Draft Press Statement

FOR RELEASE NOT BEFORE 18.00 ON WEDNESDAY, 20 OCTOBER 2004

PRESS STATEMENT

“Introduction of the Compliance Statement Obligations is unlikely before 1 July 2005” - Director of Corporate Enforcement

During the course of remarks this evening to the Association of Compliance Officers in Ireland, Mr Paul Appleby, the Director of Corporate Enforcement, outlined some of the primary issues which had been raised by those who had made submissions to his Office on the Consultation Paper and associated Draft Guidance on Directors’ Compliance Statements. This obligation which originates in the Companies (Auditing and Accounting) Act 2003 will require the directors of certain significant companies to prepare and publish statements of compliance with respect to company, tax and certain other legislation.

Mr Appleby indicated:

“I was pleased that some 36 bodies and individuals submitted comments in response to the consultation process. Many respondents clearly appreciated the ODCE consultation process and the quality of the Draft Guidance.

A primary concern which was raised in many submissions was the question of the commencement date of this obligation. The majority of those who expressed a view on this issue did not favour this obligation coming into effect with effect from 1 January 2005. Some suggested later dates within 2005, while others proposed 1 January 2006 or even later.

At present, I am examining the various comments which have been made in this area. My assessment is being undertaken with assistance from representatives of IBEC, the Institute of Directors, the Revenue Commissioners and the Consultative Committee of Accountancy Bodies – Ireland who all contributed to the production of the earlier Draft Guidance.

I plan within a relatively short period to forward this assessment to the Minister for Trade and Commerce together with all of the relevant submissions which dealt with the commencement issue. I will be making a specific recommendation to the Minister whose decision it will be to determine the form and timing of the operation of the compliance statements obligation. Given the further work which is required in finalising the necessary Guidance and the need expressed by business and professional interests for additional time to prepare for introduction of the Compliance Statement obligation, I am likely to recommend that this provision be brought into effect no earlier than 1 July 2005.

Suggestions for improvement of the Draft Guidance which emerged from the consultation process included:

-greater clarity on certain issues, including the companies affected by the obligation, how groups of companies will be treated and the timing of application of the obligation to newly qualifying companies;

-the inclusion within the Guidance of framework compliance statements indicating the form of statement that directors might be expected to prepare and publish;

-the availability of schedules of obligations for company law, tax law and other relevant legislation for certain defined business sectors which might be the subject of these compliance statements;

-better guidance on understanding the implications of certain key elements of the legislation, including terms like ‘relevant obligations’, ‘all reasonable endeavours’ and ‘a reasonable assurance of compliance in all material respects’;

-the reporting obligations of directors where non-compliance was detected and/or remedied.

My colleagues and I who are working on the Guidance will endeavour to respond as best we can to the comments that have been made. For instance in order to assist directors, I have already set about trying to develop a list of offences within the Companies Acts, and even if I have to indicate that this does not constitute a comprehensive statement of company law obligations, I am prepared to make this available in conjunction with the final Guidance.

Similarly, a number of financial service industry representatives commented on the need to eliminate any inconsistency in the interpretations to be adopted by my Office and the Irish Financial Services Regulatory Authority in respect of the distinct compliance statement obligations contained in the Companies (Auditing and Accounting) Act 2003 and in the Central Bank and Financial Services Authority of Ireland Act 2004. In response, I have invited a representative of IFSRA to participate with us in finalising the Guidance for publication, and they will join us at our next meeting.

While I believe that the final Guidance will be improved by the consultation process, I must make it clear that what my Office will produce will not be comprehensive in the sense of dealing with all situations which the directors of different business sectors will face in implementing this obligation. Even though directors may be in a position to obtain additional assistance from their professional advisers, it will still be up to directors at the end of the day to interpret the legislation and their obligations in the context of the circumstances of their own particular firm.

I hope that it will be possible to publish the final Guidance in a few weeks’ time, so as to allow directors a reasonable period of time to complete the process of preparing for the implementation of the compliance statement obligations during 2005.”

20 October 2005

ENDS/

EDITORS’ NOTE

A new legal requirement in Section 45 of the Companies (Auditing and Accounting) Act 2003 will shortly oblige the directors of certain companies to prepare and publish in their annual directors’ report –

a Compliance Policy Statement and

an Annual Compliance Statement

indicating the extent of their company’s compliance with company, tax and certain other legislation that may materially affect the company’s financial statements. The auditors of the affected companies will also be required to publish their opinion of the validity of the directors’ compliance statements.

In conjunction with other interested parties (the Consultative Committee of Accountancy Bodies – Ireland, IBEC, the Institute of Directors and the Revenue Commissioners), the Director of Corporate Enforcement published on 22 July 2004 a Consultation Paper and Draft Guidance on the Directors’ Compliance Statements in order to assist directors in meeting their new obligations. The deadline for comments on this Guidance was 30 September.

The Auditing Practices Board, in consultation with CCAB-I and the Office of the Director of Corporate Enforcement, has also published a draft Bulletin on compliance by Auditors with the new obligations. The deadline for comments on this Bulletin was 15 October.

The Minister for Trade and Commerce, Mr Michael Ahern, T.D., will decide when these new obligations will come into effect. The Minister will take into account the views of interested parties on the appropriate timetable in response to the views given to the Director on his Consultation Paper and Draft Guidance. The Director plans to relay these submissions and his assessment of them to the Minister and his Department for consideration shortly.

A copy of the ODCE’s Consultation Paper and Draft Guidance on Directors’ Compliance Statements is accessible from the Publications and Consultation Notices section of the ODCE website at

Press queries in relation to this Statement may be addressed to Paul Appleby at (01) 8585820 or Adrian Brennan at (01) 8585840.

Office of the Director of Corporate Enforcement

20 October 2004