Monday, 03 October 2022

The "Whistleblower law" in Spain: Everything you should know about the Bill that will force companies to implement internal information channels.

VolverAs indicated in the title of the Bill itself, the Bill arises as a transposition of a 2019 Directive of the European Parliament which aims to strengthen the application of Union law and policies in specific areas by establishing common minimum standards providing a high level of protection for persons who report breaches of Union law.

The need for whistleblower protection

The explanatory memorandum of the Draft Law already makes clear why its creation is necessary: Citizen collaboration in anti-corruption matters is absolutely indispensable to prevent such situations from arising. However, on many occasions, cooperation is not forthcoming due to fear of reprisals on the part of those committing corrupt conduct. For this reason, and in order to encourage this cooperation, it is necessary that the whistleblower feels protected through the implementation of various mechanisms.

Protected whistleblowers

The Draft Law also specifies who will be those whistleblowers who have this protection, which will be:

- Persons with the status of public employees and salaried workers.

- The self-employed.

- Shareholders, participants and persons belonging to the administrative, management or supervisory body of a company, including non-executive members.

- Any person working for or under the supervision and direction of contractors, subcontractors and suppliers.

- Whistleblowers who communicate or publicly disclose information on breaches obtained in the framework of an employment or statutory relationship that has already ended, volunteers, trainees, trainees in training, whether or not they receive remuneration, as well as those whose employment relationship has not yet started, in cases where the information on breaches has been obtained during the recruitment process or pre-contractual negotiation.

- The legal representatives of the employees in the exercise of their functions of advising and supporting the informant.

- Anyone related to the whistleblower who may also suffer retaliation.

Information channels

Of the most significant new features of this Bill, the one that will perhaps have the greatest impact in the business sphere is the establishment of both external and internal information channels, which must be implemented in both the public and private sectors.

Those responsible for the implementation of these internal channels must be the Administrative Body or Governing Body of each obliged entity or body, and they may subsequently be managed either by them or by an external third party, in which case they must comply with the appropriate guarantees of respect for independence, confidentiality, data protection and secrecy.

These internal channels must allow for written and/or verbal communications, with the informant being able to indicate an address, e-mail or safe place for the purpose of receiving notifications. Likewise, a communications management procedure must be created that complies with requirements regarding the anonymity and secrecy of the informant, and a System Manager must be appointed by the administrative body or governing body of each obliged entity or body.

Obligated parties

Within the private sector, the following are obliged to implement this internal information system:

- Natural or legal persons with 50 or more employees.

- Political parties, trade unions, employers' associations and foundations created by them, provided that they receive or manage public funds.

- Those legal entities in the private sector that fall within the scope of financial services, products and markets, prevention of money laundering or terrorist financing, transport security and environmental protection, regardless of their number of employees. In this case, even if they are not domiciled in the national territory, they must implement the system if they establish their activities through branches or agents or by providing services without a permanent establishment.

In the event of failure to comply with this obligation to create information channels, the penalties provided for in the Draft Law range from 5,000 euros to 1,000,000 euros.

Independent Whistleblower Protection Authority

With regard to external channels, a separate Independent Whistleblower Protection Authority will be established to receive relevant information through this channel. This information may be anonymous and will be stored in a secure database with access restricted exclusively to suitably authorised staff of the Independent Whistleblower Protection Authority.

On the other hand, the Bill also provides, irrespective of the reporting channel, that persons who report or disclose corruption offences are entitled to protection.

"Clemency Programmes"

Finally, another of the most important new features of this Bill is the introduction of the so-called "Leniency Programmes", which are based on the fact that, when a person who has participated in the commission of the administrative offence that is the subject of the information is the one who reports the existence of the offence by submitting the information and provided that the information was submitted before the opening of the investigation or sanctioning procedure was notified, the body responsible for resolving the procedure, by means of a reasoned resolution, may exempt him/her from compliance with the corresponding administrative sanction.

It is therefore clear that once this Bill enters into force, companies that comply with the requirements indicated above must begin to implement these information systems or else face penalties that, in many cases, can be very heavy.

The implementation of these systems and the fulfilment of all the requirements that this entails can be very complex and, for this reason, it is necessary to have a law firm specialised in this area that can help to resolve any type of problem that may arise in the most precise and efficient manner, so do not hesitate to contact the Commercial and Corporate Law Department of Belzuz Abogados.

 Adrián Fraguas García - Departamento del SeguroAdrián Fraguas García 

Commercial and Corporate Law department | Madrid (Spain)

 

Belzuz Abogados SLP

This publication contains general information not constitute a professional opinion or legal advice. © Belzuz SLP, all rights are reserved. Exploitation, reproduction, distribution, public communication and transformation all or part of this work, without written permission is prohibited Belzuz, SLP.

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