The Criminal Justice Act 2011 (“The Act”) was signed into law on 9th August 2011. The purpose of this wide ranging and somewhat controversial piece of legislation is to provide Gardai power to access information that will assist an investigation into any offence outlined in the Act with particular focus on “White Collar Crime”.
The intention of the Act is that the new provisions will assist in reducing the delays associated with the investigation and prosecution of complex crime particularly White Collar Crime.
Section 19 of the Act provides a person “shall be guilty of an offence if he or she has information which he or she knows or believes might be of material assistance in preventing the commission by any other person of a relevant offence or securing the apprehension, prosecution or conviction of any other person for a relevant offence and fails without reasonable excuse to disclose that information as soon as it is practicable to do so to a member of the Garda Siochana.”
The obligation to report in Section 19 is on “a person” which is very broad and undefined and requires any person who has information is in breach of the Act if they do not report.
The Act requires the information to be disclosed to a Garda “as soon as practicable” which is also undefined and may lead to difficulty as do you report as soon as you become aware or do you wait until an internal investigation is complete before you report.
Section 17 of the Act provides that any person who falsifies, conceals, destroys or otherwise disposes of a document or record which he or she knows or suspects is or would be relevant to the investigation or causes or permits is falsification, concealment, destruction or disposal shall be guilty of an offence.
The Act also contains whistle-blower provisions protecting employees and prohibits the penalisation of employees by employers for disclosing information in respect of relevant offences to Gardai.
A person guilty to an offence under sections 17 & 19 shall be liable to a fine up to €5,000 and or 12 month imprisonment on a summary conviction or an unlimited fine and a 5 year imprisonment.
The Act sets out a list of relevant offences and the net is cast very wide. The variety of the offences include:-
- Banking and finance
- Company law
- Money Laundering
- Consumer protection
Company Law Offences
The Company Law offences are detailed in Schedule 1 of the Act which are;
- An offence under section 60(15) , Breach of Financial Assistance, 295 Frauds by officers of companies which have gone into liquidation or 297 Fraudulent Trading , or under paragraph (a), (d), (e), (f), (g), (i), (j), (k), (l), (m), (n), (o) or (p) of section 293(1) (Offences of officers of companies in liquidation), of the Companies Act 1963.
- An offence under any of the following provisions of the Companies (Amendment) Act 1986:
- section 22(1)(a) (insofar as it relates to a failure to comply with section 5 or 16 of that Act),
- section 22(2) (insofar as it relates to a failure to take all reasonable steps to secure compliance with the requirements of section 3 of that Act or a failure to comply with
- section 13 of that Act), or
- section 22(3). Wilfully providing false information in any return, report, certificate, balance sheet or other document under this Act
- An offence under section 197 (False Statement to Auditors), 202(10) (Failure to Keep Proper Books of Account), 242(Furnishing False Information) or 243(1) (Penalisation of destruction, mutilation or falsification of documents) of the Companies Act 1990
- An offence under section 37(1) of the Companies (Amendment) (No. 2) Act 1999.(False Statements in returns, balance sheets, etc)
- An offence under section 48 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005. (Untrue Statements and omissions in prospectus)
- An offence under Regulation 5 or 6 of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (S.I. No. 342 of 2005).
- An offence under Regulation 76(4) of the Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. No. 277 of 2007).
Impact for Accountants and Auditors
The Criminal Justice Act, 2011 has the biggest impact for Accountants. The Companies Acts require auditors to report any reportable indictable offences to the ODCE. The Criminal Justice Act 2011 requires any person to report information to an Garda Siochana. Most of the offences listed in the 1st Schedule are reportable indictable offences and are required to be reported my an auditors. However an accountant is not required to report them under the Companies Act and will now be required under this Act. This now brings accountants back into the reporting requirement.
Accountants and Auditors and their staff have access to relevant information and must be aware of their duties under the Act and report if necessary.
Accountants and Auditors should take legal advice to inform them of the new reporting requirements and have policies and procedures so that all staff are aware of the new requirements.
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