Sunday Read: AML Explained
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On December 7, the U.S. Senate voted unanimously by voice to pass the bipartisan Anti-Money Laundering (AML) Whistleblower Improvement Act. Soon after, NWC urged whistleblower supporters to take urgent action and push for the House to pass the bill. But what is the AML Whistleblower Improvement Act and why is it so vital?
In this Sunday Read we will examine why money laundering whistleblowers are vital in holding Russian oligarchs accountable, what the AML Whistleblower Improvement Act does, and how you can help get it passed!
The Importance of Money Laundering Whistleblowers
Money laundering is the process of taking large amounts of illegally obtained funds and making their source seem legitimate. Criminals, including Russian oligarchs, launder money in order to use the profits of illicit activities. In order to hold Russian oligarchs accountable for the invasion of Ukraine, the U.S. needs to be able to crack down on their money laundering schemes.
Insiders with direct knowledge of money laundering schemes are critical to proper AML enforcement. For example, the largest money laundering scheme in history, a $243 billion scheme in which Russian funds were laundered through Estonia, was exposed by Danske Bank whistleblower Howard Wilkinson.
Money laundering whistleblowers are thus critical to the U.S.’s ability to hold Russian oligarchs and other bad actors accountable.
The AML Whistleblower Improvement Act
The AML Whistleblower Improvement Act addresses loopholes which have undermined the U.S. Treasury Department’s AML Whistleblower Program and expands the program to cover whistleblowers who disclose sanctions violations. The bill is essential to establishing a successful AML Whistleblower Program which incentivizes whistleblowers with high-quality information on money laundering and sanctions violations to come forward and cooperate with U.S. authorities.
The AML Whistleblower Program was established in January 2021. The law establishing the program was largely modeled off of the Dodd-Frank Act (DFA), which created the highly successful SEC Whistleblower Program. The AML law strayed from the DFA in two key provisions, however, creating loopholes which have undermined the program’s success.
Over the past two years, NWC and other whistleblower advocates have repeatedly urged Congress to reform the AML Whistleblower Program. A recent Congressional filing by Taxpayers Against Fraud details a number of would-be-whistleblowers with information on Russian oligarchs’ illicit funds who are simply waiting for the U.S. to reform its AML Whistleblower Program.
The bipartisan AML Whistleblower Improvement Act makes two simple but meaningful reforms to the AML Whistleblower Program. First, the bill entitles qualified whistleblowers to a statutory minimum award of at least 10% of the sanctions collected in the enforcement action aided by their disclosure. This is the same minimum award guaranteed found in the DFA. Currently, AML whistleblower awards are fully discretionary, meaning that would-be-whistleblowers are unlikely to take the tremendous risks associated with blowing the whistle on money laundering.
Secondly, the bill establishes a fund to finance the payment of whistleblower awards. Currently, the AML Whistleblower Program relies on Congressional appropriations to pay awards. The AML Whistleblower Improvement Act instead creates a fund which is entirely financed through sanctions paid by money launderers. This is the same funding process used in the SEC Whistleblower Program and other successful whistleblower award programs.
Lastly, the bill expands the reach of the AML Whistleblower Program to cover individuals blowing the whistle on violations of sanctions. Currently, whistleblowers who expose sanctions-busting are not covered under any U.S. whistleblower laws.
By addressing the current loopholes of the AML Whistleblower Program and expanding the program to cover sanctions whistleblowing, the AML Whistleblower Improvement Act will allow the U.S. to incentivize whistleblowers with direct knowledge of the illicit financial schemes of Russian oligarchs and other bad actors.
How You Can Help:
Congress is close to passing the AML Whistleblower Improvement Act. On December 7, the U.S. Senate voted unanimously to pass the bill. Previously, the House Committee on Financial Services unanimously approved the bill.
Representative Rosa DeLauro (D-CT), the Chair of the House Appropriations Committee, needs to sign off on the bill before it can proceed to the House for a final vote. If DeLauro signs off on the bill, it will pass and the U.S. will be able to use money launderer whistleblowers to hold Russian oligarchs accountable for the war in Ukraine.
This is why I am asking you to call Representative Rosa DeLauro’s office at (202) 225–3661 and express their support for the Anti-Money Laundering Whistleblower Improvement Act.
Support NWC
NWC has long supported Anti-Money Laundering Whistleblowers and improvements to Anti-Money Laundering Whistleblower Protections and Incentives. We have been working for YEARS to achieve these improvements and your continued support enables us to continue in our fight. NWC has won in the Securities and Exchange Commission, we continue to support wildlife whistleblowers, and we think we can win for AML Whistleblowers in 2022. Please donate today.
