In 2021, a new whistleblowing program was passed as part of the Anti-Money Laundering Act of 2020 (AMLA). The new program is an important step for anti-money laundering (AML) enforcement, and provides for mandatory awards for whistleblowers who bring forward information about violations of the Bank Secrecy Act.
The new AML Whistleblower Program is administered by the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Unfortunately, the AMLA did not set a deadline for the implementation of the whistleblower regulatory framework, which means that, while the AML Whistleblower Program is now in effect, no rules to guide applicants have yet been promulgated. You can follow the steps being taken by FinCEN on the implementation of the AMLA here.
The AML Whistleblower Program shares many of the basic elements of the SEC and CFTC reward programs. For example, to be eligible for a reward, whistleblowers must provide information about BSA violations “voluntarily,” meaning before they receive a request from an agency about the conduct in question, and the information they provide must be based on either (a) their independent knowledge or (b) their independent evaluation or analysis of publicly available information. Similarly, whistleblowers in all three programs can supply information anonymously, provided that they are represented by a lawyer. In recognition of the global nature of the financial services industries, none of the programs require that a whistleblower be an American citizen.
There are also several important differences between the SEC/CFTC programs and the new AML program. For example, the SEC and CFTC programs limit the circumstances under which an individual involved in compliance or internal audit functions can act as a whistleblower; in contrast, the AMLA has no such carve-out. Another key difference concerns the reward “floor.” Unlike the SEC and CFTC programs, which both prescribe an award range from 10% to 30% of monetary sanctions, the AMLA maintained the same award ceiling (30%) without setting a floor. Without a minimum award amount, this could mean—in theory—that a “successful” whistleblower could provide a valuable tip leading to a successful enforcement action, but receive nothing more than a nominal sum. On the other hand, it is possible that FinCEN may promulgate regulations setting out how rewards will be calculated, perhaps setting out a presumption of a minimum award; this step would go a long way to add certainty for potential whistleblowers concerned about risking their livelihood for an ambiguous incentive.
The new AML Whistleblower Program also covers BSA violations occurring prior to the program’s creation, provided that they occurred within the statute of limitations for government enforcement actions. That means that a potential whistleblower could submit information concerning wrongdoing within the last five years.