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Luxembourg’s prosecutor keeps digging; announces appeal of verdicts in LuxLeaks trial

In June, Luxembourg became the subject of criticism worldwide when whistleblowers Antoine Deltour and Raphael Hallet were convicted for casting light on the industrial scale tax avoidance that was being enabled by the country’s government. At the time, Deltour said that the ruling was “a warning towards future whistleblowers, which is detrimental to citizens’ information and the good functioning of democracy.”

The UN’s Independent Expert on the promotion of a equitable and democratic international order, Alfred de Zayas, also condemned the sentence:

We seem to live in an upside-down world in which whistleblowers are convicted and those who loot society are not… Governments are systematically being deprived of essential tax revenues. As long as there are widespread tax avoidance, tax evasion and tax havens, States will not have the financial capacity to meet their human rights treaty obligations.”

Deltour and Hallet, two former employees of PwC, were sentenced to 12- and 9-month suspended jail terms, respectively, which they said they intended to appeal. Journalist Edouard Perrin was also prosecuted under Luxembourg’s banking secrecy laws, but was acquitted. Yesterday, he tweeted that Luxembourg’s prosecutor had filed a general appeal of his own.

As reported in the Luxembourger Wort and le Monde, this likely means an appeal against both Perrin’s acquittal and the suspended sentences handed down to Deltour and Hallet. The prosecutor’s appeal is not likely to be heard before the end of 2016.

If successful, the impact of this new appeal could be significant for Deltour, Hallet and Perrin. At the start of the LuxLeaks trial in May, prosecutors asked for 18-month prison sentences for both whistleblowers and recommended a fine for Perrin, arguing the former don’t deserve whistleblower protections and that the latter broke the law.

Europe needs to protect its financial whistleblowers

The LuxLeaks revelations, which exposed rulings covertly legalizing tax avoidance for 340 major corporations, led to sweeping changes in the public debate over tax fraud. In June, Detour spoke in front of European Parliament – which last year awarded him its European Citizens’ Prize – to discuss his case, tax avoidance and protections for whistleblowers.

As we explained at HOPE XI, although Europe has proven receptive to many high-profile whistleblower cases, particularly national security cases emerging out of the United States, the continent does not serve its financial whistleblowers particularly well. Countries like Luxembourg and Switzerland have banking secrecy laws that private companies can use to repress existing whistleblowers and deter others. The long persecution of Bank Julius Baer whistleblower Rudolf Elmer is a case in point.

In the case of Antoine Deltour and Raphael Hallet, there is an additional irony in that even their former employer PwC, which was a party to their prosecution and received a symbolic one Euro in damages, has now admitted that the LuxLeaks disclosures were justified. It could hardly be more clear that the prosecution of Deltour, Hallet and Perrin – let alone the prosecutor’s new appeal for harsher sentences – runs contrary to the public interest.

More than 200,000 people have signed a petition in support of Antoine Deltour, whose support committee camapigns actively on his behalf. We’ll continue to report, and support, those efforts as the LuxLeaks case continues.