Chile has joined a growing number of countries to ban the commercial use of plastic bags.
It became the first country in Latin America to enact the new law on Friday.
“I want to share with you the joy that as of today we’re enacting the law,” said President Sebastian Pinera at a public ceremony in Santiago.
He later handed out cloth bags to passers-by.
It comes after Mumbai became the largest Indian city to ban single-use plastics in June.
Residents in the Indian city caught using plastic bags, cups or bottle could face penalties of up to 25,000 rupees (£250) and three months in jail.
In Chile, large businesses have six months to phase out the use of plastic bags.
Smaller ones will be given two years to adapt to the new rules.
It means that any form of plastic bag other than those constituting primary packaging “necessary for hygiene or to prevent food wastage” are prohibited.
Those who disobey the new law will be subject to a 370 peso (44p) fine in a country where $800 (96p) is the minimum wage.
“Without a doubt we’re taking a giant step towards a cleaner Chile,” added Mr Pinera.
Companies will be limited to handing out a maximum of two plastic bags per transaction in the meantime.
Taiwan, Zimbabwe, Australia and the UK are some of the other countries to ban plastic bags.
From August last year, anyone in Kenya found using, producing, or selling plastic bags could face four years in jail.