Financial Crime World

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Denmark Passes Groundbreaking Whistleblower Act, Strengthening Fight Against Financial Crimes

Copenhagen - Denmark has made a significant move to combat financial crimes and corruption by becoming the first EU Member State to fully transpose the Whistleblower Protection Directive into national law. The new Whistleblower Act, passed on June 24th, requires private employers with 250 employees or more and public sector entities to implement comprehensive whistleblowing schemes by December 2021.

A New Era of Whistleblower Protection

The Act marks a significant departure from Denmark’s previously lax whistleblower protection laws, which had no general regulation in place. However, many private companies had already established their own voluntary schemes, recognizing the value of protecting whistleblowers.

Key Requirements of the Act

  • Employers must provide a secure and confidential reporting channel for employees to report suspected wrongdoing, including financial crimes, corruption, and other serious violations of law.
  • The Act extends protection to reports made by external parties, such as customers or suppliers.
  • Large companies with 250 employees or more may opt for a joint whistleblowing scheme under the parent company, but this has raised concerns about consistency with EU regulations.

Employer Obligations

Employers must ensure that their whistleblowing schemes are well-established and compliant with the Act’s requirements. This includes:

  • Providing information to employees on how to report suspected wrongdoing.
  • Implementing necessary policies, guidelines, and procedures to protect whistleblowers.

Data Protection Considerations

The Act also raises important data protection considerations for employers, particularly in relation to outsourcing the handling of whistleblower reports. Employers must ensure that third-party providers can meet the highest standards of protection implemented by each EU Member State, while also complying with Danish regulations.

Anonymous Reports

In a welcome development, the Act allows employers to receive anonymous reports, which will otherwise be reported through external whistleblowing schemes. However, employers are not obliged to process anonymous reports, and Plesner recommends receiving them as they may provide valuable information.

Conclusion

The passage of Denmark’s Whistleblower Act is a significant step forward in the fight against financial crimes and corruption, and sets an important precedent for other EU Member States.