Draft EU law seeks to bolster protections for whistleblowers

Antoine Deltour blew the whistle on tax avoidance schemes in Luxembourg.

Employees who blow the whistle on corporate malpractice would be given protected status, including legal aid and possible financial support, under a draft EU law due to be proposed by the European Commission next week.

The draft commission directive states that employers would be banned from dismissing or demoting whistleblowers and would face “dissuasive” penalties if they attempt to prevent employees from exposing misdemeanours, according to the Guardian.

It suggests that potential whistleblowers often do not feel safe enough to come forward about corporate misconduct, which allows these concerns to “[translate] into underreporting and therefore missed opportunities for preventing and detecting breaches of union law which can cause serious harm to the public interest.”

German Green MEP Sven Giegold, an advocate of introducing better safeguards for whistleblowers, told The Guardian that corporate misconduct such as tax avoidance and the systematic cheating on emissions tests by VW, could have been exposed sooner if stronger legal protections had been in place.

However, he noted that the draft directive “still needs some improvement in order to make sure that whistleblowers in the public [interest] are truly protected in all circumstances”.

Under current EU law, whistleblowers are protected from certain forms of retaliation if they expose misconduct in a number of areas, such as audit and money laundering, trade secrets, market abuse, capital requirements and other instruments regulating financial services.

If passed, the EU directive would take effect after the UK leaves the EU as the process usually takes 18-24 months. However, Giegold said it might be implemented in the UK, despite Brexit, as it might form part of the core EU standards it would be required to adopt in order to secure a trade deal.

“As this refers to single market legislation I am confident that the UK has a strong interest to have regulatory convergence and Europe has [this interest],” he said.

The law will be proposed by the European Commission ahead of a court appearance by Antoine Deltour – a former PricewaterhouseCoopers employee who helped to expose widespread tax avoidance in Luxembourg – next month.

Deltour received a six-month suspended sentence for his role in the exposure of the tax avoidance schemes, but had his conviction overturned on appeal. The Court of Appeal in Luxembourg will next month consider his role in downloading internal training documents.

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