Yesterday, the Financial Crimes Enforcement Network (FinCEN) released proposed rules governing the AML Whistleblower Act, which provides for mandatory rewards to qualified whistleblowers who report violations of the Bank Secrecy Act, anti-money laundering requirements, and sanctions violations. The regulations largely mirror those of a similar program managed by the SEC under the Dodd-Frank Act. However, the proposed rules significantly undercut the ability of whistleblowers who file reports to maintain their anonymity and confidentiality.
“The AML whistleblower law has strict confidentiality and anonymity requirements, and these statutory provisions are absolutely essential for the success of the law,” said Stephen M. Kohn, a leading whistleblower attorney and Chairman of the National Whistleblower Center. “Unfortunately, the proposed rules contain a massive loophole that permits a whistleblower’s identity to be disclosed simply because FinCEN determines tha such disclosures may be ‘necessary to accomplish the purposes’ of a law. This loophole violates the AML Act.”
Money laundering charges often implicate extraordinarily dangerous criminals, such as drug cartels and groups engaged in terrorist financing, and thus the need for strict confidentiality is necessary. But Proposed Rule (f)(2)(i)(B) states that information revealing a whistleblower’s identity can be released to any law enforcement agency, domestic or foreign, “when FinCEN determines that it is necessary to accomplishes the purpose of a covered statute.”
According to Kohn, this proposed rules violates the AML statute, which specifically prohibits such open-ended disclosures. “Under the AML law, prior to a whistleblower’s information being shared with another agency, FinCEN must confirm that the sister will “maintain such information as confidential,” Kohn explained. Furthermore, FinCEN may not share a whistleblower’s identity with foreign entities unless they obtain proper “assurances” that fulfill confidentiality.
“If this rule were to go into effect, it would directly contradict the AML statute’s confidentiality provisions and place at risk whistleblowers who are literally risking their careers and lives to step forward. This proposal is a radical departure from the legal requirements necessary for the proper protection of whistleblowers,” Kohn added.
Kohn is available for comment. For more information, contact NWC at programs@whistleblowers.org and Alice Wanamaker at alice.wanamaker@kkc.com.
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NWC is the leading nonprofit working with whistleblowers worldwide to fight corruption and protect people and the environment. For over 35 years, NWC has successfully advocated for policies to protect whistleblowers from retaliation and reward them for helping deliver criminal and civil penalties against wrongdoers.
