Latest updates

Legal framework for lithium gets recharged
Montt y Cia SA
  • Energy & Natural Resources
  • Chile
  • May 21 2018

Until 1979, the Mining Code 1932 defined the legal regime for lithium. During that period, lithium was treated like any other mineral and could be privately owned without special restrictions. This situation has changed with the enactment of a number of laws. Most recently, the Ministry of Mining's Supreme Decree 64 established special operation contract requirements and conditions for the exploration, exploitation and processing of lithium deposits in the Atacama region.

Conversation recorded by concealed voice recorder accepted as valid evidence
Porzio Rios Garcia
  • Employment & Benefits
  • Chile
  • May 16 2018

Evidence used in employment cases must be obtained in a lawful manner and in accordance with fundamental rights, such as due process. However, a recent Supreme Court decision has fostered debate about the protection of fundamental rights within the context of an employment relationship. The court found that a conversation recorded without consent by a concealed voice recorder at a meeting could be considered valid evidence and did not violate the fundamental rights of the individuals recorded.

INAPI designated as international searching and preliminary examining authority
Montt y Cia SA
  • Intellectual Property
  • Chile
  • May 07 2018

In 2015 the National Institute of Industrial Property (INAPI) was designated as an international searching authority (ISA) and international preliminary examining authority (IPEA) under the Patent Cooperation Treaty. From January 1 2018, the INAPI can issue international search and preliminary examination reports for Chilean applicants and applicants from Latin American and Caribbean countries that have designated the INAPI as their ISA and IPEA.

Supreme Court casts doubt on non-unionised employees' right to collective bargaining
Porzio Rios Garcia
  • Employment & Benefits
  • Chile
  • May 02 2018

The right to collective bargaining for non-unionised employees is a contentious issue following the recent labour reform. The Supreme Court recently decided on constitutional protective action, finding that the Labour Inspectorate need not register a collective agreement with a non-union employee group. Although this has not rendered such agreements illegal, it has increased the uncertainty around them and may discourage them in future.

Navigating choppy waters – new wreck removal provisions introduced
JJR Abogados
  • Shipping & Transport
  • Chile
  • May 02 2018

Law 21,066 recently came into force and amended the Navigation Law in connection with the extraction of sunk or stranded vessels and harmful materials contained therein. The changes strengthen marine environment preservation and navigation safety, and the new faculties granted to the Maritime Authority in respect of ships or craft whose condition poses a risk or danger represent a positive change.

Tax implications for foreign mergers
Montt y Cia SA
  • Corporate Tax
  • Chile
  • April 06 2018

A business group recently requested an advance ruling from the Internal Revenue Service regarding the merger of a Chilean subsidiary with a company resident in a low-tax jurisdiction. The service stated that pursuant to Article 64 of the Tax Code, it will not exercise its assessment authority where it has been effectively proven that the legal effects of a merger in another country will be carried out in accordance with Chilean legislation and that the operation will be carried out under the terms of tax neutrality.

SoE orders permanent closure of Pascua Lama mine
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • March 26 2018

The Superintendence of the Environment (SoE) recently issued an environmental resolution ordering the permanent cessation of Compañía Minera Nevada (CMN) SpA's Pascua Lama mining project. After having considered the background and evidence provided during the investigative process, the SoE ordered the permanent closure of the mining site based on a number of breaches and imposed a series of fines. CMN SpA has filed a complaint against the resolution.

Technology and innovation support centre inaugurated
Montt y Cia SA
  • Intellectual Property
  • Chile
  • March 05 2018

The National Institute of Industrial Property (INAPI) recently inaugurated its technology and innovation support centre, which was backed by the World Intellectual Property Organisation. The INAPI also recently implemented an advanced electronic signature programme, strengthened security measures to safeguard information and initiated a pilot plan that will enable the institute to become a paperless organisation.

Recognition of salvors' rights to limit liability
JJR Abogados
  • Shipping & Transport
  • Chile
  • February 28 2018

A limitation fund was recently constituted in the context of a salvage and towage operation. The plaintiffs opposed the fund's constitution, arguing that, under Chilean law, salvors are not entitled to limit their liability. The Valparaiso Second Civil Court rejected the opposition and upheld the limitation fund. The decision is one of the most relevant substantive decisions in this regard and should provide future certainty in the safeguarding salvors' rights to limit their liability.

Defining permanent establishments for tax purposes
Montt y Cia SA
  • Corporate Tax
  • Chile
  • February 02 2018

The Tax Department recently issued Circular 57, which provides a definition of a 'permanent establishment' for domestic law purposes and underlines that such fixed places of business require a tax registration number. Although the circular has been issued with a limited scope, it may have additional benefits, including identifying whether a foreign entity or individual has a permanent establishment operating in Chile.

Lights on – El Pelicano solar park opened
Montt y Cia SA
  • Energy & Natural Resources
  • Chile
  • January 29 2018

The El Pelicano solar park, a photovoltaic power plant located north of Santiago, was recently opened. The plant, which represents an investment of $250 million, has a capacity of 110 megawatts (MW) and will provide approximately 42% of the energy required by the Santiago subway system. In 2014 solar power in Chile had an installed capacity of 11 MW. With the launch of the El Pelicano project, this capacity has risen to 2,100 MW.

Supreme Court decision on completion of title for water rights
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • January 15 2018

A recent Supreme Court of Justice decision required the applicant in a proceeding initiated to complete the good and legal title of surface water rights to notify all holders of water rights in the same watershed to which the application referred. Failure to involve other rights holders in the same river basin in the respective proceedings, as required by this decision, could render subsequent proceedings obsolete and thus result in the loss of considerable time for the applicant.

New law reforms IP Act and creates new ministry
Montt y Cia SA
  • Intellectual Property
  • Chile
  • December 18 2017

Law 21,045, which was recently published in the Official Gazette, created the Ministry of Culture, Arts and Patrimony and reformed the IP Act through the creation of the National Cultural Patrimony Service. Under the changes introduced, the Intellectual Rights Department is now under the auspices of the National Cultural Patrimony Service. As a result, all IP matters are now part of the new Ministry of Arts, Cultures and Patrimony.

Interpretation of international arbitration agreements
González & Rioseco Abogados
  • Arbitration & ADR
  • Chile
  • December 07 2017

As with any other contract, general rules of interpretation are crucial to ascertain the scope and reach of arbitration agreements. The Supreme Court recently missed the chance to provide a sharper and more sophisticated decision concerning the applicable legal rules of interpretation of arbitration agreements, which is a crucial matter for the uniform enforcement of international commercial arbitration agreements.

New competition control procedure for mergers introduced
González & Rioseco Abogados
  • Competition & Antitrust
  • Chile
  • November 09 2017

The latest reform of the Competition Statute introduces a preventive control procedure for merger operations that have effects in Chile. As of June 1 2017 the national economic prosecutor will undertake a control procedure for merger operations before they begin. The amendment aims to provide legal certainty and reduce the length of merger control procedures.

Supreme Court overturns decisions denying taxpayers' authority to issue tax invoices
Montt y Cia SA
  • Corporate Tax
  • Chile
  • November 03 2017

The Supreme Court recently revoked two appeal court decisions in which the underlying issue was the Tax Department's authority to deny taxpayers the ability to issue invoices in certain circumstances. It is unclear whether the Tax Department will review its criteria in this regard, as court decisions in Chile affect only the parties in the specific case.

Green tax on industrial emissions approved
Montt y Cia SA
  • Environment & Climate Change
  • Chile
  • October 23 2017

Congress recently approved a tax reform that introduced a new Pigovian or green tax and amended income and indirect tax rates. The green tax will apply directly to emissions derived from industrial processes that result in environmental damage. The new tax will be implemented before the end of 2017 and will affect industrial establishments that use boilers or turbines.

Withholding tax on interest paid on certain portfolio investments – an overview
Montt y Cia SA
  • Corporate Tax
  • Chile
  • September 15 2017

A taxpayer resident in Chile with a portfolio investment in the United States recently requested a ruling on whether he was entitled to a refund of certain withholding taxes paid by the portfolio because it included bonds issued in Chile. The taxpayer argued that withholding tax should be refunded to the beneficiary of the interest if the beneficiary is a Chilean resident. However, the Tax Department took a different view.

Disposal procedure for unclaimed shares
  • Company & Commercial
  • Chile
  • September 04 2017

Law 20,954, which amends the Corporations Act in Law 18,046, was recently published in the Official Gazette. The amendment provides that custodians of shares in public companies that hold shares on behalf of other parties must provide the Securities and Insurance Commission with the identity of those parties. Banks that act as custodians must report this information to the Superintendence of Banks and Financial Institutions.

Trademark Office rejects trademark applications for differences between applied trademark and applicant
Montt y Cia SA
  • Intellectual Property
  • Chile
  • July 31 2017

The Trademark Office recently rejected several trademark applications containing the terms 'corporation', 'corporations' or similar when the applicant was not a US-based company on the basis that they would result in error or confusion. However, the Industrial Property Appeals Court dismissed this argument and revoked the Trademark Office's decisions, stating that the law does not require a trademark to be concordant with the applicant's corporate structure or organisation.