1 GENERAL CRIMINAL LAW ENFORCEMENT
1.1 What authorities can prosecute business crimes, and are there different enforcement authorities at the national and regional levels?
Under Irish law, offences are divided between summary (minor) offences and indictable (serious) offences. In general, regulatory bodies are authorised to prosecute summary offences along with the Garda Siochána (the Irish police) and the Director of Public Prosecutions (the "DPP"). However, the DPP has the sole authority to prosecute offences on indictment (except for a limited category of offences still prosecuted at the suit of the Attorney General). In addition, there are a number of authorities that prosecute business crimes in Ireland on a summary basis. These include: the Office of the Director of Corporate Enforcement (the "ODCE"); the Criminal Assets Bureau ("CAB"); the Office of the Revenue Commissioners (the "Revenue Commissioners"); the Competition and Consumer Protection Commission (the "CCPC"); and the Office of the Data Protection Commission (the "ODPC"). In relation to indictable offences, the relevant authority prepares a file and submits it to the DPP for consideration; it is then solely at the discretion of the DPP as to whether a case will be taken in respect of a suspected offence.
1.2 If there is more than one set of enforcement agencies, how are decisions made regarding the body which will investigate and prosecute a matter?
As mentioned above, only the DPP can prosecute offences on indictment. However, in relation to summary offences, offences are primarily prosecuted by the Irish police or, if there is a specific statutory provision, by the relevant authority (see question 1.3 below).
1.3 Is there any civil or administrative enforcement against business crimes? If so, what agencies enforce the laws civilly and which crimes do they combat?
Some authorities, such as those mentioned above, are empowered to take civil or administrative action against business crime. In particular:
- the CCPC is empowered to take civil proceedings to enforce breaches of competition law involving anti-competitive agreements and abuses of dominant positions, where the public interest does not require criminal prosecution;
- the Revenue Commissioners can take civil enforcement action in relation to revenue offences and compel compliance with revenue law through insolvency and restitution proceedings; and
- by bringing criminal proceedings for breaches of the Companies Act 2014, the ODCE brings civil proceedings for the restriction and disqualification of directors, and initiates fact-finding company investigations.
In addition, the Central Bank of Ireland (the "Central Bank") can impose civil and administrative penalties for breaches of banking regulations. For instance, it can impose on a person or entity: a private/public caution or reprimand; a direction to pay a penalty not exceeding €10 million or 10% of turnover, whichever is the greater or up to €1 million on an individual; and/or a disqualification that prohibits individuals from being involved in any regulated financial service provider for a specified period.
1.4 Have there been any major business crime cases in your jurisdiction in the past year?
In June 2018, former Anglo Irish Bank chief executive David Drumm was sentenced to six years imprisonment for his role in a €7.2 billion fraud perpetrated at the peak of the banking crisis in 2008, in one of the most prominent business crime cases in Ireland to date.
Mr. Drumm is the most senior employee of Anglo Irish Bank to be convicted and was found guilty of conspiracy to defraud and false accounting over deposits circulating between Anglo Irish Bank and Irish Life & Permanent that "dishonestly" created the impression that Anglo Irish Bank's deposits were €7.2 billion larger than they actually were.
2 ORGANISATION OF THE COURTS
2.1 How are the criminal courts in your jurisdiction structured? Are there specialised criminal courts for particular crimes?
Offences which are tried summarily are heard before a judge in the District Court (the lowest court). Appeals from the District Court lie to the Circuit Court. Offences tried on indictment are heard before the Circuit Court and the Central Criminal Court (the High Court exercising its criminal jurisdiction), and trials in these courts are heard by a judge and jury. While the Central Criminal Court has full and original jurisdiction to hear all criminal cases, in practice, only those cases which are outside the jurisdiction of the Circuit Court will be brought before the Central Criminal Court at first instance. Appeals from both of these courts lie with the Court of Appeal. Appeals against decisions of the Court of Appeal will be heard by the Supreme Court if the Supreme Court is satisfied that the decision involves a matter of general public importance or, in the interest of justice, it is necessary that there be an appeal to the Supreme Court. The only Criminal Court dedicated to particular crimes is the Special Criminal Court, which deals with terrorism and organised crime.
2.2 Is there a right to a jury in business crime trials?
The Irish Constitution provides that "no person shall be tried on any criminal charge without a jury", save in specified circumstances. One of these circumstances is in relation to a minor offence which is being prosecuted summarily. No distinction is made for business crimes.
3 PARTICULAR STATUTES AND CRIMES
3.1 Please describe any statutes that are commonly used in your jurisdiction to prosecute business crimes, including the elements of the crimes and the requisite mental state of the accused:
- Securities fraud
In accordance with the Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations"), a prospectus must be published in order to offer securities for sale to the public in a lawful manner.
The Companies Act 2014 provides that a person who authorises the issue of a prospectus shall be guilty of an offence where such prospectus includes an untrue statement or omits information required by law to be contained in the prospectus.
- Accounting fraud
Irish law provides for the offence of "false accounting" under section 10 of the Criminal Justice (Theft and Fraud Offences) Act 2001 (the "Theft and Fraud Offences Act"). A person is guilty of the offence if he:
- dishonestly interferes with any document required for accounting purposes;
- dishonestly fails to make or complete any accounting document; or
- produces any accounting document which he knows to be misleading or false.
Related offences which may also be committed in the process of committing the offence of false accounting include:
- making a gain or causing a loss by deception under section 6 of the Theft and Fraud Offences Act; or
- completing a report or balance sheet which contains information which the accused knew to be false under section 876 of the Companies Act 2014, or other company accounting-related offences considered further under "Company Law Offences" below.
- Insider trading
Insider trading, or dealing, is governed by the Investment Funds, Companies and Miscellaneous Provisions Act 2005, the European Union Market Abuse Regulation (EU 596/2014), and the Market Abuse Directive (Directive 2014/57/EU), which were made part of Irish law by S.I. No. 349/2016 European Union (Market Abuse) Regulations 2016 (the "Market Abuse Regulations"). Section 5 of the Market Abuse Regulations 2016 creates the offence of "insider dealing", and 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. Insider information is information that, if it were made public, would likely have a significant effect on the price of financial instruments or on the price of related derivative financial instruments.
There is no specific offence of embezzlement under Irish law. Rather, embezzlement is likely to be prosecuted as a theft and fraud offence, under the Theft and Fraud Offences Act. Section 4(1) of the Theft and Fraud Offences Act provides that a person is guilty of theft if he dishonestly appropriates property without the consent of its owner, and with the intention of depriving its owner of it. "Dishonesty" is defined under the Act as appropriating "without a claim of right made in good faith".
- Bribery of government officials
The principal statutory source of bribery law in Ireland is the Criminal Justice (Corruption Offences) Act 2018. The Act which commenced on 30 July 2018 consolidated the existing anti-corruption laws and introduced a number of new offences. The Act prohibits both "active" bribery (making a bribe) and "passive" bribery (receiving a bribe). A person is guilty of passive bribery if he corruptly accepts, agrees to accept, or agrees to obtain, a gift, consideration or advantage, for himself or any other person, as an inducement, reward or on account of the agent doing any act, or making any omission, in relation to the agent's position, or his principal's affairs or business. A person is guilty of active bribery if they corruptly give, agree to give or offer, a gift, consideration or advantage to an agent or any other person, as an inducement to, or reward for, or otherwise on account of the agent doing any act, or making any omission, in relation to his office or his principal's affairs or business.
One of the most important developments in the new Act is the new corporate liability offence which allows for a corporate body to be held liable for the corrupt actions committed for its benefit by any director, manager, secretary, employee, agent or subsidiary under section 18 of the Act. The single defence available to corporates for this offence is demonstrating that the company took "all reasonable steps and exercised all due diligence" to avoid the offence being committed.
- Criminal anti-competition
The Competition Act 2002 as amended (the "Competition Act") prohibits:
- all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in Ireland or any part of Ireland (section 4); and
- the abuse of dominant position by one or more undertakings in trade for any goods of services in Ireland or in any part of Ireland (section 5).
There is no express statutory requirement for the prosecution to establish intention or any other particular mental state of the accused, in order to satisfy the Irish Courts that an offence under the Competition Act has been committed.
- Cartels and other competition offences
The operation of cartels is prohibited at European Union level by Article 101 of the Treaty on the Functioning of the European Union ("TFEU"). At European Union level, offences relating to the operation of cartels are investigated by the European Commission. Section 4 of the Competition Act regulates offences relating to the operation of cartels and other competition offences. As stated above, section 4(1) of the Competition Act affirms that "all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void".
The Competition Act offers express examples of arrangements which contravene cartel regulation, and which include arrangements that:
- directly or indirectly fix purchase or selling prices or any other trading conditions;
- limit or control production, markets, technical development or investment;
- share markets or sources of supply;
- apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; or
- make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.
An entity may breach section 4(1) by engaging in a concerned practice, or by entering into, or making or implementing a decision, of an agreement prohibited by section 4(1).
The Competition Act's prohibition on cartels applies to arrangements between two or more "undertakings" or involving an association of undertakings. An "undertaking" is defined in the Competition Act as any person, being an individual, a body corporate or an unincorporated body of persons, engaged for gain in the production, supply or distribution of goods or the provision of a service. Any officer of a company who authorises or consents to conduct prohibited under section 4(1) is also guilty of an offence. A breach of section 4 of the Competition Act or Article 101 of the TFEU is a criminal offence under the Competition Act, punishable on prosecution in the Irish Courts by fines and/or imprisonment.
The prohibition against the operation of cartels has extraterritorial effect in Ireland, and the scope of the Competition Act extends to conduct that takes place outside Ireland, but has anti-competitive effects within the State.
- Tax crimes
Irish revenue offences are prosecuted under Part 47, Chapter 4 of the Taxes Consolidation Act 1997 (the "TCA"). The revenue offences under the TCA include the following:
- knowingly or wilfully furnishing an incorrect return or other information to the Revenue Commissioners;
- knowingly aiding, abetting or inducing another person to deliver an incorrect return or other information to Revenue;
- deliberately making a false claim for relief from tax;
- failing to make certain tax returns;
- failing without reasonable excuse to comply with revenue law requirements to provide information to Revenue or failing to retain or produce certain tax-related records;
- knowingly or wilfully destroying, defacing or concealing information the person is required to retain or produce under Irish tax law; and
- failing to deduct certain withholding taxes.
It is a requirement for many of the offences that the accused knowingly or wilfully undertakes the particular act; however, certain offences, such as the failure to deduct certain withholding taxes, are strict liability offences.
In addition to the taxpayer offences identified above, a tax adviser or an auditor to a company may commit an offence if he becomes aware of the commission of a revenue offence by that company and: (a) does not notify the company; (b) continues to act for that company in circumstances where the company fails to rectify the matter or to report it to the Revenue Commissioners; or (c) in some circumstances, if the tax adviser or auditor fails to notify the Revenue Commissioners that he no longer acts for the company.
- Government-contracting fraud
Irish public procurement law governs the award of public contracts and does not make provision for a specific criminal offence of government-contracting fraud.
- Environmental crimes
There are more than 300 pieces of environmental protection legislation in Ireland, including a range of statutes aimed at dealing with pollution. Irish environmental protection legislation includes air pollution acts, water pollution acts (including fisheries acts), noise pollution acts, waste management acts, habitat and species protection legislation, sea pollution legislation, public health acts and many others. There also exists a range of Irish environmental legislation aimed at preventing industrial activities operating without, or contrary to the conditions of, an appropriate environmental licence. Further, Ireland is also subject to a large volume of EU environmental laws.
Polluters may incur liability for criminal offences, fines, clean-up costs and compensation costs under Ireland's environmental legislation. In most cases, directors, managers or other officers of a company may be prosecuted with the company for criminal offences under Irish environmental legislation, where the offence is proved to have been committed by the company with the consent or connivance of the particular individual, or is attributable to any neglect on their part. This may lead to criminal sanctions involving substantial fines and imprisonment.
- Campaign-finance/election law
Under section 24 of the Electoral Act 1997, all members of the Irish Parliament and Irish representatives in the European Parliament in receipt of donations in excess of €600 must submit a donation statement indicating the value of donation received, and the name, description and postal address of the person by or on whose behalf the donation was made. Failure to provide such a statement is an offence, which is liable to a fine and/or, at the discretion of the court, imprisonment for up to three years.
- Market manipulation in connection with the sale of derivatives
The Market Abuse Regulations deal with market manipulation in respect of "financial instruments", a term which is widely defined and includes derivatives. It provides that a person may not engage in market manipulation and sets out four categories of market manipulation, any one of which, if proved, will amount to an offence. The categories are summarised as: effecting transactions or orders to trade that give, or are likely to give, false or misleading impressions; effecting transactions which secure the price at an artificial or abnormal level; employing fictitious devices or any other form of deception or contrivance; or dissemination of information which gives, or is likely to give, false or misleading signals as to financial instruments.
Each category of offence must be considered separately with respect to the requisite mental state of the accused, as each category phrases the mental element differently.
- Money laundering or wire fraud
Under section 7 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, a person commits a money laundering offence if the person engages in any of the following acts in relation to property that is the proceeds of criminal conduct: (a) concealing or disguising the true nature, source, location, disposition, movement or ownership of the property, or any rights relating to the property; (b) converting, transferring, handling, acquiring, possessing or using the property; or (c) removing the property from, or bringing the property into, the State.
It must be proved that the accused knew, believed, or was reckless as to whether or not the property is the proceeds of criminal conduct.
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 is currently at the fifth stage of the legislative process and proposes to amend the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 and 2013 to give effect to certain provisions of Directive (EU) 2015/849 (the Fourth Money Laundering Directive) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. Directive (EU) 2015/849 (the Fifth Money Laundering Directive) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing was published in June 2018 and has a transposition deadline of 10 January 2020.
- Cybersecurity and data protection law
The Criminal Justice (Offences Relating to Information Systems) Act 2017 was enacted on 24 May 2017 and gives effect to provisions of EU Directive 2013/40/EU on attacks against information systems.
The Act creates new offences relating to:
- unauthorised access of information systems;
- interference with information systems or with data on such systems;
- interception of transmission of data to or from information systems; and
- the use of tools to facilitate the commission of these offences.
The Act also makes provision for wide ranging, technologically specific warrants in respect of entry, search and seizure to assist in investigations of the commission of the new cybercrime offences.
Under the General Data Protection Regulation (the "GDPR") and the Data Protection Acts 1988 to 2018 (the "DP Acts"), there are a number of duties on data controllers, including an obligation to process personal data, under the meaning of the GDPR and DP Acts, fairly, for it to be kept up to date and to be kept secure. Appropriate security measures must be taken against unauthorised access to, or unauthorised alteration, disclosure or destruction of, the data, in particular where the processing involves the transmission of data over a network, and against all other unlawful forms of processing. Certain breaches of the GDPR and the DP Acts can amount to criminal offences under the DP Acts.
The offence of damaging property created by section 2 of the Criminal Damage Act 1991, includes, in relation to data, adding to, altering, corrupting, erasing or moving to another storage medium or to a different location in the storage medium in which they are kept (whether or not property other than data is damaged thereby), or doing any act that contributes towards causing such addition, alteration, corruption, erasure or movement of data.
Under section 9 of the Criminal Justice (Theft and Fraud Offences) Act 2001, a person who 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, is guilty of an offence.
- Trade sanctions and export control violations
Ireland fully subscribes to its international obligations in implementing trade and financial sanctions. The Department of Business, Enterprise and Innovation co-ordinates the implementation of the various UN and EU measures which have been accepted concerning trade.
The Central Bank, Department of Business, Enterprise and Innovation and the Department of Foreign Affairs and Trade are the competent authorities for UN and EU financial sanctions and are responsible for their administration, supervision and enforcement in Ireland.
The primary legislation which governs export controls in Ireland is the Control of Exports Act 2008. The Act includes provisions on the export of 'intangibles' (e.g., exportation of software and technology through electronic means), goods imported into Ireland for exportation and brokering activities. Any breach of the provisions included in the Act may result in penalties on summary conviction of a fine of up to €5,000 and/or six months' imprisonment, or penalties on indictment of a fine of up to €10,000,000 or three times the value of the goods/technology concerned and/or up to five years' imprisonment.
The Financial Transfer Act 1992 imposes certain legislative restrictions on financial transfers from Ireland to other countries. provisions included in the Act may result in penalties on summary conviction of a Class C fine up to €2,500 and/or up to 12 months' imprisonment, or penalties on indictment of a fine of up to approximately €22.2 million or twice the amount of the value in respect of which the offence was committed (whichever is greater) and/or up to 10 years' imprisonment.
- Any other crime of particular interest in your jurisdiction
There are a number of business-related offences proscribed under the Companies Act 2014 that may be classified as "Company Law Offences". These are enforced by the Office of the Director of Corporate Enforcement. An outline of the main types of offences is set out below. These offences are generally punishable by a fine of up to €50,000, five years' imprisonment, or both, unless otherwise stated.
1. 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 €1 million or 10% of the company's net assets may result in a fine of up to €500,000 or 10 years' imprisonment, or both.
2. 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".
3. 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.
4. 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.
5. 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.
6. 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/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.
3.2 Is there liability for inchoate crimes in your jurisdiction? Can a person be liable for attempting to commit a crime, whether or not the attempted crime is completed?
Ireland has substantial jurisprudence on inchoate liability. A person may be guilty of an offence where he intentionally attempts to commit a criminal offence by carrying out an act, which is not merely preparatory, with respect to the commission of the offence. To establish liability, the attempted crime need not be completed, but the act itself must be proximate to the conduct prohibited by law. For instance, under section 4 of the Competition Act 2002, it is an offence to attempt to enter into anti-competitive agreements. Similarly, attempting to commit a money laundering offence is prohibited under section 7(2) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.
Further, where a person incites or solicits another to commit an offence, even though the actual offence is neither committed nor attempted, he will be guilty of an offence under common law. The person encouraging or suggesting to another to carry out the offence must intend the other to commit the offence.
Where two persons agree to commit a "serious offence" (an offence liable to a term of imprisonment of four years or more), those persons are guilty of conspiracy pursuant to section 71(1) of the Criminal Justice Act 2006, irrespective of whether or not the act actually takes place.
Originally published by The International Comparative Legal Guide to: Business Crime 2019.
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.