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U.S. and U.K. Update: Protections Proposed for AML Whistleblowers

03/31/23 5 minute read
Governments across the globe are calling for protections for anti-money laundering (AML) whistleblowers. In this ever-changing global sanctions environment, the U.S. and U.K. governments are attempting to more effectively counter transnational corruption and sanctions evasion. 

Read on to learn about the latest proposed legislation that, if passed, will help bolster anti-money laundering efforts.

U.S. Proposal Passes the Senate

At the end of 2022, the U.S. Senate voted unanimously to expand whistleblower incentives and strengthen whistleblower protections by passing the Anti-Money Laundering Whistleblower Improvement Act.

This Act would revamp the current anti-money laundering whistleblower program by adding support for whistleblowers who report violations of U.S. sanctions laws, guaranteeing that whistleblowers will be paid a minimum award amount, and providing a funding mechanism to pay whistleblower awards. Specifically, the proposed legislation would:

  • Entitle whistleblowers to an award of between 10 and 30 percent of the value of fines collected as a result 
  • Create a $300 million fund to pay whistleblower awards from fines collected by the Justice and Treasury Departments

The Biden administration supports the proposed law, and stated, “Whistleblower protections are critical to promoting public accountability and integrity. If prospective whistleblowers do not expect to be protected, and instead fear job loss and further targeted punishment, they are deterred from raising concerns about misconduct, fraud, or corruption.”

The AML Whistleblower Improvement Act covers employees at a wide variety of institutions, including but not limited to, banks, broker-dealers, insurance companies, operators of credit card systems, mutual funds, certain casinos, and travel agencies. It also broadens the scope of the law to cover the reporting of violations of financial management rules for executive agencies; sanctions on foreign nations, entities, or individuals identified as enemies of the US; and sanctions on foreign narcotics traffickers.

While the Act passed in the Senate, it now lies in the hands of the U.S. House of Representatives to vote on the future of the bill.

The U.K. Considers A Bill

In April of 2022, U.K. Parliament member Mary Robinson proposed The Whistleblowing Bill. This prospective law aims to:

  • Protect all whistleblowers and those associated with whistleblowers
  • Set mandatory minimum standards for policies and procedures and investigations of protected disclosures
  • Create a new judicial process for deciding disputes arising from whistleblowing
  • Impose fines and penalties against those retaliating against whistleblowers
  • Dedicate helplines and resources that can make citizens aware of their whistleblower rights

The core purpose of the bill is to build on the standards set by the Public Interest Disclosure Act of 1998 by providing stronger legal protection against victimization and dismissal of whistleblowers. By increasing access to justice services and providing both financial and community support, the bill incentivizes more widespread reporting of corruption. It also sets up a framework to establish an Office of the Whistleblower to support the reporting process. 

The Whistleblowing Bill is currently being debated in Parliament.  

Impacts of Whistleblower Protections

Since both acts were proposed with the purpose of encouraging more AML and sanctions whistleblowers to come forward, employers in the affected categories will need to prepare for a potential increase in the number of reports made by employees. 

The best way to avoid any report of wrongdoing is to remain in compliance with money laundering and sanctions regulations. With compliance, information is the key to success as you can’t avoid what you can’t see. 

For instance, a commercial risk intelligence platform such as Sayari Graph leverages global public records and graph technology to map complex, cross-border corporate networks, thus providing a clear picture of illicit financial actors, their infrastructure, and relationships. This comprehensive view provides investigators with broader context surrounding their customers and counterparties – a key aspect for effective sanctions and AML compliance. 

Want to see an AML and sanctions investigation in action? Watch our Masterclass on tracking the assets of sanctioned Russian oligarchs.

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