FinCEN Proposes Whistleblower Program for AML and Sanctions Violations

The Financial Crimes Enforcement Network ("FinCEN") proposed a rule to create a whistleblower program offering financial incentives and anti-retaliation protections for reporting potential AML and sanctions violations.

The proposed rule, which implements provisions of the Anti-Money Laundering Act and the Anti-Money Laundering Whistleblower Improvement Act, provides a framework for rewarding individuals who submit actionable tips. FinCEN stated that the program will contribute to the U.S. government’s efforts to "safeguard the financial system from illicit use, promote national security, and combat money laundering, terrorist financing, proliferation financing, and related crimes." Under the framework, eligible whistleblowers whose information leads to a "covered action"—defined as a successful enforcement action resulting in monetary sanctions exceeding $1 million—will receive an award of between 10% and 30% of the collected monetary sanctions.

The proposal would require a whistleblower's submission to satisfy several criteria, including:

• Original Information: A whistleblower must provide information derived from their own "independent knowledge" or "independent analysis." The information cannot already be known to the Treasury or the Department of Justice and cannot be exclusively derived from public sources, such as news media or government reports, unless the whistleblower was the original source of that public information.
• Voluntariness: Information must be submitted voluntarily, meaning it is provided before any formal or informal request, inquiry, or demand from the government, a self-regulatory organization, or the whistleblower's employer.
• Eligibility and Exclusions: Whistleblowers can be U.S. or non-U.S. natural persons, but the rule excludes certain individuals, such as foreign officials, government and law enforcement employees, and individuals convicted of a criminal violation related to the covered action. Additionally, personnel with internal audit or compliance responsibilities must generally wait 120 days after obtaining the information before reporting it to FinCEN to remain eligible, a provision designed to give companies time to address issues through internal compliance programs.
• Procedures and Anonymity: Whistleblowers must submit a "Tip, Complaint, or Referral" and, later, an "Application for Award" through FinCEN's secure online portal. Individuals may submit tips anonymously, provided they are represented by an attorney who verifies their identity.
• Confidentiality and Anti-Retaliation: The rule implements strict anti-retaliation protections prohibiting employers from discharging, demoting, threatening, or harassing whistleblowers. It also imposes strict confidentiality requirements on FinCEN to prevent the disclosure of any information that could reasonably be expected to reveal a whistleblower's identity, except in limited circumstances.

FinCEN underscored that the rule covers not only the Bank Secrecy Act but also sanctions laws, including the International Emergency Economic Powers Act, the Trading With the Enemy Act, and the Foreign Narcotics Kingpin Designation Act. FinCEN clarified that it retains broad discretion in determining the exact percentage of an award based on factors like the significance of the information, the degree of assistance provided, and the whistleblower's potential culpability. However, to incentivize the reporting of smaller-dollar actions, the rule creates a presumption that awards will be paid at the maximum 30% rate when the total collected sanctions in an action are $15 million or less. 

Comments on the proposed rule are due on or before May 31, 2026.