CHILE Trends and Developments Contributed by: Jorge Cabrera, Jaime Winter and Felipe Berríos, Winter Etcheberry
Conflict with civil claims Forfeiture may come into conflict with civil patrimo - nial claims, particularly in insolvency scenarios. Patri - monial claims grounded in civil law may thus conflict with those arising from the forfeiture action. Chilean legislation resolves this complex concurrence of patri - monial claims radically, by means of a distributive rule contained in Article 48, first paragraph, of the Criminal Code, which grants the forfeiture of gains absolute payment priority, displacing fines, procedural costs and even the civil compensation of damages caused to victims. With a view to mitigating the effects of state priority, the legislature created a special action under Articles 46 and 47 of Law 21,595 for victims who are unable to have their civil claim satisfied due to the offend - er’s insolvency. This action entitles them to proceed subsidiarily against the state itself, compelling it to pay their compensation using the very same assets that the Treasury succeeded in forfeiting in the crimi - nal proceedings. In this way, the substantial mass of confiscated assets constitutes an authentic guaran - tee fund or special purpose estate, harmonising the demands of criminal policy with restorative justice. The exercise of this restitution action is neither free nor automatic, being subject to strict cumulative condi - tions designed to protect the public purse and prevent abuse. For the action to succeed, the victim must hold, without exception, a monetary credit arising from the offence that has been judicially declared. The victim must likewise demonstrate conclusively the insuf - ficiency of assets in the convicted person’s estate, confirming that it is materially impossible to meet the pecuniary liabilities without recourse to public funds. Of equal importance, the law requires an unavoidable “direct causal link” between the harm suffered by the victim and the specific gain that was forfeited. This action is subject to a limitation period of four years. The state is not left without procedural recourse: the legislation grants it a catalogue of exceptions raised as preliminary and special procedural incidents. The state may invoke the “exception of availability of other assets”, a defence analogous to the civil benefit of excussion, whereby the Treasury obliges the victim to exhaust the search for and liquidation of the offender’s
the offence” or “for or by committing it”. This legisla - tive formulation captures not only tangible patrimonial advantages, fruits and profits derived from the invest - ment of illicit funds, but also corporate cost savings. The calculation of gains must be carried out in accord - ance with the so-called gross proceeds principle, under which the court is prohibited from deducting the expenses or costs incurred by the offender in the preparation and execution of the offence. Given the complexity of precisely reconstructing the amount of the gains, the law also authorises basing the forfeiture calculation on a simple comparison of the convicted person’s income level or on the unjustified increase in assets relative to their lawful sources of income. Effects on third parties of the forfeiture of gains To prevent the pursuit of criminal profitability from being easily evaded through corporate concealment manoeuvres or strategic transfers to family members, the legal order has had to extend the reach of for - feiture beyond the direct perpetrator of the offence, encompassing the assets of third parties. Article 24 ter of the Chilean Criminal Code strictly reg - ulates the manner in which this exception is consti - tuted, with a view to safeguarding the position of the bona fide third-party acquirer. Accordingly, forfeiture against third parties shall only proceed in the following circumstances: • gratuitous acquisition – where the third party acquired the gain on a gratuitous basis, as occurs in successions upon death or donations, given that the law affords no protection to the gratuitous receipt of assets tainted by unlawfulness; • offence committed in the interest of the third party – where the underlying offence was committed directly in the interest or for the benefit of the third party, a situation that constitutes the cornerstone of criminal liability of legal persons; • bad-faith acquirer – where the third party acquired the assets knowing, or having reasonable grounds to know, of their illicit origin at the time of the trans - action; and • capital contribution to a legal person – where a legal person has received the illicit gain material - ised as a contribution to his or her share capital.
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