Lithuania Strengthens Whistleblower Protections for Financial Crimes

In a significant move towards combating financial crimes and promoting transparency, Lithuania has amended its Law on Protection of Whistleblowers to ensure greater protection for individuals who report violations.

Aligning with EU Directives

The updated law aligns with the European Union’s Directive (EU) 2019/1937, aimed at strengthening whistleblower protections across the continent. This move demonstrates Lithuania’s commitment to promoting transparency and combating financial crimes.

New Definitions and Clarifications

The revised legislation introduces new concepts, including:

• Reporting Person: A natural person providing information about a violation related to an entity.
• Person Involved in the Violation: An individual recognized by the competent authority as being involved in a violation.
• Whistleblower: An individual who provides information on a violation recognized by the competent authority.

What Constitutes a “Violation”

The law clarifies what constitutes a “violation”, including:

• Criminal offenses
• Administrative misconduct
• Breaches of professional ethics or public interest

However, providing information based solely on personal interests will not be considered a report.

Internal Reporting Channels and Incentives

Entities with higher-risk activities, such as finance and public procurement, as well as those with 50 employees or more, are now required to establish internal channels for reporting violations. The provision of valuable information may also be incentivized through remuneration or compensation.

Progress and Statistics

According to data from the Prosecutor’s Office of Lithuania:

• Over 80% of interviewed entities have implemented internal reporting channels since the law came into force in 2019.
• Only about one-third of these entities have publicly available descriptions of their internal channels, and some still limit access to reporting persons’ data.
• The number of reports has increased steadily, with:
  • 75 reports filed in 2019
  • 86 reports filed in 2020
  • 73 reports filed in 2021
• Whistleblower status was granted in:
  • 36 cases in 2019
  • 49 cases in 2020
  • 43 cases in 2021
• Pre-trial investigations were commenced based on:
  • Seven instances in 2019
  • 16 instances in 2020
  • 11 instances in 2021
• Remuneration requests have been granted, with a total of EUR 24,000 paid out in 2019-2020.
• Compensation was also awarded, with:
  • EUR 5,000 paid in 2019
  • EUR 3,700 paid in 2021

Conclusion

While the numbers may not be as significant as those seen in the US, where whistleblowers have received over USD 5 billion in the past 30 years, Lithuania’s efforts demonstrate a commitment to promoting transparency and combating financial crimes. As the country continues to adapt to these new regulations, it is essential to monitor progress and ensure that whistleblower protections are effective and robust.