The US Treasury Department OFAC Enforces Whistleblower Programmes
BEFORE YOU GO...
Check how Shufti Pro can verify your customers within seconds
Request DemoNo thanks
According to the US Treasury’s Department Office of Foreign Assets Control (OFAC), companies must have an adequate framework for whistleblowers to report misconduct-related crimes under the Anti-Money Laundering (AML) regulation.
In a recent enforcement action from the US Treasury Department, OFAC highlighted the importance and impact of whistleblowers on sanctions compliance and enforcement. A whistleblower is a person who discloses information to the authorities about the violations of the AML sanctions. In accordance with the Department of Treasury 2021 programme, whistleblowers who disclose data on violations of the Bank Secrecy Act (BSA), the fundamental AML compliance law, must be rewarded. When sanctions are violated, a whistleblower can report it anonymously upon the case’s final decision; when the party is found guilty of the crime, they will be rewarded 10% to 30% of the fines.
To emphasise the importance of whistleblowers, OFAC also pointed to the $660,594 settlement case with Construction Specialist Inc (CS) to allegedly overshadow the Iranian Transaction and Sanction Regulations (ITSR). The US employee in Dubai of CS fully controlled company, Construction Specialist Middle East (CSME), reported OFAC about their suspicious transactions to the management. After the OFAC investigation, they disclosed that CSME intentionally re-exported the US commodities to Iran. By doing that, the senior manager and general manager of CSME break the CS policies and counterfeit trade documents. OFAC stated that this case demonstrates the difference between “seeing something and saying something.” To urge companies to design proper platforms for employees to raise their voices against crime related to sanctions violations, OFAC stated, “Whistleblowers play a vital role in identifying prohibited conduct, promoting compliance, and responsible companies should have channels in place for employees to raise concerns without fear of retaliation also respond quickly and meaningfully to the credible claims of those who speak up.”
Firms should consider the impact and importance of whistleblowers so that employees can confidently report sanctions and company policy violations without fear of retribution. To protect themselves from hefty fines for AML sanctions breaches, companies must establish a framework that adequately checks the report and timely investigates the loopholes.
Suggested Reads:
US COURT DECLARES BITCOIN AND ETH AS COMMODITIES, DISMISSING UNISWAP LAWSUIT
US SET TO DISCLOSE NEW REAL ESTATE REGULATIONS TO COMBAT MONEY LAUNDERING
