SANTIAGO, Aug. 3 (Xinhua) -- Chile's President Sebastian Pinera enacted a law on Friday that bars businesses nationwide from giving out plastic bags to customers.

The law puts Chile "on the forefront" in protecting the environment, said Pinera, who touted the regulation by handing out reusable canvas bags to passersby in downtown Santiago.

"We have become the first country in Latin America and one of the first in the world to say goodbye to plastic bags that pollute our beaches, parks and streets, and also severely harm our fish and birds," he said.

Chile uses more than 3.4 billion plastic bags a year, or the equivalent of 200 bags per person, according to the Plastic Industries Association.

The law, which aims to remove about 3 million plastic bags from circulation in the short and medium term, takes effect immediately, but will be gradually phased in.

As of Friday, businesses were restricted to giving out a maximum of two plastic bags per person, with violators facing fines of up to 371 U.S. dollars for each bag.

The new law was spearheaded by the Environment Ministry, passed by Congress in May, and hailed by Pinera as a way to "stop dumping millions and millions of plastic bags into the oceans every year, helping to make the oceans cleaner."

Roughly 90 percent of plastic shopping bags end up in the trash and in the oceans, according to environmental groups.

An earlier law passed by the previous administration banned plastic bags from Chile's coastal communities.

Not everyone is happy with the new law, namely plastics manufacturers that appealed to Chile's Constitutional Court to stop it, saying it would lead to a 50 percent loss in earnings and to layoffs.

Secretary general of the presidency, Gonzalo Blumel, told the press the government is not obligated "to make laws that benefit the interests of businesses, but rather to safeguard general wellbeing."

Studies have shown that millions of birds die each year after ingesting plastics and some animals, like turtles, cannot tell the difference between a floating plastic bag and a jellyfish, which is part of its diet.

Scientists have also found evidence that plastics in the seas are eventually ingested by humans through table salt.