All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

LuxLeaks verdict sets ‘strong precedent’, says acquitted ex-PwC whistleblower Antoine Deltour

LuxLeaks verdict sets ‘strong precedent’, says acquitted ex-PwC whistleblower Antoine Deltour

Luxembourg’s Court of Appeal has cleared whistleblower Antoine Deltour of stealing PwC documents in the LuxLeaks scandal. Deltour told International Tax Review the ruling sets a strong precedent for tax justice.

The Court of Appeal has affirmed Deltour’s status as a whistleblower, as recognised by the European Court of Human Rights (ECHR), thereby acquitting him of all charges concerning the copying and use of PwC documents.

“It was the best we could expect from the judgment,” Deltour told ITR. “It’s a great victory.”

This appeal concerned the use of PwC’s internal training documents. Though he never used them, Deltour photocopied these documents and the prosecution argued that he did so to share the files with competitors and recommended a symbolic fine of €1.

Although the Court of Appeal ruled on May 15 that copying these internal documents constituted a breach of law , it withheld any sentence. This verdict brings the two-year legal battle to a close.

 “A lot of observers thought that the justice would hand down a sentence,” Deltour said. “This judgment sets a strong precedent. It was a long judicial battle, but it ended in a victory for the whistleblower.”

“The case has shown that it is useless to push on in the courts, and this may mean there will be a stronger case for putting whistleblower protections in place,” he added.

ITR contacted PwC Luxembourg for comment on the verdict, but the Big 4 firm declined.

Deltour’s supporters welcome this verdict as a victory. Meanwhile, critics of whistleblowing stress that the court did find that the law was technically breached.

It may be over for Deltour, but his co-defendants Raphaël Halet, a former PwC employee, and investigative journalist Édouard Perrin are still awaiting their final hearings. But Halet and Perrin will no doubt heave a sigh of relief after this verdict.

What does this mean for whistleblowers?

The struggle faced by Deltour to obtain whistleblower status is not an isolated case. Recognising the role whistleblowers play, the European Commission (EC) released its proposed directive on the protection of persons reporting on breaches of Union law (the so-called whistleblower directive) on April 23, in a move widely welcomed by campaigners.

These measures are crucial for preventing businesses retaliating against employees leaking information, and require all companies with more than 50 employees or an annual turnover of more than €10 million ($12 million) to set up an internal procedure for whistleblowers. The proposals still require approval by the 27 member states, but the proposals are a big step forward for tax justice.

“I remember just three years ago attending a public event at the European Commission with Antoine Deltour and the EC said there was not enough political will or even a legal basis for such a proposal,” Nicholas Aiossa, EU policy officer at Transparency International, told ITR.

“The EU has since moved to develop large tracts of policy on tax avoidance and money laundering, benefiting from whistleblowers like Deltour and Halet while watching them being persecuted by national courts,” Aiossa said.

At the time, ex-PwC auditor Deltour saw the EC’s proposal as a step forward in reinforcing existing measures at the EU-wide level. However, he expressed some concern that the scope of the legislation wouldn’t be wide enough.

“I hope this case strengthens the EU’s hand,” Deltour said. “It’s clear that a long legal battle is useless, so it’s better to put direct protections in place.”

Although Deltour's court battle has ended, he plans to continue fighting for whistleblowers.

“I’ll soon be taking on responsibilities in a new organisation campaigning for whistleblower protections,” Deltour said.

He explained that the organisation has yet to be launched because it still faces legal problems in the US, but he was optimistic that these hurdles will be overcome.

How the LuxLeaks case unfolded

The LuxLeaks scandal has been influential in political dialogue to tackle tax avoidance, improve transparency and protect whistleblowers. The revelations have put pressure on politicians, the European Commission, members of parliament and governments to make changes to tax policy

It began when Deltour discovered tax rulings between multinationals and the Luxembourg authorities while copying documents from PwC before leaving the firm on October 13 2010.

The trouble started when Deltour later leaked the details to Perrin and the International Consortium of Investigative Journalists (ICIJ). The Luxembourg authorities charged Deltour with theft and with violating trade secrets and secrecy laws. Soon after, Deltour’s PwC colleague Halet was charged for helping to leak the documents. Perrin was then arrested in April 2015 for his role in publicising the details.

The trial began at Luxembourg's Cite Judiciare  in April 2016. Judge Marc Thill found Deltour and Halet guilty of theft, violating trade secrets and secrecy laws in June of the same year. Deltour was given a 12-month suspended prison sentence with a €1,500 ($1,665) fine. Halet was given a nine-month suspended prison sentence with a €1,000 fine.

Halet and Deltour waged an appeal to overturn the verdict, but the Luxembourg courts upheld the initial judgment and reduced their suspended sentences to six months each.

Gerard Ryle, director of the ICIJ, called the verdict a “disgrace”.

“It is a step back for free speech and society. I think it now shows that we do need rules around this. If you do good for society there needs to be some way of protecting you,” Ryle said“I think the people who lose are   society  in general.”

Yet the case went to the Court of Cassation, where Deltour’s conviction was quashed on January 11 2018. It was the first time that such a court had recognised the jurisprudence of the ECHR. Though Deltour was granted whistleblower status, Halet’s conviction was upheld by the same court.

The only issue left to settle in the Deltour case was whether or not he broke the law when copying training documents. Halet's case is expected to go to the ECHR in June 2018.

more across site & bottom lb ros

More from across our site

The European Parliament raises concerns over unanimity in voting on pillar two, while protests break out over tax reform in Colombia.
Ramesh Khaitan speaks to reporter Siqalane Taho about tax morality, transfer pricing regulations, Indian tax developments, and the OECD’s two-pillar solution.
Join ITR and KPMG China at 10am BST on October 19 as they discuss the personal, employment, and corporate tax-related implications of employees working from overseas.
Tricentis and Boehringer Ingelheim, along with a European Commission TP specialist, criticised the complexity of pillar one rules and their scope at an ITR event.
Speakers at ITR’s Managing Tax Disputes Summit said taxpayers can still face lengthy TP audits, despite strong documentation preparation
Gig economy companies in New Zealand will need to fully account and become liable for the goods and services tax of underlying suppliers on their platforms, under new proposals.
Join ITR and Thomson Reuters at 2pm (UAE) / 11am (UK) on October 13 as they discuss how businesses can prepare for Tax Administration 3.0 and future-proof against changes such as e-invoicing and increasing digitisation.
ITR has partnered with global TP leaders from Deloitte to discuss transfer pricing controversy around the globe, and to share advice on how to navigate an increasingly uncertain and risky TP landscape.
Sources say they are not satisfied with pillar one protections in the marketing and distribution safe harbour, even though it was designed to give businesses greater tax certainty.
Political support for qualified majority voting is at a peak as unanimity rules continue to block the European Council from passing a directive on pillar two.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree