The recent publication of the Companies (Corporate Enforcement Authority) Bill 2021 paves the way for the establishment of a new independent statutory authority, the Corporate Enforcement Authority ("CEA"), tasked with investigating and prosecuting economic and white collar crime in Ireland. The CEA will replace the Office of the Director of Corporate Enforcement ("ODCE") and assume its role in the investigation and enforcement of corporate crime. The Minister of State for Trade Promotion, Digital and Company Regulation Robert Troy TD has indicated that it is intended to have the CEA operational by 1 January 2022.
The Bill signals the increasing momentum to overhaul the corporate enforcement regime in Ireland, though further legislative reform will be needed in order to enhance the CEA's investigative and enforcement powers.
At present, the ODCE operates as an office under the Department of Enterprise, Trade and Employment. The Bill provides for the CEA to be a statutory and independent agency with an emphasis on increased autonomy and resources to investigate and prosecute white collar crime.
As discussed in our previous briefing, in its report reviewing the criminal justice structures to combat economic crime and corruption published in December 2020, the White-Collar Crime Review Group identified a lack of resources for enforcement agencies as a matter for concern, particularly when dealing with large complex cases or those that require specialist expertise.
The new structure of the CEA is intended to enable the CEA to meet the demands of its remit through the introduction of the following measures to address resourcing:
- the Bill provides for up to three full time Members, one of whom will be appointed Chairperson of the CEA;
- the CEA will be able to appoint its own staff with the required skill and expertise it deems necessary to perform its functions instead of having staff assigned to it by the Department of Business, Enterprise and Innovation; and
- the Bill provides for the secondment of members of An Garda Síochána to the CEA.
In preparation for the establishment of the CEA, the Department of Enterprise Trade and Employment has increased the budget of the ODCE by approximately ?1 million and approved the assignment of additional civil servants and members of An Garda Síochána in order to enable it to undertake its new functions. It is understood that this represents a nearly 50% increase in the headcount for the new CEA.
Powers and Functions of the CEA
The Bill provides for the CEA to perform the same functions as the ODCE with some modifications to reflect the new structure. These functions include encouraging compliance with the Companies Act, investigating suspected offences and non-compliance under the Companies Act, prosecution of summary offences, referring indictable offences to the DPP and the exercise of certain supervisory functions with respect to liquidators and receivers.
The precursor to the Bill (the "General Scheme") envisaged other powers for the CEA including affording the CEA a statutory exemption from the rule against hearsay to permit written statements to be admitted into evidence in addition to enhanced search powers relating to electronic evidence. These powers are not captured in the Bill nor does the Bill extend any additional investigatory or prosecutorial powers to the CEA other than those currently performed by the ODCE.
Looking to the Future
Minister of State for Trade Promotion, Digital and Company Regulation Robert Troy TD has indicated that it is hoped that the Bill will be enacted in the Autumn session to facilitate the establishment of the CEA in 2022.
While there is certainly scope to further enhance CEA investigatory and prosecutorial powers, this is an important step in a series of reforms to address the findings of the White-Collar Crime Review Group and strengthen the State's capacity to investigate and prosecute white-collar crime.
The Hamilton Review Group Implementation Plan which was published in January 2021 envisages further legislative measures to implement the findings of the White-Collar Crime Review Group and strengthen CEA powers including the enactment of legislation that enables CEA staff to participate in interviews with suspects detained by An Garda Síochána.
Further legislative reform can therefore be expected as the Government continues to act on the recommendations of the White-Collar Crime Review Group. We will continue to monitor developments with respect to the CEA and the implementation of the recommendations of the White-Collar Crime Review Group and update you on further developments.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.