The development of the regulation on whistleblower protection in Lithuania started prior to the Directive (EU) 2019/1937 (Directive) coming into force. The first edition of the Law on Protection of Whistleblowers of the Republic of Lithuania (the Law) was passed by the parliament on November 28, 2017, set to enter into force on January 1, 2019. This took place mainly because of OECD insistence on the adoption of the Law prior to Lithuania’s accession to the OECD.
After the adoption of the Directive, it became evident that the Law is subject to modification. Therefore, on February 15, 2022, the Law was modified in compliance with the Directive, making Lithuania among the very first few to successfully incorporate the Directive into national law.
Key Concepts of the Law
In the current version of the Law new concepts, that were not present previously, have been added, such as the “Reporting person,” the “Assistant,” “Circumstances related to the work,” and the “Person involved in the violation.” However, let us stay on the key concepts of the Law, which will allow us to look into the following section more effectively.
“Whistleblower” – a person who provides information on a violation and is recognized as a whistleblower by the competent authority. In other words, not every reporting person qualifies as a whistleblower. Every other person who does not qualify as a whistleblower, therefore, is considered a “Reporting person,” which in essence is defined as every natural person who provides information about a violation related to an entity (including, but not limited to employees, contractual counterparties, shareholders, board members, etc.).
The alleged, committed, or in the act of being committed criminal offense, administrative misconduct, official misconduct, or breach of work duties, as well as a serious breach of mandatory professional ethics, attempting to conceal such a breach, or any other threat to the public interest shall qualify as a “Violation.” However, the provision of information based exclusively on personal interest shall not be qualified as a report.
Those entities whose nature of activities is related to higher risk (for example, public procurement, finance, etc.) and entities with 50 employees or more have an obligation to implement internal channels enabling reporting persons to submit reports.
The provision of valuable information may be incentivized through remuneration or compensation.
Practical Implementation
The Prosecutor’s Office of the Republic of Lithuania is the competent authority under the Law. Based on interaction with the Prosecutor’s Office, we acquired some statistical data from which conclusions can be drawn. For example, based on the data for the years 2019-2020 (the period when the Law first came into force): (1) more than 80% of interviewed entities declared that internal channels for reporting violations had been implemented; (2) all the all channel-implementing entities strictly limit access to the reporting person’s data; (3) among channel-implementing entities, more than 50% should work on improving their publicly available descriptions of the internal channels; (4) among channel-implementing entities, one third indicated that the description of the internal channel is available only through internal information dissemination channels; (5) out of all entities interviewed, one in ten indicated no awareness of the obligation to implement an internal channel.
The above is related to business adaptation. Additionally, we can look into the number of reports, the results of scrutinization thereof by the competent authority, as well as the outcome of those reports.
The total number of reports stands at: 75 in 2019 (whistleblower status was granted in 36 instances); 86 in 2020 (whistleblower status was granted in 49 instances); and 73 in 2021 (whistleblower status was granted in 43 instances). The outcome of such reports can be classified as follows: out of all the reports, pre-trial investigations were commenced based on 7 instances in 2019, 16 instances in 2020, and 11 instances in 2021.
In terms of remuneration, two requests for remuneration were granted for a total of EUR 19,000 in 2019; one request was granted in 2020 amounting to EUR 5,000. In terms of compensation, one request for compensation was granted in 2019, amounting to EUR 1,950, and no requests for compensation were received in 2020 – nevertheless, EUR 3,700 was paid.
While the above numbers are dwarfed by the impressive USD 5 billion that was paid to whistleblowers in the US in the past 30 years, according to US Securities and Exchange Commission data, one still has to start somewhere.
By, Matas Balenas, Associate Partner, and Viktorija Minkeviciute, Associate, TGS Baltic
This article was originally published in Issue 9.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
