Goal 5:E NSUR E T H AT O UR BUSINE SS R E GULATION F ACILITATE S

Goal 5:E NSUR E T H AT O UR BUSINE SS R E GULATION F ACILITATE S BUSINE SS INV E ST ME NT AND D E V ELO PME NT , CO MP ETITIO N IN T H E MAR KE T P L ACE, H IGH ST ANDARDS O F CO NSUMER P R O TECTION AND CO R P O RATE GO V E RNANCE AND P R OVIDE S IR EL AND WIT H A CO MP E T ITIVE AD VANT AGE IN T H E GL O BAL MARKE T

C O MP A NY LA W, C O MP ETITIO N A ND C O NS UMER P RO TEC TIO N During 2020, the Department built on work previously done on the successful development of a stable, transparent and modernised company law framework in Ireland and continued to develop and shape responses to new and emerging challenges in company law, competition and consumer policy at EU and at national level in particular on Brexit and COVID-19. This work was done in collaboration with stakeholders, the Department’s Offices and Agencies and other Government Departments to achieve the best outcomes in line with our high-level goal.

C O VID- 19 RES P O NS E During 2020 the Department responded to the unprecedent challenge of the COVID-19 pandemic with the aim of mitigating the short and medium term impacts on companies.

This included rapid agreement by Member States on the amendment to the Regulation on European Companies (EC 2157/2001) extending the time for holding general meetings due to the impact of the COVID-19 pandemic.

C O MP A NIES (MIS C ELLA NEO US P RO VIS IONS) (C O VID- 19) A C T 2020 The Act, which was enacted on 1 August 2020, makes temporary amendments to the Companies Act 2014 and the Industrial and Provident Societies Act 1893 to address issues arising as a result of COVID-19.

It ensures that 240,000 companies and 950 industrial and provident societies in Ireland can hold their Annual General Meetings and general meetings by electronic means. It also makes provision in respect of business solvency by increasing the period of examinership to 150 days and increasing the threshold at which a company is deemed unable to pay its debts to €50,000.

The amendments applied for an interim period, initially up to 31 December 2020. The interim period was extended to 9 June 2021 following Government approval on 15 December and was provided for by two Government Orders:

S.I. No. 672 of 2020 Companies Act 2014 (Section 12A (1)) (COVID-19) Order 2020

S.I. No. 671 of 2020 Industrial and Provident Societies Act 1893 (Section 14A (1))

(COVID-19) Order 2020

P RO P O S ED LEGIS LA TIO N O N TH E RES A LE O F TIC KETS The General Scheme of the Sale of Tickets (Cultural, Entertainment, Recreational and Sporting Events) Bill 2020 was referred on 5 February 2020 to the European Commission and other Member States in accordance with the requirements of Directive (EU) 2015/1535 on the procedure for the provision of information in the field of technical regulations and of rules on information society services. No issue of compatibility with EU law or the Internal Market was raised by the European Commission or Member States in the course of the scrutiny of the Scheme.

The General Scheme of the Bill was approved by the Government for drafting on 29 September 2020. The Bill’s main provision is a prohibition on the sale or advertising for sale of tickets or ticket packages above their original sale price for events in designated venues with a capacity of 1,000 or more. It includes also a ban on the unauthorised resale of tickets for matches and events taking place during the EURO 2020 football championship which is now to be held in 2021.

Pre-legislative scrutiny of the Bill by the Joint Committee on Enterprise, Trade and Employment took place on 9 December 2020 and publication of the Bill and its passage through the Houses of the Oireachtas is a priority in 2021.

GENERA L S C H EME O F TH E C O MP A NIES (C O RP O RATE ENFO RC EMENT A UTH O RITY ) BILL The General Scheme of the Companies (Corporate Enforcement Authority) Bill establishes the Office of the Director of Corporate Enforcement (ODCE) as an agency, in the form of a Commission, to be called the Corporate Enforcement Authority. Changing the structure of the ODCE from an office in the Department to a statutory agency will provide it with greater autonomy and flexibility to adapt to the challenges it faces in its investigation and prosecution of increasingly complex breaches of company law.

Pre-legislative scrutiny of the Bill did not conclude before the dissolution of the 32nd Dáil, it began again under the new Joint Committee on Enterprise, Trade and Employment in December 2020. Finalising and publication of the Bill awaits the conclusion of pre-legislative scrutiny which is anticipated in early 2021.

REVIEW O F TH E INDUS TRIA L A ND P RO VIDENT S O C IETIES A C TS Following a root and branch review of the existing, largely Victorian era legislative framework, the Department continued work on a General Scheme of a Co-operative Societies Bill. This is a very comprehensive and lengthy piece of legislation and is intended to consolidate existing provisions and provide a modernised and effective legislative framework suitable for the diverse range of organisations using the co-operative model in Ireland.

C O MP A NY LA W REVIEW GRO UP The Company Law Review Group (CLRG) is an expert advisory group charged with advising the Minister on company law matters. It operates from a two year work programme, determined by the Minister and the secretariat is provided by the Department.

The CLRG was heavily engaged in the Department’s response to the impact of COVID-19 on business from a company law perspective and submitted two reports in this regard during 2020. Its June 2020 report on ‘Measures to address company law issues arising by reason of the COVID-19 pandemic’ dealt with emergency legislative amendments required to ensure the normal operation of the Companies Act 2014 during the pandemic. The recommendations contained in the report informed the Companies (Miscellaneous Provisions) (COVID-19) Act 2020 as set out above. The CLRG also considered in an accelerated timeframe, medium-term stabilisation measures to mitigate the economic impact of COVID-19. In its October 2020 report, it made recommendations for a rescue process suitable for small companies. Following receipt of the report, the Department considered the recommendations and began the necessary work to develop the proposal with a view to drafting a General Scheme in early 2021.

There is a strong focus on insolvency in the CLRG Work Programme 2020-2022. The Corporate Insolvency Committee of the Group commenced its consideration of the issue of creditors rights under the Companies Act 2014, in the context of liquidations as well as issues in relation to transactional avoidance.

The CLRG is also mandated, as part of its work programme, to examine and make recommendations on whether it is necessary or desirable to amend company law in light of Brexit. In this regard, the Group’s June 2020 ‘Report on certain company law issues arising under the EU Central Securities Depositories Regulation 909/2014 (CSDR)’ informed Part 4 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 (further information below).

In December 2020, the CLRG presented its ‘Report on potential impact of artificial intelligence on company law in the context of corporate governance’.

MIGRA TIO N O F S EC URITIES Settlement of securities trades - whereby securities are transferred by the seller to the buyer and funds are transferred from the buyer to the seller - are typically made in a securities settlement system operated by a Central Securities Depository (CSD).

Part 4 of the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 which was enacted on 10 December 2020 provides miscellaneous amendments to the Companies Act 2014 to facilitate the operation of a substitute securities settlement system, compatible with the law of the European Union, after the transition period. Part 4 commenced on 15 March 2021, the date identified by the Irish Stock Exchange as the migration date.

To ensure that there would be no disruption in CSD services for EU operators using a UK securities settlement system, the European Commission granted equivalence to UK CSDs until the end of June 2021. The Companies Act 1990 (Uncertificated Securities) (Amendment) Regulations 2020 were thus amended to provide continued recognition for UK CSDs approved by a competent authority in the UK for the equivalence period concerned.

EU DIRECTIVES/ REG ULA TIONS ➢2 0 1 7 Directive as regards the encouragem ent of long -term s hareholder engagem ent The European Union (Shareholders’ Rights) Regulations 2020 (S.I. 81 of 2020) came into operation on 30 March 2020 giving effect to the provisions of Directive EU 2017/828 as regards the encouragement of long-term shareholder engagement. The Regulations inserted several Chapters into Part 17 of the Companies Act 2014 dealing with the subject matter of the Directive. Certain provisions related to transparency requirements for institutional investors, asset managers, and proxy advisors.

➢2 0 1 9 Directive to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market Directive (EU) 2019/1of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market was published on 14 January 2019. The Directive must be transposed into Irish law by 4 February 2021 and it is intended to transpose the ECN+ Directive by primary legislation.

The Bill will deliver on the Programme for Government commitment to enable the Competition and Consumer Protection Commission and ComReg to make greater use of administrative penalties to sanction rogue operators and is an action in the Action Plan for Insurance Reform. In addition, the Bill will further strengthen the powers of the State in tackling white collar crime, economic crime and corruption.

The central aim of the ECN+ Directive is to ensure that National Competition Authorities (NCAs) have guarantees of independence, sufficient resources and appropriate powers of enforcement, including the ability to issue fines, for breaches of Articles 101 and 102 of the Treaty on the Functioning of the European Union. Alongside the application of Articles 101 and 102, the Directive also covers the parallel application of national competition law to the same case and the application of national competition law on a stand-alone basis. The Directive sets rules on mutual assistance to ensure close cooperation within the European Competition Network (ECN).

The Directive has the following specific objectives:

1. ensuring NCAs have effective investigation and decision-making tools;

2. ensuring that NCAs are able to impose effective deterrent fines;

3. ensuring that NCAs have a well-designed leniency programme in place which facilitates; applying for leniency in multiple jurisdictions; and 4. ensuring that NCAs have sufficient resources and can enforce EU competition rules independently.

In March 2020, the Department convened a Project Group comprising of the NCAs7 and other relevant parties8 to draft a General Scheme for the Heads of a Bill to transpose the ECN+ Directive. The Heads of Bill also included additional powers for the NCAs, addressing a number of competition issues such as Bid Rigging and Gun Jumping. The draft General Scheme also benefited from extensive legal advice from the Attorney General’s Office on those elements that would have possible constitutional implications. The General Scheme will become the Competition (Amendment) Bill 2021.

A Memo for Government seeking approval for the priority drafting of the Competition (Amendment) Bill 2021 was subsequently approved on 22 December. The Bill has been included as a priority for both Publication and Enactment in the first half of 2021.

Regulation laying down rules and procedures for the market surveillance and compliance of products Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market surveillance and compliance of products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 205/2011 was published on 25 June 2019.

The Regulation aims to strengthen enforcement powers of market surveillance authorities, particularly on products sold online and to strengthen controls at external borders. The Regulation also aims to cover new supply chains and address online sales as well as improving compliance with EU law. Some of the provisions in the Regulation will apply from 1 January 2021, while the rest will apply from 16 July 2021.

Directive on the use of digital tools and processes in Company Law Directive (EU) 2019/1151 amending Directive (EU) 2017/1132 on digital tools was published in the Official Journal on 11 July 2019 and entered into force on 31 July 2019, with a transposition date of 1 August 2021. The Directive is part of the EU Company Law Package: making the best of digital solutions and providing efficient rules for cross-border operations. The objective of the Directive is to apply digital solutions to allow online access to business registers, for companies registering and providing information, as well as access to such information for third parties. EU Company Law Expert Group meetings on transposition and an Implementing Act continued throughout 2020. The Directive must be transposed by 1 August 2021.

Directive on preventive restructuring frameworks, insolvency and discharge of debt The Directive (EU) 2019/1023 of the European Parliament and Council, which was adopted in June 2019, seeks to harmonise aspects of national insolvency laws both for companies and for individuals. It is focused on specific areas of insolvency law ‘early restructuring’ opportunities (for businesses in financial difficulties which may not, or not yet, be insolvent)

7The Competition and Consumer Protection Commission and ComReg, the Courts Service and the Director of Public Prosecutions

8 Department of Justice and Department of Communications, Climate Action and the Environment

and ensuring a ‘second chance’ for ‘honest entrepreneurs’ who become insolvent without any fraud or malpractice.

The Department of Justice, which has responsibility for transposing elements of the Directive which relate to personal insolvency, and this Department continued during 2020 to engage in preparing for the transposition of the Directive. However, towards the end of 2020 it became the shared view of both Departments that the 17 July 2021 deadline could not be achieved given the disruption and additional legislative requirements arising as a result of COVID -19. The Commission was notified on 23 December 2020 of the State’s intention to avail of the one-year extension as provided for under Article 34 paragraph 2. The Directive must now be transposed by 17 July 2022.

Directive on cros s -border convers ions , m ergers and divis ions A Directive (2121/2019) amending Directive (EU) 2017/1132 on cross-border conversions, mergers and divisions was published in November 2019 and aims to simplify cross border rules and enhance the EU Single Market while providing for appropriate safeguards that discourage abuses and protect the legitimate interests of workers and other, minority shareholders and creditors. Transposition is due within a three-year timeframe by November 2022.

Enabling the enforcem ent of ecodes ign regulations The EU Ecodesign Directive is designed to improve the energy efficiency of energy-related products on the market by setting higher energy efficiency standards. The aim is to encourage consumers to be more responsible about their energy use. In turn, less energy efficient products are forced off the market. More product groups are being added under the Directive.

The enforcement of (European) Ecodesign Regulations was enabled in S.I. No 625 of 2020. The S.I. replaces the Schedule contained in S.I. 454/2013 with an updated list of products and the associated (European) Regulations These include the following:

Servers and Data Storage Products Regulation (EU) No 2019/424;

Electric Motors Regulation (EU) No 2019/1781;

External Power Supplies Regulation (EU) No 2019/1782;

Small, Medium and Large Power Transformers Regulation (EU) No 2019/1783;

Welding Equipment Regulation (EU) No 2019/1784;

Light Sources Regulation (EU) No 2019/2020;

Electronic Displays Regulation (EU) No 2019/2021;

Household Dishwashers Regulation (EU) No 2019/2022;

Household Washing Machines Regulation (EU) No 2019/2023;

Refrigerators with Direct Sale Function Regulation (EU) No 2019/2024.

➢2 0 2 0 Directive to Empower Qualified Entities to take Representative Actions on Behalf of a Group of Consumers to Provide for Redress in Cases of Mass Harm Directive 2020/1828 was published in the Official Journal on 4 December 2020 and proposes a modernised system of representative actions, building on the existing Injunctions Directive (Directive2009/22/EC).

The agreed Directive proposes a modernised system of representative actions by:

expanding the scope of the old Directive to cover other horizontal and sector-specific EU instruments relevant for the protection of collective interests of consumers in different economic sectors such as financial services, energy, telecommunications, health and the environment;

allows non-profit making qualified entities such as consumer organisations or independent public bodies, which have been designated in advance by Member States, to take either domestic or cross border representative actions to defend the collective interests of consumer in cases of mass harm;

requires Member States to ensure ‘due expediency’ of procedures and to avoid procedural costs becoming a financial obstacle to bringing representative actions;

requires that Member States shall lay down the penalties applicable to non-compliance with decisions issued within the representative action, that they shall take all necessary measures to ensure that they are implemented and shall ensure that penalties may take the form of fines; and

enables qualified entities to bring representative actions seeking different types of measures as appropriate, depending on the circumstances of the case i.e. interim or definitive measures to stop and prohibit a trader’s practice or to eliminate the continuing effects of the infringement. The latter could include redress orders establishing the trader’s liability towards the consumers harmed by the infringement.

The Department is considering these issues and working to ensure this Directive is transposed into Irish law by December 2022, as required.

C O NS TRUC TIO N C O NTRA CTS A C T, 2013 – REGULA TIO N O F P A Y MENTS UNDER C O NS TRUC TION C O NTRAC TS A ND S TA TUTO RY ENTITLEMENT TO A DJUDIC A TIO N During 2020 there were 54 applications made to the Chairperson of the Construction Contracts Adjudication Panel, for the appointment of an Adjudicator under section 6(4) of the Construction Contracts Act, 2013.

The Chair of the Construction Contracts Adjudication Panel, Dr. Nael Bunni, submitted the fourth Annual Report on the implementation of the Construction Contracts Act, 2013 to Minister English in August 2020 and this report is available on the Department’s website.

INS URA NC E ➢ACTION PLAN FOR INSURANCE REFORM The Programme for Government sets out a range of commitments to reform the insurance sector. As the issue of insurance concerns a number of Departments a Sub-group of the Cabinet Committee on Economic Recovery and Investment chaired by the Tánaiste was established by Government in September 2020. The Sub-group is meeting on a regular basis to oversee and implement reform and consider the progress that each Minister is making in implementing the specific actions for which they have responsibility.

Arising from the work of the Sub-group, on 8 December 2020, Government published the first Action Plan for Insurance Reform to make Ireland’s insurance sector more competitive and consumer-friendly, assisting enterprise and job creation. The Plan sets out 66 actions across Government to bring down the costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden on business, community and voluntary organisations.

Actions will be undertaken and delivered by Ministers in this Department and the Departments of Finance and Justice over the next 18 months. The Sub-Group will meet regularly, engage with stakeholders and publish progress of the actions every six months.

➢OFFICE TO PROMOTE COMPETITION IN THE INSURANCE MARKET Following work undertaken by the Department in collaboration with the Department of Finance, ‘The Office to Promote Competition in the Insurance Market’ was established in December 2020 under the responsibility of the Minister of State for Financial Services, Credit Unions and Insurance, Seán Fleming T.D.

This new Office comprises officials from the Department of Finance assisted by officials from this Department, with regular input to be provided from other relevant Departments, Agencies and stakeholders. The Office has been established to advance Government’s work on insurance reform so as to encourage greater competition in the Irish insurance market and follows a commitment contained in the Programme for Government. The new Office will provide a coordinated Government policy approach to promote competition in the insurance sector.

➢PERSONAL INJURIES ASSESSMENT BOARD Since its establishment in 2004 the Personal Injuries Assessment Board (PIAB) has delivered major benefits by providing a low-cost, quick and fair option in injury compensation. The Central Bank’s National Claims Information Database 2nd Motor Report (November 2020) shows that the legal costs involved in going to litigation on claims for up to €100,000 are more than 15 times greater than through settling claims through PIAB. The report also shows significant differences in the time taken to resolve claims where they cannot be agreed directly between claimants and respondents. For claims settled through PIAB, the average time from date of accident to award was 2.9 years, whereas if settled via ligation it was 4.7 years.

The Programme for Government commits to enhancing and reforming the role of PIAB, with the overarching aim to have more cases resolved through the PIAB system. During 2020,

work has progressed between the Department and PIAB to examine options to enhance and reform the agency. A public consultation on the enhancement of PIAB took place in March 2021 with the enhanced role, including legislative proposals, to be put in place by June 2021.

➢COMPETITION AND CONSUMER PROTECTION COMMISSION STUDY ON THE

PUBLIC LIABILITY INSURANCE MARKET On 23 December 2020 the Competition and Consumer Protection Commission (CCPC) published its market study on the public liability insurance market. The study found that the functioning of the public liability insurance market is a significant concern. It found that the incidence of high premiums is spread across all sectors, while availability issues seem to be primarily impacting certain segments of the market (community and sports organisations in particular).

The CCPC study recommends the adoption of a strategic approach to the reform of the insurance market, improved data availability, measures to enhance competition, supports for business and consumers and reform of the PIAB. This study will be an important input to the work of the Cabinet Sub-group on Insurance Reform as it works to implement measures acrossGovernment to reform the insurance sector. The majority of the recommendations in the CCPC study are reflected in the Action Plan for Insurance Reform.

TRA DE LIC ENS ING A ND C O NTRO L The Department administers EU and national Export Controls to prevent the proliferation of weapons of mass destruction, to assist regional stability and to protect human rights. This regime is a key component of the business regulation framework for companies trading internationally from Ireland. Despite difficulties posed by the global pandemic, activity in this area continued to be strong during 2020 with achievements including:

873 export licences for controlled goods were issued, with a value of almost €3.8bn;

17 licenses were issued between March and May 2020 related to the implementation of EU Export Controls for Personal Protection Equipment, which was introduced to ensure adequacy of supply of such products in the EU during the initial stages of the COVID-19 pandemic;

300 licences for imports of certain steel and aluminium products from third countries were issued up to May 2020, when EU surveillance requirements in this area were discontinued;

Outreach and compliance visits to exporters were conducted when restrictions allowed. These were complemented with desk-based audits and virtual meetings; and

25 Statutory Instruments were enacted to give full legal effect to EU sanctions.

MEDIC A L DEVIC ES C ERTIFIC A TIO N In early 2020, the Medical Devices Division at NSAI were approved for designation to the new EU Medical Device Directive. After two and a half years working towards this designation, NSAI became the 11th notified body in the world to be designated to the new regulation. The achievement represents a significant endorsement and global recognition for the organisation as the only Irish notified body in the medical technology space.

NA TIO NA L METRO LO GY Early 2020 saw the National Metrology Laboratory (NML) being awarded the Calibration/ Testing Laboratory of the Year Award at the Irish Laboratory Awards, recognising the importance of NML to the sector.

During 2020, NML remained operational and providing critical and essential measurement services to Irish industry throughout the COVID-19 pandemic restrictions. Demand for NML’s calibration services remained strong during the year with the laboratory issuing over 4,600 calibration certificates for the year.

While the ability to provide training courses in-house was greatly curtailed, NML did deliver 12 courses to 21 companies, with six delivered on-line through recreating a virtual laboratory environment. NML also produced three on-line presentations relating to metrology issues important to industry.

LEGA L METRO LO GY COVID-19 restrictions had a significant impact on the on-site inspection activities carried out by NSAI legal metrology inspectors, particularly during periods of Level 5 restrictions. However, inspectors visited 2,504 traders (59% of 2019) and inspected 13,599 (92% of 2019) instruments during the year. Six inspections campaigns were undertaken in the business sectors of Fisheries, Licenced Premises, Truck Mounted Oil Meters, Weighbridge, Truck Mounted Waste Weighers, Milk Metering Systems.

During the year the Legal Metrology Service secured a guilty verdict against a taxi service for operating two unverified taximeter and removing a security seal. In addition to a penalty and contribution to NSAI’s legal fees the probation Act was also applied.

Legal Metrology introduced an online Taxi Trader Information for taxi meter installers which delivers improved records management for installers, notifies the taximeter owner/operator of their legal obligations regarding taximeter verification, while also improving environmental sustainability. In addition, new security sealing arrangements for taximeters to replace the old tamper proof sticker with a wire and plastic locking mechanism.