Financial Crime World

Whistleblower Protections Take Center Stage in Sweden’s Banking Industry

Sweden has made significant strides in strengthening its whistleblower protection framework by implementing the European Union’s Whistleblowing Directive into national law. The country became the second EU member state to do so, following Denmark.

Background

In May 2019, the Swedish government launched an inquiry commission to explore how the EU directive should be transposed into national legislation. This move was unprecedented, as Sweden was one of the first countries to kick off its transposition process before the EU even adopted the directive.

The Old Law: Criticisms and Limitations

Sweden’s Whistleblower Act, which came into force in 2017, was criticized for exposing whistleblowers due to a lack of anonymity and confidentiality guarantees. The new law addresses these flaws by extending protection to individuals who provide assistance to whistleblowers or are connected to them.

Key Changes

The key differences between the old and new legislation include:

  • Protection of persons reporting information about misconduct in a work-related context: Whistleblowers now have greater protection against retaliation.
  • Extension of protection to legal entities and individuals providing assistance: This includes protection for those who provide support or aid to whistleblowers.
  • New standards for processing personal data and dealing with complaints: The law sets new guidelines for handling whistleblower reports and complaints.

Notable Provisions

Some notable points from the new law include:

  • Confirmation of reports must be provided within seven days
  • Feedback on complaints must be given within three months
  • Personal information can only be collected when necessary and is available only to case handlers
  • Personal information can be stored for a maximum of two years, and irrelevant information must be removed

Going Beyond the EU Directive

Sweden’s law goes beyond the EU directive in some areas. For example:

  • Municipalities with less than 10,000 inhabitants: Sweden requires these municipalities to implement internal reporting channels, whereas the EU directive has a requirement above a population of 10,000.

Commitment to Whistleblower Protection

The country’s commitment to improving whistleblower protection is evident in statements from Employment Minister Eva Nordmark, who emphasized that “people should not have to fear dismissal or being locked in a freezer for reporting wrongdoing in their workplace.”

International Recognition

A recent report from Transparency International and the Whistleblowing Network International praised Sweden for its transparent and inclusive transposition process. The country’s early start on implementing the directive has set an example for other EU member states.

Implications

The implications of this new law are significant, particularly within the financial services sector where whistleblower protections have become increasingly important. As EQS Group’s Country Manager Nordics, Ulrik, notes, “Sweden’s proactive approach to whistleblower protection sets a high standard for other countries to follow.”