Whistleblower advocates were quick to raise the alarm about the recent proposed rule implementing the Anti-Money Laundering Whistleblower Improvement Act (“AML WIA”). The advocates argue the rule, proposed by the Financial Crimes Enforcement Network (“FinCEN”), offers limited protections and could dampen incentives for whistleblowers. They also argue that it doesn’t align with Congressional intent nor the actual language of the AML WIA.
On April 30th, the National Whistleblower Center submitted 19 rulemaking comments detailing problems it found with the Proposed Rules. The comments strongly urge FinCEN to address the issues in its final rulemaking to ensure the effectiveness of the AML whistleblower program.
This article is part of a series that will address the major issues identified by the NWC and explain why the success of FinCEN’s whistleblower program depends on their resolution before the final rules are codified. To learn more about the importance of the AML whistleblower program, check out the first article in this series. You can also find more information about NWC’s campaign on their website.
The Lack of Confidentiality Protections for Whistleblowers
The AML WIA contains strong confidentiality protections for whistleblowers, requiring FinCEN to maintain whistleblowers’ public anonymity. Confidentiality protections are critical for any whistleblower law because they ensure that whistleblowers feel safe enough to report financial crimes. A lack of strong confidentiality protections would make whistleblowers fearful of retaliation and would ultimately create a chilling effect on whistleblowers, diminishing the efficacy of the AML WIA. Therefore, it is deeply concerning that FinCEN’s proposed regulations implementing the law stray away from the statute’s confidentiality requirements.
The law itself states that when whistleblower information is shared with other government agencies, Federal and State authorities, or foreign law enforcement, FinCEN must ensure that these recipients will maintain the whistleblower’s confidentiality. However, FinCEN’s proposed regulations state that FinCEN may share original information to other agencies and foreign law authorities at its discretion, without any mention of confidentiality protections. The failure to include confidentiality in the regulations directly conflicts with the language of the AML WIA. Correspondingly, FinCEN’s rules as written would violate the Administrative Procedure Act, which requires federal agencies to comply with all applicable statutory requirements.
Furthermore, while the AML WIA states that FinCEN shall pay awards to whistleblowers who voluntarily provide original information to the DOJ as well as FinCEN, the proposed regulations make no mention of how whistleblowers are to anonymously and confidentially provide tips to the former source, nor do they require the DOJ to maintain whistleblower confidentiality during its investigatory processes. FinCEN also failed to establish clear guidelines for how whistleblower tips initially reported to a third party will subsequently be shared with FinCEN, which is another award path explicitly permitted by the AML WIA. Whistleblowers who do not have a clear submission procedure to follow when making reports are much more likely to find their identity compromised.
This lack of procedural clarity is particularly problematic for international whistleblowers. International sources play an essential role in detecting large overseas financial crimes but are not covered by U.S. anti-retaliation laws. This can leave them highly vulnerable to retaliation from their companies and governments if their country lacks comparable anti-retaliation laws. There are countless stories of whistleblowers in hostile countries being jailed or even killed for speaking out.
Since the DOJ has a large international presence, with multiple offices in various countries and officials stationed in embassies, international whistleblowers often come to the DOJ to make a report. In these cases, it is essential that proper procedures for filing AML WIA claims are laid out and that international whistleblowers receive full assurances of confidentiality. To put it simply, the proposed regulations’ failure to require the DOJ to maintain whistleblower confidentiality places international whistleblowers at risk.
How Confidentiality Should Be Incorporated in FinCEN’s Regulations
The National Whistleblower Center has called on FinCEN to fully implement the AML WIA’s confidentiality requirements. To do so, NWC argues that FinCEN should adopt the IRS’s regulation on whistleblower confidentiality. The IRS’s Internal Revenue Manual lays out comprehensive details for protecting a whistleblower’s identity “to the fullest extent permitted by the law,” and mandates that “the identity or existence of a whistleblower must not be disclosed to anyone, including IRS officials or employees.” These robust protections appropriately account for the amount of risk financial whistleblowers take and have been highly successful at keeping IRS whistleblowers safe.
In recognizing that confidentiality is the key to effectively mobilizing whistleblowers and thereby enabling the functionality of the AML WIA, it makes sense to prioritize it in the regulations as the IRS did. Additionally, IRS agents are often involved in money-laundering cases, which means that both IRS agents and Treasury Department employees will investigate cases reported under the AML WIA. Therefore, it would be beneficial for the agencies’ confidentiality procedures to align so that confidential whistleblower information is handled under one set of rules.
Conclusion
The gaps in confidentiality protections within the AML WIA cannot be ignored. The current proposed regulations would severely undermine the potential of the AML WIA to mobilize whistleblowers and enhance global mechanisms for detecting and tackling economic crime. It would be a regression to disregard confidentiality protections, considering that the success of current US whistleblower programs was contingent on these protections.
The comment period for FinCEN’s Proposed Rules closes on June 1, 2026. The NWC launched a grassroots campaign to encourage whistleblowers, supporters, and anti-corruption advocates to comment on FinCEN’s proposed rules.
