Law on Economic Crimes and Tax Crimes

November 9, 2023

The “Economic Crimes Law” was published on August 17, 2023. This rule will govern on the first day of the thirteenth month following the publication of the law, beginning its application in October 2024.

What does the law do?
It systematizes economic crimes and attacks against the environment, modifies various legal bodies that classify crimes against the socioeconomic order, and adapts the applicable penalties (large companies).
The law defines economic crimes as those that by their nature are economic and others that become economic in certain circumstances (committed in the exercise of a position in the company or those committed by a public official at the request of someone who has a position in a company, such as bribery).
In addition, the law adds crimes against the environment in the category of economic crimes.

What other crimes become economic crimes?
The receipt, laundering and laundering of assets become considered economic crimes when the acts from which the assets come are considered economic crimes or are perpetrated in the exercise of a position, function or position in a company, or when they are committed in economic or other benefit for a company.

Who is responsible for economic crimes?

All persons criminally responsible in accordance with the general rules for an act considered an economic crime.
Persons criminally responsible in accordance with the general rules for an act considered an economic crime who, at the time of their intervention, had knowledge of the circumstances of the crime.

What rules are there to determine the ruling?
The penalty established by the specific law for the specific crime is applied. However, the determination of the sentence of imprisonment or confinement, as well as its replacement, will be made according to the provisions of the special law.
Every economic crime also carries a penalty of fine, the amount of which will be established in accordance with the special law, as well as the imposition of the disqualifications and prohibitions provided for.
The fine will be set at a number of fine-days that corresponds to the extension of the custodial or restrictive sentences of liberty. The amount of the fine will be the amount that corresponds in money to the value that the court sets for each day-fine.
There will be a formula to determine the penalty, its replacement and the amount of the fine, which will be a financial penalty proportional to the seriousness of the crime and will be calculated based on the average daily income of the convicted person.

What special rule is there for determining mitigating circumstances?
The general rules on mitigating and aggravating circumstances will not apply. There will be a special rule of diminished culpability. Among other aspects, it is related to the fact that the convicted person had not sought economic benefit from the perpetration of the act for himself or another person or that the convicted person, even though he was in positions of power in the organization, did not participate in the crime by action, but rather by omission.
It will also be considered mitigating if the damage caused was limited. It will be understood that this occurs when the total damage exceeds 40 monthly tax units and does not exceed 400 UTM.
The mitigation of previous irreproachable conduct will not be considered in economic crimes.

What rules will there be regarding highly qualified mitigating circumstances?
The following will be considered highly qualified mitigating circumstances of an economic crime:

The greatly diminished guilt of the convicted person, established whenever any of the following situations occur:

The convicted person acted in the interests of needy people or out of pressing personal need.
The convicted person promptly and voluntarily took measures aimed at preventing or substantially mitigating the generation of harm to the victim or others.
The convicted person acted under pressure and in a situation of subordination within an organization.
The convicted person acted in a subordinate situation and with limited knowledge that his actions were illegal.
That the event had an amount of trifle (little value). It will be understood like this when:

The total damage does not exceed 40 monthly tax units.
Any of the mitigating causes related to the fact that the fact has not caused damage to the fiscal interest, as well as the fact that the tax due, its interests and pecuniary penalties have been paid.

What will be the aggravating factors?

The high guilt of the convicted person, with the following assumptions:

The convicted man actively participated in an intermediate position in the organization in which the crime was perpetrated.
The convicted person abusively exercised authority or power when perpetrating the act.
The convicted person had previously been punished for perpetrating an economic crime.
A person convicted of an economic crime of violating tax regulations is found in any of the following situations: he has used tax advice, false documentation,fraudulent or adulterated, or has agreed with others to carry it out or, having the status of producer, has not issued invoices, thereby facilitating tax evasion by other taxpayers.
That the event has caused harm or reported a relevant benefit. If it exceeds 400 monthly tax units and does not exceed 40,000.

What will be the highly qualified aggravating factors?
The following are highly qualified aggravating circumstances of an economic crime:

The very high guilt of the convicted person, established whenever any of the following cases occur:

The convicted person actively participated in a senior hierarchical position in the organization in which the crime was perpetrated.
The convicted person put pressure on his subordinates in the organization to collaborate in the commission of the crime.
That the event has caused very high damage.

When the event has caused damage to natural or legal persons, public or private, that in total exceeds 40 thousand monthly tax units, or has reported a benefit of that amount.
When the event has affected the supply of essential goods or mass consumption.
When the event has abusively affected individuals who belong to a vulnerable group.
In certain actions of public officials such as the appointment of a person to a public position or function, participation in an acquisition, contracting or concession procedure that exceeds one thousand monthly tax units, the supervision of economic activities or when the aggravating circumstance of more than one doer.

Are alternative penalties applied to economic crimes?
Compliance with custodial or restrictive sentences of liberty may be replaced by the court that imposes them, with any of the following:

Conditional remission (sentence is served in freedom).
Partial confinement at home.
Partial confinement in a special establishment.

In this way, the sentence of probation is not applied for major sentences.

What conditions are set for remitted sentences?
When applying conditional remission, the court will establish a period of observation that will not be less than the duration of the sentence, with a minimum of one year and a maximum of three, and will impose the following conditions on the convicted person:

Residence in a specific place, which may be proposed by the court.
Subject to administrative control and assistance from the Chilean Gendarmerie.
Exercise of a profession, trade, employment, art, industry or commerce, if the convicted person lacks known and honest means of subsistence and does not have the status of student.

What does partial home confinement consist of?
The penalty of partial home confinement consists of confinement in the condemned person’s home. Partial confinement may be daytime or weekend.
Daytime confinement is confinement in the condemned person’s home, for a period of eight continuous hours a day, which will be set between eight and twenty-two hours.
Weekend confinement will consist of confinement in the condemned man’s home between 10 p.m. on Friday and 6 a.m. on the following Monday.

What is partial confinement in a special establishment?
The penalty of partial confinement in a special establishment consists of confinement in a place specially designed for this purpose for 56 hours per week.

What does the law determine about attacks against the environment?
Anyone who, without having submitted their activity to an environmental impact evaluation and knowing that they are obliged to do so, will be punished with imprisonment or minor confinement in its minimum to medium degrees (61 days to three years):

Dump polluting substances into maritime or continental waters.
Extract continental waters, whether surface or underground, or maritime waters.
Pour or deposit polluting substances on the ground or subsoil, continental or maritime.
Dump soil or other solids into wetlands.
Extract components from the soil or subsoil.
Release polluting substances into the air.

The penalty will be imprisonment or minor confinement in its medium to maximum degrees (541 days to 5 years) if the offender perpetrates the act and is obliged to submit his activity to an environmental impact study.

What penalties will be applicable to the legal person (companies or entities)?

The extinction of the legal entity.
Disqualification from contracting with the State.
The loss of tax benefits and the prohibition of receiving them.
Supervision of the legal entity.
The fine.
The publication of an extract of the conviction.

Tax Implications of the Economic Crimes Law.

Special attention to the analysis regarding the tax crimes existing in the Tax Code (“CT”) since the crimes established in the same CT will have an expansion of the people who can commit them, along with greater penalties, being classified as economic crimes of “Second Category”:

(i) “in the exercise of a position, function or position in a company”; either
(ii) “for economic or other benefit” to a company.

Regarding criminal prosecution, as currently in force, a prior complaint or complaint must be made by the Director of the SII or the CDE.

Tax Crimes that are considered in this Law.

The crimes enshrined in the fourth paragraph of article 8 ter; numbers 4, 5, 8, 9, 12, 13, 14, 18, 22, 23, 24, 25 and 26 of article 97, and article 100, all of the Tax Code, will be within the catalog of Second-Class Economic Crimes Category.

1.- Malicious presentation of a sworn statement of simple existence of address, effectiveness of the facilities, with false data or background (Art. 8 ter, paragraph 4 of the Tax Code).

2.- Tax evasion obtained by maliciously false or incomplete declaration (Art. 97 No. 4, paragraph 1, of the Tax Code).

3.- Fraudulent obtaining of tax refunds (Art. 97 No. 4, paragraph 3, of the Tax Code).

4.-Maliciously providing false data in the initial declaration or in declarations to stamp documents (Art. 97 No. 23, paragraph 1, of the Tax Code).

5.- Concertedly facilitate the means to maliciously include false data in the indicated declarations (Art. 97 No. 23, paragraph 2, of the Tax Code).

6.- Crimes related to Invoices and Value Added Tax (“VAT”):
Malicious maneuvers to increase the amount of credits or imputations, in VAT and withholding or surcharge taxes (Art. 97 No. 4, paragraph 2, of the Tax Code).

7.- Malicious preparation or sale of invoices or other tax documents, for the commission of tax crimes (Art. 97 No. 4, paragraph 5, of the Tax Code).

8.- Malicious use of invoices or other false documents (Art. 97 No. 4, paragraph 4, of the Tax Code).

9.- Crimes related to Donations: Receiving fraudulently and repeatedly, consideration for donations that grant tax benefits. Simulate said donations (Art. 97 No. 24, paragraph 1, of the Tax Code).

10.- Deceitfully allocating donations that grant tax benefits for purposes other than those for which they correspond (Art. 97 No. 24, paragraph 2, of the Tax Code).

11.- Defraudingly and repeatedly deducting, as first category expenses, donations that the law does not allow.
authorizes (Art. 97 No. 24, paragraph 3, of the Tax Code).

12.- Trade in merchandise, securities or species that have not paid the corresponding tax
(Art. 97 No. 8 of the Tax Code).

13.- Reopening of an establishment closed by the SII (Art. 97 No. 12 of the Tax Code).

14.- The effectively clandestine exercise of commerce or industry (Art. 97 No. 9 of the Tax Code).

15.- Subtraction, concealment or disposal of species retained in the possession of the offender by the SII (Art. 97 No. 14 of the Tax Code).

16.- Destruction or alteration of seals or locks placed by the SII (Art. 97 No. 13 of the Tax Code).

17.- Malicious use, to defraud the Treasury, of true stamps or other technological means of authorization of the SII (Art. 97 No. 22 of the Tax Code).

18.- Accountants who commit falsehood or fraudulent acts when signing the client’s statements or balance sheets (Art. 100 of the Tax Code).

19.- Sale or supply of compressed natural gas or liquefied petroleum gas for vehicular consumption, understood as those carried out by people who do not have the authorizations established in the fourth paragraph of article 2 of Law No. 18,502. (Art. 97 No. 26 of the Tax Code).

20.- Illegal purchase and sale of tax control strips or tickets to public shows (Art. 97 No. 18 of the Tax Code).

21.- Acting as a Free Trade Zone user without being authorized or using the authorization to defraud to the Treasury (Art. 97 No. 25 paragraph 1, of the Tax Code).

22.- Carry out transactions with a Free Zone user knowing that they lack authorization (Art.97 N°25, paragraph 2, of the Tax Code).