AML Whistleblower Reform Bill Passes House Committee

On June 22, the U.S. House Committee on Monetary Providers voted unanimously by voice to approve H.R. 7195, a invoice amending the whistleblower provisions of the Anti-Cash Laundering Act of 2020 (AML Act). The AML Act established a whistleblower award program for money laundering whistleblowers however main loopholes have undermined this system. H.R. 7195 closes these loopholes.

“This bipartisan, bicameral legislation provides a proven solution to improving the whistleblower fund of the Financial Crimes Enforcement Network (FinCEN),” stated Consultant Alma Adams (D-NC) the principal sponsor of the invoice. “FinCEN’s whistleblower fund was designed to pay awards to the brave souls who too often risk their livelihoods and their lives to report criminal wrongdoing that they witness. Unfortunately, we have found that FinCEN’s award model which we implemented in 2020 AMLA has been so far insufficient to meet the statutory requirements. So I’m proud to say this legislation brings FinCEN’s fund in line with other successful funds currently operating in the federal government and will substantially aid FinCEN as it executes its Congressionally directed mission.”

H.R. 7195 addressed two main shortcomings with the AML Act. First, the invoice provides a required statutory minimal award of 10%. At present, there is no such thing as a minimal award assure, which means that every one whistleblower awards by way of this system are discretionary. Discretionary award packages have confirmed to be ineffective at correctly incentivizing whistleblowing.

“This bicameral, bipartisan legislation will strengthen our whistleblower programs to combat money laundering and provide law enforcement information to better protect our country,” added Consultant Anthony Gonzalez (R-OH). “This bill will make sure that whistleblowers receive at least 10% of the value of fines collected from their willingness to speak out compared to current law which has no minimum award. We should be doing more to incentivize whistleblowers to come forward and ensure that they are awarded for their bravery and commitment to justice.”

H.R. 7195 additionally establishes a fund modeled off these created by the Dodd-Frank Act which pays whistleblower awards financed fully by way of sanctions collected in enforcement actions introduced by whistleblowers. 

Because the AML Act was handed in January 2021, Kohn, Kohn & Colapinto founding companion Stephen M. Kohn has championed the necessity for reforms to the regulation, writing numerous pieces on the issue. As Chairman of the Board of the National Whistleblower Center (NWC), Kohn additionally performed a key function in numerous letters sent to Congress in support of reforms.

On the listening to, Committee Chair Consultant Maxine Waters (D-CA) highlighted NWC’s advocacy. “According to the National Whistleblower Center,” Waters said, “‘It is highly unlikely that persons with relevant information relating to illegal money laundering and financing terrorism will risk their livelihoods, reputations and the potential of high litigation costs without reasonable financial assurances.’”

H.R. 7195 will subsequent proceed to the House flooring for a vote. A companion invoice has been launched within the Senate by Senators Chuck Grassley (R-IA) and Raphael Warnock (D-GA).

Geoff Schweller additionally contributed to this text.

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