On December 2nd 2009 it was published in the Official Journal the N. 20.393 Law which enacts Criminal Responsibility of Legal Entities on Money Laundering, Terrorism Financing and Bribery.

Ley Nº 20.393 You can also download the complete law in PDF format Here

Rule Type: N. 20393 Law
Date of Publication: 02-12-2009
Date of Enacting: 25-11-2009
Organ: TREASURE MINISTRY; TREASURE SUBSECRETARY

IT ESTABLISHES CRIMINAL LIABILITY OF LEGAL ENTITIES ON THE OFFENSES OF MONEY LAUNDERING, TERRORISM FINANCING AND BRIBERY.

Version Type: Unique: 02-12-2009
Enacting Procedure: 02-12-2009

N. 20.393 Law

IT ESTABLISHES CRIMINAL LIABILITY OF LEGAL ENTITIES ON THE OFFENSES OF MONEY LAUNDERING, TERRORISM FINANCING AND BRIBERY.

Whereas the H. National Congress hereby approves the following draft legislation:

First Article.- Orders the approval of the following legal entities criminal responsibility law:
Article 1° .- Law’s content. The present law hereby regulates criminal responsibility of legal entities on the crimes laid down in article 27 of N. 19.913 Law, in article 8° of the N. 18.314 Law and in the articles 250 and 251 bis of the Criminal Code; the investigation and prosecution procedure for the aforementioned Criminal Responsibility, the establishment of pertinent penalties and their execution.

If not otherwise specifically provided, provisions of Criminal Code’s Book I, Criminal Procedure Code and Special Laws will be applied supletorily. For the purposes of this Law, article 58 clause 2° of the Criminal Procedure Code will not be applied.

Article 2° .- Extents. The present provisions must be applicable to private and public legal entities.

Temario

Responsability I

ON THE ATTRIBUTION OF CRIMINAL RESPONSIBILITY TO LEGAL ENTITIES


Article 3°.- Criminal responsibility attribution.

Legal entities are responsible of the offenses laid down in article 1, committed directly or indirectly in their own interest or benefit, by its owners, controllers, senior executives, representatives, or anyone who performs administration and supervision activities, as long as the commission of the crime is a consequence of breaching direction and supervision duties.

Under the same circumstances listed beforehand, legal entities also have responsibility of natural persons committed offenses, as long as those people are under the direction or supervision of any of the aforementioned individuals.

Direction and supervision duties will be fulfilled when, before the commission of the crime, the legal entity has adopted or implemented organization, administration and supervision models in order to prevent offenses as such, according to the following article.

Legal entities will not hold responsibility when the aforementioned individuals have committed the crime exclusively in their own benefit or favoring a third party.

Article 4°.- Crime prevention model. For the purposes of the third clause of previous article, legal entities will be able to adopt that prevention model, which must contain at least:

1) Appointment of a prevention commissioned.
a) The highest administrative authority, whether directory, an administrator partner, a manager, a senior executive, liquidator, any representative, owners or partners, as appropriate to its form of administration, henceforth “Legal Entity Administration” must appoint a prevention commissioned, charge that will last three years tops, renewable for an equal period.
b) Prevention commissioned must have autonomy concerning Legal Entity Administration, its owners, partners, shareholders or controllers. Nonetheless, this person will be able to perform comptrolling or internal auditing functions.

In the case of legal entities whose annual income does not exceed of UF 100.000, its owner, controlling partner or shareholder will be able to personally assume the prevention commissioned tasks.

2) Definition of prevention commissioned’s means and powers. Legal Entity Administration must provide to the prevention commissioned with sufficient means and powers for the fulfillment of his or her duties, among those:

a) Necessary resources and material means to adequately perform his duties, considering size and economic capacity of the legal entity.
b) Direct access to the Legal Entity Administration to timely inform, through a suitable channel about implemented measures and plans in the fulfillment of its objectives and to report at least once every six months.
3) Establishment of a crime prevention system.

Prevention commissioned, along with the Legal Entity Administration, must establish a legal entity crime prevention system, that must contain:

a) Identification of the company’s activities or processes, whether habitual or sporadic, in which context produces or increases the risk of committing any of the offenses listed in article 1°.
b) Setting of rules, protocols and specific procedures that allow to the intervinients to program and execute their tasks or duties in a crime preventive manner.
c) Identification of administration and auditing procedures of financial resources, allowing to the company preventing their usage on the commission of said crimes.
d) Existence of internal administrative penalties, as well as denounce or prosecution procedures of pecuniary responsibility against breachers of the crime prevention system.

This internal obligations, prohibitions and sanctions must be mentioned in regulations dictated by the very legal entity and must be communicated to all workers.

This internal regulation must be incorporated into the respective work and service delivery contracts of all workers, employees and services providers, including senior executives.

4) Supervision and certification of the crime prevention system.

a) Prevention commissioned, along with Legal Entity Administration, must stipulate methods in order to effectively apply the crime prevention model and its supervision with the purpose to detect and correct any failure, as well as to update it according to any change of circumstances.
b) Legal entities shall obtain crime prevention model adoption and implementation certification. Such certificate must convey all requirements of previous numbers 1), 2) y 3), regarding situation, size, line of work, level income and complexity of the legal entity.

Certificates can be submitted by external auditing companies, risk agencies and any other SVS registered entity, able to do that, according to the terms of the regulatory agency.

c) Natural persons participating in the aforementioned certification activities serve to a public function, as declared in article 260 of the Criminal Code.

Article 5°.- Autonomous criminal responsibility of the legal entity. Legal entity’s responsibility shall be autonomous and shall persist when, all requirements of article 3° concurring, any of these situations take place:

1) Individual criminal responsibility has extinguished according to numbers 1° and 6° of article 93 of the Criminal Code.
2) When a criminal process against natural persons listed in article 3° clauses first and second is temporarily dismissed, according to letters b) and c) of article 252 of the Criminal Procedure Code.

That responsibility will be prosecuted when, attested the existence of any of the offenses laid down in article 1° along with concurring of the requirements of article 3°, the individual responsibilities have not been attested, as long as in the respective process the commission of the crime in a corporate context has been unequivocally proven, according to the first clause of the aforementioned article 3°.

Responsability II

On the mitigating circumstances of legal entities criminal responsibility


Article 6°.- Mitigating circumstances. They are the following:

1) The one in number 7° of article 11 of the Criminal Code.
2) The one in number 9° of article 11 of the Criminal Code. Legal entity is substantially collaborating when, in any state of the investigation or judicial process, his legal representatives have make known the punible fact to th authorities or have given information to settle the investigated facts.
3) Adoption, before the beginning of the process, of effective measures to prevent the same kind of investigated crimes to occur again.

Responsability III

On aggravating circumstances of criminal responsibility


Article 7°: Aggravating circumstance.

It is aggravating circumstance of the criminal responsibility, to have been condemned, within the last five years, for the same crime.

On determination of penalties


Article 14.- General scale. Penalty imposed to the legal entity shall be determined regarding that of the crime signaled in article 1°, according to the following scale:

Legal Entities Penalties General Scale

1.- Crime penalties.
a) Dissolution or cancellation of the legal entity.
b) Prohibition of celebrating contracts with State organs from maximum to perpetual degree.
c) Loss of tax benefits in its maximum degree or absolute prohibition of perceiving those from three years and a day to five years.
d) Fine for fiscal benefit, in its maximum grade.

In all the aforementioned cases accessory penalties laid down in article 13 shall be applied.

2.- Simple offense penalties.
a) Temporary prohibition of celebrating contracts with State organs from its minimum to medium degree.
b) Loss of fiscal benefits in its minimum to medium degree or absolute prohibition of receiving those from two to three years.
c) Fine in its minimum to medium degree. In this cases, accessory penalties laid down in article 13 shall be applied.

Article 15.- Legal determination of the applicable sanction. Offenses listed in articles 250 and 250 bis of the Criminal Code, and in the articule 8° of N. 18.314 Law, shall be sanctioned with the penalties of simple offenses, according to the previous article.

Crime laid down in article 27 of the N. 19.913 Law shall be punished with the crime penalties, according to the previous article.

Article 16.- Responsibility modifying circumstances. In the event of  mitigating circumstances, excluding aggravating ones, for simple offenses, only two of the article 14 penalties shall be applied, imposing just one of them in its minimum degree. In case of crimes, court shall apply only two of them in its minimum, if appropriate.

In case of crimes, it shall apply penalties in its maximum, if appropriate, or dissolution or cancellation.

In the event of two or more mitigating circumstances, excluding aggravating ones, for simple offenses, court shall apply only one penalty, with no limit of its legal extension. For crimes, it shall apply two of the sanctiones listed for simple offenses.

In the event of several mitigating circumstances and the aggravating one, signaled by this law, this shall be rationally compensated with any of the mitigating circumstances, adjusting penalties to the ones listed in previous clauses.

Article 17.- Rules of judicial determination of the penalty. In order to regulate quantum and nature of the imposing penalties, court must meet, socializing its arguments in the very same sentence, the following criteria:

1) Amounts of money involved in the crime commission.
2) Size and nature of the legal entity.
3) Economic capacity of the legal entity.
4) Degree of subjection and compliance of the legal and regulatory rule along with technical rules of mandatory observance, regarding its line of work or usual activity.
5) Full extent of the damage caused by the offense.
6) Seriousness of the social and economic consequences or, if applying, serious damages the penalty might cause to the community, in case of State enterprises or public utility services providers.

Article 18.- Succession of criminal responsibility of the legal entity. In the event of transformation, fusion, acquisition, partitioning, winding-up agreement of the legal entity which holds responsibility for one or more crimes of those listed in article 1°, its responsibility derived from previous offenses shall succeed to the legal entities which are a result of those operations, if any, according to the following rules, all of this with no prejudice of bona fide third parties rights.

1) In case of imposing a fine, in the event of transformation, fusion or acquisition of a legal entity, the resulting legal entity must respond for all the quantum. In case of partitioning, resulting legal entities will hold joint liability for its payment.
2) In cases of winding-up agreements of a profit-seeking legal entity, fine shall be succeeded to partners and capital stakeholders, who will respond until the limit of value of the assigned liquidation quota.
3) In case of any other penalty, judge must appreciate, regarding pursued objectives, its convenience. To adopt this decision, he must consider, above everything, the substantial continuity of material and human resources, along with the developed activity.
4) Since the request of the hearing of formalization of investigation against a non-profit legal entity and until accquittal or condemning sentence, as long as this is not being observed, authorization laid down in article 559 of Civil Code, shall not be granted.

Extinction of legal entity’s criminal responsibility


Article 19.- Extinction of criminal responsibility.
Legal entity’s criminal responsibility shall be extinguished by the same causes laid down in article 93 of the Criminal Code, except for the one listed in its number 1°.

Article 20 – 22

Article 20.- Investigation of criminal responsibility in legal entities.

If during investigation of any of the offenses laid down in article 1°, Public Prosecutor come to know of the probable participation of any of the individuals listed in article 3°, it will extend such investigation for the purpose to establish legal entity’s liability.

Article 21.- Application of rules concerning  the accused.

For all matters not regulated in this law, provisions concerning the defendant, accused and condemned established in Criminal Procedure Code and respective special laws must be applied to legal entities, as long as they are compatible.

Specially, there will be applicable provisions contained in articles 4° , 7° , 8° , 10, 93, 98, 102, 183, 184, 186, 193, 194 and 257 of the Criminal Procedure Code, rights and guarantees that shall be exercised by any representative of the legal entity.

Article 22.- Investigation formalization

Anytime the prosecutor finds necessary to formalize the procedure directed against the legal entity, he will request to the judge the summoning of its legal representative, according to article 230 of the Criminal Procedure Code. To proceed in this manner it will be required, at least, the request of formalization according to the rules of simplified procedure, regarding the natural person who could compromise legal entity’s responsibility according to clauses first and second of article 3°, except in the cases listed in article 5°.

This request must contain, also, individualization of legal entity’s representative.

Article 23 – 25

Article 23.- Legal entity’s representation

If summoned to testify before the court, legal representative does not appear without explanation, court shall order his arrest until the hearing, which must be celebrated in 24 hours tops since imprisonment.

If legal representative is not found, prosecutor shall request to the court the appointment of a criminal public defender, who could perform as an ad litem curator, representing the legal entity. In any case, the legal entity shall appoint a trusted defender.

Whenever the criminal procedural law requires defendant’s presence as a condition to a judicial hearing, it will be understood that such request has been satisfied through an ad litem curator or a trusted defender, as the case may be. There will be applicable the warnings listed in the first clause.

Article 24.- Inadmissibility of oportunity principle application.

Article 170 of the Criminal Procedure Code shall not apply to the legal entity’s responsibility.

Article 25.- Conditional suspension of the procedure.

Conditional suspension of the procedure shall be decreed when there is not condemn or any other conditional suspension, concerning the accused legal entity.

Judge shall dispose, if appropriate, that during the suspension period, which should not last less than six months nor more than three years, the legal entity must comply one or more of the following conditions:

1) To pay an established amount to tax benefit.
2) To deliver a certain service in community benefit.
3) Periodically report his financial state to a determined institution.
4) To implement a program to make the organization, administration and supervision model, listed in article 4, effective.
5) Any other adequate condition, taken into account the particular circumstances of the case, and as long as it is based on a proposal by the Public Prosecutor.

Whenever the judge imposes the number 1) measure, he must communicate this to the General Treasury of the Republic.

Article 26 – 29

Article 26.- Determination of the applicable procedure to legal entity’s responsibility.

If the prosecutor, in accusing according to the rules of the simplified procedure, requests the application of any of the penalties settled to simple offenses, in their minimum grade, knowledge and sentence of those will be performed in concordance with the rules of simplified procedure.

Whenever the prosecutor asks only crime or simple offense penalties, in their medium grade, knowledge and sentence will be performed according to the rules of oral judgement in Title III of Book II of the Criminal Procedure Code.

If the prosecutor requests or accuses both the natural and the legal person at the same time, it will follow the rules of the natural person, except on crime penalties.

In regards to criminal responsibility of legal entities, monitory procedure shall not be performed.

Article 27.- Abbreviated procedure.

Procedure established in articles 406 and so on of the Criminal Procedure Code shall be aplicable to determine responsibility and legally established sanctions.

This procedure must be followed in order to know and judge facts on whose behalf the prosecutor requests one or more penalties of simple offense. The court shall not impose any penalty superior nor unfavorable to the one requested by the prosecutor.

Article 28.- Legal entities defense.

Every legal entity with no access through its own means, will have the right to a criminal public defender appointed by the judge.

Article 29.- Condemn Suspension.

If condenatory sentence sets any penalty of simple offense in its mínimum grade, it will be posible, through founded resolution and exceptionally, considerating number of workers or annual level of sales or exportation amounts, to dispose suspension of condemn and its effects for a period not lesser than six months, nor longer than two years. In this case, the court shall not apply accessory penalty of confiscation.

In case of State enterprises or enterprises who delivers any public utility service, whose interruption might cause severe social and economic damages, judge shall dispose the suspension, disregarding the sentenced penalty.

When the period mentioned in the first clause have expired without the legal entity being requested nor formalized again, the court shall invalidate the sentence and, instead of it, shall decree the definitive dismissal of the case.

This suspension does not affect civil responsibility derived from the offense “.

Third article.- It is hereby introduced, in the article 28 of N. 19.913 Law, which enacts the Financial Analysis Unit and modifies diverse provisions on matters of money laundering, the following second clause:

“Whenever the association has been formed through a legal entity it will be disposed, also, as an accesory consequence of the imposed penalty to the individuals responsible, the dissolution or cancellation of the legal entity.”. Be it enacted as a Law of the Republic.

Santiago, November 25th 2009.- MICHELLE BACHELET JERIA, President of the Republic.- Andrés Velasco Brañes, Treasure Ministry.- Edmundo Pérez Yoma, Interior Ministry.- Mariano Fernández Amunátegui, External Relations Ministry.- Carlos Maldonado Curti, Justice Ministry.

Which I hereby transcribe to your knowledge.- Presenting her compliments, María Olivia Recart Herrera, Treasure Subsecretary.