DRAFT WHISTLEBLOWING LEGISLATION SUBMITTED TO PARLIAMENT FOR APPROVAL

On 24 November 2021, a group of members of Parliament submitted for Parliament approval a draft law on the protection of whistleblowers for reasons of public interest (the “Whistleblowing Draft Law“), implementing EU Directive no. 2019/1937 on the protection of persons who report breaches of Union law (the “Whistleblowing Directive“). The Whistleblowing Draft Law is available here (Romanian language only).  

The Whistleblowing Draft Law foresees to become applicable as of 17 December 2021 to meet the transposition deadline under the Whistleblowing Directive.

In a nutshell, the Whistleblowing Draft Law requires Romanian companies to implement whistleblowing reporting channels and procedures, as well as related processes, and to appoint specialised staff to manage whistleblowing reports received, internally or via outsourcing, as follows:

• Companies with 250 or more employees will have to comply with the requirements on or shortly after 17 December 2021;
• Companies with 50 to 249 employees will have to comply with the requirements by 1 January 2023;
• Certain regulated companies (e.g., financial services providers, listed companies, etc.) will have to comply with the standards of the Whistleblowing Draft Law irrespective of their number of employees;
• Companies with fewer than 50 employees and that do not fall under the regulated categories are exempt from the obligation, but are free to implement whistleblowing channels and procedures compliant with the draft law.

Immediate action for compliance is required for companies with 250 or more employees, including for those companies that already have in place whistleblowing policies and processes, which must revise them to implement the requirements of the Whistleblowing Draft Law.

Failure to implement internal reporting channels and whistleblowing procedures and to appoint a designated person is sanctioned, as per the Whistleblowing Draft Law, with fines. The amounts of the fines are not particularly high in the Whistleblowing Draft Law (e.g., the failure to implement reporting channels is sanctioned with fine up to RON 25,000, the failure to implement a whistleblowing procedure is sanctioned with fine up to RON 30,000, the application of retaliation measures is sanctioned with fine up to RON 50,000, etc.). However, companies may consider the benefits of keeping whistleblowing reports under control via solid internal reporting channels, as well as the risk of reputational damage in case of publicity of a breach to the law reported using external channels or media disclosure, or individual damages awarded to aggrieved whistleblowers, which could be material.  

The National Integrity Agency is the public authority designated for purposes related to the Whistleblowing Draft Law, inter alia in charge of external reporting channels.

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Who is concerned

The Whistleblowing Draft Law requires public authorities and companies with at least 50 employees, or companies active in certain industries and sectors, such as financial services, irrespective of the number of employees, to implement reporting channels and whistleblowing procedures for persons who wish to report breaches of legal requirements at the standards of the Whistleblowing Draft Law.

How does whistleblowing reporting work

Persons involved with companies or public authorities in a professional context (e.g., as employees, contractors, self-employed, members of management and boards, trainees, volunteers, partners’ staff, job applicants, etc.), referred to as whistleblowers, may report breaches to legal provisions, generally, occurred or that are likely to occur at those entities.

Whistleblowers are protected by the legislation provided they had reasonable grounds to believe that what they report was true at the time of reporting and reporting is made in accordance with the available reporting channels. There are no further conditions for protection, such as reporting in good faith or a public interest condition for reporting.

Whistleblowing may be made using the internal channels made available by the entity, as well as the external channels opened by the National Integrity Agency or by public disclosure of breaches. There is no admissibility requirement for reporting via external channels to report beforehand via the internal channels. Internal channels must be made available to both employees and external potential whistleblowers.