Chile | Economic Crimes Act: Quick Guide Law No. 21,595, ULDDECO

Chile | Economic Crimes Act: Quick Guide Law No. 21,595, ULDDECO

The Specialized Unit for Economic Crimes, Environmental Crimes, Cybercrime and Money Laundering (ULDDECO) of the National Prosecutor’s Office organized a work day aimed at the study and analysis of economic crimes, which took place between October 8 and 10 in the city of Santiago.

As a result of this workshop, the “Quick Guide to Law No. 21,595 on Economic Crimes” was published, aimed at prosecutors and officials of the Public Ministry as a comprehensible and concise tool to facilitate their approach to the law.

It is worth noting that this guide has not only been useful for prosecutors in our country, but also for all those who make compliance their career, clarifying, without a doubt, some questions that arose from the law.

The guide outlines the most relevant aspects and changes brought about by the Economic Crimes Act, reviewing the four categories of crimes and the requirements that must be met in each of the categories for the application of the EDL in the commission of the crimes provided for in each of them.

In particular, this guide highlights its statement on third-category crimes, which refer to criminal types with a qualified active subject; that is, those that require that the person committing the crime be a public official or agent. The guide clarifies that, in these cases, the intervention as a co-author or accomplice could lead to the application of the principle of communicability to third parties who do not hold public office.

This issue remains controversial, as there are conflicting doctrinal theories on whether or not these crimes can be communicable, as well as jurisprudence that rules in both directions.

It is worth mentioning that, in Chile, although not in the area of ​​economic crimes, the Supreme Court has applied the principle of communicability in cases of tax fraud, as observed in Case No. 17014-2015, condemning third parties involved as co-authors of the official crime.

The guide also explains some special rules contemplated in the LDE, the sanctions applicable to persons responsible for economic crimes, as well as

the mitigating and aggravating circumstances inherent in the law, the admissibility of alternative sentences, the determination of the fine and the imposition of disqualification sanctions in the context of the law.

The guide is, without a doubt, a must-read for all those involved in compliance, as it provides visual material that simplifies and systematises the law, making it accessible to everyone.

For more information on what actions your company or corporation should take to prevent crimes from being committed within it, we recommend that you consult our Compliance Group:

Rodrigo Albagli | Partner | ralbagli@az.cl

Yoab Bitran | Compliance Group Director | ybitran@az.cl

Caterina Ravera | Senior Associate | cravera@az.cl

Florencia Fuentealba | Associate | ffuentealba@az.cl

Loreto Osorio | Associate | losorio@az.cl

Sebastian Achondo | Associate | sachondo@az.cl

Macarena Navea | Associate | mnavea@az.cl

Felipe Barrera | Associate | fbarrera@az.cl

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Chile | Economic Crimes Act and application of abusive agreements

Chile | Economic Crimes Act and application of abusive agreements

The new Economic Crimes Law not only reconfigured the modifications of liability and incorporated a special system for determining punishment and alternative punishments in light of economic crime, but also added new criminal figures, whose limits and practical application have filled the business world with resentment.

One of them is that contained in article 134 bis of the Law on Public Limited Companies (LSA) which penalizes the illegality of abusive agreements that may occur in the boards of directors.

It is important to note that this crime, in its typical structure, punishes those who, taking advantage of their majority position on the board of directors of a corporation, adopt an abusive agreement to benefit or financially benefit another, to the detriment of the other partners and without the agreement bringing benefit to the company.

Next, we proceed to limit its scope of application to provide the following considerations:

First, the criminal type incorporated into article 134 bis was drawn up based on the text contained in article 291 of the Spanish Penal Code. Thus, the consideration of the latter, when resolving problems of interpretation and application of our criminal type, is essential for our dogmatics and jurisprudence.

In this sense, and to delimit the typical scope of the Chilean crime, it is necessary to keep in mind that, in light of Spanish dogma, the criminal type of abusive agreement has quite specific characteristics that we must consider.

As a reference, the offence only penalises, without prejudice to the other typical elements of the offence, those agreements that do not benefit society or do not respond to a rational need of the latter. In other words, it does not penalise the adoption of agreements that, even if they harm minority shareholders, benefit or respond to a rational need of society.

It is therefore essential for the configuration of the crime to have in view the “social balance” associated with the adopted agreement. For these purposes, the mere occurrence of damage to the minority is not sufficient.

Thus, agreements that are beneficial to society, despite harming minority partners, and neutral agreements, which respond to a rational need of society, even when harming minority partners, would be atypical.

Secondly, it must be considered that the benefit, harm or specific effect that an agreement has on the social interest must be determined in light of criteria of economic rationality that exceed the sole consideration of the immediate effects associated with a particular agreement.

Let us consider an agreement that initially generates an economic advantage for society, but which, in the long term, is detrimental to its interests. In this case, this initial advantage is completely irrelevant in terms of the definition of the criminal type of abusive agreement. The conduct may also be criminal. And the same applies in reverse.

Finally, we must mention that the typical conduct sanctioned must be limited to the adoption of those agreements that are suitable to cause harm to the other partners. In other words, if a certain agreement does not have the possibility of causing harm to the other partners, then it cannot be sanctioned as a result of the crime of abusive agreement.

However, these clarifications are merely indicative. There are other clarifications that must be considered in order to delimit the typical scope of application of Article 134 bis.

The Chilean criminal type, a mirror of the Spanish one, cannot be applied in a way that goes beyond its superficial meaning or contradicts its origin. There is already a guide, there are already substantive delimitations that can guide the application of this new crime in our law. And this cannot be ignored by our doctrine and jurisprudence.

To discuss these issues, you can contact our Criminal Litigation team:

Gabriel Zaliasnik | Partner | gzaliasnik@az.cl

Loreto Hoyos | Director of the Criminal Group | lhoyos@az.cl

David Segall | Senior Associate | dsegall@az.cl

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