Financial Crime World

Whistleblowers Play Crucial Role in Uncovering Financial Crimes in the Czech Republic

The Czech Republic has finally passed the Whistleblowing Act, which came into effect on August 1, 2023. After a year of turbulent discussions and legislative proposals, the Czech government has joined other EU states in providing robust protection for individuals reporting breaches of Union law.

Key Points of the New Whistleblowing Act

  • Coverage: The Act applies to most state authorities, contracting authorities in public procurement, and employers with 50 or more employees.
  • Scope: Covers criminal and administrative offenses carrying a fine of at least €4,200 and violations of various legal regulations.
  • Reporting Channels: Obliged entities must publicly disclose whistleblowing channels and contact details of competent persons.
  • Types of Reports: Reports can come from individuals who have performed work or work-related activities, or had contact with the entity. Anonymous reporting is not explicitly allowed, but entities may accept it voluntarily.
  • Reporting Forms: Reports can be made in written or verbal forms, and reporting channels have strict deadlines for acknowledgment of receipt and assessment.
  • Confidentiality and Record-keeping: Mandates confidentiality and detailed record-keeping requirements.

Sharing and Handling of Reporting Channels

  • Small Companies: Companies with fewer than 250 employees can share a common whistleblowing channel or use an internal system set up by another obliged entity.
  • Large Companies: Larger companies must establish both a group-wide reporting system and a local internal reporting system. Reporting channels may be outsourced to third-party service providers.

Penalties and Consequences

  • False Reporting: Carries fines of up to €2,100.
  • Personnel and Obliged Entities: Fines of up to €4,200 for breaching their duties.
  • Prevention of Filing Reports or Retaliation: Penalties of €4,000 and €4,200, respectively.
  • Revealing Sensitive Information: Fines of up to €3,400.

Importance of the Czech Whistleblowing Act

The Czech Whistleblowing Act is a significant step forward in strengthening transparency and combating financial crimes within the Czech Republic’s public and private sectors.