In December 2022, Congress handed would-be whistleblowers reporting money laundering and sanctions violations fresh financial incentives when it passed the Anti-Money Laundering (AML) Whistleblower Improvement Act.¹ The Act may have flown under the radar, as it was tucked into the Omnibus Budget signed into law by the President at year end. But it should be top of mind for financial and multinational institutions, as the risk of sanction or AML prosecution just increased.

The AML Whistleblower Improvement Act was just that—an upgrade designed to “improve”² and purportedly fix the deficiencies inherent in the whistleblower program established by the Anti-Money Laundering (AML) Act of 2020.³

Proponents of the Act expect the enhanced whistleblower provisions to finally encourage those who witness violations of U.S. sanctions laws⁴ to come forward, resulting in increased enforcement of the financial restrictions placed on Russian oligarchs and sanctioned entities after the invasion of Ukraine. The potential reach of the enhanced whistleblower programs stretches as far as the expansive U.S. sanctions regime, thus putting individuals, multinational corporations, and state-entities all at increased risk.

MINIMUM PAYOUTS

The new legislation, which updates the existing whistleblower program originally created in the 2020 Act, dictates that whistleblowers receive a minimum of ten percent of the value of any monetary sanction resulting from their disclosures. This enhances the 2020...

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