117 HR 8001 IH: Countering Atrocities through Currency Accountability Act of 2022
U.S. House of Representatives
2022-06-09
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EN
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I
117th CONGRESS
2d Session
H. R. 8001
IN THE HOUSE OF REPRESENTATIVES
June 9, 2022
Mr. Buck (for himself, Mr. Gooden of Texas, Mr. Banks, Ms. Herrell, Mr. Hern, Mr. Long, Mr. Steube, Mr. Wilson of South Carolina, Mr. Cawthorn, Mr. Burchett, and Mr. Torres of New York) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend title 31, United States Code, to ensure the United States currency market does not support egregious human rights violations.
1.

Short title
This Act may be cited as the “Countering Atrocities through Currency Accountability Act of 2022”.
2.

Findings
Congress finds the following:
(1)
The United States dollar composes nearly two-thirds of the world’s currency reserves, with more than one trillion dollars being owned by the Government of China as of October 2020.
(2)
It is the policy of the United States to advance freedom and human rights globally, a policy that is incompatible with egregious human rights violations, and as such has a responsibility to ensure that the United States currency market does not complicitly support perpetrators of these abuses.
(3)
In regions of the world where political, governmental, or other realities preclude humanitarian due diligence practices from ensuring the currency market of the United States is not interwoven with entities’ egregious human rights violations, additional measures must be taken to separate the economy of the United States from these violations, as well as to apply pressure on relevant actors to uphold their humanitarian responsibilities.
3.

Special measures for jurisdictions, financial institutions, or international transactions of primary humanitarian concern
(a)

In general
Chapter 53 of title 31, United States Code, is amended by inserting after section 5318A the following:
“5318B.

Special measures for jurisdictions, financial institutions, or international transactions of primary humanitarian concern
(a)

International humanitarian requirements
(1)

In general
The Secretary of the Treasury shall require domestic financial institutions and domestic financial agencies to take 1 or more of the special measures described in subsection (b) if the Secretary finds that reasonable grounds exist for concluding that a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States, or 1 or more types of accounts is of primary humanitarian concern, in accordance with subsection (c).
(2)

Form of requirement
The special measures described in—
(A)
subsection (b) shall be imposed in such sequence or combination as the Secretary shall determine; and
(B)
paragraphs (1) through (5) of subsection (b) shall be imposed by regulation, order, or otherwise as permitted by law.
(3)

Duration of orders; rulemaking
Any order by which a special measure described in paragraphs (1) through (5) of subsection (b) is imposed—
(A)
shall be issued together with a notice of proposed rulemaking relating to the imposition of such special measure; and
(B)
may not be terminated unless the Secretary—
(i)
certifies to Congress that the applicable jurisdiction, financial institution, class of transaction, or type of account is no longer of primary humanitarian concern; and
(ii)
not more than 30 days before the date of such termination, notifies, in writing, the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate of such termination.
(4)

National security waiver
(A)

In general
The Secretary shall waive the application of any special measure required by the Secretary under paragraph (1) with respect to a transaction related to the production, manufacture, or commerce related to rare earth minerals if the Secretary determines such waiver is necessary on national security grounds.
(B)

Time limit
A waiver issued under subparagraph (A) may not be for longer than one year, but such a waiver may be renewed.
(C)

Written justification
If the Secretary issues (or renews) a waiver under this paragraph, the Secretary shall provide the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate with a written justification for such waiver. Such justification shall be submitted in unclassified form, but may include a classified annex.
(D)

Information for the public
If the Secretary issues a waiver under this paragraph, the Secretary, in consultation with the Secretary of Commerce and the Secretary of the Interior, shall provide the following information to the public, including on the website of the Department of the Treasury:
(i)
Opportunities for public-private partnerships to increase domestic production of rare earth elements and intermediate and finished products containing rare earth elements, including permanent magnets.
(ii)
Information regarding the relationship between the reason the applicable jurisdiction, financial institution, class of transaction, or type of account was found to be of primary humanitarian concern and the production, manufacture, or commerce related to rare earth minerals.
(5)

No limitation on other authority
This section shall not be construed as superseding or otherwise restricting any other authority granted to the Secretary, or to any other agency, by this subchapter or otherwise.
(b)

Special measures
The special measures referred to in subsection (a), with respect to a jurisdiction outside of the United States, financial institution operating outside of the United States, class of transaction within, or involving, a jurisdiction outside of the United States, or 1 or more types of accounts are as follows:
(1)

Recordkeeping and reporting of certain financial transactions
(A)

In general
The Secretary of the Treasury may require any domestic financial institution or domestic financial agency to maintain records, file reports, or both, concerning the aggregate amount of transactions, or concerning each transaction, with respect to a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States, or 1 or more types of accounts if the Secretary finds any such jurisdiction, institution, class of transactions, or type of account to be of primary humanitarian concern.
(B)

Form of records and reports
Such records and reports shall be made and retained at such time, in such manner, and for such period of time, as the Secretary shall determine, and shall include such information as the Secretary may determine, including—
(i)
the identity and address of the participants in a transaction or relationship, including the identity of the originator of any funds transfer;
(ii)
the legal capacity in which a participant in any transaction is acting;
(iii)
the identity of the beneficial owner of the funds involved in any transaction, in accordance with such procedures as the Secretary determines to be reasonable and practicable to obtain and retain the information; and
(iv)
a description of any transaction.
(2)

Information relating to beneficial ownership
In addition to any other requirement under any other provision of law, the Secretary shall require any domestic financial institution or domestic financial agency to take such steps as the Secretary may determine to be reasonable and practicable to obtain and retain information concerning the beneficial ownership of any account opened or maintained in the United States by a foreign person, or a representative of such a foreign person, that involves a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States, or 1 or more types of accounts if the Secretary finds any such jurisdiction, institution, or transaction or type of account to be of primary humanitarian concern.
(3)

Information relating to certain payable-through accounts
If the Secretary finds a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, or 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States to be of primary humanitarian concern, the Secretary shall require any domestic financial institution or domestic financial agency that opens or maintains a payable-through account in the United States for a foreign financial institution involving any such jurisdiction or any such financial institution operating outside of the United States, or a payable through account through which any such transaction may be conducted, as a condition of opening or maintaining such account—
(A)
to identify each customer (and representative of such customer) of such financial institution who is permitted to use, or whose transactions are routed through, such payable-through account; and
(B)
to obtain, with respect to each such customer (and each such representative), information that is substantially comparable to that which the depository institution obtains in the ordinary course of business with respect to its customers residing in the United States.
(4)

Information relating to certain correspondent accounts
If the Secretary finds a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, or 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States to be of primary humanitarian concern, the Secretary shall require any domestic financial institution or domestic financial agency that opens or maintains a correspondent account in the United States for a foreign financial institution involving any such jurisdiction or any such financial institution operating outside of the United States, or a correspondent account through which any such transaction may be conducted, as a condition of opening or maintaining such account—
(A)
to identify each customer (and representative of such customer) of any such financial institution who is permitted to use, or whose transactions are routed through, such correspondent account; and
(B)
to obtain, with respect to each such customer (and each such representative), information that is substantially comparable to that which the depository institution obtains in the ordinary course of business with respect to its customers residing in the United States.
(5)

Prohibitions or conditions on opening or maintaining certain correspondent or payable-through accounts
If the Secretary finds a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, or 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States to be of primary humanitarian concern, the Secretary, in consultation with the Secretary of State, the Attorney General, and the Chairman of the Board of Governors of the Federal Reserve System, shall prohibit, or impose conditions upon, the opening or maintaining in the United States of a correspondent account or payable-through account by any domestic financial institution or domestic financial agency, if such correspondent account or payable-through account involves any such jurisdiction or institution, or if any such transaction may be conducted through such correspondent account or payable-through account.
(c)

Consultations and information To be considered in finding jurisdictions, institutions, types of accounts, or transactions To be of primary humanitarian concern
(1)

In general
In making a finding that reasonable grounds exist for concluding that a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, 1 or more classes of transactions within, or involving, a jurisdiction outside of the United States, or 1 or more types of accounts is of primary humanitarian concern so as to authorize the Secretary of the Treasury to take 1 or more of the special measures described in subsection (b), the Secretary shall consult with the Secretary of State, the Attorney General, and the Secretary of Commerce.
(2)

Additional considerations
In making a finding described in paragraph (1), the Secretary shall consider in addition such information as the Secretary determines to be relevant, including the following potentially relevant factors:
(A)

Jurisdictional factors
In the case of a particular jurisdiction—
(i)
covered human rights violations have been or are being committed by an individual, group of individuals, corporation, organization, government, or other state or non-state actor, and that they have transacted business in that jurisdiction;
(ii)
the extent to which covered human rights violations in that jurisdiction enable, support, or are connected to transacted business therein;
(iii)
the substance and quality of administration of the human rights laws of that jurisdiction pertaining to covered human rights violations;
(iv)
the jurisdiction is characterized as committing covered human rights violations by credible international organizations or multilateral expert groups;
(v)
the jurisdiction is characterized by a disregard for human rights; or
(vi)
whether the United States has issued or maintained formal genocide or crimes against humanity determinations covering that jurisdiction within the previous 5 years.
(B)

Institutional factors
In the case of a decision to apply 1 or more of the special measures described in subsection (b) only to a financial institution or institutions, or to a transaction or class of transactions, or to a type of account, or to all 3, within or involving a particular jurisdiction—
(i)
such financial institutions, classes of transactions, or types of accounts are used to facilitate or promote covered human rights violations in or through the jurisdiction; and
(ii)
whether such action is sufficient to ensure, with respect to transactions involving the jurisdiction and institutions operating in the jurisdiction, that the purposes of this subchapter continue to be fulfilled, and to guard against covered human rights violations.
(d)

Notification of special measures invoked by the Secretary
Not later than 10 days after the date of any action taken by the Secretary of the Treasury under subsection (a)(1), the Secretary shall notify, in writing, the Committee on Financial Services of the House of Representatives, the Committee on Foreign Affairs of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Foreign Relations of the Senate of any such action.
(e)

Due diligence for United States private banking and correspondent bank accounts involving foreign persons
(1)

In general
Each financial institution that establishes, maintains, administers, or manages a private banking account or a correspondent account in the United States for a non-United States person, including a foreign individual visiting the United States, or a representative of a non-United States person shall establish appropriate, specific, and, where necessary, enhanced, due diligence policies, procedures, and controls that are reasonably designed to detect and report instances of covered human rights violations through those accounts.
(2)

Additional standards for certain correspondent accounts
(A)

In general
Subparagraph (B) shall apply if a correspondent account is requested or maintained by, or on behalf of, a foreign bank operating—
(i)
under an offshore banking license; or
(ii)
under a banking license issued by a foreign country that has been designated—
(I)
as noncooperative with international human rights principles or procedures by the United States or an intergovernmental group or organization of which the United States is a member, with which designation the United States representative to the group or organization concurs; or
(II)
by the Secretary as warranting special measures due to concerns with covered human rights violations.
(B)

Policies, procedures, and controls
The enhanced due diligence policies, procedures, and controls required under paragraph (1) shall, at a minimum, ensure that the financial institution in the United States takes reasonable steps—
(i)
to ascertain for any such foreign bank, the shares of which are not publicly traded, the identity of each of the owners of the foreign bank, and the nature and extent of the ownership interest of each such owner;
(ii)
to conduct enhanced scrutiny of such account to ensure the account is not associated with covered human rights violations and report any suspicious transactions under section 5318(g); and
(iii)
to ascertain whether such foreign bank provides correspondent accounts to other foreign banks and, if so, the identity of those foreign banks and related due diligence information, as appropriate under paragraph (1).
(3)

Minimum standards for private banking accounts
If a private banking account is requested or maintained by, or on behalf of, a non-United States person, then the due diligence policies, procedures, and controls required under paragraph (1) shall, at a minimum, ensure that the financial institution takes reasonable steps—
(A)
to ascertain the identity of the nominal and beneficial owners of, and the source of funds deposited into, such account as needed to guard against supporting covered human rights violations and report any suspicious transactions under section 5318(g); and
(B)
to conduct enhanced scrutiny of any such account that is requested or maintained by, or on behalf of, a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure, that is reasonably designed to detect and report transactions that may involve the proceeds of covered human rights violations.
(4)

Definitions
In this subsection:
(A)

Offshore banking license
The term offshore banking license means a license to conduct banking activities which, as a condition of the license, prohibits the licensed entity from conducting banking activities with the citizens of, or with the local currency of, the country which issued the license.
(B)

Private banking account
The term private banking account means an account (or any combination of accounts) that—
(i)
requires a minimum aggregate deposit of funds or other assets of not less than $500,000;
(ii)
is established on behalf of 1 or more individuals who have a direct or beneficial ownership interest in the account; and
(iii)
is assigned to, or is administered or managed by, in whole or in part, an officer, employee, or agent of a financial institution acting as a liaison between the financial institution and the direct or beneficial owner of the account.
(f)

Definitions
In this section:
(1)

Covered human rights violation
The term “covered human rights violation” means—
(A)
an offense described under chapter 50A of title 18, United States Code; and
(B)
crimes against humanity.
(2)

Xinjiang
The term “Xinjiang” means the Xinjiang Uyghur Autonomous Region, People’s Republic of China.
(3)

Other definitions
The definitions under section 5318A(e) shall apply to this section.”.
(b)

Clerical amendment
The table of contents for chapter 53 of title 31, United States Code, is amended by inserting after the item relating to section 5318A the following:
“5318B. Special measures for jurisdictions, financial institutions, or international transactions of primary humanitarian concern.”.
4.

Assessing Xinjiang as a jurisdiction of primary humanitarian concern
(a)

Determination
Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Commerce, shall determine whether reasonable grounds exist to determine that Xinjiang Uyghur Autonomous Region, People’s Republic of China, is a jurisdiction of primary humanitarian concern under section 5318B of title 31, United States Code.
(b)

Report
As soon as practicable after the determination required under subsection (a), the Secretary of the Treasury shall issue a report to the Congress containing the following:
(1)
Whether the Secretary determines that reasonable grounds exist to determine that Xinjiang is a jurisdiction of primary humanitarian concern.
(2)
If so, which special measures described under subsection (b) of such section 5318B, if any, the Secretary of the Treasury shall require domestic financial institutions and domestic financial agencies to take with respect to Xinjiang.
(3)
If not, a detailed explanation of the Secretary’s reasoning in making such determination and evidence supporting that determination.
(c)

Classification
The report submitted pursuant to subsection (a) shall be submitted in unclassified form, but may include a classified annex.
5.

Report on polysilicate production and trade
Not later than 120 days after the date of enactment of this Act, the Secretary of State shall issue a report to the Congress containing a description of the following:
(1)
Polysilicate production in Xinjiang.
(2)
The use of forced labor in polysilicate production and trade.
(3)
The role of the Chinese Government and its affiliated actors, including the Xinjiang Production and Construction Corps, in polysilicate production and trade.
(4)
The impacts of Chinese polysilicate production on international markets and ethical implications thereof.