Identify activities with a risk of crime
Map the legal entity's activities or processes that carry a risk of criminal conduct (art. 4 No. 1).
Law 20.393 · Law 21.595 · Chile
A crime prevention model you can prove actually works
Since September 1, 2024, a model on paper does not protect a legal entity: an adequate, effectively implemented one exempts it. What Law 20.393 requires and how Snap Compliance helps you back it with evidence.
At a glance
What it governs
Corporate criminal liability
When a legal entity is criminally liable, how it is investigated and which penalties it faces. It covers every crime in articles 1 to 4 of the Economic Crimes Law and the others listed in its article 1.
Who it covers
Every private-law legal entity
Also public companies created by law; State-owned companies, corporations and universities; political parties and public-law religious legal entities (art. 2).
Who investigates
Ministerio Público
The Public Prosecutor's Office investigates and charges the legal entity, and the criminal courts decide its liability and impose the penalties (arts. 20 to 29). There is no administrative supervisor.
Reform in force
September 1, 2024
Law 21.595 was published in the Diario Oficial on August 17, 2023, and set the first day of the thirteenth following month for its changes to Law 20.393 (art. 60 No. 1).
What it requires
What Law 20.393 requires
The law does not impose a single model: it describes the one that exempts from liability. It applies to the extent the entity's purpose, business, size, complexity, resources and activities call for, and it must be effectively implemented.
Protocols to prevent and detect
Set protocols and procedures to prevent and detect criminal conduct in those activities (art. 4 No. 2).
Secure reporting channels and internal sanctions
The protocols must necessarily include secure reporting channels and internal sanctions for non-compliance (art. 4 No. 2).
Communicate it and write it into contracts
Communicate the protocols and sanctions to all workers and write them into employment and service contracts, including those of top executives (art. 4 No. 2).
An independent, resourced person in charge
Appoint one or more people in charge with independence, effective powers of direction and supervision, direct access to management and the resources they need (art. 4 No. 3).
Assessments by independent third parties
Provide for periodic assessments by independent third parties and mechanisms to improve or update the model based on them (art. 4 No. 4).
Effective implementation, not just on paper
Liability arises when the crime is favored or made easier by the lack of effective implementation of an adequate model (art. 3); the model must address its elements seriously and reasonably (art. 4).
Look at the group too
The entity can also be liable for acts committed from another legal entity that provides services managing its affairs or lacks operational autonomy from it, when there are ownership or equity ties (art. 3).
Consequences
Penalties for the legal entity
Article 8 provides for the dissolution of the legal entity, disqualification from contracting with the State, loss of tax benefits and a ban on receiving them, supervision for six months to two years, a fine, confiscation and publication of an extract of the conviction. The fine is always imposed (art. 15): 2 to 400 day-fines, each worth 5 to 5,000 UTM, and never more than 600 day-fines in total (art. 12). Dissolution applies only to felonies, with a prior conviction in the previous ten years or repeat offending, and not to public companies created by law or to providers of an essential public utility service (art. 9). To choose the other penalties, the court weighs whether a prevention model exists and how far it is implemented (art. 15). The entity is liable even if the individual who committed the act is not convicted or identified (art. 5).
How we help
How Snap Compliance helps you with Law 20.393
Compliance Agent, available today, runs the crime prevention model as a living compliance model: a catalog of regulations and risks, controls, assessments, KRIs, action plans with owners and follow-up, and a control dashboard. What article 4 requires is documented with evidence, and the findings of each independent assessment become traceable improvements. Two modules in development complete the model: the Anonymous Whistleblowing Channel, designed with cryptographic anonymity, a unique tracking code and a workflow for the ethics committee; and Risk Copilot, with inherent and residual risk matrices, AI-suggested controls and a view across the group's companies.
Snap Compliance modules
What people ask us most about Law 20.393
Which legal entities are covered by Law 20.393?
Article 2 of Law 20.393 covers private-law legal entities, public companies created by law, State-owned companies, corporations and universities, political parties and public-law religious legal entities. It makes no distinction by size: what varies with the entity's business, size, complexity and resources is how much the prevention model must cover (art. 4). Compliance Agent helps you size that model and document its controls.
When is a company criminally liable under Law 20.393?
Under article 3, when a crime listed in article 1 is committed in the course of its activity, by or with the involvement of someone holding a position or role in it or providing services managing its affairs before third parties, and the act is made easier by the lack of effective implementation of an adequate prevention model. It is not liable if the crime is committed solely against it. Compliance Agent organizes the evidence of that model.
Which crimes can a legal entity be liable for in Chile since Law 21.595?
Since September 1, 2024, article 1 of Law 20.393 includes every crime in articles 1 to 4 of the Economic Crimes Law, whether or not that law treats them as economic: among them, securities, banking, tax and environmental crimes, bribery and money laundering. It adds terrorist financing, crimes under the arms control law, human trafficking and timber theft. Risk Copilot is designed to keep those risks in a matrix.
What must a crime prevention model include under Law 20.393?
Article 4 requires four elements to be addressed seriously and reasonably, to the extent the entity's business, size, complexity and resources call for: identifying activities or processes with a risk of crime; protocols and procedures with secure reporting channels and internal sanctions; one or more people in charge with independence, powers and resources; and periodic assessments by independent third parties with improvement mechanisms. Compliance Agent organizes each element as controls with their evidence and action plan.
Who assesses the crime prevention model under Law 20.393?
The current text does not speak of certifying the model. Article 4 No. 4 requires periodic assessments by independent third parties and mechanisms to improve or update the model based on them. The law sets no frequency and does not define who counts as an independent third party, so it is wise to document why each assessor and frequency was chosen. The findings of each assessment can become action plans with owners and deadlines in Compliance Agent.
What penalties can a legal entity face under Law 20.393?
Article 8 lists dissolution of the legal entity, disqualification from contracting with the State, loss of tax benefits and a ban on receiving them, supervision, a fine, confiscation and publication of an extract of the judgment. The fine is always imposed (art. 15) and ranges from 2 to 400 day-fines, each worth 5 to 5,000 UTM (art. 12). To choose the other penalties, the court weighs whether a prevention model exists and how far it is implemented.
Does a crime prevention model exempt a company from criminal liability?
Yes, if it is adequate and effectively implemented: article 4 defines it as the model that exempts from criminal liability, and article 3 requires the crime to have been made easier by its absence. Having it on paper is not enough. A partial model still counts: its degree of implementation weighs in choosing penalties (art. 15), and adopting effective measures before charges are filed is a mitigating factor (art. 6). Compliance Agent keeps the trail of that implementation.
What role does the Public Prosecutor's Office play under Law 20.393?
The Public Prosecutor's Office investigates. If, while investigating a crime, it finds grounds for the legal entity's liability, it extends the investigation (art. 20), can charge it by summoning its legal representative (art. 22) and can request supervision as a precautionary measure (art. 20 bis). It cannot drop the case on discretionary grounds (art. 24). In a conditional suspension, the judge can order the prevention model to be implemented (art. 25). Compliance Agent keeps the model's evidence ready to show.
What does Chilean law require of the crime prevention officer?
Article 4 No. 3 of Law 20.393 requires appointing one or more people in charge of applying the protocols, with adequate independence, effective powers of direction and supervision, and direct access to management to inform it, report on their work and request measures beyond their remit. The legal entity must give them the resources and means they need, according to its size and economic capacity. Risk Copilot is designed to give that officer auditable reports to present to the board.
Is a company liable for crimes committed from another company in its group?
It can be. Article 3 extends liability to acts of a person linked to another legal entity, when that entity provides services managing its affairs before third parties or lacks operational autonomy from it, and there are ownership or equity ties between them, provided an effective model is missing. That is why protocols and reporting must reach the whole group: the Anonymous Whistleblowing Channel is designed to run several companies from one console.
Would your program withstand a supervisor's review today?
We review with you where your institution stands against these rules and what it still needs to demonstrate compliance.
Talk to a specialist