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Senators Echo Calls for AML Whistleblower Program that Works for International Anti-Corruption Whistleblowers
Wednesday, February 14, 2024

Passed in the final days of 2022, the Anti-Money Laundering (AML) Whistleblower Improvement Act has the potential to be one of the most important anti-corruption laws ever passed. The law addressed loopholes in the AML Whistleblower Program, establishing an effective whistleblower award program for individuals across the globe to report money laundering as well as sanction violations.

Given the role of money laundering and sanctions evasion in corruption worldwide, an effective AML Whistleblower Program will be a crucial tool in the United States’ global anti-corruption efforts. In fact, the role of money laundering whistleblowers in fighting corruption is explicitly laid out in the United States Strategy on Countering CorruptionWhistleblower advocates have thus called on the Treasury Department and Financial Crimes Enforcement Network (FinCEN) to enact regulations for the program which align with the anti-corruption strategy and work for international anti-corruption whistleblowers.

To date, however, the Treasury Department and FinCEN have yet to fully implement the program: they have neither proposed regulations for the program nor set up a dedicated webpage. On February 2, a bipartisan group of senators sent a letter to FinCEN expressing their concerns with the significant delays in implementing the AML Whistleblower Program and highlighting the importance of the program for national security.

The senators, Chuck Grassley (R-IA), Elizabeth Warren (D-MA), and Rapael Warnock (D-GA), were the cosponsors of the AML Whistleblower Improvement Act. They wrote that “We were proud to introduce and pass this legislation because it provides vital support to U.S. law enforcement to enforce sanctions and anti-money laundering statutes and protect our national security interest.”

According to the senators, the failure to set up a webpage and propose rules for the program is “unacceptable.” They explain that “it is well established that whistleblower incentive programs are powerful tools to prevent, detect, and prosecute criminal misconduct, wrongdoing, and fraud” and that “[t]herefore, it is essential FinCEN prioritize the full implementation of the AML whistleblower program.”

Echoing the U.S. anti-corruption strategy, the senators outline how the AML Whistleblower Program allows whistleblowers worldwide to “report violations involving authoritarian regimes… as well as individuals with transnational criminal organizations and terrorist organizations.”

“Given these circumstances,” the senators write, “we also encourage FinCEN to give whistleblowers flexibility regarding when and how they may report and be eligible to receive rewards.”

This flexibility of eligible reporting channels has been a main aspect of effective regulations highlighted by whistleblower advocates. In letters sent to Treasury and FinCEN, whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto has outlined why passing regulations which are not overly restrictive on the ways international whistleblowers may report violations would bolster the AML Whistleblower Program and align it with the U.S. Strategy on Countering Corruption.

For example, Kohn points to the treatment of international law enforcement agencies by the SEC Whistleblower Program’s regulations as a pitfall that Treasury and FinCEN need to avoid in their regulations.

“The current SEC regulations do not give any credit to a whistleblower who reports to an international law enforcement agency, and such reports are not considered ‘voluntary,’ and thus can lead to a complete disqualification of a whistleblower,” Kohn writes. “Strategic Objective 3.4 mandates that the United States ‘Strengthen the ability of foreign partner governments to pursue accountability in a just and equitable manner.’ Excluding the sources of disclosures made to foreign government partners from recognition under the AML reward program is inconsistent with this Objective.”

Kohn further claims that the AML Whistleblower Program rules should allow for qualified whistleblowers to report to “any federal law enforcement or regulatory agency; Congress; a state regulatory or law enforcement agency; an international regulatory or law enforcement agency; an ‘anti-corruption’ agency; the news media, an investigative journalist; civil society organizations that thereafter report the whistleblower’s information to the media or a governmental organization; and other human rights defenders as understood by the Department of State or Agency for International Development.”

“If FinCEN follows the mandates of the Strategy, it can protect and compensate whistleblowers in extreme danger worldwide,” Kohn wrote in an article laying out the same points made in his letters. “Many whistleblowers are unable to live normal lives after exposing wrongdoing. Often subjected to life-threatening retaliation, they have limited employment prospects and often deserve police protection, due to the reprisals they may face from organized crime and corrupt government officials.”

In their letter, the senators ask that FinCEN Director Andrea Gacki answer a number of questions about the implementation of the AML Whistleblower Program, including when the proposed rules will be published and if FinCEN has met with other whistleblower offices to receive guidance on implementing the program.

Geoff Schweller also contributed to this article.

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