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Anti-Money Laundering & Sanctions Violations

Recently enacted and improved Treasury Department programs enable whistleblowers to help enforce anti-money laundering and U.S. sanctions violations.

Money Laundering

Money laundering generally refers to financial transactions that attempt to hide or otherwise disguise the proceeds, sources, or nature of illicit activities. The primary anti-money laundering (“AML”) enforcement statute is the Bank Secrecy Act (“BSA”), which establishes program, recordkeeping, and reporting requirements for national banks, federal savings associations, and foreign branches and agencies of foreign banks. In general terms, the BSA requires banks and other regulated financial institutions to: (1) have a system of internal controls to ensure ongoing compliance; (2) conduct independent testing of BSA/AML compliance; (3) designate and train an individual responsible for day-today compliance; (4) provide adequate training for employees on BSA/AML issues; and (5) implement risk-based procedures to allow for ongoing customer due diligence so as to identify and report suspicious transactions or other issues.

The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) administers the BSA, and violations of the BSA are actionable under the Anti-Money Laundering Whistleblower Program.

Sanctions

From time to time, the U.S. government issues economic sanctions targeted at specific countries or other bad actors. In general, the President has statutory authority under the International Emergency Economic Powers Act (“IEEPA”) and other laws to issue Executive Orders that establish sanctions. The Department of Treasury’s Office of Foreign Activity Control (“OFAC”) is responsible for promulgating regulations relating to these Executive Orders and for administering the government’s sanctions programs. OFAC administers numerous sanctions programs, including those related to Russia, Iran, North Korea, Cuba, Venezuela, Narcotics, and Cyber-crime. OFAC’s sanctions programs can take many forms, including blocking of assets or implementing trade restrictions.

Violations of OFAC sanctions programs—as well as any other violations of IEEPA, the Trading with the Enemy Act, and the Foreign Narcotics Kingpin Designation Act—are actionable under the Anti-Money Laundering Whistleblower Program.

OFAC Has Broad Jurisdiction

OFAC’s jurisdiction extends to all forms of property that fall within the “possession or control” of U.S. entities or individuals. In practice, this means that OFAC has jurisdiction to enforce sanctions against foreign companies, so long as the transactions at issue pass through or otherwise involve the U.S. financial sector. In addition, as part of the Anti-Money Laundering Act of 2020, Congress granted both the Treasury Department and the Department of Justice the authority to issue subpoenas to any foreign bank, so long as the bank maintains a correspondent account in the United States. As the Deputy Attorney General said in 2023: “Whether you are a U.S. or foreign bank, if you use the U.S. financial system, you must comply with our laws.”

Contact Us

If you think you may have information relating to anti-money laundering or sanctions violations, fill out our contact form or call us at (212) 376-5666 for a free evaluation of your potential case. We represent whistleblower clients on a contingent fee basis, meaning that an attorney’s fee is paid only if your case is successful.