Integrity: Measure to act

Integrity: Measure to act

Last January, Fundación Generación Empresarial presented the results of a study that has been carried out annually for 18 years. A total of 165 public and private institutions, for-profit and non-profit, large and small, were encouraged to be part of the Recognition of Commitment to Integrity, a process that allows them to know how they live the values, and which culminated with a ceremony that He distinguished those that stood out the most. This is the largest number that has participated in this activity that includes the application of the Barometer of Values ​​and Organizational Integrity and the delivery of documentation that certifies good practices. More than 45 thousand people from all walks of life responded to this survey about the advancement of the “culture of integrity” in their workplace, communicating with actions and not words, that integrity is a central value in their work, and that they are making genuine efforts to improve themselves.

On average, people who responded to the Barometer expressed themselves positively about the place where they work. They said that there are established values ​​and they are promoted (87%), that they are actively disseminated (82%) and that managers act in accordance with them by setting an example (72%). They also expressed concern that their organization could become involved in corruption scandals (one in three people). These figures are reason to be optimistic. But the situation in the country makes us be cautious because, in the circumstances we live in today, it is not integrity that monopolizes the headlines, but corruption.

The Barometer measures perceptions and the Accreditation Guidelines record the institutionalization of practices of the Ethics and Compliance Program. Today we talk about “compliance” to refer to the legal requirements that must be met, but if this becomes an issue that is entrusted only to lawyers, it does not help much. This way, behaviors are not changed much.

The focus should be on corporate governance and culture, that is, the way things are expected to be done, how the organization is run and decisions are made at the top level. This implies that “the tone at the top”, which refers to the actions promoted by managers, must be effective in strongly communicating the ethical implications of behavior at all levels of the organization. Your message should be that you have to strive to “do things right,” and that you trust people’s ability to self-regulate their behavior. The best way to make this message credible is through ethical leadership that “speaks from action” and “zero tolerance” for abuse and corruption.

Not only people with values-based behavior win. Whoever acts accordingly, whatever their role, will feel the satisfaction of having done their best and this will have a positive impact on the work environment. The same goes for organizations. Their effort to get things done supports the integrity of the entire country. Hence the importance of all organizations “dare to be better.” Measuring yourself is the first step of change, as it shows the intention to renew yourself. But we must move beyond measurement… it is time to act.

By Fernanda Hurtado, General Manager FGE and Compliance Latam Collaborator.

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Chile | Personal Data Protection Law: the pillar of the regulation of artificial intelligence

Chile | Personal Data Protection Law: the pillar of the regulation of artificial intelligence

The imminent technological evolution leads us to recognize the importance of robust regulation that addresses the challenges posed by artificial intelligence (AI). At an international level, examples such as “The Artificial Intelligence Act” of the European Union and the Executive Order in the United States show the need for legislation that establishes guidelines and supervises the development of this powerful technology.

In Latin America, and particularly in Chile, we face the challenge of advancing regulations, learning from comparative experiences to avoid errors. However, we face significant obstacles, especially since the Bill on the Protection of Personal Data is still awaiting approval. This situation makes legislative discussion on more complex issues difficult, such as the regulation of AI systems, which has already been approved in general and has advanced to its particular discussion.

It is essential to recognize that the lack of an updated law on the protection of personal data, combined with little experience in implementing practices to reduce risks or conducting impact assessments, represents a significant challenge to responsibly moving forward in the regulation of issues. as relevant as this. In that sense, updating the Law on the Protection of Personal Data is presented as the fundamental pillar to progress in any regulatory framework related to technology.

We understand that artificial intelligence uses data of various types, including personal data, which must be used and protected appropriately. Likewise, we cannot ignore how the decisions made by these systems directly impact people’s rights. An illustrative example would be the selection of individuals for waiting lists in the health sector or the allocation of educational scholarships. In both cases, in the absence of updated legislation and lacking practical experience in the responsible use of this type of data, the risk of abuse and discrimination by artificial intelligence systems is significant.

This Sunday, January 28, was International Data Protection Day, an ideal time to look forward with optimism, anticipating that the mixed commission can reach agreements in March on the issues on which the chambers have not yet reached consensus. This advance will mark the conclusion of the legislative process and open a new chapter in Chile’s technological regulation.

By Constanza Pasarin and Trinidad Moreno, associates of the compliance group of Albagli Zaliasnik (az).

Source: Diario Financiero

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Chile | Do I have to submit to the internal regulation of my clients or contractual counterparties?

Chile | Do I have to submit to the internal regulation of my clients or contractual counterparties?

Regarding a conversation related to the new Economic Crimes Law, we had a question about whether there is expressly a legal obligation that orders me to submit to the internal regulations of third parties related to my activity. The above, considering that, if effective, this implies that I must read, know and apply all the policies and manuals of my clients and, eventually, other third parties.

In that sense, and at least as far as it concerns a contractual relationship with clients or counterparties on an equal footing in negotiation, it is reasonable to maintain that if I sign a contract with a third party, in which my complete opposition to the commission is expressly mentioned of crimes within my organization, and I have a living, controlled and regularly updated prevention model, it should not be an imperative to have to submit to the self-regulation of my related parties.

In addition to being somewhat extreme, requiring all companies to comply with each of the internal obligations of their related parties, which commonly also depend on the needs, logic and legal techniques of each original regulation, it is tremendously expensive—in terms of time and efficiency—think that each company has to submit, purely and simply, to each and every one of the policies and manuals that make up the Crime Prevention Model of related third parties, simultaneously avoiding its potential application and also ensuring to be attentive to the possible modifications of each of such models (in foreign, and sometimes even foreign, computer servers), which is what is usually asked to accept, ex ante, in such types of regulations.

Although the “obligation” referred to above is inserted in the context of the elements that a crime prevention model must contain, in accordance with the provisions of Article 3 No. 3 of Law No. 20,393, in practice it is observed that These obligations, prohibitions and sanctions mainly deal with the establishment of specific prohibitions relating to certain topics (eg, making facilitation payments, making decisions through undeclared conflicts of interest, carrying out illicit activities in the context of the execution of the contract) and compliance with obligations to report any suspicious situation through established reporting channels, among other points. But the problem, also practical, is that the way of approaching how these obligations, prohibitions and sanctions are implemented for those who contract with another has generally consisted of the supposed duty of having to accept, as noted, purely and simply , the entirety of a certain Crime Prevention Model that is imposed on the other, as a condition of the conclusion of the respective contract.

Consequently, and reflecting on the actual implementation of the new Economic Crimes Law, it is to a certain extent unfeasible, and, at the same time, excessive, to think that all companies must sign the internal regulations of their related third parties and accept them in a closed package. Without prejudice to the foregoing, the failure to incorporate clauses relating to compliance with the crime prevention model could entail risks for the provider when accrediting compliance with its management and supervision duties, especially when what is in question, eventually, is the liability of the legal entity for criminal acts committed in the context of the supplier/client contractual relationship.

From a practical perspective, it should be noted that a serious and relevant situation that involves the commission of an illegal act will require addressing potential criminal contingencies as a first priority, which will allow for early mitigation of possible contractual risks related to non-compliance with these clauses.

Thus, today it is essential to review the contracts with my related third parties and not rest on the fact that there is an identical standard clause in all of these and that it must be accepted automatically or sine qua non to conclude the contract. We think that essential base points can be established, with common objectives, with a view to safeguarding the legal assets protected in Law No. 20,393, such as the obligations, prohibitions and sanctions already mentioned, and contractually refine the relevant points for both parties, but this It does not mean that I must necessarily submit to the internal regulation of my suppliers and clients.

By the way, as part of such essential bases, the controls through the contracts and monitoring of the correct fulfillment of the services agreed in this will be an important armor in the eventual case that said third party commits a crime in the context of the functions that are the subject of my contract.

* Francisca Franzani is director of the Compliance group at Albagli Zaliasnik and Andrés Illanes is manager of Corporate Affairs at Bodegas San Francisco.

Source: El Mercurio

For more information you can contact :

Francisca Franzani  | Compliance Group Director | ffranzani@az.cl

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Integrity: Measure to act

Chile | One step away from becoming law: Double Taxation Agreement between Chile and the US.

The initiative seeks to avoid duplication in the payment of taxes and also prevent tax evasion of income and wealth taxes.

On November 16, 2023, the National Congress approved the agreement between Chile and the United States by which the “Agreement between the Government of the Republic of Chile and the Government of the United States of America to Avoid Double Taxation and to Prevent Tax Evasion in Relation to Income and Property Taxes and its Protocol.”

The entry into force of the agreement will occur when it is ratified by the President of the Republic of Chile and the exchange of notes between Chile and the United States takes place.

Thus, the provisions of the agreement will come into force in accordance with the following detail:

Withholding taxes at source, with respect to amounts paid or accrued, will take effect on or after the first day of the month following the entry into force of the Agreement.

Other taxes will take effect starting January 1 of the year following the entry into force of the Agreement.

Regarding the rules for exchanging information, they will govern from the entry into force of the Agreement, without making distinction to the tax period to which the information refers.

This is a fact that will undoubtedly favor commercial exchange between both countries. Among its main tax implications we can find the following:

Capital gains: The rate is reduced from the current 35% to 16%, provided that the transferor has not owned, within the 12 months preceding the transfer, more than 50% of the capital of the company with residence in Chile.

Interests: The maximum rates currently in force are limited (Chile 35%, United States 30%). The maximum rate will be 10% as a general rule and may be as high as 4%. However, during the first two years of validity of the Agreement it will be a rate of 15%.

Dividends: A maximum rate of 5% is established if the beneficiary of the dividends is a company that owns at least 10% of the voting shares of the company that pays the dividends and 15% in other cases. In the case of Chile, given our semi-integrated system, the maximum rate will not apply to the extent that the First Category Tax can be used entirely as a credit and the Additional Tax rate does not exceed 35%.

Use of credits: The corporate tax paid or withheld in the United States may be used in Chile as a credit.
Information exchange: A mechanism is contemplated for information requirements and exchanges.

For more information you can contact :

Francisca Franzani  | Compliance Group Director |  ffranzani@az.cl

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