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Measures to enhance Ireland's corporate, economic and regulatory framework

10 November 2017

Context

The recent publication by the Government of the above framework to tackle white collar crime has created much debate and discussion in the past week.  The well anticipated report makes a number of proposals and sets out a time frame for implementation of these proposed changes and initiatives.

The report is divided into 4 key headings: (a) Organisational and procedural reform; (b) corporate governance; (c) enhancing the powers of the authorities to identify and combat economic and regulatory offences in the financial sector; and, (d) countering Money Laundering and Corruption.

Key actions

Each of these areas have a number of key actions.  The report allocates a delivery date and a Department responsible for implementation of each action.  Among the main recommended actions are:

  • Establishing the Office of the Director of Corporate Enforcement as an independent company law enforcement agency; 
  • Establishing a Joint Agency Task Force on a pilot basis to tackle criminality in a specific area; 
  • Enacting the Criminal Justice (Corruption Offences) Bill 2017 which involves a major consolidation of anti-corruption legislation. This bill will also introduce new offences and legislative provision for recommendations arising from the Mahon Tribunal;
  • Implementing the Markets in Financial Instruments Directive II (MiFID II) to improve the functioning of financial markets, making them more “efficient, resilient and transparent and to strengthen investor protection”;
  • Evaluating the Protected Disclosures Act, which can relate to any aspect of the operation of the Act but seeks to inform in particular, whether the legislation has been effective in line with its objectives, and how it might be improved.

The document goes on to state that “this package of measures will be subject to regular scrutiny by the Oireachtas to monitor the implementation of the measures and ensure the regulatory environment is enhanced, while also increasing the prevention, identification, investigation and prosecution of corporate, economic and regulatory offences.  This is designed to enhance Ireland’s competitiveness and attractiveness as a place to do business”.

Institute view

The proposal to overhaul the Office of the Director of Corporate Enforcement (ODCE) is a major development designed to provide greater autonomy to the new agency. Key challenges include how that office is funded and whether it can attract senior experienced staff that have the resources to enforce company law. As part of a package of measures to improve corporate governance, it is a welcome initiative.

Company secretaries will also be taking note of a number of other developments within the Framework including;

  • the commitment to establish Registers of Beneficial Ownership for Companies, Industrial and Provident Societies (cooperatives), Trusts & Irish Collective Asset-management Vehicles with a proposed time line for implementation of Q1 2018;
  • the work of the Company Law Review Group ("CLRG") in preparing a suite of recommendations for legislative change to further refine the Corporate Governance provisions of the Companies Act 2014. In that regard, the Institute’s representative on the CLRG is a member of two sub committees; Corporate Governance and Enforcement and Compliance, both of which are working to make recommendations to improve corporate governance and enforcement of company law;
  • the commitment to implement MiFID II; and,
  • the introduction of new offences and tougher sanctions by the Criminal Justice (Corruption Offence) Bill, 2017 for corruption offences to include an offence called the strict liability offence whereby companies will now become liable for the actions of directors, managers, employees or agents who commit a corruption offence for the benefit of the company.  A body corporate will therefore have to prove that it took all reasonable steps and exercised all due diligence to prevent the original action taking place.  Companies should now start reviewing the Bill in detail and also their own procedures and policies to ensure they will be compliant when the bill becomes law, (enactment expected in late 2018/early 2019). The Institute has produced a ebook on the UK’s Bribery Act  that might be useful for Irish companies in preparing for the enactment of this new legislation (follow the link):

https://www.icsa.org.uk/shop/search-results?query=uk+bribery+act

There is no doubt that this framework has an objective of ensuring that Ireland remains a safe place in which to conduct business and ensuring that from a global perspective, Ireland has a reputation internationally as a low risk economy in which business can operate securely.

For further details please click on the link below to read the report in detail.

https://dbei.gov.ie/en/Publications/Publication-files/Measures-Enhance-Irelands-Corporate-Economic-and-Regulatory-Framework.pdf

John Burns
Business Development Manager
ICSA Ireland Region