Enhanced powers for investigating corporate crime on the horizon
White-Collar Crime Review Group’s report highlights the associated risks from a financial and reputational perspective if Ireland fails to develop an adequate legislative architecture to combat economic crime and corruption.
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As part of its White-Collar Crime Package in 2017, the Government appointed a multi-agency Review Group, chaired by Mr. James Hamilton, former Director of Public Prosecutions, to report on anti-corruption and anti-fraud structures and procedures.
The Review Group has recently published a report of its review of criminal justice structures to combat economic crime and corruption.
The report noted Ireland’s role as “a major international hub for financial services, with Irish based companies administering funds valued at approximately €1.8 trillion”, and its high proportion of workers engaged in financial services and insurance activities. Accordingly, the report emphasised the need for appropriate reforms in Ireland’s approach to economic crimes, and cited the associated risks from both a financial and reputational perspective if Ireland failed to develop adequate protections against economic crime and corruption.
The report is a positive, necessary and long awaited step towards ensuring Irish enforcement authorities are sufficiently resourced to successfully deal with economic crimes in the future.
Of note, the report rightly identifies areas where, owing to its increased complexity, the treatment of economic crime and non-economic crimes should differ. For example, it proposes that the period for which a person arrested on suspicion of having committed a relevant criminal offence can be detained (currently 24 hours) should be extended for economic crimes.
The report also responds to the work of other groups such as the Law Reform Commission (“LRC”), where their proposals are relevant to the objectives of the Review Group. For example, the report agrees with the LRC’s proposal that the definition of fraud in the Criminal Justice (Theft and Fraud Offences) Act 2001 should be expanded or replaced by inserting a standard of recklessness to widen behaviours giving rise to liability. However, it does not recommend, which the LRC has done, the establishment of a Deferred Prosecution Agreement (“DPA”) regime in this jurisdiction as the Review Group is not yet convinced that the introduction of a DPA will yield any significant benefit given the UK’s experience so far.
Most significantly, the report notes that “the issue of resources, including specialist expertise and technology”, are a matter of particular concern. For instance, it notes that for certain key enforcement agencies (most notably the Garda National Economic Crime Bureau (“GNECB”)), this lack of resources “substantially undermines their ability to carry out their function and ultimately to adequately combat fraud and corruption.” Glaringly, the report notes that the number of permanent investigators designated to investigate economic crimes in An Garda Síochána is currently lower than the 45 investigators employed by the fraud squad in 1992.
In response to these concerns (amongst others), the report includes 25 potentially far-reaching recommendations. Major features include:
- Increased investigative powers for An Garda Síochána (the Irish police), the Revenue Commissioners, the Office of the Director of Corporate Enforcement and the Competition and Consumer Protection Commission in investigating economic crime and corruption.
- Updates to the law on warrants to include a power for An Garda Síochána to require persons subject to arrest warrants to provide the passwords to electronic devices owned or controlled by them. Similar powers are also proposed in the context of searches when investigating theft and fraud offences.
- Amending the Custody Regulations to allow statutorily-mandated regulatory or investigative bodies or an independent expert to participate in Garda interviews of detained suspects.
- The potential to extend freezing orders under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 from 28 days to six months.
- Extending the power to obtain evidence by covert means to the Director of Corporate Enforcement and the Competition and Consumer Protection Commission, as is currently permissible for An Garda Síochána and the Revenue Commissioners.
- Structural reforms in economic crime investigations, including the establishment of a cross-sectoral Advisory Council against Economic Crime and Corruption
- Increased resourcing of the GNECB, as well as increased resourcing for the prosecution of financial crime including additional prosecutors and seconded specialists in digital forensics.
- The expedition of the Criminal Procedures Bill, which would include the introduction of a preliminary pre-trial hearing procedure in criminal trials.
- The introduction of new Ethics in Public Office offences including nepotism, preferential treatment and the improper use of influence. This area will also be extended to deal with situations where breaches are discovered after an Oireachtas (Irish parliament) member leaves office.
- The introduction of a new offence on bid-rigging (whereby competing parties collude to determine the winner of a procurement process and ensure that the tenderer does not get value for money) in Irish competition law.
The Department of Justice has issued a press release indicating that the Minister for Justice, Helen McEntee, has received cabinet approval to bring forward an implementation action plan for the report’s recommendations which will include set timelines for the introduction of a series of reforms to strengthen the State’s capacity to prevent and prosecute white-collar crime.
In the short term, we can expect the enactment of the Criminal Procedure Bill, which is on the current legislative programme for enactment, and which provides for measures to reduce delay and improve efficiency in procedural aspects of criminal trials, including by introducing preliminary trial hearings
A related report from An Garda Síochána Inspectorate on Countering the Threat of Internal Corruption is also expected to be published soon.
The authors would like to thank David Ryan for his contribution to this article.