On Dec. 29, 2022, President Joe Biden signed into law the Anti-Money Laundering Whistleblower Improvement Act as part of a 1,600-page, $1.7 trillion omnibus appropriations bill. The Act for the first time authorizes monetary rewards for tips leading to government penalties for violations of certain economic sanctions relating to drug trafficking, terrorism, and other threats to national security, foreign policy or the U.S. economy — including various types of sanctions imposed by the U.S. government on Russian oligarchs.
In an analysis for Law360, LFM attorneys, Daren Firestone and Kimberly Wehle, explain the legal context and scope of this new law administered by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
FinCEN’s whistleblower program will also require robust enforcement.
Whistleblower tips have little value unless pursued by agency investigators and attorneys — presumably derived from some combination of FinCEN’s Enforcement and Compliance Division; OFAC’s Office of Compliance and Enforcement; the FBI’s Money Laundering, Forfeiture and Bank Fraud Unit; and the U.S. Department of Justice’s Money Laundering and Asset Recovery Section.
It remains to be seen how aggressively these agencies will pursue whistleblower tips submitted under the Anti-Money Laundering Whistleblower Improvement Act.
Nonetheless, it is significant for the rule of law that new financial incentives are now in place for whistleblowers to uncover Russian oligarchs and other sanctioned individuals who are illegally hiding assets.
The Anti-Money Laundering Whistleblower Improvement Act could lead to exposures of funds held in nominee accounts, identification of cryptocurrency held in anonymous wallets, and revelations regarding the beneficial ownership of mega-yachts, among countless other areas now open to whistleblower claims.
The full impact of the new law on the U.S. government’s efforts to address financial crime writ large has yet to be seen.
Read the full opinion, “New AML Law May Be Key Tool To Enforce Russia Sanctions,” on Law360 (account required), or download a PDF here.