New Criminal Offence

Section 66 of the Act inserts Section 793A into the Companies Act 2014 which creates a new category 2 criminal offence relating to obstructing or interfering with an officer of the CEA in the course of exercising a power conferred on them under the Companies Act 2014 or impeding an officer in the exercise of their power under the Companies Act 2014. The offence of obstruction would cover non-search warrant or non-production offences.

A summary conviction for a category 2 offence can result in a class A fine (i.e. a fine of up to €50,000) or imprisonment for a term of up to 12 months or both.  A conviction on indictment for a category 2 offence can result in a term of imprisonment of up to 5 years or a fine of up to €50,000 or both.

Privilege

Applications for Court Determination on Privilege

Section 795 of the Companies Act 2014 provides that where the CEA has seized privileged legal material, it must apply to the High Court for a determination on whether privilege applies to that material within 7 days after the date of disclosure or the taking of possession of the material. Other regulators such as the Central Bank of Ireland have lengthier periods in which to make similar applications to the High Court for determinations in relation to privilege.

Section 67(a) of the Act amends Section 795(4) by extending the time within which the CEA must apply to the High Court to 14 days.

Assessors

Where an application is brought to the High Court for a determination as to whether information disclosed or taken into possession is privileged legal material, the High Court, under section 795(6)(b) of the Companies Act 2014, can appoint a suitably qualified person for the purpose of examining the information and preparing a report for the court with a view to assisting or facilitating the court in making a determination as to whether the information is privileged. Section 67(b) amends Section 795(6)(b) of the Companies Act 2014, providing that the High Court may now appoint more than one independent and suitably qualified person. This provision for additional resourcing will expedite the timeline for preparation of the court report and improve the overall efficiency of applications for determinations on privilege.

Information Sharing and Investigations

The Act contains several provisions which facilitate information sharing in addition to measures to assist the CEA in its investigations.  These measures include a requirement that the CEA is put on notice of any application made by an undischarged bankrupt for leave to act as director or a secretary of a company or to take part in its promotion, foundation or management (section 10) and a requirement that auditors provide the CEA with information or access to the books and documents under their control or facilitate the CEA taking copies of relevant extracts of these books and records (section 23).  

The Act also extends information sharing between the CEA and other competent authorities.  The CEA can now share any information, book or document of a company obtained in defined circumstances with an expanded list of competent authorities provided that the information, book or document is required for a purpose specified.

The entities are as follows: – the Registrar of Beneficial Ownership; – the Registrar of Friendly Societies; – the Charities Regulatory Authority; – the Competition and Consumer Protection Commission; – the Data Protection Commission; – the Insolvency Service of Ireland; – Office of the Protected Disclosures Commissioner; and – the Criminal Assets Bureau.

The following entities may also now make disclosures to the CEA: – the Registrar of Beneficial Ownership; – the Charities Regulatory Authority; – the Minister for Social Protection; – the Data Protection Commission; – Office of the Protected Disclosures Commissioner; and – the Criminal Assets Bureau.

Measures have also been introduced to lend efficiency to CEA information gathering through, amongst others, amendments introduced by sections 68 to 70 of the Act which facilitate the direct flow of information from the courts to the CEA. For example, court orders restricting a director of an insolvent company will now be sent directly to the CEA.

Comment

The measures introduced by the Act strengthen Ireland’s company law regulatory and enforcement regime, enhancing the powers of the CEA through, for example, the creation of a new criminal offence and greater information sharing capability. The reforms are also directed at creating efficiencies across existing procedures.

If you would like to discuss any of the matters discussed herein in more detail, please get in touch with any member of our Corporate Crime Group.