On July 29, 2021, the Seventh Court of Guarantee of Santiago (El Séptimo Juzgado de Garantía de Santiago) reopened an investigation into whether the Banco de Chile helped the former dictator Augusto Pinochet launder money. It notified the Supreme Court of Chile of the reopening of the case and advised the bank, whose ownership in related to the Pinochet family, to set aside $103 million.
The Spanish Court’s Decision
The plaintiffs are led by the President Allende Foundation, named after the former President Salvador Allende, whom Pinochet overthrew in a coup. The Foundation represents more than 20,000 victims of the Pinochet dictatorship. The plaintiffs allege the funds were obtained by illegal expropriations by General Pinochet and his associates and transferred to personal offshore accounts. The complaints allege that the transfers constituted acts of tax evasion and money laundering, which the Banco de Chile assisted.
In 1998, Spanish judge Baltasar Garzon ordered Pinochet detained for crimes against humanity. Spain requested Pinochet’s extradition from England. Although the English courts ordered him extradited, the British Home Office ordered that he not be extradited due to humanitarian considerations, namely his age and failing health. General Pinochet died under house arrest in Chile in 2006 without being tried.
Banco de Chile, the Alleged Enabler, and the Luksić Family
Banco de Chile successfully claimed for years that Chile rather than Spain has jurisdiction to investigate the allegations. In 2013, the Chilean judiciary closed a money laundering investigation without charging the general or anyone else. A study commissioned by the Chilean Supreme Court stated only $2 million of the $21 million identified as Pinochet’s personal wealth could be considered clean.
In 2018, Chile’s Supreme Court ordered the return of $1.6 million of Pinochet’s assets. It convicted three of his former generals for fraud connected to public money. Banco de Chile paid Chilean authorities $3.1 million in 2009 for administrative irregularities concerning General Pinochet’s money. However, the bank was never indicted.
Although the court told Banco de Chile it should set aside $103 million to cover potential payments to the victims, it has not yet ordered it to do so. Banco de Chile has deposits in around ten countries, six in the European Union.
Quiñenco is the majority owner of the Banco de Chile. The Luksić family has Quiñenco as its holding company. Vladimir Luksić was the brother-in-law of Augusto Pinochet.
Prosecutor José Morales has also charged Anita María Pinochet Ribbeck, the spouse of former army general, Juan Miguel Fuente-Alba, and Fuente-Alba, with money laundering.
Morales claims that a report of the Financial Intelligence Agency shows the pair increased their wealth more than 280% between 2010 and 2016 by hiding and falsify the illegal source of their funds. The defendants, represented by Cuatrecasas, one of the largest Spanish firms specializing in tax and money laundering, tried unsuccessfully to dismiss the case.
Spain has extraterritorial jurisdiction for Spanish victims. Already the Spanish courts imposed a penalty against Riggs Banks for alerting General Pinochet’s to move the money in his accounts in London ahead of Garzon’s request that Britain to freeze his accounts.
This case should be watched for its efforts to hold accountable Banco de Chile, the alleged enabler, almost 23 years after the initial charges in Spain.
Spain’s wide-ranging tax collection and enforcement and mutual assistance agreements with the EU countries may play an important role in this case.
The case illustrates the use of extraterritorial jurisdiction when a court believes a foreign court, although exercising jurisdiction, have not properly adjudicated the case.
The current issue of the IELR will have a more comprehensive discussion of the case.
 Raphael Minder, Spain Reopens Pinochet Inquiry Into Tax Evasion and Laundering, N.Y. Times, July 31, 2021, at A7, col.1.
 Spanish court targets Chilean bank linked to Pinochet, July 30, 2021 https://www.hebergementwebs.com/europe/spanish-court-targets-chilean-bank-linked-to-pinochet.
 They Decide on a Bond for Ana Maria Pinochet, spouse of the Former General Fuente-Alba, after the Money Laundering Charges (Decretan arraigo para Ana María Pinochet, esposa del ex general Fuente-Alba, tras ser formalizada por lavado de dinero, El Mercurio, July 29, 2021).
 Spanish court targets Chilean bank linked to Pinochet, supra.