This article was republished with permission from FCPAméricas Blog, for which Matteson Ellis is founder, editor and regular contributor.
There has been considerable discussion over the last few years about anti-corruption developments in Brazil, Mexico, Argentina and Colombia – four of the five Latin American parties to the OECD Anti-Bribery Convention. FCPAméricas has discussed each country at length (see posts on Brazil, Mexico, Argentina, and Colombia).
What about the fifth OECD member state in the region – Chile?
Chile was recently featured at the Latin Lawyer Anti-Corruption and Investigations Conference in São Paulo. José Luis Cortés Zepeda, a legal advisor in the anti-corruption unit of the Chilean Public Prosecutor’s Office, discussed the country’s commitment to bribery matters and recent advancements in its legal framework. Here are three things that companies need to know about Chile’s anti-corruption regime:
Corporate Criminal Liability: While other countries in the region – such as like Brazil, Argentina and Peru – have been resistant to establish criminal liability for the corrupt acts of legal persons, Chile has embraced it. Congress passed the Corporate Criminal Liability Law (Ley 20392, found here) in 2009, which applies to money laundering, the financing of terrorism and bribery of domestic and foreign public officials. The National Prosecutor’s Office has published a summary of the law here.
The establishment of corporate criminal liability did not come about easily. In Chile, like in many civil law jurisdictions throughout the region, many reject the notion that companies can form the mens rea necessary to commit willful acts. But in 2009 there was a strong political will to join the OECD Anti-Bribery Convention and satisfy its requirements.
Even a representative of Chile’s Production and Commerce Federation testified about that organization’s support to Congress, “I affirm that it is unquestionable that in the modern and globalized world, regulations should develop and confront new realities. The existence of criminal figures like the ones that this legislation addresses is grave and should be addressed with force because, if not, the development of our societies and well being will be harmed” (see page 220 of the law’s legislative history). This view contrasts the business pushback that similar legislation has experienced in countries like Brazil and Peru.
Interestingly, in the case of bribery, Chilean law does not attribute criminal liability to legal entities based on a theory that the company has willfully performed the criminal act. Instead, it generally applies a theory that the corporate entity failed to implement and fulfill its obligation of preventing the specific crime.
Compliance Program Certifications: Like the new Brazilian Anti-Bribery Law, Chile’s Corporate Criminal Liability Law explicitly provides credit for corporate compliance programs (“modelos de prevención”). Since corporate entities are obligated to prevent specific crimes like bribery, one way they can fulfill the obligation is by implementing a compliance program.
Chile’s approach to anti-corruption compliance is also unique. The Corporate Criminal Liability Law provides that corporate entities can have their compliance programs certified. Chile’s Securities and Insurance Authority authorizes a group of local firms to review companies’ compliance programs and certify them as sufficient. Certifying firms are listed on the Authority’s website. The site even lists companies that each firm has already certified.
The effect of certification is still subject to some debate in Chile. Some maintain that certifications should entitle a company to full immunity. Others think that obtaining a certification merely increases the standard of proof in the case of a violation – the government would have the burden of establishing that the company did not fulfill its obligation to prevent the crime, despite having implemented and obtained certification for its compliance program. What is not unclear is the fact that, when companies do not have such certificates, they have a harder time demonstrating that they have fulfilled their obligations.
Leniency Agreements: Chilean law provides for Conditional Suspensions of Proceedings that can occur during investigations. They amount to settlements between prosecutors and defendants. Courts approve the settlements and determine conditions that must be met within a defined period of time for defendants to be acquitted. Conditions can include adoption of a compliance program, obligations to make restitution payments or other requirements.
For example, in April of this year, Chilean authorities secured a US$2.5 million settlement with Chile’s Industrias Ceresita for alleged bribe payments to public officials in connection with construction permits for industrial premises. It is the largest settlement since the Corporate Criminal Liability Law came into force. The settlement involves numerous conditions, such as making major infrastructure improvements in the affected municipality and even painting the facades of the buildings that face the main squares of the town.
Chile’s National Prosecutor’s Office tells FCPAméricas that corporate criminal liability represents a “major change in the Chilean legal system.” It adds, “The new law challenges prosecutors, the courts and the business community that is now responsible for the design and effective implementation of compliance programs.”
The opinions expressed in this post are those of the author in his or her individual capacity and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
