Anti-Money Laundering and Kleptocracy Whistleblower Programs

Under the Improvement Act, whistleblowers can now receive awards for reporting violations of the Bank Secrecy Act and U.S. sanctions laws. In particular, the Act now covers violations of the International Emergency Economic Powers Act, Trading with the Enemy Act, and Foreign Narcotics Kingpin Designation Act. With this expanded scope, whistleblowers can now report the following types of violations:

• Anti-money laundering;
• Companies doing business with sanctioned individuals/entities or individuals/entities from a sanctioned country;
• Companies allowing sanctioned individuals/entities to use the company’s systems or tools;
• Companies failing to create and maintain effective compliance programs;
• Repeat noncompliance with rules and requirements.

The Anti-Money Laundering Whistleblower Improvement Act expanded the scope of potential whistleblowers and enacted enhanced whistleblower awards. Key components of the program include the following:

• Whistleblowers do not have to be industry insiders. However, corporate auditors and compliance professionals can also qualify as whistleblowers.
• Whistleblowers who provide voluntary, original information relating to a violation can receive between 10% and 30% of resulting monetary sanctions over $1,000,000.
• The amount of the award depends on the value of the information and the degree of assistance that the whistleblower provides.
• Employers cannot retaliate against whistleblowers who report AML violations.
• Whistleblowers who are represented by an attorney can report information anonymously, though they must reveal their identity to the Treasury Department before they receive an award.
• The program is international: whistleblowers can be from outside of the United States and report violations that took place outside of the United States.

The Russian invasion of Ukraine has led to a renewed focus on the enforcement of economic and trade sanctions by the United States and its allies. For example, in April 2022, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a special advisory on Kleptocracy and Foreign Public Corruption in which it urged financial institutions to focus efforts on detecting the proceeds of foreign public corruption. In addition, the Department of Justice established Task Force KleptoCapture, dedicated to enforcing sanctions, export restrictions, and economic countermeasures that the United States has imposed, along with its allies, in response to Russia’s invasion of Ukraine.

As part of the government’s increased effort to enforce economic and trade sanctions, it has recognized the crucial role whistleblowers can play.

The U.S. Department of Treasury (“Treasury”) has established the Kleptocracy Asset Recovery Rewards Program (“Kleptocracy Program”), which offers rewards payments for information leading to seizure, restraint, or forfeiture of assets linked to foreign government corruption. Treasury’s Office of Terrorism and Financial Intelligence manages the Kleptocracy Program in coordination with the Department of State and Department of Justice.

The Kleptocracy Program provides up to a maximum of $5,000,000 for information leading to the restraint, seizure, forfeiture, or repatriation of stolen assets: (1) in an account at a United States financial institution; (2) that come within the United States; or (3) that come within the possession or control of any U.S. person. Assets in U.S. branches of a foreign financial institution are also eligible. Employees of foreign, U.S. federal, state, or local governments who furnish information obtained in the performance of official duties are ineligible for reward payments.

If you think you may have information relating to money laundering or U.S. sanctions violations, fill out our contact form or call us at (212) 376-5666 for a free evaluation of your potential case.

We represent our whistleblower clients on a contingent fee basis, meaning that an attorney’s fee is paid only if your case is successful.