The Flanders-China Chamber of Commerce, Grant Thornton Belgium, Grant Thornton China, and Dentons organized a collaborative webinar on 7 May 2025 covering the EU Whistleblowing Directive, focusing on cross-border operations between China and Belgium, including the handling reports and practical implementation of the directive.
Ms. Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce, introduced the topic of the webinar and the speakers. The webinar focusses on the EU whistleblower directive and legal and compliance insights from China and Belgium. How companies are managing reports and practically implementing the directive on both sides? Businesses drive on certainty but geopolitical developments such as Trump's incoherent trade strategy has deeply undermined that certainty, presenting some serious challenges. Among all the tariffs he imposed, China was the hardest hit.
Mr. Tang Xiaoyi is a lawyer from Dentons based in Brussels practicing trade law for more than 15 years. The Trump tariffs have a tremendous impact on global trade and the EU-China economic and trade relationship. Trump tariffs version 2 are stronger than the previous one starting in 2017. As a result of the tariffs there is trade diversion. Goods previously exported to the U.S. may now be diverted to the EU. If the U.S. market is blocked, the goods are very likely to a great extent coming to Europe. We have seen a historically high number of trade investigations since the second half of 2024, such as on electric vehicles (EVs). The EU is investigating whether some goods are subsidized by the Chinese government. The European Commission has imposed restrictions on the imports of aluminum and steel from China. The economy in China is slowing down which means consumption in China is decreasing and some goods might be diverted to the EU. China is also an attractive market for some European companies and China has also launched some trade investigations. During Covid, investments from China decreased dramatically, but now they are recovering. Some of them may trigger anti-subsidy investigations. The whistleblower directive will also put some obligations on foreign investors.
Mr. Tim Klatte, Partner and head of Shanghai Forensic Services at Grant Thornton, and Mr. Martijn Van Knippenberg, Director Advisory and Head of Business Risk Services at Grant Thornton Belgium had a discussion on the Chinese and Belgian legislation and how whistleblowing impacts trade registrations. Mr. Klatte talked about whistleblowing from the China perspective and from working together with European companies here. Mr. Klatte has been around China for more than 30 years, working in forensic accounting for almost 19 years, with a big four accounting firm for 10 years and also with Grant Thornton now for nine years. He has been working with European companies, helping them with their compliance programs and fraud risk management challenges. We can see that there are some changes coming from the perspective of global fraud trends.
The Association of Certified Fraud Examiners (ACFE) puts out a report every year called a “Report to the Nations”. Looking at the percentage of corruption cases that were part of this survey of about 2,000 cases, Western Europe is covering over half of the cases related to corruption and fraud management. You can see that it's really critical to have a forward compliance strategy. This Report to the Nations revealed basically that half of the tips or more than half of the corruption violation tips come from internal reporting. Whistleblowing channels are critical for not only the external market, but also the internal employees. I'd like to remind everyone not to forget the importance of opening your whistleblower hotline and your communications to your vendors and your suppliers and customers as well, as you can see that nearly one third came from vendors and customers of the program.
The trend now obviously is to anonymously send an email through a web-based platform, followed by emails to the company headquarters, and we still have a small percentage of telephone reporting. The trend is definitely moving towards more email and web-based reporting. Fraud is discovered through internal audits, through management reviews, but certainly it's these whistleblower tips that are leading the pack in terms of discovery, as 52% are reporting it from inside. Looking at the whistleblower programs in the United States, I want to just kind of remind everyone that if you're doing business globally, the U.S. will be part of that area. There are two programs in the United States. The one under the SEC is quite well known and launched in 2011. They have had about 450 whistleblowers and actually awarded over USD2 billion. Last year alone, amongst the 47 whistleblowers, payout was USD255 million, so it pays to blow the whistle. This is true for sure in the United States. This is a global program led by the SEC. On February 10th of this year, U.S. President Trump suspended the FCPA for a six-month review, but please keep in mind the FCPA has been around for 50 years and is going to have a statute of limitations for five and six years respectively of the two directives of the FCPA. So although this current administration wants to suspend it or maybe pause or even cancel it, the next administration may restart it and go back five to six years for enforcement. In August of last year, the Department of Justice, to complement the SEC program, introduced their new whistleblower program. Some European nations were working together to kind of tighten their whistleblower and compliance programs so I think this is important to note that the Europeans are seeing this as an opportunity to become a global leader now in enforcement of fraud and risk management issues.
From a legal perspective and legislative trends in China, over the years, many laws have been addressing the protection of whistleblowers, the channels of how to take care of whistleblowing confidentiality, and also the rewards of whistleblowers and the rights of the citizens. There are a lot of legal requirements in China around whistleblowing. There are many players involved: the Cyberspace Administration, MIIT, Public Security, SAMR, CSRC and CBIRC. We really have a strategy by many Chinese companies, your business partners, suppliers or vendors here to focus on compliance and that's a very positive thing. We always say that you should respond to a whistleblower allegation within 72 hours. The point is that there are laws and regulations in place and there are specific requirements for not only multinational companies in China, but also for private and public SOEs as well. You've got to do the right thing and make compliance your key strategy when you're doing business in China.
A lot of companies have established whistleblowing channels for many years. Some of them are going back to headquarters, some are outsourced here in China to a call center, and some are handled in-house by the legal department. It is great to have a hotline, but some companies will outsource that to call centers. It is really critical to make sure that your person on the other end of the phone or at the other end of the email knows what questions to ask and knows how to follow up. When the operators are internal employees, sometimes they're worried about exposure. The largest fear of whistleblowers in my many years of experience here is identification and fear of retaliation. Many whistleblowers are afraid to speak up. We have to make sure that the person on the other side is asking the right questions, and maybe someone on the outside who's independent. Mailboxes certainly are an option. People can shoot an email out with a complaint and maybe attach some evidence. A public forum, where many whistleblowers will speak up, represents a very small percentage, as their identity is immediately known and they're exposed, and so they won't share details or connections. We've been hired many times for investigation work simply because it's too sensitive inside the company, or because the allegations are against the CEO or the CFO or some senior leader in the organization. To have a firewall between the company and the accuser, they need to hire a third party. Sometimes there's a concern of going to a third party. How do you prevent additional people knowing what they don't need to know? Whistleblowers are coming to the table to share very confidential and personal information that could damage or end their own career if exposed. At Grant Thornton we have developed the Insight program, a website where you find details of the of the questions and then it just kind of walks you through the program so you don't have to worry giving too much information or not enough information. We have real-time monitoring and risk assessment. You have to take a three-step approach: forensic accounting, conducting interviews, and following up on the whistleblower information.
Maarten Van Knippenberg, Director Advisory and Head of Business Risk Services at Grant Thornton Belgium, gave an explanation about how you can be compliant with the whistleblower legislation in Belgium, which finds its origin in the European directive of 2019. Although it has been six years, we see that there is still a low compliance rate in the different EU countries, which is remarkable as there are some very heavy sanctions on breaching local legislations. We now see in the courts some very heavy whistleblower cases that have to do with non-compliance of the transposition into local legislation of this directive. We've got different acts in Belgium: one for the private sector, one for the federal public sector and some different regional acts. Chinese investors will probably be private companies falling within the scope of the act of the private sector, which is quite a straightforward legislation and quite easy and clear to comply with. Who is a whistleblower according to this legislation? Any person reporting a breach, so it's a very broad definition. Who can be a whistleblower? Anybody in a work-related context in the company or organization. Your employees can be protected whistleblowers, but also your independent contractors, shareholders, board members, interns, and volunteers, and even the personnel of the contractors and future staff, if they see something which might constitute a breach during their hiring process. Also, former employees can be whistleblowers, irrespective of the size of the company. There's a whole plethora of different domains that can be reported. Belgium transposed the directive as directly as possible. When converting the directive into local legislation, the Belgian legislator decided to add social and tax fraud.
There are three methods of reporting as a whistleblower. There is no cascading principle whatsoever. So the whistleblower can report to an internal channel, an external channel or use a public disclosure. The tax inspection and social fraud inspection have now been appointed as competent authorities and they can receive the complaints or the reports from whistleblowers. They will do so through different protected reporting channels. So for example, Grant Thornton provides a technical means for different external competent authorities to allow their whistleblowers to do safe reporting. If you do a public disclosure, you are protected under the whistleblower legislation in Belgium, but is only possible if the internal channel within the company did not take any action after three months or the whistleblower says there is an immediate danger to the public interest.
Every company needs to set up an internal reporting channel as soon as they have 50 employees. This does not mean that you can't have whistleblowers if you have less employees. When you set up this channel, you need to make sure that you appoint a whistleblower officer, which must be somebody independent and impartial. So the possibility of outsourcing your internal reporting channel as a company also exists in Belgium. This whistleblower officer needs to receive the report and within seven days he needs to answer to the whistleblower, saying he will evaluate this within three months. We see in practice that there is only about 40% of the companies within the scope of the Belgian legislation which are being compliant for the moment, which is remarkable since there are severe sanctions if you breach the acts, resulting in up to three years of imprisonment and a fine of €48,000 per breach.
There are only two conditions for being protected as a whistleblower. Did the whistleblower use a reporting channel and did the whistleblower have sufficient cause to think that the information falls under the scope of the act and was correct at the time of reporting. If later on it is proven that the information was not correct, but the whistleblower was not aware of it, the whistleblower is still protected. The government is going to take a look at what effort the company took to make sure that the whistleblower or the potential whistleblower was up to speed with the scope of the legislation. Informing your employees about the whistleblower legislation, how to report, what can be reported, what is the protection status is super important. There's a strict protection of the identity of the whistleblower. So only with a court order you will be able to acquire the identity of a whistleblower and only in very, very restricted cases.
The company Secrets Act will not apply to the whistleblower and this is a serious risk for some companies, for example, companies where the research and development is of high value and whistleblower wants to report something about this. The whistleblower will be free to share some company secrets with the government and that might prove to be a challenge for the companies. If you have non-disclosure agreements with your personnel, they are not binding for a whistleblower. Certain parts of the GDPR are also not applicable, so the whistleblower can share certain documents with private information in it. Last but not least, whistleblowers are protected against any retaliation by the employer. Dismissing, suspending and firing a whistleblower is of course considered retaliation, but also things like withholding a training or failing to renew a temporary employment contract. The real challenges for the companies are short delays in the legislation. Within 70 days you need to respond to the question of a whistleblower. Within three months, you really need to provide enough feedback to the whistleblower in the case of a company, while the government has got three to six months to give feedback.
A Q&A session concluded the webinar.
