This criminal offense seeks to criminally punish conflicts of interest in the context of asset management associated with the crime of incompatible negotiation.
The crime of incompatible negotiation, contemplated in Article 240 of the Criminal Code, generally punishes those who, through a power of disposition or administration, intervene in any negotiation, action, contract, operation or management involving an asset. This could apply to a public official or bankruptcy liquidator.
It is a criminal offense that seeks to criminally punish conflicts of interest within the framework of the management of an estate, punishing those who make relevant decisions that can be qualified as “self-hiring” or contracting with relatives or persons related for business reasons, even without the need to verify any damage to the estate in question.
A practical case is evidenced in a public employee of a municipality who, through his position, contracts services on behalf of the municipality with a company of which he (or his spouse) is the owner.
In order to understand this in a better way, it is interesting to analyze the regulatory evolution that this criminal figure has had in recent times.
Until 2018, the norm contemplated as possible perpetrators only public officials -being this the most relevant hypothesis in practice-, experts, arbitrators, commercial liquidators, guardians and executors.
It was only with Law No. 21,121 of November 2018 that the rule was systematized in various numerals and incorporating the hypothesis with the greatest impact on the business world:
“Incompatible negotiation committed by the director or manager of a corporation, as well as by any person to whom the duties established for these positions are applicable, to the extent that the conditions provided by law are violated”.
This is, in short, a prohibition of self-hiring within corporations; a prohibition that, in any case, is not absolute, since the rule refers to the rules on related party transactions (RPO) of Law No. 18,046 on corporations.
This means that, as long as the contract or operation complies with the rules on operations between related parties, the act will not be criminal, since it complies precisely with the conditions established in the law.
The last modification -but no less relevant- in this matter was introduced by the Economic Crimes Law. This new regulation limited the scope of incompatible negotiation, restricting it only to open or special corporations, leaving out the closed corporations, since a special criminal protection -in this area- was not justified for the acts performed by companies of this type.
Consequently, it is urgent that the management of open or special corporations take special note of the crime of incompatible negotiation and adopt all the steps established by law in operations with related parties.
Failure to do so may result in criminal consequences, even increased by virtue of the tightening of the regime of determination of penalties and alternative penalties introduced by the Economic Crimes Act.
To discuss these issues please contact our Criminal Litigation team:.
Gabriel Zaliasnik | Partner | gzaliasnik@az.cl
Loreto Hoyos | Criminal Group Director | lhoyos@az.cl
David Segall | Senior Associate| dsegall@az.cl
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