement in your country? Describe any legal limitations on authorities executing search warrants or dawn raids, and what redress a company has if those limits are exceeded.
Search warrants need to be authorised by a judge and, generally, are effected after giving notice. With due cause, prosecutors can request that prior notice need not be given.
Authorities executing search warrants have to maintain strict custody of, and record, all seized items. They are prohibited from seizing communications that fall under the umbrella of professional secrecy.
A company can request that excessive behaviour should cease by presenting a constitutional action to consider a violation of fundamental rights. Moreover, a company can formally request consideration that the evidence obtained is null and void.
26How can privileged material be lawfully protected from seizure during a dawn raid or in response to a search warrant in your country?
Authorities executing search warrants must safeguard and record all seized items.
27Under what circumstances may an individual’s testimony be compelled in your country? What consequences flow from such compelled testimony? Are there any privileges that would prevent an individual or company from providing testimony?
All witnesses are obliged to answer a summons and testify. However, if there is a risk of self-incrimination, or if a person’s testimony could affect spousal or family relationships, or professional secrecy (such as attorney–client privilege), witnesses can refuse to testify, although they still have to answer the summons.
Witnesses who do not answer a summons can face fines and arrest. All witnesses, except defendants and their close relatives, can face charges of false testimony.
Whistleblowing and employee rights
28Describe the whistleblowing framework in your country. What financial incentive schemes exist for whistleblowers? What legal protections are in place for whistleblowers?
Chile does not have a specific whistleblower regulation in respect of employment matters. However, there are regulations relating to sexual harassment at work (Article 211-A et seq., Labour Code).
Internal claims (apart from sexual harassment) are not lawfully regulated in respect of whistleblowers but a company could create its own incentives. However, if an employee makes specific allegations before the Labour Department or labour courts, the employer cannot dismiss them (Article 485, Labour Code).
29What rights does local employment law confer on employees whose conduct is within the scope of an investigation? Is there any distinction between officers and directors of the company for these purposes?
Employment law does not confer exclusive rights to employees who participate in an internal investigation. If it is an investigation conducted by the Labour Department, individuals may have protection against dismissal. Employment law does not distinguish between employees, officers and directors.
30Do employees’ rights under local employment law differ if a person is deemed to have engaged in misconduct? Are there disciplinary or other steps that a company must take when an employee is implicated or suspected of misconduct, such as suspension or in relation to compensation?
Each case must be considered on its merits. If the matter relates to sexual harassment, or another form of harassment in the workplace, in the first instance, the suspect should be separated from the injured party. That may represent a suspension of the suspect’s duties or relocation from the usual place of work. In any case, the employer could not stop paying the salary while the investigation is taking place.
31Can an employee be dismissed for refusing to participate in an internal investigation?
There is no scope for compelling someone to participate in an internal investigation. The only possible cause for dismissal is when a suspect is declared guilty of sexual harassment, or another form of harassment in the workplace (Article 260(1)(b) and (f), Labour Code).
Commencing an internal investigation
32Is it common practice in your country to prepare a document setting out terms of reference or investigatory scope before commencing an internal investigation? What issues would it cover?
Internal investigations are a relatively new phenomenon, so there are few common practices in place. However, before starting any investigation, companies usually prepare documents containing the claimant’s name, the accused’s name and a summary of the accusation. It also may contain details regarding the investigation process, such as the dates involved and details of the investigation process.
33If an issue comes to light prior to the authorities in your country becoming aware or engaged, what internal steps should a company take? Are there internal steps that a company is legally or ethically required to take?
Reporting can make leniency rules applicable. In labour cases, such as matters relating to sexual harassment, the affected employee can request the intervention of the Labour Department. In these circumstance, the company should provide the information requested by the authority.
34What internal steps should a company in your country take if it receives a notice or subpoena from a law enforcement authority seeking the production or preservation of documents or data?
There is no specific labour regulation. However, subpoenas from the labour authority must be met. Also, the employer has a legal duty to store all labour documentation.
35At what point must a company in your country publicly disclose the existence of an internal investigation or contact from a law enforcement authority?
In labour issues, the only applicable situation is with sexual harassment cases. If a company carries out an internal investigation, the results of it should be sent to the Labour Department within 30 days of the date of the initial claim.
36How are internal investigations viewed by local enforcement bodies in your country?
Regarding labour issues, such as mobbing or sexual harassment, usually, they are resolved through internal investigations, which is permitted by the Labour Code.
Regarding sexual harassment procedures, the law includes minimum requirements such as deadlines and investigations carried out according to due process.
37Can attorney–client privilege be claimed over any aspects of internal investigations in your country? What steps should a company take in your country to protect the privilege or confidentiality of an internal investigation?
There is no specific rule regarding internal investigations within a company. However, the attorney–client privilege is a general rule established in the Lawyer Ethics Code. A lawyer must always maintain and protect a client’s confidentiality.
38Set out the key principles or elements of the attorney–client privilege in your country as it relates to corporations. Who is the holder of the privilege? Are there any differences when the client is an individual?
There is no difference between an individual client or a company. The holder of the privilege is the lawyer. The main principles of the attorney–client privilege are as follows:
- strict confidentiality (the scope for which extends to all the information that an attorney receives from a client);
- the attorney’s right to recognition of privilege;
- prohibition on disclosure;
- duty of care towards all information received or disclosed;
- duty of care towards people who assist an attorney; and
- indefinite duration.
39Does the attorney–client privilege apply equally to in-house and external counsel in your country?
The law does not distinguish between, and applies equally to, in-house and external counsel. The attorney–client privilege generally applies, and is extendable to law firms.
40Does the attorney–client privilege apply equally to advice sought from foreign lawyers in relation to (internal or external) investigations in your country?
Lawyers in Chile should comply with the rules established in the Lawyers Ethics Code.
41To what extent is waiver of the attorney–client privilege regarded as a co-operative step in your country? Are there any contexts where privilege waiver is mandatory or required?
The Lawyer Ethics Code only establishes the duty to waive the attorney–client privilege to avoid or impede a crime. Also, it provides for the possibility to waive in specific instances, such as to avoid serious risks of death or serious injury, to obtain advice from another lawyer with the duty of confidentiality, or to comply with a duty of law. Co-operation is not established as a specific waiver.
42Does the concept of limited waiver of privilege exist as a concept in your jurisdiction? What is its scope?
Chile does not regulate this issue expressly. The Lawyers Ethics Code only provides for those instances when a lawyer must or can waive the right.
43If privilege has been waived on a limited basis in another country, can privilege be maintained in your own country?
Attorney–client privilege should be maintained in Chile.
44Do common interest privileges exist as concepts in your country? What are the requirements and scope?
No, the privileges only apply regarding the client.
45Can privilege be claimed over the assistance given by third parties to lawyers?
Yes, the Lawyers Ethics Code establishes a broad scope of privilege, and relates to all information that has been received by a client or third parties that relates to issue raised by the client.
46Does your country permit the interviewing of witnesses as part of an internal investigation?
This is not addressed by Chilean law, so it is common practice for witnesses to be interviewed. In fact, it is one of the most widely used forms of evidence in an internal investigation.
47Can a company claim attorney–client privilege over internal witness interviews or attorney reports?
This is not addressed by Chilean law. Privileges are claimed in practice, but their effects are unclear.
48When conducting a witness interview of an employee in your country, what legal or ethical requirements or guidance must be adhered to? Are there different requirements when interviewing third parties?
There is no specific regulation on this issue. However, the main requirements relate to the confidentiality of communications and data protection. Since there is a lack of common standards regarding interviews, the most prudent way for a witness to handle an interview is to identify straight away any risk of self-incrimination or conflict of interest.
49How is an internal interview typically conducted in your country? Are documents put to the witness? May or must employees in your country have their own legal representation at the interview?
There is no specific regulation in respect of such interviews, but typically those present are the interviewer and the witness. Interviews are sometimes recorded. Relevant documents are presented to the witness depending on the case. It is not typical for an employee to have legal representation.
The lack of common standards means that, in general, there is no requirement for attendance by an attorney other than the company’s attorney, but an employee may wish to do have their own representation. The company attorney should make it clear that he or she is not acting for the witness to avoid any confusion on the matter.
Reporting to the authorities
50Are there circumstances under which reporting misconduct to law enforcement authorities is mandatory in your country?
The moral obligation to report misconduct is rare in Chilean law. As a matter of doctrinal law, however, there may be a case for criminal liability for omission if the misconduct continues after the party becomes aware of it.
51In what circumstances might you advise a company to self-report to law enforcement even if it has no legal obligation to do so? In what circumstances would that advice to self-report extend to countries beyond your country?
As regards antitrust, self-reporting to the relevant law enforcement authority is crucial in cases of collusion. Articles 39 bis and 63 of Decree Law 211 establish and regulate a leniency programme. According to Guidelines issued by the Fiscalía Nacional Económica (the national competition authority responsible for defending and promoting competition), the programme allows individuals or companies who have engaged in collusive conduct to be exempted from the relevant sanctions, or to have them reduced, provided that the applicant provides information that can be used to prove the conduct and identify the parties involved. Therefore, if a client has participated in a collusion scheme, self-reporting would be advisable.
In matters other than collusion, there are no rules regarding self-reporting. Usually, if it is an important issue, it will be disclosed as material information, or as a note in the financial statements. Further, companies usually name one specific internal authority for the resolution of a case. In most cases, a company’s managing director will determine whether the matter in question is sufficiently important.
52What are the practical steps you need to take to self-report to law enforcement in your country?
Given that there are no incentives to self-report to law enforcement authorities, it is not usual for companies or compliance officers to make a self-report (except in cases of collusion). However, the formal method would be to submit a writ before the criminal court. If deemed admissible, the writ of self-report would be assigned to the MP for further investigation.
Responding to the authorities
53In practice, how does a company in your country respond to a notice or subpoena from a law enforcement authority? Is it possible to enter into dialogue with the authorities to address their concerns before or even after charges are brought? How?
There is always a chance to have a dialogue with the authorities and to request a meeting through public processes as regulated by law, either before or after charges are brought.
54Are ongoing authority investigations subject to challenge before the courts?
55In the event that authorities in your country and one or more other countries issue separate notices or subpoenas regarding the same facts or allegations, how should the company approach this?
Two main principles in the Chilean legal system are the (1) territoriality and (2) relative effects of the awards. Thus, negotiating a consistent disclosure package might not be very useful, considering each of the different cases. Extraterritorial liability is allowed by law only in certain specific cases, such as offences between Chilean people, conspiracies that affect the Chilean market, a number of sexual offences, foreign bribery, among others.
Individuals may also face restrictions or bans, such as exercising public duties or serving as a director or manager in public corporations. Corporations may also be punished by being barred from negotiating contracts with the state and losing the benefits obtained from such contracts. The most severe punishment for corporations is dissolution.
56If a notice or subpoena from the authorities in your country seeks production of material relating to a particular matter that crosses borders, must the company search for, and produce material, in other countries to satisfy the request? What are the difficulties in that regard?
According to Chilean law, companies must disclose all the documents requested by the authorities that are in their possession or to which they have access. However, should a company decide not to present requested documents, the only sanction is that the company is not allowed to use those documents in its own favour.
57Does law enforcement in your country routinely share information or investigative materials with law enforcement in other countries? What framework is in place in your country for co-operation with foreign authorities?
In private law, this is not usual. In criminal law, however, information regarding border control, international crimes, among other things, is routinely shared. For example, the International Co-operation Unit of the MP does provide information to international law enforcement agencies. The Financial Analysis Unit, a government agency, also provides information when required.
58Do law enforcement authorities in your country have any confidentiality obligations in relation to information received during an investigation or onward disclosure and use of that information by third parties?
Prosecutors must keep all their internal proceedings and investigations secret from third parties while there is an ongoing investigation.
59How would you advise a company that has received a request from a law enforcement authority in your country seeking documents from another country, where production would violate the laws of that other country?
We would present a statement in response, asserting that, according to the country where the documents are available or were produced, it is not possible to obtain them. In any case, according to Chilean law and under Chilean jurisdiction, the only sanction on a party that does not produce documents is a ban on using those documents in its own favour.
60Does your country have secrecy or blocking statutes? What related issues arise from compliance with a notice or subpoena?
Not that we are aware of.
61What are the risks in voluntary production versus compelled production of material to authorities in your country? Is this material discoverable by third parties? Is there any confidentiality attached to productions to law enforcement in your country?
Both criminal and civil proceedings are public in Chile. In criminal law, during the course of an investigation, all the evidence produced should be treated as confidential; however, once it has been produced in open court, it becomes public information, unless a particular exemption applies.
There is no difference between voluntary or compelled production of documents in private law. In criminal law, however, if a defendant co-operates with the authorities, it might gain some benefits, such as a reduction in penalties or lesser charges.
Prosecution and penalties
62What types of penalties may companies or their directors, officers or employees face for misconduct in your country?
The usual sanctions for misconduct are imprisonment and fines.
63Where there is a risk of a corporate’s suspension, debarment or other restrictions on continuing business in your country, what options or restrictions apply to a corporate wanting to settle in another country?
There are unlikely to be any restrictions because of the principle of territoriality.
64What do the authorities in your country take into account when fixing penalties?
Sentencing is underdeveloped in Chile. Judges will generally apply the minimum prison sentence that the law allows. Regarding fines, there is more room for discretion, though even here there is no clear guidance. In general terms, a penalty might be more severe to reflect the seriousness or scale of the infringement, or in the case of a repeated infringement.
Resolution and settlements short of trial
65Are non-prosecution agreements or deferred prosecution agreements available in your jurisdiction for corporations?
These are available only in cases of diversion agreements and plea bargains.
66Does your jurisdiction provide for reporting restrictions or anonymity for corporates that have entered into non-prosecution agreements or deferred prosecution agreements until the conclusion of criminal proceedings in relation to connected individuals to ensure fairness in those proceedings?
Even though prosecutors must keep all their internal proceedings and investigations secret from third parties, in general terms, all criminal proceedings are public unless a judge rules to the contrary.
67Prior to any settlement with a law enforcement authority in your country, what considerations should companies be aware of?
Companies should confirm that the law enforcement authority is authorised to sign the agreement (proxies), that the settlement covers every aspect of the case, that the law enforcement authority is waiving any actions regarding the same issue, and that the agreement is legally usable and confidential.
68To what extent do law enforcement authorities in your country use external corporate compliance monitors as an enforcement tool?
Authorities seldom use external corporate compliance monitors as an enforcement tool.
69Are parallel private actions allowed? May private plaintiffs gain access to the authorities’ files?
Private parties can file private actions, but they will generally not be able to go beyond a certain point if the prosecutor decides to dismiss the case.
Publicity and reputational issues
70Outline the law in your country surrounding publicity of criminal cases at the investigatory stage and once a case is before a court.
Prosecutors must keep all their internal proceedings and investigations secret from third parties (Article 182, CPP). All procedures that take place before the courts are public unless a judge rules to the contrary.
Despite the duty to keep all proceedings secret from third parties to avoid reputational damage, prosecutors are known to inform the press when it is beneficial to the case. Although measures have been taken to avoid this taking place, higher MP authorities have been unable to police such misconduct effectively.
71What steps do you take to manage corporate communications in your country? Is it common for companies to use a public relations firm to manage a corporate crisis in your country?
It has become common, and sometimes essential, in corporate cases involving potential criminal liability for a company to use a public relations firm. However, internal communications are usually dealt with by a company’s managing director or communications manager.
72How is publicity managed when there are ongoing related proceedings?
There is no rule regarding this issue. If it is an important matter, it will be duly disclosed as material information, or as a note in the financial statements. It is usually the managing director who determines whether a matter is sufficiently important for details to be published.
Duty to the market
73Is disclosure to the market in circumstances where a settlement has been agreed but not yet made public mandatory?
As regards listed companies, if a settlement is in relation to ‘material information’, in accordance to the relevant law, it must be disclosed immediately. Further, the law establishes certain cases where disclosure may be withheld temporarily.
74Do you expect to see any key regulatory or legislative changes emerge in the next year or so designed to address corporate misconduct?
Law No. 21,121 has provided for a significant change in local regulation. It is likely that in the next few years, there will not be any further similar changes, except in some specific areas, such as cybercrime and data protection, which are key objectives for local authorities as regards regulations.
1 Andrés Jana and Karen Werner are partners at Bofill Mir & Alvarez Jana.