We recently brought you details of the establishment of the Corporate Enforcement Authority (CEA).The same legislation which established the CEA, the Companies (Corporate Enforcement Authority ) Act 2021 (“2021 Act”) also brought about some changes to the Companies Act 2014.These changes have now for the most part been brought into force with the commencement of the 2021 Act. Please click here to access our publication which gives some details of those changes .  

Section 819 of the Companies Act 2014 (2014 Act) relating to the restriction of directors of insolvent companies has recently been amended as a result of the commencement of the Companies (Corporate Enforcement Authority) Act 2021 (CEA Act). Section 34 of the CEA Act has added additional grounds for application to court by the Corporate Enforcement Authority (CEA), a Liquidator or a Receiver to restrict a director including failure by a director of an insolvent company to: convene a general meeting of shareholders for the purpose of nominating a named Liquidator, table a notice to nominate such Liquidator, or provide the required notice to employees of the company in the winding up of the company.  Some of these changes were brought about by a Company Law Review Group report in 2017 on the protection of employees and unsecured creditors. These changes were recommended to address difficulties where directors do not put a company into liquidation or walk away without a Liquidator being appointed. Additional insolvency-related changes to the 2014 Act, following the commencement of the CEA Act, include: the CEA has power to request evidence from a person that they are qualified to act as Liquidator of an Irish company (section 32 CEA Act); restoration of the obligation to file resolutions with the CRO in a creditors' winding-up (section 31 CEA Act); and if a liquidation is not concluded within 12 months after commencement, a Liquidator may be required to file more frequent reports to the CRO on the progress of the liquidation (section 33 CEA Act). 

THE LEGISLATIVE PROHIBITION The Russia (Sanctions) (Eu Exit) (Amendment) (No. 14) Regulations 2022 (“No.14/2022 Regulations”) came into force on 21 July. An explanatory memorandum was issued with the No.14/2022 Regulations which the reader can access here . The No.14/2022 Regulations amend the Russia (Sanctions) (EU Exit) Regulations 2019 (“2019 Regulations”) and provide for a ban on certain professional and business services. Under newly enacted section 54C a person must not directly or indirectly provide “accounting services” to a person connected with Russia. “accounting services” is defined in new section 54B and means accounting review services, which are services involving the review by a person of annual and interim financial statements and other accounting information, but excluding auditing services; compilation of financial statements services, which are services involving the compilation by a person of financial statements from information provided by a client, including preparation services of business tax returns when provided together with the preparation of financial statements for a single fee, but excluding such preparation services of business tax returns when provided as a separate service; other accounting services such as attestations, valuations, preparation services of pro forma statements; bookkeeping services, which are services consisting of classifying and recording business transactions in terms of money or some unit of measurement in the books of account, but excluding bookkeeping services related to tax returns; Readers can see that the definition scopes out certain services, auditing services is excluded from the prohibition under “accounting review services”, preparation services of business tax returns when provided as a separate service is excluded and so are bookkeeping services related to tax returns. Regulation 21(2) of the 2019 Regulations sets out what a person connected with Russia means. A person is to be regarded as “connected with” Russia if the person is— (a) an individual who is, or an association or combination of individuals who are, ordinarily resident in Russia, (b) an individual who is, or an association or combination of individuals who are, located in Russia, (c) a person, other than an individual, which is incorporated or constituted under the law of Russia, or (d) a person, other than an individual, which is domiciled in Russia. DEFENCES, EXCEPTIONS AND LICENCES New section 54C provides that it is a defence for a person to show that they did not know and had no reasonable cause to suspect that the person to whom the services were provided was connected with Russia. New section 60DA provides certain exceptions to the ban. The prohibition is not contravened if the act is done: - to satisfy UK statutory or regulatory obligations (not arising under contract). - in respect of contractual obligations concluded before 20 July 2022 provided the act is done before the end of the period of one month beginning with the day on which the No 14/2022 Regulations came into force (21 July 2022) and that the person doing the act has notified the Secretary of State in the UK no later than the day 10 working days before the day on which the act is carried out. -out of necessity for the official purposes of a diplomatic mission or consular post in Russia or of an international organisation enjoying immunities in accordance with international law. Licensing provisions are contained in Part 7 of the 2019 Regulations. Please see Chartered Accountants Ireland  sanctions webpages for further information and links including paragraph  3.2 of updated government guidance  UK Government webpage on “Russia Sanctions: Guidance”. Please see here for a useful article on the sanctions by Stephenson Harwood LLP UK sanctions: professional and business services to Russian clients (shlegal.com) .The article includes  a comparison with the EU ban on provision of accounting services introduced in early June 2022 and about which see further Chartered Accountants Ireland recent news item . Readers attention is drawn to an update whereby  the Russia (Sanctions) (EU Exit) (Amendment) (No. 17) Regulations 2022 (the No. 17 Regulations ) were  passed in the UK bringing into effect further prohibitions  from 16 December 2022 including a ban on auditing services which was announced in September 2022. “Auditing services “is defined and means services consisting of examination of the accounting records and other supporting evidence of an organisation for the purpose of expressing an opinion as to (a) whether financial statements of the organisation present fairly its position as at a given date, and (b) the results of its operations for the period ending on that date, in accordance with generally accepted accounting principles. Readers should note that the No. 17 Regulations bring further changes into effect including a prohibition on the provision of trust services and they also contain certain exemptions from the prohibitions contained in the No.17 Regulations (see section 60DA(3) in relation to auditing services) . This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages. Chartered Accountants Ireland can accept no responsibility for the content on any site that is linked to/from the Institute website. Links are provided in good faith for the potential support of members and students.  

The Corporate Enforcement Authority (“Authority”) was established by law on 7 July 2022. Ian Drennan, the former Director of Corporate Enforcement, is Chief Executive Officer and currently the sole appointed member (of a maximum of three members) of the Authority. In the press release on its establishment, the Tánaiste said that the Government is to increase staffing levels of the Authority over that of the Office of the Director of Corporate Enforcement (ODCE) by nearly 50%, including doubling the number of gardaí. He also mentioned that the Authority’s budget has been increased by almost 30% over the budget of the ODCE. As we covered in a previous news item, much of the Companies (Corporate Enforcement Authority) Act 2021 (“2021 Act”) is taken up with setting out the organisation, structure and powers of the Authority. What does the establishment of the Authority mean for readers? The Authority has been described as Ireland’s company law enforcement agency. It is responsible for promoting compliance with, and investigating suspected breaches of, company law and now has additional resources to investigate and prosecute so-called white-collar crime. The government press release states that the establishment of the Authority will ensure consumers and businesses have confidence that alleged breaches of company law will be effectively investigated and prosecuted. The extra staff and additional funding will ensure that the new Authority can really make a difference and meet the differing and evolving demands of its remit, which includes investigation, prosecution, supervision and advocacy. Much has been written about the new Authority .Click here to be brought to the Corporate Enforcement Authority's website. Please click here for a quick guide available on the Authority website to introduce and explain the role of the Authority . It explains who they are, what they do and how you can contact them. There are a number of helpful booklets on the website .For example please click here for the booklet on auditors and here for the booklet on liquidators receivers and examiners. It has also produced a company guide ,a single guide for companies which you can access here . See also the links below to read further articles on the establishment of the Authority: New Corporate Enforcement Authority established in Ireland – Arthur Cox LLP New Corporate Enforcement Authority (mccannfitzgerald.com) Corporate Enforcement Authority is Established (williamfry.com) New Corporate Enforcement Authority Takes its Place (matheson.com) The Establishment of the Corporate Enforcement… | Dillon Eustace Readers may know that the 2021 Act also provides for company law amendments which largely correct unintentional omissions from or clarify provisions of the Companies Act 2014. Other than the provision relating to directors’ personal public service numbers, which has not yet been brought into force, these company law amendments have now been enacted. More details of these amendments will be the subject of a separate publication to be issued shortly. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages. Chartered Accountants Ireland can accept no responsibility for the content on any site that is linked to/from the Institute website. Links are provided in good faith for the potential support of members and students.

In the UK the National Economic Crime Centre (NECC) and others have this month issued a red alert on Financial Sanctions Evasion Typologies: Russian Elites and Enablers. The purpose of the alert is to provide information on some common techniques suspected to be used to evade financial sanctions.  It lists some indicators of methods being used to evade sanctions and provides some industry recommendations. Read also the NCA news item here.

The establishment of the Corporate Enforcement Authority (CEA) was announced by the Dept. of Enterprise Trade and Employment in a press release on 7 July. The CEA is a new statutory independent agency with the staff and resources to investigate and prosecute breaches of company law. The Office of the director of Corporate Enforcement recently encouraged people to follow the Corporate Enforcement Authority on LinkedIn and Twitter at @CEA_Ireland and you will find resources and further information about the CEA website.