Opinion of the European Central Bank of 11 May 2018 on administrative sanctions and criminal offences in connection with the provision of false or misleading information to the Central Bank of Ireland (CON/2018/24)
Date: 2018-05-11
Institutions: European Central Bank
Subjects: Ireland, banking supervision, central bank, disclosure of information, disinformation, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 11 May 2018  

on administrative sanctions and criminal offences in connection with the provision of false or 

misleading information to the Central Bank of Ireland 

(CON/2018/24) 

Introduction and legal basis 

On  4  April  2018  the  European  Central  Bank  (ECB)  received  a  request  from  the  Chairman  of  the 

Oireachtas  (the  Irish  National  Parliament)  Joint  Committee  on  Finance,  Public  Expenditure  and  Reform 

and  Taoiseach  (the  Irish  Prime  Minister),  for  an  opinion  on  the  Central  Bank  Bill  2018  (hereinafter  the 

‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC1, as 
the  draft  law  relates  to  the  Central  Bank  of  Ireland  (CBI)  and  to  the  tasks  conferred  upon  the  ECB 

concerning  the  prudential  supervision  of  credit  institutions  pursuant  to  Articles  127(6)  of  the  Treaty.  In 

accordance  with  the  first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central 

Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  The  draft  law  confers  on  the  CBI  the  powers  to  conduct  inquiries  into  the  suspected  provision  of 

false or misleading information to the CBI. It furthermore sets out the administrative sanctions that 

may be imposed by the CBI in such circumstances. In order to achieve this, the draft law extends 

the scope of application of certain existing provisions of Irish law, which set out the powers of the 
CBI for the enforcement of designated legislative acts (enactments and statutory instruments)2, to 

three categories of additional addressees, including both natural and legal persons.  

1.2  First, the draft law extends the scope of application of existing enforcement powers to persons who 

are  either  (i)  under  an  express  or  implied  duty  to  provide  information  to  the  CBI  pursuant  to  a 

legislative enactment or to a European act, or at law, or in equity, or (ii) indirectly under that duty, 

whether by being obliged to co-operate in providing that information, or to procure the provision of 

that  information,  or  otherwise.  The  draft  law  does  not  further  define  these  persons.  Thus,  this 

provision  of  the  draft  law  must  be  read  together  with  other  legislative  enactments, such  as  those 

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2  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
Part IIIC of the Central Bank Act 1942, as amended. 

 
 
 
 
                                                 
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which oblige credit institutions to report information for supervisory purposes3 or those which oblige 
credit institutions to report to the CBI on lending to related parties4.  

1.3  Second,  the  draft  law  extends  the  scope  of  application  of  the  existing  enforcement  powers  to 

natural  persons  performing  functions  that  may  be  described  as  ‘controlled  functions’  by  the  CBI. 

These include those natural persons holding a managerial function in a regulated financial service 

provider, such  as a credit  institution, financial  holding  company,  mixed-financial  holding company 
or mixed-activity holding company5.  

1.4  Third, the  draft law  extends  the scope of application  of the  existing  provisions on  enforcement to 

persons who  could potentially be the subject of an  obligation to provide the  CBI  with information, 

records  or  forecasts,  plans,  accounts,  explanations,  answers  to  questions,  or  other  documents 

requested by the CBI under its information-gathering power, regardless of whether such obligation 

has  already  been imposed on them.  These  persons include regulated financial service providers, 

such as credit institutions, and natural persons who are or have been an officer, employee or agent 
of such financial service providers6.  

1.5  With regard to the nature of the CBI’s enforcement powers, the existing provisions allow the CBI to 

(i)  hold  an  inquiry  into  the  conduct  of  a  regulated  financial  service  provider,  such  as  a  credit 

institution, or a person concerned in its management; (ii) make a finding as to whether the financial 

service provider or person concerned is committing or has committed the prescribed contravention 

to which the inquiry relates; and (iii)  impose on the financial service provider or person concerned 

in its management one or more sanctions. These sanctions can include a monetary penalty to be 
paid  to  the  CBI;  suspension  or  revocation  of  the  authorisation  of  a  financial  services  provider  in 

respect of any one or more of its activities; the submission of a proposal to the ECB to suspend or 

withdraw the authorisation of a financial service provider, i.e. a credit institution authorised by the 
ECB under Council Regulation (EU) No 1024/20137 in respect of any one or more of its activities; 

and, if  the financial service  provider is  a  natural person, a  direction disqualifying the  person  from 

being concerned in the management of a regulated financial service provider. 

1.6  The draft law also creates a criminal offence of providing false or misleading information to the CBI. 

A  person  who  commits  an  offence  is  liable  on  summary  conviction  to  a  class  A  fine  or 

imprisonment of a term not exceeding 12 months (or both), or, on conviction on indictment, to a fine 

not exceeding EUR 250 000 or imprisonment for a term not exceeding 5 years (or both). 

1.7  Finally, the draft law amends the Criminal Justice Act 2011 to include the offence of contravening 

the above new provisions. 

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7  

See  for  example  the  fourth  subparagraph  of  Article  99(5);  the  fourth  subparagraph  of  Article  99(6);  the  third 
subparagraph  of  Article  101(4);  the  third  subparagraph  of  Article  394(4);  and  the  fourth  subparagraph  of  Article 
415(3) and the third subparagraph of Article 430(2) of Regulation (EU) No 575/2013 of the European Parliament and 
of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending 
Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 
Section 7 of the Central Bank of Ireland Code of Practice on Lending to Related Parties, 2013. 
Section 20 of the Central Bank Act 2010 and Statutory Instrument No 437 of 2011, Central Bank Reform Act 2010 
(sections 20 and 22) Regulations 2011, as amended. 
Section 21 of the Central Bank (Supervision and Enforcement) Act 2013. 
Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the ECB concerning policies 
relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63). 

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2. 

General observations 

2.1  The  draft  law  complements  the  CBI’s  existing  tasks,  in  particular  in  the  field  of  supervision  of 

financial service providers (including credit institutions), and, hence, does not confer genuinely new 

tasks on the CBI in this area. For example, in respect of credit institutions and investment firms, the 
CBI’s  enforcement  regime  already8  applies  to  an  institution  which  fails  to  report  information  or 

provides  incomplete  or  inaccurate  information  contrary  to  various  obligations  arising  from 
Regulation  (EU)  No  575/20139.  It  is  an  offence  for  a  person  to  provide  the  CBI  with  false, 
misleading or inaccurate information in relation to any requirement arising from those provisions10.  

2.2  Pursuant  to  the  provisions  of  Council  Regulation  (EU)  No  1024/201311,  the  ECB  has  various 

supervisory and investigatory powers for the exclusive purpose of carrying out the tasks conferred 

upon the ECB in respect of the prudential supervision of credit institutions, including in Ireland. To 

the extent necessary to carry out the tasks conferred on the ECB by Council Regulation (EU) No 

1024/2013, the ECB may require, by way of instructions, the CBI to make use of its powers under, 

and in accordance with, the conditions set out in Irish law, where this Regulation does not confer 

such  powers  on  the  ECB.  Moreover,  in  the  cases  provided  for  by  Council  Regulation  (EU)  No 

1024/2013,  the  ECB  may  require  the  CBI  to  open  proceedings  with  a  view  to  ensuring  that 

appropriate  penalties  are  imposed.  In  such  cases,  the  CBI  may  only  open  proceedings  at  the 

request of the ECB but may ask the ECB to issue such request. The ECB and the CBI cooperate 

closely  in  the  exercise  of  their  respective  supervisory  and  investigatory  powers  and  in  respect  of 
the imposition of penalties12.  

2.3  The draft law would increase the CBI’s powers to take enforcement measures against those who 

provide  false  or  misleading  information  to  it  and  would  allow  such  enforcement  measures  to  be 

applied to a broad range of addressees, including credit institutions and natural persons who are or 

have  been  an  officer  or  employee  or  agent  of  those  credit  institutions.  Thus,  for  the  purpose  of 

carrying  out  the  tasks  conferred  upon  the  ECB  in  respect  of  the  prudential  supervision  of  credit 

institutions, the ECB may require, by way of instructions, the CBI to make use of these new powers 

under Irish law.  

2.4  Finally, it is  not fully clear  how the  provisions  of  the  draft  law  will  interact  with  existing  provisions 

that either: (i) set out the administrative sanctions that can be imposed by the CBI; or (ii) make the 

8  

9  

10  

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12  

Regulation 55 of Statutory Instrument No 158/2014 European Union (Capital Requirements) Regulations 2014. This 
statutory instrument seeks to implement Directive 2013/36/EU of the European Parliament and of the Council of 26 
June  2013  on  access  to  the  activity  of  credit  institutions  and  the  prudential  supervision  of  credit  institutions  and 
investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 
27.6.2013, p. 338). 
Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on  prudential 
requirements  for  credit  institutions  and  investment  firms  and  amending  Regulation  (EU)  No  648/2012  (OJ  L  176, 
27.6.2013, p.1). 
Regulations 147 and 148 of Statutory Instrument No 158/2014; and Regulations 5 and 6 of Statutory Instrument No 
159/2014 European Union (Capital Requirements) (No 2) Regulations 2014. 
See Articles 9-18 of Council Regulation (EU) No 1024/2013. 
See  Article  9(1)  and  (2)  and  Article  18(5)  of  Council  Regulation  (EU)  No  1024/2013.  See  also  Article  134  of 
Regulation  (EU)  No  468/2014  of  the  European  Central  Bank  of  16  April  2014  establishing  the  framework  for 
cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent 
authorities and with national designated authorities, OJ L 141, 14.05.2014, p. 1. 

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provision  of  false  or  misleading  information  to  the  CBI  a  criminal  offence13.  It  may  be  useful  to 

further examine  whether there are specific gaps in the CBI’s powers to  sanction financial service 

providers  and  their  senior  managers.  In  that  respect,  the  ECB  notes  that  the  CBI  has  already 
provided  comments14  to  the  Law  Reform  Commission  in  the  context  of  its  Issues  Paper  on 
‘Regulatory Enforcement and Corporate Offences’15. The work of the Law Reform Commission and 

the comments of the CBI may also be of use in order to ensure that the draft law is targeted and 

effective and ensures the overall coherence of the regulatory and enforcement framework available 

to the CBI. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 11 May 2018. 

[signed] 

The President of the ECB 

Mario DRAGHI 

13  

14  

15  

See for example, sections 18 and 32 of the Central Bank (Supervision and Enforcement) Act 2013, section 27I of the 
Central Bank Act 1997, as amended, and section 33BA(9) of the Central Bank Act 1942, as amended. 
Central  Bank  of  Ireland,  Response  to  the  Law  Reform  Commission  Issues  Paper  ‘Regulatory  Enforcement  and 
Corporate Offences’, December 2017. 
Law Reform Commission, Issues Paper: Regulatory Enforcement of Corporate Offences, 27 January 2016, LRC IP 
8-2016. 

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