In our briefing below, the Dublin office outlines some of the key updates with regard to white collar and financial crime.

What this update covers:

• Individual Accountability Framework Act 2023
• Protected Disclosures and Whistleblowing
• Corporate Fraud
• Anti-Money Laundering
• Bribery and Corruption
• Sanctions

Individual Accountability Framework Act 2023 

• The Central Bank Individual Accountability Framework Act 2023 (IAF Act) was signed into law on 9 March 2023 and was partially commenced on 19 April 2023. The IAF Act places enhanced personal accountability on individuals in regulated entities for wrongdoing, with the aim of encouraging better governance, performance and accountability in regulated entities and in-scope firms by focusing on individual accountability. 
• There are six parts to the IAF Act, including: the introduction of the Senior Executive Accountability Regime; new Conduct Standards for individuals which apply to all regulated entities; enhancements to the Central Bank's Fitness and Probity regime; and enhancements to the sanctions individuals can face for breaches of their obligations under the Central Bank Acts. 
• On 27 June 2023, the Minister for Finance signed a commencement order indicating that the remaining parts of the IAF Act which have not yet been commenced will be operational from 29 December 2023. 

Protected Disclosures and Whistleblowing

• The Protected Disclosures (Amendment) Act 2022 (Amendment Act) was commenced on 1 January 2023. Employers should update their protected disclosures policies to ensure they comply with the new provisions under the Amendment Act. 
• The Amendment Act creates an obligation on all private sector employers with 50 or more employees to establish formal channels and procedures for employees to make protected disclosures. There is a delayed application date of 17 December 2023 for employers employing between 50 and 249 employees. However, the delayed application does not apply to public bodies or to employers falling to be regulated under certain areas of EU law, including financial services, products and markets and prevention of money-laundering and terrorist financing, which were required to be in compliance with the Amendment Act from 1 January 2023. The Amendment Act introduces some important changes in this area, including: 

1. Shareholders and members of the board of directors of firms falling under the Amendment Act now come under the definition of "worker". 
2. The Amendment Act broadens the definition of "penalisation" to include any direct or indirect act or omission which is prompted by the making of a protected disclosure and causes or may cause unjustified detriment to the worker including: suspension, lay-off or dismissal; demotion, loss of opportunity for promotion or withholding of promotion; transfer of duties, change of location of place of work, reduction in wages or change in working hours; and a negative performance assessment or employment reference.
3. The definition of "Relevant Wrongdoing" has been broadened to include an act or omission that breaches EU law in areas including public procurement, financial services, products and markets, and prevention of money laundering and terrorist financing. 
4. Employers must establish and maintain reporting channels and procedures to enable employees to make protected disclosures and the Amendment Act creates an offence where there is a failure to do so. If it is proved that a failure to do so is committed with the consent or connivance of or to be attributable to any neglect on the director, manager, secretary or other officer of the company, or a person who was purporting to act in any such capacity, that person will also be guilty of an offence and will be subject to the penalties on summary conviction or indictment as set out in the Amendment Act. 
5. The Amendment Act provided for the establishment of the Office of the Protected Disclosures Commissioner (PDC), within the Office of the Ombudsman. The PDC receives and identifies the prescribed person or another suitable person competent to take appropriate action to follow up on a protected disclosure. In circumstances where no appropriate person can be identified by the PDC, the Commissioner will follow up directly on the report. 

Corporate Fraud

• Dentons recently acted on behalf of Sharon Barrett of Kroll Advisory as receiver in a fraud case before the High Court. 
• The High Court gave an ex-tempore judgment confirming that financial institutions that hold bank accounts over which the receiver has been appointed are required to furnish bank statements and details of financial transactions for those accounts to the receiver and it is not sufficient to provide balance statements. As we outlined in our recent briefing in relation to this case, this highlights the benefit in fraud cases of appointing a receiver at the post-judgment stage of the proceedings, as receivers will have access to information and documents that would not be available to judgment creditors alone. 

Anti-Money Laundering

• On 13 June 2023, the Minister for Finance signed a Statutory Instrument (SI) amending regulations which govern the beneficial ownership of corporate entities. The SI sets out the new rules for accessing the Register of Beneficial Owners (Register) following the suspension of access to the Register in Ireland. 
• The suspension of access to the Register follows the CJEU's decision in November 2022 in the joined cases of WM and Sovim SA v. Luxembourg Business Registers (C‑37/20 and C‑601/20). In its decision, the CJEU found that the ability of the public to access information on beneficial ownership constituted a serious interference with the fundamental rights to respect for private life and to the protection of personal data, enshrined in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union. 
• The Register, which is operated by the Companies Registration Office (CRO) is now only accessible by Competent Authorities and Designated Persons, including An Garda Síochána, the Revenue Commissioners and certain authorised individuals from the CBI. Individuals must now have a legitimate interest in the beneficial ownership information and can no longer access information available on the Register without first making a formal submission to the CRO. Access may be refused. 

Bribery and Corruption

• The Corporate Enforcement Authority (CEA) was established in August 2022 as a statutory body with investigative and enforcement powers in respect of company law offences under the Companies Act. Since its inception, the CEA has brought a number of enforcement actions against individuals due to breaches of the Companies Act for making false companies' office filings and there is a proposal that it gets enhanced surveillance and seizure powers.
• The Competition (Amendment) Act 2022 introduced an offence of bid-rigging which includes a new definition of "bid-rigging" which covers "participation or non-participation in a relevant bidding process without informing the person requesting the bids or tenders..."
• The CBI has continued to reprimand financial institutions for regulatory breaches which came to light through the tracker mortgage scandal. In 2022, the CBI imposed the largest fine to date of €100,52 millions on The Governor and Company of the Bank of Ireland pursuant to its ASP. Bank of Ireland had admitted to 81 separate regulatory breaches in respect of 15,910 tracker mortgage customer accounts between August 2004 and June 2022.
• The Garda National Economic Crime Bureau (GNECB) continues to investigate allegations of insider trading contrary to the European Union (Market Abuse) Regulations 2016. In June, following an investigation into market abuse by the GNECB, a businessman was charged with insider trading.

Sanctions

• In June, the EU announced an 11th round of sanctions against Russia and its supporters in the war against Ukraine, set out in Council Regulation (EU) 2023/1212 of 23 June 2023, amending Regulation (EU) No. 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine. The new round of sanctions includes an "anti-circumvention tool" to enable the EU to restrict the sale, supply, transfer or export of specified sanctioned goods and technology to certain third countries whose jurisdictions are considered to be at continued and particularly high risk of circumvention. This is a last resort measure when other individual measures and outreach by the EU to concerned third countries have been insufficient to prevent circumvention. In addition to this, the list of individuals and entities subject to sanctions has been significantly expanded.
• In July, the High Court ruled that the presumption of control by a sanctioned parent company, which arises in respect of the companies under Article 2 of the Asset Freeze Regulation, is rebutted in circumstances where a liquidator has been appointed to its subsidiaries.
• The sanctioned entity, Joint Stock Company GTLK (JSC), is wholly owned by the Russian Federation and ultimately controlled GTLK Europe DAC (GTLK Europe) and GTLK Europe Capital DAC (GTLK Capital). Neither GTLK Europe nor GTLK Capital was a sanctioned entity under the Asset Freeze Regulation. However, the Asset Freeze Regulation and related EU Guidance sets out a presumption of control that, where a sanctioned entity controls a non-sanctioned entity, the assets of the non-sanctioned entity are available for the benefit of the sanctioned entity. As subsidiaries of JSC, the assets of GTLK Europe and GTLK Capital were subject to sanctions.
• The liquidators sought Orders including that the presumption of control was rebutted as a result of their appointment and that the assets of GTLK Europe and GTLK Capital are under the control of the liquidators who are the only parties who can deal with them. The High Court was satisfied that the presumption of control of GTLK Europe and GTLK Capital by JSC, and ultimately by the Russian Federation, was rebutted.