Hungary: Preparation for the Whistleblowing Directive

Scope of the Whistleblowing Directive

Companies in the private sector with at least 50 employees must establish internal channels and procedures for reporting and follow up on any breach of Union law in the following areas (“Internal Reporting Channels”):

• public procurement;
• financial services, products and markets, and prevention of money laundering and terrorist financing;
• product safety and compliance;
• transport safety;
• protection of the environment;
• radiation protection and nuclear safety;
• food and feed safety, animal health and welfare;
• public health;
• consumer protection;
• protection of privacy and personal data, and security of network and information systems.

Furthermore, breaches affecting the financial interests of the Union and breaches relating to the internal market also fall under the scope of the Whistleblowing Directive.

Obligations arising from the Whistleblowing Directive

When establishing Internal Reporting Channels, companies must ensure, among others, (i) the confidentiality of the identity of the reporting person and any third party mentioned in the report, (ii) prevention of access to the reports by non-authorised persons, (iii) diligent follow-up, (iv) a reasonable timeframe to provide feedback and (v) provision of clear and easily accessible information regarding the Internal Reporting Channels.

Companies in the private sector must also keep records of every report received in compliance with the confidentiality requirements provided for in the Whistleblowing Directive. Reports must be stored for no longer than it is necessary and proportionate in order to comply with the requirements imposed by the Whistleblowing Directive.

Effect of the Whistleblowing Directive

The 27 EU Member States, including Hungary, must transpose the new requirements introduced by the Whistleblowing Directive into national law by 17 December 2021 for companies with more than 249 employees and 17 December 2023 for companies with 50 to 249 staff, and may go beyond those minimum standards.

It bears mentioning that Hungary (as well as many other EU Member States) have not yet adopted such implementation acts and that it is unclear whether such laws will enter into force in due time. In any event, national authorities and courts will have to apply and respect the Whistleblowing Directive as of its effective date (i.e. 17 December 2021 for many requirements).