Defining a new standard in Chile: The Economic Crimes Law in corruption scandals

Chile has recently made significant amendments to its regulatory framework aimed at combatting corruption and white collar crime. Since the enactment of Law No. 20.393 in 2009, the country has criminalized certain actions committed by legal entities to align with international standards as a member of the Organization for Economic Co-operation and Development (OECD).

In 2019, Chile experienced a complex political crisis characterized by widespread protests. Among various grievances, many citizens felt that white collar crimes were only punished with fines, allowing offenders to evade true accountability. As a result, there was a public demand for legislation that would impose strict penalties on such crimes, including effective and nonreducible prison sentences for white collar offenders.

The Economic Crimes Law

Responding to this demand, Congress enacted the Economic Crimes Law in 2023. This legislation covers more than 250 offenses, including white collar crimes, negligent homicide, labor-related violations, tax fraud, and environmental offenses, among others. For individuals, the law establishes stricter penalties for crimes committed in a corporate context, removing mitigating factors like an unblemished previous record and introducing special aggravating circumstances for board members and C-suite executives involved in criminal activities.

These changes reflect a cultural shift toward greater accountability at all organizational levels and emphasize the importance of effective compliance programs in exempting companies from liability and preventing such crimes. This new compliance standard is expected to influence corporate practices and transactions, fostering better methods that contribute to sustainable development. Additionally, it shapes public expectations regarding law enforcement and the imposition of penalties in response to future corruption scandals.

This legislation represents a key shift in the treatment of economic crimes in Chile, with a stricter focus on criminal prosecution of illicit business conduct. While the implementation of these changes poses significant challenges for companies and authorities, particularly regarding the proper investigation and application of the new criteria, one tool to mitigate risk and ensure compliance emerges: strengthening crime prevention models. The success of this reform will largely depend on the ability of the Public Prosecutor’s Office and organizations to adapt to this new legal landscape, promoting an environment of greater responsibility and transparency in the business sector.

The law’s impact on compliance

The implementation of the Economic Crimes Law contributes to this challenge and has incentivized companies to invest in risk prevention. It has also highlighted the importance of continuous training, effective communication, and leadership from the top. What is truly encouraged is for this activity to be integrated across an organization, with corporate culture playing a fundamental role. Today, the greatest risk a company can face is claiming to have a compliance system in place, but not applying it in practice.

In effect, the Economic Crimes Law marks a relevant moment in Chile's fight against corruption, implementing stricter standards for accountability and ethical business practices. By tackling systemic issues and enforcing harsher penalties, the law reinforces the country's commitment to combatting impunity. As cases like the Audio Recordings Case develop, this new standard highlights Chile's determination to restore trust and ensure justice in corruption scandals.

Currently, major corruption scandals are under investigation by the Public Prosecutor's Office in Chile, with the Audio Recordings Case being the most notable. This scandal emerged after audio recordings were leaked on social media, allegedly made by a lawyer connected to a prominent attorney in Chile known for his ties to public and government officials, including judges, politicians, and prosecutors. These recordings reportedly reveal potential acts of corruption and influence peddling across various government sectors, exposing systemic issues from the appointment of judges to the granting of political favors. Beyond the specifics of the case, this situation raises significant concerns about communication between lawyers and public officials, potentially jeopardizing attorney–client confidentiality.

Conclusion

In this sense, this new regulation not only sets a standard in the business context, but also for Chilean authorities and the way political systems operate. Indeed, common practices that were not necessarily considered criminal offenses are now a potential source of corruption. For this reason, standards of integrity and best practices will likely need to be raised across all sectors.