RULE 21

Money Laundering and Sanctions-Busting: Report to FinCEN/Treasury

Anti-Money Laundering: Report to FinCEN/Treasury

Danske Bank Whistleblower Howard Wilkinson: 60 Minutes

Introduction

The 2022 Anti-Money Laundering Whistleblower Improvement Act revitalized AML and sanctions reporting by extending Dodd-Frank style protections to whistleblowers reporting these crimes.

The Bank Secrecy Act requires robust AML programs, suspicious activity report filings, “know your customer” protocols, and sanctions enforcement from banks, financial institutions, and cryptocurrency wallets. These entities fall under the jurisdiction of the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

Howard Wilkinson’s Danske Bank case serves as a stark warning for companies lacking adequate AML safeguards. Discover the intricacies of money laundering and sanctions, as well as their connection to whistleblowing, in our Rule 21.

Practice Tips

The AML whistleblower law is codified at 31 U.S.C. § 5323. The legislative history of the AML Whistleblower Improvement Act is published as House Report 117-423 (July 20, 2022).
The Improvement Act covers violations of the money laundering laws, the Bank Secrecy Act and sanctions-busting.
The IRS whistleblower law that covers crimes investigated by the IRS criminal division, which can include money laundering and asset forfeiture, is located at 26 U.S.C. § 7623(c)(2).
FinCEN can take enforcement actions under the Bank Secrecy Act (BSA), 31 U.S.C. 5311 et seq., and its implementing regulations at 31 C.F.R. Chapter X. This includes actions based on record-keeping violations (31 C.F.R §1010.415); Currency Transaction Report violations (31 C.F.R. §1010.311); failure to file SARs, or Suspicious Activity Reports (31 C.F.R. § 1021.320), failure to report foreign bank accounts (i.e., FBAR violations) (31 C.F.R §1010.350); and failure to register money services businesses (31 C.F.R §1022.380).
FinCEN publishes its enforcement actions online at https://www.fincen .gov/news-room/enforcement-actions.

Resources

The Anti-Money Laundering Whistleblower Protection Act, passed in Dec. 2022, will be codified at 31 U.S.C. § 5323. The Act was passed as House Bill 7195/Senate Bill 3316.

The IRS whistleblower law that covers crimes investigated by the IRS criminal division is located at:

26 U.S.C. § 7623(c)(2).

In The News: Advocacy for the AML Bill

“FinCEN Regs Must Recognize Int’l Whistleblower Realities” — Stephen Kohn, Law360
“New AML whistleblower law is a game changer in enforcing Russian sanctions,” — Stephen Kohn, Reuters
“Whistleblower Advocates Show Thanks to Congress Members Who Supported AML Bill,” — Geoff Schweller, Whistleblower Network News
“VICTORY: Congress Passes Historic Anti-Corruption Whistleblower Law,” — Geoff Schweller, Whistleblower Network News
“The Anti-Money Laundering Whistleblower Improvement Act: Justice for Whistleblowers; No Peace for Russian Oligarchs,” — Mary Jane Wilmoth, JD Supra
“Danske Bank Scandal Proves Need for AML Whistleblower Law,” — Grace Schepis, JD Supra
“Opinion: DeLauro action needed to pass whistleblower protection act” — Frederic Whitehurst and Jane Turner, Connecticut Post
“House must act on whistleblower bill to protect ‘insiders’ who report Russian money laundering,” — Stephen Kohn, The Hill

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