March 23, 2023

Volume XIII, Number 82


March 23, 2023

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Anti-Money Laundering (AML) Whistleblower Provision Expanded to Cover Economic Sanctions Violations, Increase Incentives for Reporting

Go-To Guide:

  • Amendment to Bank Secrecy Act (BSA)’s whistleblower provision makes award mandatory for successful tips and provides funding for awards, up to $300 million.

  • Amendment also expands the types of reporting subject to the bounty to include violations of U.S. economic sanctions laws.

  • With these increased incentives for reporting BSA/Anti-Money Laundering and economic sanctions violations, companies may wish to review internal reporting and other compliance measures.

On Dec. 29, 2022, the Anti-Money Laundering Whistleblower Improvement Act (the “Whistleblower Improvement Act” or “Act”), enacted as part of the Consolidated Appropriations Act of 2023, amended the Bank Secrecy Act (BSA) to bolster incentives for reporting BSA violations to federal officials and to expand the scope of reportable violations to include violations of U.S. economic sanctions. 

The Act expands on an overhaul of the BSA whistleblower provision, codified at 31 U.S.C. § 5323, effectuated by the Anti-Money Laundering Act of 2020 (AMLA). The AMLA authorized the Secretary of the Treasury to award whistleblowers up to 30% of any monetary penalties in excess of $1 million recovered by the government as a result of tips about BSA violations. It also provided a new private cause of action against employers for whistleblower retaliation. But unlike the U.S. Securities and Exchange Commission whistleblower program on which it was modeled, the AMLA whistleblower provision did not set any mandatory minimum for whistleblower recovery, creating some ambiguity about the strength of the incentive.

The Whistleblower Improvement Act resolves that ambiguity by entitling whistleblowers to at least 10% of any monetary penalties exceeding $1 million (unless the whistleblower is also rewarded under a second whistleblower program). The Act also creates a $300 million “Financial Integrity Fund” to allow the Department of the Treasury to pay whistleblower awards from fines collected by Treasury and the Department of Justice without the need for further appropriations.

The Act also expands the types of tips that may be subject to these awards, to include violations of the International Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), and the Foreign Narcotics Kingpin Designation Act, which together are the primary statutory authority for most U.S. economic sanctions measures. With this change, the BSA Whistleblower Provision becomes an important compliance consideration not only for financial institutions subject to the BSA but also for all U.S. companies expected to comply with U.S. economic sanctions administered by the Department of Treasury’s Office of Foreign Assets Control.

The Department of the Treasury is expected to issue a rulemaking implementing the BSA whistleblower provision in the near future. In the meantime, companies implicated by these changes—which now include a wide range of entities subject to the U.S. economic sanctions regime (namely all entities subject to U.S. jurisdiction)—may wish to review the adequacy of internal compliance, reporting mechanisms, and remediation measures, to make sure they are in a position to address significant BSA/AML and sanctions lapses before they are reported to federal authorities for a bounty.

©2023 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XIII, Number 32

About this Author

Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney

Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

Kyle R. Freeny Shareholder Anti-money laundering issues Bank Secrecy Act Anti-corruption, Foreign Corrupt Practices Act, Asset forfeiture, Foreign Agents Registration Act FARA, Government investigations,Compliance counseling

Kyle R. Freeny, a skilled trial attorney and former federal prosecutor for the Special Counsel’s Office and the Department of Justice (DOJ), Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), focuses her practice on white collar criminal defense, government and internal investigations, and anti-money laundering (AML) and international corruption matters.

Kyle was one of 19 prosecutors selected by Robert S. Mueller III to conduct the high-profile investigation into alleged Russian election interference, coordination between Russian officials and the Trump...

Nathan J. Muyskens Greenberg Traurig  DC Global White Collar Criminal Defense Practice Foreign Corrupt Practices Act

Nathan J. Muyskens is Co-Chair of the Global White Collar Criminal Defense Practice and defends corporate and individual clients in criminal grand jury investigations and prosecutions, internal investigations, regulatory inquiries and enforcement matters, and related parallel civil proceedings. Nate defends companies in corruption investigations and other matters related to the Foreign Corrupt Practices Act, and has experience handling government antitrust investigations on behalf of companies in various industries, such as health care, air travel, defense, pharmaceuticals, energy,...

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Marina Olman Pal, Greenberg Trauig Law Firm, Miami, Corporate and Finance Law Attorney
Practice Group Attorney

Marina Olman-Pal advises foreign and U.S. financial institutions on licensing, regulatory and compliance matters. She represents clients before U.S. regulators such as the Federal Reserve, OCC, FDIC, FinCEN, OFAC, Florida Office of Financial Regulation and other supervisory authorities. Marina counsels foreign and U.S. financial institutions on a broad range of issues including the Bank Secrecy Act (BSA), anti-money laundering compliance and Office of Foreign Assets Control (OFAC) sanction programs.


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Sonali Dohale, Greenberg Traurig Law Firm, Washington DC, Environmental and International Trade Law Attorney

Sonali Dohale focuses her practice on compliance counseling, environmental due diligence and environmental litigation under state and federal statutes. Sonali’s experience at government regulatory agencies and her background in civil and environmental engineering help give her insight into both the legal and technical challenges faced by her clients.

In addition, Sonali assists clients engaged in international trade with a variety of federal regulatory issues, including matters related to the International Traffic in Arms Regulations (ITAR), the...