There are statutory provisions in the US, the EU and in each member state, including Austria, protecting people who make criminal activities known to the relevant authorities. Such people are generally known as a whistleblower or a cooperating/key witness
There is sometimes a difference between a whistleblower and a cooperating witness. A whistleblower might give information about illegal actions in which he is not necessarily involved. The cooperating/key witness is, according to central European definition, usually co-perpetrator or abettor. In order not to confuse the two, this article will only deal with the term whistleblower.
A legal framework for whistleblowers was first introduced in antitrust regulations in the United States. By now, you will also find similar provisions in the cartel laws of the European Union and its member states. There are attempts to introduce some form of preferential treatment for whistleblowers to other areas of the law. The website of the European Anti-Fraud Office, OLAF, contains a link where people may report incidences of fraud electronically.
Austria has also passed laws to aid whistleblowers. They might avoid cartel fines if they cooperate with the antitrust authority. Austrian criminal law contains a provision according to which a person who reports on heavy crimes, e.g. the formation of a criminal or terrorist organisation, shall receive a sentence which is significantly lower than the minimum sentence mandated by law for that particular crime. Austrian criminal procedure law contains a provision which entitles the state attorney to not prosecute a crime, if the people involved have voluntarily aided in revealing the crime.
Another area, in which whistleblowing regulations have been called for, is the war against money laundering and the financing of terrorists.
According to regulations regarding banking supervision, credit institutions are required to report to the authorities business relations where there is a suspicion of money laundering or the financing of terror.
Even attorneys are required to report to the authorities with regard to deals where there is a suspicion that the transaction is used for money laundering or the financing of terrorism.
However, it is not my aim to report all the different regulations which will turn people to whistleblowing or the privileges and immunities involved. The aim of this article is to show briefly, without being able to provide an in-depth analysis, due to the format of this article, that even within the existing legal framework protecting whistleblowing, there are liability risks which should not be neglected.
The United States has protected whistleblowers by creating a statute of its own. To this day, such a code which deals with all kinds of problems with regard to the different aspects of whistleblowing does not exist either for the European Union or nationally in Austria.
One must differentiate between two types of whistleblowers.
- People who themselves have participated in illegal actions and by their own free will report this actions to the authorities in charge of the persecution.
- People who have in some way or other gained knowledge of an illegal act and who report this to the authorities in charge of the persecution.
The people belonging to the first group of whistleblowers will usually not face any danger when reporting on illegal activities, except being persecuted themselves. But as mentioned before, they gain certain advantages from being the ones to report. It must be assumed that a crime has been perpetrated.
Much more difficult is the situation for people, who have knowledge of illegal acts or believe they have. Since these people did not participate in the crime, they usually have only limited knowledge with regard to the details of a potential crime.
Both groups of people face the risk that they charge people with illegal actions which might later turn out to be in fact legal. This puts them in danger of afterwards being criminally charged with libel by the alleged perpetrators.
Both groups of people also face the risk of civil action. In case they work for a company, these people have very often signed employment contracts which obligate them to keep business and trade secrets. If it turns out that the actions, formerly reported as illegal, were in fact totally legal, the employee will most certainly face civil procedures of some sort. Even if the allegations turn out to be correct, a whistleblower may still face a civil trial. Statutory regulations within the c in most cases do not contain regulations which would explicitly exempt a whistleblower from civil prosecution from the person or institution detrimentally affected by the disclosure of the illegal act.
It is therefore advisable for companies and other institutions to pass internal regulations dealing with employees who have reported illegal activities e.g. antitrust violations or money laundering. It should be pointed out that these employees do not act in violation of their employment contract and may therefore not be terminated. Especially with regard to antitrust violations, it is in the company’s best interest to be the whistleblower since this might exempt the company from fines.
Individual whistleblowers are strongly advised to seek legal counsel with regard to the legal consequences for the whistleblower before reporting on alleged criminal activities.
As might be imagined there are great uncertainties for people who want to report on illegal activities.
In Austria, it is planned to introduce the so called ‘broad cooperating/key witness regu-lation’ in 2012. Content and extent of the regulations are not known so far. It remains to be seen whether the new regulations will clarify legal uncertainties in this area.
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