You are a compliance officer fighting the good fight against money laundering and terrorist financing. If the United States Government gifted you with a USD114 million reward for your whistleblowing, would you quit your job or stay in the ring? How about USD50 million? Get ready to retire those boxing gloves, because the above scenario just became a real possibility.
As American as apple pie: a supercharged whistleblowing programme has just been announced in the United States. On 11 December 2020, the United States Senate passed the 2021 National Defense Authorization Act, which includes the Anti-Money Laundering Act of 2020 (AMLA). President Trump’s veto of the act on December 23, 2020 was later overridden by Congress (the first time the Senate has overridden a Trump veto).
The AMLA comes with an enhanced whistleblowing programme modelled after the wildly successful Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CTFC) whistleblowing programmes that were created by the Dodd–Frank Act in 2010. At last count, the largest reward given to an individual under the SEC whistleblowing programme was USD114 million in October 2020; previous to that reward, an individual was rewarded USD50 million in June 2020. Under the SEC programme, tips about violations of federal securities laws have been received from individuals in over 130 countries, while the CFTC whistleblowing programme awarded USD75 million (including a single award of USD30 million to an individual) to whistleblowers in FY2018.
Under the ten-year-old SEC whistleblowing programme, a compliance officer could only expect to be rewarded if 120 days had passed after filing an internal report and the company in question had taken no action. In March 2020 the SEC made its third whistleblower reward to a compliance officer in the amount of USD450,000. Prior to that, its first reward to a compliance officer was USD300,000 and its second was in the amount of USD1.5 million.
Unlike the Dodd–Frank Act, the AMLA apparently makes internal compliance officers, in-house counsel and audit professionals eligible to be whistleblowers under its whistleblowing programme as those who inform ‘including as part of the job duties’.
AMLA follows the Dodd–Frank model and offers up to 30% of the funds recovered from enforcement to its whistleblowers. To reassure potential whistleblowers, the AMLA programme allows informants to remain anonymous by hiring counsel to represent them as well as offering a private right of action for informants who suffer retaliation after informing the Treasury or Justice departments of Bank Secrecy Act violations.
AMLA’s enhanced programme is a reflection that whistleblowing hotlines are effective and impactful when implemented properly. In fact, they are key to fighting misdeeds and misfeasance in any organisation. With AI-assisted technology, whistleblowing hotlines will only become more secure, reliable and essential as part of the compliance officer’s toolkit.
Key features of the AMLA programme are the cornerstones of any successful whistleblowing programme, and include:
- the option to remain anonymous
- protection from retaliation
- ease and reliability of reporting (expect SEC whistleblowing programme ease of reporting)
- full support from the highest levels of authority.
A bipartisan bill passed in a decidedly partisan year, the AMLA was endorsed by law enforcement professionals, national security experts, financial services associations and business associations as it modernises, and closes recognised gaps in legislation.