Financial Crime World

Iceland Passes Whistleblower Protection Laws to Encourage Reporting of Misconduct

Iceland has introduced new whistleblower protection laws aimed at promoting transparency and accountability in the workplace. The Protection of Whistleblowers Act No. 40/2020 came into effect recently, authorizing employees to report breaches of legal obligations and reprehensible misconduct.

Key Provisions

  • Employees who report violations of legal obligations or other reprehensible misconduct in good faith will be protected from any potential repercussions.
    • Shielded from criminal or tortious liability
    • Granted legal aid if a dispute arises over their position
  • External whistleblowing must be preceded by internal whistleblowing. This means that employees must exhaust all internal channels before reporting information to outside parties, such as the media.
  • In exceptional cases where making information public is deemed necessary to protect important public interests, external whistleblowing may be permitted.

Employer Responsibilities

  • Employers with a staff complement of 50 or more are required to establish procedures for whistleblowing, which must include rules on:
    • Receiving reports of possible breaches
    • Handling and processing reports
  • Aim is to make it easier for employees to report misconduct and for employers to respond effectively.
  • Employers must provide feedback to whistleblowers on the measures taken in response to their reports, and inform them whether any action was taken as a result of their disclosures.

Guidelines and Monitoring

  • The Minister of Finance and Economic Affairs has been empowered to issue guidelines for public bodies and state-owned enterprises.
  • Local authorities and the Administration of Occupational Safety and Health will provide model rules and monitoring mechanisms.

Impact on Business Environment

The new whistleblower protection laws in Iceland are expected to have a positive impact on the country’s business environment. By promoting transparency and accountability, these laws aim to create a more trustworthy and responsible work culture.