The government’s recently published Spring Legislation Programme features the Criminal Justice (Theft and Fraud Offences) (Amendment) Bill 2020 (the “Bill”), which is currently at Committee Stage before the Dail. As outlined in the Justice Plan 2021 published by the Department of Justice on 22 February 2021, the Bill is expected to be implemented by Q4 2021.
The Bill is intended to give further effect to the “PIF Directive” EU 2017/1371, which provides for minimum rules that Member States must enact to prosecute and sanction offences against the EU’s financial interests. This includes corruption, fraud, money laundering and misappropriation of funds offences. This Bill will give further effect to the PIF Directive by amending the Criminal Justice (Theft and Fraud Offences) Act 2001 and other enactments.
It is just one of a number of legislative reforms the government is pushing ahead with in its battle to combat corporate crime and further strengthen Ireland’s reputation as a good place for domestic and international companies to do business.
What does this mean for Irish companies?
The Bill has significant implications for Irish companies, particularly those with wider EU operations. Companies involved in public procurement processes will need to ensure they have appropriate systems and policies in place to ensure they do not fall foul of the new offences under the Bill. Companies should conduct risk assessments to identify their potential exposure to the offences being introduced by the Bill and ensure that appropriate steps are taken to put in place measures to reduce and manage any such risk. Appropriate policies, systems and training should be implemented to enable companies to avail of the ‘reasonable steps’ defence available under the Bill. Indeed, the imminent implementation of the Bill into law is also a timely reminder to companies, directors and senior management to ensure that adequate steps are being taken to prevent the commission of any offence under the Criminal Justice (Corruption Offences) Act 2018.
Key features of the Bill include:
- The introduction of a new specific offence of fraud affecting the financial interests of the EU, which will be of significance for companies which attract EU funding and those involved in public procurement exercises involving EU funds.
- The introduction of an offence for public officials who intentionally misappropriate funds in any way which damages the EU’s financial interests.
- The introduction of corporate liability for companies where a relevant offence is committed for the benefit of the company by a relevant person and the commission of the relevant offence is attributable to the failure, by a director, manager, secretary or other officer of the company, at the time of the commission of the relevant offence and in all the circumstances of the case, to exercise the requisite degree of supervision or control of the relevant person.
- The Bill provides for a defence for companies where they can show that they took all reasonable steps and exercised all due diligence to avoid the commission of the offence. Similar provisions are found in the Criminal Justice (Corruption Offences) Act 2018.
- The introduction of individual liability where one of the aforementioned offences is committed by a body corporate and it is proved that it was committed with the consent, connivance, or was attributable to any wilful neglect of an officer of the company.
- The introduction of an offence of inciting, aiding and abetting, or attempting the commission of an offence involving a fraud affecting the financial interests of the EU or the misappropriation of funds in a way which damages the EU’s financial interests.
- The Bill provides for extraterritorial effect, meaning individuals and companies can be prosecuted in Ireland for certain offences committed outside Ireland.
The corporate liability provisions under the Criminal Justice (Corruption Offences) Act 2018 are broader than those which are contained in the Bill, in that the former does not require the prosecution to establish that there was a failure to supervise or control the individual who committed the offence. This additional hurdle may well serve to make securing a prosecution for the corporate liability offence under the Bill more difficult.
It is also interesting to note that the Statement of Strategy 2021 - 2023 published by the Department of Justice on 22 February 2021 identifies amending the Criminal Justice (Corruption Offences) Act 2018 in order to make the prosecution of white-collar crime more manageable and efficient as a key action within the wider goal of tackling crime, enhancing national security and transforming policing.
Our experienced team at Matheson can assist in preparing you for the implementation of the requirements under Bill, including conducting risk assessments and updating policies to address the new offences under the Bill.
Update – the Bill was passed by the Oireachtas on 11 March 2021 and has been sent to the President for signing into law.