Tuesday

4th Oct 2022

LuxLeaks forces discussion on EU-wide protections

  • Few member states have "comprehensive" whistleblower protection rules (Photo: Sven Graeme)

Justice ministers are meeting over lunch in Brussels on Tuesday (28 March) to discuss possible whistleblower protection rules at EU level.

But talks are likely to encounter obstacles given the broader resistance at member state level towards any meaningful rules. "The idea is to generate a discussion," noted one EU official.

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  • Delrour: "The fate handed over to the whistleblower has a direct impact on the freedom of expression." (Photo: European Parliament)

Antoine Deltour, the Frenchman who helped uncover one of the biggest tax scandals in Europe, told EUobserver that EU-wide whistleblower rules are needed due to the varied interpretations of public interest across EU countries.

"The interests of the business circles and the financial companies are a matter of public interest for Luxembourg, while the car industry is a public interest for Germany," he said in Strasbourg on Friday (24 March) at an event hosted by the European Centre for Press and Media Freedom.

Deltour said the wide interpretation between member states is a disadvantage for whistleblowers, who may be revealing shortcomings that affect people all over Europe.

Varied interests

"This notion of public interest can be interpreted very differently according to whether you have a European standpoint or a domestic point of view," he said.

He said EU rules are needed also to strengthen the notion of a much broader public interest.

Deltour, along with Raphael Halet, leaked documents from the Luxembourg branch of the accountancy firm, PricewaterhouseCoopers (PwC), to French television reporter Edouard Perrin in 2011.

The documents eventually ended up being probed by dozens of media outlets who then exposed how some 340 big companies secured secret deals from Luxembourg that allowed many of them to cut their global tax bills.

Although their revelations led to stronger EU tax transparency rules, both Deltour and Halet received suspended jail sentences and fines in Luxembourg for their actions.

A Luxembourg court shortened their convictions earlier this month, with Deltour now receiving a six-month suspended jail sentence and a €1,500 fine. Halet was fined €1,000, and Perrin was acquitted.

"They acted in the public interest, and without whistleblowers like them, we would not see real effort to tackle tax dodging,” Transparency International said in a statement following the latest rulings.

Those sentences may be appealed but Deltour said the money, time, and personal costs involved are making him hesitate.

His defence expenses have so far totalled up to around €60,000, paid by a support committee.

Whistleblowers needed

"The fate handed over to the whistleblower has a direct impact on the freedom of expression because without sources journalists have a very limited power," he said.

One study in 2016 looked at 2,400 cases of fraud in over 100 countries and found that 40 percent of the detected cases came from whistleblowers.

Earlier this year, the European Parliament piled on pressure for the European Commission to adopt rules on whistleblowers.

The EU executive institution has started a public consultation on whistleblowers that should end in May.

It has also launched an impact assessment, an extensive fact-finding probe that usually precedes any legislative proposals.

"This year we are basically looking into options, doing further consultations, doing the impact assessment, and then we see what comes out of it," noted an EU commission spokesperson.

LuxLeaks whistleblowers sentenced again

PwC employees Antoine Deltour and Raphael Halet, who revealed how multinational companies dodged taxes through deals in Luxembourg, were given reduced sentences.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.

EU on path towards whistleblower protection

EU lawmakers and member states have struck a political deal on the first-ever EU-wide directive on whistleblower protection - following years of big tax-evasion revelations and the laundering of dirty money in European banks.

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