Croatian law permits citizens to report frauds against the U.S. Government under the False Claims Act, or violations of the provisions of the Securities & Exchange Act, Foreign Corrupt Practice Act, or Commodities Exchange Act.

Current Status of Croatia’s Whistleblower Laws

What disclosures are currently protected?

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.

Can Croatian whistleblowers receive rewards?

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

Recent updates and future legislative developments

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.

Can/should Croatian whistleblowers report to U.S. officials?

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.

Introduction for Croatian Whistleblowers Using U.S. Laws

An overview of the whistleblower protections in the United States

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.

Protection and anonymity under commonly used whistleblower laws

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.

Examples of what to do or not do to ensure you are protected as a whistleblower under U.S. law

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.