Analysis: One year of the Corporate Enforcement Authority
William Fry consultant Deirdre O’Donovan and partner Paul Convery look at the enhanced CEA and its involvement in tackling white-collar crime over the last year.
With effect from 7 July 2022, the Corporate Enforcement Authority (CEA) was formally established as an independent statutory body under the Companies (Corporate Enforcement Authority) Act 2021, replacing the Office of the Director of Corporate Enforcement (see our previous updates here and here).
Powers and resources of the CEA
While the new CEA was not granted any additional powers of enforcement under the CEA Act, it has been provided with increased resources to enable it to investigate and prosecute breaches of company law. The primary functions of the CEA, therefore, derive mainly from the Companies Act 2014 and include:
- encouraging compliance with the 2014 Act;
- investigating suspected offences and non-compliance with the 2014 Act;
- prosecution of offences by way of summary proceedings;
- referring indictable offences to the Director of Public Prosecutions;
- a supervisory role over the activity of liquidators and receivers.
In addition to the 2014 Act, the CEA has certain statutory functions under the Irish Collective Asset-Management Vehicles Act 2015 and is the competent authority to impose sanctions on company directors under the Companies (Statutory Audits) Act 2018.
In June 2023, the CEA was conferred with further powers concerning tax reporting under the European Union (Disclosure of Income Tax Information by Certain Undertakings and Branches) Regulations 2023. The Regulations set out certain reporting requirements for specified undertakings. Under the Regulations, the CEA may investigate certain prescribed offences, enforce the Regulations by the summary prosecution of offences, and do all such things necessary or expedient for the performance of its functions under the Regulations.
The establishment of the CEA as an independent agency means that it now has the autonomy to appoint its own staff and to recruit additional specialist staff to combat white-collar crime in accordance with its requirements. A significant provision of the CEA Act is the option to second additional members of An Garda Síochána to the CEA, who become officers of the CEA. Up to 16 members of An Garda Síochána can be assigned to support the CEA in its work.
Awareness, enforcement, advocacy
The launch of the CEA occurred in conjunction with measures to increase public awareness of the role and activities of the CEA, and the CEA actively encourages members of the public to submit complaints to it where there is concern about a potential breach of company law.
The CEA is also a designated body to receive protected disclosures from “workers” within the scope of the Protected Disclosures Act 2014. Notably, the definition of “worker” has been significantly expanded since the enactment of the Protected Disclosures (Amendment) Act 2022 and now extends to board members (including non-executive members) and shareholders, among others. See a related article on this topic here.
The authority has also been active in its criminal enforcement role, with numerous arrests and prosecutions initiated over the last 12 months for alleged company law, theft and fraud-related offences. A new Director of Criminal Enforcement is due to be appointed shortly.
The CEA is clearly focussed on further enhancing and increasing its enforcement powers. In May 2023, Minister of State for Trade Promotion, Digital and Company Regulation, Dara Calleary TD, launched a public consultation on the proposed Companies (Corporate Governance Enforcement and Regulatory Provisions) Bill 2023.
The Bill is intended to enhance the corporate governance and company law enforcement and supervision provisions of the 2014 Act. In its response, the CEA put forward several proposals intended to grant it additional powers to: (i) enhance its investigative capabilities; (ii) increase its access to certain Court documents; and (iii) permit the sharing of certain information, which would otherwise be confidential, with other statutory bodies – the so-called ‘statutory gateway’. The proposals would also make it an offence to threaten or intimidate a CEA officer.
With the push for a further increase in its powers and the increased focus across the board on white-collar crime, it seems likely that the CEA will see a further increase in activity over the next 12 months.
The Attorney General, Rossa Fanning SC, recently noted that the CEA is one of several statutory bodies that can litigate autonomously from the government, while on 8 July, the Taoiseach, Leo Varadkar, stated that a complaint has been made to the CEA concerning the ongoing RTE payments scandal. The CEA will have to determine whether an investigation is required.
Companies and their directors should be aware of developments in this area, and we will keep you apprised of updates relevant to your business.