The Corporate Enforcement Authority: A welcome development in tackling white collar crime

The Companies (Corporate Enforcement Authority) Act 2021 (“the Act”) was signed into law on 22 December 2021 and is currently awaiting commencement by Ministerial Order.

The purpose of the Act is to establish an independent statutory agency – called the Corporate Enforcement Authority (“CEA”) – to replace and perform the functions currently performed by the Office of the Director of Corporate Enforcement (“ODCE”). The CEA will have greater autonomy and enhanced resources to investigate and prosecute alleged breaches of company law in Ireland. Director of Corporate Enforcement, Ian Drennan, has remarked that the Act constitutes “a watershed moment in Ireland’s strategic approach towards addressing economic and white collar crime.”

Although outside the scope of this article, in addition to the establishment of the CEA, the Act also makes amendments to the Companies Act 2014 to address some of its perceived anomalies.

The Corporate Enforcement Authority

Composition

The ODCE operates under the umbrella of the Department of Enterprise, Trade and Employment and has a single Director. By contrast, the CEA will be a standalone corporate body and is designed to be structured as a commission with up to three full-time ‘members’, one of whom is to be designated as the Chairperson of the CEA.

The intention is that all existing ODCE staff will transfer automatically to the CEA once it is established. The CEA will then have the power to appoint its own staff with the skills and expertise it deems necessary, as opposed to having its staff assigned by the Department. The Act also provides that members of An Garda Síochána may be seconded to the CEA.

Powers

The CEA’s functions set out in the Act generally mirror the existing functions of the ODCE, with some modifications to reflect the new structure. The Act does not grant the CEA any significant additional powers.

The primary powers of the CEA will include: the enforcement of the provisions of the Companies Act and the investigation of suspected breaches; the prosecution of summary offences and referral of indictable offences to the Director of Public Prosecutions; the exercise of certain supervisory functions relating to liquidators and receivers; and to act as a member of IAASA (the Irish Auditing and Accounting Supervisory Authority). The transition is intended to be seamless, and further powers are expected to be transferred to the CEA at a later date.

Accountability

There are increased accounting and reporting requirements in the Act. The Chairperson of the CEA will be accountable to the Oireachtas Committee of Public Accounts, while members of the CEA will also be accountable to any Oireachtas Committee or Sub-Committee to “give account for the general administration of the Authority”. In addition to the current requirement to submit an annual report to the Minister for Enterprise, Trade and Employment, the CEA will also be required every three years to prepare and submit to the Minister a strategy statement identifying “key objectives, outputs and related strategies”.

Conclusion

The increased staffing and resourcing that is being put in place is likely to enhance the CEA’s capacity to investigate and prosecute crimes and although the Act appears to function largely to transfer operations from the ODCE, further legislative reforms are likely to be addressed later by way of future legislation to enhance the CEA’s powers further.

If you require advice in relation to the matters covered in this briefing please contact a member of our Commercial Litigation Team.

The authors would like to thank Jack Doyle for his contribution to this article.