The lowdown on Chile’s economic and environmental crimes law

Economic and environmental crimes law No. 21,595 came onto Chile’s statute books in August.

The legislation constitutes a major systemic overhaul that toughens punishments for economic crimes and crimes against the environment. 

Chiefly, the law establishes new criminal offenses, increases penalties for economic crimes and expands criminal liability.

In terms of environmental crimes, some aspects of the law punish specific actions such as concealment of information while others are aimed at protecting ecosystems and areas. 

To get an overview of the new legislation, BNamericas conducted an email interview with Jorge Guerrero, partner at Chilean law firm Guerrero y Cía Abogados.

BNamericas: What political sector promoted this legislation and what were the justifications?

Guerrero: Law No. 21,595, on economic crimes, published in the official gazette on August 17, 2023, is rooted in the so-called anti-abuse agenda, announced at the end of 2019 by the government of President Sebastián Piñera. The first stage of its passage through congress corresponded to a parliamentary motion submitted by 14 legislators from different political spheres, who presented a bill based on a draft devised by an academic commission comprising prominent criminal lawyers.

In summary, the justifications of the legal text seek to provide a legal-criminal response to the social opposition generated by crimes of an economic nature and their impact on economic public order, for which purpose the economic criminal system is strengthened, establishing stronger and more effective sanctions.

BNamericas: What are the pillars or fundamental elements of the new economic crimes law?

Guerrero: The fundamental pillars of the economic crimes law are the following: a) Adaptation of the system for determining and substituting penalties in the field of economic crimes; b) General reform of the system of pecuniary consequences and disqualification; c) Reform of the criminal liability of legal entities, significantly expanding the list of base crimes; and d) Partial reforms of classic substantive criminal law.

The first category of economic crimes is those that the law considers “unconditionally economic,” since it is not necessary for special circumstances to be present for them to be considered as such. 

The second category is the one that establishes “conditional economic crimes,” in the case of criminal offenses that, being committed in a non-economic context, acquire the category of economic crimes only when there is a connection factor with medium or large companies. 

The third category is also “conditional,” having the character of economic crimes to the extent that a connection factor exists between the form or context of carrying out the crime and the performance of business activities. 

The fourth category is an extension of the previous categories, relating to the receipt, laundering and reconversion of assets. In this regard, it is especially worth considering that, for the purposes of criminal liability of legal entities, the four categories of economic crimes are applicable, no matter whether they are considered economic crimes in the aforementioned law.

BNamericas: To what type of company does this new legislation apply?

Guerrero: The scope of application of criminal liability of legal entities was significantly expanded to include legal entities under private law; public companies created by law; state companies, societies and universities; political parties; and religious legal entities under public law.

BNamericas: What are the implications for companies?

Guerrero: From the moment in which the scope of application of criminal liability of legal entities was expanded to new entities and given that a large number of criminal categories were added to the list of base crimes applicable to legal entities, the implications of the law of economic crimes for a company are of great magnitude, being relevant for their interests that they effectively implement an adequate crime prevention model, in order to exempt it from criminal liability.