Davis Polk counsel Will Schisa was quoted in American Banker discussing the expansion of a whistleblower program to incentivize referrals of potential violations of U.S. sanctions at financial institutions.

Will said cases involving the facilitation of sanctions evasion often result from the “failure to properly integrate compliance programs” that meet new regulations. Since sanctions rules typically focus on the movement of physical assets to sanctioned jurisdictions, compliance with the sanctions regime has not always been a major priority at financial institutions, he noted.

He said that while the whistleblower program could provide prosecutors with new information, it may not have a “huge practice impact,” considering the increased attention other federal agencies are already giving to money laundering and sanctions evasion. 

“It may, on the margins, result in only a few extra cases, but some of those cases may be very important,” Will said. “Anything that provides an avenue to get information, particularly about the most serious violations, is a good thing.”

Treasury eyes bank whistleblowers as it steps up sanctions enforcement,” American Banker (November 5, 2023) (subscription required)