Chile WT/TPR/S/220/Rev.1 
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IV. TRADE POLICIES BY SECTOR 
(1) OVERVIEW1 
1. During the review period, the agriculture and fo restry sector continued to contribute to the 
expansion and diversification of Chilean exports.  The level of ta riff protection and support for the 
sector is low, but protection may fluctuate in the case of products subject to a price band.  Domestic 
support is mainly geared to small farmers and do es not include production-based measures.  Within 
the fishing sector, aquaculture has gained in impor tance and accounts for two thirds of the sector's 
exports.  There are some restrictions on the partic ipation of foreigners in fishing and aquaculture. 
2. The mining sector accounts for over 60 per cent of  the value of Chilean merchandise exports 
and is the foremost recipient of fo reign investment.  The State continues to play a strategic role in 
mining, mainly in copper production.  The manuf acturing sector has increased its productivity, due 
partly to trade liberalization and the implementa tion of horizontal incentive policies;  the industry 
continues to make intensive use of natural resource s.  Chile depends on imports to satisfy two thirds 
of its energy consumption.  During the period u nder review, the energy sector encountered problems 
that affected the performance of the economy;  steps were taken to stabilize domestic prices and 
ensure a sustainable energy supply.  Both domestic  and foreign enterprises may participate in the 
energy sector. 
3. The services sector generates 67 per cent of Chile's GDP.  Concessions to operate public 
telecommunications services and intermediate services are granted to companies established in Chile, regardless of the origin of the capital.  Within the context of the GATS, Chile made no commitments 
on the supply of basic local telecommunications.  The establishment of financial institutions is subject 
to approval by the regulatory body.  Foreign ba nks and insurance companies may provide services in 
Chile through locally incorporated  companies or branches with separ ate capital.  Insurance companies 
were allowed to establish branches in 2007, since when foreign companies from countries with which 
Chile has a corresponding international treaty have also  been authorized to se ll international maritime 
and air transport insurance, together with insurance for goods in transit. 
4. Chile practises an "open skies" air transport policy, but makes market access for foreign 
companies subject to reciprocity.  It has concluded 43 bilateral air transport agreements with various 
degrees of openness.  Chile requires reciprocity with respect to intern ational maritime traffic cargoes.  
Cabotage is reserved for ships registered in Chile , with certain exceptions.  For a vessel to be 
registered in Chile, more than 50 per cent of the capital must be owned by Chilean persons or 
companies.  A 5 per cent tax is imposed on the in come received from international maritime freight 
charges by persons not domiciled in Chile, except wh en the country in which the foreign vessels are 
registered offers reciprocity.  There are no restric tions on foreign participation in Chilean ports and 
airports. 
5. A valid professional diploma is required to engage  in a regulated profession in Chile.  Foreign 
diplomas must be revalidated by the University of Chile, unless recognized under an international 
agreement.  Only Chileans and foreigners who ha ve studied law in Chile may practise law in the 
country.  However, foreign legal consultants may ad vise on foreign law.  Foreign engineers who have 
been hired to perform a particular job in Chile must obtain authorization from the Colegio de 
                                                     
 
1 In Chapters III and IV, the figures in Chilean pesos have been converted into United States dollars at 
an exchange rate of Ch$587.32/US$1, which corresponds to the arithmetic average of the exchange rate for the 
United States dollar over the first six months of 2009.  Unidades de Fomento  – UF (Development Units) have 
been converted into United States dollars at a rate of US$35.9/1 UF, which corresponds to the arithmetic 
average of the value of the UF over the first six months of 2009. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 84 
 
 
Ingenieros , the national engineering society.  Foreign accountants may establish a consultancy firm in 
Chile, but must have at least one partner with a di ploma valid for the practice of accountancy in Chile. 
(2) AGRICULTURE AND FORESTRY  
6. The agriculture and forestry sector has played a major role in Chile's economic development, 
contributing to the rapid expansion and diversification of its exports in recent years.  The level of 
tariff protection and support that Chile grants to  agricultural products is fairly low, although 
protection may vary in the case of products to which the price band system applies (wheat, wheat 
flour and sugar).  Although public expenditure in the agricultural sect or increased during the review 
period, aid for agricultural producers has declined considerably over the last decade.  Support is 
mainly geared to small farmers.  Chile do es not apply production-based support measures. 
(i) General characteristics 
7. Between 2003 and 2008, GDP in the Chilean agricu lture and forestry sector (which includes 
crop farming, livestock farming and fo restry but not processing) grew at a real average rate of 5.5 per 
cent a year, while the sector's share of GDP at  constant prices rose from 3.6 to 3.7 per cent.2  
Employment in the sector fell from 12.7 per cent of the total labour force in 2003 to 11.1 per cent in 
2008.3 
8. Chile is a major exporter of agri cultural and forestry products.4  In 2008, exports of these 
products amounted to US$12,743 million (as compared with US$5,934 million in 2003) and accounted for 19 per cent of total exports.  The cr op farming subsector accounted for 53 per cent of 
agricultural and forestry exports, followed by fore stry (38 per cent) and livestock farming (9 per 
cent).
5  The growth of agricultural and forestry e xports has accelerated in recent years, as new 
products such as chicken, pork, red meat and forestry products have b een added to exports of fruit and 
wine.  In 2008, the main products exported were:  grapes, coniferous and non-coniferous chemical 
wood pulp, temperate-climate fruit (berries, etc.), pork, and other products of wood.6  Chile is the 
world's fifth-ranking wine exporter and the s outhern hemisphere's leading fruit exporter.7  I n  
accordance with the definition used  in Chapter I, in 2008, ag ricultural exports amounted to 
US$15,605 million and accounted for 23.3 per cent of total exports (see Chapter I). 
9. In 2008, Chile imported agricultural products (as defined in Chapter I) with a value of 
US$4,554 million, equivalent to 8 per cent of total imports.  Chile imports a substantial proportion of 
its domestic consumption of cereals (wheat, soya, ma ize (corn), and barley),  animal and vegetable 
oils, bovine meat, and sugar. 
10. According to the National Agricultural and Fo restry Census of 2007, Chile has some 
301,000 farms, of which 73 per cent are holdings of l ess than 20 hectares, while holdings of more than 
500 hectares account for only 2 per cent.  The total ar ea allocated to crop farming, livestock raising 
and timber plantations is about 19 million hectares.  As compared with ten years ago, the census data 
on the cultivated area reveal a continuing trend away from traditional crops (cereals, pulses, root 
                                                      
2 Central Bank of Chile.  Viewed at:  http://si2.bcentral.cl/Basededatos económicos/ 
3 National Statistical Office (INE).   Viewed at:  http://www.ine.cl/ 
4 In this section, the trade data are based on the definition of "fores try and agricultural" products used 
by Chile, i.e., include crop farming, livestock farming and forestry products. 
5 Oficina de Estudios y Políticas Agrarias  – ODEPA (Office for Agricultural Research and Policy 
Development).  Viewed at:  http://www.odepa.go.cl/servlet/systems.sice.balanza 
6 Ibid. 
7 The Economist Intelligence Unit (2008). Chile WT/TPR/S/220/Rev.1 
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vegetables and fodder) towards products in which Chile  has a comparative advantage, such as fruit, 
wine and forestry products. 
11. A recent OECD study notes that Chile's agricultu ral sector has played a key role in the 
country's favourable economic pe rformance, helping to raise incomes and reduce poverty, although 
small-scale farmers have seen little change in their incomes.8  The study concludes that the sector has 
benefited from a stable macroeconomic environment and an open trade regime, characterized by a 
uniform MFN tariff of 6 per cent, and an even lo wer average effective tariff resulting from Chile's 
wide network of preferential trade agreements.  This has made possible the rapid growth of 
agricultural exports, mainly high value- added products such as wine and fruit. 
(ii) Policy objectives and institutional framework 
12. The Ministry of Agricultur e (MINAGRI), through the Oficina de Estudios y Políticas 
Agrarias  – ODEPA (Office for Agricultural Research a nd Policy Development), is responsible for the 
formulation and analysis of agricultural and forest ry policy.  During the review period, the general 
thrust of this policy has remained the same, namely :  to make Chile a food and forestry power;  to 
promote inclusive agricultural development with th e participation of the small and medium-sized 
farmer;  and to foster the sustainable use of natu ral resources and the protection of biodiversity.  
MINAGRI's Strategic Agenda 2008-2010 envisages sever al areas of action, including the promotion 
of innovation through clusters and technological co nsortia, the creation of new export markets, the 
improvement of border controls connected with the implementation of sanitary and phytosanitary 
measures, the development of animal and plant ge netics, and the protection of the environment and 
indigenous forests.9 
13. For implementing agricultural and forestry policy, MINAGRI relies on various subordinate 
bodies which include, in addition to ODEPA, the Instituto de Desarrollo Agropecuario  – INDAP 
(Institute for Agricultural Development), the Servicio Agrícola y Ganadero  – SAG (Agriculture and 
Livestock Service), the Corporación Nacional Forestal  – CONAF (National Forest Corporation) and 
the Comisión Nacional de Riego  – CNR (National Irrigation Commission).  In 2008 MINAGRI 
managed a budget equivalent to  Ch$334.795 billion (a bout US$570 million), of which 45.9 per cent 
was allocated to INDAP, 22.5 per cent to SAG, 14. 6 per cent to CONAF, 1.7 per cent to the CNR and 
1.1 per cent to ODEPA. 
14. Within the context of the Doha Development Ag enda, Chile has participated actively in the 
negotiations on agriculture and as a member of the G-2010 has submitted numerous proposals in this 
area.  Specifically, Chile is seeking ambitious results  in relation to the reduction or elimination of all 
trade-distorting forms of subsidy, and an effec tive improvement in market access, especially for 
fruit-farming products. 
15. Through the conclusion of regional trade ag reements (RTAs), Chile  has negotiated the 
opening up of markets for its agricultural products , whilst reducing the general level of domestic 
protection.  Nevertheless, in most of these agre ements certain sensitive agricultural products, for 
example, those to which the price band system a pplies, have remained subject to longer phase-out 
                                                      
8 OECD (2008). 
9 Online information from the Ministry of Agriculture, Strategic Agenda 2008-2010.  Viewed at:  
http://www.minagri.gob.cl/contenidos.php?code=DQJDAVpqB1wMR1MMWlwOCQ46MmE2M2Y2MTE%3 
10 The G-20 is composed of Argentina, Bolivia, Brazil, Chile, China, Cuba, Ecuador, Egypt, 
Guatemala, India, Indonesia, Mexico , Nigeria, Pakistan, Para guay, Peru, Philippines, South Africa, Tanzania, 
Thailand, Uruguay, Venezuela and Zimbabwe. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 86 
 
 
periods or, in some cases, excluded from tariff reducti on.  Chile considers that the expansion of its 
agricultural exports is associated with the access opportunities deriving from its RTAs. 
(iii) Agricultural support indicators 
(a) OECD 
16. According to OECD estimates, between 2004 and 2007 government aid for Chilean 
agricultural producers (Producer Support Estimate or PSE11) accounted, on average, for 4.5 per cent 
of farm income (Table IV.1).  This figure corr esponds to a little over half the aid that Chile was 
granting a decade ago and is markedly lower than the current average for the OECD countries (26 per 
cent in 2005-2007).  The Market Price Support (MPS) granted by Chile fell from 47 per cent of PSE 
in 2004 to only 13 per cent in 2007, and in 2005- 2007 the prices paid to Chilean farmers were on 
average only 1 per cent higher than international prices.12  The OECD notes that Chile does not grant 
output-based support. 
17. While the support measures that generate most  distortions have been reduced, public 
expenditure in the agricultural sector as a whol e has increased.  Between 2004 and 2007, payments to 
farmers for plot irrigation, inputs, productivity and training increased steadily, as did public 
expenditure on general agricultural services (General  Services Support Estimate or GSSE), such as 
infrastructure, research and development, and in spection services.  In 2007, the GSSE accounted for 
37 per cent of total support for the sector.13  At the same time, costs for consumers (Consumer 
Support Estimate or CSE), which take the form of  an implicit tax, decreased from 5 to 1 per cent 
between 2004 and 2007.  The Total Support Estimate (TSE), which includes transfers from consumers 
and taxpayers, as well as net budget revenues, has rema ined stable and accounts for just 0.28 per cent 
of Chile's GDP (as compared with an aver age of 0.97 per cent for the OECD countries). 
18. The OECD points out that, in general, the Chilean agricultural sector receives no more 
protection than other sectors;  that approximately  half of government spending on the sector is on 
public goods;  and that the other half is aimed at making the poorer farmers competitive.14  However, 
the OECD considers that government policies should try to help small-scale farmers diversify their 
incomes and find better paid work outside the agricu ltural sector.  Agricultural policies therefore need 
to be framed within an economy-wide context and made consistent with other policies such as 
regional incentives and social safety nets. 
Table IV.1 
Estimated support for agriculture, 2004-2007 
(Ch$ million) 
Item 2004 2005 2006 2007 
Total value of production 3,273,557 3,527,278 3,549,379 3,715,438 
 Share of MPS commodities (%)a 64 62 65 70 
 Total value of consumption 3,491,245 3,710,845 3,719,737 3,970,384 
Producer Support Estimate (PSE)b 163,801 179,243 157,112 149,008 
 Market price support (%)  47.4 45.7 27.5 12.9 
 Payments based on output (%) 0.0 0.0 0.0 0.0 
Percentage PSE (%) 5 5 4 4 
                                                      
11 The PSE includes price support, among other types of support.  Its scope is greater than that of the 
Aggregate Measure of Support (A MS) used for expressing reduction commitments in the WTO. 
12 OECD (2009). 
13 OECD (2009). 
14 OECD (2008). Chile WT/TPR/S/220/Rev.1 
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Item 2004 2005 2006 2007 
General Services Suppo rt Estimate (GSSE) 59,929 68,643 75,938 88,836 
GSSE as a share of TSE (%) 26.8 27.7 32.6 37.4 
Consumer Support Estimate (CSE) -173,913 -176,895 -69,457 -45,172 
Percentage TSE -5 -5 -2 -1 
Total Support Estimates (TSE) 223,730 247,886 233,050 237,844 
 Transfers from consumers 173,913 176,895 72,036 45,514 
 Transfers from taxpayers 145,942 165,883 189,881 218,958 
 Budget revenues -96,125 -94,892 -28,866 -26,629 
Percentage  TSE (share of  GDP, %) 0.39 0.37 0.30 0.28 
a The MPS commodities are:  wheat, maize (corn), apples, grapes , sugar, tomatoes, milk, beef and veal, pigmeat and poultry. 
b The PSE index includes various support measures.  In this table only market price support and payments based on output are 
broken down. 
Source : OECD (2008) and OECD (2009). 
 
(b) WTO 
19. Within the context of the Uruguay Round, although Chile bound most of its tariffs on 
agricultural products at a rate of 25 per cent, ce rtain products remained s ubject to a bound rate of 
31.5 per cent, namely, dairy products, wheat, wheat flour, oil-seeds and oleaginous fruit, and 
vegetable fats and oils.  Follo wing negotiations under Article XXVIII of the GATT 1994, the bound 
rate for sugar was raised to 98 per cent.  Chile did not reserve the right of recourse to the special safeguard provisions for agriculture under Ar ticle 5 of the Agreement on Agriculture. 
20. Chile did not undertake any commitments to re duce domestic support for agriculture, since 
the assistance programmes that it maintained were not covered by the definition of Aggregate 
Measure of Support (AMS) established in the nego tiations, or because their monetary value was 
below the agreed de minimis  level.
15 
21. According to Chile's domestic support notifica tions to the WTO for the period 2003-2006 and 
the year 2007, most of the official support pr ogrammes for farmers fall within the "green box" 
(measures exempt from reduction commitments) and c onsist of general services (research, training, 
advice, inspection, marketing and infrastructure) , direct payments to producers (agricultural 
insurance), and disaster relief payments.16  In 2007, the total value of this support amounted to 
Ch$105.634 billion (about US$180 million).17 
22. Moreover, Chile notified as a development progr amme (under Article 6.2 of the Agreement 
on Agriculture) investment credits with a valu e of Ch$14.477 billion (US$24.6 million) in 2007.  
Chile's only measure that satisfies the AMS definiti on is the soil recovery programme, whose value in 
2007 (Ch$26.215 billion or US$44.6 million), as in previous years, fell within the agreed de minimis  
level.18 
23. Chile has notified the WTO that it does not apply subsidies to exports of agricultural products 
that are subject to reduction commitments.19 
                                                      
15 Schedule VII-Chile, Part IV, Section I. 
16 WTO documents G/AG/N/CHL/26, of 3 December  2007, and G/AG/N/CHL/28, of 8 June 2009. 
17 WTO document G/AG/N/CHL/28, of 8 June 2009. 
18 WTO document G/AG/N/CHL/28, of 8 June 2009. 
19 WTO documents G/AG/N/CHL/23, of 21 March 2007, G/AG/N/CHL/23/Rev.1, G/AG/N/CHL/29, 
G/AG/N/CHL/30, the last three documents being dated 8 June 2009. WT/TPR/S/220/Rev.1 Trade Policy Review 
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(iv) Policy instruments 
(a) Border measures 
24. During the review period, the tariff protection provided for agricultural products remained at 
a low level.  In 2009, the average MFN tariff applied to agricultural products (ISIC definition) was 
6.1 per cent.20  All agricultural products are subject to a tariff of 6 per cent, with the exception of 
12 tariff lines relating to poultry meat21, which are subject to a tariff of 12.5 per cent, and the products 
to which the price band system applies (see below and Chapter III(2)(iv)). 
Price band system 
25. In 2001, Chile's price band system (PBS) for imports of wheat, wheat flour, sugar and 
vegetable oils was challenged by Argentina before  a WTO dispute settlement panel, which found the 
system to be incompatible with Chile's oblig ations under the Agreement on Agriculture.  In 
October 2002, the Dispute Settlement Body (DSB) a dopted the respective Panel and Appellate Body 
reports.22  In order to implement the DSB's recommendations, at the end of 2003 Chile modified the 
PBS for wheat, wheat flour and sugar and stopped appl ying that for vegetable oils.  The modification 
of the PBS is based on Law No. 19.897, publis hed on 25 September 2003, and on Supreme Decree 
No. 831 of the Ministry of Finance of 4 October 2003. 
26. Under the modified PBS, the MFN tariff applie d to imports of wheat, wheat flour and sugar 
takes the form of a compound duty consisting of two components:  (a) an ad valorem  duty (6 per cent) 
and (b) a specific duty that is added to or deducted from the ad valorem  duty.  For this purpose, a 
price band with a "floor value" and a "ceiling value"  is established in relation to a reference price.  
The latter is the average of the daily internationa l prices for wheat and sugar on the most relevant 
markets23 over a prior period.  The reference price for wheat is fixed six times a year and that for 
sugar monthly.  The upper and lower limits of the price bands for both products have been determined 
for a period that extends from December 2003 to the end of 201424 and are subject to an annual 
reduction starting from December 2007. 
27. If the reference price is lower than the "floor value", the MFN tariff is the amount of the 
ad valorem  component (6 per cent) plus the specific duty;  in its turn, the specific duty is equal to the 
difference between the "floor value" and the reference price multiplied by one (1).  The ad valorem  
equivalent of the MFN tariff may not exceed the level bound by Chile in the WTO.  If the reference price is higher than the "ceiling value", the MF N tariff is calculated as the amount of the ad valorem  
component (6 per cent) less the specific duty;  the latter is equal to the difference between the ceiling 
of the band and the reference price, multiplied by on e (1), and may not be greater than the amount of 
the ad valorem  component.  If the reference price lies between the floor and ceiling values, only the 
MFN tariff is applied.  In the case of wheat flou r, the duties or rebates determined for wheat 
                                                     
 
20 In the case of price band products, the ad valorem  equivalents provided by the Chilean authorities 
were used for calculating the average tariff. 
21 Namely, lines 0207.1300, 0207.1411, 0207.1419,  0207.1421, 0207.1422, 0207.1423, 0207.1424, 
0207.1429, 0207.1430, 0207.2600, 0207.2710, and 0207.2790. 
22 WTO documents WT/DS207/R, of 2 May 2002, and WT/DS207/AB/R, of 23 September 2002. 
23 For wheat, the most relevant markets are the Argentine bread wheat  market during the period 
extending from 16 December to 15 Ju ne of the following year and the No. 2 Soft Red Winter  market during the 
period from 16 June to 15 December.  In the case of refined sugar, the most relevant market is No. 5 white sugar  
futures contract, London Exchange , while for raw sugar it is No. 11 raw sugar contract, New York Exchange . 
24 Law No. 19.897 and Supreme Decree No. 831. Chile WT/TPR/S/220/Rev.1 
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multiplied by a factor of 1.56 are applied.  All the du ties or rebates thus calculated are established by 
Supreme Decree and published in Chile's Diario Oficial  (Official Journal). 
28. At the end of 2005, Argentina again challenged the PBS for wheat.  The corresponding Panel 
found that, in continuing to maintain a border measure  similar to a variable import tax and a minimum 
import price, Chile had failed to bring the PBS into conformity with the WTO rules.  The Panel report 
and the report of the Appellate Body, which upheld the Panel's conclusions, were adopted by the DSB 
in May 2007.25 
29. Following these findings, Chile undertook to modify the PBS for wheat and wheat flour.  In 
September 2007 a corresponding draft law was submitted to Congress and in mid-2009 it was 
awaiting approval by the Senate.  The draft law pr ovides for the replacement of the duty determined 
in accordance with the PBS by a compound tariff consisting of two fixed components:  (i) US$30 per 
tonne of wheat or US$47 per tonne of wheat flour, and (ii) the ad valorem  tariff (6 per cent);  the sum 
of these two components will determine the MFN tari ff of the two products.  The PBS will continue 
being applied to sugar imports. 
30. In a context of high international prices, the PBS appears not to have increased the tariff 
applied to wheat, wheat flour and sugar above the general level of 6 per cent.  For example, data 
provided by ODEPA for the period from December 2003 to December 2008 indicate that in 19 out of the 30 two-month periods in which reference prices  were established for wheat and wheat flour an 
MFN tariff of less than 6 per cent was applied;  in nine periods the tariff applied was equal to 6 per 
cent;  and only in two periods was a duty of more than  6 per cent applied.  In January 2009, the simple 
average MFN tariff applied under the PBS was 0 per cent for wheat and 6 per cent for sugar.
26 
Tariff quota for refined sugar 
31. In January 2002, as a result of the amendment of its Schedule of Concessions, Chile 
introduced an annual MFN tariff quota of 60,000 tonnes for refined sugar27 and at the same time 
increased the bound tariff for sugar28 from 31.5 to 98 per cent.29 
32. In-quota imports enter duty free, while the out-of-quota rate applied is 6 per cent plus the 
specific duty or rebate determined under the PBS.  The ad valorem  equivalent of the specific 
component of the band fluctuated between 37.6 per cent in 2004, -5.3 per cent in 2006 and 0 per cent in January 2009.
30 
33. According to the regulations on the administra tion of the tariff quotas for sugar, these quotas 
are intended for imports of inputs for the manufacture of food products.  Allocation is proportional to 
the total amount of sugar actually processed and used as an input in the manufacture of food 
preparations, other than sugar, placed on the domestic market by each producer during a prior 
period.31  No single importer may make use of more than 20 per cent of the quota.  Quotas are 
reserved for imports from Argentina (21,000 tonnes), Guatemala (16,700 tonnes), Brazil 
                                                      
25 WTO documents WT/DS207/RW, of 8 December 2006, and WT/DS207/AB/RW, of 7 May 2007. 
26 Information provided by the Chilean authorities. 
27 Tariff heading 1701.9900. 
28 Tariff headings 1701.1100, 1701.1200, 1701.9100 and 1701.9900. 
29 Law No. 19.772 of 8 November 2001. 
30 Information provided by the Chilean authorities. 
31 National Customs Service Resolution No. 4.062 of 29 October 2003, as amended by Resolutions 
No. 4.696 of 29 October 2004 and No. 2.897 of 29 June 2005. WT/TPR/S/220/Rev.1 Trade Policy Review 
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(9,700 tonnes) and other countries (12,600 tonnes).  The notifications, the requirements for applying 
for a quota and the quota allocations are published on the Customs website. 
34. According to Chile's notifications to the WTO32, the tariff quotas for sugar were utilized 
100 per cent or nearly 100 per cent during the period 2003-2005, 87 per cent in 2007, and 37 per cent 
in 2008.  The non-utilization of the quota in 2006 a nd its reduced utilization in 2008 were apparently 
due to the fact that the application of the PBS resulted in an MFN tariff of around zero per cent. 
35. In 2003, Chile established two additional annual quotas for sugar:   one of 30,000 tonnes for 
tariff line 1701.9100 and another of 15,000 tonnes for tariff lines 1701.91 and 1701.99.33  Against 
these quotas, the Executive can establish tariff pref erences for countries that have signed trade 
agreements with Chile, as it did in 2008 in  favour of Bolivia, Colombia and Honduras.34  Apart from 
sugar, under its RTAs Chile applies tariff quotas to imports of certain agricultural products, including 
meat products and oils. 
Other measures 
 
36. Chile has also resorted to contingency meas ures to protect certain sensitive agricultural 
products.  In fact, most of the safeguards imposed by Chile under Article XIX of the GATT 1994 
have involved products of this kind, including wheat and wheat flour, dairy products, sugar, and 
fructose.  Moreover, since the findings of the 2007 Panel, Chile has imposed anti-dumping duties on imports of wheat flour from Argentina;  these duties were still in force in June 2009 (see 
Chapter III(2)(vii)). 
(b) Domestic support measures 
37. Within the framework of its policy objectives fo r the agricultural sector, the Government of 
Chile maintains several domestic support programmes,  most of which are targeted at small-scale 
farming.  In this connection, the budget allocated  to the agricultural sector increased considerably 
during the review period to reach Ch$224, 247 million (about US$382 million) in 2008.
35  The main 
areas on which public expenditure has been concen trated are:  irrigation;  improvements in 
productivity and capacities (including preferential fina ncing);  rural development;  soil reclamation;  
research and development;  training;  sanitary an d phytosanitary measures;  and marketing and 
promotion. 
38. The development of irrigation is one of the ma in tools of Chilean agricultural policy.  The 
National Irrigation Commission (CNR) administers La w 18.450, which provides for the granting of 
subsidies to the private sector for small-scale irri gation projects costing not more than 12,000 UF 
(US$430,800) in the case of individual farmers, or 24,000 UF (US$861,600) in the case of projects undertaken by farmers' associations.  The maximum amount of the subsidy is 75 per cent of the cost 
of the project.  Moreover, the Ministry of Public  Works (MOP) invests in larger-scale irrigation 
projects intended to benefit whole communities or regions.  In 2008, total public expenditure on 
irrigation amounted to Ch$50,265 million (about  US$85.5 million), of which 80 per cent was 
administered by the CNR and 20 per cent by the MOP.
36 
                                                      
32 WTO documents G/AG/N/CHL/18, of 13 May 2005, G/AG/N/CHL/21, of 27 September 2006, 
G/AG/N/CHL/25, of 21 March 2007 and G/AG/N/CHL/27, of 31 March 2009. 
33 Law No. 19.897 of 17 September 2003. 
34 Exempt Resolution No. 8. 834 of 5 December 2008. 
35 Provisional figures provided by the Chilean authorities. 
36 Information provided by the Chilean authorities. Chile WT/TPR/S/220/Rev.1 
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39. The programmes intended to improve the prod uctivity of small-scale family farming 
(agricultura familiar campesina ) are another cornerstone of Chile's agricultural policy.  The objective 
of the Institute for Agricultural Development (INDAP) is to promote the development of this sector in 
order to turn small-scale family farms into self-sustaining productive units.  Some of INDAP's 
programmes are aimed at capitalizing and modernizi ng small farming with a view to improving its 
market integration and economic ra te of return, while other prog rammes are directed towards the 
development of human capital and include technical advisory services, business training and training for small farmers.
37  The 2009 Budget Law allocated INDAP around Ch$76,170 million (about 
US$129.6 million) to cover both kinds of programmes.38 
40. INDAP also operates credit programmes for the small farmer or campesino .  The loans 
offered may be short-term (up to  359 days), mainly to provide working capital, or long-term, to 
finance investment in capital goods and infrastructur e relating to products which take a long time to 
mature.  The budget allocated to  INDAP in 2009 for such loans amounted to Ch$38,373 million 
(about US$65.3 million).39 
41. To make it easier for small agricultural produ cers to obtain private credit, INDAP uses an 
instrument called the Bono de Articulación Financiera  (BAF) or "financial linkage subsidy".  This 
consists of an incentive for financial institutions that grant credit to small farmers and covers the 
major transaction costs associated  with these loans.  The subsidy is determined by competitive 
bidding among the institutions that have signed a participation agreement with INDAP.  In 2009, 
Ch$3,574 million (about US$6 million)  was allocated for the BAF. 
42. The Fondo de Administración Delegada  – FAD (Delegated Cash Management Fund) was 
established in 2003.  Through this fund INDAP transfer s resources to financial institutions to enable 
them to provide financing for small agricultural producers.  The resources are transferred by competitive bidding, with the financial institutions quo ting the interest rates that they will pay INDAP 
for administering the funds.  The advantages of th e FAD for the financial institutions consist in the 
mechanism for the coverage of the portfolio risk , which is partially assumed by INDAP, and access to 
resources at rates lower than the market rate.  In 200 7, a total of 15,169 loans were granted under this 
procedure for an amount in excess of  Ch$10,300 million (US$17.5 million). 
43. Faced with the shortage of credit resulting from the global financial crisis, in February 2009 
MINAGRI introduced measures to generate liquidity for input distributors and the agro-industry, so that they, in their turn, could extend credit to small agricultural producers;  the measures include 
guarantee mechanisms operating through the FAD, debt rescheduling and the purchase of debt 
portfolios, the injection of working capital a nd a general expediting of State contributions.
40 
44. Chile maintains an agricultural insurance progra mme that transfers the weather risk to which 
farm crops are exposed to private insurance companie s.  The State grants a s ubsidy of 50 per cent of 
the net insurance premium plus a fixed amount of 1.5 UF (US$54) per policy, with a maximum of 
55 UF (US$1,975);  in the case of small farmers, the subsidy can cover up to about 90 per cent of the 
net premium.  In 2009, Ch$4,2 41 million (about US$7.2 million) was allocated to agricultural 
insurance with a view to covering 16,000 policies.41 
                                                      
37 INDAP's support programmes can be viewed on its website at:  http://www.indap. gob.cl 
38 The budgeted costs includ e current transfers to the private sector plus capital transfers to the private 
sector. 
39 INDAP online information.  View ed at:  http://www.indap.gob.cl 
40 Idem . 
41 Ministry of Finance (2008), p. 38. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 92 
 
 
45. Another of the main agricultural support programmes is the Sistema de Incentivos para la 
Recuperación de Suelos  – SIRSD (System of Incentives for Soil Reclamation), whose purpose is to 
reclaim or improve degraded or eroded land.  The SIRSD involves the granting of a subsidy that varies between 50 and 80 per cent of the net costs associated with the inputs, works and technical 
assistance necessary to reclaim the soil.
42  The SAG and INDAP are responsible for administering this 
programme, INDAP's support being targeted exclus ively at small farmers.  For the purpose of 
improving 155,000 hectares of degraded soil, the 2009 budget allocated about Ch$28,000 million 
(about US$47.6 million) of resources to the SIRSD43, of which 62 per cent went to INDAP and the 
rest to the SAG. 
46. The SAG is responsible for establishing animal a nd plant health regulations, as well as for the 
corresponding inspection and certification services ( see Chapter III(2)(ix)).  The SAG's services are 
offered to the farming community, although there are some programmes targeted at individual farms, 
such as disease and pest controls and subsidies fo r improving sanitary conditions.  Much of Chile's 
favourable agricultural export performance in recent year s is due to the high standard of its sanitary 
and phytosanitary regulations.  In 2009, the SAG' s budget for this item included Ch$10,104 million  
(US$17.2 million) for controlling viniferous a nd table grape vine pests and Ch$329 million 
(US$0.5 million) for improving the competitiveness of beef producers.44 
47. Export promotion is another way in which th e Chilean Government supports farmers.  
PROCHILE provides support to help the sector's businesses increase and diversify their exports, by 
supplying market intelligence, information about business opportunities and assistance in establishing 
contacts with foreign buyers.  In 2008, the Forestry and Agricultural Export Promotion Fund had a 
budget of US$14.6 million.45 
(v) Forestry 
48. Chile has an important forestry sector that is making an ever-increasing contribution to the 
country's merchandise exports.  Timber plantations, ma inly of pine and eucalyptus, cover an area of 
2.5 million hectares.  In 2008, exports of wood prod ucts amounted to US$4,326 million, equivalent to 
6.4 per cent of total merchandise exports.46 
49. The Government has encouraged forestry activ ities by offering subsidies and favourable tax 
treatment.  The Corporación Nacional Forestal  – CONAF (National Forest Corporation), which is 
responsible for the conservation and sustainable use of woodland and forest resources, offers rebates 
of between 75 and 90 per cent of the net costs of afforestation and sustainable forest management 
activities, especially those carried out by small woodland owners.47  In 2009, it was planned to budget 
Ch$24,600 million (about US$42 million) for CONAF fo rest management, woodland area protection 
and fire control programmes.48 
                                                      
42 The SIRSD covers several programmes:  recovery of  soil phosphate fertility, lime dressing to correct 
excess acidity, establishment and regeneration of pastures, soil conservation and reclamation, and crop rotation. 
43 Ministry of Finance (2008), p. 38. 
44 Ministry of Finance (2008). 
45 Information provided by the Chilean authorities. 
46 WTO Secretariat calculations based on data provided by the Chilean authorities.  Does not include 
semi-manufactures or manufactured wood products. 
47 Decree Law No. 701 on Forest Development (1974) and amendments thereto. 
48 Ministry of Finance (2008). Chile WT/TPR/S/220/Rev.1 
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50. The Law on Indigenous Forests49 (populated by native species) was approved in 2008 and 
provides rebates to help meet the cost of reclaiming, protecting and improving indigenous forests.  In 2009, Ch$5,629 million (about US$9.6  million) was budgeted for the implementation of this law.
50 
(3) FISHING AND AQUACULTURE  
51. During the review period, the production of the Chilean fishing industry  stabilized, partly as a 
result of a fisheries management system underpin ned by medium- and long-term policies involving 
the definition of catch quotas.  Aquaculture, whic h accounts for two thirds of the fisheries sector's 
external sales, has encountered serious sanitary  problems.  The residence and establishment 
requirements for foreign natural and legal persons to participate in fishing and aquaculture are being 
maintained, as is the limit on fore ign capital in fishing enterprises. 
52. Between 2003 and 2008, the GDP of the fisheries sector, including aquaculture, grew at an 
average real rate of 4.0 per cent a year (although w ith substantial annual fluctuations), while its share 
of GDP at constant prices remained st able, amounting to 1.2 per cent in 2008.51  The fisheries sector, 
including processing activities, employs approximate ly 144,000 people (equivalent to 2 per cent of the 
national labour force), half of whom  are involved in small-scale fishing.52 
53. Since its previous Review, Chile has made pr ogress with the consolidation of its fisheries 
sector, succeeding in stabilizing landings from the main  fisheries on the basis of new legislation that 
promotes better utilization of fisheries resources.  While catch volumes have been tending to stabilize, 
aquaculture has been gaining in importance.  Chile  is the world's second producer of farmed salmon 
after Norway, with a more than 35 per cent shar e of the world market;  trout, various molluscs and 
algae are also farmed. 
54. The exports of the fisheries sector as a whole doubled in value during the period under 
review, reaching US$4,110 million in 2008.53  Aquaculture contributes 65 per cent of exports and 
caught fish the rest.  The main products exporte d are Atlantic salmon (fresh and frozen), rainbow 
trout, fish meal, Pacific salmon and jack mackerel, which together account for about 74 per cent of fisheries exports.
54 
55. The Undersecretariat of Fisheries of the Mi nistry of Economy is responsible for policy 
formulation and application of the legisla tion governing fishing and aquaculture.  The Servicio 
Nacional de Pesca  – SERNAPESCA (National Fisheries Serv ice) monitors compliance with the 
legislation and issues and applies technical regula tions and sanitary standards in the sector (see 
Chapter III(2)(ix)).  The Instituto de Fomento Pesquero  – IFOP (Institute for the Promotion of 
Fishing) carries out public-interest research in supp ort of the decisions of the fisheries authority. 
56. Under the General Law on Fisheries and Aquaculture (Supreme Decree No. 430 of 1991), 
access to fishing is regulated in order to maintain  a sustainable level of exploitation of fisheries 
resources.  There are four access regimes:  (i) a general access regime;  (ii) a regime for species being fully exploited;  (iii) a recovering fisheries regime;  and (iv) an inci pient fisheries regime.  Licences to 
fish for species classified in the first category are granted on the basis of less rigorous requirements;  
on the other hand, the granting of licences for the second category is suspended and new operators 
                                                     
 
49 Law No. 20.283 on Reclamation of the Indigenous Forest and Forest Development of 2 July 2008. 
50 Ministry of Finance (2008). 
51 Central Bank information.  Viewed at:  http://si2.bcentral.cl/Basededatoseconomicos/ 
52 Information provided by the Chilean authorities. 
53 Information provided by the Chilean authorities. 
54 Undersecretariat of Fisheries data.  Viewed at:  http://www.subpesca.cl WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 94 
 
 
may gain access only through the transfer of licence s already granted and subject to the conditions 
laid down in the law.  Special permits to fish fo r incipient or recovering species are awarded by public 
tender, are transferable and are granted for a period of ten years;  the quantity in tonnes depends on 
the annual global quota established by the Undersecretariat of Fisheries. 
57. The first five nautical miles off the Chilean co ast, the fjords and the sea islands, together with 
the inland waters, are reserved for small-scale fish ing.  Before they can catch fish, small-scale 
fishermen and their vessels must first be registered in the Small-Scale Fishing Registry.  Small-scale 
fishing is that engaged in by a vessel with a maximum length of 18 metres, not more than 80 cubic metres of hold space and a displacement of up to 50 gross register tonnes (GRT). 
58. For the purpose of distributing the annual quota allocated to the industrial fisheries sector, 
Law No. 19.713 of 2000 established maximum catch li mits per enterprise, based on the operational 
and functional parameters of the fleet.  Law No . 19.849 of 2002 extended Law No. 19.713 up to 2012 
and created the Small-Scale Harvesting Regime, which distributes among the small-scale fishing 
associations the small-scale share of th e annual quota for certain fisheries. 
59. Under the legislation, it is necessary to obtain a concession from the Ministry of Defence to 
engage in aquaculture.  SERNAPESCA and the Unde rsecretariat of Fisheries carry out technical 
studies of concession applications;  an environmen tal impact assessment is also often required.
55  In 
recent years, the procedures for obtaining aquacultu re concessions have been simplified, which has 
made it possible to speed up the granting process, with a corresponding increase in applications to 
develop aquaculture in more southe rly areas (in 2008, a total of 1,60 0 applications were submitted).  
Supreme Decree No. 125 of 2003 enacted the Nationa l Aquaculture Policy, which is intended to 
promote the economic growth of aquaculture within  a framework of environmental sustainability and 
fair access to the activity.  The pr iorities for the sector include improving the sanitary regulation of 
aquaculture products. 
60. Since Chile's last Review, there have been no changes in the legislation on foreign 
participation in the fisheries sector.  Foreign natu ral persons are not permitte d to fish in Chilean 
waters or own fish farms unless they are perman ent residents or, in the case of legal persons, 
established under Chilean law.  To engage in fishing it is necessary to hold a fishing licence issued by 
the Undersecretariat of Fisheries and be regist ered in the ship register administered by 
SERNAPESCA.  Only a Chilean natural or legal person may register a vessel in Chile.  A legal person must be established with its principal domicile and real and effective head office in Chile;  a 
majority of its directors or managers must be Chil ean;  more than 50 per cent of its capital must be of 
Chilean origin;  and the investment must be approved by the Foreign Investment Committee (see 
Chapter II(3)).
56  However, foreign participation in the fi sheries sector may be possible without capital 
restrictions on condition of reciprocity in the country of origin of the capital. 
61. To import hydrobiological species it is necessary to produce sanitary certificates issued by the 
country of origin.  Fish products to be used as inputs for the production of exportables can be 
imported only with the permission of SERNAPESCA.  The sanitary norms applicable to the fisheries sector can be viewed on the Service's website.
57  Since June 2007, the Chilean salmon industry has 
been faced with a health problem resulting from an  outbreak of the infectious salmon anaemia (ISA) 
virus.  To deal with this problem, SERNAPESCA ha s implemented a continge ncy plan which, among 
other measures, includes sacrificing cages with in fected fish, the establishment of quarantine and 
                                                      
55 The procedure for applying for aquaculture conc essions is available on the Undersecretariat of 
Fisheries website at:  http://www.subpesca.cl 
56 Article 11 of Decree Law No. 2.222 of 31 May 1978. 
57 SERNAPESCA online information.  Vi ewed at:  http://w ww.sernapesca.cl Chile WT/TPR/S/220/Rev.1 
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surveillance zones, restrictions on movement from the areas affected, biosecu rity measures, special 
harvesting conditions and permanent monitoring of the fi sh farming sites in the affected areas.  A plan 
for the rational handling and use of antibiotics in  the salmon industry has also been drawn up.  
According to the authorities, the virus has had a severe impact on production and employment.  In 
2008, it was necessary to sacrifice approximately 24, 000 tonnes and outbreaks of the virus were 
recorded at 13 per cent of the farming sites in opera tion.  It is expected that in 2009 amendments to 
the Law on Fishing, designed to improve the or ganization of this activity, will be adopted. 
62. The Fisheries Administration Fund, established by Law No. 19.849 (2002), finances fishery 
research projects, small-scale fishing promoti on projects, programmes for the surveillance and 
administration of fishing activities, and training and retraining programmes.58  In 2008, the Fund had a 
budget of US$12 million, of which US$10 million was ear marked for small-scale fishing and the rest 
for research and development.59 
63. Within the context of the Doha Development Agenda negotiations, Chile is advocating the 
introduction of WTO disciplines that specifically address the problems of distortion relating to fisheries subsidies.  To this end, Chile has submitted, individually
60 or jointly with other 
WTO Members61, several communications proposing various approaches to improving disciplines in 
the area of fisheries subsidies. 
(4) MINING  
64. During the period under review, the Chilean mini ng sector benefited from high international 
mineral prices, which enabled it to consolidate its  position as Chile's main exporter and recipient of 
foreign direct investment.  The State continues to play a fundamental role as an operator in the sector, 
mostly in copper production.  Since its last Review, Chile has introduced a specific mining tax levied on a mining company's operating income.  A regulation remains in place requiring the main mining companies to deliver a certain proportion of the copper refined to the domestic manufacturing sector. 
(i) General characteristics 
65. The output of Chile's mining sector continued to  increase in value during the review period, 
although the fall in the international prices of coppe r and other metals put th is trend into reverse 
starting in the second half of 2008.  In 2008, mini ng's share of GDP was 6. 7 per cent at constant 
prices, as compared with 8.4 per cent in 2003.
62  During the same period, employment in the sector 
remained stable at about 1.5 per cent of the total labour force.63 
66. Chile's copper mining industry is one of the larg est in the world.  Its development in recent 
years has mainly reflected the s ubstantial increase in the interna tional prices of copper and other 
metals.  Although the general mining production index increased from 100 to 114 between 2003 and 
2007, it fell back to 108 in 2008.64  The authorities have attributed the sluggish production to the lack 
                                                      
58 The programmes of the Fisheries Administratio n Fund can be viewed at:  http://www.fap.cl 
59 Information provided by the Chilean authorities. 
60 WTO documents TN/RL/W/115 and Rev.1, of 10 and 13 June 2003. 
61 WTO documents TN/RL/W/166, of 2 November 2004, TN/RL/W/196, of 22 November 2005, and 
TN/RL/W/234, of 17 July 2008. 
62 Central Bank information.  Viewed at:  http://si2.bcentral.cl/Basededatos economicos 
63 National Statistical Office (INE) data.  Viewed at:  http://www.ine.cl 
64 National Statistical Office data.  Viewed at:  http://www.ine.cl/ 
canales/chile_estadistico/estadisti cas_economicas/mineria/s eries_estadisticas/series_estadisticas.php WT/TPR/S/220/Rev.1 Trade Policy Review 
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of new high-quality deposits as a result of a dec line in exploration between 1998 and 2003 and to a 
reduction in the average grade of the ore in the country's mines. 
67. Chile is the world's leading producer and supp lier of copper, with a market share of 34 per 
cent in 200865, and its reserves are estimated at 38 per cent of world reserves.66  It is also a major 
producer of molybdenum, manganese, gold, silver, zinc and iron, and of non-meta llic minerals such as 
iodine, nitrates, borates, salt and lithium nitrate. 
68. Mining continues to be Chile's foremost recipi ent of foreign direct investment, with 45 per 
cent of the total amount invested in 2008 (under Decree Law 600) and with an annual average of 
US$947 million between 2004 and 2008.67  In 2008, mining products accounted for about 60 per cent 
of Chilean merchandise exports (Table AI.1).  Taken together, copper ore and refined copper 
accounted for 54 per cent of Chile's exports in 2008. 
69. According to the Chilean authorities, geological a nd structural factors and the maturity of the 
Chilean mining industry will help to  moderate the impact of the global crisis in the sector.  For 
example, expenditure on exploration will decline less than in the rest of the world, since enterprises 
face fewer financing restrictions in the Chilean mark et.  However, copper production is expected to be 
lower in 2009 and investment projects are likely to be postponed.68 
70. The State still retains a strate gic stake in the Chilean mining industry through the State-owned 
enterprises Corporación Nacional del Cobre  – CODELCO (National Copper Corporation) and 
Empresa Nacional de Minería  – ENAMI (National Mining Company).  Within the context of this 
review, the authorities have indicated that ther e are no plans to privatize these enterprises. 
71. CODELCO is the world's largest copper-pr oducing enterprise and its second molybdenum 
producer.  In 2008, it produced 1.55 million tonnes of refined copper69 and 20,525 tonnes of 
molybdenum.70  Total sales amounted to US$14,425 m illion during 2008, of which 76 per cent 
corresponded to copper (refined and concentrated) a nd the rest to by-products.  In 2008, its copper 
sales amounted to US$11,004 million, broken down by region as follows:  Asia (44 per cent), Europe (29 per cent), North America (18 per cent) and South America (9 per cent).
71  A fixed 10 per cent of 
the value of CODELCO's external sales of copper a nd by-products is allocated to the Armed Forces, 
and its profits are paid into th e general State budget.  In mid-2009 the Senate was discussing a draft 
law to amend CODELCO's founding charter (Dec ree Law No. 1.350 of 1976) with a view to 
improving its corporate governance, as well as the rules on the disposal of its mining concessions (Law No. 19.137 of 1992 on partne rships with third parties). 
72. The role of ENAMI is to promote the devel opment of small and me dium-scale mining in 
accordance with Decree Law No. 153 (ENAM I Charter) and Supreme Decree No. 76
72, by offering 
                                                      
65 Comisión Chilena del Cobre  – COCHILCO (Chilean Copper Commission) (2008). 
66 COCHILCO, with Minerals Commodity Summaries  (USGS) and World Metal Statistics  data.  
Viewed at:  http://www.cochilco.cl/a tencion_usuario/chile_mineria.asp 
67 Foreign Investment Committee figures.  Viewed at:  http://www.foreign 
investment.cl/estadisticas/estadisticas.asp 
68 Statements by COCHILCO's Director of  Research, 2 April 2009.  Viewed at:  
http://www.cochilco.cl/Archivos/destacados/2 0090403094932_ COMUNICADO%20DE%20PRENSA%20COC
HILCO%20CRU.pdf 
69 Includes CODELCO's participation in the El Abra deposit. 
70 CODELCO (2008). 
71 CODELCO (2008). 
72 Supreme Decree No. 76 on Small and Medium-S cale Mining Development Policy, July 2003;  
amended by Supreme Decree No. 4 of 2009. Chile WT/TPR/S/220/Rev.1 
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services to facilitate ac cess to the metals market on compet itive terms.  ENAMI is active in 
three areas:  promotion (technical assistance and financing);  production, by processing ore in its refineries and smelting plants;  and marketing, by purchasing the mineral products of small and 
medium-sized suppliers on market terms and selling them in the globalized markets.
73  L a w  
No. 19.993 (2005) authorized ENAMI to transfer the Las Ventanas smelting plant and refinery to 
CODELCO so as to improve its finances and enable it to concentrate on small and medium-scale mining;  nevertheless, the processing of the produc ts of small and medium-scale mining that ENAMI 
sends to this plant is guaranteed. 
(ii) Policy objectives and legal and institutional framework 
73. The Ministry of Mining is responsible for na tional mining policy.  At regional government 
level, it operates through the Regional Ministeria l Secretariats (SEREMIS).  Moreover, for 
implementing its mining policy, the Ministry relies mainly on two of its subordinate agencies:  the Comisión Chilena del Cobre  – COCHILCO (Chilean Copper Commission) and the Servicio Nacional 
de Geología y Minería  – SERNAGEOMIN (National Geology and Mining Service).  COCHILCO 
proposes policies for the sustainable development of the mining sector, supervises compliance with 
the mining regulations and the performance of the State-owned mining enterprises and advises the 
Foreign Investment Committee on approvals of mi ning investment contracts.  SERNAGEOMIN is 
responsible for the geological survey of Chile, fo r keeping the register of mining concessions and the 
official mining land register, and for prevention an d inspection where mine safety is concerned. 
74. According to the Bicentenary Mining Policy, the main components of State policy in the 
sector are:  to consolidate the development of the mi ning industry and its international leadership;  to 
promote the sustainable development of the industry;   to build capacity in education, innovation and 
technological development in the sector;  to enhance the efficiency and contribution of the State mining enterprises;  and to strengthen the institutional system.
74 
75. Under the Political Constitution of the Republic, the absolute, inalienable, exclusive and 
imprescriptible ownership of all mines is vested in the Chilean State.75  However, under the legal 
concessions regime, individuals, bot h Chilean and foreign, may explore and exploit minerals.  The 
Constitutional Organic Law on Mining Concessions76 and the Mining Code77 establish the procedures 
for the granting of exploration and exploitation concessions and the legal mechanisms for their 
protection.  Concessions are grante d to any person who fulfils the requirements laid down and may be 
granted for all mineral substances subject to con cession, including those that lie under the sea bed and 
those accessible from land through tunnels. 
76. On the other hand, legal concessions are not gr anted for the exploration, exploitation or 
refining of uranium, lithium, liquid or gaseous hy drocarbons, or deposits of any kind in maritime 
waters subject to national jurisdic tion or situated, wholly or partia lly, in areas identified as important 
for national security.  However, the State can gr ant operating contracts which allow individuals, 
national or foreign, to exploit t hose minerals for which concessions are not granted.  These contracts 
permit the exploitation of a specific mineral for a limited period, for which the State provides the 
necessary permits and licences. 
                                                      
73 For further information on ENAMI's activities,  consult its website at:  http://www.enami.cl 
74 Ministry of Mining (2005). 
75 Article 19, No. 24, of the Political Constitution of the Republic. 
76 Law No. 18.097 of 21 January 1982. 
77 Law No. 18.248 of 14 October 1983. WT/TPR/S/220/Rev.1 Trade Policy Review 
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77. Foreign investment can participate in the Chilean mining industry under Decree Law No. 600 
(see Chapter II(3)).  Foreign investors in the mining sector have eight years within which to bring in 
the capital, a period which may be extended to as much as 12 years by the Foreign Investment 
Committee when prior exploration is required. 
78. Mining enterprises may not avail themselves of th e tax benefits of the free zone regime, nor 
do they have access to the export finance programmes and the simplified drawback system.  However, 
Law No. 19.709 of January 2001 established a prefer ential customs and tax regime for the commune 
of Tocopilla (Region II) which provides benefits simi lar to those available in free zones for industrial 
enterprises that produce inputs, parts or components or repair capital goods for the mining industry.  
This regime will remain in force up to 31 Dece mber 2026 and is applicable only to enterprises 
established in Tocopilla between February 2001 a nd January 2012 (see Chapter III(4)(iii)).  Supreme 
Decree No. 135 (1983), which allows mineral and oil re finers to import raw materials at reduced rates 
of duty and tax provided that they are re -exported after processing, is still in force. 
79. Since its previous Review, Chile has made changes in its mining legislation.  Law 
No. 20.02678, in force since January 2006, established th e specific mining tax (IEM) on the operating 
income of the mine operator.  The rate is 5 per cent for mining companies with annual sales of more 
than 50,000 tonnes of refined copper, and 0.5 to 4. 5 per cent if the annual sales vary between 12,000 
and 50,000 tonnes.  Mining operations with annual sales of less than 12,000 tonnes are exempt from 
the tax.  The authorities have indicated that th e impact of the IEM on new investment has been 
insignificant.  The resources generated by the IE M are destined for development and innovation 
projects in the mining and other sectors.  Accordi ng to the assessments for fiscal year 2008, the IEM 
levied on private sector mining amounted to US$496 million.79 
80. Moreover, Law No. 20.026 (which amends Decree  Law No. 600) establishes a new system of 
tax invariability applicable to  foreign mining investments of not less than US$50 million.  
Invariability of the IEM and other taxes (including ro yalties) is granted for a period of 12 years.  The 
amount and the method of calculation of mining con cession fees also remain invariable.  Foreign 
investors who wish to avail themselves of this bene fit must submit their annual financial statements to 
external audit and present them to the Superintendencia de Valores y Seguros  – SVS (Securities and 
Insurance Supervisory Authority). 
81. Law No. 20.235, published on 31 December 2007,  is intended to facilitate access to the 
securities market for mining enterpri ses to enable them to obtain financing for their exploration and 
exploitation projects by issuing shares and/or bonds.  For this purpose, at the end of 2008, the 
Qualifying Commission for Competence in Mining Resources and Reserves was established, with 
responsibility for administering the public register of the "competent pers ons" who will prepare the 
technical reports necessary for mining enterprises to ma ke public offerings.  It was expected that the 
first "competent persons" woul d be certified in July 2009. 
82. In August 2005, the Ministries of Mining and the Economy, together with other public and 
private entities, signed the Framework Agreement fo r the Integral Sustainability of Small-Scale 
Mining, whose objectives include improving the e nvironmental conditions of the productive processes 
and the health and safety conditions in the indus try.  In May 2008, the National Public-Private 
Strategic Council of the Mining Cluster was set up to identify areas of mining suitable for developing 
research and technological innovation and to create productive links between the producing industry, 
the inputs industry and mining services. 
                                                      
78 Published on 16 June 2005. 
79 Chilean Internal Tax Service information. Chile WT/TPR/S/220/Rev.1 
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83. In November 2008, the Ministries of Mining a nd Energy, the National Energy Commission, 
the sector's trade associations (the Mining Council  and the National Mining Society) and Chile's 
principal mining enterprises signed the Protocol of Agreement on Energy Efficiency in Large-Scale 
Mining.  The signatories undertook to promote research aimed at introducing improved energy 
efficiency practices into mining, to encourage the development of pilot projects and programmes, and 
to step up technological development and innovation in  the field.  The protocol of agreement is an 
important one, given the close relationship be tween production and energy supply in the mining 
sector, which consumes on average 9 per cent of the country's energy.80 
84. The Law establishing the Copper Reserve (No. 16. 624 of 1967) remains in force.  This law 
sets quotas for the delivery of refined copper by th e large-scale mining companies to authorized 
domestic manufacturing sector enterprises with a view to satisfying their demand for the metal.  According to the authorities, the operations under th is law comply with market conditions, since in 
determining the price of the deliveries efforts ar e made to ensure that, as far as the producer is 
concerned, there is little difference between sel ling to a domestic cust omer and exporting.  
COCHILCO establishes the Reserve on the basis of  annual requests submitted by the manufacturing 
enterprises.  Supreme Decree No. 32/88 establishes th e procedures for allocating the Reserve to the 
requesting enterprises.  The annual average volum e of copper delivered from the Reserve is 
80,000 tonnes (equivalent to 1.5 per cent of total copper production in 2008). 
85. The Copper Stabilization Fund, established in 198 6, was a means of enabling the Treasury to 
preserve national economic stability in the face of international economic fl uctuations and adverse 
variations of the price of copper in world markets.   In 2007, the Fund ceased to exist, becoming part 
of the Fondo de Estabilización Económica y Social  – FEES (Economic and Social Stabilization Fund) 
Fondo  (see Chapter I).  In November 2008, the G overnment announced that permission would be 
given to use this Fund to support small-scale mining,  through ENAMI, in view of the fall in copper 
prices.  It was calculated that in the next 15 m onths (from November 2008) this operation would cost 
approximately US$18 million.
81 
(5) MANUFACTURING  
86. Chile's manufacturing sector has succeeded in  increasing productivity and remains an 
important generator of value adde d and employment, which partly reflects the national development 
strategy based on trade liberalization and cross-sect oral policies.  The manufacturing sector continues 
to make intensive use of local natural resources, thereby exploiting Chile's comparative advantage. 
87. Between 2003 and 2008, the GDP  of the manufacturing sector82 increased at an annual 
average rate of 4 per cent at constant prices, wh ile its share of GDP declined from 16.4 to 15.8 per 
cent during the same period.83  The most important manufacturing activities include:  the food and 
beverages industry, the chemicals industry, the o il, rubber and plastics industry, and the paper and 
printing industry (Table IV.2).  In terms of their contribution to GDP, the two most dynamic 
industries during the review period were the pape r and printing industry and the metal products, 
machinery and equipment industry. 
88. The Chilean processing industry continues to make  intensive use of local natural resources, 
particularly those of the forestry, fishing and mining sectors.  In 2008, the manufacturing sector 
                                                      
80 Energy Commission, National Energy Audit (2007). 
81 Revista Am, viewed at:  http://www.aminera.cl, 28 November 2008. 
82 Includes the processing of agriculture and forestry products, minerals and other raw materials. 
83 Central Bank figures.  Viewed at:  http://si2.bcentral.cl/Basededatoseconomicos/ WT/TPR/S/220/Rev.1 Trade Policy Review 
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employed about 862,000 people, equivalent to 13 per cent of the total labour force (as compared with 
14.2 per cent in 2003). 
Table IV.2 
Manufacturing sector GDP, constant prices 2003-2008 
(2003 Ch$ million and percenta ge of manufacturing GDP) 
Sector 2003 2004 2005 2006 2007a 2008b 
Contribution of the manufacturing sector 
to GDP (constant Ch$ million) 8,398,990 8,985,620 9,520,422 9,896,183 10,200,157 10,200,496 
Percentage of manufacturing GDP       
Food, beverages, and tobacco  30.1 29.6 29.7 29.5 29.5 30.2 
Textiles, clothing, and leat her 4.7 4.8 4. 8 4.9 4.5 4.2 
Wood and furniture 6.7 7.1 6.8 6.7 6.4 6.1 
Paper and printing 10.4 10.9 10.4 10.5 11.9 12.3 
Chemicals, petroleum, rubber, a nd plastics 28.1 27.6 27.7 28.1 26.8 26.4 
Non-metallic mineral products and basic 
metal industries 8.1 8.4 8.5 8.4 8.4 7.9 
Metal products, machinery, equipment, etc. 11.9 11.5 12.1 11.8 12.5 12.9 
a Provisional figures. 
b Preliminary figures. 
Source : Online information from the Central Bank of Chile.  Vi ewed at:  http://si2.bcentr al.cl/Basededatoseconomicos 
 
89. In 2008, exports of manufactured products (SITC classification) amounted to 
US$8,102 million, equivalent to 12 per cent of Chil ean merchandise exports.  The principal exports of 
the manufacturing sector include chemical products, semi-manufactured wood, paperboard and paper 
products, machinery and transport equipment.  In the same year, imports of manufactured products 
totalled US$34,076 million, i.e., 60 per cent of tota l merchandise imports.  Imports of manufactured 
goods consisted mainly of machinery, tr ansport equipment and chemical products. 
90. According to a recent OECD study, the pr oductivity of Chile's manufacturing industry has 
increased in the last few years, but still remain s below the average for the OECD countries and is 
characterized by considerable differences between the various industrial activities.  The study also 
points out that trade liberalization has been a signi ficant factor in the increase in the productivity of 
Chilean industry, due to the greater exposure to  foreign competition and easier access to imported 
inputs and capital goods that incorporate technological advantages.84  According to the 
WTO Secretariat's calculations, the productivity of labour in the manufacturing sector grew at a real 
annual average rate of 3 per cent during the period 2003-2008. 
91. A Central Bank of Chile study notes that the d eceleration in productivit y starting in 2000 is a 
phenomenon that affects the majority of Chile's manufacturing sectors and that the most energy-intensive sectors are those that have expe rienced the greatest reduction in the rate of 
productivity growth.
85  According to the same study, these resu lts suggest that the increase in the price 
of energy could be an important determinant of this deceleration (see (6) below). 
92. Chile does not apply any development policy ta rgeted specifically at the manufacturing 
sector.  Industrial activities, like others, benefit from cross-sectoral policies that pursue objectives 
such as the promotion of investment, the developm ent of SMEs, the encouragement of technological 
innovation and clusters.  The cross-sectoral incentiv es consist basically of tax concessions, financing 
                                                      
84 OECD (2007), pp. 30-31. 
85 Álvarez, García and García (2008). Chile WT/TPR/S/220/Rev.1 
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for investment and technological development,  and support for business management (see 
Chapter III(4)(iii)). 
93. At the end of 2008, the average MFN ta riff applied to manufactured products 
(ISIC definition) was 6 per cent.  The almost unifo rm structure of Chile's Tariff is devoid of tariff 
escalation and provides virtually no special a ssistance for the manufacturing sector (see 
Chapter III(iv)).  Law No. 20.269, which entered in to force on 27 June 2008, abolished the MFN tariff 
applied to imports of capital goods included in the definition86 and the list established by Law 
No. 18.634.87 
94. Since its last Review, Chile has not applied any anti-dumping or countervailing duties to 
manufactured products.  Betwee n 2002 and 2003, Chile maintain ed safeguard measures (tariff 
surcharge of 10 per cent) on imports of certain steel products. 
95. The manufacturing sector can take advantage of  the general export incentive programmes that 
consist essentially of administrative facilities for the payment and reimbursement of customs duties 
(see Chapter III(3)(iv)).  The tariff and tax concessi ons granted to the automotive industry under the 
Automotive Statute were abolished by Law No. 19.912 of November 2003.  The prohibition on 
importing used vehicles, used motorcycles and used tyres which, according to the authorities, is for 
environmental and safety reasons, is be ing maintained (see Chapter III(2)(vi)). 
(6) ENERGY  
96. Private companies, domestic and foreign, can participate in all energy sector activities, 
although in practice the State-owned enterprise ENAP dominates hydrocarbon exploitation, 
production and refining.  Chile is a net importer of  energy and depends on foreign supplies for about 
two thirds of its energy consumption.  During the review period, the energy sector was confronted with supply problems that adversely affected Chile's  economic performance.  Chile has intervened in 
the domestic market by establishing a system for stabilizing the domestic prices of certain fuels 
derived from petroleum and is adopting policies aimed at ensuring a sustainable energy supply in the 
long term. 
(i) General characteristics 
97. In 2008, the energy sector (which includes electricity, gas and water) accounted for 1.8 per 
cent of Chile's GDP (at constant 2003 prices)
88 and employed 0.6 per cent of the national labour 
force.89  Despite the fact that up to 2005 the energy sect or, particularly the electricity sector, received 
substantial investment flows, its GDP decreased at a real annual aver age rate of -0.4 per cent between 
2003 and 2008.  According to the IMF, the contraction of GDP in the energy sector was associated 
with the reduced availability of hydroelectric resour ces due to droughts, together with cutbacks in the 
                                                      
86 According to Article 2 of Law No. 18.634, " capital goods" means thos e machines, vehicles, 
equipment and tools that are intended, directly or indirectly, for the production or marketing of goods or services 
whose depreciation period exceeds three years. 
87 Since the elimination of the tariff, which is applied ad hoc  to capital goods that comply with the 
definition in Law No. 18.634, did not appear in the Chilean Tariff in effect in March 2009, it was not taken into 
account in the analysis of its structure carried out by the WTO Secretariat. 
88 Central Bank data.  Viewed at:  http://si2.bcentral.cl/Basededatos economicos 
89 National Statistical Office (INE) data.  Viewed at:  http://www.ine.cl WT/TPR/S/220/Rev.1 Trade Policy Review 
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supply of imported natural gas and high oil prices.  Moreover, the IMF estimates that the restrictions 
on the availability of energy have reduced economic growth by one percentage point.90 
98. In 2007, gross output of primary energy amounted to 91,775 teracalories91, of which 54 per 
cent corresponded to firewood;  25 per cent to natural gas, coal and oil;  and 21 per cent to 
hydroelectricity.  In terms of consumption, the 2007 data indicate that gross consumption of primary 
energy can be broken down as follows:  crude  oil (40 per cent), natural gas (16 per cent), 
hydroelectricity (7 per cent), firewood (19 per cent), and coal (15 per cent).92  According to the 
National Energy Audit, Chile impor ted about 68 per cent of its gross primary energy consumption in 
2007.93 
99. The sector's institutional framework compri ses the National Energy Commission (CNE), 
which is responsible for formulating the policies and regulations that govern the energy sector and 
overseeing their application, as well as for regula ting prices, where appropriate, and technically 
evaluating the investments of the State-owned enterprises operating in the sector.  Its Ministerial Council is headed by the Minister who presides over the CNE and is composed of the Ministers of Mining, the Economy, Finance, National Defen ce, and Planning and Cooperation, and the 
Secretary-General of the Presidency. 
100. The Ministries of the Economy and Mining issue concessions and decrees and participate in 
the discussion of regulatory issues.  The Electric ity and Fuels Supervisory Authority (SEC) oversees 
the enforcement of the legislation and technical regulations on the generation, production, storage, 
transport and distribution of liquid fuels, gas and electricity.  The competition authorities supervise 
the operation of the energy markets, particularly the electricity transmission and distribution markets.  
A Panel of Experts, created in 2005, settles differences between the players in the electricity sector (see (iii) below).  In June 2009, Congress was in the process of debating a draft law on establishing a 
Ministry of Energy that would take over some of  the functions currently being performed by the 
Ministries of Mining and the Economy. 
(ii) Hydrocarbons 
101. Under the Chilean Constitution, the right to explore and exploit hydrocarbon deposits is 
reserved for the State.  However, private compani es, domestic and foreign, can participate in these 
activities through Contratos Especiales de Operación Petrolera  – CEOP (Special Petroleum 
Operation Contracts) subject to the conditions laid down, in each case, in a presi dential decree.  In the 
first half of 2009, there were 14 CEOPs in effect a nd one in process of being approved;  of the CEOPs 
in force, 11 were located in the Ma gallanes area, two in Iquique and one in Arauco.  As a result of an 
international tendering procedure, nine CEOPs were  in their initial development stage and involved 
commitments to invest in exploration valued at about 250 million dollars. 
102. Enterprises to refine, distribute, market, store and transport hydrocarbons in their various 
forms or to import and export these products may be started up freely.  However, a concession must 
be obtained for the transport and distribution of natural gas.
94 
                                                      
90 IMF (2008). 
91 One teracalorie is equivale nt to one billion calories. 
92 CNE online data, National Energy Audit.  View ed at:  http://www.cne.cl/fuentes_energeticas/ 
f_primarias.html 
93 CNE online data.  Viewed at:  http://www.cn e.cl/cnewww/opencms/06 _Estadísticas/balances_ 
Energ.html.BNo. 2007 
94 Law on Gas Services and amendments thereto (Decree No. 323 of May 1931, amended in 1989). Chile WT/TPR/S/220/Rev.1 
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103. The Empresa Nacional de Petróleo  – ENAP (National Petroleum Company), which is 
State-owned, continues to dominate the exploration,  production and refining of petroleum and natural 
gas.  Its exploration and production activities are con centrated in the Magallanes Basin, where most of 
the hydrocarbon deposits have been discovere d.  In 2008, petroleum production totalled 
177,000 cubic metres and natural gas production 2,171 million cubic metres.95  Domestic crude 
production covers less than 5 per cent of annual de mand and has decreased each year as a result of 
well depletion and the decline in reserves;  the r est of the demand is met by oil imported by ENAP. 
104. In 2008, Chile imported crude oil and petr oleum products valued at US$13.9 billion, 
equivalent to 24 per cent of its total merchandise imports.  Moreover, private companies in Chile 
import natural gas from Argentina under a Protocol signed by the two countries in 1995.  Since 2004, 
there have been increasing restrictions on the deliver y of Argentine gas, which has affected the supply 
to Chilean power stations, industrial customers and the Methanex petrochemical complex in the 
Magallanes area.  In response to these restrictions , a consortium consisting of private companies and 
ENAP has invested in the construction of a liquefied  natural gas (LNG) terminal in the Quintero area, 
which is expected to enter into service in the second half of 2009 with a view to supplying residential, 
commercial and industrial consumer s and some power stations in the central basin (see also 
(iii) below). 
105. Refining is carried out by three enterprises bel onging to ENAP, one located in the Valparaíso 
Region, another in the Bío-Bío Region and the thir d in Magallanes.  In 2007, the three enterprises 
together had a total daily capacity of 37,800 cubic metres96 (13.6 million cubic metres of fuel per 
year), enough to provide for between 75 and 85 per cent of the demand for fuel.  Where distribution is 
concerned, there are four enterprises operating in the liquid fuel market and three in the liquefied gas 
market, all with national coverage.  There are five enterprises that transport and distribute natural gas 
in their respective concession areas. 
106. The prices of liquid fuels and liquefied gas are free and governed by the prices quoted 
internationally through import parity (see below), w ith the addition of business costs and margins.  
There are specific taxes on gasoline and diesel (s ee Chapter III(2)(v)).  Except in the Magallanes 
region, the tariffs for the distribution of natural gas can be set freely.  However, the Law on Gas 
Services empowers the Tribunal de Defensa de la Libre Competencia  – TDLC (Tribunal for the 
Defence of Free Competition) to request the Ministry  of the Economy to regulate the tariffs of those 
users who consume less than 100 gigajoules, if during a year the distributor's rate of return exceeds by 
more than five points the rate for the cost of capital calculated by the Ministry.  The Law also 
stipulates that all consumers with comparable  characteristics must pay the same price. 
107. The Fondo de Estabilización de  Precios del Petróleo  – FEPP (Fund for the Stabilization of 
Petroleum Prices), created in 199197, and the Fondo de Estabilización de Precios de los 
Combustibles  – FEPCO (Fund for the Stabilization of Fuel Prices), created in 200598, are intended to 
stabilize the domestic prices of fuels against oil market fluctuations.  Both Funds operate by 
establishing weekly reference price bands for fuel o il, gasoline, kerosene, diesel and liquefied gas.  
The upper and lower limits of the price bands are co mpared with the parity price for the product in 
question (spot price in a relevant market, free Chil ean port).  When the parity price exceeds the upper 
limit of the price band, the difference is covered by the resources of the FEPP or the FEPCO, as appropriate, while if the parity price falls belo w the band, the FEPP or the FEPCO takes in funds 
through taxes.  The adjustments resulting from the Funds are applied directly to the producers and 
                                                     
 
95 CNE online data.  Viewed at:  http://www.cne. c l/archivos_bajar/produccion_anual_combustibles.xls 
96 Information provided by the Chilean authorities. 
97 Law No. 19.030 of 1991, as amended by Law 19.681 of 2000. 
98 Law No. 20.063 of 29 September 2005, as amended by Law No. 20.278 of 29 August 2008. WT/TPR/S/220/Rev.1 Trade Policy Review 
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importers in the form of a tax or credit and, through them, to the rest of the economy.  At the end of 
April 2009, the FEPP had an estimated balance of US$44 million, while the FEPCO had an estimated balance of US$502 million.
99 
108. According to the IMF, to facilitate the ad justment of the Chilean economy to higher 
petroleum prices, the Government of Chile inject ed US$200 million into the FEPP and announced an 
additional contribution of US$1,000 million in June 2008.  The IMF estimates that with this measure 
subsidies amounting to US$500 million would be granted.100  Moreover, the Government has 
temporarily reduced, by variable percentages, th e rate of the specific tax on gasoline (see also 
(iii) below). 
(iii) Electricity 
109. Chile has an installed power generating capac ity of about 13,000 MW (as compared with 
11,146 MW in 2002), 38 per cent of which is provided by hydroelectric power plants, 61.8 per cent by 
thermal power plants, and 0.2 per cent by wind farms.  In 2007, a total of 56,378 GWh was generated.
101  The mining and industrial sectors are the main consumers of electrical energy, 
accounting for about 37 per cent of total consumption.   Chile imports approximately 4 per cent of the 
electricity it consumes.102 
110. The cost of electricity in Chile is high.  The increases in recent years have been due, in part, 
to cutbacks in the supply of imported natural gas a nd the high prices of hydrocarbons.  For example, 
the precio medio de mercado  – PMM (average market price)103 for the Central Grid, published by the 
CNE, rose from Ch$28.71/kWh in November 2006 to Ch$57.19/kWh in May 2009.  The increase in 
electricity prices appears to have had a negativ e impact on industrial productivity (see (5) above). 
111. The Chilean electricity market includes the generation, transmission and distribution of 
electricity, all of which are in the hands of privat e capital, domestic and foreign.  The State, through 
the CNE and the SEC, is responsible for regulat ion, oversight and planning.  The competition 
authorities can regulate prices in those segments in which they consider that there is no 
competition.104  Where generation is concerned prices can be set freely, whereas the tariffs for 
transmission and distribution and for supplying small consumers are regulated. 
112. The main legislative instrument gove rning the electricity sector is the Ley General de 
Servicios Eléctricos  – LGSE (General Law on Electrical Services).105  The amendments made to the 
LGSE during 2004 and 2005 are aimed at consolidati ng a competitive generation market and ensuring 
free access to power transmission and distribution lines. 
                                                      
99 CNE online data.  Viewed at:  http ://www.cne.cl/hydrocarbons/destacados/ 
comunicados/coffep30mar 2009.htm 
100 IMF (2008). 
101 CNE online data.  Viewed at:  http://www .cne.cl/estadísticas/anuario /electricidad 
102 CNE online data.  Viewed at:  
http://10.0.0.128/cnewww/opencms/06_E stadísitcas/anuario_estadísitico/ 
103 The PMM is determined using the average prices  of the free customer c ontracts communicated to 
the CNE by the generating companies, corresponding to the four-month window ending the third month prior to 
the date of publication of the average market price.  CNE online information.  Viewed at:  
http://www.cne.cl/electricidad/destacados/price_ medio/Precio_Medio_de_Mercado_SIC_ABR.xls 
104 OECD (2004). 
105 Decree with Force of Law No. 4, published on 5 February 2007, contains the revised, coordinated 
and consolidated text of the Genera l Law on Electrical Services (1982). Chile WT/TPR/S/220/Rev.1 
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113. In general, concessions are not needed to inst all generating units.  Where hydroelectric power 
stations are concerned, a concession may or may not be requested;  if it is, the administrative 
procedures necessary for them to be brought into service will be expedited.106  Generation projects 
must obtain environmental permits and other authorizations in the same way as any other industrial 
plant.  The authority may impose certain technical re quirements on generating stations before they are 
interconnected with the grid, to ensu re the safety and quality of the service.107 
114. Generating companies may sign long-term supply contracts with distributors and/or large 
industrial customers, which require them to supply th e customer's demand at agreed prices.  There is a 
parallel short-term (spot) market, on which the ge nerating companies sell the power they produce at 
marginal prices;  its function is to enable these companies to cover the differences between their 
power generation and their contractual commitments.   The short-term opera tion of the generators 
connected to a particular grid is planned and decided by the Centro de Despacho Económico de 
Carga  – CDEC Economic Load Dispatch Centre, whic h groups representatives of the generating and 
transmission companies and the large-scale users. 
115. Power is transmitted by the companies that own the lines and substations for transporting 
electricity from the point of generation to the dist ribution or consumption centres.  Transmission units 
may operate either under or without a concession;  in the first case the administrative procedures 
necessary for them to be brought into service are expedited.108  The tariffs for the use of transmission 
lines are regulated. 
116. In order to ensure open access to transmissi on installations and compliance with the service 
obligation, Law No. 19.940 of 2004 (so-called Short Law I), amending the LGSE, establishes that the 
transport of electricity through the trunk system and the subtransmission systems is a public electrical service.
109  Thus, the transmission company is under an obligation to provide the service to anyone 
who requests it and is responsible for investing in new lines or extensions.  The generating companies 
may impose a right of way on the available transm ission capacity through the payment of tolls.  The 
CDEC for each grid coordinates the operation be tween the generating and transmission companies. 
117. The distribution market consists of the compan ies that own the installations for distributing 
electricity to the end users in specific geographical areas.  In order to operate, the distributors must 
obtain a public service concession.  The definitive concessions are for an indefinite period and are non-exclusive. 
118. Concession-holders are under the obligation to pr ovide the service to anyone who requests it 
within their area.  Moreover, they must maintain pow er supply contracts that enable them to cover the 
estimated consumption of their customers for at least three years ahead.  Law No. 20.018 of 
May 2005 (Short Law II), which amended the LGSE, requires distributors to sign supply contracts 
with the generators who offer to supply power at the best price in public tender proceedings. 
119. Consumers are classified according to the scale of their demand for electricity.  Those with a 
connected load of less than 2,000 kW (residential, commercial and SME customers) are considered to 
                                                     
 
106 Articles 2, 3 and 4 of Decree with Force of Law No. 4 of 2007. 
107 Law No. 19.940 of March 2004, published on 13 March 2005. 
108 The concession application is optional.  Articles 2, 3 and 4 of Decree with Force of Law No. 4 of 
2007. 
109 The trunk system consists of all the lines and substations that form the common market, while the 
subtransmission systems are those that enable the power to be transported from the trunk system to the local consumption points. WT/TPR/S/220/Rev.1 Trade Policy Review 
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be regulated customers and pay a tariff established by the CNE.110  Consumers with a connected load 
of 2,000 kW or more (large-scale industrial and mini ng users) are considered to be free customers and 
are able to negotiate contracts to purchase electricity  directly with the generating companies;  these 
customers accounted for about 61 per cent of total consumption in 2007. 
120. Law No. 20.040, published in July 2005, establis hed a subsidy to help residential users of 
limited means pay for their electricity consumption,  whenever a real cumulative increase in price of 
5 per cent or more is recorded over a six-month period.  The subsidy, applied provisionally during 
2005-2006, was funded by the Treasury.  Moreov er, Law No. 20.258, published in March 2008, 
established a provisional mechanism for refunding the specific tax on diesel purchases in favour of the 
power generating companies.  This mechanis m will remain in effect until March 2011. 
121. An important institutional reform in the el ectricity sector, introduced by Law No. 19.940 
(2004), was the creation of a panel of experts for settling disagreements between electricity companies 
or between the companies and the regulatory author ities, for the purpose of applying the electricity 
sector regulations, including tariff aspects. 
122. Chile's electricity supply system has been ope rating under pressure in recent years because of 
increased domestic demand, higher hydrocarbon pri ces and restrictions on the supply of imported 
natural gas for use in power stations, mainly in th e north and centre of the country, which has forced 
them to use diesel, which is more expensive th an gas.  These problems have resulted in the 
postponement of several investment  projects related with natural gas-based production systems, as 
well as in a rise in the operating costs of energy-intensive industries. 
123. Although the measures adopted by the authorities to  deal with the power shortage have so far 
made it possible to avoid rationing, the need to secure the electricity supply and reduce generating 
costs continues to pose a problem fo r the near future.  It is expect ed that the installation of new 
generating plants and the implementa tion of the liquefied natural gas project in the central region at 
the end of 2009, and in the northern region at the be ginning of 2010, will help to solve the problem. 
124. In order to reduce the dependence on certain energy sources, and for environmental reasons, 
the Chilean authorities are seeking to promote the diversification of the energy matrix.  Law 
No. 20.257 of April 2008 on non-conventional re newable energy sources stipulates that as from 2010 
electricity companies that sell power from the grid w ill have to prove to the CDEC that 5 per cent of 
their annual sales comes from non-conventional renewa ble energy sources, such as geothermal, wind, 
solar and biomass, among others;  this percenta ge will increase annually up to 10 per cent in 2024.  
Tax incentives are envisaged by way of compensation. 
(7) SERVICES  
(i) General characteristics and multilateral commitments 
125. In 2008, services accounted for almost 67 per cent of Chilean GDP (at constant prices), as 
compared with 65.3 per cent in 2003.  The most important subsectors were  financial and business 
services111 (16.8 per cent) and personal services112 (10.8 per cent), followed by commercial and 
restaurant and hotel services (10.5 per cent), constr uction services (7.5 per cent) and transport services 
                                                      
110 Customers whose connected load is greater than 500 kW but not greater than 2,000 kW may choose 
between a regulated tariff  and a free price regime. 
111 Includes financial services, in surance, property leasing and services provided to businesses. 
112 Includes education, health and other services. Chile WT/TPR/S/220/Rev.1 
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(7.3 per cent).113  In 2008, the services sector employed a bout 74 per cent of the national labour 
force.114 
126. Chile is a net importer of services and the services account is traditionally in deficit (see 
Chapter I).  In 2008, the services sector recei ved US$1,190.6 million of foreign investment, 
equivalent to 22.7 per cent of the foreign direct  investment that entered Chile under Decree Law 
No. 600 in that year.115 
127. The specific commitments made by Chile under the General Agreement on Trade in Services 
(GATS) include 5 of the 12 general sectors defined in the Services Sectoral Classification List116, 
namely:  business services, communications services, financial services, tourism and travel related 
services, and transport services;  under the latter h eading, Chile only undertook commitments relating 
to auxiliary air transport services (Table AIV.1).117  In general, the market access conditions in Chile's 
existing legislation are more liberal than those s tipulated in its Schedule of Specific Commitments. 
128. In its Schedule of Commitments Chile recorded  horizontal limitations relating to commercial 
presence and the movement of natural persons.  The former concern service providers that operate in 
Chile through a commercial presence118 and make investments under the Foreign Investment Statute 
(Decree Law No. 600).  In this connection, it is indica ted that the authorization of foreign investment 
for the provision of services may be contingent on the effects of commercial presence on economic 
activity (including the use of local inputs, etc.),  productivity and competition and its contribution to 
Chile's integration in world markets.  Moreover, foreign investors must wait for three years after 
making their investment before they are allowed to transfer their capital abroad.  In practice, Decree 
Law No. 600 permits the repatriation of capital one year after it has entered Chile (the situation with 
regard to capital repatriation as it actually exists is described in Chapter II(3)). 
129. With respect to the movement of natural persons, there are restrictions on the presence of 
senior and specialized personnel who, in addition to having worked for at least two years in the head 
office of the enterprise of their country of origin, must establish their domicile or residence in Chile.  
Moreover, the number of foreigners that a foreign enterprise may employ in Chile is limited to 15 per 
cent of the total staff.  Service providers receive authorization to stay in Chile for a once renewable 
period of two years. 
130. Chile's list of MFN exemptions includes the dispute settlement procedures contained in 
existing or future bilateral treaties on the protecti on of investment;  reciprocal measures concerning 
access to freight by Chilean vessels;  the Bilateral Agreement on Maritime Freight Transport with 
Brazil (1974);  the taxation of maritime freight ra tes and commissions;  maritime cabotage;  the 1977 
Agreement on International Land Transport with Ar gentina, Bolivia, Brazil, Paraguay, Peru and 
Uruguay;  and audiovisual services.119 
                                                      
113 Central Bank data.  Viewed at:  http://si2.bcentral.cl/Basede datoseconomicos 
114 National Statistical Office (INE) data.  Viewed at:  http://www.ine.cl 
115 Foreign Investment Committee online data.  Viewed at:  http://www.foreign 
investment.cl/estadisticas/estadisticas.asp 
116 WTO document MTN.GNS/W/120, of 10 July 1991. 
117 WTO documents GATS/SC/18, of 15 April 1994, GATS/SC/18/Suppl.1, of 28 July 1995, 
GATS/SC/18/Suppl.2, of 11 April 1997, and GATS/SC/18/Suppl.3, of 26 February 1998. 
118 Commercial presence includes corporations, open or closed, private limited companies, and 
subsidiaries. 
119 WTO document GATS/EL/18, of 15 April 1994. WT/TPR/S/220/Rev.1 Trade Policy Review 
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131. Chile has signed the Fourth and Fifth Protocol s annexed to the GATS, which entered into 
force for the country on 16 June 1998120, and has amended its Schedule of Specific Commitments on 
telecommunications121 and financial services.122  Chile is actively participating in the services 
negotiations under the Doha Deve lopment Agenda.  In July 200 3 it submitted an initial offer123 and in 
July 2005 a revised offer.124 
132. Most of Chile's RTAs contain provisions on trad e in services.  The agreements vary in terms 
of their sectoral scope and the way in which th e liberalization commitments are expressed.  Although 
most of the agreements cover telecommunications , professional services and the temporary entry of 
business persons, this is not the case with financial services, since whereas some RTAs contain 
specific rules for this sector or envisage future ne gotiations for its inclusion, others exclude it from 
their coverage.  With regard to the way of expr essing the commitments, some agreements establish a 
negative list (for example, the RTAs with Canada, United States, Mexico and Central America), while 
others contain a positive list of sectors to be lib eralized (for example, the agreement with the 
European Communities). 
(ii) Telecommunications 
133. The telecommunications sector is privately operated.  Concessions to provide public 
telecommunications services and inte rmediate services are granted to enterprises established in Chile, 
irrespective of the origin of the capital.  Howe ver, concessions for free-reception radio broadcasting 
are granted to companies with more than 10 per cent of foreign capital only if their country of origin 
grants reciprocity to Chilean companies.  Interc onnection tariffs are set by law and maximum tariffs 
may be established for concession-holders who occupy  a dominant position in any of the services 
liable to price-setting.  Since Chile's last Review , there have been no fundamental changes in the 
legislation governing this sector, a lthough new provisions have begun to be applied in the areas of the 
VoIP service and number portability.  Chile ma de no commitments on the supply of basic local 
telecommunications under the GATS. 
(a) General characteristics 
134. Between 2003 and 2008, the aggregate value of th e Chilean communications sector increased 
at an annual average real rate of 9.3 per cent125, while its share of GDP at constant prices increased 
from 2.3 to 2.8 per cent.126  Communications is one of the three main recipients of foreign direct 
investment in Chile, having attracted about US $2,616 million under Decree Law No. 600 during the 
period 2003-2008.127 
135. In the telecommunications subsector, the market  segments that saw the greatest expansion 
were mobile telephony and Internet  access services, in contrast to the gradual decline in fixed 
telephony.  Between 2003 and 2008, the number of mobile line subscribers doubled to 14.7 million, 
                                                      
120 WTO documents WT/Let/227, of 29 June 1998, and WT/Let/288, of 18 February 1999. 
121 WTO document GATS/SC/18/Suppl.2, of 11 April 1997. 
122 WTO document GATS/SC/18/Suppl.3, of 26 February 1998. 
123 WTO document TN/S/O/CHL, of 16 July 2003. 
124 WTO document TN/S/O/CHL/Rev.1, of 5 July 2005. 
125 Communications GDP includes  postal services, in addition to telecommunications. 
126 Central Bank data.  Viewed at:  http://si2.bcentral.cl/Basededatos economicos 
127 Foreign Investment Committee online data.  Viewed at:  
http://www.foreigninvestment.cl/e stadisticas/estadisitcas.asp Chile WT/TPR/S/220/Rev.1 
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while the penetration level reache d 87.8 per cent per 100 inhabitants.128  Similarly, the number of 
Internet connections rose from 836,000 at the end of 2003 to 1.4 million in September 2008, and the 
Internet penetration index rose from 2. 2 to 8.4 per cent per 100 inhabitants.129  The penetration indices 
for these two services are among the highest in Latin America.130  Within the Internet market, there 
has been a remarkable increase in dedicated acc ess connections (mainly ADSL), which account for 
98.4 per cent of all Internet connections.  At th e end of 2008, there were about 3.5 million fixed 
telephone lines, with a penetration leve l of 20.9 per cent per 100 inhabitants.131 
136. Chile's telecommunications sector was fully privatized during the 1980s and now has a 
modern infrastructure.  As far as the organization of the market is concerned, in 2008 there were 
16 fixed telephony providers, 3 mobile telephony providers and 32 companies offering Internet 
access.  Telefónica (CTC) continues to occupy a dominant position with 60.1 per cent of the fixed 
telephony segment and 45.7 per cent of the Intern et segment.  In mobile telephony, Movistar 
accounted for 42.6 per cent of subscribers.132  The State is not involved in the provision of 
telecommunications services, although it plays a regulatory role. 
(b) Legal and institutional framework 
137. The Ministry of Transport and Telecommunications (MTT), through the Undersecretariat for 
Telecommunications (SUBTEL), is responsible for formulating sectoral policy, implementing and 
enforcing the corresponding legislation (including t echnical regulations), administering the radio 
frequency spectrum, deciding on applications for concessions, permits and licences, and applying 
administrative sanctions in accordan ce with the law.  The Ministry of the Economy participates in 
price-setting and, together with the MTT, signs the corresponding tariff decrees.  The TDLC decides 
when to set the tariffs of those telecommunications  services that are liable to tariff-setting under the 
law (see below). 
138. The Ley General de Telecomunicaciones  – LGT (General Law on Telecommunications)133 
provides for free and egalitarian access to th e use of the radio frequency spectrum through 
concessions, permits or licences.  Public teleco mmunications services and intermediate services134 
concessions are granted by the MTT (through SUBTEL) by means of a Supreme Decree and remain 
valid for 30 years.  A concession is also re quired to supply radio and television services135, in which 
case the concession remains valid for 25 years.136  If for technical reasons it is only possible to grant a 
limited number of concessions (for example, because  of frequency spectrum constraints), they are 
granted on the basis of competitive bidding.  Con cessions are granted to legal persons established and 
domiciled in Chile137;  there are no restrictions on the origin of the capital.  However, applications for 
free-reception radio broadcasting con cessions submitted by corporations with more than 10 per cent 
of foreign capital will be issued only if it can be sh own that in the country of origin of the capital 
                                                      
128 Undersecretariat of Telecommunications (SUBTEL) online data.  Viewed at:  
http://www.subtel.cl/prontus_subtel/site/a rtic/20070212/pags/20070212182348.html#T1 
129 SUBTEL online data.  Viewed at:  http://subtle.cl/ 
130 International Telecommunication Union.  Vi ewed at:  http://www. itu.int/ITU-D/icteye/ 
131 SUBTEL (2008). 
132 SUBTEL (2008). 
133 Law No. 18.168, published on 2 October 1982, and amendments thereto. 
134 These include signal transmission and/or  switching and long-distance telephony. 
135 Television broadcasting concessions are granted by resolution of the National Television Council 
(CNTV), in accordance with Article 27 of  Law No. 18.838 establishing the CNTV. 
136 Article 8 of the LGT and Article 15 of Law No. 18.838. 
137 Article 21 of the LGT. WT/TPR/S/220/Rev.1 Trade Policy Review 
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reciprocity is granted to Chilean companies.138  Other telecommunications services require permits or 
licences.  The granting of concessions, permits and li cences is free of charge and the only fees payable 
are those for the use of the frequency spectrum;  the procedures to be followed can be found on the 
SUBTEL website.139 
139. Nationality requirements apply to free-recepti on broadcasting concession-holders.  According 
to Article 22 of the LGT, the chairmen, managers, administrators and legal representatives of radio 
broadcasting companies must be Chilean.140  However, foreign directors are allowed, provided that 
they do not constitute a majority.  In the case of  television concessions, the chairmen, directors, 
managers, administrators and legal representatives must all be Chilean.141 
140. The holders of concessions to provide public telecommunications services and intermediate 
long-distance telephony services must es tablish and accept interconnections.142  Any interested party 
may offer additional services through the public ne tworks, by connecting equipment to those 
networks;  the marketing of these services does not require the prior agreement of the public 
telecommunications services concession-holders, w ho may not discriminate between providers of 
additional services. 
141. The LGT establishes a general free-pricing regi me for the provision of telecommunications 
services, but also stipulates that if the TDLC de termines that some services are not being supplied 
under competitive conditions, tariffs may be set.143  The services liable to have their tariffs set are the 
public local and national and international l ong-distance telephone services (excluding mobile 
telephony), and signal switching and/ or transmission services provided as an intermediate service or 
as private circuits.  During the review period, it  was decided to set tariffs only for local fixed 
telephony services and the decision ceased to be applied as from 2009. 
142. If the TDLC determines that tariffs should be set, SUBTEL takes charge of the process of 
calculating them in accordance with  the stages established by the relevant Tariff Regulations.144  
Under the LGT, every five years SUBTEL sets the ma ximum tariffs that can be applied by the public 
local telephony service concession-holders deemed to be  dominant, together with the interconnection 
tariffs.  The tariff decrees can be viewed on the SUBTEL website.145 
143. A distinctive aspect of the Chilean legislati on is that it provides for the setting of the 
interconnection tariffs that must be applie d by all public telecommunications service 
concession-holders.146  This is the case with the fixed-mobile  access charges that are set for the mobile 
telephone companies and paid by the user who mak es calls terminating in mobile networks.  The 
method of calculating interconnection tariffs is co mplex and appears to have given rise to an 
imbalance, in that mobile telephone tariffs are much higher than those for fixed telephone calls. 
                                                      
138 Law No. 19.733 on the Freedoms of Opinion and Information and the Practice of Journalism 
(Article 9). 
139 SUBTEL online information.  Viewed at:  http://www.subtel.cl/prontus_subtel/ 
site/edic/base/port/p_auto_tramites.html 
140 See also Article 18 of Law No. 18.838 es tablishing the National Television Council. 
141 Article 18 of Law No. 18.838. 
142 Article 25 of the LGT. 
143 Article 29 of the LGT. 
144 Regulation No. 4 (16 January 2003) and Regulation No. 381 (29 July 1998). 
145 SUBTEL online informat ion.  Viewed at:  
http://www.subtel.cl/prontus_subtel/site/a rtic/20070102/pags/2007010 2135454.html 
146 Article 25 of the LGT. Chile WT/TPR/S/220/Rev.1 
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144. Holders of national and international long-di stance telephone service c oncessions must be 
established as open corporations (i.e., subject to su pervision by the SVS) and may be subsidiaries or 
associates of public telecommunications services concession-holders. 
(iii) Financial services 
145. Chile has a diversified financial sector with a high degree of international integration.  Since 
2003, there have been no major regulatory changes in  the banking sector, but there have been some in 
the insurance and pension fund sectors.  For reasons  of national interest, approval is required for a 
person to acquire more than 10 per cent of a ba nk's capital.  Bank loans are subject to maximum 
interest rates.  Foreign banks and insurance comp anies may provide services in Chile through locally 
incorporated companies or branch es with separate capital.  Foreig n insurance companies have been 
allowed to establish branches since 2007;   these companies may also engage in the direct marketing of 
international maritime and air transport insurance and insurance for goods in transit, but only if they 
are established in countries with which Chile has an in ternational treaty that allows such insurance to 
be effected. 
(a) Introduction 
146. In 2008, financial services147 accounted for 16.8 per cent of GDP in constant pesos, as 
compared with the 15 per cent recorded in 2003.148  Between 2003 and 2008, financial services grew 
at an annual average real rate of 7.2 per cent.  Employment in the sector rose from 8.1 per cent to 
9.1 per cent in the same period.149  During the review period, Chile's  trade in financial and insurance 
services ran a deficit, which reached US$657.9 million in 2008, as a result of imports worth 
US$970.9 million and exports worth US$313 million.150 
147. Chile has a diversified financial sector with a high degree of international integration.  The 
sector operates within a supervisor y and regulatory framework that has been deemed adequate by 
international organizations.151  The Basel I international banking rules have been applied since 1997 
and progress is being made with the incorporation of the Basel II rules.  The Chilean financial sector, especially banking, has one of the highest levels  of solvency in the Latin American region.
152  I n  
2008, the average capital adequacy ratio of the Chilean banking system stood at about 12 per cent.153 
148. The most important sectors of the financial services market are the banking, insurance and 
pension fund sectors.  Since privatization in 1981, the latter (pension fund managers) have 
experienced a notable expansion.  The local capital ma rket is also important in terms of its size, when 
compared with other Latin American markets.154 
149. Law No. 20.130 of 2006 provided for a gradua l reduction in the stamp duty on lending 
operations (from 1.6 to 1.2 per cent of the princi pal in 2009) and exempted loan refinancing 
                                                      
147 Includes financial services, in surance, property leasing and services provided to businesses. 
148 Central Bank data.  Viewed at:  http://si2.bcentral.cl/Basededatos economicos 
149 National Statistical Office (INE) data.  Viewed at:  http://www.ine.cl/ 
150 Central Bank data.  Viewed at:  http://si2.bcentral.cl/basede datoseconomico/ 
951_417.asp?m=BP_serv_X&f=T&i=E and http://si2.bcent ral.cl/basededatoseconomico/951_ 417.asp?m=BP_ 
serv_M&f=T&i=E 
151 IMF (2004b). 
152 Superintendencia de Bancos e Instituciones Financieras  – SBIF (Banks and Financial Institutions 
Supervisory Authority) (2009). 
153 Central Bank of Chile (2008). 
154 IMF (2004a). WT/TPR/S/220/Rev.1 Trade Policy Review 
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operations from payment of the duty.  Law 20.326 of 20 of January 2009 provides for the 
non-application of the duty to lending operations during 2009, its application at a rate of 0.6 per cent 
in the first half of 2010 and a return to 1.2 per cent in the second half of 2010.  Moreover, this law 
gradually reduces the rate applicable to instrument s and documents pertaining to credit operations 
using demand deposits or without a maturity date.  Law No. 20.291 of 15 of September 2008 
abolished, from 1 October 2008, the taxes on the dr awing of cheques and on transfers or payments 
made by order for payment. 
(b) Banking sector 
General characteristics 
150. In December 2008, the assets of the Chilean banking system were valued at Ch$103 trillion 
(US$163,723 million), equivalent to about 116 per cent of GDP, while total deposits amounted to 
Ch$61 trillion (US$97,128 million), whic h amounts to 69 per cent of GDP.155  On the same date, the 
Chilean banking system comprised 11 domestic privat e banks, 12 foreign private banks (subsidiaries 
and branches) and a State-owned bank (BancoEs tado).  The banks and branches under foreign 
ownership or control held about 41 per cent of to tal assets (45 per cent in 2002), while the domestic 
private banks held 44 per cent and the State-owned bank 15 per cent.156 
151. Following the global trend, over the last 20 years Chile's banking sector has undergone 
increasing concentration, although during the peri od 2003-2008 the number of banking institutions 
remained relatively stable, declining slightly fro m 26 to 24 institutions.  At the end of 2008, the 
five largest banks accounted for 73 per cent of total assets.157  There are a few conglomerates with a 
substantial presence in various financial segments.   The functions of the Committee of Supervisory 
Authorities, created in 2003 to coordinate the work of the three financial supervisory bodies158, with 
the participation of an observer from the Centra l Bank, include supervising the activities of the 
conglomerates through the exchange of information (Law No. 20.190). 
152. During the period under review, there was an increase in the spread (see Chapter I).  
However, it is still relatively low, which reflects a high level of efficiency.  The Chilean financial 
system is also characterized by the maintenance of  a low level of dollarization and the availability of 
long-term credit, which reflects the widespread  use of indexation instruments (such as UF).159 
153. According to the Central Bank of Chile, the soundness of the Chilean banking system, 
associated with a low level of exposure to credit, ma rket and liquidity risks, has enabled it to weather 
the global financial crisis.  However, in view of  the uncertain economic outlook, there has been a 
slowdown in business lending and consumer credit.160 
                                                      
155 Information provided by the Chilean authorities. 
156 Information provided by the Chilean authorities. 
157 These are:  Banco Santander-Chile (20.5 per cent), Banco de Chile (17.58 per cent), BancoEstado 
(14.9 per cent), Banco de Crédito e Inversiones (13.08 per cent), and Ba nco Bilbao Vizcaya Argentaria, Chile 
(7.52 per cent). 
158 The Banks Supervisory Authority, the Securities and Insurance Supervisory Authority, and the 
Pensions Supervisory Authority. 
159 IMF (2004a). 
160 Central Bank of Chile (2008). Chile WT/TPR/S/220/Rev.1 
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Legal and institutional framework 
154. Since 2003 there have been no fundamental chan ges in the institutional framework of the 
banking system.  The main regulatory bodies are the Superintendencia de Bancos e Instituciones 
Financieras  – SBIF (Banks and Financial Institutions  Supervisory Authority), an autonomous 
institution linked to the Ministry of Finance, and th e Central Bank of Chile.  The SBIF is responsible 
for supervising the banks and other financial institutions.161  The Central Bank establishes the reserve 
requirement for banks, the collateral and guarantee le vels for foreign exchange transactions, and the 
maximum interest rate that the banks may charge.  The competition authorities oversee the functioning of the banking market. 
155. Since the last Review, there has been no substa ntial change in the basic banking legislation, 
namely, the Ley General de Bancos  – LGB (General Law on Banks) and amendments thereto (Decree 
with Force of Law No. 3/1997 of the Ministry of  Finance), although some important reforms have 
been introduced in such areas as the promotion of  the venture capital indust ry (Law No. 20.190 of 
5 June 2007, known as MK II) and ol d age pensions (Social Securi ty Reform Law No. 20.2555 of 
17 March 2008, see below).  Most of the regulations  relating to banking ope rations can be found in 
the Central Bank's Compendium of Financial Regulations.
162 
156. The registration and approval procedures for ba nks are laid down in Articles 27 to 39 of the 
LGB.  Banks must be established as corporations or branches.  The founding shareholders must 
provide the SBIF with a prospectus, a business plan for the first three years and a guarantee of 10 per 
cent of the capital of the proposed company, as we ll as meet solvency and integrity requirements.  
There are no limits on the number of shares that an individual investor may own in a bank or on the 
overall percentage of the banking system an investor  may control.  However, in the national interest, 
for a person to acquire, directly or through third pa rties, more than 10 per cent of a bank's capital the 
prior authorization of the SBIF is required.163  The purpose of this provision is to prevent a person 
who does not meet the requirements of the Law acqui ring a stake in a bank by purchasing shares.  The 
minimum capital requirement for founding a bank is 800,000 UF (US$28.7 million). 
157. The SBIF may decide to reject the founding prospectus, within a period of 180 days, on the 
grounds that the shareholders do not meet the require ments laid down;  failure of the SBIF to take a 
decision within this period will be interpreted as ta cit approval and the licence will be deemed to have 
been granted (amendment introduced by Law No. 20.190, of 5 June 2007).  The authorities have pointed out that in recent years applications to fo und a bank have always been processed in less than 
180 days. 
158. The legislation allows Chilean nationals and resi dents of Chile to make deposits in and obtain 
loans from banks located abroad.  However, th e cross-border supply of banking services is not 
permitted. 
159. Subject to the approval of the SBIF, a foreign bank may operate in Chile by holding shares in 
a Chilean bank, establishing a corporation in Chile or  setting up a branch with separate capital, in 
conformity with the LGB and Law No. 18.046 on the establishment of an agency of a foreign corporation.  The capital and reserves that foreign banks allocate to their branches must be actually 
brought into the country and converted into the natio nal currency.  In operations between a branch and 
its parent company abroad, the two are deemed to be independent entities.  There are no restrictions 
                                                     
 
161 The SBIF's Statutes can be found in Title I of the General Law on Banks. 
162 The compendium can be viewed at:  http://www.bcentral.cl/normativa/normas-financieras/ 
index.htm 
163 Article 36 of the LGB. WT/TPR/S/220/Rev.1 Trade Policy Review 
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with respect to the number of branches of foreign banks that can operate in the country.  The LGB 
stipulates that for a foreign bank to obtain approval to participate in a Chilean bank, or to establish a 
branch in Chile, its operations must be adequately supervised in its home country and it must have the 
prior authorization of the competent regulatory body.164  The branches of foreign banks are subject to 
the same regulations as domestic ba nks, can engage in the same activities165 and can tap funds in the 
local market.  A foreign bank may also maintain a representative office in Chile, subject to the 
approval of the Director of the SBIF;  represen tative offices may not engage in banking business 
proper.  The authorities have noted that since 2003 no  applications from foreigners to establish a bank 
or branch in Chile have been refused. 
160. Banks established in Chile, whether domestic or foreign, may set up and hold shares in 
banking support subsidiaries166, as well as companies with separate capital that offer various financial 
services permitted by law.167  Banks may not participate as sharehol ders in companies that engage in 
activities other than the provision of the aforementioned services;  specifically, they may not hold shares in insurance comp anies, industrial enterprises, co mmercial enterprises or public utility 
enterprises, among others.  The LGB allows Chilean banks to carry on activities abroad, provided that 
they comply with minimum requirements of capital adequacy and the country in which they operate 
provides for adequate supervision.
168 
161. The authorities have tried to prevent a situa tion from arising in which, as a result of 
concentration, the banks adopt dominant positio n practices.  Thus, limits are imposed on the 
maximum rates of interest ( tasa máxima convencional  – TMC (agreed maximum rate)) that banks 
may charge on loans, depending on the amount, the term and the currency and on whether or not the 
loans are adjustable for inflation.169  In accordance with the re forms introduced in the Law on 
Consumers' Rights (2004)170, all financial institutions that offer consumer loans, including credit card 
companies, must respect the TMC.   The competent authorities have intervened to prevent collusive 
practices in the consumer credit market.171 
162. Chile has a deposit insurance system that cove rs 100 or 90 per cent of the amount deposited, 
depending on whether the deposits in question are sight  or term deposits;  in the latter case, there is a 
maximum of 120 UF (US$4,320).172 
163. Chile has signed the Fifth Protocol annexed to the GATS.  In accordance with its Schedule of 
Specific Commitments, Chile does not impose any market access or national treatment limitations as regards commercial presence for providing banking services and supplementary services.  Although, 
in its Schedule of Commitments, Chile maintains the ri ght to require proof of need in the form of an 
authorization from the SBIF or the SVS, that pr oof has been eliminated by amendments to the 
                                                     
 
164 Article 29 of the LGB. 
165 Article 69 of the LGB lists the activities in which banks may engage. 
166 Defined as the activities that provide services intended to facilitate the achievement of the purposes 
of the banking institution. 
167 Namely, over-the-counter securities agents, stock ex change brokers, mutual fund, investment fund 
or foreign capital fund management, asset securitizatio n, insurance brokers, leas ing operations, factoring, 
financial advisory services, securities custody, loan re covery and advisory services relating to the pensions 
system. 
168 Article 76 of the LGB. 
169 In January 2009, the TMC for non-indexed loans in national currency with a term of less than 
90 days in an amount equivalent to up to 5,000 UF was 29.91 per cent, and 22.2 per cent for loans of more than 5,000 UF.  See:  http://www.sbif. cl/sbifweb/servlet/InfoFinancier a?indice=4.2.1&FECHA =1/1/2009 
170 Law No. 19.496 of 1997 as amended by Law No. 19.955 of July 2004. 
171 See, for example, TDLC Judgment No. 63 of April 2008. 
172 On 31 March 2009, 1 UF was equivalent to US$36. Chile WT/TPR/S/220/Rev.1 
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banking and insurance laws.  Foreign banks must be companies legally established in their country of 
origin, acquire legal personality in  Chile and put up the capital specified by law.  In accordance with 
Chile's commitments, foreign investors in the fina ncial sector can transfer their capital abroad 
two years after it was brought in173 (the situation that prevails in practice as far as capital repatriation 
is concerned is described in Chapter II(3)). 
164. Some of Chile's RTAs incorporate financial ser vices chapters, for example, the agreements 
with Japan, Australia, the European Union and the United States.  Other agreements envisage future 
negotiations for their inclusion, for example, th e agreements with Korea, EFTA, Colombia, Peru, 
China and the P-4.  In other cases, financial services are not included (agreement with Central 
America).  The SBIF has concluded memoranda of  understanding with the United States, Spain, 
Argentina, the Dominican Republic and Peru. 
(c) Insurance 
General characteristics 
165. During the review period, the assets of the insu rance companies increased steadily;  in 2008 
they amounted to US$33,652 million (as compared  with US$14,559 million in 2003) and accounted 
for 19.9 per cent of GDP.  During the same peri od, the net worth of the insurance companies 
increased from US$2,356 million to US$3,280 million.174  In 2007, insurance premiums accounted for 
3.57 per cent of GDP;  the general insurance co mpanies contributed 1.19 per cent, while the life 
insurance companies contributed 2.38 per cent.175  The Chilean insurance sector  is relatively large;  its 
expansion is linked to the growth of the pension funds, which by law must cover the risks of death 
and disability resulting from occupational accidents suffered by their members. 
166. At the end of 2008, there was a total of 52 insurance companies (as compared with 53 in 
2003), of which 23 were in general insurance and 29 in life insurance.176  The latter dominate the 
market with about 70 per cent of total premiums.  In both groups, foreign companies hold a majority 
stake:  67 per cent in the general insurance market  and 58 per cent in the life insurance market.  In 
2008, there were also 103 reinsurance companie s, 48 reinsurance brokers, 187 adjusters and 
2,269 insurance brokers operating in the market.177 
Legal and institutional framework 
167. The Securities and Insurance Supervisory Auth ority (SVS), an autonomous institution linked 
with the Ministry of Finance, is responsible fo r supervising the activities and entities involved in the 
Chilean securities and insurance mark et, as well as for regulating t hose activities.  The Insurance Law 
(Decree with Force of Law No. 251 of 1931 and it s amendments) constitutes the basic legislative 
framework for the insurance indus try.  The Commercial Code (rules governing insurance contracts), 
Decree Law No. 1.092 of 1975 on mutual insurance societies, and Law No. 18.490 of 1986 on compulsory personal accident insura nce (SOAP) are also applicable. 
168. To provide insurance and reinsurance services in  Chile it is necessary to obtain the approval 
of the SVS.  The Insurance Law reserves these activiti es for companies incorporat ed in Chile for this 
                                                     
 
173 WTO documents GATS/SC/18, of 15 April 1994, and GATS/SC/18/Suppl.3, of 26 February 1998. 
174 SVS figures.  Viewed at:  http://www .svs.cl/sitio/estadisticas/seg_market.php 
175 Information provided by the Chilean authorities. 
176 SVS figures.  Viewed at:  http://www .svs.cl/sitio/estadisticas/seg_market.php 
177 SVS figures.  Viewed at:  http://www .svs.cl/sitio/estadisticas/seg_market.php WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 116 
 
 
sole purpose.178  However, Law No. 20.190 of June 2007 (Law MK II) introduced an important 
reform by authorizing foreign insurance companie s to establish branches with separate capital in 
Chile.  Once authorized by the SVS, branches of foreign companies have the same rights and 
obligations as domestic insurance companies. 
169. In general, insurance entities from abroad may not  offer or effect insurance in Chile, either 
directly or through intermediaries.  Nevertheless,  as a result of another reform introduced by Law 
No. 20.190, since 2007 foreign insurance companies may sell international ma ritime and air transport 
insurance and insurance for goods in  transit.  However, this authorization is restricted to foreign 
insurance entities established in a c ountry with which Chile has an inte rnational treaty that allows this 
insurance to be effected.  This applies to th e treaties with the United States, the European 
Communities, Japan and Australia. 
170. Decree with Force of Law No. 251 also stipulat es that any Chilean natural or legal person 
may take out insurance freely abroad, subject to the foreign exchange legislation.  However, 
compulsory insurance (SOAP) and insurance relati ng to the pension and social security systems are 
excluded and must be taken out in Chile. 
171. To establish an insurance company it is necessar y to meet a minimum capital requirement of 
90,000 UF (US$3.2 million) and in the case of a reinsurance company 120,000 UF 
(US$4.3 million).179  Life insurance companies may not o ffer general insurance and vice versa.  
Moreover, insurance companies may only reinsure ri sks of the same group as that in which they are 
authorized to operate.  Credit risks must be insu red with a general insurance company whose sole 
purpose is to cover this type of risk. 
172. An applicant for a licence to operate a gene ral insurance company may request a decision by 
the SVS after 60 days.  After that, the SVS will have five  days to rule on the application;  if there is no 
reply, the application is deemed to have been rejected.  In practice, the SVS provides a report 
indicating the basis for its rejection.  Following th e entry into force of th e Law on Transparency in 
April 2009, the SVS is under the obligation to explai n the reasons for rejection.  Where life insurance 
is concerned, the SVS has 90 days within which to a pprove or reject the application;  if it fails to 
notify its decision, the licence is deemed to have be en granted.  The authorities have noted that the 
average time taken to authorize a licence varies between 45 and 60 days. 
173. Foreign insurance companies may operate in Chile by establishing a corporation or, since 
2007, a branch with separate capital, subject to SVS approval;  they may also maintain a 
representative office.  There are no restrictions on the number of branches that foreign insurance 
companies may establish in Chile.  Foreign entities may carry out reinsuranc e operations without the 
need to establish themselves in Chile, provided that th ey have an international risk rating of at least 
BBB, appoint a representative in Chile and are enrolle d in the SVS's register of foreign reinsurers. 
174. Insurers can set premiums freely.  Intermedia tion commissions are also agreed freely between 
the insurer and the insurance broker.  The amounts insured, premiums and claims must be expressed 
in UF, unless the contracts are in foreign currency.  The law authorizes insura nce companies to invest 
in instruments and assets abroad up to a maximum of 20 per cent of their technical reserves and risk capital. 
175. Insurance brokers must be registered with the SVS.  To engage in this activity it is necessary 
to be Chilean or a foreigner established in Chile and, in the case of a legal person, to have been legally 
                                                     
 
178 Article 4 of Decree with Force of Law No. 251. 
179 Articles 7 and 16 of Decree with Force of Law No. 251. Chile WT/TPR/S/220/Rev.1 
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incorporated in Chile for the purpose.  However,  Law No. 20.190 allows in ternational maritime and 
air transport insurance and insurance for goods in inte rnational transit to be in termediated in Chile by 
natural or legal persons establishe d in a country with which Chile has an international treaty that 
permits such insurance to be  effected from that country.180  Foreign reinsurance brokers are subject to 
the same requirements with respect to registrati on and the issuance of insurance policies as domestic 
brokers and must be legal persons  established in their country of origin, with the capacity to 
intermediate risks transferred from abroad and pay claims in convertible currency. 
176. In accordance with its Schedule of Commit ments under the GATS, in addition to the 
previously mentioned evidence of economic need (see ( iii) above), Chile may restrict or prescribe, in 
a non-discriminatory manner, the type of commerci al presence that must be adopted by firms 
operating in the Chilean securities and insurance sector.  With regard to market access, it is stipulated 
that insurance services may only be provided by co mpanies incorporated in Chile that offer life or 
general insurance.  Insurance brokers must be en rolled in the SVS's register and the service may be 
provided only by legal persons incorporated in Chile  for the purpose.  For the cross-border supply of 
services, foreign reinsurance companies and foreig n reinsurance brokers must be enrolled in the 
SVS's register of foreign reinsurers.181  Chile has not submitted a revised financial services offer to the 
WTO. 
177. As in the case of banking services, some of th e RTAs signed by Chile include provisions on 
insurance in the respective financia l services chapters;  other agreemen ts envisage future negotiations 
with a view to their inclusion.  The SVS has not  signed any memoranda of understanding with its 
counterparts in other countries. 
(d) Pension funds 
General characteristics 
178. Chile's pension system was privatized in 1981.   Since then, it has become one of the most 
dynamic sectors of the Chilean financial system and has served as a model for the pension systems of several Latin American countries.  It is a compul sory individual capital account system designed to 
receive the social security savings of the affiliate d workers, who must each month pay 10 per cent of 
their wages into a personal account with the Administradora de Fondos de Pensiones  – AFP (pension 
fund management company) of their choice.  At  the end of 2008, there were 8,372,022 people 
affiliated to the Individual Capital Account Pension System, which is equivalent to almost half the 
population of Chile (16.8 million).
182 
179. The AFPs, private institutions responsibl e for managing individual accounts through a 
Pension Fund, are the largest institutional investor in  the Chilean financial mark et.  The total value of 
the assets of the AFPs amounted to US$82,226 million on 31 March 2009 (almost 50 per cent of 
GDP).183  There is a high level of concentration in th e pension fund market owing to the existence of 
economies of scale.184  The number of AFPs fell from a ma ximum of 21 in 1994 to seven in 2003 and 
five in 2009.  In four of the AFPs, some of the ma jority shareholders are controlled by foreign entities. 
180. A recent study, commissioned by the OECD, indicates that the privatization of Chile's 
pension system has been successful in improving its l ong-term sustainability, creating a fairer system, 
                                                      
180 Article 58 bis of Decree with Force of Law No. 251. 
181 WTO document GATS/SC/18/Suppl.3, of 26 February 1998. 
182 Pensions Supervisory Authority.  Viewed at:  http://www.safp.cl/573/ar ticles-5945_resource_1.pdf 
183 Pensions Supervisory Authority (2009). 
184 SAFP (2006). WT/TPR/S/220/Rev.1 Trade Policy Review 
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promoting the development of capital markets and removing some distortions in the operation of 
labour markets.  However, it notes that there is room for operational costs and prices to go down, as 
well as for improvements in the extent and quality of  the funded pension programme coverage.  The 
study concludes that, while some regulatory ch anges could improve these aspects, the long-term 
solution lies in the creation of more jobs in the formal sector, the reduction of unemployment and an 
increase in the retirement age.185 
Legal and institutional framework 
181. The Superintendencia de Pensiones  – SP (Pensions Supervisory Authority) is the public body 
responsible for authorizing the establishment of AFPs, overseeing the legal, administrative and 
financial aspects of their functioni ng and regulating their operations. 
182. The pension fund sector is governed mainly by Decree Law No. 3.500 of 1980, which created 
the individual capital account system managed by th e AFPs.  During the review period, reforms were 
introduced in the pension legislation, in particular  those effected by Law No. 20.255, published on 
17 March 2008.  Among other things, Law No. 20.255 extended the scope of the system by making it 
compulsory for the self-employed as well;  allowed the insurance companies to set up their own 
AFPs;  increased the options and the maximum lim its for investment in domestic and foreign 
instruments available to the Pension Funds186;  and established a public tender mechanism for 
allocating new compulsory accounts.  Another of the principal objectives of the reform was to expand 
the social protection. 
183. AFPs must be established as sole-purpose corpora tions, subject to the approval of the SP.  
Any Chilean or foreign person, natural or legal, may be a shareholder in an AFP.  There are no 
restrictions on the participation of foreign investme nt in the equity of an AFP.  The minimum capital 
requirement for establishing an AFP is 5,000 UF (US$179,500).187  AFPs may charge commissions, 
which they may set freely and which must be unifo rm for all those affiliated to the same AFP.  
Moreover, AFPs must provide a minimum rate of return on the Pension Funds they manage.  The 
resources of the Pension Funds may only be inv ested in the securities expressly established by law 
and the level of risk varies according to the Fund. 
184. Chile has not made any specific commitments w ith regard to pension funds under the GATS. 
(iv) Air transport and airports 
185. Chile practises an "open skies" policy based on free market entry and free pricing.  However, 
for foreign companies market entry is subject to the principle of reciprocity.  Chile has negotiated 
43 bilateral air transport agreements with different  degrees of openness;  more than half of these 
agreements grant fifth and sixth freedom rights and several also grant the seventh freedom.  There are no restrictions on private or fore ign participation in Chilean airports;  the 12 main airports are 
State-owned, but nine of them have been  put out on concession to the private sector. 
(a) General characteristics 
186. During the period 2003-2008, international p assenger traffic (expressed as the number of 
passengers per kilometre flown or pax-km) increa sed by 46 per cent, driven by strong economic 
                                                     
 
185 OECD (2009b). 
186 For more information, see Article 45 of Decr ee Law 3.500 (as amended by Law No. 20.255). 
187 On 31 March 2009, 1 UF was equivalent to US$36. Chile WT/TPR/S/220/Rev.1 
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growth.188  However, since the first quarter of 2009 th e effects of the global economic crisis on the 
Chilean aviation industry have become more no ticeable:  in January-March 2009, international 
passenger traffic fell by 12 per cent as compared  with the same period in the previous year.189  I n  
2007, less than 1 per cent of Chile's foreign trad e, expressed in tonnes, was moved as air cargo.190  
Between 2003 and 2008, international cargo traffi c (measured in tonnes per kilometre flown) 
progressed slowly, increasing by only 16 per cent during the period.191  In the first quarter of 2009 
international cargo traffic was 20.1 per cent down on the corresponding figure for 2008. 
187. In 2008, the exports and imports carried by Chile's air transport services were valued at 
US$2,025.3 million and US$1,166.2 million, respectively.192  In 2008, airline companies incorporated 
in Chile carried 48 per cent of international passe nger traffic (expressed in pax-km) and held 50 per 
cent of the international air cargo market.193 
188. The domestic air transport market is highly con centrated, with one dominant player (the Lan 
Group) and several smaller ones (SKY, PAL and Aero DAP).  Competition in the international market 
has intensified in recent years with the entry of low- cost airlines.  At the beginning of 2008, there was 
a total of 32 airline companies providing international passenger and cargo air transport services in 
Chile. 
189. A study of the industrial organization of the Chilean domestic air transport industry has 
concluded that, despite the high le vel of concentration, the markets are sufficiently competitive, 
among other things, because there are no legal obstacles to entry or real restrictions on the ability of a foreign operator to access the domestic markets.  Howe ver, the study suggests that there is room to 
increase competition and prevent the use of anticompetitive practices.
194 
190. The Chilean airport network comprises 330 airports and airfields.  The Dirección General de 
Aeronáutica Civil  – DGAC (Directorate-General of Civil Aeronautics) manages 35 of them and also 
performs supervisory and control func tions in relation to the rest.  The primary network is composed 
of 12 State-owned airports with facilities for intern ational operations, of which nine are managed by 
domestic and foreign private concession-holders.  The secondary network comprises 13 airports that 
provide links between the country's main cities,  the rest being public and private airfields.195  Merino 
Benítez international airport, which serves the metr opolitan area of Santiago handles more than 98 per 
cent of international passengers and cargo.  In 2008, this airport recorded 4.8 million passenger 
arrivals and departures (as compared with 3 million in 2002).196 
191. Since 1997 nine concessions have been granted to private companies for airport construction, 
maintenance and management, which has made it po ssible to expand and modernize the main regional 
airports.  Concessions are granted through competitiv e bidding for a fixed term.  The dominant airline 
                                                      
188 Junta de Aeronáutica Civil  – JAC (Civil Aeronautics Board) online data.  Viewed at:  
http://www.jac-chile.cl/OpenSupport_Estadisticas Vuelo/asp/pagDefault.asp?arginstanciaID=48 
189 JAC online data.  Viewed at:  
http://www.jac-chile.cl/OpenNews/as p/pagDefault.asp?argInstanciaId=1 &argNoticiaId=41&argEdicionId=1 
190 Information provided by the Chilean authorities. 
191 JAC data.  Viewed at:  http://www.jac -chile.cl/OpenSupport_EstadisticasVuelo/ 
192 Central Bank figures.  Viewed at:  http://si2.bcentral.cl/basede 
datoseconomico/951_417.asp?m=BP_serv_X&f=T&i=E and 
http://si2.bcentral.cl/basededatoseconomico/951_417.asp?m=BP_serv_M&f=T&i=E 
193 JAC figures.  Viewed a t:  http://www.jac-chile.cl/OpenS upport_EstadisticasVuelo/ 
194 Agostini (2006). 
195 DGAC data.  Viewed at:  http://www.mop.cl/dap/ 
196 Information provided by the Chilean authorities. WT/TPR/S/220/Rev.1 Trade Policy Review 
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company has a minority stake in several of the airport concession-holders.197  The State does not 
participate in the supply of air transport services, ex cept insofar as it controls air traffic and collects 
fees for air traffic control and use of the airports. 
(b) Legal and institutional framework 
192. Since the last Review there have not been  any fundamental changes in the legal and 
institutional framework for air transport in Chile.  Th e legislation comprises:  the Charter of the Civil 
Aeronautics Board (Decree with Force of Law No. 241 of 1960);  the Law on Commercial Aviation 
(Decree Law No. 2.564 of 1979) establishing the basi s of Chilean commercial aviation policy;  Law 
No. 18.916 of 1990 approving the Aeronautics Code (as amended by Law No. 19.366 of 1995);  the 
Law on the Organization of the Directorate-General of Civil Aeronautics (Law No. 16.752 of 1968);  
and Supreme Decree No. 102 of 1981 of the Mi nistry of Transport and Telecommunications 
establishing the public tender procedures for the allo cation of international frequencies to domestic 
airline companies.  International air transpor t is governed by 43 bilateral agreements and 
three multilateral agreements negotiated by Chile (see below). 
193. The public institutions that regulate the commerc ial air transport sector are the DGAC of the 
Ministry of National Defence, which f unctions as the national aviation authority198;  the Junta de 
Aeronáutica Civil  – JAC (Civil Aeronautics Board), respons ible for commercial aviation policy and 
for negotiating reciprocity in  international agreements199;  and the Dirección Nacional de Aeropuertos  
– DAP (National Directorate of Airports), which is  entrusted with planning the development of the 
airport infrastructure.200 
194. In accordance with its legislation, Chile prac tises an "open skies" commercial air transport 
policy, based on free market entry, free pricing a nd minimum official intervention.  No licences are 
required to enter the market;  both Chilean and fo reign companies may furnish air transport services 
in the country, provided that they comply with the technical requirements and hold the compulsory 
insurance.201 
195. However, free market entry for foreign companies is subject to the principle of reciprocity in 
their country of origin.  The JAC may restrict the access of foreign companies to the domestic market 
if their country of origin applies restrictions on Ch ilean companies, or if the foreign company operates 
a route that is restricted by a third country for Ch ilean companies and this restriction is deemed to 
have a significant impact on the Chilean airlines.202  Any airline company incorporated and domiciled 
in Chile is regarded as a domestic airline compa ny, regardless of whether the shareholders, board 
members and/or executives are or are not Chilean and reside or do not reside in Chile.  However, for 
an aircraft to be registered in Chile more than 50 per cent of the capital must belong to Chilean natural 
or legal persons.  A Chilean airline company can u se both Chilean and foreign-registered aircraft to 
provide air transport services. 
196. Airline companies can establish their tariffs freely,  but must register them with the JAC.  The 
authority is not authorized to set or challenge tariffs.  However, exceptionally it may set tariffs on 
international routes where the authority of the ot her country involved does not accept free pricing, 
                                                      
197 Agostini (2006). 
198 For further information see the DGAC website at:  http://www.dgac.cl/portal/ 
199 For further information see the JAC website at:  http://www.jac-chile.cl/ 
200 For further information see the DAP website at:  http://www.mop.cl/dap/ 
201 Article 1 of Decree Law No. 2.564. 
202 Article 2 of Decree Law No. 2.564. Chile WT/TPR/S/220/Rev.1 
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although this has never happened in practice.203  It should be noted that before approving the merger 
between Lan Chile and Ladeco in 1995, the Resolutive Commission (predecessor of the TDLC) 
required these companies to submit a plan for the self-regulation of tariffs that establishes certain 
restrictions with respect to the tariffs that  Lan Chile may charge in the domestic markets.204 
197. There are no restrictions on the participation of foreign investors in airport concessions. 
198. There are no legal provisions requiring national aircra ft to be repaired or maintained in Chile.  
Both domestic and foreign companies can provide aircraft maintenance services in Chile.  There are no restrictions on the supply of ground handling services by domestic or foreign companies.  Providers of computer reservation services do not have  to be established in Chile in order to offer 
their services.  Moreover, there are no restrictions on the number of providers of computer reservation 
systems that can operate in Chile, or on the numbe r of travel agencies to which these providers can 
offer their services. 
199. In conformity with its air transport libera lization policy, by 2009 Chile had negotiated 
43 bilateral air transport agreements  or conventions with varying degrees of openness (Table IV.3).  
In 35 of these agreements third and fourth freed om rights are established without restrictions (in 
another eight cases the number of flights is restricted).  In 26 agreements fifth and sixth freedom 
rights are also granted.  In addition, in 16 cases the agreements grant the seventh freedom (with 
respect to passenger or cargo transport).  Moreover, in seven bilateral conventions the right of air 
cabotage is granted.  The authorities have pointed out that their policy is to achieve the greatest 
possible openness in each agreement, but that freque ntly the degree of openness achieved depends on 
what the other party is prepared to accept.  In general, the agreements concluded by Chile, in 
particular the most recent, are fairly liberal and its  air transport liberalization policy has been deemed 
to be "best practice".
205 
200. Chile has included a chapter on air transport in some of its RTAs (for example, those with 
Central America and Mexico) by incorporating bila teral conventions within the framework of these 
agreements.  Chile participates in the Fortal eza Agreement on regional air transport services 
concluded with Argentina, Bolivia, Brazil, Paraguay, Peru and Uruguay.  Chile also forms part of the 
multilateral air transport agreement concluded betw een various members of APEC (Brunei, Chile, 
United States, New Zealand, Peru, Samoa and Singapor e).  Moreover, in 2003, Chile, together with 
Brunei, New Zealand and Singapore, signed an optio nal protocol to the APEC agreement permitting 
national cabotage and the seventh freedom for passenger transport. 
201. Under the GATS, Chile made specific commitments  on aircraft maintena nce and auxiliary air 
transport services.  Chile's Schedule permits the co mmercial presence of foreign providers to offer 
aircraft maintenance services, the opening of offi ces, the issue and sale of air transport fares and 
tickets, the ground operation of sup port equipment and computer reservation systems;  for the latter 
cross-border supply was also bound (Table AIV.1). 
                                                      
203 JAC online information.  Viewed at:  http://www.jac-chile.cl 
204 Resolution No. 496 of 1997 of the Resolutive Commission approved the plan proposed by Lan and 
Ladeco. 
205 IATA, Agenda for Freedom.  Viewed at:  http://www.agenda-for-freedom.aero/agenda/ WT/TPR/S/220/Rev.1 Trade Policy Review 
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Table IV.3 
Rights for foreign airlines in Chile 
Country Year Between territories 
of the parties Between 
counterparty 
territory and third 
countries From counterparty 
territory to third 
countries Within 
counterparty 
territory 
  3rd and 4th freedoms 5th and 6t h freedoms 7th freedom Cabotage 
Englandb 2008 Open skies Open skie s Open skies Open skies 
Paraguay 2005 Open skies Open sk ies Open skies Open skies 
Uruguaya 2003 Open skies Open skie s Open skies Open skies 
Brunei 2002 Open skies Open sk ies Open skies Open skies 
New Zealand 2002 Open skies Open skies Open skies Open skies 
Singapore 2002 Open skies Open sk ies Open skies Open skies 
United Arab Emirates 2005 Open skies Open skies Open skies Open skies 
Finland 2005 Open skies Open skies Open skies Without rights 
United States 2002 Open skies Open skie s Open skies (cargo) Without rights 
Guatemala 1999 Open skies Open skies Open skies (cargo) Without rights 
Panama 1997 Open skies Open skies Op en skies (cargo)  Without rights 
Dominican Republic 2006 Open skies Open sk ies Open skies (cargo)  Without rights 
Jamaica 2006 Open skies Open skiesh Open skies (cargo)  Without rights 
Ecuador 2007 Open skies Open skiesc 21 flights/week Without rights 
Malaysia 2009 Open skies Open skies Without rights     Without rights 
Belgiuma 2001 Open skies Open skies Without rights Without rights 
Korea 2001 Open skies Open skies Without rights Without rights 
Denmark 2001 Open skies Open skies Without rights Without rights 
Netherlands 2001 Open skies Open skies Without rights Without rights 
Luxembourga 2001 Open skies Open skies Without rights Without rights 
Norway 2001 Open skies Open skies Without rights Without rights 
Sweden 2001 Open skies Open skies Without rights Without rights 
Aruba 1999 Open skies Open skies Without rights Without rights 
Costa Rica 1999 Open skies Open skies Without rights Without rights 
Brazilb 2008 Open skies Open skiese,f Without rights Without rights 
Colombia 1993 Open skies Open skiesd Without rights Without rights 
China 2009 Open skies Open skies (6a)g Without rights Without rights 
Argentina 1996 Open skies Open skies (6a)  Open skies (cargo)  Without rights 
Spain 2008 Open skies 19 flights/w eek Without rights Without rights 
Canada 2001 Open skies 14 flights/w eek Without rights Without rights 
Switzerland 2001 Open skies 7 flights/ week Without rights Without rights 
Italy 1999 Open skies 7 flights/w eek Without rights Without rights 
Bolivia 1998 Open skies Without ri ghts Without rights Without rights 
Cuba 1995 Open skies 2 points Without rights Without rights 
Israel 1982 Open skies To be determined Without rights Without rights 
Peru 2007 28 flights/week 14 flights/week  Open skies (cargo)  Without rights 
Indiaa 2007 14 flights/week 14 flights/week Open skies (cargo)  Without rights 
Germany 1998 9 flights/week 9 flights/ week Without rights Without rights 
France (Paris) 1998 7 flights/week 7 fli ghts/week Without rights Without rights 
France (Papete) 1998 7 flights/week 7 fli ghts/week Without rights Without rights 
Australia 1998 7 flights/week 7 flight s/week Without rights Without rights 
Mexico 1998 10 flights/week Without rights Without rights Without rights 
Venezuela 1992 2 flights/week 2 flight s/week Without rights Without rights 
  Open skies with 
35 countries Open skies with 
26 countries Open skies with 
16 countries Open skies with 
7 countries 
a Agreement signed but not ratified. 
b Agreement initialled but not yet signed. c Open skies within Latin America;  up to 15 scheduled flights outside the region. 
d Open skies within Latin America;  up to 3 scheduled flights outside the region. 
e Open skies within South America. 
f Outside of South America up to 56 passenger f lights/week and 37 cargo flights/week in 2012. 
g With 5th freedom:  7 scheduled pa ssenger flights and 14 cargo flights. 
h With the exclusion of Miami, New York and Toronto. 
Note: Open skies means without limitation on the number of flights or operating points. 
Source : Chile Civil Aerona utics Board (JAC). 
 Chile WT/TPR/S/220/Rev.1 
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(v) Maritime transport and ports 
202. In accordance with its legislation, Chile may re quire reciprocity where international maritime 
traffic cargoes are concerned.  Cabotage is reserved for vessels registered in Chile, although exceptions are allowed.  To register a vessel in Chile more than 50 per cent of the capital must be 
owned by Chilean natural or legal persons.  A 5 pe r cent tax is levied on the income from maritime 
freight transport to or from Chilean ports recei ved by persons not domiciled in Chile, unless the 
country in which the foreign vessels are registered o ffers reciprocity to Chilean vessels.  There are no 
restrictions on foreign participation in Chilean  ports;  most of them are privately owned and 
considered efficient by world standards. 
(a) Maritime transport 
203. In 2008, the value of Chile's exports and impor ts of maritime transport services amounted to 
US$4,031 million and US$4,877 million, respectively.
206  During the review period, both exports and 
imports of these services increased considerably due to the rapid expansion of Chile's international 
trade;  during 2008, 91.7 per cent of Chilean forei gn trade tonnage and 84.6 per cent of its foreign 
trade in value terms was carried by sea.207  The national merchant fleet consists of 192 vessels with a 
total transport capacity of 951,046 deadweight tonnes.208  There are two Chilean companies among 
the world's first 30 shipping lines.209 
204. Maritime transport and port activities are governed by the Shipping Law (Decree Law 
No. 2.222 of 31 May 1978), the Ley de Fomento a la Marina Mercante  – LFMM (Law on the 
Development of the Merchant Mari ne) contained in Decree Law No . 3.059 of 22 December 1979 and 
its regulations (Supreme Decree No. 237 of 25 July 2001), and the Law on the Modernization of the 
State Port Sector (Law No. 19.542 of 19 December 1997). 
205. The main public institutions in volved in the regulation of maritime transport are:  the 
Transport Undersecretariat of the Ministry of Tr ansport and Telecommunications, responsible for the 
commercial aspects of international mar itime transport and cabotage;  the Dirección General del 
Territorio Marítimo y de Marina Mercante  – DIRECTEMAR (Directorate-General of the Maritime 
Territory and Merchant Marine) of the Ministry of  National Defence, which is responsible for the 
technical aspects of the merchant marine and safet y at sea;  and the Merchant Marine Development 
Commission, which oversees the application of the principle of reciprocity where cargo preferences are concerned. 
206. According to Article 11 of the Sh ipping Law, for a vessel to be registered in Chile its owner 
must be a Chilean person.  Where legal persons are concerned, they must be incorporated in Chile, a 
majority of the directors or managers must be Chile an, and more than 50 per cent of the capital must 
be controlled by Chilean natural or  legal persons.  However, vessels, other than fishing vessels, owned 
by foreigners may be registered in Chile if their ow ners are domiciled in the country, if the principal 
location of their business is Chile or if they are pe rmanently engaged in an industry or profession in 
Chile.  Once a vessel has been entered in the corr esponding Register, it is deemed to be Chilean.  
                                                     
 
206 Information provided by the Central Bank of Chile.  Viewed at:  
http://si2.bcentral.cl/basededatoseconomico/951_417.asp?m=BP_serv_X&f=T&i=E and http://si2.bcentral.cl/basededatoseconomico/951_417.asp?m=BP_serv_M&f=T&i=E 
207 National Customs Service figures provided by the Chilean authorities. 
208 Information provided by the Chilean authorities. 
209 According to the AXS-Alphaliner Top 100 register, cited in CIMA Ingeniería EIRL (2008). WT/TPR/S/220/Rev.1 Trade Policy Review 
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However, for it to fly the national flag the captain of the vessel and its officers and crew must be 
Chilean.210 
207. Under the legislation, the Chilean authorities are empowered to subject access to cargoes in 
international maritime traffic to the principle of r eciprocity.  According to Article 4 of the LFMM, the 
percentage access of foreign merchant vessels to maritime cargoes, from or to Chile, depends on the 
percentage access allowed, in the corresponding traffic,  to Chilean vessels by the country in question.  
The Chilean authorities have pointed out that, being discretionary, the reciprocity requirement is applied flexibly and only in response to limitations on access to cargoes imposed by the countries of origin of the foreign vessels. 
208. National maritime cabotage is reserved for vessel s registered in Chile (Article 3 of the 
LFMM).  However, foreign merchant vessels may pa rticipate in national cabotage if the volumes of 
cargo involved exceed 900 tonnes, subject to a public te nder procedure organized by the user.  In this 
case, and solely for tender acceptance purposes, bids involving foreign vessels are increased by a percentage equivalent to the general customs tariff rate.  If the cargo volume is equal to or less than 
900 tonnes and no Chilean vessels are available, cabotag e in foreign merchant ships may be allowed.  
Such authorization may also be given for the excl usive transport of passengers.  Moreover, foreign 
vessels are also allowed to carry empty containers  in cabotage traffic, subject to reciprocity. 
209. The legislation allows Chilean or foreign sh ipping companies that provide international 
freight and passenger transport services to recoup the VAT paid to purchase or import goods or use 
services, insofar as these operations are nece ssary for the development of their activities.
211  T h e  
Income Tax Law establishes an additional 5 per ce nt tax on the income received by persons not 
domiciled or resident in Chile by way of charges for carrying maritime freight to or from Chilean 
ports.212  The tax is not applied if in the country in wh ich the foreign vessels are registered there is no 
similar tax or Chilean shipping companies are granted exemptions.  This tax was included in Chile's List of MFN Exemptions under the GATS.  The authorities have explained that the tax is seldom applied. 
210. Chile is a signatory to the United Nations C onvention on the Law of the Sea, has been a 
member of the International Maritime Organizati on since 1972, and has signed various international 
maritime transport agreements.  Moreover, Ch ile applies a Bilateral Agreement on Maritime 
Transport concluded with Brazil in 1974.  Chile has not made any specific commitments on maritime 
transport under the GATS. 
(b) Ports 
211. Chile has 36 ports, of which 10 are State-owned and 26 are in private ownership.  Of the 
latter, 15 are for public use and 11 for private use.   Six of the State-owned ports are operated by 
private companies under concessions.  As far as cargo handling is concerned, the most active ports are 
Quintero, San Antonio, Valparaíso, Huasco, Lirquén, San Vicente and Mejillones.  The volume of 
freight moved through Chilean ports (including transit, but excluding cabotage) rose from 
58.8 million tonnes in 2003 to 83.6 million tonnes in 2007.  In 2007, the privately owned ports 
handled 64 per cent of cargo (mainly bulk), while th e rest was handled by the State port enterprises 
                                                     
 
210 Articles 13 and 14 of the Shipping Law. 
211 Article 7 of the LFMM. 
212 Article 59, No. 4, of the Income Tax Law. Chile WT/TPR/S/220/Rev.1 
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(including private concession-holders).  During th e review period, the freight volume carried by 
cabotage remained almost static, am ounting to 12.3 million tonnes in 2007.213 
212. The State port enterprises214 manage the State-owned ports for public use and are governed by 
Law No. 19.542.  Private companies may participat e through port concessions for operating wharves 
or through cargo handling under the multi-operator system.  Concessions are granted by the State port 
enterprises under a public tender procedure, in accordance with the Regul ations established by 
Supreme Decree No. 104 (1998) of the Ministry of Transport and Telecommunications.  Chilean or 
foreign natural or legal persons may participate in the bidding.  The Sistema de Empresas  (SEP) 
(Enterprise System) oversees the management of the State port enterprises. 
213. To engage in port activities in a private port it  is necessary to obtain a maritime concession 
granted directly by the Marine Undersecretariat of the Ministry of Defence;  the port thus put out on 
concession may decide whether it will be for public or private use.215  The ports are subject to 
regulation and supervision by other public agencies such as the Customs, the SAG, the Ministry of 
Health and DIRECTEMAR. 
214. The State has continued to encourage the particip ation of the private sector in port activities, 
although the process of granting port operating conc essions progressed more slowly during the review 
period.  From 1999 to 2004 seven State wharves were  put up for tender, of which five were awarded 
to enterprises with both domestic and foreign capita l participation.  A new series of port concessions 
that will include wharves in the ports of Coquimbo,  Valparaíso and San Antonio is planned for the 
near future. 
215. The injection of capital into the concession ports since the end of the 1990s, together with the 
greater competition between State ports, has made  possible a considerable improvement in the 
efficiency of Chile's ports and a reduction in their costs.216  In keeping with the global trend, Chilean 
ports have experienced a steady increase in the use of containers, which grew by more than 15 per 
cent a year between 2003 and 2007.217 
216. A recent diagnostic study of maritime transport in Chile recognizes the levels of efficiency 
achieved by the Chilean ports, but points out that th ese will not be sufficient to absorb the increase in 
demand generated by the expansion of the country's fo reign trade in the next few years, and therefore 
recommends that a start be made as soon as possible on expanding the national port infrastructure.218  
Similarly, a report of a panel of port experts notes that the rapid growth of Chile's foreign trade poses a challenge not only for the provision of infrastru cture but also for the entire associated supply 
chain.
219 
                                                      
213 Cámara Marítima and Portuaria Chile, A.G., Anuario 2007 .  Viewed at:  
http://www.camport.cl/anuario2007/indice.htm 
214 The State Port Enterprises are:  Arica, Iquique, Antofagasta, Coquimbo, Valparaiso, San Antonio, 
Talcahuano-San Vicente, Port Montt, Chacabuco and Austral. 
215 Decree with Force of Law No. 340 of 1960. 
216 For example, in Chile the cost of handling a container is US$85.  Drewry Shipping Consultants 
figure provided by the Chilean authorities.  According to  another indicator, the average value of the logistical 
costs (transport, inventories and intermodal transfer) as a proportion of the value of the products transported is 18 per cent, one of the lowest in Latin America.  CIMA Inge niería EIRL (2008). 
217 CIMA Ingeniería EIRL (2008). 
218 CIMA Ingeniería EIRL (2008). 
219 SEP (2008). WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 126 
 
 
(vi) Professional services 
217. A valid professional diploma is required to engage in a regulated profession in Chile, 
including law, accountancy and engineering.  Forei gn diplomas must be revalidated by the University 
of Chile or be otherwise recognized under an inte rnational agreement.  Only Chilean citizens and 
foreigners who have completed their law studies in Chile may appear before Chilean courts.  
However, legal consultants with foreign diplomas may provide legal advice on foreign law in Chile.  
Engineers who obtained their diploma abroad and are hired to perform a particular job in Chile must 
receive temporary authorization from the Colegio de Ingenieros de Chile , the national society of 
engineers.  Accountants with foreign diplomas ma y establish a consultancy firm in Chile, but must 
have at least one partner with a diploma valid for the practice of accountancy in Chile. 
(a) General characteristics 
218. To exercise in Chile a profession for which a qualifying professional diploma is 
indispensable, it is necessary to obtain a valid professional diploma.220  This requirement applies both 
to Chilean citizens and to foreigners wishing to ex ercise a profession in Chile on a permanent basis.  
The situation is different when the professional servi ces are to be supplied on a temporary basis.  In 
this case a foreign provider may provide professional services by acting as a consultant, for which it is 
not necessary to hold a di ploma valid in Chile. 
219. In Chile there are two ways of obtaining the recognition or revalidation of diplomas for 
studies completed abroad:  under international agreem ents or through the system of revalidation and 
recognition administered by the University of Chile. 
220. Chile has bilateral mutual recognition agre ements with Uruguay, Ecuador, Colombia, 
Spain221, Brazil and Peru, under which it automatically r ecognizes diplomas granted in these various 
countries and authorizes the exercise of the corresp onding profession in its territory.  The persons 
concerned must submit the documents required222 (previously authenticated by the Chilean consulate 
of the country in which the studies were completed) to the Ministry of Foreign Affairs for review and 
subsequent registration, which constitutes qualific ation.  Chile, along with Bolivia, Costa Rica, 
El Salvador, Guatemala, Honduras, Nicaragua and Peru , is also a signatory to the Mexico Agreement 
(1902).  Under this agreement, diplomas granted in the signatory countries are automatically 
recognized, but in the case of medical (including pharmacy) diplomas a general examination must be passed before it is possible to exer cise the profession.  Data provided by the authorities show that, 
between 2003 and 2008, a total of 5,982 foreign di plomas were recognized under mutual recognition 
agreements. 
221. In the case of countries with which Chile has no agreement, foreign diplomas are recognized 
or revalidated by the University of Chile which, under its Charter
223, is the only institution so 
authorized by the Ministry of Education.  University Decree No. 0030.203 of 2005224 regulates the 
foreign diploma recognition and reva lidation procedures in detail, without prejudice to the relevant 
international treaties to which Chile is a signatory. 
                                                      
220 The professions for which a professional diploma is required are listed in Article 52 of the 
Constitutional Law on the Organization of Education (Law No. 18.962). 
221 This agreement is at an impasse since Sp ain has failed to recognize Chilean diplomas. 
222 Photocopy of the diploma, certificate of authenticity, photocopy of the grade transcript, photocopy 
of the passport or identity card, official translation of the diploma and of the grade transcript (in some cases it 
may be an ordinary translation). 
223 Decree with Force of Law No. 153 of 1981. 
224 This Decree repealed Univers ity Decree No. 006895 of 1993. Chile WT/TPR/S/220/Rev.1 
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222. In general, the revalidation procedure cons ists in submitting the authenticated documents225 to 
the Office of the Rector of the University of Chile , which after reviewing them refers them to the 
relevant faculty or institute.  Once the academic unit in question has examined the records (within a 
period of 60 days), it sends the Rector a reply, in which it may approve or reject the application or 
demand that additional curricular requirements be me t.  In the case of approval, the University of 
Chile delivers a diploma certifying that the pers on concerned holds a fo reign professional diploma 
equivalent to a diploma granted by the Universi ty of Chile or other national institutions.  The 
obtaining of such a diploma is sufficient to authori ze the exercise in Chile of most of the professions 
that require a qualifying professional diploma, except for the health professions, for which an 
additional examination and/or pr actical experience is required. 
223. In Chile it is not necessary to belong to a pr ofessional association or society or to obtain 
special authorization from a trade association to ex ercise a profession (except in the case of engineers 
who graduated abroad, see below).  Once in possessi on of a diploma valid in  Chile, foreigners may 
join professional societies on the same terms as Chilean nationals, except in the case of the Colegio de 
Médicos  (College of Physicians), to join which a definitive residence certificate is required. 
224. In general, the RTAs concluded by Chile in corporate provisions on cross-border trade in 
services, including professional services.  Among other things, they stipulate that the granting of licences or certificates should not constitute an unnecessary barrier to trade and, where professional 
services are concerned, governments are called upon to encourage the competent authorities to 
establish common criteria for the recognition of diplomas and licences (for example, in the RTAs with 
the United States and Canada).  The inclusion of chapters on temporary entr y for businesspersons is 
also common (for example, the ag reements with Canada, Mexico, United States, Australia, Japan, 
Colombia, Peru, Korea and the P-4).  In these cases the aim is to establish transparent criteria and 
procedures for the temporary entry of professionals and to facilitate the procedure for granting visas. 
225. Within the framework of the GATS, Ch ile undertook specific commitments under 
four professional services headings:  international legal services (solely for advice on matters of 
public international law), accountan cy and auditing, architectural services and engineering services, 
for which commercial presence was bound.   In the case of advice on international law, if this involves 
appearing before a Chilean court or administrativ e body or generates any formal procedure, the 
service must be provided by a locally qualified la wyer of Chilean nationality.  With respect to 
accounting services, the presentation of financial statements must be endorsed by a professional 
legally authorized to practise in  Chile.  In accordance with its  horizontal commitments, Chile bound 
the temporary transfer of natural persons (senior a nd specialized personnel) with in a foreign enterprise 
established in Chile, for a once-renewable period of two years.  Where enterprises with a staff of 15 or more are concerned, in no case may the foreign personnel exceed 15 per cent of the total number of 
persons employed.
226  Under Article VII.4 of the GATS, Ch ile has notified the agreements on the 
mutual recognition of diplomas it has in force.227 
(b) Legal services 
226. In Chile, in accordance with the Courts Orga nization Code, law diplomas authorizing the 
exercise of the profession are granted exclusively by the Supreme Court of Justice to those who hold 
an academic degree ( Licenciado ) in legal and social sciences and meet the requirements laid down in 
                                                      
225 Original copy of diploma, grade transcript, programme of study, course content, curriculum vitae, 
and a certificate of entitlement to practise the profession  in question in the country in which the diploma was 
granted. 
226 WTO document GATS/SC/18, of 15 April 1994. 
227 WTO document S/C/N/8, of 22 December 1995. WT/TPR/S/220/Rev.1 Trade Policy Review 
Page 128 
 
 
the Code.  Up to a few years ago, only Chilean na tionals could obtain a law diploma and practise as a 
lawyer.  Following the publication of Law No. 20. 211 of 5 September 2007, resident foreigners who 
have completed all of their law studies in Chile may exercise the profession.228  Foreign lawyers with 
diplomas obtained abroad may not plead before or address a Chilean court. 
227. Some of the RTAs signed by Chile provide fo r the status of foreign legal adviser, which 
allows a national of the other Part y to provide legal consultancy or advisory services in relation to the 
law of a country in which the national in question is authorized to practise as a lawyer.  Moreover, 
under these agreements, the Parties must consult with  their relevant professional bodies with respect 
to the form of association of national lawyers with foreign legal advisers and the drafting of rules for 
the authorization of such advisers.  As noted a bove, under these agreements, foreign legal advisers are 
not required to possess a diploma valid in Chile in order to provide their services in the country.  Foreign legal advisers are not permitted to advise on Chilean law.  At the sa me time, there are no 
restrictions on a foreign lawyer establis hing a foreign law consultancy in Chile. 
228. The Colegio de Abogados de Chile A.G.
229 is a private professional organization whose aim is 
to develop, protect and advance the legal profession a nd its prestige.  It also establishes codes of good 
practice that govern the exercise of the profession in Chile.  Membership of the Colegio de Abogados  
is optional and is not a prerequisite for practising law. 
(c) Engineering services 
229. To exercise the profession of engineer it is necessary to be in possession of a professional 
diploma valid in Chile, whether it be a national diplom a or a foreign one that has been revalidated or 
recognized.  Article 6 of Law No. 12.851230 stipulates that engineers who graduated abroad (whether 
Chilean or foreign) and have been specially hired to  perform a particular function in Chile must apply 
for permission to the Colegio de Ingenieros de Chile , which will proceed to enrol them in a special 
register, placing them under the society's protection and discipline.  Permits are granted for the duration of the contract, but with a maximum of three years.
231  In these cases, there is no need for the 
persons concerned to revalidate their foreign diploma. 
230. There is no legislation that limits the exercise of the profession of engineering in Chile on the 
basis of nationality.  Likewise there are no restrictions on the establishment of a foreign firm of  consulting engineers or on the association of fore igners with Chilean pr ofessionals in consulting 
engineering firms in Chile;  in these cases, the foreign engineers are not required to obtain the 
permission of the Colegio de Ingenieros . 
231. Chile's RTAs frequently contain provisions in which the Parties undertake to work together 
with their relevant professional bodies for the purpose of establishing procedures for granting 
engineers of the other party temporary licences to exercise their profession in their territory. 
(d) Accounting and auditing services 
232. To exercise the accounting and auditing profession in Chile it is necessary to possess a 
qualifying diploma.  The Colegio de Contadores de Chile A.G.  is a private professional association 
                                                     
 
228 Article 526 of the Courts Organization Code, as amended by Law No. 20.211 (2007). 
229 Created by Article 1 of  Decree Law No. 3.621. 
230 Law No. 12.851, published on 6 February 1958, established the Colegio de Ingenieros . 
231 The procedure is governed by the regulations approved by the Colegio de Ingenieros de Chile  and 
published in the Official Journal of 28 April 1999.  Viewed at:  http://www.ingenieros.cl/index.php?option=com_content&task=view&id=124&Itemid=254 Chile WT/TPR/S/220/Rev.1 
 Page 129 
 
 
empowered by Law No. 13.011232 to issue standards for the practice of accountancy and auditing in 
Chile.  These standards are based on Genera lly Accepted Accounting Principles and other 
international standards.  The State oversees th e application of the accounting and auditing rules 
through the Banks and Financial In stitutions and Securities and Insurance Supervisory Authorities.  
There are no legal provisions that limit the exercise  of the accounting or auditing profession in Chile 
on the basis of nationality. 
233. The external auditors of open corporations must be enrolled in the Register of Auditors of the 
Securities and Insurance Supervisory Authority.233  Only juridical persons legally established in Chile 
as partnerships or associations and whose main business is the provision of auditing services may be 
enrolled in this Register. 
234. Chile participated in the preparation of guide lines for mutual recognition agreements in the 
accountancy sector of the WTO Working Group on Professional Services and replied to the questionnaire on the sector.
234  In this document, Chile noted that there were no restrictions on the 
commercial presence of foreign providers of accoun ting services in Chile.  However, foreign firms 
must have at least one partner with a licence to  exercise the profession in Chile, since that is a 
requirement for the presentation of financial statements. 
 
 
                                                      
232 Law No. 13.011 of 1958 established the Colegio de Contadores de Chile . 
233 Article 50 of the Regulations of the Law on Corporations (Law No. 18.046). 
234 WTO document S/WPPS/W/7/Ad d.15, of 2 October 1996. Chile WT/TPR/S/220/Rev.1 
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