Welcome to this week’s Technical Roundup. In developments this week, the Financial Reporting Council has responded to the International Sustainability Standards Board’s request for feedback to inform future development of the IFRS Sustainability Disclosure Taxonomy for Digital Reporting and the European Securities and Markets Authority has this week published its latest edition of its Spotlight on Markets Newsletter. Read more on these and other developments that may be of interest to members below. Financial Reporting The International Accounting Standards Board has published its proposals to update the IFRS for SMEs Accounting Standard. The updates are intended to reflect changes that have been made in full IFRS Accounting Standards while keeping the overall standard suitable for the small and medium entities that apply it. Comments are welcomed by 7 March 2023. EFRAG, the European Financial Reporting Advisory Group has published its August 2022 monthly update. The Global Preparers Forum (GPF) is seeking new members to join the GPF from 1 November 2022. Successful candidates are expected to participate for a term of at least two years, with a maximum term of five years. Sustainability The Climate Change Unit of the Central Bank has issued its latest Financial Stability Note and is titled “Climate Risks in the Financial System: An Overview of Channels, Impact, and Heterogeneity". Please click here for the press release which gives summary details of the note. The International Organization of Securities Commissions (“IOSCO”) recently published its final report on retail investor education in the context of sustainable finance markets and products. The purpose of the report is to enhance investor education and protection and support the sound development of the sustainable finance market. It also includes educational activities that regulators should consider, and it  includes some key messages that securities regulators should consider for their financial education programs, to help retail investors understand how a “smart investor” would behave when faced with sustainable finance products. Auditing IAASA has published a third video in a series designed to provide information on the Quality Management Standards in Ireland. This video provides an overview of the eight components of a system of quality management as set out in International Standard on Quality Management 1. Previous videos recently published in the series are available on the IAASA YouTube channel, and there will be further videos available over the coming weeks, which will provide greater detail on ISQM 2 and ISA 220. Anti-Money Laundering and Sanctions IFAC, the International Federation of Accountants has issued its action plan to enhance the accountancy profession’s contribution to, and support of, a robust anti-corruption ecosystem. The Anti-money Laundering and Counter Terrorism Financing, Example Red Flag Training Material, issued in May 2022 is a publication by a Joint Practice Group with GNECB and the Garda Financial Intelligence Unit, and the Irish accountancy bodies including Chartered Accountants Ireland. A second update has been made to this document in September 2022. The changes are mainly to provide an explanation of the use of the word “fungible “in case study 7, to ensure correct reference to “FIU Ireland” and “suspicious transaction reports” throughout the document and to reference a threshold for suspicion being reached (rather than breached). You can access the red flags updated document here and details are also included on our “red flags -know the signs” page on our AML hub which you can access here. FATF’s recent webinar on Beneficial Ownership Transparency of Legal Persons which discussed new FATF obligations on beneficial ownership transparency, national experiences, challenges, and lessons and the role of private sector is now available to watch or listen to. In its recent second report, the EBA has called for more proactive engagement between  supervisors in anti-money laundering and counter-terrorist financing colleges to ensure ongoing collaboration and proactive information exchange. Colleges are permanent structures that serve to enhance cooperation between different supervisors involved in the supervision of cross-border institutions. In 2021, a total of 227 AML/CFT colleges were established and the EBA is a member of each college. In the report the EBA sets out its observations of good practices with an aim to help competent authorities to enhance their effectiveness in future, reminds the supervisors of the importance of consistent and timely exchange of information in colleges and emphasises the need for colleges to be organised in a more risk-sensitive manner. On the same subject, the EBA has recently issued the latest EBA AML/CFT newsletter (Issue 8) which may contain some news items of interest to readers. The UK FIU issued a recent reminder that Suspicious Activity Reports (SARs) are a vital source of intelligence that help detect and prevent money laundering, terrorist finance and all other types of crime and you can watch their latest video here to learn about the usefulness of SARs.  Chartered Accountants Ireland is currently regularly updating its webpage on sanctions. You can now read an update on the recent High Court judgment in the case of Pola Logistics Limited as plaintiff and GTLK Europe DAC, GTLK Malta Four Limited and Central Bank of Ireland (CBI) as defendants. The judgment is available free of charge from the Irish courts service website. The case which considered a number of matters provides some interesting insights into the role of CBI in the sanctions regime. Also on the webpage are details of a recent UK High court case (which readers can access free from the BAILII website). This case saw minority shareholders of London-listed gold producer Petropavlovsk failing to persuade an English judge to adjourn its sale to a Russian metals’ producer, days after he allowed the transaction to go ahead in the wake of UK and EU sanctions. See in particular the Appendix to the judgment which considers the application of the relevant sanctions’ legislation, the relevant UK sanctions legislation and the relevant EU sanctions regime. Other areas of interest The Financial Reporting Council (FRC) has published the list of signatories to the UK Stewardship Code (the Code) following its Spring 2022 assessment.  Following an extensive review process which considered organisations’ investment styles, sizes and types, 43 new signatories were added, taking the total number of signatories to 236, with assets under management (AUM) of £40.7tn, up from £33.3tn. The Equality and Human Rights Commission, Britain’s national equality body (EHRC) has made tackling discrimination in Artificial Intelligence  a major strand of its strategic plan for 2022-2025. EHRC has recently published new guidance to help organisations avoid breaches of equality law, including the public sector equality duty (PSED). The guidance gives practical examples of how AI systems may be causing discriminatory outcomes.  Please also click the link here to read the EHRC news item on their strategic plan. The Decision Support Service (DSS) has published a short video message on behalf of the Director of the DSS, Áine Flynn, to potential future service users, which outlines the current position on the progress of amending legislation to the Assisted Decision-Making (Capacity) Act 2015. The Department of Enterprise, Trade and Employment has issued its September Enterprise newsletter recently. In it you can read about various items of interest including a proposal for a  new law which will help to modernise the Employment Permits system in Ireland. Also read about the Screening of Third Country Transactions Bill which was published in August 2022. This legislation was drafted in response to the potential threat posed to security and public order from some third country investments and when enacted will establish a screening mechanism for third country investments into Ireland for the first time. It is also drafted to give further effect to an EU regulation on the matter. We will bring you more information on this draft legislation as relevant to members as it passes through the Dail. For further technical information and updates please visit the Technical Hub on the Institute website.     

Welcome to this week’s Technical Roundup In case you missed it over the Summer…. The Protected Disclosures (Amendment) Act 2022  was signed into law in July 2022. It has not been commenced yet. It provides for a comprehensive overhaul of the statutory framework for the protection of whistleblowers in Ireland and for the transposition of the EU Directive 2019/1937 on the protection of persons who report breaches of Union law. A new Office of the Protected Disclosures Commissioner will be established in the Office of the Ombudsman to support the operation of the new legislation. You can read here the press release on the Act from the Dept of Public Expenditure and Reform. The Dept. of Enterprise Trade and Employment announced the establishment of the Corporate Enforcement Authority (CEA) on 7 July. Click here for our recent article on what the CEA is. We also provided an information sheet recently on changes to the Companies Act 2014 made by the Companies (Corporate Enforcement Authority) Act 2021 the same legislation which established the CEA. Please click here to access our publication on the changes to the Companies Act 2014. The Register of Overseas Entities came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022. The Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 3) Regulations 2022 commenced section 3 of the Act. The Register is held by Companies House. Overseas entities who want to buy, sell or transfer property or land in the UK, must register with Companies House and provide information on who their registrable beneficial owners or managing officers are. Companies House has some guidance here on the register and how you can add an overseas entity and its registrable beneficial owners or managing officers to the Register of Overseas Entities. On the AML front there were a few publications over the summer which may be of interest to readers. The UK National Crime Agency’s issued the July edition of its SARs in Action publication. The Consultative Committee of Accountancy Bodies (CCAB) published a number of helpful client due diligence case studies which readers can access here. Readers dealing with or having an interest in the Virtual Asset Service Providers (VASP) sector should take a look at the Irish Central Bank’s latest Anti Money Laundering (AML) bulletin published in July 2022. During the summer we continued to update our sanctions pages with relevant news items. These included the addition of details to our webpage of the EU maintenance and alignment package adopted in July 2022,the issuance in the UK by the National Economic Crime Centre (NECC) of a red alert on Financial Sanctions Evasion Typologies: Russian Elites and Enablers and the coming into force of the UK legislative ban on providing accounting services to Russia. Our news item explaining the scope of the regulations bringing the ban into force as well as defences, exceptions and licences can be accessed here . In July, the Minister for Finance, Paschal Donohoe TD, received agreement from his Cabinet colleagues to approve the drafting of the Central Bank (Individual Accountability Framework) Bill, the main purpose of which is to improve accountability in the financial sector. The general scheme of the bill has now been published and you can read it here. You can also read here the press release  delivered on the publication of the general scheme for the bill . The European Union (Preventive Restructuring) Regulations 2022 (“Regulations”) came into force at the end of July 2022.Their purpose is to amend examinership provisions in Companies Act 2014 so as to implement the directive (2019/1023) on preventive restructuring frameworks. Please click here to read our recent news item on the Regulations which provides some information on the content of the Regulations and links to several useful articles explaining further the Regulations and some different aspects. Over the summer, the European Financial Reporting Advisory Group (EFRAG) held a public consultation on its draft European Sustainability Reporting Standards (ESRSs). This consultation involved the consideration of 13 Exposure Drafts covering general disclosure requirements as well as specific Environmental, Social and Governance Standards. These standards will be used by larger companies under the Corporate Sustainability Reporting Directive (CSRD) to report on sustainability matters in their annual report. The 100-day consultation period closed on 8th August with over 750 submissions made by stakeholders. This included the response of the Institute. Our response outlined support for the introduction of ESRSs, but highlighted some significant practical difficulties with the standards as currently drafted. The UK Endorsement Board has published its 2021/2022 Annual Reports.  The Financial Reporting Council (FRC) has published regulations for the upcoming PIE Auditor Register. The FRC Lab published a report on digital security risk disclosures to help companies improve the disclosure of digital security strategies, risks and governance. The FRC published its thematic review of judgements and estimates update. The FRC published guidance on running effective AGMs.                                                               ****** In developments this week, Accountancy Europe have issued a summary which explains some of the key points made in their recent response to the European Sustainability Reporting Standards and the Financial Reporting Council is inviting investors, equity analysts and debt analysts to take part in one of two roundtables to discuss how auditor reporting in the UK can be further improved.  This will be an in-person event taking place at their London Wall offices on 12 September. Read more on these and other developments that may be of interest to members below. Sustainability The FRC is hosting a webinar on navigating the ESG and Sustainability reporting landscape on 7 September, an area that can be confusing and challenging for many of the entities we regulate. Accountancy Europe have issued a summary which explains some of the key points made in their recent response to the European Sustainability Reporting Standards. 65 different organisations comprising companies, investors and professional accountants have endorsed a joint statement calling for stronger alignment of regulatory and standard-setting efforts around sustainability disclosure. The statement encourages the International Sustainability Standards Board, the US Securities Exchange Commission and the European Financial Reporting Advisory Group to continue to work closely together in achieving their common goals. Financial Reporting The UK Endorsement Board has announced the appointment of Pauline Wallace as its first permanent chair. The Financial Reporting Council Lab has published a report on ESG data production designed to help companies consider how to collect and use ESG data more effectively to support better decision-making. Auditing The International Auditing and Assurance Standards Board (IAASB) has issued a non-authoritative publication  featuring Frequently Asked Questions addressing some of the common questions related to reporting going concern matters in the auditor’s report.  The Financial Reporting Council (FRC) is inviting investors, equity analysts and debt analysts to take part in one of two roundtables to discuss how auditor reporting in the UK can be further improved.  This will be an in-person event taking place at their London Wall offices on 12 September. Anti-Money Laundering The UK National Crime Agency  has issued its latest SARs in Action bulletin for September 2022. In it you can read about SARs case studies and how the UKFIU engages with a number of AML groups from a range of industries and sectors. Other areas of interest IAASA has this week published the second video in a series designed to provide information on the Quality Management Standards in Ireland. The Revenue Commissioners have updated their webpage on the information required for the Central Register of the Beneficial Ownership of Trusts (CRBOT). This includes the new requirement to provide the personal public service number (PPSN) for each beneficial owner. If the individual does not have a PPSN they must provide and upload proof of one of the following: foreign tax registration number passport number or national identity number. Further information on the CRBOT can be found here. The Central Bank’s third Quarterly Bulletin of 2022 forecasts continued economic growth but high rate of inflation will weigh on households and businesses. The Competition and Consumer Protection Commission has recently published its submission to the Department of Finance’s Banking Review, the  public consultation on banking. In it the CCPC expressed concerns about the impending increase in the concentration levels of the retail banking sector in Ireland as a result of the exits of KBC and Ulster Bank and made a number of recommendations to promote competition and the consumer interest. For further technical information and updates please visit the Technical Hub  on the Institute website.           

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). 

Technology is shaping the future of financial services and creating exciting opportunities for innovative professionals at the heart of the fintech revolution As Chief Executive of Swoop Funding, Andrea Reynolds occupies a unique position at the nexus of fast-changing trends in financial services, emerging technologies, and the evolving role of the financial professional. The Chartered Accountant established Swoop in 2017 with Ciarán Burke, the company’s co-founder, to develop software that could help accountants identify the best funding options for SMEs. “The platform has been used now by 75,000 businesses to access funding, ranging from equity and grants to loans and tax credits. That’s given us an interesting overview of how much technology is changing the world of finance,” said Reynolds. Headquartered in Dublin, Swoop was founded in the UK where Reynolds had been working as a management consultant with KPMG in London before deciding to go into business with Burke. “At the time, everyone was moving to cloud accounting and open banking was coming down the line with the EU’s Revised Payment Services Directive (PSD2). We were seeing these new fintech lenders emerging, offering alternative funding to businesses and consumers,” she said. “In accountancy, you are trained to solve a problem by breaking it down into smaller elements, and that’s basically what I did with Swoop. I built a platform that could bring all of these funding options together in one place and do the heavy lifting for accountants advising SMEs.” Five years on, Swoop is on course for expansion in North America and other markets, having recently raised €6.3 million in Series A funding. “Finance is increasingly data-driven and borderless and that creates opportunities for fintechs like us, but different markets also have different strengths and weaknesses,” said Reynolds, pointing to her experience launching her own start-up in Ireland and the UK. “The idea for Swoop originally came from my experience navigating the funding system for SMEs in the UK, which is a lot more fragmented than the Irish system,” she said.  “The flipside is that the UK has been much more open to alternative finance, as have other European countries. That’s meant a lot more activity in non-bank lending, whether that’s crowdfunding, or loan finance from the likes of Wayflyer, Clearco or Youlend.” By comparison, Ireland is in ‘catch-up mode’, but it is catching up fast, said Reynolds. “Wayflyer is a huge fintech success story and there are other alternative lenders in the Irish market, like Linked Finance, Flender, and Accelerated Payments.  “Ireland already has a very strong fintech base in regulatory technology, anti-money laundering, ID verification, and Know Your Customer (KYC) technology. Where we still have to build up momentum is in the area of open banking.”  Automating auditing For David Heath, FCA, it was his early experience training as an auditor that sparked the idea for Circit, the fintech venture he co-founded in Dublin in 2015. “I trained with Grant Thornton, and it was a really great experience because the firm was so ambitious and the clients so varied, but as an entrepreneur, your starting point is always ‘what is the problem and how can we solve it?’  “For me, it was a case of thinking back to those early years in my career and digging into the processes that were the most challenging,” said Heath. “Auditors typically have a good relationship with their clients but getting the information they need from third party evidence providers is a big pain point.  “You have to verify the information your client gives you with an independent source—usually a bank, law firm or broker—and that process can take anywhere from three to six weeks.” Heath saw an opportunity to solve this problem with the advent of PSD2, using the EU’s open banking regulation to create a digital verification platform for auditors.  A cloud-based open banking platform, Circit connects auditors to their clients’ banks, solicitors, and brokers, allowing them to verify information within seconds.  Circit is approved by the Central Bank of Ireland as an Account Information Service Provider (AISP) under PSD2. It works with more than 300 accounting firms in Ireland and overseas and recently closed a €6.5 million funding round. “The funding will help us to increase our footprint and build out our open banking and regulated products, leveraging the license we have from the Central Bank of Ireland,” said Heath. “The problem we’re addressing may be niche, but it has global application.” Global ambition This global ambition is a common trait among Ireland’s most promising fintechs, according to Matt Ryan, a director in the Financial Services Consulting Group at Deloitte Ireland. “The ones to watch—the ones that do well quickly—tend to be thinking globally from day one. They have the talent and the funding, but they also know that Ireland is a very small market, so they are thinking in cross-border terms from the get-go,” said Ryan. Ryan points to Transfermate and Wayflyer as two such Irish fintech ventures whose global vision is paying dividends. A business payments infrastructure company founded in 2010, Transfermate closed a $70 million funding round in May, valuing the Kilkenny fintech at $1 billion. Wayflyer secured $300 million in debt financing in the same month following a $150 million Series B funding round, closed in February, which earned the Dublin start-up a $1.6 billion valuation and coveted ‘unicorn’ status. The pandemic effect The speed with which Wayflyer’s revenue-based financing and e-commerce platform succeeded globally reflects a wider trend in fintech. “The pandemic really accelerated the development of the sector as businesses and consumers suddenly moved online en masse,” said Ryan.  “Fintech was already a fast-growing market, but COVID-19 has made digital and contactless payments the norm and that has catapulted financial technology into a new era of growth.” While fintech awareness among consumers tends to centre on high-profile digital banks like Revolut and N26, the fintech sector globally, and in Ireland, is far more diverse.  “People usually think of full stack providers like Stripe and Revolut when they think of fintech, but that’s really not the whole story,” said Ryan. “Equally relevant are the technology companies selling services and solutions to financial institutions. “There are some very successful Irish companies in this space, such as TansferMate and Fenergo, which specialises in KYC technology for banks.” Fintech in Northern Ireland The established financial services sector is equally important to the fintech ecosystem in Northern Ireland, according to Alex Lee, Executive Chair of Fintech Northern Ireland (Invest NI). Figures published last year by Fintech NI found that there were 74 fintech companies in the region and 7,000 people employed in fintech jobs. “The financial services sector here has a good track record of attracting foreign direct investment (FDI), particularly over the last 15 to 20 years,” said Lee. “Large institutions like Citi, Allstate, CME, TP ICAP and Liberty Mutual have all established a meaningful presence here.” Together, these US multinationals form ‘the foundation’ on which Northern Ireland’s fintech sector has continued to build, Lee said.  “Attracting big international players has helped to grow out our fintech expertise and talent pool, because most of these companies have global technology development centres running out of Northern Ireland, and that has contributed to the rise of some really successful homegrown fintechs,” he said. FinTrU is one such success story. Founded in 2013, FinTrU develops regulatory technology for investment banks, ranging from legal, risk and compliance, to Know Your Customer (KYC). The Belfast-headquartered company employs 1,000 people and, in July, announced plans to create a further 300 jobs at a European Delivery Centre in Letterkenny, Co. Donegal. Another scaling success story in Northern Ireland is FD Technologies (formerly First Derivatives).  Founded in 1996, the Newry-headquartered data firm employs 3,000 people at 13 offices in Ireland and globally and recently announced plans to create 500 jobs at a new technology hub in Dublin. Northern Ireland is also continuing to attract FDI. In June, the Bank of London announced plans to establish a Centre of Excellence in Belfast, creating 230 jobs by 2026.  “We are making strides now and my hope is for a homegrown fintech ‘unicorn’ to come out of Northern Ireland. We’re not quite there yet, but I would like to see this ‘poster child’ for the sector emerge soon,” said Lee. Decline of the unicorn Such is the pace of growth in the fintech sector globally, however, that even the much sought-after ‘unicorn’ moniker is losing its lustre.  “In developed markets at least, I think there is a view that ‘unicorn’ status has lost some of its cachet,” said Ian Nelson, FCA, Head of Financial Services and Regulatory at KPMG Ireland, and a member of the board of the Fintech and Payments Association of Ireland. Even Stripe—perhaps the best-known ‘unicorn’ with Irish origins—has outgrown the label.  Established in Silicon Valley in 2010 by Limerick brothers Patrick and John Collison, the online payments giant’s $95 billion market capitalisation has soared beyond the $1 billion unicorn requisite. “Stripe is really now a ‘centicorn’, if you like, and there are numerous other fintechs in the same sphere, and ‘decacorns’ valued at $10 billion coming up behind them,” said Nelson. “At $1 billion, becoming a ‘unicorn’ has less meaning for fintech start-ups in developed markets, but it will continue to be an important building block for start-ups in emerging markets and less mature fintech hubs.” Among the other trends Nelson is keeping an eye on is the role technology will play in supporting environmental, social, and governance (ESG) capabilities in business. “Since COP26, we have seen a lot of attention directed towards fintechs with ESG capabilities,” he said.  “This really reflects the growing prioritisation of ESG in financial reporting and financial services generally. ESG is going to be a really important play in fintech. “We can expect to see more fintech companies focused on climate change, decarbonisation and the circular economy, and more jurisdictions setting up incubators specifically focused on ESG solutions.” Digital innovation in financial services Already a leader in payments globally, Ireland is now shaping the business environment for digital finance, writes Seán Fleming TD, Minister of State at the Department of Finance As Minister of State with responsibility for financial services, I lead the whole-of-government strategy for developing international financial services in Ireland, titled Ireland for Finance. I very much welcome this timely report on fintech.  In recent years, new entrants and long-standing financial institutions have looked to capture the opportunities presented by digital technologies.  Ireland is well-placed to benefit from the application of new technologies in the financial services industry. We have both a well-developed financial centre and a renowned technology sector.  This makes Ireland a centre of excellence for start-ups and big-name companies that want to establish operations in the European Union.  Ireland has shown leadership in shaping the business environment for digital finance. Important to this is Ireland’s education system, which has produced some of the finest innovators in the world. These graduates are leading the development of cutting-edge technologies.  The Government has an ambitious agenda for education. Two out of 15 Cabinet Ministers are dedicated to education and skills. Consecutive Governments have invested substantially in education, making it a cornerstone of Ireland’s economic strategy.   This economic strategy has created a strong mix of multinationals that have chosen Ireland as a place to do business. We have been very successful in supporting high-potential start-ups, with over 200 Irish fintech firms at various stages of development. Ireland is a leader in payments, and a number of firms have substantial development operations here. The digital finance ecosystem has expanded in recent years to include institutional financial services providers that have chosen Ireland to help them develop their fintech capability. The importance of fintech is reflected in the Ireland for Finance strategy. I identified Fintech and Digital Finance as one of the five themes in Action Plan 2022.  The Department of Finance’s Fintech Steering Group leads the cross-government approach with other departments and state agencies, and with representatives of the financial services and information technologies industries, and third-level researchers. Financial Services Ireland, the Ibec sector representing financial services companies, recently identified the future talent pipeline as being critically important. Particular areas they identify are fintech, digital finance and the environmental, social and governance agenda. I will shortly be publishing the updated Ireland for Finance strategy and fintech will be a key theme, and it will be at the centre of our work in the coming years.

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.

Welcome to this week’s Technical Roundup.  In developments this week, the FRC has published its response to the International Sustainability Standards Boards (ISSB) first two Exposure Drafts, IAASA has published the first video in a series designed to provide information on the Quality Management Standards in Ireland and both IAASA and the ODCE have recently published their 2021 Annual Reports. Read more on these and other developments that may be of interest to members below. Financial Reporting EFRAG are hosting a number of outreach events in the coming weeks in relation to the ongoing public consultation on the first set of European Sustainability Reporting Standards. The FRC has published its response to the International Sustainability Standards Boards (ISSB) first two Exposure Drafts, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The FRC strongly supports the development of high-quality global standards for sustainability reporting and welcomes the opportunity to provide comments on the ISSB's first Exposure Drafts. The IASB has issued it’s June 2022 update and updated work plan. Financial Reporting Lab newsletter: June 2022 The Lab has released its second quarterly newsletter for 2022.   This issue reflects on the Lab's focus for the year provides an update on upcoming and ongoing projects, and information on how you can get involved. https://frc.org.uk/news/june-2022-(1)/financial-reporting-lab-newsletter-june-2022 Auditing IAASA has published the first video in a series designed to provide information on the Quality Management Standards in Ireland. This first video provides an overview of the Quality Management Standards and the relationship between ISQM 1, ISQM 2 and ISA 220. Further videos in the series, which will be published on IAASA’s YouTube channel over the coming weeks, will provide greater detail on the individual standards. Anti-Money Laundering Click here to access a presentation delivered recently by Elizabeth McCaul, Member of the Supervisory Board of the ECB, on the ECB’s Banking Supervision’s role in AML/CFT. The Financial Action Task Force (FATF) is conducting a review of its recommendation on the transparency and beneficial ownership (BO) of legal arrangements. Click to access the white paper for public consultation. FATF’s states that its work in this area is ongoing, and will benefit from hearing views from stakeholders, including trustees, financial institutions, designated non-financial businesses and professions (DNFBPs), and non-profit organisations. A response can be sent by 1 August 2022 and details of where to send are contained within the white paper. In other FATF news the outcomes of the FATF plenary held recently can be read on their website which includes a statement on the Russian federation, some strategic initiatives and priorities under the Singapore presidency. Other areas of interest  IAASA has published its 2021 Annual Report, providing a summary of IAASA’s activities during 2021.  The Report includes an overview of IAASA’s work across its principal statutory functions, including significant developments during 2021, strategies employed, and the outcomes associated with those strategies.  The ODCE recently published its annual report for 2021.The Director’s statement gives an overview of 2021 and looks to the year ahead and gives details of the ODCE’s activities including compliance and enforcement activities. The Charities Regulator has recently published its summer newsletter where you will find information on charity matters including how to register for a lunch time webinar on 6 July on how to ensure your charity is up-to-date and proposed changes to charity law in a recent draft bill. The Central Bank Director of Financial Regulation Policy and Risk recently gave a wide-ranging speech on the new Individual and Senior Executive Accountability framework which will come into effect next year. He considered some key aspects of the new framework including the Central Bank’s approach to the regulations and guidelines that will implement the primary legislation. Further details of his speech can be read here. The Irish Department of Finance issued a recent press release giving details of the European Investment Bank’s plans to strengthen support for climate, connectivity, renewables, education and innovation across Ireland following the meeting of the Ireland-EIB Financing Group held at the Department of Finance recently. Further details of the announcement can be read here. The Department of Finance also recently published the 2021 progress report of the Ireland for Finance Strategy. Achievements in the 2021 progress report of the Ireland for Finance strategy, noted in the press release include developing and launching a national Sustainable Finance Roadmap and launching Ireland’s Women in Finance Charter. For further technical information and updates please visit the Technical Hub  on the Institute website. 

On 3 June 2022 the European Commission announced its sixth package of sanctions against Russia. Further details are now available  on the Institute’s webpage on sanctions. One of the measures is that the provision directly or indirectly of certain business-relevant services such as accounting, auditing including statutory audit, bookkeeping and tax consulting services, business and management consulting, and public relations services to the Russian government, as well as to legal persons, entities or bodies established in Russia are now prohibited. The relevant legal acts, a Decision 2022/884 and a Regulation 2022/879 have been published in the Official Journal. The recitals to Regulation 2022/879 provide a little more detail of the services which fall within the sanctions. They state that “......accounting, auditing, bookkeeping and tax consultancy services cover the recording of commercial transactions for businesses and others; examination services of accounting records and financial statements; business tax planning and consulting; and the preparation of tax documents….” Exemptions to the EU sanction are provided. There is an exemption for provision of services that are strictly necessary for the termination by 5 July 2022 of contracts which are not compliant with the Article (i.e now prohibited by the sanction) which were concluded before 4 June 2022 or of ancillary contracts necessary for the execution of such contracts. Exemption is also given for services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy. An exemption is given for services for the exclusive use of entities established in Russia but owned, solely controlled, or jointly controlled, by an entity in an EU Member State. Derogations (which would have to be sought) are provided for services necessary for humanitarian purposes. The provisions are somewhat vague. For example, the wording on the applicable date is not entirely clear though it seems that the services are banned with a deadline for cessation of activities ,the provision of services that are strictly necessary, of 5 July 2022. Strictly necessary services are not defined either. On 24 June 2022 the EU Commission updated its FAQs to include an FAQ document on prohibition of certain business relevant services. You can click here to read the FAQs on sanctions on certain business relevant services. In the UK a ban on professional services exports to Russia was announced by the UK government  on May 4th.Legislation has now been passed implementing that ban (as of July 21 2022 ).Please click here to read an article with more information on that UK ban. Please see links below for some recent news items on this issue: European Commission press release on Sixth package of sanctions Arthur Cox, solicitors Linklaters Responses to the Russia/Ukraine Crisis – Sanctions Update No.3 Reed Smith This news item is provided as resources and information only and nothing in the news item  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 news item. 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 the news item 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 the news item. 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.

Welcome to this week’s Technical Roundup.   In developments this week, the Financial Reporting Council (FRC) has issued a consultation on publishing audit quality indicators (AQIs) for the largest UK audit firms, the FRC has issued an updated edition of the Guidance on the Strategic Report to incorporate the new climate-related financial disclosures and MEPs and EU governments struck a provisional agreement on new reporting rules for large companies. The Corporate Sustainability Reporting Directive (CSRD) will make businesses more accountable by obliging them to disclose their impact on people and the planet. Read more on these and other developments that may be of interest to members below. Financial Reporting The deadline for commenting on EFRAG’s discussion paper ‘Better Information on Intangibles – Which is the best way to go?’ is approaching (30 June 2022). The Discussion Paper explores various approaches to improve information on intangibles in financial reports. IFRIC, the IFRS Interpretations Committee, has issued its June 2022 update. The IASB has published a Project Report Feedback Statement concluding its Post-Implementation Review of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. The FRC has issued an updated edition of the Guidance on the Strategic Report to incorporate the new climate-related financial disclosures, following changes in legislation made earlier this year. In addition, a number of other amendments were also made to maintain alignment with legislation. For entities within their scope, the new climate-related financial disclosures are effective for financial years beginning on or after 6 April 2022. The FRC has published a consultation on proposed changes to Technical Actuarial Standard 100 which would require actuaries to include climate change risks in the course of their work. The UK Endorsement Board is holding a virtual outreach event on the International Sustainability Standards Board’s Exposure drafts. The event will take place on 30 June 2022. Auditing  The Financial Reporting Council (FRC) has issued a consultation on publishing audit quality indicators (AQIs) for the largest UK audit firms, which would provide users of audited information with greater detail on audit firms’ efforts to deliver high quality audit. The FRC welcome the views of all stakeholders – including users of audit services, investors, audit firms, and others with an interest in this topic by 18 August. A link to the consultation is available here. The Financial Reporting Council (FRC) has published comprehensive professional judgement guidance for auditors to improve how they exercise professional judgement. Professional judgement is key to high quality audit, however the FRC regularly identifies poor professional judgement as one of the most significant issues affecting audit quality. The new guidance includes a framework for making professional judgements and a series of illustrative examples. Insolvency The UK government recently published its interim report on the permanent measures in  the Corporate Insolvency and Governance Act 2020. Those measures are restructuring plans, the stand-alone moratorium, and restrictions on contractual termination (ipso facto) clauses. As part of the review,  the University of Wolverhampton was commissioned to conduct independent research. The report concludes that the permanent measures have been broadly welcomed by stakeholders and are seen as satisfying their policy objectives. It also  includes suggestions as to  how the measures could work even better.Details of the report can be found by following this link . Sanctions and Anti-Money Laundering The Irish Central Bank Director of Enforcement & Anti Money Laundering  has this week contacted business groups and professional representative bodies including Chartered Accountants Ireland regarding financial sanctions obligations. You can read details of the press release  here. The Central Bank  has asked for a letter they have written on sanctions to be circulated to members. The letter advises recipients that the Central Bank is the competent authority for the administration and enforcement of financial sanctions and that the adoption of sanctions places legally binding obligations on all individuals and entities. You can read our news item and the full contents of the letter here. PWC has recently published its Global Economic Crime Survey 2022: UK findings. Almost two in three respondents reported a fraud in the last 24 months. The survey deals with what types of fraud are occurring, who is perpetrating the crimes and how are they being detected. It identifies five key trends in respect of both fraud frameworks and specific risks. They are fraud risk and maturity, data and technology in risk management and detection, supply chain risk and resilience, ESG risk and cybercrime.You can go to their webpage and follow the registration procedure for a copy of the report. Other areas of interest The EU Corporate Sustainability Reporting Directive New social and environmental reporting rules for large companies were agreed this week by the European Council and European Parliament. It is an ambitious deal on compulsory reporting on environment, social affairs and governance. The Corporate Sustainability Reporting Directive (CSRD) will make businesses more accountable by obliging them to disclose their impact on people and the planet. This aims to end greenwashing and lay the groundwork for sustainability reporting standards at global level. New social and environmental reporting rules for large companies | News | European Parliament (europa.eu). Sustainability will become a new pillar of businesses’ performance, moving away from focus on short-term profits and the CSRD EU set to become front-runner in setting global sustainability reporting standards The UK House of Commons Treasury Committee recently issued a report on the future of financial services regulation. It includes consideration of the new regulatory framework (post Brexit),regulatory objectives and priorities and payment innovation including a focus on cryptoassets. You can read a copy of the report here. CLS Chartered Secretaries has published an article which maybe of interest to members on whether a company limited by guarantee  or a dormant Company must make a  filing  with the RBO. You can read more details and their conclusion here. The UK government, HM Treasury recently published the outcome of a consultation launched in July 2021. The consultation outlined how the government intended to amend the UK’s Money Laundering Regulations (the MLRs) to make updates to ensure that the UK continues to meet international standards, whilst also strengthening and ensuring clarity on how the UK’s anti-money laundering and counter-terrorist financing (AML/CTF) regime operates. The recently published  document summarises the responses to the consultation and sets out the government’s final approach to the relevant Statutory Instrument (SI) and you can read it here. Ministers in the Dept. of Enterprise Trade and Employment recently welcomed the publication from the Expert Group on Future Skills Needs (EGFSN) on the skills needed for Ireland to fully benefit from the opportunities presented by Artificial Intelligence.The report is entitled  AI Skills: A Preliminary Assessment of the Skills Needed for the Deployment, Management and Regulation of Artificial Intelligence.You can read the press release here and a copy of the report here. The Irish government recently announced a new €85 million fund, the Digital Transition Fund, to help businesses, at any stage or in any sector to go digital. The fund will be administered by Enterprise Ireland.Funding of €85 million has been allocated during the period to 2026 as part of Ireland’s National Recovery and Resilience Plan. €10 million will be available in 2022. A new online website is being developed and you can read more detail on the fund here. Any one member arrangements (OMA) set up on or after 22 April 2021 must meet the full requirements of the Pensions Act, 1990, as amended, including the new requirements of the IORP II Directive, by 1 July 2022.The Pensions Authority has recently issued a further reminder to trustees about this details of which you can read here. For further technical information and updates please visit the Technical Hub  on the Institute website.