KPMG Whistleblower Channel KPMG Whistleblower Channel KPMG Whistleblower Channel

On 12 May 2023, the Federal Council adopted the Whistleblower Protection Act (HinSchG), as the national implementation of the EU Directive 2019/1937 on the protection of persons who report infringements of Union law.

Companies with more than 250 employees as well as cities and municipalities with more than 10,000 inhabitants are obliged as of 2 July to introduce whistleblower systems. The transitional regulation for companies with 50 to 249 employees provides for implementation by 17 December 2023. Violations can be punished with a fine of up to EUR 50,000.

According to the draft of the "Act for Better Protection of Whistleblowers" (Whistleblower Protection Act, HinSchG) and for the implementation of the Directive on the Protection of Persons Reporting Breaches of Union Law, companies with more than 50 employees will be obliged to set up reporting channels/whistleblower systems for internal reports as well as follow-up measures. Private employers with between 50 and 249 employees can benefit from an extension of the deadline until 17 December 2023 based on the EU Directive. 

We help you to master the associated requirements and challenges. We will be happy to advise you on the (global) conception and implementation, on the organisational structure and processes, as well as on the content-related and technical system requirements, for example, on set-up and maintenance. 

In particular, we also offer you a technical platform as a comprehensive solution.

Furthermore, we support you in the ongoing operation of your whistleblower system as well as the downstream processes, for example in crisis management, conducting special investigations and implementing preventive measures.

Whistleblowers play an important role in uncovering wrongdoing in companies. According to the current KPMG study on white-collar crime in Germany 2023, 52% of white-collar crime is discovered through open tips from within the company, 34% from outside the company. Around 25% of white-collar crime is identified through anonymous tips. 

Each year, white-collar crime causes considerable damage to companies, which can be significantly limited or even completely avoided by an effective and efficient whistleblower system. The whistleblower system serves as an early warning system for risk control and contributes to the protection against material as well as immaterial damages of your company and the management against liability in case of violations.

The law is intended to protect whistleblowers from reprisals or negative consequences for reporting criminal offences, fines and other violations of federal and state law. This protection applies not only to (former) employees, trainees and apprentices of a company, but also to third parties such as customers and suppliers. 

The Whistleblower Protection Act places the following requirements on (internal or external) whistleblower systems, among others:

• Possibility of written and/or oral reporting
• Decision on the possibility of anonymous reporting
• No access for unauthorised persons to the reporting channels
• Acknowledgement of receipt of reports to the whistleblower within seven days of receipt
• Designation of an impartial person or department to contact the whistleblower
• Take follow-up action, such as an internal investigation.
• Re-feedback to the whistleblower within three months of acknowledging receipt of the report, including identification of any action taken.

The KPMG Whistleblower Channel offers you a secure, user-friendly and cost-effective solution to set up and manage an effective whistleblower system that ensures compliance with future legal requirements of the Whistleblower Protection Act as well as established reporting deadlines. 

Our solution is online around the clock, accessible via mobile devices and can be used in different languages. The whistleblowers also have the option of attaching files in various formats.

Our global experts have extensive experience in the prevention, detection and investigation of white-collar crime, compliance violations and misconduct.

If requested, we act as an independent reception point for information received. In this function, we provide feedback to the whistleblower within the specified reporting deadlines, initiate anonymous communication with the whistleblower if necessary, and make an initial assessment of the reported facts based on our expertise. We then forward the prepared report, together with all the information, to the contact persons designated by you for a decision on how to proceed.

Alternatively, you can also use the whistleblower system completely autonomously.

If desired, we can also support you in creating and implementing processes and guidelines for the implementation of the Whistleblower Protection Act and downstream processes. These can be, for example, effective crisis management, the investigation of white-collar crime and misconduct on the basis of received tips as well as the control and implementation of adequate preventive measures.

An effective whistleblowing system significantly reduces the risk of reputational damage, fines or litigation. You strengthen your company profile in the eyes of the public, potential investors and (future) employees, customers and suppliers. The whistleblowing reports you receive also serve as a source of knowledge for you to specifically identify potential weaknesses in your company and to sensitise employees to avoid unethical or illegal behaviour.

Our colleagues at KPMG Law* are available to answer any legal questions you may have on the subject of whistleblower protection.