Our Compliance Group Director, Yoab Bitran, spoke with LexLatin about the reform of the Public Prosecutor’s Office in Chile and its implications for how companies design and manage their compliance programs.
The reform of the Public Prosecutor’s Office in Chile expands resources and specialized units dedicated to investigating economic crimes. Companies will need to strengthen their compliance programs to address corporate criminal liability effectively.
The strengthening of the Public Prosecutor’s Office in Chile, approved in January and currently under review by the Constitutional Court prior to its publication, foresees a more scrutinized environment for companies, in a context where the prosecution of economic crimes is gaining prominence. Experts anticipate more investigations, stricter compliance standards, and a growing focus on the criminal liability of legal entities.
This reform coincides with the entry into force of Law 21,595 on Economic Crimes, which expanded the list of offenses and strengthened the criminal liability of legal entities. For Yoab Bitran, director of the Compliance Group at Albagli Zaliasnik (az),the institutional change could result in an increase in investigations and cases related to the business sector.
“One of the problems shared by various countries in the region is the lack of enforcement of enacted laws. In Chile, for example, following the entry into force of the Economic Crimes Law, doubts have been raised by various stakeholders, including the prosecuting authority itself, regarding the Public Prosecutor’s Office’s actual capacity to investigate and pursue criminal prosecution under the Law, given the urgent matters, priorities, and resources (budget and staff) at its disposal,” he explains.
More resources to investigate complex crimes
According to Bitrán, the strengthening of the Public Prosecutor’s Office will enhance its investigative capacity and oversight of criminal prosecution, which foreshadows an environment with greater enforcement and a stronger focus on complex economic crimes and the liability of legal entities.
“Simply put, this should translate into more cases,” he states.
Impact on crime prevention models
Institutional strengthening could also change the way companies manage their compliance programs. According to the director of the Compliance Group at Albagli Zaliasnik (az), a Public Prosecutor’s Office with greater investigative capacity will require companies to demonstrate that their Crime Prevention Models (CPMs) work in practice and are not limited to meeting formal requirements.
“In this context, companies must identify and prioritize risks, have adequate controls in place, establish accessible policies and practical training, and maintain governance that enables progress in the effective implementation and oversight of the model, among other aspects. In particular, it becomes essential to have traceability and evidence of compliance,” he states.
Risk Map by Industry
The impact of the reform will not be uniform across sectors. Exposure to criminal risk will depend on the nature of each industry’s operations. Bitrán warns that each industry faces specific risks and that the main challenge is to avoid standardized prevention models.
“The challenge is precisely to have models adapted to those risks, rather than copy-paste documents,” he emphasizes.
In infrastructure and construction, for example, the main risks are associated with public procurement and interaction with government officials. In mining and energy, risks linked to environmental crimes and community relations stand out.
In the case of financial services and fintech, the most relevant risks include fraud, money laundering, and cybercrime.
All in all, the attorney identifies a cross-cutting exposure factor: the operational complexity of companies.
“If I had to name one, I would say companies with more complex supply chains,” he concludes.
Read the full article here.
