If you have information relevant to white collar or financial crime and do not report it, you may be guilty of a criminal offence.
The constitutionality of this type of offence was recently upheld by the Supreme Court in Sweeney v Ireland which concerned the obligation to report to the Gardaí information about certain serious crimes. Mr Sweeney was interviewed multiple times by the Gardaí in relation to a murder. He did not disclose any information to the Gardaí and he was informed that he had the right to remain silent. Mr Sweeney was charged with failure to disclose information in relation to the murder. The High Court found that this was unconstitutional as infringing the right to silence and the certainty principle. This was overruled by the Supreme Court which upheld the constitutionality of the offence, but clarified that there is no obligation to report a crime if it would compel a person to self-incriminate.
What types of white collar crime need to be reported?
Under section 19 of the Criminal Justice Act 2011:
- Company Law offences
- Offences relating to banking, investment of funds and other financial activities
- Money laundering and terrorism
- Theft and fraud
- Bribery and corruption
- Consumer protection offences
- Criminal damage to property
- Competition Law offences
Under section 38(2) of the Central Bank (Supervision and Enforcement) Act 2013:
- Offences under financial services legislation
When should you report?
You have a mandatory statutory obligation to report:
- If you have information; and
- You know or believe it will or might be of material assistance in preventing the commission of a relevant offence or securing the apprehension, prosecution or conviction of any other person for a relevant offence ; and
- There is no "reasonable excuse" not to report that information.
What might be a "reasonable excuse" for not reporting?
- When you may be involved or implicated in the offence and reporting might compel you to incriminate yourself.
- The Courts have held that a reasonable excuse may exist when there is some "physical or practical" difficulty in reporting the crime.
- If the information has already been disclosed.
What happens if you don't report?
Failing to report without "reasonable excuse" is a criminal offence carrying the following penalties:
- On summary conviction, a potential fine of €5,000 or imprisonment for up to 12 months or both.
- On conviction on indictment under the Criminal Justice Act, an unlimited fine or imprisonment for a term not exceeding 5 years or both.
- On conviction on indictment under the Central Bank (Supervision and Enforcement) Act, a fine of up to €250,000 or imprisonment for a term not exceeding 5 years or both.
For organisations, the failure to report such crime can have other serious consequences. For example, in a UK context, the Financial Conduct Authority (FCA) recently fined Bank of Scotland £45.5 million failing to report suspicions of fraud at one of its branches which dealt with small companies in financial distress.
The Sweeney judgment in this case serves as a timely reminder to individuals and organisations as to the mandatory reporting obligations which exist and for which they face criminal sanction for non-compliance. In addition to mandatory reporting, individuals and organisations should also consider their overall good corporate governance and culture in relation to non-mandatory reporting.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.