Battling business crime: the EU Whistleblowing Directive

Dentons’ Compliance Solutions provide assistance in setting up a whistleblowing system to ensure good corporate governance and to protect both companies and employees

The EU Directive on Whistleblowing will make it mandatory for businesses with 50 or more employees operating in Romania to include a whistleblower service in the management plan. The whistleblowers will be able to report company crimes in a variety of areas such as competition, corruption, asset and tax crime, GDPR, network security, public tenders, state aid and many others, while being protected by the Law.

Dentons’ Bucharest-based and international lawyers and professionals are able to provide companies with legal advice and insights into the EU and local legislation in order to design smart whistleblowing processes. The firm recently co-hosted the first event in Romania on the EU Directive in partnership with the Romanian National Institute of Internal Control (INCIR)  and Fredel Governance, featuring some of the leading experts in whistleblowing such as Brad Birkenfeld, largest whistleblower in the history of the world; Raul Mihu, Head of Dentons’ Competition, Data Privacy and Compliance in Romania; Martyn Birchall, Chairman of Fredel Governance; Christian Schefold, Partner, Dentons Berlin; Cosmin Serbanescu, President of INCIR.

The worskhop focused on identifying key opportunities and risks associated to the new directive:

• Whistleblowing is likely to appeal most to only a limited number of disgruntled employees

• Relatively few whistleblower reports actually lead to a formal investigation

• The tool can function only if employees are aware of its existence and, more generally, aware of applicable regulations and potential infringements thereof by their companies

• The interplay between existing public whistleblowing systems (such as the one implemented by the European Commission for competition law infringements) and upcoming private whistleblowing systems to be implemented by companies

• Dentons believes that comprehensive trainings and internal whistleblowing systems are key to companies managing the risks

• Major challenge for global corporations – the application of a general and centralized approach vs. compliance with national law requirements

• Reduce company operating costs by preventing and exposing economic or business crime

Breaches of the obligation to set-up an effective system may result in:

• heavy fines for the company

• depending on the applicable laws – personal liability and criminal sanctions, including imprisonment, for the company management

• damaging the goodwill and reputation of a company

Dentons provides an online comparative tool to analyze the legal requirements related to whistleblowing across more than 30 countries in North America, UK, Europe, Latin America, Australia, Asia Pacific, Africa and the Middle East. The tool is free of charge and available online at www.whistleblowerguidelines.com. The whistleblower tool was prepared by Dentons’ global Compliance group, which includes more than 200 compliance lawyers, representing multiple practice areas worldwide.

Martyn Birchall, Chairman of Fredel Governance, a company providing whistleblower systems and services: „Romania is moving from being a low-cost, lightly regulated economy in terms of governance to needing to become competitive in a higher value-added business environment. Hence businesses operating on the local market need to show greater regard for corporate governance if they are to attract investment, trade and retain personnel.”

Partner Raul Mihu, Head of Dentons’ Competition, Data Privacy and Compliance in Romania: “Compliance should not be regarded as a cost, but rather as an investment and at the same time an opportunity for companies to become more competitive and differentiate themselves in the market.”

Cosmin Serbanescu, President of the Romanian National Institute of Internal Control (INCIR): „The EU Whistleblowing Directive enforces certain legal requirements for both public and private organizations to protect whistleblowers who report non-compliance issues through dedicated and secured communication channels such as integrity hotlines from dismissal, demotion and all other forms of retaliation. Implementing a robust and efficient whistleblowing system helps organizations not only comply with the EU’s Directive provisions but also to better understand and manage the compliance specific risks and strengthen the internal control environment.”

About Dentons

Dentons is the world’s largest law firm, connecting talent to the world’s challenges and opportunities in more than 75 countries. Dentons‘ legal and business solutions benefit from deep roots in our communities and award-winning advancements in client service, including Nextlaw, Dentons’ innovation and strategic advisory services. Dentons‘ polycentric and purpose-driven approach, commitment to inclusion and diversity, and world-class talent challenge the status quo to advance client and community interests in the New Dynamic.

Dentons’ legal team in Bucharest, under the leadership of Managing Partner Perry Zizzi, provides its clients with a results-oriented approach and efficient legal solutions. In over two decades of activity in Romania, the Firm has advised on cornerstone deals for domestic and international clients across multiple sectors. Key practice areas include Banking and Finance, Real Estate, Corporate, Employment, Energy and Infrastructure, Competition and Litigation.

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