Director restrictions
The operators of various Irish franchises, including several Starbucks cafes, TGI Fridays, Mao and Hard Rock Cafe, were recently restricted from acting as company directors for five years. The judge’s decision in the relevant case – Downtul Limited (in liquidation) – is now available and includes an extensive examination of the grounds for restricting a director under section 819 of the Companies Act 2014.
The three cumulative statutory criteria set out in section 819 are that a person will not be able to avoid restriction unless the court is satisfied that:
They acted honestly and responsibly in relation to the conduct of the affairs of the company (before or after insolvency), and that includes there not being any irresponsible conduct.
- They cooperated with the liquidator as much as could reasonably be expected when asked to.
- There is no other reason why it would not be just and equitable to impose restriction.
- These three principles are to be applied objectively and without hindsight.
A higher standard of care is effectively imposed on a qualified professional, as the standard of care, skill and diligence required of a director depends on that individual’s particular experience and qualifications. The fact that a restriction would have serious consequences for a director is not relevant.
Careless use of innovative compliance products can increase money laundering risks
Operational resilience
The Central Bank of Ireland has updated its cross-industry guidance on operational resilience to align with the Digital Operational Resilience Regulation and Directive (DORA). The document requires financial institutions to address existing vulnerabilities and weaknesses and mitigate risks in the financial system to ensure they can better withstand future shocks and crises and to limit the impact of such events.
AML/CTF risks
The Europe Banking Authority has published its 2025 opinion on money laundering and terrorist financing risks affecting the EU’s financial sector. The opinion concludes that careless use of innovative compliance products can lead to such risks, and that some banks ‘prioritise growth over compliance’. Some of the other findings include:
- Over half of serious compliance failures involved the improper use of regtech tools.
- Many crypto-asset service providers lack effective anti-money laundering and counter-terrorism financing (AML/CTF) systems, and some attempt to bypass regulatory oversight.
- Criminals are increasingly using AI to automate laundering schemes, forge documents and evade detection.
- The complexity of EU sanctions regimes poses compliance challenges.
The Central Bank of Ireland is adapting its supervisory approach to money laundering and terrorism financing risk. This initially involves replacing the current AML/CTF risk evaluation questionnaire with sector-specific questionnaires to capture more detailed and pertinent risk data.
Read more about how the EU is planning to support member states in cracking down on financial crime in this AB article.
Russian sanctions
The EU has adopted an 18th package of measures aimed at ‘cutting Russia’s energy revenues, hitting Russia’s banking sector, further weakening its military industrial complex, strengthening anti circumvention measures, and holding Russia accountable for its crimes against Ukrainian children and cultural heritage’.
The EU sanctions helpdesk has also provided guidance on the meaning of ‘ownership’ and ‘control’ in the context of the sanctions.
Sustainability-linked debt
The growth in sustainability-linked financing instruments (whose pricing is linked to the attainment of predefined environmental or social targets) has been addressed by the Irish Auditing and Accounting Supervisory Authority (IAASA). It has issued a report on sustainability-linked debt and related disclosures from a sample of issuers’ annual reports.
Practices are being targeted by fraudulent trademark emails
Disclosures
A recurring theme of the IAASA review of audits of public interest entities (PIEs) is weaknesses in financial statement disclosures. To address this, IAASA has released a publication on the key auditing requirements of PIE financial statement disclosures.
Scam emails
The Intellectual Property Office has warned that practices are being targeted by emails from fraudulent trademark agents claiming that individuals are attempting to trademark the practice’s name. The scam email then encourages the practice to make contact and engage the agent to remedy the issue.
