Ukraine adopts comprehensive whistleblower law

The EU Directive on Whistleblower Protection of October 2019 will not be completely transposed into national law for two years, but in Ukraine, a comprehensive law implementing reporting systems, protecting whistleblowers and paying rewards to them will enter into force early next year.

Fighting corruption[1] is the main focus of the new whistleblower protection law, which was signed by the Ukrainian president on 13 November[2]. Under this law, whistleblowers are defined as individuals who report on possible corrupt actions, related violations of the law or other violations of the Ukrainian Anti-Corruption Law, provided that they have obtained this information in the context of their professional, commercial, social or academic activity.

Reporting systems

Whistleblowers can report anonymously using internal channels (private or public employers), regular channels (law enforcement authorities) or external channels (e.g. mass media, journalists or associations). However, disclosing protected information via external channels is subject to certain conditions such as unsuccessful attempts to report via other channels or the risk that evidence could be destroyed.

Law enforcement authorities that fight corruption, public law organizations, state enterprises, private companies of which more than 50% is owned by the state and companies participating in state tenders exceeding UAH 20 million (approx. EUR 750,000) must establish protected anonymous channels for whistleblower reports. Any reports received through these channels must be reviewed and processed within certain time periods, and the whistleblowers must be informed of the status of their reports.

Whistleblower protection

Whistleblowers will now benefit from extensive protective measures starting when they received information on relevant violations. Their rights will include anonymity, protection of their own safety and that of those close to them, free legal aid and psychological support. Whistleblowers will be exempt from any professional or contractual confidentiality obligations as regards their report. Unless the report is evidently false, they cannot be held liable for damage caused by the report.

The law also provides for a comprehensive prohibition of reprisal in the context of employment against whistleblowers and those close to them. This prohibition extends to actions that, although formally legal, have not usually been taken by the employer in comparable situations. Employees suffering reprisal can demand reinstatement and compensation for financial losses or a severance payment if the employment has been terminated.

Rewards

The law also provides for a financial reward to incentivise whistleblower reports. If a bribe or the damage caused to the state exceeds 5,000 times the minimum living standard of a person who is able to work (currently in total UAH 10.51 million[3]; approx. EUR 400,000), the whistleblower will receive 10% of this sum. The reward is capped at 3,000 times the minimum wage (currently in total UAH 12.519 million[4]; approx. EUR 470,000). When the same corruption offence is reported by more than one whistleblower, this amount will be split equally among them.

Conclusion

With its new whistleblower law modelled on the EU Directive, Ukraine is leading the way among the former Soviet republics, where whistleblowers have little or no protection (please see Noerr Overview). As recently as June of this year, a comparable legislative initiative in Russia failed for the foreseeable future[5]. Practice will show to what extent Western-style whistleblower protection laws will help to counter the deficiencies in anti-corruption enforcement in the post-Soviet region.

 

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[1] According to the Corruption Perceptions Index of Transparency International for 2018, Ukraine shared the rank of 120 out of 180 with three African countries (https://www.transparency.org/cpi2018).

[2] http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=66253 .

[3] https://index.minfin.com.ua/labour/wagemin/.

[4] https://index.minfin.com.ua/labour/salary/min/.

[5] https://sozd.duma.gov.ru/bill/286313-7.