Ireland: Corporate Bulletin, May 2016

Corporate Bulletin

Welcome to the Dillon Eustace corporate bulletin. We have set out some of the recent legal developments which we feel may be of interest to you and/or your business.

In this edition we discuss the effect of the revised Payment Services Directive which came into force in January 2016.

We also review recent developments in the area of Anti-Money Laundering and provide an update on Data Protection issues and developments.

We assess the Irish Stock Exchange's Review of 2015. We also discuss the recent ruling of the High Court which limits the statutory powers of the Irish Competition Authority Regulator.

We review the European Commission's Recommendation on reinforcing their tax treaties against abuse by aggressive tax planners. Finally, we discuss further upcoming changes in the area of company law and the Companies Act 2014.

Companies Act 2014 – Transition Period for Conversion to a Designated Activity Company Expires on 31 August 2016

All companies which are required, or wish, to convert to a designated activity company under the Companies Act 2014 (the "Act") need to do so before 31 August 2016.

Under the Act, all private limited companies need to make a decision whether to convert to:

  1. a company limited by shares (LTD); or
  2. a designated activity company (DAC); or
  3. another type of company (public limited company, Societas Europaea).

The Act provides for an 18 month transition period, commencing on the commencement date (1 June 2015). The Act goes on to provide that an existing private company may re-register as a designated activity company by passing an ordinary resolution, not later than 3 months before the expiry of the transition period, resolving that the company be so registered. Therefore companies which intend to convert to a DAC must do so before 31 August 2016.

Thereafter, should the company fail to convert, it will be deemed to be a LTD and may only reregister following the re-registration procedure under Part 20 of the Act or following a court order under section 57.

Is the Company engaged in lending money or extending credit?

If a company believes the LTD option is the more appropriate form of company for it, it should first consider whether it is in the business of lending money or extending credit? As you may be aware, certain companies such as insurance undertakings and credit institutions are required to convert to a DAC under the Act. The requirement for credit institutions to convert to a DAC was aimed at banks and lending institutions.

However the definition of credit institution under the Act is very broad and, as a result, appears to catch any private limited company which lends money in the ordinary course of business ("a company or undertaking engaged in the business of accepting deposits or other repayable funds or granting credit for its own account").

This is acknowledged as an error in drafting and is expected to be rectified in an upcoming Bill. However we have no way of knowing when this will be.

In the meantime, while a company may not be a credit institution from the perspective of the Central Bank, it could be classed as a credit institution for the purposes of the current definition in the Act where it is engaged in the activity of lending.

This would mean that it would be obliged to convert to a DAC and should do so before 31 August 2016. There are different views as to whether this catches all lending of any nature (no matter how ad hoc) by a company or whether it should be interpreted less strictly as catching more systematic type lending activity (such as by a treasury company within a group). If you think this may be an issue, we can discuss further.

Payment Services Directive

(i) Revised Payment Services Directive (the "PSD2") comes into effect and the European Banking Authority (the "EBA") Discussion Paper on future Draft Regulatory Technical Standards (the "RTS") on strong customer authentication and secure communication under revised PSD2

Following its publication in the Official Journal of the EU on 23 December 2015, the PSD2 entered into force on 12 January 2016. Member States have 2 years from that date to transpose it into national law.

  • Introduction of strict security requirements for the initiation and processing of electronic payments and the protection of consumers' financial data;
  • Opening the EU payment market for companies offering consumer or business oriented payment services based on the access to information about the payment account – the so called "payment initiation services providers" and "account information services providers";
  • Enhancing consumers' rights in numerous areas, including reducing the liability for nonauthorised payments, introducing an unconditional ("no questions asked") refund right for direct debits in euro; and
  • Prohibition of surcharging (additional charges for the right to pay e.g. with a card) whether the payment instrument is used in shops or online.

The EBA is mandated to provide RTS under the PSD2 by January 2017. The RTS will specify the requirements of strong customer authentication, exemptions from the application of these requirements, requirements to protect the user's security credentials, requirements for common and secure open standards of communication and security measures between the various types of providers in the payment sector.

To assist in drafting the RTS, the EBA published a discussion paper in December 2015 with responses to have been submitted up until 8 February 2016. No update on the RTS has been provided as of yet by the EBA since this deadline passed.

Fourth Anti-Money Laundering Directive

(ii) Department of Finance and the Department of Justice and Equality publish consultation paper on Member States discretions in transposing Fourth Anti-Money Laundering ("AML") Directive

On 29 January 2016, the Department of Finance and the Department of Justice and Equality (the "Departments") issued a consultation paper on the transposition of the Fourth AML Directive into Irish law and the discretions available to Ireland (the "Consultation Paper").

Some of the areas where the Consultation Paper requested feedback included:

  • Beneficial ownership registers (corporate) – The Fourth AML Directive requires Member States to ensure that corporate entities obtain and hold accurate information on their beneficial ownership which can be made available when due diligence is being undertaken on them. The information on beneficial ownership is required to be held in a central register and Member States are obliged to ensure that the information on beneficial ownership is accurate, adequate and current. Member States must also ensure that the beneficial ownership information register is readily accessible to competent authorities without restrictions, obliged entities within the due diligence framework and any person or organisation who can demonstrate a legitimate interest. The Consultation Paper asked for feedback on the level of access to the register for corporate and other entities and further asked whether access should be extended to the public at large. It also asked for views as to whether beneficial owners should be required to apply, on a case-by-case basis, to restrict access to certain information and, if so, what circumstances and information could be restricted.
  • Beneficial ownership register trusts – Under the Fourth AML Directive Member States are required to hold trust-related information in a central register where the trust generates tax consequences, with the Revenue Commissioners indicating its openness to being the body to maintain such a register. The Consultation Paper suggested that evidence of the generation of a tax consequence could be the receipt by the trustees of income or capital gains, disposal of income or capital assets by the trust and/or the movement of funds by the trust. The Consultation Paper asked for feedback on the registration requirements for trusts and on the list of tax consequences, as well as any other views on how this article may be transposed.

The Consultation Paper also asked for views on other areas of the Fourth AML Directive such as the ability to exempt certain gambling services from AML/CFT laws, the discretion to allow certain obliged entities not apply customer due diligence measures, the discretions available in relation to due diligence carried out in high risk jurisdictions by wholly owned subsidiaries of entities established in the EU and the appointment of a central contact point for e-money issuers.

The Consultation Paper can be accessed at the following link: National Discretions Consultation National Discretions Consultation Paper.pdf

The deadline for responses to the Consultation Paper was 4 March 2016. The responses are currently being considered by the Departments.

(iii) Commission establishes Action Plan for strengthening the fight against terrorist Financing

On 2 February 2016 the Commission published its action plan aiming to strengthen the fight against terrorist financing (the "Action Plan"). The Action Plan seeks to prevent the movement of terrorism-derived funding and aims to target the sources of terrorist funding. It also comments on the international dimension to terrorism and the need for the EU to be an active player on the international scene in the fight against terrorist financing to include closer cooperation with third countries in identifying terrorist entities and being at the forefront of international forums on the issue of terrorist financing.

In order to better prevent the movement of funds and identify terrorist financing, the Action Plan proposes certain amendments to the Fourth AML Directive, as follows:

  • Concrete effect to the EU "list of high risk third countries" – Under the Fourth AML Directive, where a country is listed as having strategic deficiencies in the area of AML or CTF, EU obliged entities will have to apply enhanced due diligence measures, however the exact nature of these measures is not currently specified. The Action Plan recommends clarifying the obligation in respect of applying the enhanced due diligence measures.
  • Virtual currency exchange platforms – Virtual currencies are not currently regulated at EU level and lack the reporting mechanism currently found in the mainstream banking system to report suspicious activity. On this basis, the Action Plan seeks to bring the anonymous currency exchanges under the control of competent authorities by extending the scope of the Fourth AML Directive to include virtual currency exchange platforms.
  • Prepaid instruments –The Commission is currently considering how to address the concerns raised by the anonymity of such general purpose cards without eliminating the benefits that they offer in their normal day-to-day use. The Commission stated that it will present further changes to the Fourth AML Directive, which could focus in particular on reducing existing exemptions such as thresholds below which identification is not required, notably for cards used face-to-face, and requiring customer identification and verification at the time of online activation of the prepaid cards. The Commission is currently exploring the detailed design of such measures, taking into account their impact and the need for proportionality.
  • Centralised bank and payment account registers and central data retrieval systems – The Commission proposes amending the Fourth AML Directive to ensure that each Member State must establish centralised bank and payment accounts registers or electronic data retrieval systems as, currently, Member States are not bound by EU legislation to maintain such registers or retrieval systems.

The Commission has also said in the Action Plan that it will adopt an EU blacklist to identify high risk third countries with strategic deficiencies in their AML/CTF by the second quarter of 2016 at the latest. It also said that it will publish a report on a supranational assessment of ML and TF risks and recommendations to Member States on measures suitable to address those risks by the second quarter of 2017.

The full Action Plan can be found by accessing the following link:

To read this bulletin in full, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions