The first cross-government plan on implementing reforms to tackle economic crime and corruption (the "Action Plan"), was published by the Department of Justice on 19 April 2021. The Action Plans sets an ambitious deadline of 18 months for 22 actions to achieve wide-ranging reform to be completed across government, underlining the priority and commitment afforded by government to achieving results in this area.
The Action Plan follows hot on the heels of the publication of the Hamilton Report - to give it its long title: "Review of Structures and Strategies to Prevent, Investigate and Penalise Economic Crime and Corruption" (the "Report") in early December 2020. The motivation for government's focus on this area is acknowledged in the Report; "Ireland punches above its weight" in the global economy. An effective legal and regulatory framework to prevent and respond promptly and effectively to economic crime and regulatory crime is therefore imperative to maintaining Ireland's status as a good place to do business. Recent legislative reforms (for example, the Criminal Justice (Corruption Offences) Act 2018 - see our note here) in the area of economic crime are positive developments, however there is no doubt that significant and serious gaps still exist, with relatively few examples of criminal prosecutions of fraud or corruption offences.
2. Implementing the Action Plan
The overarching themes of the Report are (i) the need for cooperation between state agencies and (ii) the need for additional resources and expertise to assist with investigations into economic crime, the goal being to enhance multi-agency enforcement and prevention capacity in the criminal justice sphere. The main recommendations, and the implementation timelines as set out in the Action Plan, are set out below.
- Establish an Advisory Council against Economic Crime and Corruption. Its function will be to make proposals to the government on strategies and policies to tackle economic crime and corruption. It should have a permanent forum of senior representatives from relevant bodies to facilitate greater collaboration and information sharing. Although the Report recommends that the Advisory Council should meet at least once a year, we would hope for greater traction (and believe it will be necessary) to achieve meaningful and prompt action. The Action Plan has set Q3 2021 as the deadline for selection, subject to government approval, and appointment of a Council Chairperson and members of the Advisory Council.
- Develop a multi-annual strategy to combat economic crime and corruption and an accompanying action plan. In Q4 2021, per the Action Plan, a public consultation will be held to canvass views from interested parties.
- Consider strengthening the Ethics in Public Office Act 1995 and Standards in Public Office Act 2001 (the "Ethics Acts"). The Report called for reform to deal with contraventions of the Ethics Acts by former members of the Oireachtas which come to light after a term in public office and to include new offences of nepotism, preferential treatment and the improper use of influence. The Action Plan requires a review of the Ethics Framework to begin in Q2 2021 and be completed by Q4 2021. The preparation of a scheme of a new Ethics Bill and the seeking of government approval for the drafting of the Bill has a deadline of Q1 / Q2 2022.
- Amend the Criminal Justice (Corruption Offences) Act 2018 to extend the powers of the An Garda Síochána to compel persons under arrest warrants to provide access to electronic devices. The Action Plan requires consultation with An Garda Síochána and the Office of the Director of Corporate Enforcement / Corporate Enforcement Authority to commence in Q2 2021 and Q3 2021. Q4 2021 is the timeline set to develop the proposed legislative amendments.
- Continuous training for investigators of economic crime and corruption and higher engagement with the Irish Judiciary, with provision for specialisation in the area such as expert judges and experts as required in State bodies and An Garda Síochána. Q3 2021 has been set as the timeline to consult with relevant stakeholders. Q4 is the timeline set to develop a suitable training programme. Referral of action to the Judicial Council should happen in Q1 2021.
- Provide for a longer detention period of up to a maximum of seven days for someone suspected of committing an arrestable offence. The Action Plan sets a timeline of Q2 2021 to assess this recommendation in the wider context of the Police Powers Bill amendments and formulate a policy position. These actions are welcomed, as the necessity of such a lengthy detention period for certain arrestable should be further scrutinised in terms of its proportionality to the offence in question.
- Extend certain powers conferred on An Garda Síochána and the Revenue Commissioners under the Criminal Justice (Surveillance) Act 2009 (the "2009 Act") to obtain evidence using covert means to other bodies such as the Office of the Director of Corporate Enforcement and the Competition and Consumer Protection Commission. A policy basis to include consultation with relevant agencies will be actioned in Q2 2021 with legal advice to be sought in Q3 2021. Q4 2021 is the deadline set to progress appropriate legislation.
- Amend certain provisions of the Criminal Justice (Theft and Fraud Offences) Act 2001 (the "2001 Act") to provide a standard of recklessness for fraud offences. Currently fraud offences require proof of intention. The Action Plan requires a policy basis for the amendment to be developed by Q2 2021, following consultation with the relevant agencies. Appropriate legislation must be brought forward by Q4 2021.
- Enhance resources available to state investigatory agencies such as the Standards in Public Office Commission, the Office of the Director of Public Prosecutions and the Garda National and Economic Crime Bureau. A plan to achieve this action must be completed by in Q3 2020.
3. Challenges and Opportunities
The recognition by government and its commitment to respond to the need to invest in enhancing and improving resources dedicated to the prosecution of economic crime and corruption is to be welcomed.
The Report identified a number of significant shortcomings in agency resources, which extend not only to personnel but also to the IT and technology infrastructure available within the relevant regulatory and investigatory bodies. The Report recommended that new technological solutions that support the detection and investigation of economic crime should be explored, including considering a centralised framework for the procurement of state-of-the-art electronic documentary analysis and e-disclosure systems, which could be accessed by the relevant law enforcement bodies on a shared basis. The Action Plan has set Q3 2022 as the deadline to evaluate tenders and agree contracts for these systems.
It is positive to see government addressing this recommendation and demonstrative of a willingness to embrace innovation - if the COVID-19 pandemic has taught us anything it is that accessible and robust IT infrastructure and technology is of paramount importance. Indeed, events such as the pandemic create conditions ripe for exploitation by fraudsters and economic criminals, and investigators and law enforcement must be vigilant and ready to take action.
4. What Next?
If the recommendations of the Report are to be implemented effectively, meaningful and decisive collaboration between the relevant law enforcement / investigative bodies is crucial. We can perhaps be optimistic that the fact that the Action Plan has been produced on a cross-departmental basis will obviate any potential risk that competition for resources, or diverging agendas, between the various agencies will slow down progress.
Government is not alone in its focus on combatting economic crime. For example, the Central Bank is equally focused on ensuring firms are alive to the risk and potential impact of financial crime. Derville Rowland, Director General, Financial Conduct, at the Central Bank of Ireland speaking recently stated "Financial Crime also threatens financial stability and confidence in the integrity of the financial system. I am very much of the view that in the fight against financial crime, combatting fraud and money laundering are two sides of the same coin."
Particularly for those in the regulated financial service sector, taking robust action to combat economic crime and corruption is and will continue to be a priority agenda item for boards, senior executives and those in controlled functions. It is now more important than ever for companies to ensure they have in place robust policies, tailored to their business, to prevent financial and economic crime and corruption.
Originally published 29/04/2021
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