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Clifford Chance

Clifford Chance

Regulatory Investigations and Financial Crime Insights

Is Belgium ready for the EU Whistleblower Protection Directive?

Belgium as yet does not have a comprehensive framework for whistleblower protection. Two piecemeal regulations, however, regulate such protection for financial markets and money laundering.

Sector-specific regulations

Although formal whistleblowing procedures exist for staff members of the federal and Flemish public administrations, no general legislation as envisaged by the Whistleblower Protection Directive has yet been introduced. The Belgian legislator has only adopted two specific whistleblower regimes for the private sector.

Financial sector

Firstly, Belgium adopted a sectoral whistleblowing regime for reporting infringements of the financial legislation to the National Bank and the Financial Services and Markets Authority (the "FSMA"). Financial  institutions (i.e. amongst others credit institutions, insurance companies and financial intermediaries) are also obliged to set up their own internal whistleblowing systems and to ensure appropriate follow-up. All actual or potential infringements of the financial legislation falling within the scope of the supervisory powers of either the National Bank or the FSMA qualify as  reportable infringements. While the legal provisions on whistleblowing at the level of the National Bank remain silent on the procedural aspects, the FSMA rules of procedure for receiving and dealing with reports of infringements clarify – amongst others – that the means of communication used for correspondence with whistleblowers must be independent from other means of communication used. The rules also impose that any information disclosed by the whistleblower remains confidential. The in-scope financial institutions are likewise obliged to ensure that they keep whistleblower reports confidential and that the whistleblower is protected against retaliation or unfair treatment as a result of the reporting.

Money laundering

Belgium has furthermore implemented the fourth European anti-money laundering Directive, which imposes a duty on entities such as credit institutions, insurance companies, investment firms, notaries and lawyers (the "Obliged Entities") to report to the Belgian Financial Intelligence Processing Unit (Cel voor financiële informatieverwerking / Cellule de traitement des informations financières) and/or the relevant Obliged Entity's supervisory authority. All Obliged Entities must implement appropriate internal procedures to enable their employees or other persons acting on their behalf to report suspicious customer transactions, on the one hand, or actual or potential internal breaches of the obligation to prevent money laundering and terrorist financing, on the other. The Obliged Entities must also ensure that the persons reporting such breaches are protected against threats or any unfavourable or discriminatory treatment by their employer or principal.

Belgian transposition of Whistleblower Protection Directive

In order to transpose the Whistleblower Protection Directive, Belgium will have to introduce a more comprehensive legal framework on whistleblowing than the current piecemeal sectoral rules. This means that, among the main obligations imposed by the Directive, the Belgian legislator will need to address the requirement for all companies with over 50 employees to introduce internal whistleblowing procedures, as well as the designation of the appropriate authority to facilitate external reporting and follow-up.

The future will show whether the Belgian legislator will limit itself to the minimum standards imposed by the Whistleblower Protection Directive or whether it will go beyond these requirements in certain areas. On 4 March 2020, a motion for a resolution was submitted to the Belgian Parliament, proposing to transpose the Whistleblower Protection Directive into Belgian law. The motion was tabled by the Belgian Green Party and contemplates additional protection compared to that offered by the Directive. Amongst others, it is proposed to broaden the scope of the whistleblower protection to cover as many sectors as possible (including defence, diplomacy, national security and protection of classified information) and all possible violations of the law (both national and European) as well as threats or damage to the public interest. It remains, however, to be seen to what extent this initiative will receive support from the government or in parliament.