This article is an up-to-date summary of the corporate and
financial crime landscape in Ireland. It examines emerging trends
that may shape the future of corporate criminal enforcement in
Ireland.
Background
The corporate criminal and regulatory framework in Ireland has
been significantly overhauled in recent years, with a new Corporate
Enforcement Authority (“CEA“)
established to replace the Office of the Director of Corporate
Enforcement, which grew to be seen as ill-equipped to deal with
Ireland’s rapidly developing corporate environment.
The CEA is an independent statutory agency, which is equipped to
deal with the large, complex investigations that have become
commonplace in Ireland since its establishment as a go-to
destination for the world’s largest multinational
corporations.
At the same time, the Garda National Economic Crime Bureau (a
branch of the Irish police force, the
“GNECB“) has flexed its muscles in
prosecuting corporate fraud, recently securing the first criminal
conviction for insider trading in Ireland in October 2023,
following an investigation with the Central Bank of Ireland
(“CBI“).
Enforcement Bodies and Powers
The Irish corporate criminal enforcement framework is made up of
several multidisciplinary independent bodies, including the CEA ,
the Competition and Consumer Protection Commission and the CBI
aided by the Irish police, as well as the specialist branch of the
Irish police, called the GNECB.
Garda National Economic Crime Bureau
The GNECB (formerly known as the Garda Bureau of Fraud
Investigation) is a specialist unit within the Irish police force
(known as An Garda Síochána) which is responsible for
the investigation of fraud and economic crimes and all foreign
bribery and corruption offences. The GNECB also acts as the central
repository for economic crime related intelligence.
The GNECB encompasses a number of units, including for example,
the Anti-Bribery & Corruption Unit and the Money Laundering
Investigation Unit. These units interact with certain regulatory
bodies, for example the Central Bank of Ireland, which has a
statutory mandate to supervise regulated entities and investigate
contraventions of anti-money laundering laws.
Furthermore, the GNECB sends a number of specialist
Gardaí (Police) on secondment to the Competition and
Consumer Protection Commission and the Corporate Enforcement
Authority.
Corporate Enforcement Authority
In a major overhaul of the corporate enforcement regime the CEA
was established in July 2022 under the Companies (Corporate
Enforcement Authority) Act 2021.
The CEA’s statutory mandate is principally: to prosecute
breaches of the Companies Act 2014; to impose sanctions on company
directors under the Companies (Statutory Audits) Act 2018; and to
act as the primary enforcement agency for certain investment
vehicles under the Irish Collective Asset-management Vehicles Act
2015.
The CEA’s primary functions under the functions under the
Companies Act 2014 include:
- promoting compliance with company law
- investigating instances of suspected breaches of company
law - taking appropriate enforcement action in response to identified
breaches of company law - supervising the activities of liquidators of insolvent
companies and - operating a regime of restriction and disqualification
sanctions on directors of insolvent companies.
Where appropriate, the CEA will refer serious offences to be
prosecuted by the Director of Public Prosecutions (the
“DPP“).
Criminal Assets Bureau
In response to a high-profile period of proliferation of
organised and violent drug crime in the 1990s, Ireland established
a robust regime for the seizure of unexplained wealth, based
primarily around the multi-agency Criminal Assets Bureau
(“CAB”).
The statutory objectives of the CAB, as set out in s.4 of the
Criminal Assets Bureau Act 1996 are: (a) the identification of the
assets, wherever situated, of persons which derive or are suspected
to derive, directly or indirectly, from criminal activity; and (b)
the taking of appropriate action under the law to deprive or to
deny those persons of the assets or the benefit of such assets.
The CAB can use many powers normally reserved for the
Gardaí, including search warrants and mandatory orders to
furnish documents and information to the CAB.
In addition, the CAB can apply pursuant to s.2 of the Criminal
Assets Bureau Act 1996 ex parte to the High Court for
short-term ‘interim’ orders to prevent a person from
dealing with assets on the basis that they are the proceeds of
crime. Crucially, the standard of proof applied in determining
these applications is the balance of probabilities (i.e. the civil
standard of proof). S.2 of the Criminal Assets Bureau Act 1996
allows for the longer-term freezing of assets for a minimum of
seven years. At the expiry of seven years, the CAB can apply to
transfer the asset in question to the State or to any other body
that the Court may direct.
Dawn raids and powers of search and seizure
In Ireland, a number of bodies have the power to carry out
unannounced inspections of business premises to obtain documents
and information. Dawn raids are frequently carried out with the
assistance of An Garda Síochána and are used to
gather evidence and information relevant to an investigation. Most
of the statutes which confer powers on authorities to carry out
dawn raids also create a number of offences relating to the
obstruction of the exercise of those powers.
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In Ireland the following bodies have the power to carry out a
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It is clear that entities may be the target of more than one of the
above bodies. For example, a telecoms provider who is suspected of
a breach of competition law could be the target of a raid by any
combination of: the European Commission, the CCPC and/or
ComReg).
Corporate Offences
Corporate Fraud
The Criminal Justice (Theft and Fraud Offences) Act, 2001 (as
amended by the Criminal Justice (Theft and Fraud Offences)
Amendment Act 2021) is the primary source of legislative provisions
governing corporate fraud issues, including the criminal offences
of theft, deception, forgery, and false accounting.
The Criminal Justice (Theft and Fraud Offences) Amendment Act
2021 was introduced to transpose Directive (EU) 2017/1371 and
created the new offence of fraud which affects the financial
interests of the EU and re-enforcing the corporate liability for
offences committed by agents, employees and others acting in the
interests of a company.
Anti-Competitive Behaviour
The Competition Act 2020 is the primary statutory framework
governing compliance with competition law in Ireland.
Section 4 of the Competition Act 2002 provides that it is
prohibited for “undertakings” to enter into agreements,
take decisions, or engage concerted practices that have as their
object or effect the prevention, restriction, or distortion of
competition in trade in any goods or services. This includes price
fixing, bid-rigging, market sharing or artificially limiting
production to maintain prices. An “undertaking” is
defined broadly and includes any person, body corporate, or
unincorporated body of persons engaged for gain in the production,
supply, or distribution of goods or the provision of a service.
Under the Act, a conviction for cartel activity such as price
fixing can carry criminal penalties of up to ten years imprisonment
for individuals, and fines of up to €5 million or 10% of
turnover for individuals and undertakings. A company director
convicted of an offence faces automatic disqualification from
acting as a director for five years.
Corruption/Bribery Offences
Ireland introduced wide-ranging reforms to its anti-corruption
laws thorough the Criminal Justice (Corruption Offences) Act 2018
(the “2018 Act”), which
was heavily influenced by the UK’s primary anti-corruption
legislation, the UK Bribery Act 2010. The offences proscribed by
the 2018 Act include active and passive corruption and corruption
in relation to office, employment, position, or business.
The 2018 Act also provides for a new corporate liability
offence, by which a corporate body may be held liable for the
actions of its directors, managers, employees, agents,
subsidiaries, or persons otherwise acting in the interests of the
company, with the intention of obtaining and advantage for the
corporate entity.
As some of the offences are explicitly stated to have
extra-territorial effect, Irish persons, companies, and other
organisations registered in Ireland can commit an offence contrary
to the 2018 if they commit acts outside Irish territory which would
constitute an offence if committed in Ireland.
Money Laundering, Terrorist Financing and
Sanctions
The Fifth Anti-Money Laundering Directive
(MLD5) was transposed into Irish legislation by
Criminal Justice (Money Laundering and Terrorist Financing)
(Amendment) Act, 2021. The 2021 Act expanded the category of
“designated person” to include Virtual Asset Service
Providers (VASPs) (which must register with the Central Bank of
Ireland and other specified entities.
Prior to establishing a business relationship with certain
clients, designated persons will be required to adhere to strict
Customer Due Diligence (CDD) measures, including
establishing relevant beneficial ownership information.
Furthermore, additional CDD requirements will apply to high-risk
third countries
The move to include VASPs as a designated person (which will be
regulated by the Central Bank of Ireland) is Ireland’s first
move to regulate digital, crypto and/or other non-fiat currencies,
which are seen as highly vulnerable to money-laundering and
terrorist funding risk. As a major hub for the global tech
industry, Ireland’s regulation of VASPs is likely to the be
subject of scrutiny and the regime introduced by the 2021 Act will
likely be a feature of crypto-asset related investigations and
regulatory sanctions in Ireland.
Future Developments
Increased Activity from the CEA
The CEA has had a relatively quiet first 18 months, however it
is clear that it is intent on further increasing its powers. A
public consultation is currently underway on the proposed Companies
(Corporate Enforcement and Regulatory Provisions) Bill 2023, which
is aimed at enhancing corporate governance and company law
enforcement.
In its response to the consultation, the CEA has proposed that
it be given additional powers to: (i) enhance its investigative
capabilities; (ii) increase its access to certain Court documents;
and (iii) permit the sharing of certain information with other
statutory bodies.
It can be expected that the CEA will continue to increase its
investigation and enforcement activities in 2024 and beyond.
Deferred Prosecution Agreements in Ireland
In a 2019 report on “Regulatory Powers and Corporate
Offences” the Irish Law Reform Commission recommended
that Deferred Prosecution Agreements, based on those deployed by UK
agencies, be introduced in Ireland.
The report took some encouragement from the breadth of remedies
secured in the UK by use of DPAs and recommended that to ensure
consistency with requirements of Irish constitutional law, DPAs in
Ireland must be: (a) placed on a statutory basis, (b) subject to
judicial oversight, (c) subject to guiding principles, and (d)
contain sufficient procedural safeguards.
It is envisaged that the CEA and/or the Director of Public
Prosecutions would work closely with the relevant regulator to
determining whether a Deferred Prosecution Agreement would be
suitable in any given case. In all cases, the Irish Courts would
have to be satisfied that the DPA was both (a) fair and
proportionate and (b) in the interests of justice. Finally, the
report recommends that that any DPA in Ireland must be dealt with
in open Court and the relevant arrangements be made public.
Despite the recommendations, DPAs have not yet been introduced
in Ireland and it remains unclear whether the CEA has the same
appetite to see their introduction in the near future.
Increased focus on personal accountability
In keeping with a general shift in regulatory focus towards
individual accountability (as best illustrated by the Central Bank
of Ireland’s “Senior Executive Accountability
Regime”, which shares many features with the UK’s
“Senior Managers and Certification Regime”),
Ireland’s strengthening corporate crime framework has serious
implications for directors of Irish companies.
Across Irish legislation (particularly the Companies Act, the
Competition Act and the Corruption Act) there are provisions
imposing criminal liability on directors and officers of bodies
corporate. Personal criminal liability for a director can arise
where an offence is committed with the consent, connivance of or
attributable to any neglect by the director.
In a 2023 press release, the CEA issued a press release for the
attention of persons considering accepting directorships in
companies, warning that “acting as a director of a company
about which a person knows little or nothing can expose that person
to criminal liability”.
The CEA also noted that a “person who takes little, if any,
active role in the management of a company or, for example, acts
merely as a post box or as a signatory of company documents is
likely to encounter, potentially significant, difficulties in
satisfying a court that they have acted responsibly.”
For more information on white collar crime and legal services
related to this topic please contact a member of our team via their
contact details below.
This article was first published in ThoughtLeaders4 Disputes
magazine “New Perspectives On Dispute Resolution”, March
2024.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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