Reported by Robert Anello

In the wake of Russia’s invasion of Ukraine, long-standing economic sanctions have been reinvigorated, with the U.S. committing significant efforts and resources to aggressive sanctions enforcement relating, in particular, to Russian oligarchs. One weapon recently added to the Department of Justice’s arsenal is a little-noticed program enacted in the closing days of 2022. The Anti-Money Laundering Whistleblower Improvement Act empowers employees to join DOJ’s sanctions army by providing monetary rewards and legal protections to individual whistleblowers, similar to those afforded under the Dodd-Frank Act, to encourage them to call out sanctions violations by their employers and others. DOJ’s diverse arsenal of sanctions and enforcement tools that have garnered media attention since the Ukraine invasion include the imposition of sweeping sanctions against Russian individuals and entities, and DOJ’s creation of the KleptoCapture Task Force, an interagency effort dedicated to enforcing Russian sanctions and other economic laws to target Russian oligarchs’ assets. Investigations, indictments, and seizures of billions of dollars of assets belonging to sanctioned individuals, along with the Justice Department’s hiring of new sanctions-focused prosecutors and restructuring of the National Security Division also have been in the spotlight. In contrast, the Whistleblower Improvement Act, originally heralded as a “game changer” and “key tool” for Russian sanctions enforcement by private practitioners, appears to remain relatively unknown. Perhaps the Treasury Department’s impending rulemaking on the program will bring more attention and clarity to the program which has potential to provide benefits and protections to whistleblowers domestically and abroad, while creating new legal risks for companies dealing with sanctioned entities and individuals.

Sanctions Tips are Now Eligible for Whistleblower Protection

One of Congress’s last legislative acts in 2022 was to enact 31 U.S.C. § 5323(g), which expanded the Anti-Money Laundering Act of 2020’s whistleblower program to include tips related to certain U.S. economic sanctions laws. The so-called Improvement Act was enacted in response to DOJ’s renewed determination to pursue Russian-related sanctions violations. Senator Chuck Grassley, R-Iowa, the principal sponsor of the Improvement Act, explained that “[g]iven the expansive sanctions we’ve implemented on Russia as they wage an unjust war in Ukraine, our legislation is urgently needed to hold bad actors accountable.” The Act comes on the heels of other anti-Russia enforcement tools, such as high-profile sanctions-related seizures, like the Department’s seizure of a $300 million superyacht in Fiji owned by a Russian oligarch, and high-profile sanctions indictments of Russian individuals, such as that of a supposed Russian oligarch for alleged sanctions violations implicating the former head of counterintelligence for the FBI’s New York office. The sanctions whistleblower program adds to a long and growing list of other whistleblower provisions, such as those provided for by the False Claims Act, the Dodd-Frank Wall Street Reform Act, the Sarbanes-Oxley Act, the Federal Deposit Insurance Act, and the IRS whistleblower law. Although sanctions enforcement efforts to date have targeted high profile foreign individuals and their assets, the Improvement Act appears more likely to result in tips regarding companies and their compliance programs.

Read full report: https://www.forbes.com/sites/insider/2023/10/18/sanctions-whistleblower-program-a-little-known-tool-for-employees-added-to-dojs-anti-russia-arsenal/amp/