On July 19, the Constitutional Court (TC) concluded the review of the Economic and Environmental Crimes Bill (“Draft Law”) and determined that it does not contain norms contrary to the Constitution. Following this decision, the bill was ready for its official enactment into law, maintaining the same terms in which it was dispatched by Congress after the Government’s veto.
On August 1, 2023, the TC issued its ruling, Rol 14.455-23 CPR, which includes the following relevant aspects:
I. ARTICLES REFERRED BY THE CHAMBER OF REPRESENTATIVES
The Chamber of Deputies referred the bill to the Constitutional Court for the purpose of submitting it to the control of constitutionality. In this case, it corresponded to the Constitutional Court to pronounce on the norms of the Bill that were included within the matters reserved by the Constituent to a constitutional organic law. The legislator requested the Constitutional Court to rule on articles 42; 47, fifth paragraph; 49, number 1; 50, numbers 22 and 29; 59, number 2, letter a), and 64, third paragraph.
II. PROVISIONS OF THE DRAFT LAW SUBJECT TO REVIEW BY THE CC
Notwithstanding the aforementioned articles, the court only ruled on article 47, fifth paragraph, and article 64, third paragraph. Additionally, it ruled on article 50, paragraphs 2 and 9, stating the following in the sentence:
a. Items not considered for review.
• Article 42 of the Draft Law
The normative provision under analysis regulates the power of the Public Prosecutor’s Office to request precautionary measures necessary to secure the assets of the accused. This, in order to allow the execution of the confiscation of profits regulated in the law.
Observation TC: the analyzed provision does not innovate competitively in the matter, nor can it be understood as creating a new attribution called to be exercised by the competent criminal judiciary, therefore, the analyzed precept constitutes a specification of duties of the Public Prosecutor’s Office. Therefore, it does not establish new attributions related to the constitutional organic law.
• Article 49, numeral one of the Draft Law
The rule under review replaces article 468 bis of the Code of Criminal Procedure, regulating the execution of the confiscation of profits and including the cases of confiscation imposed without prior conviction.
Observation TC: the analyzed provision does not innovate competently in the attributions of the courts of justice. The attribution to execute what has been ruled by a court with competence in criminal matters is already contained in the Code of Criminal Procedure, not having been considered, either, as proper of the constitutional organic law.
• Article 50, numeral 22 and numeral 29 of the Draft Law
The norm under analysis introduces amendments to Law No. 20.393, which establishes the criminal liability of legal persons.
As consulted, N°22 introduces a new article 17 quater, related to the execution of the supervision of the legal person and the designation of a supervisor of the offending legal person, while its N°29 replaces article 20 of the aforementioned law, regulating the ways of initiating an investigation of the criminal liability of the legal person, which incorporates as a way of initiating the complaint, and the accusation in those crimes that may cause serious social and economic effects.
Observation TC: No. 22 of the article does not constitute an innovation in the competence of the courts of justice, since the competence for the execution of criminal sentences is already established in Article 113 of the Organic Code of Courts. In turn, N°29 of the article in question cannot be considered as a regulation of organic constitutional rank in accordance with Article 84 of the Constitution, since it only regulates a modality of exercise of investigative powers currently in existence.
• Article 59, second paragraph, of the Draft Law
The rule under review introduces amendments to Decree Law No. 211, which sets the rules for the defense of free competition. As consulted, the provision under analysis replaces the fourth paragraph of article 63 of said normative body, regulating the mitigation of penalty for cases of cooperation with additional antecedents contained in article 39 bis.
TC Observation: The rule does not innovate competentially in the attributions of the courts of justice and is only a specification of the power to determine penalties according to circumstances modifying criminal liability. Moreover, the powers established in paragraph 4 of Article 63 of the law that is replaced by the rule under review had already been qualified as matters of common law by the TC previously (STC Rol N°3130. c. 40°).
b. Articles considered for review of constitutionality by the TC
• Article 47, fifth paragraph, of the Draft Law
The norm under review contemplates exceptions to the exercise of the civil action, establishing, as consulted, the attribution of the Public Prosecutor’s Office to request information on assets of the criminally liable party in relation to the commission of possible economic crimes. The article states that the Public Prosecutor’s Office, at the request of the State Defense Council, shall be empowered to request the relevant information from the SII and the CMF, as well as banks, financial institutions, insurance companies and legal entities subject to control.
Observation TC: the referred provision affects the attributions of the Public Ministry in accordance with article 84 of the Constitution, regarding the creation of a new prerogative within the framework of the exercise of its functions of criminal prosecution, a matter not previously regulated, and that, in such merit, affects the indicated constitutional organic law.
• Article 64, third paragraph, of the Draft Law
The provision under analysis regulates the recognition of the modifying circumstance of responsibility of effective cooperation, regulating, as consulted, the hypothesis in which it must be recognized by the substantiating court, as well as the possibility for the Public Prosecutor’s Office to reach binding agreements with whoever is recognized as a cooperator within the framework of the criminal proceeding.
TC Observation: this rule falls within the scope that the Constitution has reserved to the constitutional organic law, by regulating the powers of the criminal court in accordance with Articles 77, first paragraph, and 84 of the Constitution and affects the powers of the Public Prosecutor’s Office.
In the twenty-second recital of the sentence, the Constitutional Court points out that, without prejudice to its obligation to rule on the articles requested by the legislator, it cannot fail to rule on other provisions contained in the same bill that are in the nature of constitutional organic laws. In this sense, ex officio, it pronounces itself on the following article.
• Article 50, second and ninth paragraphs, of the Draft Law
Article 50 N°9 of the bill establishes a new cause for dissolution of political parties if their legal personality is extinguished as a result of a sanctioning sentence. The Constitutional Court determined that this provision is framed within the competencies granted by Article 19 N°15 of the Constitution, which establishes that a constitutional organic law shall regulate the aspects related to political parties, including the sanctions for non-compliance with its precepts and the possibility of dissolution.
On the other hand, Article 50 N° 2 of the bill broadens the scope of application of Law N° 20.393, which deals with the criminal liability of legal persons. This article makes the provisions of the law applicable to companies, corporations, state universities, political parties and religious persons of public law. The Constitutional Court held that this extension also falls within the scope of a constitutional organic law according to Article 19 N°15 of the Constitution.
TC Observation: In relation to political parties, Article 19 N°15 of the Constitution establishes that a constitutional organic law shall regulate the matters that concern them, including sanctions for non-compliance and the possibility of dissolution. The Court emphasized that the dissolution of parties, even by sentence of a criminal judge, has no impediments according to the Constitution.
On the other hand, Article 50 N°9 of the bill creates a new general cause for the suppression of public services created by law, such as State universities. These entities act with legal personality under public law, which is fundamental for their existence and operation. The Court pointed out that the regulation of the extinction of their legal personality constitutes part of their basic organization, which is a matter of constitutional organic law according to Article 38 of the Constitution.
Article 65 of the Constitution establishes that the creation and suppression of public services is the exclusive competence of the President of the Republic and the legislator, and does not correspond to the judiciary. Although Article 50 N°9 of the bill empowers the judge not to apply the sanction of dissolution in certain cases, the Court considered that this competence exceeds its mandate and corresponds to the legislator and the President.
Consequently, the Constitutional Court declared that Article 50 N°9 is constitutional, but emphasized that it should not be applied to state universities because its suppression is a matter of constitutional organic law and the exclusive competence of the legislator and the President of the Republic.
In its sentence, the Constitutional Court declared:
1. Articles 50, No. 2 and 64, third paragraph, of the Bill, are in conformity with the Political Constitution of the Republic.
2. Article 47, fifth paragraph, of the Bill is constitutional in the understanding that the attribution of the Public Ministry contemplated in such provision does not exempt the prosecutor from the obligation of requesting judicial authorization in the event that the information requested may eventually violate fundamental guarantees.
3. Article 50 Nº9 of the Bill is constitutional only insofar as it is not applicable to the State universities, in accordance with what has been expressed.
4. No pronouncement is issued, in a preventive review of constitutionality, of the remaining provisions of the Bill, since they do not deal with matters that affect constitutional organic law..
II. NOW, THE NEXT STEPS?
Pursuant to the provisions of Articles 36 and 37 of the Organic Law of the Constitutional Court, once the process of constitutionality control by the Constitutional Court is concluded, the Chamber of origin must proceed to send the bill to the President of the Republic for its promulgation. It is important to remember that now that the Constitutional Court has ruled on the constitutionality of the bill, no request to resolve questions on the constitutionality of the bill or of one or more of its provisions will be admitted for processing by the Court. Now, it only remains to wait for the executive to issue the promulgating decree, which will declare the existence of the law, ceasing to be a mere bill and ordering it to be enforced and published in the Official Gazette.
It should be recalled that the general provisions of the bill will enter into force on the day of its publication in the Official Gazette, without prejudice to the exceptions contemplated in Article 60 of said law. One of those exceptions contemplates the modifications and new requirements that will be included in Law No. 20.393, which establishes the criminal liability of the legal entity, which will enter into force thirteen months after its publication date. During this period, companies will have to review and strengthen their crime prevention models, as the penalties and fines established in the new regulations are very strict. This situation represents a valuable opportunity to improve comprehensive crime prevention systems and, in this way, promote adequate regulatory compliance that contributes to the safeguarding of legality and ethics in the economic and environmental sphere.