CHILE Law and Practice Contributed by: Jorge Bofill and César Ramos, Bofill Escobar Silva Abogados
1.7 Prevention of Defendants Dissipating or Secreting Assets To prevent a defendant from dissipating assets or secreting them to avoid the consequences of a judgment, Chilean legislation provides a vari - ety of precautionary measures to protect the economic interests of the victim, which can be requested by the victim or the prosecutor. Precautionary measures extend to any act that ensures or protects the claim deduced or the favourable sentence that could be pronounced. These measures operate in rem, since they include things such as: • the seizure of the item and its deposit; • the designation of a financial controller; or • a prohibition on celebrating any kind of act or contract with respect to certain goods. There is also the possibility for the judge to cre - ate an ad hoc precautionary measure, but in such specific case it is necessary for the claim - ant to offer a cross-undertaking in damages. In these cases, no court fees are payable for suspending the measure. If the defendant does not comply with the judi - cial order, they could be prosecuted for con - tempt, which could incur a punitive sentence of 541 days to five years in prison. In general, the law does not require the claim - ant to offer a warranty to insure the defendant against potential damages that they may suffer because of the precautionary measure. How - ever, Chilean criminal procedure does impose a procedural burden on the claimant to present a civil lawsuit up until 15 days before the pre - paratory hearing of the trial, or alongside the claimant’s private indictment or in adhesion to
ties they produce, the victim could then sue for compensation, regardless of whether or not the defendant has spent those proceeds on anoth - er good. In the presented case, since it is the victim suing the defendant, they could exercise their right before the criminal court that is hear - ing the criminal matter or before the competent civil court, but once they do so the possibility to concur with the other jurisdiction is lost. If the person suing is not the victim of the crime, or if the defendant is not the person being prosecut - ed for the crime, these claims must be presented before the competent civil court. A classic issue presented by money laundering is when funds that represent the proceeds of fraud have been mixed with other funds. In an effort to contain this phenomenon, Chilean law consecrates different alternatives so that the courts can issue measures to prevent assets that have an unlawful origin from being mixed with legal transactions. For example, a judge could decree a prohibition on transferring, converting, disposing of or moving funds or other goods during a certain period, without giving notice to the parties concerned. For a sentence, the law establishes a confiscation penalty in these kinds of cases. Finally, it is important to mention that Law No 21,595 on Economic and Environmental Crimes introduced a new regime regarding the confisca - tion of profits, covering the possibility of confis - cating everything obtained as a consequence of the crime, and such imposition even when there are no convictions for those responsible. 1.6 Rules of Pre-Action Conduct There are no particular rules of pre-action con - duct in relation to fraud claims.
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