The Enhanced US Anti-Money Laundering Whistleblower Programme

Nicola Sharp of Rahman Ravelli details the most recent changes to whistleblowing protections and rewards in the United States.

The United States’ anti-money laundering whistleblower programme has been expanded by the recently-passed Anti-Money Laundering Whistleblower Improvement Act (the Improvement Act).

The Improvement Act, which was passed as part of the Consolidated Appropriations Act 2023, funds the whistleblower programme but also widens its scope beyond Bank Secrecy Act (BSA) offences so that it also relates to violations of US economic sanctions laws. The programme now covers any company that is subject to US jurisdiction if it violates US economic sanctions laws, as well as the financial institutions with BSA obligations.

AMLA

The whistleblower programme had been enhanced when it was included in the Anti-Money Laundering Act 2020 (AMLA). AMLA provided whistleblowers with protection from retaliation if they reported potential violations to their supervisor, someone else within the organisation who has the authority to investigate and take action to address the suspected misconduct or outside regulatory or law enforcement agencies.

AMLA states that employers may not “directly or indirectly, discharge, demote, suspend, threaten, blacklist, harass, or in any other manner discriminate against’’ someone who provides relevant information to authorities or assists an investigation.

AMLA also enables whistleblowers to file an initial complaint with the Department of Labor if they believe they are being victimised. They must show that they had an objectively reasonable belief that the conduct they reported violated the law, that they were retaliated against for doing so and that the disclosure they made was required or protected by law or regulation.

The Improvement Act

The Act is significant as it enables whistleblowers anywhere in the world to report money laundering violations anonymously and confidentially to the U.S. Department of Justice or Treasury. It is likely to lead to an increase in the number of violations reported – and in the number of fines and enforcement actions that result from reports.

The Improvement Act has created the Financial Integrity Fund to reward whistleblowers. Payments of not less than 10% and up to 30% of any fine imposed and collected can be made to whistleblowers. Payments may be determined by factors such as the significance of the information provided by the whistleblower and the assistance the whistleblower provides to any subsequent investigation.

This Act builds on AMLA’s enhancement of the BSA whistleblower programme. Between them, the two Acts have boosted the protection of whistleblowers, expanded the programme’s scope and made possible the payment of significant financial rewards to those who do report their concerns.

As a result, companies across a wide business spectrum must now recognise the implications of whistleblower complaints.

If they did not already have them in place, carefully-devised and managed anti-money laundering and sanctions compliance programmes have to be viewed as necessities by companies.

As should:

• Targeted, appropriate training of both management and less senior staff, coupled with written policies and procedures relating to their obligations.
• A confidential internal complaints recording procedure that is fit for purpose and capable of swiftly assessing the legal or regulatory significance of complaints.
• A system for incentivising employees to report internally any suspected violations.
• Regular assessment of the internal complaint management and compliance programmes to identify and rectify any shortcomings.