EU Whistleblower Protection – Compliance Guide: Part 1 – Introduction

Whistleblowing is one of the largest forms of detection of occupational, fraud, bribery and corruption and one of the best methods for the prevention of commercial crime. Yet, there are still individuals who, due to fear of retaliation, do not report any wrongdoings as there is a perception that these whistleblowers are not afforded enough protection. Based on a recent study conducted by Transparency International, 56% of Maltese residents believe corruption cannot be reported without fear of retaliation.   

With the implementation of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23rd October 2019 on the protection of persons who report breaches of Union law (also known as the "Whistleblower Protection Directive"), the EU is sending a strong message that those employees seeking protection or retribution from exposing and disclosing wrongdoing, will receive it.

The Directive, which was entered into force on 16th December 2019 with an implementation deadline of 17th December 2021, sets out the requirements for EU members state regulations in relation to the protection of whistleblowers and disclosures.

The Directive deals with the following:

  • Conditions for protection of reporting persons (whistleblowers);
  • Internal, external and public disclosure reporting procedures;
  • Establishment of competent authorities to receive, give feedback and follow up on reports; and
  • Penalties imposed on individuals who either hinder or retaliate against the whistleblowers.

This Directive will be appliable to all legal entities in the public sector (including any entity owned or controlled by such entities), municipalities of more than 10,000 inhabitants and legal entities in the private sector with more than 50 workers.

Even though the Maltese Government currently has a Whistleblowers Act in place (Protection of the Whistleblower Act (CAP. 527) of 2013), it is in the process of revising the applicable legislation to transpose all the new regulations as set out in the Directive. Currently, in Malta, the Whistleblowers Act applies to the following class of entities:

  1. Each ministry of the Government of Malta;
  2. Any organisation within the private sector which, according to its last annual or consolidated accounts, meets at least two of the following criteria:
    • an average number of employees, during the financial year, of more than 250;
    • a total balance sheet exceeding forty-three million euro (€43,000,000); and
    • an annual turnover exceeding fifty million euro (€50,000,000).
  3. Any voluntary organisation which annually raises more than five hundred thousand euro (€500,000) from public collections and other donations.

In observance of World Whistleblowers Day on 23rd June every year, it is our aim to raise public awareness about the important role of whistleblowers in combating corruption, fraud and commercial crime. Over the coming weeks, we will share a series of posts summarising what further obligations the Directive has imposed on the aforementioned entities, compare this with the current act in place and how we at RSM can assist our clients in complying with this new Directive.

For more insights, support and additional information on the application of the Whistleblower Protection Directive and whether you will be impacted by the implementation thereof, reach out to us by contacting [email protected] or [email protected].