The U.S. Treasury Department is currently drafting proposed rules to implement the whistleblower provisions of the Anti-Money Laundering (AML) Act of 2020. The rulemaking process’ status was first made public in a Reuters article by leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. According to Kohn, by drafting strong regulations the Treasury Department can fortify the AML Whistleblower Program, despite shortcomings in the AML Act.
The AML Act became law on January 1, 2021 as part of the massive National Defense Authorization Act. Included in the Act were provisions establishing a whistleblower reward program for individuals who report money laundering violations to U.S. authorities. These provisions, however, included a number of loopholes which whistleblower advocates claim undermine the program. One such loophole is the lack of a mandatory minimum for whistleblower awards.
The Treasury Department is expected to publish proposed rules for the AML whistleblower program sometime this year. The AML Act does not mandate that the Treasury Department enact any regulations, however, and thus there is no deadline for their publication.
According to Kohn, “[t]his rulemaking process provides an opportunity to address shortcomings in the law and also create common sense regulations effectively implementing those aspects of the law that do not need a congressional fix.”
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