On March 30, FinCEN published a proposed rule in the Federal Register to establish a whistleblower program incentivizing tips on fraud-related violations of the Bank Secrecy Act, U.S. sanctions, and the Anti-Money Laundering Act. The regulations arrived more than 5 years after the program’s legislative creation. Whistleblower advocates have already expressed major concerns.
These regulations are long overdue; They were codified by the Anti-Money Laundering Act (2020) and the Anti-Money Laundering Whistleblower Improvement Act (2022), but have not yet been fully implemented. This notice follows longstanding bipartisan pressure for FinCEN to use whistleblowers to enforce sanctions, anti-money laundering laws, and protect national security. The proposed regulations will finally fulfill these mandates.
The proposal outlines how whistleblowers can report violations promptly and securely, while detailing the award application process and eligibility criteria for making and adjudicating awards. Like the SEC’s program, whistleblowers may receive 10–30 percent of penalties collected if their tip leads to action by the Treasury or the Department of Justice. FinCEN recently launched a whistleblower portal, a major step after years of accepting tips without a dedicated public website.
While FinCEN’s long-awaited regulations are a small step towards making the program more accessible, advocates expressed heightened caution about the risk to whistleblowers’ safety and questioned whether the program would be effective in combating corruption.
The proposed regulation offers some confidentiality protections for whistleblowers who report to FinCEN, but not enough, according to the National Whistleblower Center. FinCEN will have full discretion to share a whistleblower’s identity with law enforcement, risking serious consequences for the whistleblower’s life and livelihood.
Stephen Kohn, Chairman of the National Whistleblower Center, expressed grave concern. “These are statutory rights identical to those in Dodd-Frank, which have made the SEC a welcoming environment for whistleblowers. These individuals are literally risking their careers and lives to step forward and report some of the most corrupt and dangerous criminal elements. These criminals are violating sanctions and putting illicit funds and drug money into the financial system. FinCEN’s final regulations should not stop at the bare minimum mandated by Congress…”
Whistleblowers and advocates welcome the first steps of change under FinCEN, but further work is needed before the program is safe for whistleblowers to use.
