I am trying to e-mail a colleague in Chile, but it bounces back with this error message:

The reason for the problem:
5.1.0 - Unknown address error 553-"sorry, that domain isn't in my list of allowed rcpthosts (#5.7.1)"

How do I fix this?

This part of the rejection message, "sorry, that domain isn't in my list of allowed rcpthosts..."

Means that the service that you're using to send (your email provider) has a block on it for some reason. It could be a political thing within the Chilean government or more likely an attempt to block spam messages.

Work-arounds...
If you using a hotmail account, try setting up and using a GMail or Yahoo Mail account.

If you're using a standard ISP, you can contact your ISP technical support and request assistance with getting their domain name off the blocked list.

I hope something here will help.
Dwight