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European Commission Proposes New Directive to Protect EU Whistleblowers

On April 23, the European Commission (EC) adopted a package of measures, including a draft Directive and an Impact Assessment, to protect whistleblowers who report breaches of EU law.

The definition of a “whistleblower” under the proposed new Directive would encompass any person who has “privileged access to information about breaches that can cause serious harm to the public interest and who may suffer retaliation if they report” (i.e., not just employees, but also self-employed people, contractors, unpaid trainees and even job applicants).

The EC considers the protection currently offered to whistleblowers across the EU to be fragmented and insufficient. Therefore, the proposed new Directive will set minimum and harmonized standards guaranteeing protection for whistleblowers who report breaches of a broad range of EU laws, including those covering financial services, environmental protection, consumer protection, product and transport safety, data protection and privacy, as well as competition law and corporate tax (including value added tax) rules.

The proposed new Directive would require EU member states to establish safe channels for reporting both within a whistleblower’s organization, as well as to public authorities, separate from the usual public complaints systems of those public authorities. It would protect whistleblowers against dismissal, demotion and other forms of retaliation and require training public authorities on handling whistleblowing reports.

Under the proposed new Directive, whistleblowers would even be able to disclose information directly to the public or media, without losing the protection from retaliation, if other reporting channels did not function. They also would be protected in judicial proceedings, through an exemption from liability for disclosing information related to the whistleblowing.

The proposed new Directive will be adopted using the ordinary legislative procedure (i.e., the European Parliament and the Council of the EU both need to adopt the final text of the proposed Directive before it is published in the Official Journal of the European Union and implemented). The EC has invited the public to provide feedback on the proposed new Directive by the June 20 deadline via its “Have your say” webpage.

The EC’s “Have your say” webpage and package of new measures to protect whistleblowers, including the proposed new Directive, is available here.

©2019 Katten Muchin Rosenman LLP

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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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