AML whistleblower program needs funding, development to ramp up


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AML Compliance whistleblower program off to a slow start

A new whistleblower program for money-laundering violations exists—but it doesn’t have much traction yet, according to a recent report.

Passed into law in January as part of the annual defense-spending bill, whistleblowers can gain financial rewards for reporting AML Compliance violations laid out in the Bank Secrecy Act. But an absence of funding and a lack of program development make reporting AML violations murky at best.

Lawyers who specialize in whistleblower cases note that the program will gain traction when it makes clear details like minimum rewards and exactly where and how tips should be reported. They point to the SEC’s successful whistleblower program as a model for what the AML program should aspire to.

The law now provides for tipsters to receive up to 30 percent of monetary penalties collected in enforcement actions against AML violators uncovered via whistleblower information. But other details—like deadlines for implementing a framework, setting a minimum reward, or designating a ‘home’ agency for the program—remain unspecified.

The Secretary of the Treasury has directed FinCEN to manage the program, but no additional resources have yet been allocated to support the creation of a robust and fully staffed program akin to the SEC’s.

FinCEN and Treasury officials are seeking new funding for the new program. They are disinclined to further divert existing FinCEN funds already allocated to existing enforcement commitments.

According to the report, lawyers who specialize in representing whistleblowers say for now they will need to stay on the sidelines of AML whistleblowing.  Several said they will decline clients seeking to make tips to the AML program until Treasury and FinCEN fully develop the program.

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