The $1.7 trillion year-end spending legislation passed by Congress and just signed by the President contains important amendments to the anti-money laundering (AML) whistleblower program.
The Anti-Money Laundering Whistleblower Improvement Act makes changes to the AML whistleblower program, 31 U.S.C. §5323, which was modeled on the highly successful Dodd-Frank whistleblower program that incentivizes the reporting of violations of securities laws, but had some key differences that rendered it less effective. The amended AML program now provides for a minimum whistleblower reward of 10% for successful whistleblowers who report under that program, which previously lacked a minimum reward and provides a funding source for the rewards. A key motivation for the bipartisan amendments was the ability of the program to encourage whistleblowers to disclose Russian oligarchs’ hidden assets and sanctions-busting schemes.
The amendments:
- expand the laws covered by the program to include the International Emergency Economic Powers Act, the Foreign Narcotics Kingpin Designation Act, and/or the Trading with the Enemy Act;
- provide that whistleblowers whose information leads to a successful enforcement action to a minimum award of 10 percent of the value of fines collected as a result of their reporting;
and
- creates a $300 million fund to pay whistleblower awards from fines collected by the Justice and Treasury Departments.
Originally introduced in the Senate by Chuck Grassley (R-Iowa) and Raphael Warnock (D-Georgia) and introduced in the House by Representatives Alma Adams (D-North Carolina) and Anthony Gonzalez (R-Ohio), these amendments are critical to encouraging whistleblowers to come forward. Absent a minimum reward and a well-funded program, few individuals would be willing to risk their careers by providing the Government with the information needed to pursue money laundering schemes.
Anti-Money Laundering (AML) Law
Congress created the initial anti-money laundering (AML) whistleblower program as part of the fiscal 2021 National Defense Authorization Act that was enacted in January 2021.
That Act contained provisions to overhaul anti-money laundering laws in addition to establishing a new AML whistleblower program. The latest amendments will make the program a more robust tool for pursuing money laundering.
If you are aware of violations of anti-money laundering laws and are considering becoming a whistleblower, contact Phillips & Cohen for a free, confidential review of your matter by experienced and successful whistleblower attorneys.
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