Enhancements to the AML Whistleblower Program

The Anti-Money Laundering (AML) Whistleblower Improvement Act became law on December 29, 2022. The Improvement Act provides critical upgrades to the whistleblower program established by the Anti-Money Laundering Act just two years ago.

As an initial matter, the AML Whistleblower Program will undergo an important expansion to cover whistleblowers who provide information regarding violations of United States sanctions laws that leads to successful enforcement actions. The relevant sanctions laws include, but are not limited to, the International Emergency Economic Powers Act, the Foreign Narcotics Kingpin Designation Act, and the Trading with the Enemy Act. This widening of the AML Whistleblower Program is particularly timely, considering various sanctions issues surrounding Russia’s invasion of Ukraine.

The AML Whistleblower Program will also receive two enhancements that will bring it more in line with the successful whistleblower programs established by the Dodd-Frank Act. First, the Improvement Act guarantees a minimum award for successful AML whistleblowers—no less than 10% of all amounts recovered. This puts the AML Whistleblower Program on equal footing with the SEC and CFTC Programs: requiring that whistleblowers be awarded between 10 and 30% of amounts collected where the information provided has led to a successful government enforcement action. Prior to the passage of the Improvement Act, AML whistleblower awards were wholly discretionary.

Second, the Improvement Act establishes a fund, supported by sanctions recovered by the government in whistleblower-initiated enforcement actions, that will ensure that successful whistleblowers are paid. No such mechanism existed previously. The fund will be created with $300 million from fines collected by the Department of Justice and Department of Treasury.

There is no understating the importance of the three upgrades to the AML Whistleblower Program provided by the Improvement Act. The reach of the Program now extends to sanctions violations and the procedural enhancements will ensure that whistleblowers will get paid for their service. These developments should shift the Program into second gear and put it on the same growth trajectory as the SEC and CFTC Whistleblower Programs.