Ireland: What's Another Year – January 2023

This bulletin contains a snapshot of the key legal and regulatory developments which our clients can expect over the course of 2023. If you would like to discuss any of these developments in more depth, please get in touch with your usual Arthur Cox contact.

CORPORATE AND M&A

Competition and Regulated Markets

The Screening of Third Country Transactions Bill 2022 gives the Minister for Enterprise, Trade and Employment wide-ranging powers to review investments (including certain real estate transactions relating to critical infrastructure) which meet specified criteria and ultimately to block investments that create national security and/or public order risks.

The Bill, which is expected to be enacted in early 2023, could have significant implications for in-scope real estate transactions. Parties to transactions will need to assess the applicability of the new regime and, where a filing obligation arises, there may be a lengthy review period which may impact deal timetables.

Read our briefing here.

Limited Extension of Interim Period

The "interim period", during which certain temporary amendments to the Companies Act 2014 and the Industrial and Provident Societies Act 1893 apply, has been further extended until 31 December 2023 in relation to the following measures:

• facilitating the holding of virtual AGMs and other general meetings; and
• increasing the threshold at which a company is deemed unable to pay its debts to €50,000.

The interim period in relation to other temporary measures introduced by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 expired on 31 December 2022. (This included section 43A of the Companies Act 2014, which provided that for the duration of the interim period, a company's seal and the signatures of those who countersign it could be on separate copies of the relevant agreement or deed.)

Cross Border Mergers, Divisions and Conversions

The EU Directive establishing a revised framework for cross-border mergers and a new regime for cross-border conversions and divisions is due to be transposed into Irish law by 31 January 2023.

Directors' PPS Numbers

A new requirement on company directors to include their PPS number (or verification of their identity) when making certain filings with the CRO is expected to come into force in Q1 2023.

Corporate Governance Code

The FRC has indicated that it will consult on proposed changes to the UK Corporate Governance Code and supporting guidance from Q1 2023, with the intention that the revised Code would apply to financial periods commencing on or after 1 January 2024.

Dematerialisation of Irish Securities

Under the Central Securities Depository Regulation (CSDR) all newly issued transferable securities must be dematerialised from 1 January 2023, and all existing transferable securities from 1 January 2025.

UK Register of Overseas Entities

Non-UK entities, including Irish incorporated companies and bodies corporate, who hold certain real-estate interests in the UK must register details regarding their beneficial owners with the UK Register of Overseas Entities on or before 31 January 2023.

FINANCE

Individual Accountability Framework (IAF)

The Central Bank (Individual Accountability Framework) Bill should complete all remaining stages in the Houses of the Oireachtas in late January or early February 2023. We expect the IAF to come into force in Q4 2023, following a period of consultation by the Central Bank on draft regulations and guidance. The IAF reflects the central role that culture and conduct now have in the Irish financial services sector, and will present implementation challenges for regulated firms and senior individuals working within them.

For more information, see here.

Consumer Protection Code Review

The Central Bank plans to consult on proposed reforms to the Consumer Protection Code (CPC) in Q4 2023, following the October 2022 publication of its Discussion Paper which is open for feedback until 31 March 2023. The CPC will be replaced by retail conduct framework regulations in 2024.

For more information on the CPC review, see here and for more information on the Central Bank's consumer protection-related expectations of regulated firms, see here.

Retail Banking Review Report: Recommendations

The recommendations made in the November 2022 report arising from the Retail Banking Review commissioned by the Department of Finance are now Government policy. A number of these recommendations will involve new or amended legislation in 2023, including the recommendations that providers of credit to SMEs be authorised and supervised by the Central Bank, that the SME Regulations be amended in line with the CPC review, and that the remuneration restrictions for staff of AIB, BOI and PTSB be eased.

For more information, see here.

Credit Servicing Directive

With the new Credit Servicing Directive due for transposition into national law by 29 December 2023, key issues remain to be clarified by way of draft transposing legislation, such as the categorisation of non-performing loans, how sales of combined portfolios by EU banks are to be dealt with, and how the Irish framework which currently requires that credit purchasers be regulated will be amended.

For more information, see here.

AML

With trilogue negotiations on the European Commission's AML Action Plan expected to start in late Q1/early Q2 2023, the location of the planned new Anti-Money Laundering Authority (AMLA), the scope of AMLA's mandate, and the final form of both the new directive and the new directly-effective regulation (single rulebook) should be finalised by Q3 2023. The crypto-asset related changes to the existing regulation on information accompanying the transfers of funds (part of the AML Action Plan) have already been agreed politically in tandem with MiCA (the proposed regulation on markets in crypto-assets) which is expected to be published in the Official Journal in late Q1/early Q2 2023, and will come into force 18 months later.

For more information, see here.

Green Bond Standard

Trilogue discussions are continuing on the proposal for a new voluntary EU Green Bond Standard – the final form of the proposal is expected to be known in Q1 2023.

For more information on the key negotiation points, see here.

Securitisation Regulation

While the European Commission's recent report did not recommend changes to the Level 1 text of the Regulation (for more information, see here), ESMA was asked to review the existing disclosure templates, and to draft a dedicated disclosure template for private securitisations. We expect to see outputs from these reviews in 2023, together with the publication of the regulatory technical standards (RTS) on risk retention in the Official Journal, and the finalising of a number of other outstanding RTS under the Regulation.

EMIR

The EU Council and European Parliament will start reviewing the European Commission's proposals, published on 7 December 2022 as part of a wider Capital Markets Union-related package, to make targeted changes to EMIR. In particular, to encourage clearing in the EU and to reduce reliance on third country CCPs, the proposed amendments would require firms subject to the clearing obligation to clear at least a portion of certain systemic derivatives through active accounts at EU CCPs.

For more information on the proposals, see here.

Insurance Recovery and Resolution Directive

The EU insurance recovery and resolution directive (IRRD) is likely to be passed into EU law in early 2023. It aims to introduce a harmonised recovery and resolution framework for failing or likely to fail EU insurers and reinsurers and to provide new resolution authorities with an array of resolution tools. The IRRD will need to be implemented into Irish law within 18 months of it entering into force. Irish authorised insurers should already be familiar with recovery planning due to the requirements of the existing Irish regulations and the associated Central Bank of Ireland guidance, but there will be additional work to be carried out by (re)insurers carrying on business in Ireland in 2023, once the IRRD enters into force.

ASSET MANAGEMENT AND INVESTMENT INVESTMENT FUNDS

PRIIPs: New KID on the Block

The European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022 entered into force from 1 January 2023 and set out the legislative provisions regarding the requirement for UCITS to produce a PRIIPs 'key information document' (KID) from that date. The production of a PRIIPs KID by a UCITS will satisfy the pre-existing obligation to produce a UCITS 'key investor information document' (KIID).

For more information on the impact for UCITS of using the PRIIPs KID, please see our detailed briefing here.

AIFMD II

On 25 November 2021 the European Commission published its much-anticipated draft legislative proposals in respect of the AIFMD review and the associated amendments to the UCITS Directive. The proposals include amendments on loan origination, delegation, substance and liquidity management and are designed to improve the functioning of the alternative investment funds market. The proposals also included amendments to the UCITS Directive with the aim of harmonising various rules under the two frameworks. Once a compromise text has been agreed, the next step in the legislative process will be for the Council of the EU, the European Parliament and the European Commission to enter into trilogue negotiations, which are expected to commence later in Q1 2023, to agree on the a final version of the the AIFMD II Directive for publication in the Official Journal of the EU.

ESG

Mondaq's Environmental, Social and Governance (ESG) Regulation Comparative Guide

Need to know where we are with ESG? The Comparative Guides provide an overview of some of the key points of law and practice and allow readers to compare regulatory environments and laws across multiple jurisdictions. Lawyers from across the firm have contributed the comparative guide for Ireland.

Read the full Ireland guide here.

Sustainability Reporting

EU listed companies who fall within scope of the Non-Financial Reporting Directive enter their second year of reporting under Article 8 of the Taxonomy Regulation in relation to environmentally sustainable activities for climate change adaptation and mitigation, which from 1 January 2023 also include specific nuclear and gas activities under the Complementary Delegated Act. From 1 January 2023, non-financial entities are required to report on taxonomy eligibility and alignment and will commence reporting on their KPIs. A second set of technical screening criteria for the remaining environmental objectives under the Taxonomy regulation (sustainable use of water & marine protection, circular economy transition, pollution prevention & control and protection and respiration of biodiversity & ecosystems) was due to be adopted via delegated act to be applicable from 1 January 2023, however this has been delayed.

The Corporate Sustainability Reporting Directive (CSRD) was published in the Official Journal of the EU on 16 December 2022 and EU member states are required to transpose its obligations into national law by 6 July 2024. The CSRD will be phased in, with the obligations applying to the first group of reporting companies in respect of financial years commencing from 1 January 2024 (reporting 2025). The European Commission is due to adopt the first set of mandatory reporting standards under the CSRD by 30 June 2023, to apply from 1 January 2024.

The EU Council and European Parliament are due to commence negotiations on the proposal for a directive on Corporate Sustainability Due Diligence in 2023.

SFDR Compliance for Funds

The Sustainable Finance Disclosures Regulation (SFDR) Level 1 requirements applied from 10 March 2021 and financial market participants, which include AIFMs, UCITS management companies and self-managed investment companies (Fund Management Companies), were required to comply with a number of high-level principles-based disclosure requirements by that date. The SFDR Level 1 requirements were supplemented by more detailed Level 2 requirements (SFDR RTS) and these requirements entered into force from 1 January 2023. From that date, Fund Management Companies are required to comply with detailed pre-contractual and annual reporting disclosures and must make these disclosures in the form of the mandatory templates, which are set out in the annexes to the SFDR RTS for relevant products.

In addition, from 1 January 2023, certain Taxonomy Regulation related disclosures apply to those funds under Articles 8 and 9 SFDR that make sustainable investments with environmental objectives in accordance with the EU taxonomy.

Accordingly, most Irish Fund Management Companies will have updated their prospectuses ahead of the 1 January 2023 deadline and all funds publishing their annual reports on or after 1 January 2023 will be required to comply with the prescribed disclosure requirements. Q1 2023 will see further updates required as the amended Delegated Regulation, currently being scrutinised by the European Parliament and the Council of the EU, will require additional disclosure by way of a graph reflecting the extent to which a portfolio is exposed to the gas and nuclear-related activities that comply with the EU taxonomy, as set out in the Complementary Climate Delegated Act. Responses to the further queries submitted by the European Supervisory Authorities to the European Commission on 9 September 2022, relating to the interpretation of SFDR, are also expected in Q1 2023.

Climate Governance

2023 takes us to the mid-point of our first five year carbon budget, the statutory intent of which is to get to the end of 2030 with greenhouse gases reduced by 51% compared to 2018. We also have a new Climate Action Plan 2023, which includes targets for 2025 and 2030, some of which reflect an increase in ambition since the last Climate Action Plan. Actions to be executed in 2023 are listed and include some of the eagerly awaited actions not yet closed off under the ambitious 2021 Plan.

Our overview of the Climate Action Plan 2023 is here.

LITIGATION, DISPUTE RESOLUTION AND INVESTIGATIONS

Collective Litigation

The Irish Government has approved the drafting of legislation to transpose the EU Directive on Representative Actions for the Protection of the Collective Interests of Consumers, which Ireland is required to transpose into law by 25 December 2022. The Representative Actions for the Protection of the Collective Interests of Consumers Bill 2022 is expected to come into effect from 25 June 2023. The Joint Committee on Enterprise, Trade and Employment published its Report on the Pre-Legislative Scrutiny of the General Scheme of the Bill in December 2022. The publication of the Bill is awaited.

Further information is available here.

Individual Accountability Framework (IAF)

The Central Bank (Individual Accountability Framework) Bill should complete all remaining stages in the Houses of the Oireachtas in late January or early February 2023. We expect the IAF to come into force in Q4 2023, following a period of consultation by the Central Bank on draft regulations and guidance. The IAF reflects the central role that culture and conduct now have in the Irish financial services sector, and will present implementation challenges for regulated firms and senior individuals working within them.

For more information, see here.

Lobbying

The recent publication of the Regulation of Lobbying (Amendment) Bill 2022 paves the way for the reform and strengthening of lobbying laws in Ireland through an expansion of the definition of lobbying, improvements to the functioning of the lobbying register functions and the enhancement of the enforcement regime. It is anticipated that the Bill will be enacted and commence in the first half of 2023.

Further information is available here.

Corporate Enforcement Authority

Following the commencement of the Companies (Corporate Enforcement Authority) Act 2021 in July 2022, the new independent statutory authority, the Corporate Enforcement Authority (CEA), is now tasked with investigating and prosecuting economic and white collar crime in Ireland. The CEA has replaced the Office of the Director of Corporate Enforcement and assumed its role in the investigation and enforcement of company law offences.

In January 2023 the Corporate Enforcement Authority published its 'early warning tools' to assist in the identification of when a company is 'likely to become insolvent' under the new directors' duty to have regard to the interests of creditors.

Further information is available here and here.

Third Party Funding in Arbitration

The Irish government are proposing to amend the Arbitration Act 2010 through the insertion of a new provision which will permit third-party funding in limited circumstances relating to international commercial arbitration.

REAL ESTATE

Commercial Landlord and Tenant: Green Leases

2023 will see an increased focus on the greening of property contracts, with green leases in particular being utilised by landlords and tenants to ensure the sustainable management and operation of buildings and to future proof buildings against increasing regulation of carbon emissions from the built environment. 2023 will also see further focus on retrofitting older building stock and contractual mechanisms to facilitate this.

For the past 18 months, the Arthur Cox LLP real estate group, working with colleagues in other law firms and sustainability professionals, has been leading the development of green clauses for Irish commercial leases under the umbrella of The Chancery Lane Project (TCLP), a global collaboration of lawyers and sustainability professionals working pro bono to rewire contracts to combat the climate crisis. The clauses will be published on TCLP's website in the New Year.

Regulation of Short-Term Lettings

2023 will see the implementation of further measures to bring more homes back into the long-term rental market in rent pressure zones (RPZs). The Planning and Development, Maritime and Valuation (Amendment) Act 2022 requires that, for an initial (extendable) period of six months from 1 September 2022, properties cannot be advertised and arrangements cannot be entered into for short-term letting of properties in RPZs which do not have the requisite planning permission or which are not exempted development.

The Government also hopes to have legislation enacted by the end of March 2023 to establish a new Fáilte Ireland registration system for short-term lettings.

Housing Commission Report

The Housing Commission, established in to fulfil a commitment in the Government's Housing for All Plan to examine housing issues and bring forward proposals on a housing referendum on the constitutional right to housing, is due to submit its report to the Minister for Housing, Local Government and Heritage by the end of July 2023.

Read the Government's press releases here and here.

2023 may bring further Government measures to deal with housing issues based on the Housing Commission's recommendations.

Residential Zoned Land Tax

The Residential Zoned Land Tax (RZLT) (announced in Budget 2022 to replace the vacant site levy) is an annual self-assessed tax administered by Revenue calculated at 3% of the market value of land within its scope. It applies to land that, on or after 1 January 2022, is zoned as being suitable for residential development and is serviced, with certain exclusions.

Whilst the RZLT is not payable until 2024, 2023 will see landowners engaging with local authorities and An Bord Pleanála in the submission, assessment and appeals process around the designation of land as within the scope of the tax as set out in the relevant legislation.

Vacant Home Tax

This vacant homes tax is to be introduced in 2023 and will be an annual self-assessed tax administered by Revenue calculated at three times the property's existing base LPT liability. It will apply to residential properties occupied for less than 30 days in a 12-month period, with certain exclusions set out in the relevant legislation (Part 22B of the Taxes Consolidation Act 1997 as amended by the Finance Act 2021 and the Finance Act 2022).

Irish Property Funds: Review of Tax Regimes and New CBI Leverage Measures

Review of Tax Regimes

In his Budget 2023 speech, the Minister for Finance, Paschal Donohoe TD, announced a review of institutional funding vehicles including REITs and IREFs to "consider those structures and how best they can continue to support housing policy objectives". He also announced a review of the use of section 110 companies and the establishment of a working group to consider the taxation of funds generally. It remains to be seen how and when these reviews will be carried out in 2023.

New CBI Leverage Measures

The Central Bank announced its macroprudential policy framework for Irish property funds on 24 November 2022. A key point was the introduction of a 60% leverage limit on the ratio of property funds' total debt to their total assets.

2023 will see in-scope funds reviewing current and planned borrowing to determine if they are within the leverage limit and, if they are over-leveraged, implementing strategies to reduce this.

Read our briefing here.

TAX

Fiscal Policy

As reported in a press release by the Department of Finance, the corporation tax receipts were very strong in November, with receipts of €5 billion, up €1 billion compared with the same month last year driven by strong rise in profits for a number of multinationals based in Ireland. The Government has committed to put a portion of the receipts to a rainy day fund, however, it remains to be seen what the government plans to do with the excess.

OECD Pillar 2

The Pillar 2 Directive was agreed in December. The aim of Pillar Two is to apply a global minimum effective tax rate of 15% on the profit of the large multinational and domestic groups or companies with a combined annual turnover of at least €750 million. The draft directive maintains a proposed implementation date of 31 December 2023.

The implementation of the Pillar 2 EU Directive will incentivise many companies to restructure their operations and to move activities to jurisdictions that incorporate a tax rate of close to 15% level and instate a system of refundable tax credits.

Separately, technical work on the details is ongoing on the Pillar One proposal, which will attempt to re-allocate a proportion of tax to market jurisdictions. We do not expect to see Pillar One implemented in the near future. We note however that tax authorities are becoming more active on transfer pricing disputes with taxpayers. Irish Revenue have however increased their resources to encourage quicker resolution of disputes that come under the Mutual Agreement Procedure.

Participation Exemption

The Department of Finance has alluded that once Pillar 2 was approved, Ireland will adopt a territorial tax regime. It remains to be seen whether Ireland will adopt a limited scope territorial regime, as is common among EU Member States, or a regime with a more flexible scope, incorporating a broad participation exemption for all dividends and a branch profits exemption. A consultation on the territorial regime was launched last year, so we expect that some movement on implementing various suggestions from the stakeholders should commence in 2023.

Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC 7)

DAC 7 amends the existing rules (Directive 2011/16/EU) on exchange of information. It will impose new reporting obligations for digital platform operators in respect of revenues generated by sellers carrying out certain activities on digital platforms and automatic exchange of the information for tax authorities in Member States. The rules for digital platform operators had to be implemented by Member States in domestic legislation and are applicable from 1 January 2023. Finance Act 2022 includes provisions to implement the DAC 7 rules into Irish law.

TECHNOLOGY AND INNOVATION

Data Governance Act (DGA)

EU Regulation 2022/868 on European data governance and amending Regulation (EU) 2018/1724 (DGA) aims to foster trust and confidence in data sharing and establishes certain mechanisms to facilitate data sharing. Its provisions enter into force from 24 September 2023, at which point Member States are required to have notified the Commission of the rules on penalties applicable to infringements of certain parts of the Regulation. They must also notify the Commission of the identity of competent bodies appointed; (i) in relation to the notification procedure for data intermediation services; (ii) for registration of data altruism organisations; and (iii) to assist the public sector bodies which grant or refuse access for the re-use of certain categories of data.

Digital Markets Act (DMA)

The DMA, EU Regulation 2022/1925 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828, entered into force on 1 November 2022. Once designated as a gatekeeper by the European Commission, by 6 September 2023 at the latest, an undertaking will have six months to comply with the gatekeeper obligations under the DMA.

For further information, see our detailed briefing here.

Digital Services Act (DSA)

The DSA, EU Regulation 2022/2065 on a Single Market For Digital Services and amending Directive 2000/31/EC, entered into force on 16 November 2022. While the Regulation applies from 17 February 2024, by 17 February 2023, online platforms must publish information on the average number of monthly active end users of their websites in the European Union. This information will be used to assess whether a provider is a 'very large online platform' or 'very large online search engine' and particular obligations will flow from the designation.

For further information, see our detailed briefing here.

DORA and NIS 2

EU Regulation 2022/2554 on digital operational resilience for the financial services sector (DORA); and Directive 2022/2555 on measures for a high common level of cybersecurity across the Union, repealing Directive (EU) 2016/1148 (NIS 2), have now been adopted by the European Parliament and by the Council of the EU and published in the Official Journal of the European Union, each taking effect from 16 January 2023. Member States must now transpose NIS 2 into national law and apply those measures from 18 October 2024. DORA will apply generally from 17 January 2025. Aspects of DORA will also require national transposition so EU member states will need to pass domestic legislation to give effect to DORA in their jurisdiction.

For further information on key EU operational resilience and cybersecurity legislative development, see our podcast here and detailed briefing here.

Online Safety and Media Regulation Act 2022 (OSMRA)

The OSMRA transposes the revised Audiovisual Media Services Directive ((EU) 2018/1808) into Irish law and establishes a regulatory framework for online safety. It amends the Broadcasting Act 2009 and extends the application of broadcasting codes and rules to audiovisual on-demand media services. It will also establish a Media Commission, Coimisiún na Meán, in place of the Broadcasting Authority of Ireland and provide it with more extensive enforcement mechanisms, including empowering Coimisiún na Meán to carry out investigations and to impose administrative financial sanctions.

For further information on upcoming changes to content regulation in Ireland, see our podcast: Tech Trackers: Regulation in the Digital World – Upcoming Changes to Content Regulation in Ireland

EMPLOYMENT AND PENSIONS

Protected Disclosures (Amendment) Act 2022

The Protected Disclosures (Amendment) Act 2022 came into operation in its entirety on 1 January 2023. Failure to comply with certain obligations contained in the Act are designated as offences which attract significant penalties.

All private sector organisations with 250 or more employees are required to establish formal reporting channels and procedures for workers to make protected disclosures. The threshold does not apply to employers who are public bodies or who fall within the scope of the certain European Union legislation, including in relation to financial services, products, markets, prevention of money-laundering and terrorist financing, transport safety, and protection of the environment. Such employers, regardless of size, must also comply with the obligations contained in the Act from 1 January 2023.

For further information on the Act, see our detailed briefing here.

Work Life Balance and Miscellaneous Provisions Bill 2022

The Work Life Balance and Miscellaneous Provisions Bill 2022 will transpose the EU Directive on work-life balance for parents and carers into Irish law and is expected to come into force in early 2023.

The Bill contains a new entitlement for employees to up to 5 days unpaid leave for medical care purposes, along with a new entitlement for employees who are the parents of children up to age 12 and who are providing care to those children or employees who are providing personal care or support to certain specified persons to apply for a flexible working arrangement. The Bill also introduces domestic violence leave for the first time and incorporates a right to request remote working, which means that employers will now consider requests for flexible or remote working under one piece of legislation.

For further information on the Bill, see our detailed briefing here.

Sick Leave Act 2022

The Sick Leave Act 2022 came into force on 1 January 2023. The Act introduces an entitlement for employees to statutory sick leave and pay from their employers for the first time in Ireland. The daily rate of payment for statutory sick leave is 70% of normal wages (up to a maximum €110 per day). Employers should act now to ensure that policies are updated to reflect the obligations contained in the legislation.

For further information on the Act, see our detailed briefing here.

Transposition of the EU Directive on Transparent and Predictable Working Conditions

The Government has indicated that it will transpose into Irish law the EU Directive on Transparent and Predictable Working Conditions in early 2023. The Directive is aimed at ensuring that all workers have the right to more complete information on the essential aspects of the work, the right to seek additional employment, with a ban on exclusivity clauses, and the right to more predictable working schedules. We await publication of the Heads of Bill.

For more information on the impact of the Directive on Irish employment law, see our detailed briefing here.

European Union (Occupational Pension Schemes) Regulations 2021

The deadline for the implementation of the European Union (Occupational Pension Schemes) Regulations 2021 (the IORP II Regulations) is upon us, with most pension schemes required to be IORP compliant by 1 January 2023. Standalone schemes choosing not to implement IORP regulations are making the transfer to a master trust, where IORP implementation, trusteeship and scheme management are managed by a master trust trustee.

For more information on the implementation of the IORP II Regulations, see our detailed briefing here.

COMPETITION AND REGULATED MARKETS

FDI Screening

The Screening of Third Country Transactions Bill 2022 gives the Minister for Enterprise, Trade and Employment wide-ranging powers to review investments which meet specified criteria and ultimately to block investments that create national security and/or public order risks.

The Bill, which is expected to be enacted in early 2023, could have significant implications for in-scope transactions. Parties to transactions will need to assess the applicability of the new regime and, where a filing obligation arises, there may be a lengthy review period which may impact deal timetables.

Read our briefing here.

New Powers for Irish Competition Regulator

The Competition (Amendment) Act 2022 was signed into law on 29 June 2022. Its primary purpose is to implement the EU's ECN+ Directive, which seeks to give national competition authorities across the EU similar powers for investigations and enforcement.

The Act, which is expected to be implemented in H1 2023, will enable the Competition and Consumer Protection Commission, for the first time, to issue administrative fines for breaches of competition law (of up to 10% of the relevant firm's worldwide turnover in civil cases, and 20% in criminal cases), rather than the current system which requires such cases to be prosecuted in Court. It also provides the CCPC with additional investigative tools and introduces new decision-making procedures. It also provides for the adoption of interim measures and a graduated leniency programme.

Read our briefing here.

CONSTRUCTION AND ENGINEERING

Collaboration

Use of collaborative contracting will continue to be promoted as a way of better aligning parties' objectives to improve productivity, efficiency, and overall project outcomes. A further driver will be the objective of reducing the whole-life carbon emissions of construction projects. We expect to see more frequent testing of new mechanisms such as Secondary Option X29 produced by the NEC, and the range of clauses developed by The Chancery Lane Project, which are increasingly being adapted for use in different jurisdictions.

Managing Disputes

The scale of infrastructure required to be delivered this decade, coupled with global shocks and supply chain pressures, may bring a greater focus to dispute management and resolution in 2023. In Ireland we are now equipped with some helpful case law to inform certain aspects of the statutory adjudication regime, and we expect to see increasing efficiency and clarity around the use of this swifter, more cost-effective, dispute resolution scheme. It will be important as well, in contract negotiation, to be astute to areas that can be effectively dealt with through other ADR forms, such as expert determination.

Critical Infrastructure – Investment Screening

There will be new investment screening legislation, anticipated to apply to transactions that directly or indirectly relate to, or impact upon, one or more of several matters. Those matters include critical infrastructure such as energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure and sensitive facilities, including the land/real estate used crucial for the use of such infrastructure.

For further information on the Screening of Third Country Transactions Bill 2022, see our detailed briefing here.

ENVIRONMENT AND PLANNING

New Water Legislation

There will be new legislation to regulate private and public abstractions and impoundments. The principal aim of the Water Environment (Abstractions and Associated Impoundments) Bill 2022 is to provide for a licensing regime for abstractions over a certain threshold. The licensing threshold is proposed as a rate of 2000 cubic metres or more in any 24-hour period. Abstractions of 25 cubic metres or more in any 24-hour period will have to be notified to the Environment Protection Agency within a month.

Planning, Judicial Review & Reform

It is anticipated that 2023 will continue to bring change to planning law in Ireland, perhaps most notably to the system for challenging the grant of planning permission. The Government intends to introduce a Planning and Development Bill which, it is understood, may include a material impact test and requirements aimed at preventing challenges by interest groups set up solely to stop a specific project. This would signify continuing efforts to mitigate planning risk.

It is hoped that clarity will be brought to the issue of legal standing of purported Environmental NGOs to bring court challenges to public decisions. There is potential for light to be shed on the issue through two ongoing sets of court proceedings. A judgment from the CJEU in response to a request for a preliminary ruling from the High Court in Ireland is eagerly awaited in the case of Dublin 8 Residents Association v An Bord Pleanála & Ors 2022/525 JR, as is the judgment of the High Court in Ireland in the case of Ballyshannon Action Group v An Bord Pleanála 2021/759 JR. There is also potential for light to be shed on the issue by the legislature, through the Planning and Development Bill – only time will tell!

Planning and Environment High Court Division

Establishment of a new Division of the High Court, dedicated to hearing Planning and Environment challenges, is expected. The Government indicates that this is intended to work in tandem with reforms to planning legislation to bring about improvements in the ability to process cases and in costs, and to be consistent with Ireland's obligations under EU environmental law.

Renewables Projects & Overriding Public Interest

2023 will begin to see the impact of REPowerEU proposals to speed up the delivery of renewable energy projects, with application of the emergency Regulation (EU) 2022/2577 laying down a framework to accelerate deployment of renewable energy. The planning, construction and operation of plants and installations for the production of renewable energy will be presumed to be in the overriding public interest for the purpose of certain EU environmental legislation. It remains to be seen how this will be implemented in Ireland, in light of the provision permitting Member States to restrict the application of these provisions to certain parts of their territory, types of technologies or projects. This will prove an interesting forerunner to the Recast Renewable Energy Directive III, which will likely include further mechanisms aimed at accelerating delivery of renewable energy projects, and which will have to be transposed in Ireland during the course of 2023 and 2024.

Maritime Area Regulatory Authority

The Maritime Area Regulatory Authority will be established. Phase 2 and Phase 3 offshore wind sector projects will then be able to apply to the Authority for Maritime Area Consents, which will open the route for them to apply An Bord Pleanála for development permissions.

Advancement of the Circular Economy

2023 should see the further advancement of the Circular Economy with the anticipated publication of generic by-product determinations and end-of-waste determinations in respect of particular materials, including soil and stone.

ENERGY

Energy Transition - Very Rapid Legislative Change

2023 will see the adoption by the EU of significant legislative changes to drive decarbonisation of key sectors including energy, buildings and transport. These were developed in the Fit for 55 and REPowerEU packages.

Changes will include new mechanisms to speed up the delivery of renewable energy projects in a Recast Renewable Energy Directive III. Short periods for transposition into domestic law are envisaged but, even so, the Council of Ministers agreed an emergency Regulation (EU) 2022/2577 laying down a framework to accelerate deployment of renewable energy, to apply in 2023.

In addition to a Recast Renewable Energy Directive, there will be revisions to the EU Emissions Trading Scheme, the Energy Efficiency Directive, the Energy Performance of Buildings Directive, and the Energy Taxation Directive. There will also be new or revised Regulations, which apply directly from the date they specify. These will include the Carbon Border Adjustment Mechanism, the Effort Sharing Regulation, the Alternative Fuels Infrastructure Regulation, and the Land Use, Land Use Change & Forestry Regulation. The changing world of natural and renewable gas markets and infrastructure will be regulated through a Recast Regulation and a Recast Directive, expected to be adopted in 2023.

Now that much of the Clean Energy Package has been transposed into Irish law, the challenge of implementing it will be a feature of 2023. This will involve continuing work on energy market rules and grid systems to support higher volumes of renewable power, resourcing public bodies to facilitate the permit-granting process, and developing regulatory structures to support consumer interaction with markets.

Testing of Climate Commitments

Ireland now has a multi-layered climate governance framework. 2023 takes us to the mid-point of our first five year carbon budget, the statutory intent of which is to get to the end of 2030 with greenhouse gases reduced by 51% compared to 2018. 2023 also takes us into a second year of sectoral emissions ceilings. We have a new Climate Action Plan 2023, which will carry over some of the actions not yet closed off under the ambitious 2021 Plan.

Our overview of the Climate Action Plan 2023 is here.

In terms of renewable energy support, there will be another auction for onshore renewable projects (RESS 3) and a first for offshore wind projects (ORESS 1). The success of the scheme so far will become more apparent through levels of project delivery.

Market Intervention

War in Ukraine prompted interventions in electricity and gas markets uncharacteristic of EU regulation. Electricity interventions will be applied in Ireland in 2023 to cap infra-marginal rent of non-gas generation and to require temporary solidarity contributions from surplus profits generated by businesses with activities in the crude petroleum, natural gas, coal and refinery sectors. While these interventions are billed as emergency and temporary, the EU intends in 2023 to carry out a more comprehensive, long-term review of wholesale electricity market design.