CHILE Law and Practice Contributed by: Jorge Bofill and César Ramos, Bofill Escobar Silva
crime-prevention model may be an exculpatory factor for the legal entity, as mentioned in 1.5 Corporate and Personal Liability . Under Chilean criminal law, the obligation to report a crime is exceptional, for example in the case of police - men, public officials when they become aware of a crime while on duty, chiefs of ports, airports, railways or bus stations, or other means of transport or freight, etc. Failure to comply with this obligation constitutes an offence, which can lead to a fine of up to USD285. 3.4 Insider Dealing, Market Abuse and Criminal Banking Law The Securities Market Law (Law No 18,045) includes several offences that violate the protection of informa - tion in transactions of securities, including adultera - tion, misuse and concealment or improper disclosure of information to be considered in sales decisions or in the terms of commercial acts involving publicly traded securities. Article 59 punishes providing false information to the market. Article 60 contains a series of offences involv - ing the fraudulent acquisition of shares without mak - ing a tender offer in cases in which it is mandatory, the use or disclosure of privileged information to obtain benefits or avoid a loss in transactions of public offer values, the improper use of values in custody and the deliberate concealment or elimination of accounting records or custody of securities. It is also worth mentioning that Law No 18,045 assumes that the directors, managers, administra - tors, principal executives and liquidators of an issuer of securities or institutional investor are in possession of privileged information. The penalties for these crimes generally range from three to ten years of imprisonment, but the circum - stances in which the crime is committed can alter these timeframes. The General Banking Act provides some specific offences that affect banking activity and bank staff. The most common crime covered by this law is related to the fraudulent obtainment of loans, where a person who, by providing false data about their situation or
assets, causes damage to the bank or financial insti - tution. It is also worth mentioning that the General Banking Act provides for a specific criminal offence that sanctions unauthorised banking activity. The pen - alties for these crimes generally range from 18 months to five years of imprisonment, but, again, the specific circumstances can alter these timeframes. Law No 21,595 slightly modifies some of the offenc - es contemplated in Law No 18,045 and introduces a new offence, consisting of the maintenance or artificial alteration of prices. 3.5 Tax Fraud Chilean criminal law does not distinguish between tax fraud and mere tax evasion, however, it requires the use of fraudulent procedures or machinations. The Chilean Tax Code, in its Article 97 No 4, sets out various hypotheses of tax fraud: • providing maliciously incomplete or false state - ments that may lead to a tax burden lower than the correct one, malicious omission in the account - ing books, the use of commercial documentation already used in previous transactions, and the use of other fraudulent procedures aimed at hiding or distorting the true amount of the transactions car - ried out or to circumvent tax; • the malicious performance, by taxpayers subject to sales and services tax or other taxes subject to withholding or surcharge, of any manoeuvre aimed at increasing the amount of credits to which they are entitled in relation to the amounts they must pay; and • obtaining tax refunds that do not correspond to the taxpayer’s actual situation, by simulating a tax operation or any other fraudulent manoeuvre. The same provision provides a penalty to any person who maliciously forges any commercial document or title, with the purpose of committing or enabling the commission of the crimes just described. In tax fraud cases, the Chilean Internal Revenue Ser - vice may proceed administratively or criminally, having the exclusive power to file the complaint that allows the Public Prosecutor to open a criminal investigation.
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