Text: H.R.3317 — 113th Congress (2013-2014)All Bill Information (Except Text)

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Introduced in House (10/23/2013)


113th CONGRESS
1st Session
H. R. 3317

To strengthen the Federal statutes designed to deter money laundering and terrorism financing, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES
October 23, 2013

Ms. Waters (for herself, Mrs. Carolyn B. Maloney of New York, Mr. Al Green of Texas, Mr. Clay, Mr. Capuano, Mr. Meeks, Ms. Moore, and Mr. Lynch) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary, 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 strengthen the Federal statutes designed to deter money laundering and terrorism financing, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title; table of contents.

(a) Short title.—This Act may be cited as the “Holding Individuals Accountable and Deterring Money Laundering Act”.

(b) Table of contents.—The table of contents for this Act is as follows:


Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 101. Penalties for violations of the Bank Secrecy Act.

Sec. 102. Criminal penalties.

Sec. 103. Strengthening civil injunctive authority.

Sec. 104. Clarification of removal and prohibition authority under the FDIA.

Sec. 105. Independent litigation authority for FinCEN.

Sec. 106. Treatment of executive compensation and personal liability.

Sec. 107. Corporate governance and the legal responsibilities.

Sec. 201. Reporting and oversight of Bank Secrecy Act-related enforcement actions.

Sec. 202. Consideration of BSA compliance in management ratings.

Sec. 301. Safe harbor protections.

Sec. 401. Expanding the crimes that can be a predicate offense to money laundering.

Sec. 402. Closing loopholes in Bank Secrecy Act reporting.

Sec. 403. Definition of an institution-affiliated party.

Sec. 501. Modernization and upgrading whistleblower protections.

Sec. 601. Sense of the Congress.

Sec. 701. International coordination.

Sec. 702. Sense of Congress regarding list of countries at high risk for money laundering.

SEC. 2. Findings.

The Congress finds the following:

(1) Money laundering is a serious threat to our national and economic security. The scale, efficiency, and complexity of the U.S. financial system make it a prime target for those who seek to conceal and move the proceeds of illicit activity.

(2) The spate of recent high-profile enforcement actions against some of the largest and most sophisticated financial institutions raises troubling questions about the effectiveness of U.S. domestic anti-money laundering and counter-terrorism financing regulatory, compliance and enforcement efforts.

(3) Money launderers have proven to adapt quickly in order to avoid detection. U.S. anti-money laundering laws and regulations must be rigorously reviewed and constantly updated to close loopholes and address the changing tactics employed by bad actors.

(4) Given the global nature of money laundering and terrorist financing and the increasing interrelatedness of the global financial system, a secure global framework is essential to the integrity of the U.S. financial system.

(5) Efforts to stanch the flow of illegal money across the world to drug cartels and terrorist organizations should be a top U.S. priority. To achieve this mission, extensive collaboration among financial regulators, the Department of Treasury, the Department of State, the Department of Justice and state and federal law enforcement agencies is required.

(6) U.S. anti-money laundering laws should meet international standards set by the Financial Action Task Force.

(7) Without serious consequences for institutions and individuals who fail to protect financial institutions from illicit financial activity – including significant fines, banning individuals from the industry, and prison sentences for those who seek to actively evade anti-money laundering controls, financial institutions and individuals will continue to avoid compliance with U.S. anti-money laundering rules and regulations.

(8) Effective anti-money laundering programs must emphasize sound corporate governance including business line accountability and clear lines of legal responsibility for individuals, including board members and chief executive officers.

(9) Avoiding money laundering risks requires an effective anti-money laundering program and a strong institutional compliance culture, with written standards, knowledgeable and adequate staff, strong monitoring processes, effective anti-money laundering training, and compensation structures that reward compliance.

(10) Anti-money laundering deficiencies often reflect weaknesses in the management of a financial firm, which can in turn adversely affect the firm’s overall safety and soundness. Failure to account for management deficiencies in this context may perpetuate a false perception of the stability of financial firms.

(11) Anti-money laundering examinations in recent years at times failed to recognize the cumulative effect of the violations they cited, instead narrowly focusing their attention on individual banking units. The failure to review the cumulative effect of such violations permitted national banks to avoid and delay correcting problems, which allowed massive problems to occur before serious enforcement actions were taken.

(12) Independent contractors often play a central role in monitoring and auditing the overall adequacy and effectiveness of a bank’s compliance program under the Bank Secrecy Act. Any failure to hold these independent entities to the same standard as any other party who participates in the affairs of a bank may jeopardize the efficacy of a bank’s anti-money laundering program.

(13) Collaboration is an essential component of the U.S. strategy against money laundering, and is critical to our national security. U.S. law enforcement agencies are most effective when they work together by sharing information, insight, and data.

(14) The flow of information related to suspicious activity from financial institutions to law enforcement plays a key role in facilitating the disruption of terrorist networks that seek to harm the United States. The flow of such information depends on a high degree of certainty that financial institutions will be protected from civil liability when sharing such information with federal law enforcement agencies.

(15) Whistleblower rights and protections play an important role in helping to ensure corporate integrity. Robust protections for whistleblowers and enhanced rewards for informants will incentivize compliance with anti-money laundering rules and procedures, and encourage the provision of valuable information to regulators and law enforcement agencies.

SEC. 101. Penalties for violations of the Bank Secrecy Act.

(a) Civil monetary penalties for willful violations.—Section 5321(a) of title 31, United States Code, is amended—

(1) by striking “(a)(1) A domestic financial institution” and inserting the following:

“(a) In general.—

“(1) CIVIL MONETARY PENALTIES FOR WILLFUL VIOLATIONS.—A domestic financial institution”;

(2) in paragraph (1)—

(A) by striking “willfully violating” each place such term appears and inserting “willfully violating, or willfully causing any violation of,”;

(B) by striking “the amount (not to exceed $100,000) involved in the transaction (if any) or $25,000” and inserting “10 times the amount (not to exceed $10,000,000) involved in the transaction (if any) or $250,000”; and

(C) by adding at the end the following: “In determining appropriate monetary penalty amounts under this paragraph, the Secretary has the authority to ensure that penalty amounts are commensurate with the nature of the violations, any patterns of violations, and, with respect to a financial institution or nonfinancial trade or business, the size, capitalization and market share of such institution or trade or business.”; and

(3) in paragraph (4)(A), by inserting after “who violates” the following: “, or causes any violation of,”.

(b) Civil monetary penalties for negligent violations.—Section 5321(a)(6) of title 31, United States Code, is amended to read as follows:

“(6) Negligence.—

“(A) IN GENERAL.—The Secretary of the Treasury may impose a civil money penalty, for negligent violations of any provision of this subchapter or any regulation prescribed under this subchapter, of not more than—

“(i) $50,000, with respect to a financial institution or nonfinancial trade or business; and

“(ii) $5,000, with respect to any partner, director, officer, or employee of an institution, trade, or business.

“(B) VIOLATIONS OF THE REQUIREMENT TO MAINTAIN PROCEDURES TO ENSURE COMPLIANCE.—For a violation of a regulation prescribed under section 5318(a)(2), a separate violation occurs for each day the violation continues and at each office, branch, or place of business at which a violation occurs or continues.

“(C) DETERMINATION OF PENALTY AMOUNT.—In determining appropriate monetary penalty amounts under this paragraph, the Secretary has the authority to ensure that penalty amounts are commensurate with the nature of the violations, any patterns of violations, and, with respect to a financial institution or nonfinancial trade or business, the size, capitalization and market share of such institution or trade or business.”.

SEC. 102. Criminal penalties.

(a) In general.—Section 5322 of title 31, United States Code, is amended—

(1) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively;

(2) by inserting after subsection (b) the following:

“(c) Facilitating evasion.—In the case of a person described under subsection (a) or (b) who additionally takes steps to facilitate evasion of a program or controls under a regulation prescribed or order issued under this subchapter (except section 5315 or 5324 of this title or a regulation prescribed under section 5315 or 5324), section 21 of the Federal Deposit Insurance Act, or section 123 of Public Law 91–508, the maximum prison terms under such subsections shall be treated as 20 years.”; and

(3) by adding at the end the following:

“(f) Report.—In any case in which the Department of Justice settles a case with an individual or institution for violations under the this subchapter in exchange for a monetary penalty, the Department shall report to the Congress on why it did or did not pursue prison sentences in conjunction with the monetary penalty.”.

(b) GAO review of Bank Secrecy Act criminal sentences and mandatory minimum sentencing.—

(1) STUDY.—The Comptroller General of the United States shall carry out a study of the mandatory minimum sentencing laws and guidelines for narcotics-related offenses and the prosecutorial discretion provided to the Department of Justice in determining criminal penalties for persons found guilty of violating Federal anti-money laundering laws. In carrying out such study, the Comptroller General shall compare and contrast the severity of the two sets of felonies.

(2) REPORT.—Not later than the end of the 6-month period following the date of the enactment of this Act, the Comptroller General shall issue a report to the Congress containing all findings and determinations made in carrying out the study required by subsection (a), including any disparities identified in the appropriateness of the differing sentencing procedures and recommendations for establishing a more balanced sentencing system for Federal felonious acts.

SEC. 103. Strengthening civil injunctive authority.

Section 5320 of title 31, United States Code, is amended—

(1) by striking “When the Secretary” and inserting the following:

“(a) In general.—When the Secretary”; and

(2) by inserting after “will violate” the following: “or has caused, is causing, or will cause a violation of”; and

(3) by inserting at the end the following:

“(b) Prohibition on certain individuals.—In any proceeding under subsection (a), the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall determine, any individual who violated this subchapter, or a regulation prescribed or order issued under this subchapter, from acting as an officer or director of a financial institution if the person’s conduct demonstrates unfitness to serve as an officer or director of a financial institution.”.

SEC. 104. Clarification of removal and prohibition authority under the FDIA.

Section 8(e)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(2)(A)) is amended—

(1) in clause (i), by striking “was not inadvertent or unintentional” and inserting “involved a reckless disregard for the law or any applicable regulations or prior order of the appropriate Federal banking agency”; and

(2) in clause (ii), by striking “has knowledge” and inserting “knew, or should have known,”.

SEC. 105. Independent litigation authority for FinCEN.

Section 310 of title 31, United States Code, is amended—

(1) by redesignating subsection (d) as subsection (e); and

(2) by inserting after subsection (c) the following:

“(d) Independent litigation authority.—FinCEN may act in its own name and through its own attorneys in enforcing any provision of subchapter II of chapter 53, section 21 of the Federal Deposit Insurance Act, section 123 of Public Law 91–508, any rules thereunder, or any other law or regulation, or in any action, suit, or proceeding relating to such laws or regulations to which the Financial Crimes Enforcement Network is a party.”.

SEC. 106. Treatment of executive compensation and personal liability.

(a) Certain executive compensation incentives barred.—The appropriate Federal banking agencies, the Securities and Exchange Commission, the Commodities Futures Trading Commission, and the Financial Crimes Enforcement Network shall issue regulations prohibiting financial institutions that are subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, from providing executive compensation based on any criteria that could undermine compliance by individuals with the requirements of subchapter II of chapter 53 of title 31, United States Code, section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b), or section 123 of Public Law 91–508.

(b) No avoidance of personal liability.—

(1) IN GENERAL.—An officer, director, employee, or other institution-affiliated party of a financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, who is required by a Federal bank secrecy law that provides for personal liability, or any rule or order promulgated by an appropriate Federal banking agency, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or the Financial Crimes Enforcement Network thereunder, to repay previously earned executive compensation or pay a civil money penalty—

(A) shall be personally liable for the amounts so owed; and

(B) may not, directly or indirectly, insure or hedge against, or otherwise transfer the risks associated with, personal liability for the amounts so owed.

(2) RULE OF CONSTRUCTION.—Paragraph (1) shall not preclude a person from being provided funds necessary to defend against an action to recover previously earned executive compensation or a civil money penalty described under paragraph (1)—

(A) from the relevant financial institution subject to an anti-money laundering program under chapter X of title 31, Code of Federal Regulations;

(B) under an insurance policy; or

(C) pursuant to court order.

(c) Definitions.—For purposes of this section:

(1) APPROPRIATE FEDERAL BANKING AGENCY.—The term “appropriate Federal banking agency” has the meaning given such term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(2) EXECUTIVE COMPENSATION.—The term “executive compensation” means anything of value, regardless of the form in which provided, that is given by any institution subject to subsection (a) or its parent company to an officer, director, employee, or other institution-affiliated party in return for that individual’s service to such entity.

(3) FEDERAL BANK SECRECY LAW.—The term “Federal bank secrecy law” means—

(A) the reporting requirements set forth in section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);

(B) section 123 of Public Law 91–508; and

(C) subchapter II of chapter 53 of title 31, United States Code.

(4) INSTITUTION-AFFILIATED PARTY.—The term “institution-affiliated party”—

(A) has the meaning given such term under subsection (u) of section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

(B) shall apply with respect to an institution subject to subsection (a) and its parent company to the same extent as such subsection applies to an insured depository institution.

SEC. 107. Corporate governance and the legal responsibilities.

(a) In general.—Chapter 53 of title 31, United States Code, is amended—

(1) by inserting after section 5322, the following:

§ 5322A. Corporate governance and the legal responsibility of officers and employees

“(a) Ensuring compliance.—The Secretary of the Treasury, in consultation with the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodities Futures Trading Commission, shall issue regulations requiring each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, to ensure compliance with the anti-money laundering program requirements described under section 5318(h) by establishing written policies, procedures, and risk management standards for ensuring compliance with the requirements of this subtitle that—

“(1) require the head of compliance for each business line of such institution to make regular reports directly to the board of directors and the chief executive officer of such institution on the business line’s compliance activities;

“(2) require the board to certify each report received pursuant to paragraph (1);

“(3) ensure adequate staffing and funding for entities within the institution responsible for compliance with the requirements of this subtitle; and

“(4) periodically test the effectiveness of the institution’s programs for compliance with the requirements of this subtitle.

“(b) Legal responsibility of certain officers and employees.—With respect to any violation of this subtitle by a each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, any officer or other employee who was in a position that would have enabled such officer or employee to materially affect compliance with the requirements of this subtitle shall also be in violation of this subtitle, if such officer or other employee knew, or should have known, that such violation was being committed and did not take meaningful steps to stop such violation.

“(c) Clawback employment provision.—Each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, shall, in each employment agreement entered into by such institution, include a provision that gives the institution the right to require the repayment of any bonus or other compensation paid to the employee in any case where such employee was violating a provision of this subchapter and knew, or should have known, of such violation.

“(d) Definition.—For purposes of this section, the term ‘appropriate Federal banking agency’ has the meaning given such term under section 3 of the Federal Deposit Insurance Act (12 U.S.C.1813).”; and

(2) in the table of contents for such chapter, by inserting after the item relating to section 5322 the following new item:


“5322A. Corporate governance and the legal responsibility of officers and employees”.


(b) Effective date.—The amendments made by subsection (a) shall apply to a financial institution (as such term is defined under section 5312 of title 31, United States Code) after the end of the 6-month period beginning on the date of the enactment of this Act.

SEC. 201. Reporting and oversight of Bank Secrecy Act-related enforcement actions.

(a) In general.—Chapter 53 of title 31, United States Code, is amended—

(1) by inserting after section 5326 the following:

§ 5327. Oversight of examination and enforcement activities

“(a) Reporting of enforcement activities to FinCEN.—Each appropriate Federal banking agency, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall report to FinCEN on each formal and informal enforcement or supervisory action, including each matter requiring attention, and each matter requiring immediate attention, related to a violation of this subchapter or anti-money laundering deficiency, taken by such agency to enforce the requirements of this subchapter, including, for each such action—

“(1) the type of violation or deficiency with respect to which the enforcement or supervisory action was taken; and

“(2) the specific type of formal or informal enforcement or supervisory action taken.

“(b) Review of reports by FinCEN.—

“(1) IN GENERAL.—FinCEN shall review all reports submitted by agencies under subsection (a) to identify systemic or repeated instances of non-compliance and, if FinCEN determines that an agency has failed to adequately or appropriately carry out the agency’s enforcement responsibilities with respect to the requirements of this subchapter, FinCEN shall issue a report to such agency containing an explanation of FinCEN’s determination.

“(2) REPORT TO THE CONGRESS.—FinCEN shall issue an annual report to the Congress containing—

“(A) a summary of all formal and informal enforcement or supervisory actions for which FinCEN received notification from the agencies under subsection (a), but without any privileged or confidential information contained in such report, as identified by the agency submitting the report; and

“(B) any recommendations made by FinCEN to such agencies in response to a determination by FinCEN that the agency failed to adequately or appropriately carry out the agency’s enforcement or supervisory responsibility or failed to take adequate or appropriate corrective action in response to any individual violation or pattern of violations.

“(c) Inspector General review of procedures.—The Inspector General of each appropriate Federal banking agency shall—

“(1) carry out at least one review each year of the agency’s examination and enforcement activities with respect to ensuring compliance with the requirements of this subchapter and ensuring adequate resources are being devoted to such enforcement; and

“(2) make such reviews available to the public, including on the website of the Inspector General.

“(d) Definitions.—For purposes of this section:

“(1) FINCEN.—The term ‘FinCEN’ means the Financial Crimes Enforcement Network.

“(2) OTHER TERMS.—The terms ‘appropriate Federal banking agency’ and ‘insured depository institution’ have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C.1813).”; and

(2) in the table of contents for such chapter, by inserting after the item relating to section 5326 the following new item:


“5327. Oversight of examination and enforcement activities.”.


(b) Confidentiality of information submitted to FinCEN.—Section 310 of title 31, United States Code, is amended—

(1) by redesignating subsection (d) as subsection (e); and

(2) by inserting after subsection (c) the following:

“(d) Confidentiality of information submitted to FinCEN.—The submission by any appropriate Federal banking agency (as such term is defined under section 3 of the Federal Deposit Insurance Act) of any information to FinCEN for any purpose in the course of any supervisory or regulatory process of such agency shall not be construed as waiving, destroying, or otherwise affecting any privilege, including confidentiality of supervisory information, that any agency or person may claim with respect to such information under Federal or State law.”.

SEC. 202. Consideration of BSA compliance in management ratings.

(a) In general.—To the extent there are ratings of a depository institution’s management and internal controls, the appropriate Federal banking agencies shall consider the extent to which the institution complies with the requirements of the Bank Secrecy Act.

(b) Definitions.—

(1) BANK SECRECY ACT.—The term “Bank Secrecy Act” has the meaning given the term “Federal bank secrecy law” under section 106(c)(5).

(2) OTHER DEFINITIONS.—The terms “appropriate Federal banking agency” and “depository institution” have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

SEC. 301. Safe harbor protections.

(a) Disclosure to Government agencies.—Section 5318(g)(3)(B) of title 31, United States Code, is amended—

(1) in clause (i), by striking “or” at the end;

(2) in clause (ii), by striking the period and inserting “; or”; and

(3) by adding at the end the following:

“(iii) any duty or requirement of a financial institution or any director, officer, employee, or agent of such institution to demonstrate that a disclosure described in subparagraph (A) is made in good faith.”.

(b) Disclosure to financial institutions.—Section 314 of the USA PATRIOT Act (31 U.S.C. 5311 note) is amended—

(1) in subsection (b)—

(A) by striking “terrorist or money laundering activities” and inserting “terrorist or money laundering activities or a specified unlawful activity (as defined in section 1956(c)(7) of title 18, United States Code)”; and

(B) by striking “terrorist acts or money laundering activities” and inserting “such acts or activities”; and

(2) in subsection (c), by striking “terrorist acts or money laundering activities” and inserting “terrorist or money laundering activities or a specified unlawful activity (as defined in section 1956(c)(7) of title 18, United States Code)”.

SEC. 401. Expanding the crimes that can be a predicate offense to money laundering.

Section 1956(c)(7) of title 18, United States Code, is amended to read as follows:

“(7) the term ‘specified unlawful activity’ means any act or activity constituting an offense in violation of the laws of the United States punishable by imprisonment for a term exceeding 1 year;”.

SEC. 402. Closing loopholes in Bank Secrecy Act reporting.

(a) Report to Congress on the status of the temporary exemptions.—FinCEN shall issue a report to Congress on the status of the temporary exemptions under section 1010.205(b) of title 31, Code of Federal Regulations, including any reviews, studies, or proposed or notice of a rulemaking that FinCEN has undertaken with regard to each financial institution that is exempted from the requirement concerning the establishment of anti-money laundering programs. The report shall also include a justification for the exemption of each category of financial institution exempted under the regulation.

(b) Reporting by certain transporters.—Not later than the end of the 270-day period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall issue final regulations to establish the manner in which operators of armored cars and other commercial monetary instrument transport enterprises are to comply with the reporting requirements under section 5316 of title 31, United States Code.

SEC. 403. Definition of an institution-affiliated party.

(a) Definition.—Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(u)) is amended—

(1) in subsection (u)(4), by striking “knowingly” and all that follows through the end of the paragraph and inserting “participates in the conduct of, the affairs of, or conducts the business of an insured depository institution.”; and

(2) by adding at the end the following:

“(aa) Unsafe or unsound practice.—The term ‘unsafe or unsound practice’ means, any action, or lack of action, which is contrary to generally accepted standards of prudent operation, the possible consequences of which, if continued, would be abnormal risk or loss or damage to an institution, its shareholders, or the Deposit Insurance Fund.”.

(b) Rule of construction related to independent contractors.—Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is amended by adding at the end the following:

“(x) Rule of construction related to independent contractors.—For purposes of this Act, an independent contractor participates in the conduct of the affairs of, or conducts the business of, an insured depository institution by performing services for the institution.”.

SEC. 501. Modernization and upgrading whistleblower protections.

(a) In general.—Section 5328 of title 31, United States Code, is amended—

(1) by striking subsections (a) and (b) and inserting the following:

“(a) Prohibition against discrimination.—No financial institution or nonfinancial trade or business may discharge or otherwise discriminate against any applicant for employment, employee, or former employee with respect to compensation, terms, conditions, or privileges of employment because the applicant, employee, or former employee (or any person acting pursuant to the request of the employee)—

“(1) provided, was about to provide, assisted in providing, or was perceived as providing information to the Secretary of the Treasury, the Attorney General, any Federal supervisory agency, or the Congress regarding a possible violation of any provision of this subchapter or section 1956, 1957, or 1960 of title 18, or any regulation under any such provision, by the financial institution or nonfinancial trade or business or any director, officer, or employee of the financial institution or nonfinancial trade or business; or

“(2) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the applicant, employee, former employee (or other such person) reasonably believed to be in violation of any provision of this subchapter or any other Act enforced by the Secretary of the Treasury, the Attorney General, a Federal supervisory agency, or any order, rule, regulation, standard, or ban under this subchapter of any of such Acts.

“(b) Enforcement.—Within the 2-year period beginning on the date an applicant, employee, or former employee who believes that such applicant, employee, or former employee has been discharged or discriminated against in violation of subsection (a), such applicant, employee, or former employee may—

“(1) file a civil action in the appropriate United States district court, in accordance with the burdens of proof and remedies set forth in section 1057 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5567); or

“(2) file a complaint with the Secretary of Labor with regards to a violation of subsection (a) to seek relief in accordance with the procedures, burdens of proof, and remedies set forth in section 1057 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5567) for a violation of subsection (a) of such section, except that for purposes of such a complaint, the time period specified under subsection (c)(1)(A) of such section shall be deemed to be a 2-year period.”;

(2) in subsection (c), by inserting after “district court” the following: “or the Secretary, as applicable,”; and

(3) by amending subsection (e) to read as follows:

“(e) Education.—The Secretary of the Treasury shall issue regulations requiring each financial institution and nonfinancial trade or business to provide education and training to its employees on the rights and remedies provided under this section, including through individual notice to its employees, posting information on its website home page, and providing mandatory training for its employees. Such education and training may be incorporated into existing education or training on the requirements of this subtitle provided by such institution or trade or business.

“(f) Independent lines of communication.—The Secretary of the Treasury shall issue regulations requiring each financial institution and nonfinancial trade or business—

“(1) to have a procedure in place for an employee or former employee to report directly to the chief executive officer, a representative appointed by and reporting directly to the chief executive officer who is specifically designated to receive such a report, or through a hotline consistent with professional best practices to the audit committee of the board of directors, if such employee or former employee believes that violations of this subchapter have occurred or are occurring at such institution, trade, or business; and

“(2) to not discriminate against an employee or former employee for such reports.”.

(b) Rewards.—Section 5323(d) of title 31, United States Code, is amended to read as follows:

“(d) Source of rewards.—For the purposes of paying an award under this section, there are authorized to be appropriated such sums as may be necessary, and the Secretary may also use funds from the Department of the Treasury Forfeiture Fund and the Department of Justice Assets Forfeiture Fund.”.

(c) Whistleblower incentives.—

Chapter 53 of title 31, United States Code, is amended—

(1) by inserting after section 5323 the following:

§ 5323A. Whistleblower incentives

“(a) Definitions.—For purposes of this section:

“(1) BANK SECRECY ACT.—The term ‘Bank Secrecy Act’ means this subchapter, section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b), and section 123 of Public Law 91–508.

“(2) COVERED JUDICIAL OR ADMINISTRATIVE ACTION.—The term ‘covered judicial or administrative action’ means any judicial or administrative action brought by FinCEN under the Bank Secrecy Act that results in monetary sanctions exceeding $1,000,000.

“(3) FINCEN.—The term ‘FinCEN’ means the Financial Crimes Enforcement Network.

“(4) MONETARY SANCTIONS.—The term ‘monetary sanctions’, when used with respect to any judicial or administrative action, means—

“(A) any monies, including penalties, disgorgement, and interest, ordered to be paid; and

“(B) any monies deposited into a disgorgement fund as a result of such action or any settlement of such action.

“(5) ORIGINAL INFORMATION.—The term ‘original information’ means information that—

“(A) is derived from the independent knowledge or analysis of a whistleblower;

“(B) is not known to FinCEN from any other source, unless the whistleblower is the original source of the information; and

“(C) is not exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information.

“(6) RELATED ACTION.—The term ‘related action’, when used with respect to any judicial or administrative action brought by FinCEN, means any judicial or administrative action that is based upon original information provided by a whistleblower that led to the successful enforcement of the action.

“(7) WHISTLEBLOWER.—The term ‘whistleblower’ means any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of laws enforced by FinCEN, in a manner established, by rule or regulation, by FinCEN.

“(b) Awards.—

“(1) IN GENERAL.—In any covered judicial or administrative action, or related action, FinCEN, under regulations it prescribes and subject to subsection (c), shall pay an award or awards to 1 or more whistleblowers who voluntarily provided original information to FinCEN that led to the successful enforcement of the covered judicial or administrative action, or related action, in an aggregate amount equal to—

“(A) not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and

“(B) not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions.

“(2) SOURCE OF AWARDS.—For the purposes of paying any award under paragraph (1) there are authorized to be appropriated such sums as may be necessary, and the Secretary may also use funds from the Department of the Treasury Forfeiture Fund and the Department of Justice Assets Forfeiture Fund.

“(c) Determination of amount of award; denial of award.—

“(1) DETERMINATION OF AMOUNT OF AWARD.—

“(A) DISCRETION.—The determination of the amount of an award made under subsection (b) shall be in the discretion of FinCEN.

“(B) CRITERIA.—In responding to a disclosure and determining the amount of an award made, FinCEN shall meet with the whistleblower to discuss evidence disclosed and rebuttals to the disclosure, and—

“(i) shall take into consideration—

“(I) the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;

“(II) the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;

“(III) the mission of FinCEN in deterring violations of the law by making awards to whistleblowers who provide information that lead to the successful enforcement of such laws; and

“(IV) such additional relevant factors as FinCEN may establish by rule or regulation; and

“(ii) shall not take into consideration the balance of any fund described under section 5323(d).

“(2) DENIAL OF AWARD.—No award under subsection (b) shall be made—

“(A) to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to FinCEN, a member, officer, or employee of—

“(i) an appropriate regulatory agency;

“(ii) the Department of Justice;

“(iii) a self-regulatory organization; or

“(iv) a law enforcement organization;

“(B) to any whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award under this section;

“(C) to any whistleblower who gains the information through the performance of an audit of financial statements required under the Bank Secrecy Act and for whom such submission would be contrary to its requirements; or

“(D) to any whistleblower who fails to submit information to FinCEN in such form as FinCEN may, by rule, require.

“(3) STATEMENT OF REASONS.—For any decision granting or denying an award, FinCEN shall provide to the whistleblower a statement of reasons that includes findings of fact and conclusions of law for all material issues

“(d) Representation.—

“(1) PERMITTED REPRESENTATION.—Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.

“(2) REQUIRED REPRESENTATION.—

“(A) IN GENERAL.—Any whistleblower who anonymously makes a claim for an award under subsection (b) shall be represented by counsel if the whistleblower anonymously submits the information upon which the claim is based.

“(B) DISCLOSURE OF IDENTITY.—Prior to the payment of an award, a whistleblower shall disclose their identity and provide such other information as FinCEN may require, directly or through counsel for the whistleblower.

“(e) Appeals.—Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discretion of FinCEN. Any such determination, except the determination of the amount of an award if the award was made in accordance with subsection (b), may be appealed to the appropriate court of appeals of the United States not more than 30 days after the determination is issued by FinCEN. The court shall review the determination made by FinCEN in accordance with section 706 of title 5.”; and

(2) in the table of contents for such chapter, by inserting after the item relating to section 5323 the following new item:


“5323A. Whistleblower incentives”.


SEC. 601. Sense of the Congress.

It is the sense of Congress that the Department of Justice should vigorously pursue criminal penalties to the maximum extent of the law, including prison sentences, for individuals who willfully violate Bank Secrecy Act anti-money laundering laws, thereby exposing the U.S. financial system to a wide array of money laundering, drug trafficking and terrorism financing risks.

SEC. 701. International coordination.

The Secretary of the Treasury shall work with the Secretary’s foreign counterparts, including through the Financial Action Task Force, the International Monetary Fund, the World Bank, and the United Nations, to promote stronger anti-money laundering frameworks and enforcement of anti-money laundering laws.

SEC. 702. Sense of Congress regarding list of countries at high risk for money laundering.

It is the sense of Congress that when Treasury identifies countries or jurisdictions as a primary money laundering concern under section 311 of the USA Patriot Act, it should consider—

(1) countries and jurisdictions identified by the Department of State in its annual International Narcotics Control Strategy Report as Jurisdictions of Primary Concern or jurisdiction’s subject to heightened scrutiny;

(2) whether the Financial Action Task Force has identified a country or jurisdiction as having anti-money laundering or counter-terrorism financing deficiencies and to which countermeasures apply; and

(3) countries and jurisdictions that have not made sufficient progress in addressing the deficiencies identified by the Financial Action Task Force or have not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.