A new EU directive on corporate whistleblowing will also affect Liechtenstein-based businesses. The German company whizzla provides a plug-and-play solution.
Reporting a crime or breach of corporate compliance regulations isn’t always that easy. What if it’s your boss committing the crime? Will you report it? What repercussions might that have for you for your family or your career? That’s why people think twice before reporting any misdoings, and that’s why the EU now takes action.
The EU’s new whistleblowing protections directive is due to be implemented into national law by 17 December 2021. The purpose is to establish uniform minimum protections to ensure that whistleblowers who want to report breaches of EU law are safe to do so. That includes first of all employees, but also third parties like customers or suppliers.
Who has to comply?
To implement these standards, each EU member country has to ensure their corporations have a compliant reporting system in place. That also includes any organizations that don’t have their headquarters in the EU but have EU-based operations.
The new rules are for all entities with more than 50 employees operating in the EU or those with an annual turnover of more than 10 million Euros. All financial services companies have to comply with the directive no matter their size.
The aforementioned businesses are required to install a reporting system that allows whistleblowers to make an anonymous report. The directive prohibits retaliation and attempts at retaliation against the whistleblower.
Companies are also required to put processes and procedures in place to take action. Businesses that fail to act on reported misconduct run the risk of legal liability. If there is no proper system in place, directors might be liable even if they haven’t been the offenders.
Also, whistleblowers have the right to report misconduct to the authorities and even to the public if the company doesn’t take action. The result could be serious reputational and financial damage.
What to do next?
Companies can meet the requirements of the directive in different ways. One is to provide an email, or a phone number employees and third parties can contact. That, however, is risky, as it’s difficult to ensure anonymity, and it doesn’t ensure complaints are properly managed.
Another way is to implement a plug-and-play whistleblower system such as whizzla. The company based in Bad Orb, Germany, has developed a web-based reporting system designed to meet the requirements of the new directive.
Whizzla includes a reporting system, where whistleblowers can file their complaints online, completely anonymous. The process is straightforward and designed for simplicity.
After a complaint has been filed, the compliance department gets a notification and confirms receipt. It can then take appropriate action. The whole claim management is done and recorded in whizzla. Compliance officers can set deadlines and schedule reminders.
Implementing the whole system takes just two days and gets businesses ready to meet all requirements for the new directive. Starter packages start at 49 Euros per month.
Relevance for Liechtenstein
The three EEA EFTA States (Iceland, Liechtenstein, and Norway) appear to be still debating how the Whistleblowing Directive should be incorporated into the EEA agreement. Thus, it’s not yet clear what the new directive means for Liechtenstein businesses.
That said, any Liechtenstein business with operations in the EU will have to comply there. Considering the importance of the European market for Liechtenstein-based companies, it’s better to get up to speed fast.
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