White-Collar Crime 2019

Last Updated October 21, 2019

Ireland

Law and Practice

Authors



Arthur Cox is a leading Irish commercial law firm with offices in Dublin, London, Belfast and New York. The firm's reputation is based on proven professional skills, a thorough understanding of client requirements, sound judgement and a practical approach to resolving commercial problems. Arthur Cox's leading corporate crime group works extensively with its corporate and commercial teams advising on risk management, compliance and governance issues to ensure that clients are in a position to meet any such challenge or opportunity with which they are faced. The firm has experience in dealing with law enforcement agencies in Ireland and globally, as well as other investigative and prosecutorial bodies. The team is led by partners Gregory Glynn, Joanelle O’Cleirigh, Richard Willis and Deirdre O’Mahony.

There are two main categories of criminal offence under Irish law: summary offences which are minor offences and indictable offences which are more serious offences.

Summary offences are dealt with in the District Court (the lower court) and are heard before a judge only. Indictable offences are tried before the Circuit Criminal Court or Central Criminal Court (the higher courts) and before both a judge and jury or, in certain instances, by a judge sitting alone.

There is another category of offence which is known as a “hybrid offence”. Hybrid offences are offences which can be tried summarily or on indictment and the prosecutor (the Director of Public Prosecutions) decides which route to take. If a hybrid offence is to be tried summarily, the District Court judge must also be satisfied that the offence is minor in nature. 

A person accused of a crime in Ireland, cannot be deemed guilty without the specified intent or motive to commit that crime, unless the offence is defined as one of strict liability under legislation. 

Under Irish law a person may be held liable for attempting to commit an offence even if the offence is not completed. Offences such as incitement, conspiracy and attempt are known as “inchoate offences” and form part of Irish criminal law. A typical example is the offence of attempted robbery or incitement to commit murder. 

The general limitation period for the prosecution of a summary offence is six months from the date on which the offence occurred (Section 10(4) of the Petty Sessions (Ireland) Act). In certain instances however, where legislation provides, this time period can be up to one or two years.

There is no statutory time limit in relation to the prosecution of indictable offences.

Pursuant to Section 11 of the Criminal Justice (Corruption Offences) Act 2018 (the Corruption Act), a person may be tried in Ireland for any offence under the Act if any one or more of the acts alleged to constitute an offence were committed in Ireland, on an Irish ship or an aircraft registered in Ireland, notwithstanding that the other acts alleged to constitute an offence were committed outside the State.

Pursuant to Section 12 of the Corruption Act, Irish citizens, Irish officials acting in their capacity as Irish officials, individuals with their principal residence in Ireland for the twelve months preceding the Act and companies and corporate bodies registered in Ireland will be liable under the Corruption Act for acts committed outside of Ireland, where those actions would otherwise constitute certain offences under the Corruption Act if committed in Ireland. The relevant offences are:

  • active and passive corruption;
  • active and passive trading in influence;
  • corruption by an Irish official in relation to his or her office, employment, position or business;
  • giving a gift, consideration or advantage that may be used to facilitate an offence under the Corruption Act; and
  • creating or using a false financial document.

The scope of this extraterritorial effect is somewhat limited by the requirement that the act committed must also be an offence in the jurisdiction in which it was carried out.

The Regulation of Lobbying Act 2015 makes it an offence to lobby a Designated Public Official (DPO) in relation to a relevant matter without registering that lobbying activity. DPOs include various public officials such as Government Ministers or Members of the EU Parliament. The provisions of the Act apply to lobbying activities which take place either within the State or outside the State provided the lobbying communication is with a DPO. It therefore has an extraterritorial effect albeit the Standards Commission, the body tasked with enforcing the Lobbying Act, have recognised that there may be difficulties in extraterritorial enforcement of the Act. 

Other legislation, such as Health and Safety legislation also allows for dual prosecution.

Section 18(1) of the Corruption Act provides that a body corporate will be guilty of an offence if an offence under the Act is committed by any of the following individuals with the intention of obtaining or retaining either business for the body corporate or an advantage in the conduct of business for the body corporate:

  • a director, manager, secretary or other officer of the body corporate;
  • a person purporting to act in that capacity;
  • a shadow director within the meaning of the Companies Act 2014; or
  • an employee, agent or subsidiary of the body corporate.

It is a defence for a body corporate when faced with a prosecution under Section 18(1) of the Act to show that it took “all reasonable steps and exercised all due diligence” to avoid the commission of the offence.

Pursuant to Section 18(3) of the Act, where an offence under the Act is committed by a body corporate and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect of a person who was a director, manager, secretary or other officer of the body corporate or a person purporting to act in that capacity, that person will, as well as the body corporate, be guilty of an offence. In this way, both the company and the manager or director or other officer may be found guilty of the same offence.

Regarding successor liability, a successor entity may be held liable for offences committed by the target entity. Section 501 of the Companies Act 2014 provides that where a liability of the transferor company is not allocated by the common draft terms of division and it is not possible, by reference to an interpretation of those terms, to determine the manner in which it is to be allocated the liability shall become jointly and severally the liability of the successor companies.

Victims of white-collar offences are left without any remedy under Irish criminal law in respect of claiming compensation for their loss. However, those subject to white-collar offences may have civil actions for damages that can be pursued in the civil courts. 

The concept of class-action suits is not provided for under Irish law. The civil courts have however accepted the concept of “test” cases in instances where a number of claimants are essentially bringing the same claim. In such instances, a small number of test cases are selected to be heard in full before the courts. The outcome of these test cases usually determines the course of action that the parties will then take in the remainder of the cases. However, unless by agreement between the parties, the outcome in the test cases is not binding on other claimants.

In November 2017, the Irish government introduced a suite of measures aimed at enhancing corporate governance, increasing transparency and strengthening Ireland’s response to white-collar crime. One of these measures was the introduction of the Corruption Act which came into force in July 2018. Other elements of the government’s package on the proposed reform on white-collar crime include:

  • Establishing the Corporate Enforcement Authority, replacing the current Office of the Director of Corporate Enforcement (ODCE). The General Scheme of the Companies (Corporate Enforcement Authority) Bill 2018 was published on 4 December 2018 and, under the proposed legislation, it is envisaged that the ODCE will take the form of a commission, as opposed to its current structure as an office within the Department of Business, Enterprise and Innovation, with the intention that this will provide the organisation with more autonomy and flexibility in the investigation and prosecution of complex breaches of company law;
  • Piloting a Joint Agency Task Force within the Irish police force to tackle white-collar crime; and
  • Enacting the Criminal Procedure Bill which, it is envisaged, will streamline criminal procedures to enhance the efficiency of criminal trials.

In addition, in October 2018, the Irish Law Reform Commission issued a Report on Regulatory Powers and Corporate Offences. Among the recommendations were:

  • that a properly resourced statutory Corporate Crime Agency be established;
  • that economic regulators have the power to impose significant financial sanctions and to make regulatory enforcement agreements, to include redress schemes; and
  • a proposal for reform of fraud offences to address egregiously reckless risk-taking.

While historically therefore there has been little in the way of investigating or enforcing instances of bribery and corruption in Ireland, given the increased government focus on white-collar crime and the increased focus among regulators in relation to investigations and enforcement generally in Ireland, it is anticipated that this is likely to change in the near term. 

The Garda National Economic Crime Bureau is the primary body tasked with investigating bribery and corruption in Ireland. The body tasked with the prosecution of any such bribery or corruption offences is the Office of the Director of Public Prosecutions (DPP).

The Organisation for Economic Co-operation and Development (OECD) also monitors and prosecutes violations of company law. Should the Companies (Corporate Enforcement Authority) Bill 2018 be enacted and the Corporate Enforcement Authority established, the authority will also assume a greater role relating to the monitoring of anti-bribery and anti-corruption measures and will play a significant part in the investigation of corruption offences.

The main investigative and enforcement bodies in Ireland are the Gardaí (Irish Police) or relevant regulatory bodies such as the ODCE or the Revenue Commissioners. These bodies will usually initiate white-collar investigations following receipt of a complaint against a company of an offence having been committed or on the basis of a suspicion that illegal or untoward activity is taking place or has taken place.

The mechanisms by which the relevant bodies will investigate the alleged offence(s) will depend on the powers available to them under relevant legislation. Investigations will typically commence with either a warrant or a statutory notice being issued to the relevant entity. 

The Gardaí, under Irish law, have certain powers to ensure that an individual answers questions – subject to the individual’s privilege against self-incrimination – and produces documentation to assist with an investigation. The Gardaí also have the power to issue a search warrant if they believe an individual has information or documentation which is material to an investigation.

Search warrants are written authorities to perform a specified act (ie, entry onto specified property to search the premises) and are usually issued on the basis of statutory authority.

In circumstances where the Gardaí enter a premises, either business or non-business, within the parameters of a validly issued warrant, the Gardaí are permitted to seize anything found on that premises or anything found in the possession of a person present at that premises at the time of the search, that the members conducting the search reasonably believe to be evidence of, or relating to, the commission of an offence.

Having carried out a search of a premises, either business or non-business, the Gardaí may detain any person or persons present with or without a warrant for the purposes of questioning or may make arrests for the purpose of charging with an offence.

Certain legislation allows the Gardaí to go on to a premises without a warrant.

There exists no constitutional right of inviolability of business premises. As such, entry onto a business premises beyond the parameters of the validly issued warrant is not unconstitutional, but any evidence gathered may be excluded as inadmissible at trial.

Various other regulators and enforcement agencies such as the Revenue Commissioners, the Central Bank of Ireland, the Competition and Consumer Protection Commission, the Health and Safety Authority and the Data Protection Commissioner have powers of varying degrees in relation to entry on to a premises and search and seizure of documents held at the premises.

Internal investigations are separate to regulatory or criminal investigations. However, where the enforcement agency is aware that an internal investigation has or is being conducted, it may request details of the findings of the internal investigation. The enforcement agency may also request a delay in steps being taken in the internal investigation pending any regulatory or criminal investigation.

There are no specific rules governing internal investigations but as Ireland is a common law jurisdiction with a constitution, general common law and constitutional principles such as natural justice and an entitlement to fair procedures apply in the context of any investigation, including internal investigations. When carrying out an internal investigation however, in order to preserve privilege, best practice would suggest that external counsel should be engaged from the outset so as to bolster any arguments or challenge to privilege at a later date.

Irish authorities regularly liaise with enforcement authorities in other jurisdictions in relation to requests for, and the provision of, mutual legal assistance pursuant to the Criminal Justice (Mutual Assistance) Act 2008 and the Criminal Justice (Mutual Assistance) (Amendment) Act 2015. 

There are also many other legislative provisions pursuant to which the Irish authorities may share information with other jurisdictions, including, for example, Section 33AK(5)(d) of the Central Bank Act 1942.

Ireland is subject to the European Arrest Warrant Framework Decision in respect of extradition between EU member states which was implemented in Ireland by the European Arrest Warrant Act 2003. Extradition from Ireland to other countries is governed by the Extradition Act 1965 as amended.

Extradition between EU member states takes place by way of the execution of a European Arrest Warrant (EAW). An EAW may be issued by a national judicial authority if the person, whose return is sought, is accused of an offence for which the maximum penalty is at least one year's imprisonment or if he or she has been sentenced to a term of at least four months' imprisonment.

Ireland does not allow extradition for the purposes of investigation of a criminal offence only. Extradition only applies where it is required for the purpose of prosecuting a person for an offence or the purpose of executing a custodial sentence. 

In certain instances, the concept of dual criminality (that a suspect can be extradited from one country for breaking a second country's laws only if a similar law exists in the extraditing country) is required in respect of extradition for particular offences. Dual criminality is not required however in respect of certain major offences as set out in the European Arrest Warrants Act 2003 including, for example, the offences of corruption, fraud and money laundering.

Extradition to non-EU countries can occur where extradition agreements are in place and where certain conditions are met such as the penalty associated with the offence with which the person is charged being at least one year's imprisonment, the length of the custodial sentence imposed being four months or more and dual criminality applying. Similar to the position where an EAW has been issued, a person will not be extradited for the purpose of investigation only.

Prosecutions for white-collar offences will take the same course as prosecutions in respect of all other criminal offences and will commence with the issue of a summons to the relevant individual or entity or the issuing of a charge sheet in respect of the relevant offence. In Ireland the relevant prosecutorial body is the DPP. When deciding whether or not to prosecute, the DPP will consider whether there is sufficient evidence to ground a prosecution and whether it is in the public interest to do so.

Deferred Prosecution Agreements (DPAs) are not currently recognised under Irish law. However, by virtue of the fact that DPAs are gaining traction on a global scale, the Irish Law Reform Commission (LRC) issued a report in October 2018 recommending that DPAs be introduced in Ireland on a statutory basis. Were DPAs to be introduced in Ireland, the LRC has advocated in favour of a system analogous to the UK DPA system which requires court approval for any proposed DPA however it remains to be seen if the Irish legislature will adopt this approach. 

In Ireland, the courts have exclusive jurisdiction relating to sentencing in criminal matters. The law does not provide for formal plea bargaining or the entering into of settlement agreements with the DPP. Notwithstanding the absence of a formal plea-bargaining arrangement, it may be possible for an accused in a criminal matter to plea to a lesser charge than that with which they were initially charged, which may result in a more lenient sentence. In all instances however the court retains ultimate discretion relating to sentencing. 

Criminal company law and corporate fraud offences can be found in various statutes such as the Criminal Justice (Theft and Fraud Offences) Act 2001, the Companies Act 2014 and the Criminal Justice (Corruption Offences) Act 2018 (which offences are dealt with in 3.2 Bribery, Influence Peddling and Related Offences below), to name but a few.

The Criminal Justice (Theft and Fraud Offences) Act 2001 sets out many offences in relation to fraud and fraud related activities. The most common of these are as follows:

  • Theft (Section 4), which requires that a person dishonestly appropriates property without the consent of its owner and with the intention of depriving its owner of it. A person found guilty of theft is liable on conviction on indictment to a fine or imprisonment for a term not exceeding ten years or both.
  • Making gain or causing loss by deception (Section 6), which requires that a person dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another, by any deception induces another to do or refrain from doing an act. This offence carries with it a term of imprisonment not exceeding five years or a fine or both.
  • Unlawful use of a computer (Section 9), which requires that a person dishonestly, whether within or outside the State, operates or causes to be operated a computer within the State with the intention of making a gain for himself or herself or another, or of causing loss to another. The penalties for an offence under this Section include a fine or a term of imprisonment not exceeding ten years or both.
  • False accounting (Section 10), requires that a person dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another:
    1. destroys, defaces, conceals or falsifies any account or any document made or required for any accounting purpose;
    2. fails to make or complete any account or any such document; or
    3. in furnishing information for any purpose produces or makes use of any account, or any such document, which to his or her knowledge is or may be misleading, false or deceptive in a material particular.
    4. This offence attracts penalties in the form of a fine or imprisonment for a term not exceeding ten years or both.
  • Blackmail, extortion and demanding money with menaces (Section 17), is an offence whereby any person who, with a view to gain for himself or herself or another or with intent to cause loss to another, makes any unwarranted demand with menaces. This offence carries penalties on indictment of a term of imprisonment not exceeding 14 years or a fine, or both.

Examples of offences under the Companies Act 2014 include:

  • Making a false or misleading statement to a statutory auditor (Section 389). This is deemed a category 2 offence and as such can result in imprisonment of up to five years and/or a fine of up to EUR50,000 on conviction on indictment or, on summary conviction, imprisonment for up to twelve months and/or a fine not exceeding EUR5,000;
  • Failing to keep adequate accounting records (Section 286). If the failure to keep adequate records results in an accounting discrepancy exceeding EUR1 million or 10% of the company's net assets then the company, or its directors, may be liable for a fine up to EUR500,000 or ten years' imprisonment, or both;
  • Destroying, mutilating or falsifying a book or documents (Section 877). This offence is deemed a category 2 offence and as such can result in imprisonment of up to five years and/or a fine of up to EUR50,000 on conviction on indictment or, on summary conviction, imprisonment for up to twelve months and/or a fine not exceeding EUR5,000;
  • Providing a false statement in purported compliance with the Companies Act 2014 (Section 876). This offence is deemed a category 2 offence and as such can result in imprisonment of up to five years and/or a fine of up to EUR50,000 on conviction on indictment or, on summary conviction, imprisonment for up to twelve months and/or a fine not exceeding EUR5,000;
  • Intentionally making a false statement (Section 406). This offence is deemed a category 2 offence and as such can result in imprisonment of up to five years and/or a fine of up to EUR50,000 on conviction on indictment or, on summary conviction, imprisonment for up to twelve months and/or a fine not exceeding EUR5,000; and
  • Fraudulently parting with, altering or making an omission in a book or document (Section 878). This offence is deemed a category 2 offence and as such can result in imprisonment of up to five years and/or a fine of up to EUR50,000 on conviction on indictment or, on summary conviction, imprisonment for up to twelve months and/or a fine not exceeding EUR5,000.

Other relevant legislation in Ireland includes:

  • The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 which transposed most of the provisions of the fourth EU Anti-Money Laundering Directive into Irish law. The act introduced a wide range of reforms including the expansion of the definition of persons considered to be beneficial owners of bodies corporate, trusts and partnerships; enhanced customer due diligence requirements for designated persons; widening of the definition of politically exposed persons to include individuals residing inside the State; and the tightening of exemptions relating to certain electronic money products.
  • The Regulation of Lobbying Act 2015 regulates lobbying in Ireland. Among other things, the Act provides for the establishment and maintenance of a register of persons carrying on lobbying activities, a code of conduct relating to the carrying on of lobbying activities and imposes restrictions on the involvement in lobbying by certain former designated public officials. The Act also creates offences for breaches of the legislation to include carrying on lobbying activities without being registered to do so.

The Criminal Justice (Corruption Offences) Act 2018 is the principal statutory source of anti-bribery and corruption legislation in Ireland. The key corruption and bribery offences are provided for in Part 2 of the Corruption Act and are set out below.

  • Active and passive corruption whereby it is an offence to directly or indirectly, corruptly offer, give, agree to give, request, accept, obtain or agree to accept a gift, consideration or advantage as an inducement to, or reward for, or otherwise on account of, doing an act in relation to one’s office, employment, position or business. "Corruptly" is defined under the 2018 Act and includes acting with an improper purpose personally or by influencing another person, whether:
    1. by means of making a false or misleading statement;
    2. by means of withholding, concealing, altering or destroying a document or other information; or
    3. by other means.
  • Active and passing trading in influence whereby it is an offence to, directly or indirectly, corruptly offer, give or agree to give, a gift, consideration or advantage in order to induce another person to exert an improper influence over an act of an official in relation to the office, employment, position or business of that official. Similarly, it is an offence to directly or indirectly, corruptly request, accept, obtain, or agree to accept for one’s self or for any other person, a gift, consideration or advantage on account of a person promising or asserting the ability to improperly influence an official to do an act in relation to their office, employment, position or business.
  • Corruption in relation to office, employment, position or business whereby an Irish official who directly or indirectly does an act in relation to their office, employment, position or business for the purpose of corruptly obtaining a gift, consideration or advantage for themselves or any other person, will be guilty of an offence. It is also an offence for an Irish official to use confidential information obtained in the course of their office, employment, position or business for the purpose of corruptly obtaining a gift, consideration or advantage for themselves or for any other person. "Irish official" includes members of Parliament, members of the judiciary, officers, directors and employees of public bodies and persons employed by or acting for, or on behalf of, the public administration of the state.
  • Giving a gift, consideration or advantage that may be used to facilitate an offence under the Corruption Act whereby it is an offence to give a gift, consideration or advantage to another person where the person knows, or ought reasonably to know, that the gift, consideration or advantage, or a part of it, will be used to facilitate the commission of an offence under the Corruption Act.
  • Creating or using a false document whereby it is an offence to directly or indirectly create or use a document that the person knows or believes to contain a statement which is false or misleading in a material particular, with the intention of inducing another person to do an act in relation to their office, employment, position or business to the prejudice of the last-mentioned person or another person.
  • Intimidation whereby it is an offence to directly or indirectly threaten harm to a person with the intention of corruptly influencing that person or another person to do an act in relation to their office, employment, position or business.

The penalties under the Criminal Justice (Corruption Offences) Act 2018 range from a fine to a term of imprisonment not exceeding ten years or to both.

Section 6 of the Criminal Justice (Corruption Offences) Act 2018 provides for the offence of active and passing trading in influence. Pursuant to this Section, it is an offence to, directly or indirectly, corruptly offer, give or agree to give, a gift, consideration or advantage in order to induce another person to exert an improper influence over an act of an official in relation to the office, employment, position or business of that official or to corruptly request, accept, obtain, or agree to accept for one’s self or for any other person, a gift, consideration or advantage on account of a person promising or asserting the ability to improperly influence an official to do an act in relation to their office, employment, position or business.

For the purpose of this offence, it is immaterial whether or not the alleged ability to exert an improper influence existed, the influence is exerted, the supposed influence leads to the intended result or the intended or actual recipient of the gift, consideration or advantage is the person whom it is intended to induce to exert influence.

There is no specific obligation to maintain an anti-bribery and anti-corruption compliance programme but it is considered best practice to do so to minimise the risk of corruption or bribery occurring and to ensure that all employees within the organisation, and others with whom the company does business, are aware of the company’s approach to anti-bribery and anti-corruption. A robust anti-corruption programme may also assist in the defence of any investigation into or prosecution against a company for breach of anti-corruption legislation.

The EU Market Abuse Regulation (EU596/2014) (MAR) and the European Union (Market Abuse) Regulations 2016 govern the law relating to insider dealing and market abuse in Irish law. Insider dealing prohibits a person who possesses insider information from using that information by acquiring or disposing of, for the person's own account or for the account of a third party, directly or indirectly, financial instruments to which that information relates.

MAR provides that EU member states, including Ireland, must ensure that insider dealing, the unlawful disclosure of inside information, market manipulation, breach of the obligation to prepare and maintain insider lists and breach of the obligations regarding persons discharging managerial responsibilities are the subject of administrative sanctions. Under the Regulations, those administrative sanctions include:

  • a cease and desist order;
  • giving up the profits gained, or losses avoided, as a result of the breach;
  • a private caution or reprimand;
  • public censure;
  • withdrawal and suspension of the authorisation of any regulated financial service provider;
  • a direction disqualifying (temporarily or permanently) an individual from being concerned in the management of, or having a qualifying holding in, any regulated financial service provider; and
  • fines of up to EUR15,000,000 or a percentage of annual turnover depending on the breach.

The Taxes Consolidation Act 1997 sets out various offences relating to tax fraud and tax evasion in Ireland which include the following:

  • knowingly or wilfully delivering an incorrect return, statement or accounts to the Revenue Commissioners;
  • knowingly aiding, abetting, assisting, inciting or inducing another person to make or deliver knowingly or wilfully an incorrect return, statement or accounts to the Revenue Commissioners;
  • falsely claiming or obtaining tax relief or exemption where there is no entitlement to do so;
  • failing to make a tax return;
  • knowingly or wilfully destroying, defacing or concealing documentation or other information which is required for production or inspection;
  • failing to remit tax due and payable to the Revenue Commissioners; and
  • obstructing or interfering with any officer of the Revenue Commissioners, or any other person, in the exercise or performance of their powers or duties under the Act.

A person found guilty of these offences would be subject to the following penalties:

  • on summary conviction to a fine of EUR5,000 which may be mitigated to not less than 25% of that fine or, at the discretion of the court, to imprisonment for a term not exceeding twelve months or to both the fine and the imprisonment, or
  • on conviction on indictment, to a fine not exceeding EUR126,970 or, at the discretion of the court, to imprisonment for a term not exceeding five years (or both).

The main offences in relation to financial record keeping in Ireland are to be found in the Companies Act 2014 and are set out below.

Failing to Keep Adequate Accounting Records

Section 286 of the Companies Act 2014 obliges company directors to take all reasonable steps to ensure the company complies with its obligation to keep adequate accounting records. Large-scale breaches, which result in an accounting discrepancy exceeding EUR1 million or 10% of the company's net assets may result in a fine of up to EUR500,000 or ten years' imprisonment, or both.

Making a False or Misleading Statement to a Statutory Auditor

Pursuant to Section 389 of the Companies Act 2014, it is an offence for an officer of a company to knowingly or recklessly make any statement to a statutory auditor which is "misleading or false in a material particular".

Providing a False Statement in Purported Compliance with the Companies Act 2014

In accordance with Section 876, an offence is committed by any person (which includes both corporate and natural persons) who "in purported compliance with a provision of [the Companies Act 2014], answers a question, provides an explanation, makes a statement or completes, signs, produces, lodges or delivers any return, report, certificate, balance sheet or other document that is false in a material particular" and knows, or is reckless to the fact, that it is false in a material particular.

Destruction, Mutilation or Falsification of a Book or Document

Section 877 of the Companies Act 2014 stipulates that any officer who does, or is party to doing, anything which has the effect of destroying, mutilating or falsifying any book or document relating to the property or affairs of the company, is guilty of an offence.

Fraudulently Parting with, Altering or Making an Omission in a Book or Document

Pursuant to Section 878, any company officer who fraudulently parts with, alters or makes an omission in any book or document relating to the property or affairs of the company, or who is party to such acts, is guilty of an offence.

Intentionally Making a Statement Known to be False

Section 406 provides that it is an offence for a company officer to intentionally make a statement which he or she knows to be false, in any return, statement, financial statement or other document required to ensure compliance with the obligation to keep adequate books of account.

The Criminal Justice (Theft and Fraud Offences) Act 2001 also makes it an offence to engage in false accounting.

Section 4 of the Competition Act 2002 (the 2002 Act), as amended, which is based on Article 101 of the Treaty on the Functioning of the European Union (TFEU), prohibits agreements and concerted practices that have as their object or effect the prevention, restriction or distortion of competition in the state (ie, the Republic of Ireland), or any part of the state. Section 4 contains a non-exhaustive list of agreements that are prohibited in particular, including those that:

  • share markets or sources of supply;
  • limit or control production, markets, technical development or investment;
  • directly or indirectly fix purchase or selling prices or any other trading conditions; or
  • make the conclusion of contracts subject to acceptance by other parties of supplementary obligations that have no connection with the subject matter of the contracts.

Under Section 6(1) of the 2002 Act a company that enters into, or implements an agreement or decision, or engages in a concerted practice that is prohibited by Section 4(1) (or by article 101 TFEU) is guilty of an offence.

Section 6(2) of the 2002 Act provides for a presumption that an agreement, decision or concerted practice between competing undertakings the purpose of which is to directly or indirectly fix prices, limit output or sales or share markets or customers has as its object the prevention, restriction or distortion of competition in the state (or the EU, as the case may be).

Sanctions include potentially significant fines and imprisonment, however the Competition and Consumer Protection Commission (CCPC) in Ireland operate a Cartel Immunity Programme, in conjunction with the DPP. The Cartel Immunity Programme provides a mechanism whereby a member of a cartel may avoid prosecution and sanctions if they are the first member of a cartel to come forward and reveal their involvement in illegal cartel activity before the CCPC has completed its investigation. Full co-operation with the CCPC in the subsequent investigation is then required.

The Consumer Protection Act 2007 (the CPA), governs consumer criminal law in Ireland. Under the CPA it is a criminal offence for any retailer to make a false or misleading claim about goods, services and prices. It is also an offence to sell goods which bear a false or misleading description.

The CPA protects consumers from misleading, aggressive or prohibited practices. In other words, when a breach of good faith occurs and the consumer is denied the reasonable standard of skill and care to which they are entitled.

A misleading practice involves providing false, misleading and deceptive information. Misleading advertising, misleading information and withholding material information are considered misleading practices.

The CPA prohibits traders from engaging in aggressive practices such as harassment, coercion, or exercising undue influence. Examples of harassment are pressurising, intimidating and taking advantage of vulnerable consumers.

The CPA lists 32 commercial practices which are prohibited in all circumstances.                                                                            

A person guilty of an offence under the CPA is liable on summary conviction to the following fines and penalties: on a first summary conviction for any such offence, to a fine not exceeding EUR3,000 or imprisonment for a term not exceeding six months or both; on any subsequent summary conviction for the same offence or any other offence under this Act, to a fine not exceeding EUR5,000 or imprisonment for a term not exceeding twelve months or both.

The Criminal Justice (Offences Relating to Information Systems) Act 2017 provides for the creation of five new dedicated cybercrime offences:

  • accessing an information system without lawful authority;
  • interfering with an information system without lawful authority so as to intentionally hinder or interrupt its functioning;
  • interfering with data without lawful authority;
  • intercepting the transmission of data without lawful authority; and
  • the use of a computer, password, code or data for the purpose of the commission of any of the above offences.

In terms of penalties, on summary conviction, a person can be sentenced to up to twelve months' imprisonment or receive a Class A fine, or both. On conviction on indictment, penalties range from a fine to a term of imprisonment of up to 10 years, or both.

Sanctions enforced by the EU and the UN Security Council apply in Ireland. These include comprehensive trade sanctions against other countries, embargoes that target arms, financial sanctions as well as sanctions that are enforced against specific individuals and limited sector-specific sanctions.

The Central Bank of Ireland (CBI) maintains operational responsibility for financial sanctions in Ireland. These take the form of: asset freezing (a prohibition on Irish entities making economic resources available to prohibited individuals or entities), restrictions on credit or capital markets and prohibitions on financial transfers. All legal and natural persons are under an obligation to comply with financial sanctions. 

Once a person or entity has been sanctioned by the UN Security Council (whose measures are implemented by appropriate EU legal instrument) or the EU, financial institutions must freeze any assets under their administration without delay and no economic resources may be made available to them. Funds may only be transferred to a sanctioned individual if prior authorisation or derogation has been received pursuant to the terms of the relevant regulation or another instrument. Security Council regulations specify, by person or territory, a class of people for whom no financial transactions may be effected and whose funds must be frozen.

Some Security Council regulations contain a saver clause to exclude any liability where funds or economic resources are frozen, where this was done in good faith on the understanding that such action was done in accordance with the regulations. Where such a clause is included, negligence on the part of the freezing person or institution must be demonstrated. 

The Department of Business, Enterprise and Innovation (DBEI) is responsible for the operation of sanctions and controls on trade. Import controls can be in the form of bans; quotas or licences and are imposed on the following products: iron and steel, aluminium, textiles and wood. These are based on both sanctions and EU trade legislation. 

Export controls are in place for the supply of dual-use items, military items, items that can be used for torture and items ultimately destined for a country against which trade sanctions are in place. The legislation covers three principal mechanisms: controlled items, controlled activities and controlled entities. The principal legislation in this regard is the Control of Exports Act 2008. The Act grants the relevant Minister broad powers "whenever and so often as the Minister thinks appropriate" to prohibit or regulate by order arms brokering activities (Section 3), exports, including intangibles –eg, software (Section 4) and technical assistance (Section 5).  Section 6 governs the issuing of licences. Pursuant to Section 8, where a person contravenes an order made under the Act they are liable to:

  • up to six months imprisonment and/or a EUR5,000 fine on summary conviction; or
  • up to 5 years imprisonment and/or a fine of up to EUR10 million or three times the value of the goods in question on indictment.

Bodies corporate and their members, or officers may be liable pursuant to Section 8(3).

Additional legislation takes the form of EU legal instruments and domestic statutory instruments. These cover controls on dual-use items (ie, with potential for military use), arms brokering activities and the trade in goods that can be used for torture and inhuman or degrading treatment. The extent of military items controlled for export is determined by the Common Military List and updated annually. Even where a product is not listed as a dual-use item, an export licence can still be required if the exporter has been informed by member state authorities that the items in question are or may be intended for use in connection with weapons of mass destruction, or where the destination country is subject to a UN/EU/Organization for Security and Co-operation in Europe (OSCE) arms embargo. This requirement is set out in Article 4 of Council Regulation (EC) 428/2009 (referred to as the "catch-all clause"). 

Section 17 of the Criminal Justice Act 2011 provides for an offence of concealing facts disclosed by documents, which requires that the defendant “knows or suspects” that a Garda investigation into an offence is being or is likely to be carried out and conceals, falsifies, destroys or otherwise disposes of a document or record which he or she “knows or suspects is or would be relevantto the investigation or causes or permits its falsification, concealment, destruction or disposal.

Pursuant to Section 17(3), summary conviction for the offence attracts a Class A fine or imprisonment for a term not exceeding twelve months or both. On conviction on indictment, penalties include a fine or imprisonment for up to five years or both.

Under Section 71(1) of the Criminal Justice Act 2006, a person who conspires with or assists another to commit a “serious offence” shall be guilty of conspiracy. The individual found guilty of conspiracy is then liable to be tried as a main offender and be subject to the same penalties for conviction of a serious offence under the Act. A serious offence under the Act means an offence for which a person may be punished by imprisonment for a term of four years or more.

Section 10 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 makes it an offence to aid, abet, counsel, or procure the commission of an offence of money laundering under Section 7 of that Act.  In such instances, penalties range from a fine of up to EUR5,000 or one year's imprisonment on summary conviction or both or to a fine or imprisonment of not more than 14 years or both on conviction on indictment.

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, as amended, sets out the framework relating to money laundering offences in Ireland.

Section 7 of the Act provides that if a person engages in any of the following acts in relation to property that is the proceeds of criminal conduct and if the person knows or believes (or is reckless as to whether or not) the property is the proceeds of crime, they will be guilty of an offence. The acts are as follows:

  • concealing or disguising the true nature, source, location, disposition, movement or ownership of the property or any rights relating to it;
  • converting, transferring, handling, acquiring, possessing or using the property; and
  • removing the property from or bringing the property into the State.

Penalties on indictment include a fine or a term of imprisonment of up to 14 years or both.

The Act also places an obligation on designated persons to prevent money laundering within their business. “Designated Persons” are defined in Section 25 of the Act and include:

  • credit or financial institutions;
  • auditors, external accountants and tax advisers;
  • independent legal professionals;
  • trust or company service providers;
  • property service providers; and
  • casinos and gaming companies.

The Act sets out the competent authorities that are responsible for monitoring compliance with anti-money laundering requirements in particular circumstances. For example, the Central Bank of Ireland is the body tasked with monitoring compliance of the financial services industry. Investigations in relation to money laundering are however within the remit of the Gardaí.

As with all offences, it will be a defence to a white-collar prosecutionto prove that not all of the constituent elements of the requisite offence are met. 

Certain legislation also includes specific defence provisions. For example, pursuant to Section 18(2) of the Criminal Justice (Corruption Offences) Act 2018, it shall be a defence for a company, against which proceedings under that Act are brought, to prove that it took “all reasonable steps and exercised all due diligence” to avoid the commission of the offence.

In the event of such a prosecution and reliance on the foregoing defence, the company’s anti-corruption policies and procedures are likely to come under intense scrutiny.

The existence of an effective compliance programme, while not a defence in itself, may assist in defending any charge that may be brought against a body corporate by demonstrating (at least in part) that the body corporate took all reasonable steps and exercised reasonable due diligence to avoid the commission of the offence.

There are no exceptions or de minimis exceptions for white collar offences in Ireland.

Section 19 of the Criminal Justice Act 2011 makes it an offence to withhold information from the Gardaí which one knows or believes might be of material assistance in preventing the commission by any other person of a relevant offence or in securing the apprehension, prosecution or conviction of any other person for a relevant offence.

A “relevant offence” for the purpose of the 2011 Act includes offences in the areas of banking and other financial activities, company law, money laundering and terrorist financing, theft and fraud, bribery and corruption, consumer protection and criminal damage to property.

This therefore imposes a mandatory obligation on companies and individuals to report suspected instances of white-collar or corporate offences.

There is no specific statutory provision in Ireland that provides for leniency in circumstances where a company self-reports a corporate offence save in a competition law context (see 3.7 Cartels and Criminal Competition Law). A member of a cartel may avoid prosecution and sanctions if they are the first member of that cartel to come forward and reveal their involvement in illegal cartel activity before the CCPC has completed its investigation.

The Protected Disclosures Act 2014 provides protection for a whistle-blower who is a worker when a disclosure of relevant information is made.

The term "worker" is broadly defined and includes employees, contractors, self-employed individuals, agency workers and people on work experience.

"Relevant information" is information which a worker reasonably believes tends to show one or more relevant wrong-doings and which came to their attention in connection with their employment.

"Relevant wrong-doings" include:

  • the commission of a criminal offence;
  • failure to comply with a legal obligation;
  • the occurrence of a miscarriage of justice;
  • endangerment of the health or safety of an individual;
  • misuse of public funds;
  • mismanagement of a public body; and
  • the concealment or destruction of information tending to show any of the foregoing.

In order for the protections under the 2014 Act to apply, the disclosure must be made through a specified disclosure channel, including disclosures made:

  • to a worker’s employer;
  • to a person prescribed by the Minister for Public Expenditure and Reform;
  • to a relevant government minister;
  • to a legal adviser; or
  • to a third party (in certain circumstances).

The 2014 Act requires that the recipient of the disclosure protect the whistle-blower’s identity insofar as possible. A whistle-blower is also protected from penalisation or dismissal by their employer for making a protected disclosure. Further, a whistle-blower will be immune from criminal liability in respect of any offence prohibiting or restricting the disclosure of information if, at the time of making the disclosure, they reasonably believed that it was a protected disclosure under the 2014 Act.

Under Irish law the general rule is that the prosecution must prove their case beyond a reasonable doubt. However, the burden of proof is shifted to the defence in certain instances, for example, under Section 14 of the Criminal Justice (Corruption Offences) Act 2018, there is a presumption of corruption where it is proved that a gift, consideration or advantage is given to an official or connected person and the person who gave the gift, consideration or advantage had an interest in the discharge by the official of his or her functions including for example, the awarding of a tender, contract, grant or payment, or the making of certain decisions or exercise of judicial functions. This presumption will remain in place until the contrary is proved, thereby shifting the burden of proof to the accused.

In Ireland, the courts have exclusive jurisdiction in relation to sentencing in criminal matters. The law does not provide for formal plea bargaining or the entering into of settlement agreements with the DPP. It may however be possible for an accused in a criminal matter to plea to a lesser charge than that with which they were initially charged, which may result in a more lenient sentence. In that regard, the court may exercise its discretion when considering the appropriate sentence to impose but any sentence imposed must be proportionate to the circumstances of the case. When imposing the sentence, the court may take into account any aggravating or mitigating factors.

Deferred prosecution agreements (DPAs) are not a feature of Irish legislation. However, in its 2018 Report on Regulatory Powers and Corporate Offences the Law Reform Commission (LRC) recommended the introduction of a statutory scheme of DPAs in Ireland. The LRC proposed that any such scheme should be controlled by the DPP, with oversight provided by the High Court. Further, any DPA should be subject to judicial approval prior to coming into effect, and the High Court should consider whether a DPA is in the interests of justice, fair, reasonable and proportionate before approving it. It remains to be seen however, whether DPAs will become a feature of Irish criminal law in the short term.

Arthur Cox

10 Earlsfort Terrace
Dublin 2
Ireland
D02 T380

+353 1 920 1000

+353 1 920 1020

mail@arthurcox.com www.arthurcox.com
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Law and Practice

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Arthur Cox is a leading Irish commercial law firm with offices in Dublin, London, Belfast and New York. The firm's reputation is based on proven professional skills, a thorough understanding of client requirements, sound judgement and a practical approach to resolving commercial problems. Arthur Cox's leading corporate crime group works extensively with its corporate and commercial teams advising on risk management, compliance and governance issues to ensure that clients are in a position to meet any such challenge or opportunity with which they are faced. The firm has experience in dealing with law enforcement agencies in Ireland and globally, as well as other investigative and prosecutorial bodies. The team is led by partners Gregory Glynn, Joanelle O’Cleirigh, Richard Willis and Deirdre O’Mahony.

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