• 20 April, 2021

    Law No. 21.325 – New Immigration and Foreigners Law

    20 April, 2021 / By Luis Parada, Gabriela Andrade and Ignacio Abogabir. On April 20, 2021, and after eight years of processing, the New Immigration and Foreigners Law (the “New Immigration Law”) was published in the Official Gazette, which replaces the current legislation, dating from 1975, and which was evidently surpassed by the reality of globalization and migratory flows, updating the Chilean institutions in this matter. About it we can point out the following: General aspects: In general terms, the New Migration Law strengthens the migratory institutionality, modifies the procedure for obtaining residence permits, and imposes obligations to the State, in terms of giving greater traceability to the migratory situation of foreigners during the different stages of the visa process. Migratory categories are modernized to the economic needs and global displacement, such as the one that recognizes the permit for seasonal employees. Residence visas must be requested from the corresponding Consulates and processed from abroad, so that foreigners will enter the country with an already determined migratory category. This restricts the current system, which freely allows the transition between the status of tourist and that of resident authorized for the development of remunerated activities, a figure that did not allow transparency from the beginning of the intentions to work of the great majority of people who entered the country as tourists. It is established that the President of the Republic will define a National Policy on Migration and Foreigners and a Council on Migration Policy is created. The National Migration Service (the “Service”) is created, which will replace the Department of Immigration (“DEM”), which will be in charge of granting, extending and revoking all residence and permanence permits, except in the case of official residents, which will be the responsibility of the Ministry of Foreign Affairs. The principle of the best interest of the child and adolescent is incorporated, indicating that the State will adopt all necessary measures to ensure the full exercise of their rights, as soon as they enter the country and regardless of the immigration status of their parents or the adults who have them in their care. It refers to the obligation of the State to create all the necessary conditions for persons with disabilities referred to in Law No. 20,422 (on Equal Opportunities and Social Inclusion of Persons with Disabilities) to be able to apply for their residence permits. An imperative prohibition of entry is established for foreigners who have been convicted, are being prosecuted, charged, accused or judicially persecuted abroad, as well as for those individuals who execute or have executed acts that Chilean laws classify as crimes against foreign security, national sovereignty or internal security. This is one of the main changes of the new regulations in relation to the previous system, whose prohibition of entry with respect to these persons was optional for the authority. The changes in the migratory categories originated by the New Migration Law will in no case affect the acquired rights of foreign citizens residing in the country. Dependents will be authorized to perform remunerated activities, subject to the conditions and restrictions to be established by the regulations. […]

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  • 7 April, 2021

    Labor Alert: Legality of the PCR testing in employees and labor risk of obtaining movement permits in quarantine for contracting companies’ employees

    07 April, 2021 / By Luis Parada, Gabriela Andrade and Diego González. Recently, the Labor Directorate (“LD”) has referred to the legality of requiring PCR tests to the company’s employees (opinions No. 1124/10 of March 30 and 1189/011 of April 1st). In these opinions, the LD has indicated the following:   As a general rule, it is considered discriminatory requiring a negative Covid-19 PCR test, as a condition for granting the work agreed in the employment agreement, to all kind of employees, new or old staff, and whether to start or to continue working for the company.   On the contrary, a PCR test can be requested as a requisite for granting the work agreed, to the extent that there is a reasonable suspicion of contact of the employee that requires going to a medical center to be tested with a PCR, in accordance with the current criteria of the health authorities.   Notwithstanding the above, in compliance with the mandate to protect the life and health of employees, the company may require its personnel to take a PCR test (without conditioning the granting of the agreed work), to the extent that this test is financed by the company. Obviously, if the result is positive for the virus, the employee will have to stop providing services and will be entitled to medical leave and the corresponding subsidy of his/her remunerations, for the period determined in accordance with the health criteria in force.   In addition, if such an examination is required by the employer, this measure must be included in the company’s Internal Regulations on Order, Hygiene and Safety. As part of the regulation to be incorporated in this document, it will be necessary to include the mechanism that ensures that this measure will be adopted in an impersonal manner, either universally or randomly, in order to avoid the risk of discrimination through this means. Questions remain opened regarding the lawfulness of conditioning work to the existence of a negative PCR, for services that require forced coexistence of employees (e.g., those who spend the night in camps) or for those employees who must directly work with groups at high risk of suffering the coronavirus disease, who even though, they may have been vaccinated, have a remaining risk of contracting the disease. As we have seen, these rulings clarify important aspects of the company’s powers and require the company to update its internal regulations. It is also important to consider, in the application of these measures, the convenience of reaching agreements with employees and unions when the examinations are to be carried out outside working hours and/or in places other than the usual workplace. Finally, in the recent opinion issued by the LD, dated April 1st, 2021 (No. 1190/012), this Government department has clarified that if, in compliance of the Rules of Movement Permits in Quarantine, a company (principal) requests permits for employees of a contracting company that provides services to the former, that cannot be interpreted as a sign of an employment relationship between the employee and the principal. Contacts For more information, please contact: Luis Parada Socio lparada@dlapiper.cl * […]

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  • 19 March, 2021

    Regulatory Alert: New Regulation of the REP Law: Goals for Containers and Packaging

    19 March, 2021 / By Felipe Bahamondez and Roberta Andreani. On March 16, Decree No. 12 of 2020 was published in the Official Gazette, which establishes collection and recovery goals and other obligations with respect to containers and packaging, which are defined as priority products in the Law of Extended Producer Responsibility and Promotion of Recycling. This regulation joins Decree No. 8 of 2019, published in January of this year regarding another category of priority products, tires, meaning that as of this date the are four missing regulations to be issued in relation to priority products defined in REP Law: (i) oils and lubricants, (ii) electrical and electronic equipment; (iii) batteries and (iv) cells. With respect to the collection and recovery goals for packaging, the regulation distinguishes between domestic and non-domestic waste and establishes certain common rules to prove compliance with the goals set. Regarding waste management systems, the regulation foresees individual and collective systems, and states that those collective systems of less than 20 producers will be able to meet their collection and recovery goals only with the waste generated by the packaging introduced into the market by the producers that are part of such management systems. One of the initiatives to reduce waste is the possibility for producers to submit to the Ministry projects to reduce waste generation, which, if approved, will mean a reduction in the recovery targets that producers will have to comply. Finally, the Decree recognizes the role of other actors such as Base Recyclers, Municipalities or associations of municipalities with legal personality, and provides guidelines on how they should regulate the matter and carry out tenders in this regard. Contacts For more information, please contact: Felipe Bahamondez Socio fbahamondez@dlapiper.cl   * This report provides general information on certain legal or commercial matters in Chile, and it is not intended to analyze in detail the matters contained in it, nor it is intended to provide a particular legal advice on them. It is suggested to the reader to look for legal assistance before making a decision regarding the matters contained in this report. This report can not be reproduced by any means or in any part, without the prior consent of DLA Piper BAZ | NLD SpA. (c).

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  • 8 March, 2021

    Legal Alert: Extension of the Employment Protection Law and New Social Security Caps

    8 March, 2021 / By Luis Parada, Gabriela Andrade e Ignacio Abogabir. Extension of Employment Protection Law benefits: On March 6, 2021, Supreme Decree N° 279, of 2021, of the Finance Ministry was published in the Official Gazette, which extends the validity of the Employment Protection Law  benefits (Law N° 21,227), and, in addition, grants the right to additional payments charged to the Social Unemployment Insurance Fund, in the indicated cases. The validity of the Employment Protection Law benefits is, as follows: Until June 6, 2021: The possibility to access to the Unemployment Insurance payments is extended, in the event of suspension of the employment relationship by an authority act that doesn’t allow to provide agreed services or by agreement of the parties, in accordance with Title I of Law N° 21,227. It is authorized to grant up to a fifteenth payments (15) charged to the Social Unemployment Insurance Fund, for the beneficiaries of its benefits and whose employment relationship is suspended by an act of authority that doesn’t allow to provide agreed services. iii. In accordance with the Parenting Protection Law (Law N° 21,247), the possibility for parents to suspend unilaterally their employment agreements is extended, while the operation of educational establishments that their children would attend remains suspended, by an authority act (it applies to children born from the year 2013). It is noted that the possibility of requesting the parental preventive medical leave due to the COVID-19 disease depends on the validity of the State of Exception of catastrophe due to public calamity, associated with the pandemic caused by the COVID-19 virus. Until July 31, 2021: the possibility of signing agreements to reduce working hours is extended. New Social Security Caps: The Pension Authority has recently reported, from February 2021, the amounts of the new social security caps. Thus, the new monthly social security caps to calculate the mandatory payments of the Pension Fund (AFP), Health Insurance and Labor Accident law system has been set at 81.6 UF (approx. USD 3,300.-). For its part, the monthly social security cap that must be considered to calculate Unemployment Insurance contributions is 122.6 UF (approx. USD 4,900.-). Social Security caps must be readjusted annually when the real remuneration index reported by the National Institute of Statistics (INE) registers positive variations, in accordance with current law. The indicated social security caps will be applied from the payment of the social security payments corresponding to the salaries of February 2021, which must be paid until March 10 of this year, but if the social security payment is made electronically, this period is extended until March, 13. Contacts For more information, please contact: Luis Parada Socio lparada@dlapiper.cl * This report provides general information on certain legal or commercial matters in Chile, and it is not intended to analyze in detail the matters contained in it, nor it is intended to provide a particular legal advice on them. It is suggested to the reader to look for legal assistance before making a decision regarding the matters contained in this report. This report can not be reproduced by any means or in any part, without […]

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  • 1 March, 2021

    Legal Alert: CMF: New exceptions to the registration of public securities offerings

    March 01, 2021 / By Diego Noguera and Jorge Timmermann On February 22, the Financial Market Commission (“FMC”) published General Rule No. 452 (“GR 452”), which exempts certain public offerings of securities from the registration requirement and amends General Rule No. 336 of 2012, which establishes securities offerings that do not constitute public offerings (“GR 336”). GR 452 adds new exceptions to those already established by General Rule No. 345, seeking to reduce financing costs, providing smaller companies with new tools to obtain resources from the public, through the issuance and offering of securities. GR 452 sets forth: 1. Excepted Public Offerings. The following public offerings are exempted from the requirement of registration of the issuer or security: i. those securities that may only be acquired by Qualified Investors; ii. those offerings made in national stock markets, provided that the total accumulated amount to be raised by the issuer or offeror in the 12 months following the first offering made in the stock exchange does not exceed the equivalent of 100,000 UF (USD 4,000,000 approx.), and that the offeror or the issuer complies with the information requirements established by the corresponding stock exchange; iii. those that establish as a requirement to complete each transaction, that the investor acquires at least 2% of the capital of the issuer; iv. those whose purpose is to compensate employees; and v. those that deal with securities that confer to their purchasers the right to membership, use or enjoyment of facilities of educational, sports or recreational establishments. 2. Amendments to GR 336. i. It incorporates, within the possibilities for an offer not to be deemed a public offer, that it be directed to a maximum of 50 investors that are not Qualified Investors. ii. It adds that in those securities offerings whose unit value is equal to or greater than 3,000 UF (USD 120,000 approx.), it will not be necessary to verify the presence of Qualified Investors or the maximum number of investors indicated in the preceding point. iii. It incorporates as a possibility that the communication of the offer be made in English. iv. Modifies the section on Responsibilities and Safeguards, by establishing that the people or entities that offer securities exempted from public offerings may obtain a declaration from the person acquiring these securities to indicate what type of investor he/she is, and the fact that he/she has become aware that the securities to be acquired are not registered in the registries kept by the FMC, and that, therefore, no public offering of these securities may be made in Chile. 3. Public Information Obligations. Those who make the offerings of exempted securities must indicate in the communication used to offer the securities, that the offering deals with securities not registered in the registries kept by the FMC, and that therefore (i) no public offering of such securities may be made in Chile, and (ii) in case the issuer of the securities is not registered in such registers, that such issuer will not be subject to the FMC’s supervision nor to the continuous information obligations required of registered issuers. 4. Information Obligations to the […]

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  • 13 January, 2021

    Legal Alert: Law about Energy Efficiency

    January 13, 2021 | By Felipe Bahamondez y Pablo González. On January 7, 2021, the Joint Commission of the National Congress approved the Draft Law about Energy Efficiency, which will soon become law, and which will enter into force once it is published in the Official Gazette. Likewise, it is noted that the terms of entry into force of these regulations vary according to the subject matter regulated and depend on the regulations to be issued for such purpose. The following is a brief description of the main issues: 1. National Energy Efficiency Plan This Plan will be issued every 5 years and will include subjects such as residential energy efficiency; minimum standards and labelling of appliances; energy efficiency in building and transport; energy efficiency and smart cities; energy efficiency in the productive sectors and education and training in energy efficiency, establishing short and medium term actions and goals. The first Plan must be submitted for approval by the Council of Ministers for Sustainability within 18 months of the publication of the law. 2. Obligation for companies to report on their energy consumption and energy intensity Quadrennial criteria will be established to determine the companies that will have to report this information to the Ministry of Energy. Without prejudice to the above, all those companies that have had during the previous calendar year a total energy consumption for final use equal to or higher than 50 tera-calories shall comply with the report. The latter will be called CCGE, by its acronym in Spanish (in English this means”Consumers with Energy Management Capacity”) and a list of them will be established annually in a resolution of the Ministry of Energy. Small companies are excluded. Additionally, the CCGE must implement one or more Energy Management Systems (“SGE” by its acronym in Spanish), covering at least 80% of its total energy consumption, which it must maintain in force while it is considered a CCGE and for one year after it loses such quality. These SGE must have at least an internal energy policy; objective, goals, action plans and energy performance indicators; an energy manager; and, operational control, measurement and verification. The SGE will be controlled by audits that must be contracted every 3 years by the CCGE. The audit companies must be approved by the Electricity and Fuel Superintendence. Finally, the CCGE will have to send annually a report of its energy consumption for final use and information about the opportunities and actions of energy efficiency carried out and projected. The above, without prejudice to other complementary provisions in this matter. 3. About the energy qualification of buildings The houses, public buildings, commercial buildings and offices must have it in order to obtain the final or definitive reception by the Direction of Municipal Works. The Director of Works will record in the building permit that the project is subject to this obligation. There will also be an energy prequalification, which will fall on the corresponding architectural project and which will be of a transitory nature, in those cases in which the qualification is carried out for a purpose other than requesting final or definitive […]

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  • 5 November, 2020

    Regulatory Alert: National Economic Prosecutor’s Office publishes market study on public purchases

    November 5, 2020 | By Felipe Bahamondez, Sofía O´Ryan y Macarena Alliende. The chilean antitrust authority, the National Economic Prosecutor’s Office (Fiscalía Nacional Económica or FNE) published the Final Report of a Market Study on Public Purchases, in which it analyzes the conditions of competition in purchases made through the public purchases mechanism, ChileCompra (regulated by Law No. 19,886). In the report the FNE stressed the need of a structural reform in the market, and made a series of recommendations, which were sent on Wednesday, November 4, to the Ministry of Finance. Regarding its fundamental findings, the FNE identified a deficiency in the planning and budget in the annual purchase of public bodies, which is why it recommended granting regulatory powers to ChileCompra and expanding those of the Public Procurement Tribunal. Additionally, the FNE proposed to advance in the digitization, inspection faculties and the modification of existing sanctions in the purchasing process. Regarding the operation and competitive performance of ChileCompra, the study focused on analyzing the three main mechanisms for selecting State providers: Public procurement: the Prosecutor’s Office highlighted the low participation of bidders in the tenders due to the lack of adequate planning, and that 20% of the bidding specifications would contain limitations to competition. To improve the bidding processes, the FNE proposed to carefully analyze the needs within the public sector and the delimitation of markets, standardize administrative aspects, and increase the times and sizes of contracts, to maximize the number of participants. Framework agreements: the FNE identified an absence of competition for-the-market and of internal rules to assign suppliers. To improve this mechanism, the FNE suggests ensuring competition for-the-market together with having supplier assignment rules based on competitive variables, in addition to improving the delimitation of markets. Direct treatment: the study found that the regulatory standards were not met to justify the use of this mechanism in most of the cases, and thus recommended to increase the control and review the design and existence of the causes that enable its use. Additionally, the FNE identified potential administrative savings if there were optimal contracting rules, and possible incentives to participate in procurement processes, if administration (payment, ttracking and monitoring) was improved. As a result of the recommendations, the FNE estimates that the State could save between USD 290 million to 855 million per year, while increasing the competition, efficiency and transparency of the purchasing process. Contacts For more information, please contact: Felipe Bahamondez Socio fbahamondez@dlapiper.cl Sofía O´Ryan Counsel soryan@dlapiper.cl * This report provides general information on certain legal or commercial matters in Chile, and it is not intended to analyze in detail the matters contained in it, nor it is intended to provide a particular legal advice on them. It is suggested to the reader to look for legal assistance before making a decision regarding the matters contained in this report. This report can not be reproduced by any means or in any part, without the prior consent of DLA Piper BAZ | NLD SpA. (c).

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  • 30 July, 2020

    Legal Alert Covid-19: New Law Facilitates Access to Medicines during Pandemics

    September 23, 2020 / By Tomás Muñoz On September 22th, 2020, Act N° 21.267 was officially published. The purpose of the Act is to facilitate access to medicine by extending the validity of medical prescriptions that were given before or during a pandemic officially decreed by the Chilean Government. In particular, this is achieved by extending the prescription validity, which correspond normally to 6 months since the physician has granted it. As so, the Act has established the following: All authorized establishments must permit access to medicines upon the presentation of a valid prescription´s copy, regardless of its physical or digital support. Prescriptions granted 6 month before a pandemic decree by the Government and those prescribed during it, will be considered valid during the pandemic and 6 months after. Regarding any other mandatory norms that authorized establishment must abide, they will still be mandatory regardless of an official pandemic decree. Misuse of prescriptions will be sanctioned according to the Sanitary Code, the Criminal Code and Lay N° 20.000, that sanctions drug trafficking and consumption, if applicable. The Sanitary Code is modified in order to eliminate the mandatory use of an Advanced Electronic Signature to grant a prescription, being replaced with the norms of a decree. Though the Act does not indicate which specific decree, the legislative discussion demonstrates that it was intended to refer to the Pharmacies Regulation, Decree N° 466. En relación a este tema, revise la alerta enviada el 8 de mayo sobre el Decreto que introduce el comercio electrónico de medicamentos. In relation with this matter, please review the legal alert: Ministry of Health introduces e-commerce in medicines. Contacts For more information, please contact: Tomás Muñoz Asociado tmunoz@dlapiper.cl * This report provides general information on certain legal or commercial matters in Chile, and it is not intended to analyze in detail the matters contained in it, nor it is intended to provide a particular legal advice on them. It is suggested to the reader to look for legal assistance before making a decision regarding the matters contained in this report. This report can not be reproduced by any means or in any part, without the prior consent of DLA Piper BAZ | NLD SpA. (c).

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  • 13 July, 2020

    Legal Alert: Keys tu understanding the application of VAT/GST to digital services in Chile

    July 9, 2020 / By Rodrigo Álvarez, Germán Vargas y Gonzalo Zegers Law Nº 21.210, which Modernized our Tax Legislation, was published in the Official Gazette on February 24th, 2020. This law strengthened the process of technological and digital transformation of the Chilean Tax Authority (hereafter “Servicio de Impuestos Internos” or “SII”). This process is aimed at providing tools that enable the SII to exercise the powers and faculties established by law, especially since the aforementioned Law levied some digital services with VAT. This regulation came into full force on June 1st, 2020. As we mentioned, not all digital services are subject to VAT, some will be subject to Withholding Tax (“WHT”) and exempt from VAT and vice-versa. These are the main questions surrounding the new tax: What digital services are subject to VAT? The following remunerated services rendered in Chile by non-domiciled, non-resident providers, are subject to VAT: The intermediation of services rendered in Chile, of whatever nature, or of sales made in Chile or abroad, if the latter results in an import. The supply or delivery of digital entertainment content, such as videos, music, games or other analogue content, through downloading, streaming or other technologies, texts, magazines, newspapers and books, including for these purposes. The provision of software, storage, computing platforms or digital infrastructure. This category features: Software as a Service (“SaaS”): Rendered mainly to the end user. These services are provided through applications that run on the provider’s cloud infrastructure, which the user can access through various devices such as a web browser or cell phone. Platform as a Service (“PaaS”): Aimed mainly to app developers, who are given the tools (through a platform or cloud infrastructure) to build, compile and run their programs. Infrastructure as a Service (“IaaS”): Similar to PaaS but with fewer resources offered, allows the client to rent separate service components (mainly servers, storage, networking and data centers). Users will be responsible for handling other resources such as runtime, middleware and O/S. 4. Advertising, regardless of the medium or means through which it is delivered, materialized or executed. According to the VAT Law (“VATL”), VAT applies when services are rendered or used in Chile, regardless of whether the payment is made in Chile or abroad. Thus, it is understood that a service is rendered in Chile when the activity that generates the service is developed in Chile, regardless of the place where it is used. Whereas, for the services used in Chile, the VATL establishes a special rule, by which it presumes that a service is used in Chile, when at least two of the following situations concur: i. That the IP address of the user’s device or other geolocation mechanism indicates that they are located in Chile; ii. That the card, bank account or other means of payment used for payment of the service, are issued or registered in Chile; iii. That the billing address of the user or the place of issuance of invoices is located in Chile; or, iv. That the subscriber identity module (SIM) card of the mobile telephone used to receive the service has Chile as its country code. Therefore, if […]

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  • 7 July, 2020

    Legal Alert Covid-19: Regulation on occupational safety and health conditions for remote working or teleworking. 

    July 7, 2020 / By Luis Parada, Juan Pablo Mesías y Alfonso Bustamante On July 3rd, 2020, the Official Gazette published a Regulation that establishes “Specific Conditions on Occupational Safety and Health at Work” (the “Regulation”), applicable to workers who provide their services via “Telework” or “Remote Work” according to the newly incorporated Labor Code provisions. The Regulation establishes a series of obligations for employers, the most relevant aspects of which are described below: The employer’s duty to manage occupational risks that exist at the worker’s home or in the place where Telework or Remote Work will be carried out. Prohibiting the worker from exposing himself/herself, his/her family or third parties to dangerous or highly harmful substances for their health, as classified by current regulations. An obligation for the employer to prepare a “Hazard Identification and Risk Assessment Matrix” (the “Matrix”), which must be reviewed at least annually, and may require the technical advice of the Mutual Organizations from Law No. 16,744. The Matrix must include a psychosocial risk assessment. For the preparation of the Matrix, the Regulation establishes that the Mutual Organizations must make available to the employers a document called “Self-assessment Risks Instrument”. This document shall be delivered by the employer to its workers once remote or teleworking has begun, and workers must fill it out and return it to the employer within the period indicated in the Regulation. The employer must develop a “Work Program” that contains the preventive and corrective measures to be implemented (e.g. elimination and/or mitigation of risks), as well as measures to promote the use of protective tools and prevention of such risks. Implementation of the “Right to Know” for workers in Telework or Remote Work. Mandatory Training: Employers must train their workers (in person or remotely) at least every two years on the main safety and health measures to be considered. The regulation establishes the obligation to provide personal protection equipment and elements, which must be adequate to mitigate or control the risk, and in no case may workers be charged for their value. Other obligations: Carrying out annual evaluations and laying out control and surveillance measures, to be carried out through face-to-face or remote inspections of the workplace. The Regulation will be in force 90 days after its publication, that is, from October 1, 2020, and the inspections will be carried out by the Labor Authority. Contacts For more information, please contact: Luis Parada Partner lparada@dlapiper.cl * This report provides general information on certain legal or commercial matters in Chile, and it is not intended to analyze in detail the matters contained in it, nor it is intended to provide a particular legal advice on them. It is suggested to the reader to look for legal assistance before making a decision regarding the matters contained in this report. This report cannot be reproduced by any means or in any part, without the prior consent of DLA Piper BAZ | NLD SpA. (c) DLA Piper BAZ | NLD SpA 2020.

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  • 9 June, 2020

    Legal Alert: Financial Portability Act

    June 9, 2020 / By Mauricio Halpern, Roberta Andreani y Vicente Vergara On 9 June, 2020 was enacted the Financial Portability Act that aims to promote and simplify financial portability for individuals and micro and small companies. To this end, the Law considers portability to be an inalienable right of customers and provides three main mechanisms: 1. Two types of financial portability are regulated. The first, “Portability without Surrogacy”, aims to contract products or services with a new supplier, and to obtain the termination of existing products that the client has with an initial supplier, extinguishing the guarantees that secure them. The second type corresponds to the “Portability with Subrogation” or “Special Credit Subrogation”, by which a financial provider will become, by the sole ministry of the Law, the beneficiary of the existing guarantees associated to a product, at the time of paying the initial financial provider, for which it will not be necessary to raise and constitute a new guarantee, reducing the terms and costs that this currently implies. 2. Standardization, through a Regulation to be issued, of the information provided by financial service providers with respect to their products, facilitating the client to compare them. To this end, the Law refers to the (i) Settlement Certificate regulated in the Consumer Protection Law that contains information on the costs of their products in force, and creates and regulates the content of the (ii) Portability Offers that will contain information on the costs of the new products offered. 3. In addition, the Law regulates the process of portability, specifying the stages, terms, formalities and information to be provided by each of the parties involved, as well as the interests accrued during said process and the charges or rights to which Public Notaries and Real Estate Registry are entitled. Subjects of the Law This law shall apply to financial service providers, understood as any bank, insurance company, or any other entity supervised by the Financial Market Commission. By the other hand, the Act considers customers to be natural or legal persons who hold one or more financial products or services, and who are consumers or micro or small businesses. Portability Procedure a) It starts with the request for portability presented by the client to a new financial supplier. b) The new supplier must request from the initial supplier the certificate of settlement, and the certificate of payment of stamp tax. c) In case the new supplier decides to persevere in the process, he must send the client a portability offer. d) With the acceptance of the offer, the client grants a termination mandate to the new supplier regarding the products to be transferred, which must be fulfilled within a period to be defined by the Regulations, which cannot exceed 6 banking business days. e) The new supplier must make the arrangements to sign the products. f) In the case of guarantees on assets subject to the registration system, the new credit must comply with the legal formalities for its granting, and which are necessary to record the respective special credit subrogation. Thus, registration will be a formality of publicity, necessary to […]

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  • 1 June, 2020

    Legal Alert: Law establishing the limitation of liability for loss, theft or fraud

    June 1, 2020 / By Paulo Larrain, Ricardo López y Felipe Riedel On May 29, 2020, Law No. 21,234 (hereinafter the ”Law”) was published in the Official Gazette, which amended Law No. 20,009, changing the name of the latter to “Establishment of a regime of limitation of liability for holders or users of payment cards and electronic transactions in case of loss, theft, robbery or fraud” and replacing articles 1 to 5 of the Law. Modifications introduced by the Law are the following: 1. Title I: scope and general rules: This Law regulates the liability regime applicable in cases of loss, theft, robbery or fraud of credit cards, debit cards, payment cards with provision of funds, or any other similar system, hereinafter jointly referred to as “payment cards”, issued and operated by entities subject to the supervision of the Financial Market Commission and the regulation of the Central Bank of Chile. It also regulates the liability regime in cases of loss, theft, robbery or fraud of payment cards issued and operated by entities not subject to the supervision and regulation of the aforementioned entities, unless expressly provided otherwise. It will also apply to fraud in electronic transactions. For the purposes of this Act, payment cards and electronic transaction systems may be designated jointly as “means of payment”. Holders or users of means of payment, as well as holders of other accounts or similar systems enabling electronic transactions (referred to as ”users”) may limit their liability in the event of theft, robbery, loss or fraud, to the extent that timely notice is given to the issuer. The issuer or provider of the financial service (referred to jointly as ”issuers”) must provide qualified and free channels, available 24 hours a day and permanently, that allows the making and recording of notices to users, providing a reception and identification code. Once the notice has been received, the issuer must immediately block the means of payment to carry out transactions. In addition, the user must be sent a communication that includes the number, reception code or tracking identifier, and the date and time of the notice. For operations carried out after the notice: The issuer will be responsible. With respect to operations carried out prior to the notice: Users can claim from the issuer, within a period of 30 days, those operations with respect to which users do not know they had granted his authorization or consent. The claim may include operations carried out in the 120 calendar days prior to the date of the notice given by the user. In relation to unauthorised operations, special consideration will be given to the fact that the issuer has sent a fraud alert to the user, identifying suspicious operations, and that there is proof of receipt by the user, in accordance with the service provision contract. In cases were users do not know that they had authorised an operation, it will be up to the issuer to prove that the operation was authorised by the user and that it is registered under his name. The registration of transactions alone will not necessarily suffice to prove that the […]

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