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New bill would fix AML whistleblower program

On Behalf of | May 10, 2022 | Uncategorized

The Anti-Money Laundering (AML) Act of 2020 was enacted in 2021 to incentivize whistleblowers to report money laundering to the Treasury Department. The incentives were monetary rewards for helpful information and new whistleblower protections that reflected the Dodd-Frank Act, which has been hugely successful for the U.S. Securities and Exchange Commission (SEC).

Unfortunately, there were loopholes that led whistleblower advocates to call for immediate reform of this vital award program. Representative Alma Adams (D-NC) introduced a bill (H.R. 7195) to strengthen the AML. The major loopholes that undercut the bill were:

  • There was no mandatory minimum, which means the Treasury could withhold awards to a qualified whistleblower. The new bill mandates a minimum of 10% of the monies collected by the Treasury, which aligns with other whistleblower laws.
  • The program currently relies upon Congressional appropriation to pay awards to whistleblowers. The Adams bill would fund the program using funds accrued through money laundering sanctions. This change, which also aligns with Dodd-Frank, avoids the need for the Congressional appropriations – reliance on them hampers the success of any whistleblower program.

Committee hearing reviewed the changes

U.S. House of Representatives Committee on Financial Services recently held a hearing entitled Oversight of the Financial Crimes Enforcement Network, including Adams’ bill with the AML revisions. Advocates claim these changes would exercise additional oversight over illegal banking activities like bribery and money laundering that hamper the efforts of those fighting democracy and financial stability here in the U.S. and around the world.