Financial Crime World

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Lithuania Takes Significant Step in Implementing Whistleblower Protections for Financial Crimes

In February 2022, Lithuania became one of the first European Union countries to implement the Whistleblowing Directive into national law. The directive aims to protect individuals who report financial crimes and other wrongdoing from retaliation and ensure that their reports are thoroughly investigated.

Key Features of the Law

  • Reports can be made on a broader range of topics, including:
    • Impediments to or unlawful interference with investigations
    • Unlawfully acquired assets
    • Concealing the consequences of committed violations
  • The law provides for a wider scope of persons who may report wrongdoing, including:
    • Employees
    • Former employees
    • Contractors
    • Individuals working under contract

Investigation and Reporting Channels

  • The competent body responsible for investigating reports is appointed by the head of the entity and must be a person whose reputation and qualifications do not raise doubts about their ability to properly implement their duties.
  • Entities with fewer than 50 employees are generally exempt from establishing an internal whistleblowing channel, but those operating in the financial services sector and related fields are required to set up such channels.
  • Anonymous reporting is allowed, which must be investigated to the extent possible.

Remedies for Retaliation

  • The law provides a range of remedies for retaliation, including:
    • Compensation for valuable information
    • Free legal aid
    • Exemption from liability
    • Access to full, impartial information and advice on whistleblowing procedures and remedies

Group-Wide Reporting Channels

  • Group-wide reporting channels are permitted, but must comply with local rules regulating whistleblower protection.
  • Units of legal entities with 250 or more employees must have separate internal channels and cannot share them with other departments of the entity.

Impact and Significance

The implementation of the Whistleblowing Directive in Lithuania is a significant step towards increasing transparency and accountability in the financial sector and combating financial crimes. It sets a strong example for other EU countries to follow and demonstrates Lithuania’s commitment to protecting whistleblowers who report wrongdoing.