The Financial Crimes Enforcement Network (“FinCEN”) recently issued a Proposed Rule to implement the Anti-Money Laundering Whistleblower Improvement Act (“AML WIA”). Whistleblower advocates argue that the proposed rule diverges from Congressional intent and fails to sufficiently protect or incentivize whistleblowers, undermining the law’s purpose.
On April 30 th , the National Whistleblower Center submitted a 76-page comment to FinCEN, identifying how the Proposed Rules weaken the AML whistleblower program’s impact. This article begins a series examining these major issues and explaining why the program’s success depends on their resolution before finalizing the rules.,To learn more about NWC’s campaign, click here.
A Broader Scope: Why is the AML WIA important?
The Anti-Money Laundering Act established FinCEN’s whistleblower program in 2020, requiring the Department of Justice (“DOJ”) and FinCEN to accept confidential and anonymous reports from whistleblowers worldwide who disclose violations of the Anti-Money Laundering Act, the Bank Secrecy Act (“BSA”), and other related laws. The AML WIA of 2022 strengthened this program by adding incentives for whistleblowers to make disclosures, enabling whistleblowers to receive a mandatory award of between 10%-30% of the sanctions collected by FinCEN if their original information leads to a successful enforcement action. This change aligned the AML whistleblower program with other highly successful U.S. whistleblower programs (such as the SEC’s program under the Dodd-Frank Act, which has recovered over $6.3 billion in sanctions since 2010).
Compared to these programs, the AML program has two key advantages. First, it incentivizes whistleblowers to report a much wider range of violations than previous programs, encompassing a long list of U.S. laws that prohibit money laundering and financial fraud (the “AML laws”). Second, it allows whistleblowers to report to many more governmental sources than prior programs, including any office within the Department of Justice. Advocates have called the AML WIA “the most comprehensive award program ever passed.”
Whistleblowers are a vital tool for detecting AML violations and enforcing sanctions, providing U.S. authorities with key inside knowledge. Financial crime is often undetectable without the aid of whistleblowers, and their assistance can drastically reduce FinCEN’s expenditures of investigative resources. In her address to the SIFMA AML Conference, FinCEN Director Andrea Gacki1 defined the whistleblower program as a crucial strategy to “increase enforcement by strategically deploying [FinCEN’s] limited resources.” Gacki emphasized that the program “holds tremendous potential as an enforcement force multiplier.”
Although the Proposed Rule is a step toward activating the award program, it falls short of fully protecting and incentivizing whistleblowers as required by the AML WIA. In particular, FinCEN’s proposal does not adequately support whistleblowers reporting from outside the U.S., threatening the law’s effectiveness.
Going International: Foreign Whistleblowers as Key Insiders
A key difference between the Dodd-Frank Act’s whistleblower program and the AML WIA is that the former was designed to protect American investors, while the latter is transnational in nature and specifically targets actions of international companies and banks. In its Proposed Rule, FinCEN stated that the program’s purpose “is to combat money laundering, financing of terrorism, and other illicit finance activity, including by individuals associated with drug cartels and transnational organized criminal groups.”2 The Proposed Rule aims to incentivize insiders in transnational criminal groups involved with illicit cross-border activities such as terrorism financing to come forward to U.S. authorities with significant information.
Despite this, the Proposed Rules lack specific regulations on how international whistleblowers can use FinCEN’s program. International whistleblowers face significant hardship, often residing in countries with inadequate whistleblower protections and a serious threat to their livelihoods or bodies. As non-U.S. residents, unfamiliarity with U.S. law and procedures poses obstacles to properly filing a claim under the AML WIA and obtaining an attorney.
Still, under other whistleblower programs, international whistleblowers have historically provided critical tips on major cross-border schemes. Howard Wilkinson, a former UBS banker and international whistleblower, blew the whistle on the largest money laundering scandal in history: a $234 billion Russian money laundering scheme that moved Rubles from Russia to the U.S., with $2 billion recovered. Under the SEC’s whistleblower program, almost 6,000 whistleblower tips have been reported from outside the U.S. since 2011, demonstrating a clear interest abroad in using U.S. programs to report money laundering and other violations covered by the AML laws.
Out in the Rain: FinCEN Leaves International Whistleblowers Unprotected
Despite the AML laws’ global aims and the proven importance of international whistleblowers, FinCEN’s Proposed Rules fail to seriously address the challenges whistleblowers face abroad. Most critically, the Proposed Rules do not acknowledge international whistleblowers’ limited confidentiality protections, undermining the law’s intent.
In 2018, Alexander Perepilichnyy was found dead after blowing the whistle on a Russian money-laundering network – just one of countless whistleblowers who have faced arrest or even death after making disclosures in authoritarian environments or countries that lack a strict rule of law. Without specific protections in addition to incentives, international whistleblowers cannot reasonably be expected to risk their lives and livelihoods to report to U.S. authorities. Some of the most valuable sources for whistleblower tips under the AML WIA will come from countries like Russia or China, where surveillance is extreme, and protections are minimal. FinCEN’s Proposed Rules must maximize these whistleblowers’ eligibility and confidentiality protections under the ML WIA.
FinCEN’s proposed rules successfully implement the AML WIA’s anti-retaliation provisions.3 However, courts have held that U.S. anti-retaliation laws apply only to employees working in the United States4, and the proposed rules fail to recognize this distinction. The Proposed Rules incentivize all whistleblowers to make internal disclosures to their companies and require certain high-level employees to wait 120
days to report to FinCEN after going to internal reporting structures, including international whistleblowers who have no legal recourse if their employer then retaliates against them.5 This is a reasonable policy for whistleblowers in the U.S. context, but an incredibly dangerous one for others. FinCEN’s proposal fails to distinguish between these two groups. (As will be discussed further in a subsequent article, FinCEN’s failure to implement the AML WIA’s confidentiality guarantees places international whistleblowers at higher risk.)
In addition to lacking anti-retaliation protections, international whistleblowers must also reckon with the complexity of U.S. reporting procedures, often without counsel. FinCEN’s proposal does not acknowledge this challenge. In their 2024 audit of Dodd-Frank, the Organization for Economic Co-operation and Development found that whistleblowers who should have been eligible for coverage were being disqualified, primarily due to a lack of knowledge of complex SEC reporting requirements.
The AML WIA is structurally almost identical to Dodd-Frank, and its differences are meant to expand whistleblowers’ opportunities to report. Accordingly, FinCEN’s rules should improve upon Dodd-Frank and accommodate the realities facing international whistleblowers. As proposed, FinCEN’s rules open the door to countless opportunities for making whistleblowers ineligible for awards simply because they are unaware of technical deadlines and requirements under the AML WIA. The AML WIA does not mandate this consequence, and FinCEN’s proposal risks disincentivizing extremely useful disclosures from international whistleblowers simply because they do not know how to report or qualify for an award.
Finally, the Proposed Rules do not require additional guidance for international whistleblowers, nor do they adequately expand coverage to whistleblowers who disclose through other channels of reporting that are usually more accessible or intuitive to those unfamiliar with U.S. agencies – even though the AML WIA explicitly protects whistleblowers who go to these sources. Reporting to the news media, NGOs, foreign
law enforcement, or employers may render whistleblowers who report to those entities “involuntary.” According to the OECD6 , 10% of successful enforcement cases under the foreign-targeted Foreign Corrupt Practices Act were reported by NGOs and foreign law enforcement agencies, while 20% were reported to the news media. The Rules also do not adequately protect international whistleblowers who initially contact representatives in U.S. embassies or other U.S. international offices, such as the Department of State, regarding transnational crimes covered under the AML WIA.
Without fully acknowledging that whistleblowers will initially report to these entities, many otherwise qualified whistleblowers will be denied eligibility under the AML WIA. In its current state, the Proposed Rules risk denying and deterring international whistleblowers due to arbitrary, restrictive filing requirements; disqualification or endangerment of corporate officials; insufficient confidentiality protections, particularly in regard to foreign governments; and a failure to understand the importance of initial whistleblower disclosures to the news media, NGOs, foreign government law enforcement agencies, and internal reporting structures.
In From The Storm: How FinCEN Could Improve Conditions for International Whistleblowers
To fully leverage the power of international whistleblowers and maximize the amount of significant information U.S. enforcement agencies receive, the Proposed Rules must consider the international whistleblowers’ contributions to U.S. enforcement efforts and acknowledge their particular needs for protection and incentives. Most importantly, whistleblowers must feel safe enough to come forward, meaning that FinCEN’s final rules must offer maximum confidentiality protections and omit potentially dangerous reporting incentives to shield international tipsters from retaliation.
International residents tend to be more familiar with local law enforcement agencies and anti-corruption NGOs than with FinCEN itself, naturally trusting those organizations more and reporting there first. Similarly, whistleblowers often seek to increase public awareness of misconduct by disclosing to the news media before seeking an award. FinCEN must adapt its rules to these circumstances by ensuring coverage of those who report through other legitimate channels.
Whistleblower attorney Michael Kohn suggested in a 2022 article that a voluntary whistleblower tip presented to the SEC through a news report should be treated no differently than one brought through a lawyer. “Anything else represents a policy that disincentivizes instead of incentivizing individuals to take the steps that lead to the disclosure of original information to the SEC,” Kohn said. Through this rulemaking, FinCEN has the opportunity to rectify this and other longstanding obstacles whistleblowers face in reporting to the SEC’s program, and ensure that international whistleblowers have as easy a path as possible to make reports and qualify for awards. These fixes are important for all whistleblowers under the AML WIA, but particularly for those who are unfamiliar with the U.S. legal system.
Finally, all of the above changes should occur in conjunction with educational programming to ensure that the complexities of U.S. legal procedure do not serve as a barrier to international whistleblowers making disclosures. As the OECD recommends, “guidance” on how to utilize U.S. reporting structures should be provided to international law enforcement agencies, NGOs, corporate compliance programs, attorneys, and members of the news media. NWC’s suggested improvements, in conjunction with mandated guidance, aim to accommodate transnational whistleblowers and ensure that they are not denied awards due to restrictive filing requirements.
Conclusion
International whistleblowers are an essential tool for detecting international illicit financial activity. To achieve its stated purpose, the AML WIA, FinCEN’s regulations must be designed to incentivize the maximum number of quality tips while protecting sources. Without making these changes to the proposed rule, FinCEN may be excluding deeply embedded sources who are on the front lines of detecting corruption and transnational financial crime.
“The whistleblower anti-corruption communities must insist that the final rules implement the law in line with Congressional intent,” says leading whistleblower attorney and NWC Chairman Stephen Kohn. “We’re at a pivotal turning point in the struggle against corruption. The AML whistleblower law is a potentially powerful tool, and the rules implementing it must effectuate that potentiality.”
1 FinCEN, Press Release, Prepared Remarks of FinCEN Director Andrea Gacki During the SIFMA
AML Conference (May 6, 2024),
https://www.fincen.gov/news/speeches/prepared-remarks-fincen-director-andrea-gacki-during-sifma-
aml-conference.
2 Whistleblower Incentives and Protections, 91 Fed. Reg. 16328 (April 1, 2026), 16329.
3 91 Fed. Reg., 16341 (Proposed 31 C.F.R. § 1010.930(f)(3)).
4 See, e.g., Carnero v. Boston Scientific Corp., 433 F.3d 1 (1st Cir. 2006).
5 91 Fed. Reg., 16332 (Proposed 31 C.F.R. § 1010.930(c)(5)(iii)).
6 Organization for Economic Co-operation and Development, Implementing the OECD Anti-Bribery Convention
Phase 4 Two-Year Follow-Up Report: United States,
https://www.oecd.org/content/dam/oecd/en/publications/reports/2022/10/implementing-the-oecd-anti-bribery-
convention-phase-4-follow-up-report-united-states_bbccd968/d994f92a-en.pdf, 10.
