On January 1, 2021, overriding a veto by then-President Trump, the Senate passed into law the Anti-Money Laundering Act of 2020 (AMLA)—the largest anti-money laundering legislative effort since the 2001 Patriot Act. The AMLA fortified existing laws, such as the Bank Secrecy Act (BSA), as well as a somewhat anemic whistleblowing program, to align it more closely with the highly-successful Securities and Exchange Commission (SEC) whistleblower program.
The result is that the amended AMLA’s enforcement reach is now much broader than the SEC’s program. Industry watchers predict the new whistleblowing program may have seismic repercussions throughout the financial world.
In this post, we’ll review some of AMLA’s key points, while in the next two, we’ll focus on how AMLA impacts whistleblowing—who is eligible, what are the possible awards, and how whistleblowers can identify the kinds of tips that are likely to earn an AMLA award.
The History of the Act Illuminates Its Purpose
The Bank Secrecy Act, first implemented in 1970, is the basis in American law for enforcement against money laundering. The Act had been modified slightly in the years following its implementation, but the first dramatic revision came from the Patriot Act. Passed in response to the 9/11 terrorist attack, the law required new disclosures about banking customers’ accounts and other requirements.
AMLA, the Act’s second substantial revision, was included as part of the National Defense Authorization Act, which traditionally funds the Department of Defense and addresses other national security issues.
In response to Russian aggression and the war in Ukraine, as well as heightened concern about U.S. investments and real estate purchases by entities affiliated with the Chinese government, AMLA’s whistleblowing provision was further revised in December 2022.
This history reveals the increasing focus in banking law on the way finances are tied to national security and criminal enterprises. The laws are intended to thwart the financing tied to terrorism, corruption, and other crimes. And federal officials want to use financial information to identify criminals and others who intend to weaken the U.S. by hidden entry into the financial sector (e.g., through the use of shell companies).
AMLA’s provisions address these goals, not surprisingly, by modernizing the technology used to monitor transactions. The law now expressly allows for the monitoring of cryptocurrencies and other digital assets and adds new international investigators and liaisons posted around the world.
Federal AMLA Enforcement Priorities
The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) was created in 1990 to implement the BSA, and it works with both domestic and international officials on AMLA-related issues.
One of FinCEN’s major roles is maintaining a central repository for financial information relating to transactions and suspicious activity. Investigators analyze this data and forward their findings to law enforcement agencies for white-collar crime, drug trafficking, and national security issues. According to a congressional report, in FY2022, FinCEN received approximately 23.5 million BSA-mandated financial transaction reports, including approximately 3.6 million suspicious activity reports.
When it comes to enforcement, FinCEN’s current priorities under AMLA are:
- Cybercrime, including relevant cybersecurity and virtual currency considerations
- Foreign and domestic terrorist financing
- Transnational criminal organization activity
- Drug trafficking organization activity
- Human trafficking and human smuggling
- Proliferation financing
Types of Entities Covered under AMLA
Almost every company in the U.S. will be affected by AMLA in one way or another.
When it comes to banks, AMLA requires increased training for its security officers but doesn’t have new specific requirements for compliance programs. Instead, while AMLA expects banks to have a thorough, effective compliance program, it leaves them free to be innovative in how they implement it.
Significantly, the revised AMLA isn’t limited to the banking sphere. Instead, since the goal is to track foreign money’s role in criminal activity, its provisions apply to the International Emergency Economic Powers Act (IEEPA), Emergency Economic Powers Act (IEEPA), the Trading with the Enemy Act (TWEA), and the Foreign Narcotics Kingpin Designation Act (FNKDA).
As a result, AMLA requirements now apply to more than two dozen types of entities that are likely candidates for money laundering. This means AMLA provisions touch conventional banks, investment banks, and broker-dealers, as well as antiquities and art dealers, pawn brokers, jewelers, travel agencies, vehicle and real estate sales, casinos, and other cash-heavy businesses that seem likely venues.
In an effort to identify potential shell companies, AMLA also now requires that most companies operating in the U.S. file a report with FinCEN to identify the companies’ beneficial owners. FinCEN’s registry is intended to identify foreign individuals or entities using shell companies to gain entry into the U.S. financial system.
In our next post, we’ll review how AMLA, along with these enforcement priorities, impacts whistleblowers.
But it should already have started to become clear: The AMLA is interested in hearing about corruption in U.S. markets and the way foreign actors may be misusing markets for criminal activity. As motivated as investigators and prosecutors are to hear about wrongdoing in the traditional banking and investment sectors, federal prosecutors also want to hear from whistleblowers with information related to money laundering, corruption, and other illegal foreign financial activity.
Accordingly, if you’re aware of such activity and are considering becoming a whistleblower, the Silver Law Group and the Law Firm of David Chase have created a strategic alliance to represent AMLA whistleblowers like you.
With years of experience representing whistleblowers, coupled with an SEC enforcement lawyer on our team, we have an in-depth understanding of the federal whistleblower programs are looking for. We can help you submit a tip that is more likely to result in a successful covered action. We’re here to help whistleblowers maximize their opportunity to receive a financial bounty. For a free, confidential consultation, contact us by email or call us today at (800) 975-4345.