Ireland’s new Criminal Justice Act 2011 has criminalised the failure to report information to the Police which might be useful to them in preventing, investigating or prosecuting white-collar crime. Apart from making practical reforms to Police powers in relation to detention periods and the management and admissibility of documents, the Act is intended to accelerate the investigation and prosecution of certain white-collar crimes.
So What’s New?
The Act has created a new ‘withholding information’ offence which specifically applies to serious white-collar crimes relating to:
- Financial activities
- Company law
- Money laundering
- Theft and fraud
- Bribery and corruption
- Consumer protection
- Criminal damage to property.
Criminalising the failure to report information is not a new concept in Ireland, nor is it novel over here in the UK but the obligations to report suspicions or known offences are limited to quite specific situations in both Ireland and the UK. There is a carrot and stick approach to reporting, depending upon the circumstances. Take for example the obligations upon individuals under the Proceeds of Crime Act and the associated Money Laundering Regulations in the UK. These highlight the negative consequences of failing to report and can be contrasted with the positive reinforcement associated with Competition Law breaches where ‘whistle blowers’ should enjoy more lenient disposals if they choose to bring transgressions to light. Ireland’s ‘withholding information’ offence however introduces a much wider requirement to employees in Ireland and all are potentially exposed from the receptionist to the chief executive. The company entity in itself is not exempt either.
You do not need to know that a crime has been committed. If you know or believe that you have information which could lead the Police in preventing, investigating or prosecuting white collar crimes then you should be reporting it. The question remains as to what information would be reportable in more peripheral instances? Vexatious reporting is discouraged to the extent that a false report or recklessness as to its falsehood will also be an offence but where does the recklessness cross the line from concern about matters that may require reporting?
If information was withheld without reasonable excuse and with the “consent or connivance”, or can be attributed to “wilful neglect” then the company, its directors, officers and those purporting to act in that capacity will be guilty of an offence.
More serious breaches will attract serious penalties ranging from an unlimited fine to five years’ imprisonment or both.
A concern for Irish practitioners is that the Act is unclear as to when this information should be imparted, given the vague “as soon as practicable” terminology. It is likely that individuals may err on the side of caution in this respect but this too is fraught with difficulties given the recklessness provisions.
In any event it is submitted that the enactment of Ireland’s Criminal Justice Act 2011 represents a sea change in the investigation of white collar crime and business practice in general.
Will This Follow Over the Water?
Given the much vaunted perilous state of the UK’s public finances the Coalition has indicated that more focus will go on clawing back revenues through evaded tax and the detection of crime. The cynic will have seen the growth of confiscation proceedings in criminal and regulatory cases over recent years and will therefore expect that any further legislative provision that may expand the possibilities in this respect to be positively explored.
We have the money laundering provisions as a basis for the introduction of a more general duty on businesses in the wider context. Will this be a case of businesses of all sizes having the equivalent of a ‘Money Laundering Reporting Officer’ to take the burden of reporting centrally?
If this legislation travels across the Irish Sea there will likely be an increase in the number of investigations by the Police, HMRC and other bodies such as Local Authorities and Trading Standards given that consumer protection is caught by the Act. There may also be numerous investigations made in relation to those reports that should have been made but were not. Either way, we ought to expect a burst of white collar investigations and associated ancillary proceedings.
Some ‘joined up thinking’ would be required however. If we are to expect a sudden jump in the number of investigations, then resources should be provided to those bodies tasked to deal with them. The authorities already operate within limited budgets and it remains to be seen how much resource will actually be ploughed back into investigations even before such legislation is considered. There is also the legal aid question, for white collar matters invariably require significantly more defence preparation than more general matters. Whichever form the Legal Services Commission will take following the review of legal aid, it is easy to see that there would be yet further pressures on them to rein in on spending.
If you would like more information on this topic or an initial discussion with no obligation please call Paul Haycock on 0114 274 4275.