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Writer's pictureCarlos E. Weffe H.
Sep 24, 20223 min read

CHILE: CORPORATE CRIME LIST WIDENS, BUT MOST TAX CRIMES ARE STILL NOT INCLUDED

Updated: Sep 26, 2022

Laws 21.325 and 21.412 seek to update and strengthen regulations related to illegal migration and arms trafficking, but the anti-corporate tax evasion efforts appear still inadequate.

The Chilean legislature has expanded the list of offenses that may give rise to criminal liability for legal entities in that country, by including a series of punishable behaviors associated with human and arms trafficking.


Indeed, Law 21.325 on Migration and Aliens published on 20 April 2021, in force as of 12 February 2022, incorporates human trafficking into the list of crimes regulated by Law 20.393, which establishes the criminal liability of legal entities.


In this regard, article 411 quater of the Chilean Criminal Code punishes the recruitment, transfer, harboring, or receipt of persons to be subjected to some form of sexual exploitation, forced labor or services, servitude, slavery or similar practices, using violence, intimidation, coercion, deception, abuse of power, taking advantage of the vulnerability or dependence of the victim, or receiving payments or other benefits to obtain the victim's consent, or promoting, facilitating or financing these practices with imprisonment and heavy fines.


Moreover, Law 21.412, published on 25 January 2022, includes within the scope of Law 20.393 the offenses typified in Title II of Law 17.798 on arms control, namely:

  • Participation or inducement in creating, organizing, staffing, or operating private militias, combat groups, or militarily organized parties. The legal description of the offense deems the offender's participation in the case of leasing or facilitating places used as storage of weapons, ammunition, or cartridges that are presumably at the disposal of the aforementioned groups.

  • Possession, possession, or carrying of firearms, ammunition, cartridges, fireworks, or explosives, their parts, devices, and pieces, including detonators, without the authorization of the competent authority or without registration in the corresponding registry.

  • Sale of ammunition or cartridges to a person who is not the possessor, holder, or bearer of a duly registered firearm, or of a caliber different from that of the registered and authorized firearm. More severe penalties apply for legal entities in whose establishments these conducts are carried out, or if any of their managing partners participate as a perpetrator in the commission of the offense, provided that their interest in the capital of the legal entity exceeds 10%.

  • Manufacture, authorization, assembly, elaboration, adaptation, transformation, import, export, transport, storage, distribution, offer, acquisition of firearms, ammunition, cartridges, fireworks or explosives, their parts, devices, and pieces, including detonators, without the authorization of the competent authority. The law provides for an aggravation of the penalty for the conclusion of arms contracts involving minors.

  • Construction, conditioning, use, or possession of facilities for the unauthorized manufacture, armament, testing, repair, practice or sporting, storage or deposit of weapons.

  • Alteration or destruction of the complementary traceability system of weapons or ammunition.

  • Carrying or transferring weapons outside authorized places of possession or possession without authorization.

However, despite its broad scope, the reform left unaltered the regime set out in Article 27.a) of Law 19.913 of 18 December 2003, as amended by Law 20.818 of 18 February 2015, as it provides for the fraudulent obtaining of tax benefits, typified in paragraph 3 of number 4 of Article 97 of Decree-Law 830 (Tax Code), as the only tax-related predicate offense to money laundering.


The relevant part of the rule provides as follows: "Anyone who, by simulating taxable transactions or through any other fraudulent maneuver, obtains tax refunds that do not correspond to him, shall be punished with the penalty of minor imprisonment in its maximum degree to major imprisonment in its medium degree and a fine of one hundred percent to four hundred percent of the tax due".


Notably, this regulation does not qualify as predicate offenses to money laundering or other equally relevant forms of tax fraud, namely:

  • Factual misrepresentation in tax returns and/or accounting, including through false invoices or any other proof of taxable transactions (Art. 97.4.1 Tax Code).

  • Fraudulent increase of VAT credits (Art. 97.4.2 Tax Code).

  • The issuance of false invoices and other documents is necessary for the commission of tax fraud performed by third parties other than the taxpayer (Art. 97.4.4 Tax Code).

Links to the Chilean legislation (in Spanish):

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