CHILE: An Introduction

The year 2023 was marked by several milestones that will have a direct impact on companies and their operations in the areas of Compliance, Intellectual Property (IP), labour relations, tax matters and technology.

Compliance  

Undoubtedly, the main challenge of 2024 will be the Economic Crimes Law, which signals a considerable expansion in the catalogue of crimes for which a legal entity may be liable. More than 200 crimes will be provided for in the law, thus toughening penalties and eliminating benefits that are currently applicable to individuals who commit offences within a business organisation.

This scenario involves severe penalties and real time sentences, with an infinitely narrower scope regarding circumstances affecting criminal liability.

In order to deal with the entry into force of this law, it will be key for companies to restructure their corporate governance areas and introduce changes in governance matters with regard to compliance.

To adapt to the new regulation, it is essential to foresee and anticipate risks, strategically addressing the characteristics of each business. This scenario will require the permanent commitment of the boards of directors and senior management in order to strategically address the roles and responsibilities associated with the new prevention system.

Both companies and individuals must be committed to preventing these criminal practices. This requires fostering a culture of ethics and transparency in all areas, as well as promoting training and awareness of the associated risks and establishing effective supervision and control measures.

Labour  

In labour matters, this year will be marked by the law that reduces the regular working time from 45 to 40 hours per week. However, it should be noted that the regular working time will be gradually reduced, ie, from 45 to 44 hours in the first year, to 42 hours in the third year and to 40 hours in the fifth year.

Although the Executive has explained its scope, doubts persist in the private sector. The Labour Directorate is currently awaiting the publication of the corresponding interpretative rulings for its application. Thus, companies will have to adopt dialogue instances and communicate with their workers and union organisations to prepare themselves for the effects that this law will have on their internal operations.

Tax 

Another issue that will be discussed during 2024 will be the new fiscal framework. From a tax point of view, it will require combining economic incentives, oriented towards the growth of a country whose economy has been greatly affected by different factors. Companies will have to prepare and effectively evaluate various measures to adapt to this new scenario.

Likewise, it will be key to reach agreements and promote collaboration between the public, private and academic sectors so that the possible new Tax Reform bill can be discussed in the coming years.

Technology  

New technologies will make their way to 2024 with the entry into force of the Fintech Law, a regulation that promotes competition and financial inclusion of innovation in the provision of financial services. The Financial Market Commission is currently in the process of drafting the General Rules. It will be a period full of challenges for companies and it is imperative that companies are prepared to face these challenges.

Along with the above, the enactment of the Framework Law on Cybersecurity and Critical Infrastructure will establish an institutional basis that promotes collaboration between the public and private sectors to prevent incidents of this type in the country. This news is undoubtedly encouraging; however, it is crucial to keep in mind that this new regulation will have to be compatible with other laws still under discussion.

One example is the Personal Data Protection Bill, which establishes new obligations, such as the duty of information and transparency, the confidentiality and secrecy of personal data, the duty of protection by design and by default in connection with the different products or services and the adoption of security measures to protect the integrity of the information. All of them play a key role in companies and their internal processes.

These processes will place Chile at a higher international standard, in a scenario where the promotion of good business practices is essential in decision making.

In relation to Artificial Intelligence, it is likely to remain one of the most relevant topics, although the legislative discussion in this area is seen as a more gradual process.

Public Law and Regulated Markets 

After 20 years in force, the regulation of public procurement in Chile will face a structural transformation which will focus on safeguarding probity, transparency and efficiency of spending through the creation of a new institutional framework with higher management standards.

The main modifications are aimed at procurement procedures, improvements to the Public Procurement Court, new powers for the Public Procurement and Contracting Directorate, while also promoting the participation of smaller companies and local suppliers.

In this regard, it is important to note that the gradual provisions will require planning and proper training of those involved. In short, this law represents a firm step towards a more transparent and efficient public management aligned with sustainability principles.

Mining and Natural Resources 

Finally, during 2023 the mining industry incorporated new regulations, namely: the new mining royalty; the National Lithium Strategy; the Law that creates the Biodiversity and Protected Areas Service (SBAP); the Storage and Electromobility Law; the National Green Hydrogen Strategy; and the Law that modifies the mining legal framework in Chile.

Two important milestones are expected to occur this year: the determination of the network of protected salt flats and the opening of tenders for Special Lithium Operating Contracts (CEOL) to move forward with exploration development. This will require reviewing how the Executive builds the bidding rules, their conditions, and the elements that exist to avoid possible litigation.

In general, it is expected that this sector will be able to recover its growth rate and encourage a better environment for investment in new projects.

Summary 

The year 2024 will be a period of significant adjustments and adaptations for companies in Chile. Those that manage to anticipate these changes, strengthen their compliance practices and promote an ethical and transparent business culture will be better positioned to face the challenges and therefore take advantage of the opportunities that arise in this new legal and regulatory landscape.