On 22 February 2023, the Central Bank (Individual Accountability Framework) Bill 2022 was passed by Seanad Eireann (the "Seanad"). In this insight we discuss the debates at Committee and Report stages of the Seanad and flag the next steps in the process.
On 16 February 2023, the Bill was taken at Committee Stage of the Seanad.
As signalled by the Minister at Second Stage of the Seanad, the Government proposed two amendments at Committee Stage. The Minister noted that these amendments are transitional provisions and determine the extent to which an inquiry, that is already under way at the time the relevant provisions of the Bill are commenced, shall be affected by the provisions. Both amendments were accepted.
Senator McDowell's amendments
At the outset of the discussion, Senator Michael McDowell proposed amendments to Part 2 of the Bill to include
- a general duty of disclosure on the Central Bank of Ireland (the "Central Bank") where an investigation has been initiated against a natural person; and
- to provide for legal assistance for individuals under investigation, where the interests of natural justice require it.
The amendments were discussed in detail but were not accepted. The responses from the Minister of State at the Department of Finance, Deputy Jennifer Carroll MacNeill, (the "Minister of State") are however, worth noting.
Duty of Disclosure
In response to Senator McDowell's proposed amendment, the Minister of State advised that "irrespective of this legislation, the Central Bank, as a public body, is obliged to act in a manner consistent with its obligations under administrative law and with the constitutional rights of individuals to fair procedure, including the right to be heard and to mount a defence, in the context of any investigation or inquiry".
In addition, she advised that the duty of disclosure "has already been built into the Bill throughout each set of processes" and outlined a number of areas which include such provisions. She noted that there will be "new obligations on the bank, partly informed by the Supreme Court in the Zalewski case, to ensure a person who is subject to investigation by the bank, whether under the administrative sanctions procedures or the fitness and probity regime, will have access to all the information on the basis of which an enforcement decision may be based".
Discontinuation of an investigation
Responding to Senator McDowell's questions on the discontinuation of an investigation and the possible impact on an individual's professional reputation, the Minister of State noted that the reason for the discontinuation "will have to be provided as a matter of fairness to the individual". In relation to discontinuation for reasons of resources, she noted that although the Bill refers to "reasons of resources", the decision to discontinue may also be prompted by the availability of specialist investigators and not just by financial resources. She explained that the Central Bank may wish to divert those resources to a more important or urgent issue and the should have the discretion to do so.
Regarding the proposed amendment on legal assistance, the Minister of State noted that there does "not appear to be any national or international comparators for a provision of this nature within such an administrative sanctions regime". Additionally, she explained that the issue of legal costs for an individual subject to enforcement action by the Central Bank was previously challenged in the courts without success in 2016.
A number of other amendments were proposed by senators which were not accepted including:
- extending the obligations on financial service providers to act in the best interests of society;
- requiring a report to the Oireachtas within two years of commencement of the legislation outlining how the regulations comply with due diligence obligations under European Union law;
- extending certain obligations to include legislation outside of financial services;
- taking into consideration whether a prescribed contravention has had a widespread impact on society and the State; and
- requiring a report to the Oireachtas within two years of commencement of the legislation examining the implementation of the designation and identification of controlled functions ("CFs"), the potential to expand the range of CF functions and the extent to which individuals not designated as CFs are exerting significant influence on the performance of a CF and how this may be reflected in any future revision of the legislation.
The remainder of the amendments were not moved or were withdrawn.
At Report Stage, Senator Black proposed a number of amendments which arose from the Committee Stage proceedings. These were largely variations on the amendments originally proposed by the Senator at Committee Stage. In responding to the proposed amendments, the Minister of State explained that several of the amendments could not be supported due to the vagueness of the terms proposed. Additionally the Minister of State explained that much of what the Senator was seeking to achieve was in fact already captured by the legislation. The amendments were ultimately defeated and the Bill passed.
The Bill will now return to the Dáil for approval of the Committee Stage amendments and then to the President for signing. Once enacted by the President, we understand that the Central Bank will launch its consultation process on the relevant supporting regulations and guidance.
 Purcell v. Central Bank of Ireland