On December 23, Congress passed the Anti-Money Laundering (AML) Whistleblower Improvement Act as part of the Omnibus spending package. The AML Whistleblower Improvement Act has been championed by whistleblower advocates as a historic piece of anti-corruption legislation.
“This law is the most important transnational anti-corruption law ever passed. Russian oligarchs, drug dealers, terrorists, corrupt government officials, and tax evaders all engage in money laundering. It is how they hide their ill-gotten gains. This law creates the first effective mechanism to incentivize AML whistleblowers,” said leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto.
The AML Whistleblower Improvement Act offers two reforms to the AML Whistleblower Program which was established in 2021 but has been undermined by legislative loopholes. The reforms are modeled off provisions of the Dodd-Frank Act, which established the highly successful SEC and CFTC whistleblower programs. One provision specifies that under the AML Whistleblower Program, qualified whistleblowers will receive awards of “not less than 10 percent” of the sanctions collected in the relevant enforcement action. Currently there is no statutory minimum for AML whistleblower awards, meaning that awards are purely discretionary.
Secondly, the bill establishes a fund to pay AML whistleblower awards. Like the SEC’s whistleblower fund, it is entirely financed by sanctions collected in whistleblower-assisted...
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