Every season comes with changes and, as expected, part of this season’s changes for companies will be the implementation of the EU Whistleblowing Directive in Romania. After the companies have received a welcomed ‘extension’ for complying with the whistleblowing obligations in winter because Romania missed the deadline for the implementation set in December 2021, it seems that the time has come.
After many discussions and amendments, the Government has adopted a draft law and submitted it to the Parliament in early February. The law is expected to enter into force on March 31st, 2022, although we cannot be fully confident in this date.
However, given that at this point we have a pretty clear picture of the provisions of the future law, especially the differences to the EU Directive and/or the additional measures and obligations, companies can begin setting up their whistleblowing mechanism or making some required changes to an already established mechanism.
To meet the needs of companies and anticipate struggles in complying with the whistleblowing requirements, we have prepared a series of questions and answers:
A. Which companies have these obligations?
Every company that has more than 50 employees is obliged to set up a whistleblowing reporting channel, the required procedures, as well as the follow-up process.
However, this threshold does not apply to companies falling under the scope of certain laws and regulations (e.g. reporting entities as per the anti-money laundering law), which will have to comply with the whistleblowing law obligations regardless of the number of employees.
B. When do companies need to be ready?
Unfortunately, for companies with over 249 employees the clock is ticking, as they need to comply with the law after it enters into force (expected date is March 31st, 2022).
Companies that have between 50 and 249 employees are luckier, because the obligations will apply to them starting with January 1st, 2023.
C. Which are the sanctions for not complying?
The sanctions for not complying with the obligations are set by each country, the EU Whistleblowing Directive only stating that these penalties must be effective, proportionate and dissuasive.
The Romanian draft law sets out administrative fines that reach RON 25,000 for companies that fail to establish an internal reporting channel.
However, there was no need to implement harder sanctions, because companies will be driven to establish an internal reporting channel and take the required measures, as otherwise whistleblowers would pursue external reporting channels or even public disclosure which would have greater consequences for the companies.
All in all, there is only one option for companies over 249 employees and that is to ensure a whistleblowing mechanism in line with the Romanian law requirements.
* * *
While we await the law to be approved, we will continue the series of questions and answers which hopefully will act as a much needed ‘kind reminder’ to prepare a fully compliant whistleblowing mechanism before the law enters into force.
| White Collar Compliance & Defense Team | |
|---|---|
 |
 |
 |
 |
