It has been a busy spring for the Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department agency responsible for administering and enforcing U.S. anti-money laundering (AML) laws. At the end of March, the agency announced a settlement with a broker-deal for $80 million, one of the larger penalties FinCEN has ever imposed. On April 7, the agency issued a proposed rule to encourage financial institutions to develop “risk-based” AML compliance programs. And on March 30, FinCEN issued an Advisory urging financial institutions to be vigilant to risks of facilitating healthcare fraud.
Below, we examine yet another FinCEN action: a proposed rulemaking issued on April 1, to formalize a whistleblower mechanism for AML and economic sanctions violations. The proposed rule would establish procedures for submitting tips, define award eligibility, outline application and adjudication processes, and describe available protections. In the context of the multiple recent actions taken by FinCEN, the proposed rule is further evidence that Treasury is prioritizing the detection and prevention of AML violations, including matters implicating U.S. sanctions.
At a basic level, the proposed rule would establish a fully operational enforcement tool for Bank Secrecy Act (BSA) and sanctions-related violations. The structure of the whistleblower mechanism mirrors programs maintained by the Securities and Exchange Commission (SEC)...
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