9 August 2011

The feisty celtic tiger, lauded as the exemplar of economic success at the turn of the millennium, is a much mauled beast now.  It is only the punt away from being among the PIGS.  The optimism of 2005 is long gone. What the Irish have learned is that unregulated or poorly enforced markets incite opportunism. That leads to exploitation. Too often, corruption has proved to be a close companion.

The roll call of political and business leaders convicted over the last five years is a national embarrassment.  The Garda has an ongoing case load of 200 fraud enquiries, reflecting the 5% average cost to each Irish business of fraud. Greed got the better of ethics in the banking, property and legal sectors, as officials turned a convenient, and often well rewarded, blind eye. And a church-load of paedophilac priests seemed to emphasise the demise of values.

The state is now fighting back. Politicians have been compelled by public disgust to legislate against white collar crime. Business people knowing anything about fraud will have to do something about it. For example the commercial response in many jurisdictions of quietly paying off fraudsters on the basis they will fade away, is no longer an option in Ireland.

The Criminal Justice Act 2011 comes into force today. It is now an offence to not report to the police any information that might be useful in preventing, investigating or prosecuting white-collar crime. The Act will impact on banking, finance, company law, money laundering, fraud, bribery, corruption, and consumer protection.  From drivers to directors, all will commit an offence where information is withheld with  “consent or connivance” or through “wilful neglect”. The penalty is up to five years imprisonment, an unlimited fine, or both.  This is more stringent than examples of  “withholding information” offences in other countries.  New Zealand of course has almost no statutory requirements to report criminal conduct.

Complementing the Irish legislation is another new law that will assist juries understand the complexities of a fraud trial. Expert explanations of evidence will be provided to them. Transcripts of evidence and the judge’s summing up will be given to jurors also when considering their verdict.

Ireland, sitting at 14th place on the Transparency International corruption perceptions index will be hoping these forensic tools for prosecutors will help counter the reputation it has acquired as the wild west of European business.