January 30, 2023 – The Anti-Money Laundering ("AML") whistleblower regime in the United States received significant updates as part of the Consolidated Appropriations Act, 2023 ("CAA"), signed into law by President Biden on December 29, 2022. The new provisions took effect immediately, with further developments expected in regulations yet to be issued by the U.S. Department of the Treasury ("Treasury"). The changes include extending new incentives to whistleblowers in sanctions violations cases, setting a minimum award for whistleblowers, and establishing a new fund to guarantee rewards.
Since 1984, U.S. law has offered rewards to individuals who provide information leading to monetary recoveries for AML violations. The Anti-Money Laundering Act of 2020 ("AMLA"), passed as part of the National Defense Authorization Act for Fiscal Year 2021, updated and expanded these provisions. However, lawmakers subsequently raised certain concerns regarding the AMLA whistleblower reward regime. For example, AMLA capped whistleblower rewards at 30% of the amount recovered in a law enforcement action, but did not set a minimum recovery amount. The law therefore provided no guarantee that the reward would cover the prospective costs to potential whistleblowers of raising their claims. In some instances, lawyers reportedly declined to represent potential whistleblowers due to uncertainty regarding their ability to recover legal fees under the AMLA regime. In addition, the...
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