Law 20.393 establishes the criminal liability of legal entities in Chile, marking a milestone by making companies and institutions responsible for certain crimes committed for their benefit. This legal framework not only reinforces compliance with Chile’s international commitments, such as the OECD Anti-Bribery Convention, but also promotes transparency and business ethics.
WHAT CRIMES ARE COVERED BY LAW 20.393 ?
The regulation applies to specific offenses committed to obtain an economic advantage:
- Economic crimes
- Bribery of domestic and foreign public officials
- Money laundering
- Other corruption-related crimes
CONDITIONS FOR PENALLY RESPONSABILITY
For a legal person to be criminally liable, three key conditions must be met:
- Direct or indirect benefit to the organization.
- Linkage of the facts to legal representatives, executives or employees.
- Lack of supervision or implementation of preventive measures.
Consequently, the liability of the legal person will depend on the treatment of the event prior to the criminal conduct, specifically whether a compliance program, system or crime prevention model (compliance) has been implemented.
On the other hand, criminal sanctions can also be applied to natural persons involved in this type of crimes while acting through a legal person. Among these sanctions, we can find
- Prison sentences: Depending on the crime, they can range from minimum imprisonment (61 days) to maximum imprisonment (20 years or more).
- Economic fines: They can be applied in a personal capacity, in addition to the fines imposed on the company.
- Disqualification from holding public or managerial positions: If the natural person is convicted, he/she may lose the right to hold managerial positions in companies or public entities.
- Prohibition to contract with the State: In serious cases, the person may be prevented from working with government institutions.
CRIME PREVENTION MODEL
The law allows companies to demonstrate the adoption of a Crime Prevention Model as a means to exempt criminal liability. This model must include:
- Designation of a compliance officer with autonomy and specific powers for prevention.
- Definition of means and powers of the person in charge of prevention to carry out his or her functions effectively.
- Prevention system, which encompasses:
a. Detection of risks in activities and processes of the entity.
b. Identification of those responsible for the risks.
c. Financial management and auditing procedures to prevent crimes.
d. Protocols and codes of conduct, including standards and sanctions.
e. Implementation of an internal whistleblower system to report, investigate and sanction irregularities.
f. Existence of secure whistleblower channels, training of employees, and periodic evaluations by independent third parties.
- Periodic monitoring and certification of the model to ensure its effectiveness and updating.
PENALTIES FOR NON – COMPLIANCE
Sanctions include fines, suspension of activities, prohibition of contracts with the State and even dissolution of the entity in the most serious cases. They are intended to be proportional and dissuasive, ensuring respect for legality.
IMPACT ON THE BUSINESS SECTOR
Adopting compliance mechanisms not only mitigates legal risks and sanctions, but also reinforces corporate reputation, generating trust among customers, authorities and partners, aligning with international standards of good governance, thus favoring business relationships.
For more information or questions on how to implement a preventive model, our legal team is available to assist.