Financial Crime World

Sweden Introduces Whistleblower Protection Program Amid EU Deadline

Sweden has become the second EU member state to fully transpose the Whistleblower Protection Directive into national law, effective September 29, 2021. The new Whistleblowing Act requires private sector employers with 250 employees or more and public sector employers to implement a whistleblowing scheme by December 17, 2022.

Background

Prior to the act, Sweden had a limited whistleblowing protection law in place since 2016. This previous law protected employees and consultants who reported serious misconduct by key personnel within their business. However, it did not extend to all types of serious misconduct or violations of Swedish law.

Key Provisions of the New Act

The new Whistleblowing Act introduces several key provisions:

  • Employers with 250 employees or more must implement a separate whistleblowing system for internal reports.
  • Group entities with less than 250 employees can share an internal system with other group entities. The public sector is exempt from this limitation.
  • The scope of protection is extended to include reports of serious violations of Swedish law and other types of serious misconduct, in addition to EU law violations.

Protection for Whistleblowers

Whistleblowers are required to report their concerns to a designated authority before making them public, unless there is an immediate risk or external reporting would likely lead to reprisals.

Employer Responsibilities

Employers must ensure that all necessary policies, guidelines, and procedures are in place to comply with the act by July 2022. This includes:

  • Training and awareness programs for management
  • Ensuring employees have easy access to information on how to make a report through both internal and external whistleblowing systems

Collective Bargaining Agreements and Outsourcing Whistleblowing Systems

The scope of protection under the act may be extended through collective bargaining agreements, but any agreed limitations must not reduce the minimum level of protection afforded by the law. Companies considering outsourcing whistleblowing systems to third parties must also comply with data protection regulations, particularly in relation to data processors.

By implementing this new Whistleblower Protection Program, Sweden is taking a significant step towards protecting individuals who report wrongdoing and promoting a culture of transparency and accountability.