Financial Crime World

Malta Cracks Down on Financial Crimes with Whistleblower Protection Act

Introducing the Protection of Whistleblowers Act (CAP. 527)

In a move aimed at combating financial crimes and promoting transparency in the financial sector, Malta has introduced the Protection of Whistleblowers Act (CAP. 527). This act provides a framework for protecting individuals who report improper practices within an organisation.

Definition of Whistleblowers

  • Under the Act, whistleblowers are defined as persons who disclose information regarding misconduct, dishonest or illegal activities in an organisation.
  • The law aims to protect these individuals from detrimental action that may be taken against them as a result of their whistleblowing.

The Malta Financial Services Authority (MFSA) Whistleblowing Reports Unit

  • The MFSA has set up a Whistleblowing Reports Unit to receive external disclosures from whistleblowers regarding matters related to the financial services sector.
  • The unit is responsible for handling such reports and providing feedback to the whistleblower within established timeframes.

Qualifying as a Protected Disclosure

  • To qualify as a protected disclosure, the whistleblower must have disclosed their identity.
  • They must reasonably believe that the information was substantially true at the time of disclosure.
  • They must believe that it tends to show an improper practice committed by the employer or employee.
  • The disclosure must not be protected by legal privilege.
  • Internal or public disclosures must have already been made (unless otherwise allowed by the Act).

Financial Services Sectors Covered

  • The MFSA is authorized to receive external disclosures in relation to various financial services sectors, including:
    • Credit and financial institutions
    • Insurance
    • Investment services
    • Collective investment schemes
    • Pensions
    • Retirement funds
    • Regulated markets
    • Central securities depositories
    • Trustee business
    • Company service providers
    • Other areas under its regulatory and supervisory competence

Remedies for Whistleblowers

  • In the event of a whistleblower facing disciplinary action for making a protected disclosure, they may seek remedies through:
    • The courts
    • The Industrial Tribunal
    • The Office of the Ombudsman
  • The Act also provides that whistleblowers are not liable to any civil or criminal proceedings or disciplinary proceedings for making a protected disclosure.

Important Note

  • The protections conferred on whistleblowers do not apply to employees who knowingly disclose false information.
  • Such individuals may face legal action and penalties under the Criminal Code.

Whistleblowing External Procedure

  • The procedure outlines the steps to be taken when a breach is reported, including:
    • Acknowledgement by the MFSA
    • Requests for clarification or additional information
    • Provision of feedback to the whistleblower

Contact Information

  • For more information on the whistleblower protection act and how it applies to financial crimes in Malta, individuals can contact the Whistleblowing Reports Unit at the MFSA through:
    • Their website
    • Telephone number 2144 1155
    • Email address [email protected]
    • Visiting their office at Triq l-Imdina, Zone 1, Central Business District, Birkirkara, Malta