Croatia Whistleblower Law

Croatia currently has a patchwork of whistleblower protections available through its laws but still lacks a sufficient comprehensive whistleblower protection schema.

Under its newly enacted “Whistleblower Protection Act” whistleblowers may report through internal channels (which employers with more than 50 people must have in place) unless the whistleblower faces an imminent threat to their life, health and safety; there is the potential for large-scale damage or destruction of evidence; there is no possibility of internal reporting; the reporting person no longer performs work with the employer in question; or irregularities and concerns exist regarding the internal reporting process. In such circumstances whistleblowers may report externally to an ombudsman or “authorities authorised to act on the content of the report under a separate law”, a definition which remains unclear. Additionally, whistleblowers may also make a public disclosure of their allegations without first reporting internally or externally “if there is an imminent threat to life, health, safety or large-scale damage or destruction of evidence.” However, it is also unclear how these circumstances must be different to those required for a report to an external authority.

Under this law whistleblowers also have the right to confidentiality and the right to seek protection and damages in court. And an employer in violation of this law may be subject to a fine.

Although the law is a step in the right direction for Croatia, the law has received criticism for, amongst other things, some of its vague provisions and for the fact that the fines for whistleblowers and employers who violate the act are the same, meaning that the fines for employers, in the case of large corporations are nominal at best, while the same fines for an individual whistleblowers may be a large deterrent to whistleblowing. Given its relatively recent passage and the fact that it will undergo amendment this year to be in line with the new EU Directive, it is unclear the efficacy of this law for current or would-be whistleblowers. Therefore, whistleblowers may be better off reporting to U.S. regulators, at least until the transposition of the Whistleblower Directive is complete.

Other legal mechanisms potentially supporting Croatian whistleblowers include: the Labour Code, Criminal Code and Law on Public Servants.

It is worth noting that there are reward provisions for successful whistleblowers in any of the aforementioned laws. Therefore, again, whistleblowers may be better off reporting to U.S. regulators, at least until the transposition of the Whistleblower Directive is complete.

Other legal mechanisms potentially supporting Croatian whistleblowers include: the Labour Code, Criminal Code and Law on Public Servants.

It is worth noting that there are reward provisions for successful whistleblowers in any of the aforementioned laws. Therefore, again, whistleblowers may be better off reporting to U.S. regulators, at least until the transposition of the Whistleblower Directive is complete.

There is no law in Croatia providing whistleblowers rewards, however, they may receive rewards through U.S. laws

Croatia is currently in the process of transposing the EU Whistleblower Directive and and has created a plan for the draft bill to be harmonized with Croatia’s existing whistleblower protection law.

No law in Croatia currently prohibits Croatian citizens from reporting frauds against the U.S. government under the False Claims Act, or violations of provisions of other statutes including the Securities & Exchange Act, Foreign Corrupt Practice Act, or Commodities Exchange Act. Therefore, Croatian whistleblowers can and should report relevant violations to U.S. officials under these laws.

The United States has over 50 separate whistleblower laws, and they each define a protected disclosure separately.

The most comprehensive and widely used U.S. laws offering whistleblowers significant protections are the False Claims Act, the Dodd Frank Act, the Commodities Exchange Act, and the Internal Revenue Code.
These laws all provide various degrees of anonymity, confidentiality, and rewards and cover a myriad of common legal violations.

The False Claims Act permits a whistleblower to file his or her original complaint without revealing his/her identity to the public or a would-be defendant. However, after the government concludes its investigation as to the subject of the complaint, in most cases, the complaint is made public.

The SEC Whistleblower Program (created by the Dodd Frank Act), which includes fraud under the Securities Act of 1933 and the Securities and Exchange Act of 1934, and bribery under the Foreign Corrupt Practices Act, allows for anonymous and confidential filings with the SEC. Similarly, the Commodity Futures Trading Commission’s Whistleblower Program allows for confidential and anonymous filings. Both programs have significant safeguards in place to protect confidential whistleblowers from detection and retaliation.

The IRS whistleblower program, which covers tax frauds, underpayments, and money laundering does provide that whistleblowers’ confidentiality will be protected to the maximum extent permitted by law but does not permit anonymous filings.

Federal employees also can follow rules for confidentiality under the Inspector General Act and other laws.

Every whistleblower program discussed in the prior section has its own explicit rules that whistleblowers must follow to maintain anonymity and confidentiality and to preserve their claims. However, there are also a set of “unwritten rules” in Kohn, Kohn & Colapinto’s experience for whistleblowers who want to make sure that their identity and status as a whistleblower are fully protected.

For example, we recommend only reporting to U.S. regulators and against reporting internally as made clear by the Danske Bank Whistleblower Case. In that case, Howard Wilkinson did everything right in reporting up the internal chain of command. However, despite “internal controls” his identity was ultimately leaked by Danske in retaliation.

We also recommend finding an attorney familiar with whistleblower law as soon as possible, before making any disclosures, and only reporting to agencies with strict whistleblower protection guidelines based on for example our experience working on Bradley Birkenfeld’s case. Before retaining Kohn, Kohn & Colapinto, LLP, Mr. Birkenfeld voluntarily provided information about tax fraud directly to Justice Department prosecutors who did not consider him a “whistleblower.” As a result, these prosecutors filed charges against Mr. Birkenfeld, and he was sentenced to a term in jail for participating in the fraud he was blowing the whistle on. After this misstep, he retained Kohn, Kohn & Colapinto, LLP through which he correctly filed his IRS whistleblower claim. His disclosure and cooperation with U.S. authorities began the dismantling of the historical secrecy of Swiss banks and, as of 2018, more than 56,000 delinquent taxpayers had come forward, and the IRS had collected $11.1 billion in back taxes, while numerous banks were successfully prosecuted or entered into settlement agreements with the U.S. government. The total amount of revenue generated from the U.S. government’s use of whistleblowers in detecting and prosecuting illegal Swiss banking is estimated at $16.19 billion.

The majority of Kohn, Kohn & Colapinto, LLP’s current and former clients remain anonymous and confidential, including non-U.S. whistleblowers from numerous European countries, such as France, Greece, Germany, Russia, Serbia, Spain, Switzerland, and the United Kingdom, some which do not offer confidential and anonymous reporting and are known for allowing retaliation against whistleblowers. However, our expertise in the written and unwritten laws have allowed us to continue to protect these clients.

Under the new Whistleblowing Directive there are three tiers of protected reporting, which will be implemented in every state party: reporting internally, reporting to government authorities, and reporting to the public (i.e. going to the press).

Under the Directive, whistleblowers are not required to report internally before reporting to the relevant government authorities. However, in order to “go public” whistleblowers must have first reported either internally or to government authorities and no appropriate action was taken or else have reason to believe that either there is an imminent or manifest danger to the public (i.e. a public emergency), or that there is a high risk of retaliation and a low prospect of the violation being addressed due to the particular circumstances of the case (such as where a public authority is in collusion with the violator).

Disclosing information internally to a prescribed person and the likely response

In the U.S. whistleblowers may similarly report internally and may be protected by statutes such as the Dodd Frank Act/Sarbanes Oxley as well as state anti-retaliation laws. However, there is a well-established history of employees suffering retaliation after disclosing internally, and in such cases litigation is often long and costly, and corporations often win. Whistleblowers should contact a whistleblower or employment attorney before making an internal report to discuss its advisability and properly document and escalate any internal report.

Disclosure to public officials

Whistleblowers may also report through the whistleblower offices of various agencies and remain confidential and anonymous and thereby avoid retaliation as discussed above. This is the best option for whistleblowers in most cases. Contact a whistleblower attorney to identify the best agency to report violations to and the best procedure for making a report.

Disclosure to an external person (e.g. journalist, media, public forum)

Lastly, whistleblowers who go to the media in the U.S. largely do so at their own risk, although certain First Amendment protections may apply. Neither journalists nor confidential informants have a recognized privilege to remain confidential. The First Amendment of the U.S. Constitution can provide some protection from government intrusion for the information you communicated to a journalist, but these protections are not absolute and a corporate defendant may still seek your identity in a civil proceeding. There may be strategic reasons to go public with information, however, whistleblowers considering such a step are advised to consult a whistleblower attorney first.

Whistleblowers who are able to report outside of their workplace in the circumstances enumerated by the Whistleblower Protection Act can report to the Ombudsman and likely to other relevant local authorities. Given the lack of clarity in the law, it is advisable to consult an attorney or the ombudsman’s office before submitting an official complaint.

To appeal your rights under the Whistleblower Directive to the EU, you should first seek enforcement in your national system because public authorities and national courts have the main responsibility for the application of Union law and are the other bodies able to award compensation or annul decisions.

You may also reach out to your national ombudsman to submit your complaint of violation of EU law. The contact information for Croatia’s national ombudsman can be found at: https://www.ombudsman.europa.eu/en/european-network-of-ombudsmen/members/national-ombudsmen.

Finally, if your complaint has or cannot be sufficiently redressed at the national level, you have various options at the EU level.

First, you have the right to submit a petition to the European Parliament about the application of Union law. You may submit your petition online at: https://www.europarl.europa.eu/about-parliament/en.

Second, you may submit your complaint about a breach of the Whistleblower Directive by national authorities in an EU country to the European Commission. The complaint form is available online at: https://ec.europa.eu/assets/sg/report-a-breach/complaints_en/.

Then, if you then believe that your complaint has not been adequately addressed by the commission you may submit a complaint to the European Ombudsman at: https://www.ombudsman.europa.eu/en/home.

We highly recommend contacting a lawyer before taking any of these steps or reaching out to Your Europe Advice, to ensure that your complaint is made properly to the proper authorities based on the facts of your case. Your Europe Advice provides free advice to EU citizens about EU law and rights of EU citizens.