On March 27 2017 the National Economic Prosecutor (FNE)’s new Guidelines on Leniency in Cartel Cases, which replaced the previous October 2009 guidelines, entered into force.
The guidelines set out the criteria and internal procedures that the FNE uses to:
- apply the Competition Statute (DL 211);
- provide legal certainty to parties wanting to obtain leniency benefits; and
- limit the scope of discretion conferred by law to the FNE.
The guidelines follow the latest reform to the Competition Statute, which limited leniency benefits to the first two applicants. The first applicant to provide information to the FNE will be eligible for the exemption benefit and be exempted from fines and criminal liability for collusion. The second applicant will be eligible for the reduction benefit, which means that it will:
- receive a reduction of up to 50% of the fine that would have been otherwise requested;
- receive a reduction by one degree of the penalty for collusion; and
- not be required to comply with the minimum one-year prison term.
The guidelines also introduce the leniency plus concept, which was not included in the previous guidelines. This concept allows parties that cannot apply for the exemption benefit because they were not among the first or second applicants to confess a second act of collusion to the FNE. In this case, if the applicant fulfils the requirements, the FNE will grant the maximum permitted reduction for the first collusive action and the exemption benefit for the second act.
The new guidelines have also introduced the leniency officer, who is the FNE official in charge of maintaining direct communication with applicants and beneficiaries. Requests or queries concerning the availability of benefits are made via ‘www.fne.cl’ or by contacting the leniency officer by telephone or email. This innovation extends the ways in which applicants can request benefits, as the previous guidelines allowed only making an application via the FNE website.
The guidelines have also introduced a mechanism which helps to specify an applicant’s eligibility for leniency benefits. In exceptional cases, the leniency officer may order that an application meeting be held using remote communication tools.
In qualified and exceptional cases, which have been duly and previously authorised by the FNE, the applicant may submit its benefit request verbally and in English.
The guidelines include the possibility to make hypothetical enquiries, by which any person, acting on behalf of a party interested in obtaining any of the above benefits can ask the leniency officer what benefits are available regarding a violation that has occurred within a given market, without the need to identify the interested party. To make a hypothetical enquiry, the interested party must provide a description of the market in which collusion has allegedly occurred, although the specific facts that constitute the conduct need not be specified. If the leniency officer indicates that the exemption benefit is available and no benefit request is received within five days, the FNE will be entitled to initiate, ex officio, an investigation in the same market. A hypothetical enquiry does not guarantee benefits for the interested party.
The new guidelines have also established a duty to provide information in criminal cases. If the national economic prosecutor files a criminal claim regarding the conduct for which leniency is being sought, each party exempted from criminal liability, as declared by the Competition Court, must appear as a witness and provide the criminal public prosecutor and the corresponding criminal court with the information that was previously provided to the FNE.
The FNE will keep benefit requests confidential. Such confidentiality will cease when a complaint is submitted by the FNE. Nonetheless, the identity of the parties that made statements or provided background information to a benefit request will be protected, as will any other information that may affect the competitive development of its holder. The FNE will also protect the confidentiality of the information provided by applicants from requests issued by authorities or third parties using all available legal means.
The guidelines entered into force on March 27 2017 and apply to all benefit applications made from that date.
Collusion is one of the most harmful practices for competition in the market place. In order to effectively detect, penalise and deter collusion, the law establishes and regulates a leniency programme. This programme allows individuals or companies that engage in collusive conduct to be exempted from the relevant penalties or have them reduced, provided that the applicant provides information that can be used to prove the conduct and identify the parties involved.
Since the introduction of leniency in 2009, it has been used in most of the relevant collusion cases (eg, cases concerning refrigerator compressors, interurban transport companies on the Santiago-Curacavi route, suppliers of asphalt, shipping companies and tissue paper companies).
The guidelines aim to strengthen leniency in cartel cases, allow more cases of collusion to be uncovered, enable the collection of evidence that assists in proving collusive conduct and identifying the parties involved, and provide certainty to individuals or companies engaged in collusive conduct that wish to obtain leniency benefits.
For further information on this topic please contact Andrés Rioseco at González & Rioseco Abogados by telephone (+56 228 400 400) or email (firstname.lastname@example.org). The González & Rioseco Abogados website can be accessed at www.gonzalezrioseco.cl.