by Juan Manuel González | Apr 3, 2023 | Noticias-en
The Organic Law to promote the Violet Economy within its desire to promote, guarantee and execute the mainstreaming of the gender approach and multiculturalism incorporates into the Companies Law, an unnumbered article after Article 20, through which it provides that all companies species of companies governed by the aforementioned Companies Law, at the time of the formation of their Boards, when they have three (3) or more members, they must observe that for every three members, one of them is female.
For companies and financial institutions regulated by the Companies Law, for the formation of their Board of Directors, the provisions of the aforementioned unnumbered article will apply, considering the selection and qualification rules established in the Monetary and Financial Organic Code and other applicable regulations.
In the case of companies whose Directors require prior qualification procedures in accordance with special sectoral laws, they will be subject to the provisions of said special laws.
The Law does not currently establish a sanction for the case of non-compliance with this provision, nor has any regulation been issued.
For more information contact:
Maria Rosa Fabara | Partner Bustamante Fabara | mrfabara@bustamantefabara.com
Mariana Villagómez | Partner Bustamante Fabara | mvillagomez@bustamantefabara.com
by Juan Manuel González | Apr 3, 2023 | Noticias-en
On March 6, 2023, the National Economic Prosecutor’s Office (FNE) filed a request with the Tribunal de Defensa de la Libre Competencia (TDLC) against a renowned laboratory convicted of collusion in 2018, which was also forced to implementation of a free competition compliance program .
This requirement is due to the fact that the laboratory executed late and failed to comply with what was ordered by the court, increasing the probability of occurrence of events that contravene the legal provisions on free competition, which may affect customers and/or final consumers.
Specifically, the FNE seeks a declaration of non-compliance with said sentence and the imposition of a fine of 1,100 million Chilean pesos (USD 1.4 million).
This action reminds us that the decisions of the TDLC regarding compliance programs are supervised by the FNE, through the Compliance Inspection division, while said measures imposed by the court are intended to mitigate the risks of infringement of the rules of free competition and prevent the commission of crimes of this nature.
In this sense, although the establishment of compliance programs is voluntary, there are scenarios in which their implementation is mandatory , as was the case of the condemned laboratory. The court defined that the program should contain, as a minimum, the elements established in the FNE’s Compliance Program Guide , however, with respect to certain obligations, the sentence raised the standards suggested by said document. Some of these reinforced standards are the following:
- Senior management commitment to the compliance program through the establishment of a Compliance Committee.
- The figure of an autonomous and independent Compliance Officer , who ensures respect for the rules of defense of free competition and who reports to the Board of Directors on its mission.
- Conducting annual training on antitrust matters for senior executives and the company’s board of directors and others deemed by the compliance officer.
- Obtaining statements from the company’s senior executives , indicating that they are not aware of any violation of the laws that protect free competition.
It is important to mention that, although these programs do not constitute an exemption from liability for infringement of the rules established in defense of free competition, they imply other benefits, such as: (I) possible reductions in fines; (II) the early exercise of the compensated denunciation or (III) the possibility of reaching out-of-court agreements.
However, it should be noted that, in the case of compliance programs imposed by the judicial authority, their establishment is not only an obligation, but also an obligation coupled with a sentence, and therefore cannot unilaterally modify the imposed obligations, a matter that the FNE alleges in its request.
The aforementioned case shows us that, although it is extremely beneficial for any company to voluntarily implement a compliance program in free competition matters, its correct adoption is critical for the antitrust authority when it is an obligation ordered by a court . Then, not adopting a serious, credible and effective compliance program can come at a high price.
For more information on these topics, you can contact:
Francesca Franzani | Compliance Group Director | ffranzani@az.cl
Matias Edwards | Senior Associate, Antitrust Group | medwards@az.cl
Constance Delgado | Associate, Free Competition Group | cdelgadov@az.cl
Jaime Viveros | Associate, Compliance Group | jviveros@az.cl
by Juan Manuel González | Apr 3, 2023 | Noticias-en
Recently, the Perú Libre Parliamentary Group presented Bill No. 3251/2022-CR, whose purpose is to regulate the responsibility of companies in the Financial System, with respect to computer fraud committed against users of this system in the face of active and fraudulent liabilities, establishing the actions that must be taken and determining the times for the resolution of the cases.
The purpose of said bill is to protect and guarantee active and passive operations carried out by users of the financial system, reducing economic damage and safeguarding good credit reputation.
Among the measures contemplated in the proposed standard, the obligation is prescribed for companies in the financial sector to return the amounts and/or cancel unauthorized operations reported by their users, in any case and no later than the business day following reported the incident. If the company has reasonable grounds to doubt the veracity of the report, it must inform the user and the Superintendency of Banking, Insurance and AFPs in writing, within the same term, attaching the evidence that supports its position, and it is the responsibility of the company to demonstrate that for said operation, all the verification mechanisms were activated that demonstrate that said operation was correctly registered.
For more information contact:
Mario Pinatte | CPB Partner | mpinatte@cpb-abogados.com.pe
by Juan Manuel González | Apr 3, 2023 | Noticias-en
The Standards Committee of the Central Reserve Bank issued the new Technical Standards for the Management of Money and Asset Laundering Risks, Financing of Terrorism and Financing of the Proliferation of Weapons of Mass Destruction (NRP-36).
The Central Reserve Bank approved the Regulations at the end of 2022, repealing from that date the “Technical Regulations for the Management of Money and Asset Laundering Risks, and Financing of Terrorism” (NRP-08).
The Regulations seek that the entities that are members of the financial system prevent the aforementioned risks, detect and report any unusual operation or possibly related to the prevention of money laundering.
The obligated subjects must have a continuous and documented process for the management of potential risks and the Compliance Officer will carry out periodic reviews for compliance with what is described in the Regulations.
The Rules also apply to electronic financial transactions, which oblige the entity to keep a log of access and use of the system to track the transactions made by customers.
What is also sought with these Regulations is to adapt them to the Instructions of the Financial Investigation Unit (FIU) of the Attorney General’s Office issued on June 6, 2022.
For more information contact:
Uri Weinstock | BLP Partner | uweinstok@blplegal.com
by Juan Manuel González | Apr 3, 2023 | Noticias-en
The two main technologies that are disrupting the Compliance industry today are Artificial Intelligence (AI) and Machine Learning (ML). What are the implications of these developing technologies for Compliance professionals?
We consulted the ChatGPT AI and this was their response:
Compliance in relation to artificial intelligence (AI) refers to compliance with regulations and ethical standards in the development and use of AI systems. This includes the protection of personal data, transparency in decision-making by AI systems, accountability for results, and ensuring that systems do not discriminate against or cause harm to individuals.
In the digital age, AI systems are being used in a wide range of industries, from healthcare to banking and finance. Due to their ability to process large amounts of data, these systems can help make more efficient and accurate decisions, but they also pose privacy and ethical challenges.
That is why AI Compliance is essential to ensure that these systems are used in a responsible and ethically sound manner. This may include implementing policies and procedures to ensure data privacy, transparency in decision-making by AI systems, ensuring non-discrimination, and accountability for results.
In addition, AI Compliance can also include auditing and monitoring of systems to verify their compliance with applicable regulations. This can help prevent negative consequences such as penalties, fines, and loss of public trust.
In short, AI Compliance is essential to ensure that systems are used responsibly and ethically. By complying with regulations and ethical standards, you can protect the privacy and rights of individuals, and ensure that AI technology contributes positively to society.
by Juan Manuel González | Apr 3, 2023 | Noticias-en
The importance of environmental, social and corporate governance (ESG) best practices is becoming increasingly visible in the region, as we have seen in previously published articles that included the opinion of experts from prestigious legal firms.
In recent years, due to the increased demands of investors, governments, consumers and interest groups in general, companies have had to rethink the way in which they develop their businesses, setting strategies for the incorporation and application of ESG criteria.
In the central and southern region of the continent, companies must understand the needs of customers and the community in which they produce their goods or services to make sustainable decisions. It is true that changing suppliers or materials to create a sustainable product is not cheap, but -as we have seen in the note “ ESG to generate shared value and new business ”- the long-term benefit is worth the effort.
The competitiveness of Latin American companies is a necessary condition to go out into the world and generate new markets. This intangible asset can be sustained with a solid ESG strategy, delivering a differentiating value proposition. As stated by Gerson Vaca, Partner of Basham, Ringe y Correaof Mexico “in terms of competitiveness, we believe that there is a triple added value. Today it is common practice for international companies to require their business partners and members of their supply chains to comply with ESG principles. By virtue of the above, a company that has an established ESG program will allow it to increase the scope of its business by complying with this increasingly requested requirement or otherwise, it will not be considered by these international companies”.
Companies that comply with ESG metrics offer an important competitive advantage as they are more profitable in the long term while complying with national and international standards that allow the attraction of socially responsible investments where investors seek to guarantee that their assets finance companies whose development it is done consciously benefiting the environment and society.
In this way, these topics are ceasing to be a prerogative for the business world, becoming a standard. . “All these strategies are non-financial factors that allow companies to analyze their risks and opportunities for growth, providing fundamental value for investors. ESG strategy and investments are becoming an important and growing part of the investment process in every company,” says Vivian Liberman, partner at BLP Central America.
But competitiveness is not the only north that the region looks to in terms of ESG. Measuring the impact of these strategies is a practice that is imposed because everything that can be measured can be improved .
A well-executed sustainability and compliance program should have short, medium, and long-term goals. “ESG compliance programs must include an implementation plan, as well as the metrics on which it will be analyzed and reviewed if these goals were met or in what percentages they have been achieved and what are the reasons why they were not achieved and ways correction, so the same program must establish the way in which its proper application will be measured”, Vaca details.
For Florencia Fuentealba, Associate of the Compliance Group at az in Chile: “When adopting an ESG strategy, it is not enough to make statements of value only, but as is done with financial factors, companies must incorporate objectives, goals and metrics to assess your progress. In my opinion, a good ESG strategy is one that can be measured and audited, as only then can we know if the desired impact is being generated or if it should be reconsidered”.
There are various metrics and companies dedicated to measuring the relative performance of companies in terms of their ESG attributes, Liberman explains. “The commitment acquired and the effectiveness of the changes made in their operations, practices to qualify the effectiveness with which they manage to comply with ESG issues can be measured.”
Another factor that organizations in the region are paying attention to is their own resources. These ESG strategies are also a motivational medium for both investors and workers. Respect and awareness of the environment, of social issues and transparency in how a company behaves are values for retaining talent and obtaining investment. They collaborate in the identification of risk and growth opportunities. They generate high value in new types of business with corporate culture. Currently, the markets are focused on a circular economy and a new model where the response to environmental and social challenges are essential for companies and the economy.
The experts from the firms that make up Compliance Latam agree that 2023 will be a year in which sustainability will be a protagonist on the business agenda and is consolidated as a great opportunity to align business activity with the response to social and environmental challenges.
