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Daily Tax Report: International

EU Adopts Law to Protect Whistleblowers

Oct. 7, 2019, 4:14 PM

The EU Council of Ministers on Oct. 7 adopted new rules to ensure countries in the bloc change domestic laws to protect insiders who expose institutional wrongdoing.

Member states in the European Union now have two years to transpose the whistleblower directive, which applies to both the public and private sectors, into their national laws. Several jurisdictions among the 28 countries offer whistleblowers little or no legal or physical protection.

  • Transparency International praised the directive’s “strong common minimum standards” but criticized the exclusion of matters relating to defense, security, and classified information.
  • A report by the anti-corruption organization said the EU could improve the legislation by extending protections to individuals suspected, even mistakenly, of being whistleblowers, and introducing penalties for noncompliant entities.
  • Luxembourg’s prosecution of “LuxLeaks” whistleblowers Antoine Deltour and Raphaël Halet, who released PwC documents exposing widespread corporate tax avoidance in 2014, threw the issue into focus at the EU level.
  • The European Commission estimated poor whistleblower protection costs EU countries between 5.8 and 9.6 billion euros ($6.4 billion-$10.6 billion) each year.

To contact the reporter on this story: Joe Stanley-Smith in London at jstanleysmith@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Penny Sukhraj at psukhraj@bloombergtax.com