CHILE Trends and Developments Contributed by: Francisca Levin, Benjamín Torres, María Paz Dulanto and Antonia Silva, Cuatrecasas
Chilean law does contain certain restrictions for for - eign investors in specific circumstances, and there are industry-specific regulatory requirements that apply to both domestic and foreign companies. See 1.2 Leg- islation Relating to Particular Sectors in the Law & Practice article. However, the matter has attracted increasing recent attention, particularly in response to international developments and local public debate regarding own - ership of critical infrastructure projects. For example, Chile recently signed a memorandum of understand - ing with the United States to co-operate over the sup - ply of critical rare minerals, which includes a com - mitment to “co-operate in exchanging best practices on developing new authorities or strengthening diplo - matic tools to review sales of critical mineral and rare earth assets for national security reasons, in accord - ance with their laws and regulations”. This has prompted a broader debate, particularly between legislators, academics and practitioners, over whether the adoption of an FDI screening regime is advisable in the face of the current absence of clear rules to specifically evaluate the national security and geopolitical considerations of this type of investments in the country, particularly in relation to strategic resources or sectors. This debate also follows the OECD’s “FDI Qualities Review of Chile: Boosting Sustainable Development and Diversification” report, published in 2023. The OECD highlights the importance of foreign investment and trade for the local economy and recommends that Chile improves regulatory procedures and removes barriers to public procurement for foreign companies with the aim of diversifying the type of FDI the country attracts.
In this context, two bills specifically relating to FDI were introduced recently to the Chilean Congress. First, Bill No. 18105-05 proposes the adoption of an investment screening regime for strategic sectors, critical infrastructure, operators whose impact could compromise national security, or assets whose sys - temic relevance justifies a specialised evaluation. The bill does not suggest a specific procedure for the pro - posed regime nor does it mention a specific regulatory governance. Second, Bill No. 18140-07 proposes an amendment to the Chilean Constitution incorporating the obliga - tion that “all investments affecting essential facilities, physical systems or services must make their ultimate ownership structure transparent and comply with the cybersecurity standards established by law to protect national sovereignty”. The bill does not provide further proposals on the specific regime these informational duties will be subject to. Note, however, that this is an ongoing debate, and despite recent developments none of these bills have resulted in any legislative reforms yet.
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