Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

116th Congress    }                                {     Rept. 116-245
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                {            Part 1

======================================================================



 
   COORDINATING OVERSIGHT, UPGRADING AND INNOVATING TECHNOLOGY, AND 
                      EXAMINER REFORM ACT OF 2019

                                _______
                                

October 21, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Ms. Waters, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2514]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2514) to make reforms to the Federal Bank 
Secrecy Act and anti-money laundering laws, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................    18
Background and Need for Legislation..............................    18
Section-by-Section Analysis......................................    23
Hearings.........................................................    34
Committee Consideration..........................................    34
Committee Votes..................................................    34
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    36
Statement of Performance Goals and Objectives....................    36
New Budget Authority and CBO Cost Estimate.......................    36
Committee Cost Estimate..........................................    42
Unfunded Mandate Statement.......................................    42
Advisory Committee...............................................    42
Committee Correspondence.........................................
Application of Law to the Legislative Branch.....................    42
Earmark Statement................................................    43
Duplication of Federal Programs..................................    43
Changes to Existing Law..........................................    43

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Coordinating 
Oversight, Upgrading and Innovating Technology, and Examiner Reform Act 
of 2019'' or the ``COUNTER Act of 2019''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.

                    TITLE I--STRENGTHENING TREASURY

Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. Special hiring authority.
Sec. 103. Civil Liberties and Privacy Officer.
Sec. 104. Civil Liberties and Privacy Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attaches Program.
Sec. 107. Increasing technical assistance for international 
cooperation.
Sec. 108. FinCEN Domestic Liaisons.
Sec. 109. FinCEN Exchange.
Sec. 110. Study and strategy on trade-based money laundering.
Sec. 111. Study and strategy on de-risking.
Sec. 112. AML examination authority delegation study.
Sec. 113. Study and strategy on Chinese money laundering.

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

Sec. 201. OECD pilot program on sharing of suspicious activity reports 
within a financial group.
Sec. 202. Training for examiners on AML/CFT.
Sec. 203. Sharing of compliance resources.
Sec. 204. GAO Study on feedback loops.
Sec. 205. FinCEN study on BSA value.
Sec. 206. Sharing of threat pattern and trend information.
Sec. 207. Modernization and upgrading whistleblower protections.
Sec. 208. Certain violators barred from serving on boards of United 
States financial institutions.
Sec. 209. Additional damages for repeat Bank Secrecy Act violators.
Sec. 210. Justice annual report on deferred and non-prosecution 
agreements.
Sec. 211. Return of profits and bonuses.
Sec. 212. Prohibition on tax deductions for attorney's fees related to 
Bank Secrecy Act settlements and court costs.
Sec. 213. Application of Bank Secrecy Act to dealers in antiquities.
Sec. 214. Geographic targeting order.
Sec. 215. Study and revisions to currency transaction reports and 
suspicious activity reports.
Sec. 216. Streamlining requirements for currency transaction reports 
and suspicious activity reports.

                 TITLE III--MODERNIZING THE AML SYSTEM

Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Parallel runs rulemaking.
Sec. 305. FinCEN study on use of emerging technologies.

SEC. 2. BANK SECRECY ACT DEFINITION.

  Section 5312(a) of title 31, United States Code, is amended by adding 
at the end the following:
          ``(7) Bank secrecy act.--The term `Bank Secrecy act' means--
                  ``(A) section 21 of the Federal Deposit Insurance 
                Act;
                  ``(B) chapter 2 of title I of Public Law 91-508; and
                  ``(C) this subchapter.''.

                    TITLE I--STRENGTHENING TREASURY

SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF THE BANK SECRECY ACT.

  Section 5311 of title 31, United States Code, is amended--
          (1) by inserting ``to protect our national security, to 
        safeguard the integrity of the international financial system, 
        and'' before ``to require''; and
          (2) by inserting ``to law enforcement'' before ``in 
        criminal''.

SEC. 102. SPECIAL HIRING AUTHORITY.

  (a) In General.--Section 310 of title 31, United States Code, is 
amended--
          (1) by redesignating subsection (d) as subsection (g); and
          (2) by inserting after subsection (c) the following:
  ``(d) Special Hiring Authority.--
          ``(1) In general.--The Secretary of the Treasury may appoint, 
        without regard to the provisions of sections 3309 through 3318 
        of title 5, candidates directly to positions in the competitive 
        service (as defined in section 2102 of that title) in FinCEN.
          ``(2) Primary responsibilities.--The primary responsibility 
        of candidates appointed pursuant to paragraph (1) shall be to 
        provide substantive support in support of the duties described 
        in subparagraphs (A), (B), (E), and (F) of subsection 
        (b)(2).''.
  (b) Report.--Not later than 360 days after the date of enactment of 
this Act, and every year thereafter for 7 years, the Director of the 
Financial Crimes Enforcement Network shall submit a report to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate that 
includes--
          (1) the number of new employees hired since the preceding 
        report through the authorities described under section 310(d) 
        of title 31, United States Code, along with position titles and 
        associated pay grades for such hires; and
          (2) a copy of any Federal Government survey of staff 
        perspectives at the Office of Terrorism and Financial 
        Intelligence, including findings regarding the Office and the 
        Financial Crimes Enforcement Network from the most recently 
        administered Federal Employee Viewpoint Survey.

SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER.

  (a) Appointment of Officers.--Not later than the end of the 3-month 
period beginning on the date of enactment of this Act, a Civil 
Liberties and Privacy Officer shall be appointed, from among 
individuals who are attorneys with expertise in data privacy laws--
          (1) within each Federal functional regulator, by the head of 
        the Federal functional regulator;
          (2) within the Financial Crimes Enforcement Network, by the 
        Secretary of the Treasury; and
          (3) within the Internal Revenue Service Small Business and 
        Self-Employed Tax Center, by the Secretary of the Treasury.
  (b) Duties.--Each Civil Liberties and Privacy Officer shall, with 
respect to the applicable regulator, Network, or Center within which 
the Officer is located--
          (1) be consulted each time Bank Secrecy Act or anti-money 
        laundering regulations affecting civil liberties or privacy are 
        developed or reviewed;
          (2) be consulted on information-sharing programs, including 
        those that provide access to personally identifiable 
        information;
          (3) ensure coordination and clarity between anti-money 
        laundering, civil liberties, and privacy regulations;
          (4) contribute to the evaluation and regulation of new 
        technologies that may strengthen data privacy and the 
        protection of personally identifiable information collected by 
        each Federal functional regulator; and
          (5) develop metrics of program success.
  (c) Definitions.--For purposes of this section:
          (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has the 
        meaning given that term under section 5312 of title 31, United 
        States Code.
          (2) Federal functional regulator.--The term ``Federal 
        functional regulator'' means the Board of Governors of the 
        Federal Reserve System, the Comptroller of the Currency, the 
        Federal Deposit Insurance Corporation, the National Credit 
        Union Administration, the Securities and Exchange Commission, 
        and the Commodity Futures Trading Commission.

SEC. 104. CIVIL LIBERTIES AND PRIVACY COUNCIL.

  (a) Establishment.--There is established the Civil Liberties and 
Privacy Council (hereinafter in this section referred to as the 
``Council''), which shall consist of the Civil Liberties and Privacy 
Officers appointed pursuant to section 103.
  (b) Chair.--The Director of the Financial Crimes Enforcement Network 
shall serve as the Chair of the Council.
  (c) Duty.--The members of the Council shall coordinate on activities 
related to their duties as Civil Liberties Privacy Officers, but may 
not supplant the individual agency determinations on civil liberties 
and privacy.
  (d) Meetings.--The meetings of the Council--
          (1) shall be at the call of the Chair, but in no case may the 
        Council meet less than quarterly;
          (2) may include open and partially closed sessions, as 
        determined necessary by the Council; and
          (3) shall include participation by public and private 
        entities and law enforcement agencies.
  (e) Report.--The Chair of the Council shall issue an annual report to 
the Congress on the program and policy activities, including the 
success of programs as measured by metrics of program success developed 
pursuant to section 103(b)(5), of the Council during the previous year 
and any legislative recommendations that the Council may have.
  (f) Nonapplicability of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply to the Council.

SEC. 105. INTERNATIONAL COORDINATION.

  (a) In General.--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, the 
Egmont Group of Financial Intelligence Units, the Organisation for 
Economic Co-operation and Development, and the United Nations, to 
promote stronger anti-money laundering frameworks and enforcement of 
anti-money laundering laws.
  (b) Cooperation Goal.--In carrying out subsection (a), the Secretary 
of the Treasury may work directly with foreign counterparts and other 
organizations where the goal of cooperation can best be met.
  (c) International Monetary Fund.--
          (1) Support for capacity of the international monetary fund 
        to prevent money laundering and financing of terrorism.--Title 
        XVI of the International Financial Institutions Act (22 U.S.C. 
        262p et seq.) is amended by adding at the end the following:

``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO 
                    PREVENT MONEY LAUNDERING AND FINANCING OF 
                    TERRORISM.

  ``The Secretary of the Treasury shall instruct the United States 
Executive Director at the International Monetary Fund to support the 
increased use of the administrative budget of the Fund for technical 
assistance that strengthens the capacity of Fund members to prevent 
money laundering and the financing of terrorism.''.
          (2) National advisory council report to congress.--The 
        Chairman of the National Advisory Council on International 
        Monetary and Financial Policies shall include in the report 
        required by section 1701 of the International Financial 
        Institutions Act (22 U.S.C. 262r) a description of--
                  (A) the activities of the International Monetary Fund 
                in the most recently completed fiscal year to provide 
                technical assistance that strengthens the capacity of 
                Fund members to prevent money laundering and the 
                financing of terrorism, and the effectiveness of the 
                assistance; and
                  (B) the efficacy of efforts by the United States to 
                support such technical assistance through the use of 
                the Fund's administrative budget, and the level of such 
                support.
          (3) Sunset.--Effective on the date that is the end of the 4-
        year period beginning on the date of enactment of this Act, 
        section 1629 of the International Financial Institutions Act, 
        as added by paragraph (1), is repealed.

SEC. 106. TREASURY ATTACHES PROGRAM.

  (a) In General.--Title 31, United States Code, is amended by 
inserting after section 315 the following:

``Sec. 316. Treasury Attaches Program

  ``(a) In General.--There is established the Treasury Attaches 
Program, under which the Secretary of the Treasury shall appoint 
employees of the Department of the Treasury, after nomination by the 
Director of the Financial Crimes Enforcement Network (`FinCEN'), as a 
Treasury attache, who shall--
          ``(1) be knowledgeable about the Bank Secrecy Act and anti-
        money laundering issues;
          ``(2) be co-located in a United States embassy;
          ``(3) perform outreach with respect to Bank Secrecy Act and 
        anti-money laundering issues;
          ``(4) establish and maintain relationships with foreign 
        counterparts, including employees of ministries of finance, 
        central banks, and other relevant official entities;
          ``(5) conduct outreach to local and foreign financial 
        institutions and other commercial actors, including--
                  ``(A) information exchanges through FinCEN and FinCEN 
                programs; and
                  ``(B) soliciting buy-in and cooperation for the 
                implementation of--
                          ``(i) United States and multilateral 
                        sanctions; and
                          ``(ii) international standards on anti-money 
                        laundering and the countering of the financing 
                        of terrorism; and
          ``(6) perform such other actions as the Secretary determines 
        appropriate.
  ``(b) Number of Attaches.--The number of Treasury attaches appointed 
under this section at any one time shall be not fewer than 6 more 
employees than the number of employees of the Department of the 
Treasury serving as Treasury attaches on March 1, 2019.
  ``(c) Compensation.--Each Treasury attache appointed under this 
section and located at a United States embassy shall receive 
compensation at the higher of--
          ``(1) the rate of compensation provided to a Foreign Service 
        officer at a comparable career level serving at the same 
        embassy; or
          ``(2) the rate of compensation the Treasury attache would 
        otherwise have received, absent the application of this 
        subsection.
  ``(d) Bank Secrecy Act Defined.--In this section, the term `Bank 
Secrecy Act' has the meaning given that term under section 5312.''.
  (b) Clerical Amendment.--The table of contents for chapter 3 of title 
31, United States Code, is amended by inserting after the item relating 
to section 315 the following:

``316. Treasury Attaches Program.''.

SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL 
                    COOPERATION.

  (a) In General.--There is authorized to be appropriated for each of 
fiscal years 2020 through 2024 to the Secretary of the Treasury for 
purposes of providing technical assistance that promotes compliance 
with international standards and best practices, including in 
particular those aimed at the establishment of effective anti-money 
laundering and countering the financing of terrorism regimes, in an 
amount equal to twice the amount authorized for such purpose for fiscal 
year 2019.
  (b) Activity and Evaluation Report.--Not later than 360 days after 
enactment of this Act, and every year thereafter for five years, the 
Secretary of the Treasury shall issue a report to the Congress on the 
assistance (as described under subsection (a)) of the Office of 
Technical Assistance of the Department of the Treasury containing--
          (1) a narrative detailing the strategic goals of the Office 
        in the previous year, with an explanation of how technical 
        assistance provided in the previous year advances the goals;
          (2) a description of technical assistance provided by the 
        Office in the previous year, including the objectives and 
        delivery methods of the assistance;
          (3) a list of beneficiaries and providers (other than Office 
        staff) of the technical assistance;
          (4) a description of how technical assistance provided by the 
        Office complements, duplicates, or otherwise affects or is 
        affected by technical assistance provided by the international 
        financial institutions (as defined under section 1701(c) of the 
        International Financial Institutions Act); and
          (5) a copy of any Federal Government survey of staff 
        perspectives at the Office of Technical Assistance, including 
        any findings regarding the Office from the most recently 
        administered Federal Employee Viewpoint Survey.

SEC. 108. FINCEN DOMESTIC LIAISONS.

  Section 310 of title 31, United States Code, as amended by section 
102, is further amended by inserting after subsection (d) the 
following:
  ``(e) FinCEN Domestic Liaisons.--
          ``(1) In general.--The Director of FinCEN shall appoint at 
        least 6 senior FinCEN employees as FinCEN Domestic Liaisons, 
        who shall--
                  ``(A) each be assigned to focus on a specific region 
                of the United States;
                  ``(B) be located at an office in such region (or co-
                located at an office of the Board of Governors of the 
                Federal Reserve System in such region); and
                  ``(C) perform outreach to BSA officers at financial 
                institutions (including non-bank financial 
                institutions) and persons who are not financial 
                institutions, especially with respect to actions taken 
                by FinCEN that require specific actions by, or have 
                specific effects on, such institutions or persons, as 
                determined by the Director.
          ``(2) Definitions.--In this subsection:
                  ``(A) BSA officer.--The term `BSA officer' means an 
                employee of a financial institution whose primary job 
                responsibility involves compliance with the Bank 
                Secrecy Act, as such term is defined under section 
                5312.
                  ``(B) Financial institution.--The term `financial 
                institution' has the meaning given that term under 
                section 5312.''.

SEC. 109. FINCEN EXCHANGE.

  Section 310 of title 31, United States Code, as amended by section 
108, is further amended by inserting after subsection (e) the 
following:
  ``(f) FinCEN Exchange.--
          ``(1) Establishment.--The FinCEN Exchange is hereby 
        established within FinCEN, which shall consist of the FinCEN 
        Exchange program of FinCEN in existence on the day before the 
        date of enactment of this paragraph.
          ``(2) Purpose.--The FinCEN Exchange shall facilitate a 
        voluntary public-private information sharing partnership among 
        law enforcement, financial institutions, and FinCEN to--
                  ``(A) effectively and efficiently combat money 
                laundering, terrorism financing, organized crime, and 
                other financial crimes;
                  ``(B) protect the financial system from illicit use; 
                and
                  ``(C) promote national security.
          ``(3) Report.--
                  ``(A) In general.--Not later than one year after the 
                date of enactment of this subsection, and annually 
                thereafter for the next five years, the Secretary of 
                the Treasury shall submit to the Committee on Financial 
                Services of the House of Representatives and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate a report containing--
                          ``(i) an analysis of the efforts undertaken 
                        by the FinCEN Exchange and the results of such 
                        efforts;
                          ``(ii) an analysis of the extent and 
                        effectiveness of the FinCEN Exchange, including 
                        any benefits realized by law enforcement from 
                        partnership with financial institutions; and
                          ``(iii) any legislative, administrative, or 
                        other recommendations the Secretary may have to 
                        strengthen FinCEN Exchange efforts.
                  ``(B) Classified annex.--Each report under 
                subparagraph (A) may include a classified annex.
          ``(4) Information sharing requirement.--Information shared 
        pursuant to this subsection shall be shared in compliance with 
        all other applicable Federal laws and regulations.
          ``(5) Rule of construction.--Nothing under this subsection 
        may be construed to create new information sharing authorities 
        related to the Bank Secrecy Act (as such term is defined under 
        section 5312 of title 31, United States Code).
          ``(6) Financial institution defined.--In this subsection, the 
        term `financial institution' has the meaning given that term 
        under section 5312.''.

SEC. 110. STUDY AND STRATEGY ON TRADE-BASED MONEY LAUNDERING.

  (a) Study.--The Secretary of the Treasury shall carry out a study, in 
consultation with appropriate private sector stakeholders and Federal 
departments and agencies, on trade-based money laundering.
  (b) Report.--Not later than the end of the 1-year period beginning on 
the date of the enactment of this Act, the Secretary shall issue a 
report to the Congress containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a); and
          (2) proposed strategies to combat trade-based money 
        laundering.
  (c) Classified Annex.--The report required under this section may 
include a classified annex.
  (d) Contracting Authority.--The Secretary may contract with a private 
third-party to carry out the study required under this section.

SEC. 111. STUDY AND STRATEGY ON DE-RISKING.

  (a) Review.--The Secretary of the Treasury, in consultation with 
appropriate private sector stakeholders, examiners, and the Federal 
functional regulators (as defined under section 103) and other relevant 
stakeholders, shall undertake a formal review of--
          (1) any adverse consequences of financial institutions de-
        risking entire categories of relationships, including 
        charities, embassy accounts, money services businesses (as 
        defined under section 1010.100(ff) of title 31, Code of Federal 
        Regulations) and their agents, countries, international and 
        domestic regions, and respondent banks;
          (2) the reasons why financial institutions are engaging in 
        de-risking;
          (3) the association with and effects of de-risking on money 
        laundering and financial crime actors and activities;
          (4) the most appropriate ways to promote financial inclusion, 
        particularly with respect to developing countries, while 
        maintaining compliance with the Bank Secrecy Act, including an 
        assessment of policy options to--
                  (A) more effectively tailor Federal actions and 
                penalties to the size of foreign financial institutions 
                and any capacity limitations of foreign governments; 
                and
                  (B) reduce compliance costs that may lead to the 
                adverse consequences described in paragraph (1);
          (5) formal and informal feedback provided by examiners that 
        may have led to de-risking; and
          (6) the relationship between resources dedicated to 
        compliance and overall sophistication of compliance efforts at 
        entities that may be experiencing de-risking versus those that 
        have not experienced de-risking.
  (b) De-risking Strategy.--The Secretary shall develop a strategy to 
reduce de-risking and adverse consequences related to de-risking.
  (c) Report.--Not later than the end of the 1-year period beginning on 
the date of the enactment of this Act, the Secretary, in consultation 
with the Federal functional regulators and other relevant stakeholders, 
shall issue a report to the Congress containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a); and
          (2) the strategy developed pursuant to subsection (b).
  (d) Definitions.--In this section:
          (1) De-risking.--The term ``de-risking'' means the wholesale 
        closing of accounts or limiting of financial services for a 
        category of customer due to unsubstantiated risk as it relates 
        to compliance with the Bank Secrecy Act.
          (2) BSA terms.--The terms ``Bank Secrecy Act'' and 
        ``financial institution'' have the meaning given those terms, 
        respectively, under section 5312 off title 31, United States 
        Code.

SEC. 112. AML EXAMINATION AUTHORITY DELEGATION STUDY.

  (a) Study.--The Secretary of the Treasury shall carry out a study on 
the Secretary's delegation of examination authority under the Bank 
Secrecy Act, including--
          (1) an evaluation of the efficacy of the delegation, 
        especially with respect to the mission of the Bank Secrecy Act;
          (2) whether the delegated agencies have appropriate resources 
        to perform their delegated responsibilities; and
          (3) whether the examiners in delegated agencies have 
        sufficient training and support to perform their 
        responsibilities.
  (b) Report.--Not later than one year after the date of enactment of 
this Act, the Secretary of the Treasury shall submit to the Committee 
on Financial Services of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate a report 
containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a); and
          (2) recommendations to improve the efficacy of delegation 
        authority, including the potential for de-delegation of any or 
        all such authority where it may be appropriate.
  (c) Bank Secrecy Act Defined.--The term ``Bank Secrecy Act'' has the 
meaning given that term under section 5312 off title 31, United States 
Code.

SEC. 113. STUDY AND STRATEGY ON CHINESE MONEY LAUNDERING.

  (a) Study.--The Secretary of the Treasury shall carry out a study on 
the extent and effect of Chinese money laundering activities in the 
United States and worldwide.
  (b) Strategy to Combat Chinese Money Laundering.--Upon the completion 
of the study required under subsection (a), the Secretary shall, in 
consultation with such other Federal departments and agencies as the 
Secretary determines appropriate, develop a strategy to combat Chinese 
money laundering activities.
  (c) Report.--Not later than the end of the 1-year period beginning on 
the date of enactment of this Act, the Secretary of the Treasury shall 
issue a report to Congress containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a); and
          (2) the strategy developed under subsection (b).

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

SEC. 201. OECD PILOT PROGRAM ON SHARING OF SUSPICIOUS ACTIVITY REPORTS 
                    WITHIN A FINANCIAL GROUP.

  (a) In General.--
          (1) Sharing with foreign branches and affiliates.--Section 
        5318(g) of title 31, United States Code, is amended by adding 
        at the end the following:
          ``(5) OECD pilot program on sharing with foreign branches, 
        subsidiaries, and affiliates.--
                  ``(A) In general.--Not later than 180 days after the 
                date of the enactment of this paragraph, the Secretary 
                of the Treasury shall issue rules, subject to such 
                controls and restrictions as the Director of the 
                Financial Crimes Enforcement Network determines 
                appropriate, establishing the pilot program described 
                under subparagraph (B). In prescribing such rules, the 
                Secretary shall ensure that the sharing of information 
                described under such subparagraph (B) is subject to 
                appropriate standards and requirements regarding data 
                security and the confidentiality of personally 
                identifiable information.
                  ``(B) Pilot program described.--The pilot program 
                required under this paragraph shall--
                          ``(i) permit any financial institution with a 
                        reporting obligation under this subsection to 
                        share reports (and information on such reports) 
                        under this subsection with the institution's 
                        foreign branches, subsidiaries, and affiliates 
                        for the purpose of combating illicit finance 
                        risks, notwithstanding any other provision of 
                        law except subparagraph (C), but only if such 
                        foreign branch, subsidiary, or affiliate is 
                        located in a jurisdiction that is a member of 
                        the Organisation for Economic Co-operation and 
                        Development;
                          ``(ii) terminate on the date that is five 
                        years after the date of enactment of this 
                        paragraph, except that the Secretary may extend 
                        the pilot program for up to two years upon 
                        submitting a report to the Committee on 
                        Financial Services of the House of 
                        Representatives and the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate that 
                        includes--
                                  ``(I) a certification that the 
                                extension is in the national interest 
                                of the United States, with a detailed 
                                explanation of the reasons therefor;
                                  ``(II) an evaluation of the 
                                usefulness of the pilot program, 
                                including a detailed analysis of any 
                                illicit activity identified or 
                                prevented as a result of the program; 
                                and
                                  ``(III) a detailed legislative 
                                proposal providing for a long-term 
                                extension of the pilot program 
                                activities, including expected 
                                budgetary resources for the activities, 
                                if the Secretary determines that a 
                                long-term extension is appropriate.
                  ``(C) Prohibition involving certain jurisdictions.--
                In issuing the regulations required under subparagraph 
                (A), the Secretary may not permit a financial 
                institution to share information on reports under this 
                subsection with a foreign branch, subsidiary, or 
                affiliate located in a jurisdiction that--
                          ``(i) is subject to countermeasures imposed 
                        by the Federal Government; or
                          ``(ii) the Secretary has determined cannot 
                        reasonably protect the privacy and 
                        confidentiality of such information.
                  ``(D) Implementation updates.--Not later than 360 
                days after the date rules are issued under subparagraph 
                (A), and annually thereafter for three years, the 
                Secretary, or the Secretary's designee, shall brief the 
                Committee on Financial Services of the House of 
                Representatives and the Committee on Banking, Housing, 
                and Urban Affairs of the Senate on--
                          ``(i) the degree of any information sharing 
                        permitted under the pilot program, and a 
                        description of criteria used by the Secretary 
                        to evaluate the appropriateness of the 
                        information sharing;
                          ``(ii) the effectiveness of the pilot program 
                        in identifying or preventing the violation of a 
                        United States law or regulation, and mechanisms 
                        that may improve such effectiveness; and
                          ``(iii) any recommendations to amend the 
                        design of the pilot program, or to include 
                        specific non-OECD jurisdictions in the program.
          ``(6) Treatment of foreign jurisdiction-originated reports.--
        A report received by a financial institution from a foreign 
        affiliate with respect to a suspicious transaction relevant to 
        a possible violation of law or regulation shall be subject to 
        the same confidentiality requirements provided under this 
        subsection for a report of a suspicious transaction described 
        under paragraph (1).''.
          (2) Notification prohibitions.--Section 5318(g)(2)(A) of 
        title 31, United States Code, is amended--
                  (A) in clause (i), by inserting after ``transaction 
                has been reported'' the following: ``or otherwise 
                reveal any information that would reveal that the 
                transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity''; and
                  (B) in clause (ii), by inserting after ``transaction 
                has been reported,'' the following: ``or otherwise 
                reveal any information that would reveal that the 
                transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity,''.
  (b) Rulemaking.--Not later than the end of the 1-year period 
beginning on the date of enactment of this Act, the Secretary of the 
Treasury shall issue regulations to carry out the amendments made by 
this section.

SEC. 202. TRAINING FOR EXAMINERS ON AML/CFT.

  (a) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by adding at the end the following:

``Sec. 5333. AML/CFT Training

  ``(a) Training Requirement.--Each Federal examiner reviewing 
compliance with the Bank Secrecy Act shall attend at least 10 hours of 
annual training on anti-money laundering (AML) and the countering of 
the financing of terrorism (CFT), including--
          ``(1) potential risk profiles and red flags that may be 
        encountered during examinations;
          ``(2) financial crime patterns and trends;
          ``(3) the high-level context for why AML and CFT programs are 
        necessary for law enforcement agencies and other national 
        security agencies, and what risks the programs seek to 
        mitigate; and
          ``(4) de-risking and its effect on the provision of financial 
        services.
  ``(b) Training Materials and Standards.--The Secretary of the 
Treasury shall, in consultation with the Financial Institutions 
Examination Council, the Financial Crimes Enforcement Network, and 
State, Federal, and Tribal law enforcement agencies, establish 
appropriate training materials and standards for use in the training 
required under subsection (a).''.
  (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 5332 the following:

``5333. AML/CFT Training.''.

SEC. 203. SHARING OF COMPLIANCE RESOURCES.

  (a) In General.--Section 5318 of title 31, United States Code, is 
amended by adding at the end the following:
  ``(o) Sharing of Compliance Resources.--
          ``(1) Sharing permitted.--Two or more financial institutions 
        may enter into collaborative arrangements in order to more 
        efficiently comply with the requirements of this subchapter.
          ``(2) Outreach.--The Secretary of the Treasury and the 
        appropriate supervising agencies shall carry out an outreach 
        program to provide financial institutions with information, 
        including best practices, with respect to the sharing of 
        resources described under paragraph (1).''.
  (b) Rule of Construction.--The amendment made by subsection (a) may 
not be construed to require financial institutions to share resources.

SEC. 204. GAO STUDY ON FEEDBACK LOOPS.

  (a) Study.--The Comptroller General of the United States shall carry 
out a study on--
          (1) best practices within the United States Government for 
        providing feedback (``feedback loop'') to relevant parties 
        (including regulated private entities) on the usage and 
        usefulness of personally identifiable information (``PII''), 
        sensitive-but-unclassified (``SBU'') data, or similar 
        information provided by such parties to Government users of 
        such information and data (including law enforcement or 
        regulators); and
          (2) any practices or standards inside or outside the United 
        States for providing feedback through sensitive information and 
        public-private partnership information sharing efforts, 
        specifically related to efforts to combat money laundering and 
        other forms of illicit finance.
  (b) Report.--Not later than the end of the 18-month period beginning 
on the date of the enactment of this Act, the Comptroller General shall 
issue a report to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the House of 
Representatives containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a);
          (2) with respect to each of paragraphs (1) and (2) of 
        subsection (a), any best practices or significant concerns 
        identified by the Comptroller General, and their applicability 
        to public-private partnerships and feedback loops with respect 
        to U.S. efforts to combat money laundering and other forms of 
        illicit finance; and
          (3) recommendations to reduce or eliminate any unnecessary 
        Government collection of the information described under 
        subsection (a)(1).

SEC. 205. FINCEN STUDY ON BSA VALUE.

  (a) Study.--The Director of the Financial Crimes Enforcement Network 
shall carry out a study on Bank Secrecy Act value.
  (b) Report.--Not later than the end of the 30-day period beginning on 
the date the study under subsection (a) is completed, the Director 
shall issue a report to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate containing all findings and determinations 
made in carrying out the study required under this section.
  (c) Classified Annex.--The report required under this section may 
include a classified annex, if the Director determines it appropriate.
  (d) Bank Secrecy Act Defined.--For purposes of this section, the term 
``Bank Secrecy Act'' has the meaning given that term under section 5312 
of title 31, United States Code.

SEC. 206. SHARING OF THREAT PATTERN AND TREND INFORMATION.

  Section 5318(g) of title 31, United States Code, as amended by 
section 201(a)(1), is further amended by adding at the end the 
following:
          ``(7) Sharing of threat pattern and trend information.--
                  ``(A) SAR activity review.--The Director of the 
                Financial Crimes Enforcement Network shall restart 
                publication of the `SAR Activity Review - Trends, Tips 
                & Issues', on not less than a semi-annual basis, to 
                provide meaningful information about the preparation, 
                use, and value of reports filed under this subsection 
                by financial institutions, as well as other reports 
                filed by financial institutions under the Bank Secrecy 
                Act.
                  ``(B) Inclusion of typologies.--In each publication 
                described under subparagraph (A), the Director shall 
                provide financial institutions with typologies, 
                including data that can be adapted in algorithms 
                (including for artificial intelligence and machine 
                learning programs) where appropriate, on emerging money 
                laundering and counter terror financing threat patterns 
                and trends.
                  ``(C) Typology defined.--For purposes of this 
                paragraph, the term `typology' means the various 
                techniques used to launder money or finance 
                terrorism.''.

SEC. 207. MODERNIZATION AND UPGRADING WHISTLEBLOWER PROTECTIONS.

  (a) 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 a reward under 
this section, the Secretary may use, without further appropriation, 
criminal fine, civil penalty, or forfeiture amounts recovered based on 
the original information with respect to which the reward is being 
paid.''.
  (b) Whistleblower Incentives.--
            Chapter 53 of title 31, United States Code, is amended--
          (1) by inserting after section 5323 the following:

``Sec. 5323A. Whistleblower incentives

  ``(a) Definitions.--In this section:
          ``(1) 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.
          ``(2) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network.
          ``(3) 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.
          ``(4) 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.
          ``(5) 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.
          ``(6) Secretary.--The term `Secretary' means the Secretary of 
        the Treasury.
          ``(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, the Secretary, under such rules as 
        the Secretary may issue 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 not more than 30 percent, in total, of what has 
        been collected of the monetary sanctions imposed in the action.
          ``(2) Source of awards.--For the purposes of paying any award 
        under paragraph (1), the Secretary may use, without further 
        appropriation, monetary sanction amounts recovered based on the 
        original information with respect to which the award is being 
        paid.
  ``(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 the Secretary.
                  ``(B) Criteria.--In responding to a disclosure and 
                determining the amount of an award made, FinCEN staff 
                shall meet with the whistleblower to discuss evidence 
                disclosed and rebuttals to the disclosure, and 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 
                        the Secretary may establish by rule.
          ``(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, or who the Secretary has a 
                reasonable basis to believe committed 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 the Secretary 
                may, by rule, require.
          ``(3) Statement of reasons.--For any decision granting or 
        denying an award, the Secretary 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 the 
                Secretary 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 the Secretary. 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 the Secretary. The court shall review the 
determination made by the Secretary in accordance with section 706 of 
title 5.
  ``(f) Employee Protections.--The Secretary of the Treasury shall 
issue regulations protecting a whistleblower from retaliation, which 
shall be as close as practicable to the employee protections provided 
for under section 1057 of the Consumer Financial Protection Act of 
2010.''; 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. 208. CERTAIN VIOLATORS BARRED FROM SERVING ON BOARDS OF UNITED 
                    STATES FINANCIAL INSTITUTIONS.

  Section 5321 of title 31, United States Code, is amended by adding at 
the end the following:
  ``(f) Certain Violators Barred From Serving on Boards of United 
States Financial Institutions.--
          ``(1) In general.--An individual found to have committed an 
        egregious violation of a provision of (or rule issued under) 
        the Bank Secrecy Act shall be barred from serving on the board 
        of directors of a United States financial institution for a 10-
        year period beginning on the date of such finding.
          ``(2) Egregious violation defined.--With respect to an 
        individual, the term `egregious violation' means--
                  ``(A) a felony criminal violation for which the 
                individual was convicted; and
                  ``(B) a civil violation where the individual 
                willfully committed such violation and the violation 
                facilitated money laundering or the financing of 
                terrorism.''.

SEC. 209. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT VIOLATORS.

  (a) In General.--Section 5321 of title 31, United States Code, as 
amended by section 208, is further amended by adding at the end the 
following:
  ``(g) Additional Damages for Repeat Violators.--In addition to any 
other fines permitted by this section and section 5322, with respect to 
a person who has previously been convicted of a criminal provision of 
(or rule issued under) the Bank Secrecy Act or who has admitted, as 
part of a deferred- or non-prosecution agreement, to having previously 
committed a violation of a criminal provision of (or rule issued under) 
the Bank Secrecy Act, the Secretary may impose an additional civil 
penalty against such person for each additional such violation in an 
amount equal to up three times the profit gained or loss avoided by 
such person as a result of the violation.''.
  (b) Prospective Application of Amendment.--For purposes of 
determining whether a person has committed a previous violation under 
section 5321(g) of title 31, United States Code, such determination 
shall only include violations occurring after the date of enactment of 
this Act.

SEC. 210. JUSTICE ANNUAL REPORT ON DEFERRED AND NON-PROSECUTION 
                    AGREEMENTS.

  (a) Annual Report.--The Attorney General shall issue an annual 
report, every year for the five years beginning on the date of 
enactment of this Act, to the Committees on Financial Services and the 
Judiciary of the House of Representatives and the Committees on 
Banking, Housing, and Urban Affairs and the Judiciary of the Senate 
containing--
          (1) a list of deferred prosecution agreements and non-
        prosecution agreements that the Attorney General has entered 
        into during the previous year with any person with respect to a 
        violation or suspected violation of the Bank Secrecy Act;
          (2) the justification for entering into each such agreement;
          (3) the list of factors that were taken into account in 
        determining that the Attorney General should enter into each 
        such agreement; and
          (4) the extent of coordination the Attorney General conducted 
        with the Financial Crimes Enforcement Network prior to entering 
        into each such agreement.
  (b) Classified Annex.--Each report under subsection (a) may include a 
classified annex.
  (c) Bank Secrecy Act Defined.--For purposes of this section, the term 
``Bank Secrecy Act'' has the meaning given that term under section 5312 
of title 31, United States Code.

SEC. 211. RETURN OF PROFITS AND BONUSES.

  (a) In General.--Section 5322 of title 31, United States Code, is 
amended by adding at the end the following:
  ``(e) Return of Profits and Bonuses.--A person convicted of violating 
a provision of (or rule issued under) the Bank Secrecy Act shall--
          ``(1) in addition to any other fine under this section, be 
        fined in an amount equal to the profit gained by such person by 
        reason of such violation, as determined by the court; and
          ``(2) if such person is an individual who was a partner, 
        director, officer, or employee of a financial institution at 
        the time the violation occurred, repay to such financial 
        institution any bonus paid to such individual during the 
        Federal fiscal year in which the violation occurred or the 
        Federal fiscal year after which the violation occurred.''.
  (b) Rule of Construction.--The amendment made by subsection (a) may 
not be construed to prohibit a financial institution from requiring the 
repayment of a bonus paid to a partner, director, officer, or employee 
if the financial institution determines that the partner, director, 
officer, or employee engaged in unethical, but non-criminal, 
activities.

SEC. 212. PROHIBITION ON TAX DEDUCTIONS FOR ATTORNEY'S FEES RELATED TO 
                    BANK SECRECY ACT SETTLEMENTS AND COURT COSTS.

  Section 162(f) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following:
          ``(7) Violations of the bank secrecy act.--In the case of a 
        payment described in paragraph (1) that is in relation to any 
        violation of the Bank Secrecy Act (as defined under section 
        5312 of title 31, United States Code), no deduction shall be 
        allowed under this chapter for attorney's fees related to such 
        payment.''.

SEC. 213. APPLICATION OF BANK SECRECY ACT TO DEALERS IN ANTIQUITIES.

  (a) In General.--Section 5312(a)(2) of title 31, United States Code, 
is amended--
          (1) in subparagraph (Y), by striking ``or'' at the end;
          (2) by redesignating subparagraph (Z) as subparagraph (AA); 
        and
          (3) by inserting after subsection (Y) the following:
                  ``(Z) a person trading or acting as an intermediary 
                in the trade of antiquities, including an advisor, 
                consultant or any other person who engages as a 
                business in the solicitation of the sale of 
                antiquities; or''.
  (b) Study on the Facilitation of Money Laundering and Terror Finance 
Through the Trade of Works of Art or Antiquities.--
          (1) Study.--The Secretary of the Treasury, in coordination 
        with Federal Bureau of Investigation, the Attorney General, and 
        Homeland Security Investigations, shall perform a study on the 
        facilitation of money laundering and terror finance through the 
        trade of works of art or antiquities, including an analysis 
        of--
                  (A) the extent to which the facilitation of money 
                laundering and terror finance through the trade of 
                works of art or antiquities may enter or affect the 
                financial system of the United States, including any 
                qualitative data or statistics;
                  (B) whether thresholds should apply in determining 
                which entities to regulate;
                  (C) an evaluation of which markets, by size, domestic 
                or international geographical locations, or otherwise, 
                should be subject to regulations;
                  (D) an evaluation of whether certain exemptions 
                should apply; and
                  (E) any other points of study or analysis the 
                Secretary determines necessary or appropriate.
          (2) Report.--Not later than the end of the 180-day period 
        beginning on the date of the enactment of this Act, the 
        Secretary of the Treasury shall issue a report to the Committee 
        on Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        containing all findings and determinations made in carrying out 
        the study required under paragraph (1).
  (c) Rulemaking.--Not later than the end of the 180-day period 
beginning on the date the Secretary issues the report required under 
subsection (b)(2), the Secretary shall issue regulations to carry out 
the amendments made by subsection (a).

SEC. 214. GEOGRAPHIC TARGETING ORDER.

  The Secretary of the Treasury shall issue a geographic targeting 
order, similar to the order issued by the Financial Crimes Enforcement 
Network on November 15, 2018, that--
          (1) applies to commercial real estate to the same extent, 
        with the exception of having the same thresholds, as the order 
        issued by FinCEN on November 15, 2018, applies to residential 
        real estate; and
          (2) establishes a specific threshold for commercial real 
        estate.

SEC. 215. STUDY AND REVISIONS TO CURRENCY TRANSACTION REPORTS AND 
                    SUSPICIOUS ACTIVITY REPORTS.

  (a) Currency Transaction Reports.--
          (1) CTR indexed for inflation.--
                  (A) In general.--Every 5 years after the date of 
                enactment of this Act, the Secretary of the Treasury 
                shall revise regulations issued with respect to section 
                5313 of title 31, United States Code, to update each 
                $10,000 threshold amount in such regulation to reflect 
                the change in the Consumer Price Index for All Urban 
                Consumers published by the Department of Labor, rounded 
                to the nearest $100. For purposes of calculating the 
                change described in the previous sentence, the 
                Secretary shall use $10,000 as the base amount and the 
                date of enactment of this Act as the base date.
                  (B) Exception.--Notwithstanding subparagraph (A), the 
                Secretary may make appropriate adjustments to the 
                threshold amounts described under subparagraph (A) in 
                high-risk areas (e.g., High Intensity Financial Crime 
                Areas or HIFCAs), if the Secretary has demonstrable 
                evidence that shows a threshold raise would increase 
                serious crimes, such as trafficking, or endanger 
                national security.
          (2) GAO ctr study.--
                  (A) Study.--The Comptroller General of the United 
                States shall carry out a study of currency transaction 
                reports. Such study shall include--
                          (i) a review (carried out in consultation 
                        with the Secretary of the Treasury, the 
                        Financial Crimes Enforcement Network, the 
                        United States Attorney General, the State 
                        Attorneys General, and State, Tribal, and local 
                        law enforcement) of the effectiveness of the 
                        current currency transaction reporting regime;
                          (ii) an analysis of the importance of 
                        currency transaction reports to law 
                        enforcement; and
                          (iii) an analysis of the effects of raising 
                        the currency transaction report threshold.
                  (B) Report.--Not later than the end of the 1-year 
                period beginning on the date of enactment of this Act, 
                the Comptroller General shall issue a report to the 
                Secretary of the Treasury and the Congress containing--
                          (i) all findings and determinations made in 
                        carrying out the study required under 
                        subparagraph (A); and
                          (ii) recommendations for improving the 
                        current currency transaction reporting regime.
  (b) Modified SARs Study and Design.--
          (1) Study.--The Director of the Financial Crimes Enforcement 
        Network shall carry out a study, in consultation with industry 
        stakeholders (including community banks and credit unions), 
        regulators, and law enforcement, of the design of a modified 
        suspicious activity report form for certain customers and 
        activities. Such study shall include--
                  (A) an examination of appropriate optimal SARs 
                thresholds to determine the level at which a modified 
                SARs form could be employed;
                  (B) an evaluation of which customers or transactions 
                would be appropriate for a modified SAR, including--
                          (i) seasoned business customers;
                          (ii) financial technology (Fintech) firms;
                          (iii) structuring transactions; and
                          (iv) any other customer or transaction that 
                        may be appropriate for a modified SAR; and
                  (C) an analysis of the most effective methods to 
                reduce the regulatory burden imposed on financial 
                institutions in complying with the Bank Secrecy Act, 
                including an analysis of the effect of--
                          (i) modifying thresholds;
                          (ii) shortening forms;
                          (iii) combining Bank Secrecy Act forms;
                          (iv) filing reports in periodic batches; and
                          (v) any other method that may reduce the 
                        regulatory burden.
          (2) Study considerations.--In carrying out the study required 
        under paragraph (1), the Director shall seek to balance law 
        enforcement priorities, regulatory burdens experienced by 
        financial institutions, and the requirement for reports to have 
        a ``high degree of usefulness to law enforcement'' under the 
        Bank Secrecy Act.
          (3) Report.--Not later than the end of the 1-year period 
        beginning on the date of enactment of this Act, the Director 
        shall issue a report to Congress containing--
                  (A) all findings and determinations made in carrying 
                out the study required under subsection (a); and
                  (B) sample designs of modified SARs forms based on 
                the study results.
          (4) Contracting authority.--The Director may contract with a 
        private third-party to carry out the study required under this 
        subsection.
  (c) Definitions.--For purposes of this section:
          (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has the 
        meaning given that term under section 5312 of title 31, United 
        States Code.
          (2) Regulatory burden.--The term ``regulatory burden'' means 
        the man-hours to complete filings, cost of data collection and 
        analysis, and other considerations of chapter 35 of title 44, 
        United States Code (commonly referred to as the Paperwork 
        Reduction Act).
          (3) SAR; suspicious activity report.--The term ``SAR'' and 
        ``suspicious activity report'' mean a report of a suspicious 
        transaction under section 5318(g) of title 31, United States 
        Code.
          (4) Seasoned business customer.--The term ``seasoned business 
        customer'', shall have such meaning as the Secretary of the 
        Treasury shall prescribe, which shall include any person that--
                  (A) is incorporated or organized under the laws of 
                the United States or any State, or is registered as, 
                licensed by, or otherwise eligible to do business 
                within the United States, a State, or political 
                subdivision of a State;
                  (B) has maintained an account with a financial 
                institution for a length of time as determined by the 
                Secretary; and
                  (C) meet such other requirements as the Secretary may 
                determine necessary or appropriate.

SEC. 216. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION REPORTS 
                    AND SUSPICIOUS ACTIVITY REPORTS.

  (a) Review.--The Secretary of the Treasury (in consultation with 
Federal law enforcement agencies, the Director of National 
Intelligence, and the Federal functional regulators and in consultation 
with other relevant stakeholders) shall undertake a formal review of 
the current financial institution reporting requirements under the Bank 
Secrecy Act and its implementing regulations and propose changes to 
further reduce regulatory burdens, and ensure that the information 
provided is of a ``high degree of usefulness'' to law enforcement, as 
set forth under section 5311 of title 31, United States Code.
  (b) Contents.--The review required under subsection (a) shall include 
a study of--
          (1) whether the timeframe for filing a suspicious activity 
        report should be increased from 30 days;
          (2) whether or not currency transaction report and suspicious 
        activity report thresholds should be tied to inflation or 
        otherwise periodically be adjusted;
          (3) whether the circumstances under which a financial 
        institution determines whether to file a ``continuing 
        suspicious activity report'', or the processes followed by a 
        financial institution in determining whether to file a 
        ``continuing suspicious activity report'' (or both) can be 
        narrowed;
          (4) analyzing the fields designated as ``critical'' on the 
        suspicious activity report form and whether the number of 
        fields should be reduced;
          (5) the increased use of exemption provisions to reduce 
        currency transaction reports that are of little or no value to 
        law enforcement efforts;
          (6) the current financial institution reporting requirements 
        under the Bank Secrecy Act and its implementing regulations and 
        guidance; and
          (7) such other items as the Secretary determines appropriate.
  (c) Report.--Not later than the end of the one year period beginning 
on the date of the enactment of this Act, the Secretary of the 
Treasury, in consultation with law enforcement and persons subject to 
Bank Secrecy Act requirements, shall issue a report to the Congress 
containing all findings and determinations made in carrying out the 
review required under subsection (a).
  (d) Definitions.--For purposes of this section:
          (1) Federal functional regulator.--The term ``Federal 
        functional regulator'' has the meaning given that term under 
        section 103.
          (2) Other terms.--The terms ``Bank Secrecy Act'' and 
        ``financial institution'' have the meaning given those terms, 
        respectively, under section 5312 of title 31, United States 
        Code.

                 TITLE III--MODERNIZING THE AML SYSTEM

SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.

  Section 5318 of title 31, United States Code, as amended by section 
203, is further amended by adding at the end the following:
  ``(p) Encouraging Innovation in Compliance.--
          ``(1) In general.--The Federal functional regulators shall 
        encourage financial institutions to consider, evaluate, and, 
        where appropriate, responsibly implement innovative approaches 
        to meet the requirements of this subchapter, including through 
        the use of innovation pilot programs.
          ``(2) Exemptive relief.--The Secretary, pursuant to 
        subsection (a), may provide exemptions from the requirements of 
        this subchapter if the Secretary determines such exemptions are 
        necessary to facilitate the testing and potential use of new 
        technologies and other innovations.
          ``(3) Rule of construction.--This subsection may not be 
        construed to require financial institutions to consider, 
        evaluate, or implement innovative approaches to meet the 
        requirements of the Bank Secrecy Act.
          ``(4) Federal functional regulator defined.--In this 
        subsection, the term `Federal functional regulator' means the 
        Board of Governors of the Federal Reserve System, the 
        Comptroller of the Currency, the Federal Deposit Insurance 
        Corporation, the National Credit Union Administration, the 
        Securities and Exchange Commission, and the Commodity Futures 
        Trading Commission.''.

SEC. 302. INNOVATION LABS.

  (a) In General.--The table of contents for subchapter II of chapter 
53 of title 31, United States Code, is amended by adding at the end the 
following:

``Sec. 5334. Innovation Labs

  ``(a) Establishment.--There is established within the Department of 
the Treasury and each Federal functional regulator an Innovation Lab.
  ``(b) Director.--The head of each Innovation Lab shall be a Director, 
to be appointed by the Secretary of the Treasury or the head of the 
Federal functional regulator, as applicable.
  ``(c) Duties.--The duties of the Innovation Lab shall be--
          ``(1) to provide outreach to law enforcement agencies, 
        financial institutions, and other persons (including vendors 
        and technology companies) with respect to innovation and new 
        technologies that may be used to comply with the requirements 
        of the Bank Secrecy Act;
          ``(2) to support the implementation of responsible innovation 
        and new technology, in a manner that complies with the 
        requirements of the Bank Secrecy Act;
          ``(3) to explore opportunities for public-private 
        partnerships; and
          ``(4) to develop metrics of success.
  ``(d) FinCEN Lab.--The Innovation Lab established under subsection 
(a) within the Department of the Treasury shall be a lab within the 
Financial Crimes Enforcement Network.
  ``(e) Federal Functional Regulator Defined.--In this subsection, the 
term `Federal functional regulator' means the Board of Governors of the 
Federal Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union 
Administration, the Securities and Exchange Commission, and the 
Commodity Futures Trading Commission.''.
  (b) Clerical Amendment.--The table of contents for subchapter II of 
chapter 53 of title 31, United States Code, is amended by adding at the 
end the following:

``5334. Innovation Labs.''.

SEC. 303. INNOVATION COUNCIL.

  (a) In General.--Subchapter II of chapter 53 of Title 31, United 
States Code, as amended by section 302, is further amended by adding at 
the end the following:

``Sec. 5335. Innovation Council

  ``(a) Establishment.--There is established the Innovation Council 
(hereinafter in this section referred to as the `Council'), which shall 
consist of each Director of an Innovation Lab established under section 
5334 and the Director of the Financial Crimes Enforcement Network.
  ``(b) Chair.--The Director of the Innovation Lab of the Department of 
the Treasury shall serve as the Chair of the Council.
  ``(c) Duty.--The members of the Council shall coordinate on 
activities related to innovation under the Bank Secrecy Act, but may 
not supplant individual agency determinations on innovation.
  ``(d) Meetings.--The meetings of the Council--
          ``(1) shall be at the call of the Chair, but in no case may 
        the Council meet less than semi-annually;
          ``(2) may include open and closed sessions, as determined 
        necessary by the Council; and
          ``(3) shall include participation by public and private 
        entities and law enforcement agencies.
  ``(e) Report.--The Council shall issue an annual report, for each of 
the 7 years beginning on the date of enactment of this section, to the 
Secretary of the Treasury on the activities of the Council during the 
previous year, including the success of programs as measured by metrics 
of success developed pursuant to section 5334(c)(4), and any regulatory 
or legislative recommendations that the Council may have.''.
  (b) Clerical Amendment.--The table of contents for subchapter II of 
chapter 53 of title 31, United States Code, is amended by adding at the 
end the following:

``5335. Innovation Council.''.

SEC. 304. PARALLEL RUNS RULEMAKING.

  (a) In General.--Section 5318 of title 31, United States Code, as 
amended by section 301, is further amended by adding at the end the 
following:
  ``(q) Parallel Runs Rulemaking.--
          ``(1) In general.--The Secretary of the Treasury, in 
        consultation with the head of each agency to which the 
        Secretary has delegated duties or powers under subsection (a), 
        shall issue a rule to specify--
                  ``(A) with respect to technology and processes 
                designed to facilitate compliance with the Bank Secrecy 
                Act requirements, under what circumstances it is 
                necessary for a financial institution to test new 
                technology and processes alongside legacy technology 
                and processes (`parallel runs');
                  ``(B) if parallel runs are required, what standards 
                must be met; and
                  ``(C) in what instances or under what circumstance 
                and criteria a financial institution may replace or 
                terminate such legacy technology and processes for any 
                examinable technology or process without the 
                replacement or termination being determined an 
                examination deficiency.
          ``(2) Standards.--The standards described under paragraph 
        (1)(B) may include--
                  ``(A) an emphasis on using innovative approaches, 
                such as machine learning, rather than rules-based 
                systems;
                  ``(B) risk-based back-testing of the regime to 
                facilitate calibration of relevant systems;
                  ``(C) requirements for appropriate data privacy and 
                security; and
                  ``(D) a requirement that the algorithms used by the 
                regime be disclosed to the Financial Crimes Enforcement 
                Network.
          ``(3) Confidentiality of algorithms.--If a financial 
        institution or any director, officer, employee, or agent of any 
        financial institution, voluntarily or pursuant to this 
        subsection or any other authority, discloses the institution's 
        algorithms to a Government agency, such algorithms and any 
        materials associated with the creation of such algorithms shall 
        be considered confidential and not subject to public 
        disclosure.''.
  (b) Update of Manual.--The Financial Institutions Examination Council 
shall ensure--
          (1) that any manual prepared by the Council is updated to 
        reflect the rulemaking required by the amendment made by 
        subsection (a); and
          (2) that financial institutions are not penalized for the 
        decisions based on such rulemaking to replace or terminate 
        technology used for compliance with the Bank Secrecy Act (as 
        defined under section 5312 of title 31, United States Code) or 
        other anti-money laundering laws.

SEC. 305. FINCEN STUDY ON USE OF EMERGING TECHNOLOGIES.

  (a) Study.--
          (1) In general.--The Director of the Financial Crimes 
        Enforcement Network (``FinCEN'') shall carry out a study on--
                  (A) the status of implementation and internal use of 
                emerging technologies, including artificial 
                intelligence (``AI''), digital identity technologies, 
                blockchain technologies, and other innovative 
                technologies within FinCEN;
                  (B) whether AI, digital identity technologies, 
                blockchain technologies, and other innovative 
                technologies can be further leveraged to make FinCEN's 
                data analysis more efficient and effective; and
                  (C) how FinCEN could better utilize AI, digital 
                identity technologies, blockchain technologies, and 
                other innovative technologies to more actively analyze 
                and disseminate the information it collects and stores 
                to provide investigative leads to Federal, State, 
                Tribal, and local law enforcement, and other Federal 
                agencies (collective, ``Agencies''), and better support 
                its ongoing investigations when referring a case to the 
                Agencies.
          (2) Inclusion of gto data.--The study required under this 
        subsection shall include data collected through the Geographic 
        Targeting Orders (``GTO'') program.
          (3) Consultation.--In conducting the study required under 
        this subsection, FinCEN shall consult with the Directors of the 
        Innovations Labs established in section 302.
  (b) Report.--Not later than the end of the 6-month period beginning 
on the date of the enactment of this Act, the Director shall issue a 
report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives containing--
          (1) all findings and determinations made in carrying out the 
        study required under subsection (a);
          (2) with respect to each of subparagraphs (A), (B) and (C) of 
        subsection (a)(1), any best practices or significant concerns 
        identified by the Director, and their applicability to AI, 
        digital identity technologies, blockchain technologies, and 
        other innovative technologies with respect to U.S. efforts to 
        combat money laundering and other forms of illicit finance; and
          (3) any policy recommendations that could facilitate and 
        improve communication and coordination between the private 
        sector, FinCEN, and Agencies through the implementation of 
        innovative approaches, in order to meet their Bank Secrecy Act 
        (as defined under section 5312 of title 31, United States Code) 
        and anti-money laundering compliance obligations.

                          Purpose and Summary

    On May 3, 2019, Rep. Emanuel Cleaver introduced H.R. 2514, 
the ``Coordinating Oversight, Upgrading and Innovating 
Technology, and Examiner Reform Act of 2019'' (the COUNTER 
Act), which would amend the Bank Secrecy Act (BSA) and anti-
money laundering and countering the financing of terrorism 
(AML/CFT) laws and regulations in the United States. The 
bipartisan COUNTER Act amends the BSA to close existing 
loopholes in the BSA/AML regime and increase penalties for bad 
actors. The bill also makes changes to the structure of the 
Treasury Department and Financial Crime Enforcement Network 
(FinCEN), including the creation of a Treasury Civil Liberties 
and Privacy Officer within each financial regulatory agency and 
an interagency Civil Liberties and Privacy Council. The COUNTER 
Act would also make changes to the BSA oversight and compliance 
regime, including by authorizing financial institutions to 
share BSA data with certain affiliates, and codifying financial 
regulators' guidance enabling community financial institutions 
to share training and technology resources. H.R. 2514 would 
make the financial regulators' joint innovation guidance 
permanent, would require that each financial banking regulator 
establish an innovation lab, create an inter-regulator 
innovation council, and other changes. The COUNTER Act would 
also require FinCEN to initiate raises to the Currency 
Transaction Report (CTR) threshold for domestic coin and 
currency transactions, every five (5) years, indexed to 
inflation--with the original base amount being $10,000 at the 
legislation's enactment.

                  Background and Need for Legislation

    The BSA defines the roles and responsibilities for agencies 
and industry to enable defense of the United States' financial 
system. The last major reforms to the BSA were in 2001 before 
the rise of lone-actor terrorists, decentralized 
cryptocurrencies, sophisticated transnational trafficking 
schemes, and cybercrime. At the same time, innovations in 
regulatory technologies (RegTech) and financial technology 
(Fintech) to improve operations and compliance with regulations 
are dramatically changing how both industry and bad actors 
function.
    The COUNTER Act addresses several loopholes within the 
existing U.S. anti-money laundering (AML) regime. Bad actors 
like drug traffickers and corrupt kleptocrats frequently use 
anonymous shell companies and all-cash schemes to buy and sell 
real estate to hide and clean their dirty money. In 2017, 
FinCEN acknowledged the magnitude of the U.S. real-estate 
loophole (which exempts the real estate industry from standard 
BSA/AML compliance requirements) by issuing a Geographic 
Targeting Order\1\ (GTO) to require beneficial ownership 
information to be reported in certain types of area-based, 
high-end residential transactions. The agency stated at the 
time that ``about 30 percent of the transactions covered by the 
GTOs involve a beneficial owner or purchaser representative 
that is also the subject of a previous suspicious activity 
report'' from a financial institution. This transparency 
problem also extends to commercial real estate. High-profile 
examples include an Iranian-government-owned skyscraper in New 
York City\2\ and shares of a luxury hotel, also located in New 
York City, purchased with millions in stolen, corrupt 
assets.\3\ The COUNTER Act addresses this loophole by requiring 
FinCEN to issue a GTO to cover similarly anonymous commercial 
real estate transactions throughout the United States.
---------------------------------------------------------------------------
    \1\``Geographic Targeting Order Covering TITLE INSURANCE COMPANY'' 
FinCEN, November 5, 2018. Available at: https://www.fincen.gov/sites/
default/files/shared/Real%20Estate%20GTO%20GENERIC_111518_FINAL.pdf.
    \2\``Jury Finds United States May Seize Iran-Linked Office Tower'' 
Brendan Pierson, Reuters, June 29, 2017. Available at: https://
www.reuters.com/article/us-usa-iran-lawsuit/jury-finds-united-states-
may-seize-iran-linked-office-tower-idUSKBN19K2NB.
    \3\``U.S. to Return $200 Million 1MDB-Linked Funds to Malaysia'' 
Andrea Tan, Edvard Pettersson, and Anisah Shukry, Bloomberg, May 2, 
2019. Available at: https://www.bloomberg.com/news/articles/2019-05-03/
u-s-said-to-return-200-million-1mdb-linked-funds-to-malaysia.
---------------------------------------------------------------------------
    Another loophole exists in the antiquities trade. According 
to the Antiquities Coalition, ``the United States is the 
largest destination for archaeological and ethnological objects 
from around the world.''\4\ Terror groups like the Islamic 
State have looted and sold these treasures to fund their 
operations, which the head of UNESCO, the United Nations' 
cultural heritage agency, said was worth millions of dollars 
and conducted at an ``industrial scale.''\5\ High-end art 
purchases can also be used to launder money, including multi-
million-dollar paintings\6\ and collectibles.\7\ However, 
today, persons trading or acting as intermediaries in the trade 
of works of art or antiquities are exempt from the BSA. The 
COUNTER Act would address this loophole by requiring the 
Secretary of the Treasury to study the extent to which the 
facilitation of money laundering and terror finance through 
arts and antiquities may enter or affect the financial system 
of the United States and which entities should be regulated or 
exempted. Further, the COUNTER Act addresses this loophole by 
including the antiquities industry in the BSA definition of 
``financial institution'' upon completion of the study.
---------------------------------------------------------------------------
    \4\``Antiquities Coalition Policy Note: Taking the First Step 
Toward Ending Illegal Antiquities Trafficking'' Antiquities Coalition 
website, February 22, 2019. Available at: https://
theantiquitiescoalition.org/antiquities-coalition-policy-note-taking-
the-first-step-toward-ending-illegal-antiquities-trafficking/ (last 
accessed May 3, 2019).
    \5\``Islamic State looting Syrian, Iraqi sites on industrial 
scale--UNESCO'' Andrew Osborn, Reuters, July 2, 2015. https://
uk.reuters.com/article/uk-mideast-crisis-unesco/islamic-state-looting-
syrian-iraqi-sites-on-industrial-scale-unesco-idUKKCN0PC1OS20150702.
    \6\``UK Art Dealer Matthew Green Charged in a $9 Million Picasso 
Money-Laundering Scheme'' Anti-Corruption Digest, March 8, 2018. 
https://anticorruptiondigest.com/anti-corruption-news/2018/03/08/uk-
art-dealer-matthew-green-charged-in-a-9-million-picasso-money-
laundering-scheme/#axzz5muUDakx5.
    \7\``Michael Jackson Glove: US Fights Dictator's Son'' Sky News 
August 17, 2013. https://news.sky.com/story/michael-jackson-glove-us-
fights-dictators-son-10437068.
---------------------------------------------------------------------------
    This legislation would also address trade-based money 
laundering and Chinese money laundering. Trade-based money 
laundering (TBML), in which criminals disguise illicit funds by 
engaging in legitimate trades, has also been identified by the 
U.S. Department of Treasury as one of the most difficult forms 
of money laundering to counter.\8\ Accordingly, the COUNTER Act 
would address this challenge by directing the Treasury to 
develop a government-wide strategy to combat TBML. It also 
requires a review by the Treasury to better understand how 
money laundering is used by China in illicit activity, such as 
in the international narcotics trade (including fentanyl, other 
opioids, and methamphetamine precursors\9\), intellectual 
property theft, and natural resources trafficking.
---------------------------------------------------------------------------
    \8\U.S. Department of the Treasury, National Money Laundering Risk 
Assessment, June 12, 2015, p. 29, at https://www.treasury.gov/resource-
center/terrorist-illicit-finance/Documents/
National%20Money%20Laundering%20Risk%20Assessment%20%E2%80%93%2006-12-
2015.pdf.
    \9\``Evolution of the U.S. Overdose Crisis Understanding China's 
Role in the Production and Supply of Synthetic Opioids'' Bryce Pardo, 
RAND, Testimony presented before the House Foreign Affairs Subcommittee 
on Africa, Global Health, Global Human Rights, and International 
Organizations, September 6, 2018. https://www.rand.org/content/dam/
rand/pubs/testimonies/CT400/CT497/RAND_CT497.pdf.
---------------------------------------------------------------------------
    The COUNTER Act is also designed to fortify existing Bank 
Secrecy Act collaboration, and create new avenues for such 
collaboration. Today, illicit financial flows are estimated to 
comprise 20 percent of developing country trade with advanced 
economies.\10\ One counter-terror and threat finance witness, 
Professor Celina B. Realuyo of National Defense University, 
testified before the Subcommittee on National Security, 
International Development, and Monetary Policy that good 
networks of public and private partners to combat the bad are 
vital to ensure that all entities are focused on the same 
threats and solutions.\11\ Jacob Cohen, the former Director of 
FinCEN's Office of Stakeholder Engagement, also testified that 
Treasury's ability to connect with foreign governments and 
international organization allies in developing and executing 
policy and program priorities could be enhanced by increasing 
its presence overseas through international liaisons.\12\ He 
suggested that by creating domestic liaisons, collaboration 
could be improved in the U.S., helping FinCEN to identify 
region-specific illicit finance risks and to issue targeted 
advisories or GTOs.\13\ The COUNTER Act would create these 
international and domestic liaisons and codify the FinCEN 
Exchange, a voluntary public-private information-sharing 
partnership among law enforcement, financial institutions, and 
FinCEN.\14\
---------------------------------------------------------------------------
    \10\Id.
    \11\``Communicating, Cooperating and Collaborating through Public-
Private Partnerships to Counter the Financing of Terrorism and Crime'' 
Testimony of Celina B. Realuyo Before the Task Force to Investigate 
Terrorism Financing, Committee on Financial Services, U.S. House of 
Representatives, June 23, 2016. https://financialservices.house.gov/
uploadedfiles/06.23.2016_celena_realuyo_testimony.pdf.
    \12\``Promoting Corporate Transparency: Examining Legislative 
Proposals to Detect and Deter Financial Crimes'' Testimony of Jacob 
Cohen Before the United States House of Representatives Committee on 
Financial Services Subcommittee on National Security, International 
Development, and Monetary Policy, March 13, 2019. https://
financialservices.house.gov/uploadedfiles/hhrg-116-ba10-wstate-cohenj-
20190313-u1.pdf.
    \13\Id.
    \14\``FinCEN Exchange Questions and Answers'' FinCEN Website. 
https://www.fincen.gov/resources/fin-exchange/fincen-exchange-
frequently-asked-questions (Last accessed May 2, 2019).
---------------------------------------------------------------------------
    The existing BSA/AML framework heavily relies on financial 
institutions taking steps to only provide financial services to 
legitimate actors and report suspicious activity to law 
enforcement.\15\ To do this, banks are required to know their 
customers,\16\ monitor transactions, conduct enhanced due 
diligence, report suspicious activity, and coordinate with 
industry and government partners to understand and detect 
ongoing and emerging threats. Today, however, there are 
statutory and regulatory limitations that limit how financial 
institutions may share information. For example, financial 
institutions cannot share illicit-finance information with 
foreign affiliates. In addition, FinCEN discontinued its ``SARs 
Activity Review,'' which afforded industry with federal-
government analysis of financial crime trends and patterns\17\ 
and was used, especially by smaller banks that do not have 
large, in-house intelligence units, to train staff, tune risk 
controls, and to better understand potential threats to 
institutions. The COUNTER Act establishes a pilot project to 
permit specified information sharing between financial 
institutions and certain foreign affiliates, reinstates the 
SARS Activity Review, and makes permanent guidance that permits 
financial institutions to share compliance resources,\18\ such 
as training for employees of financial institutions.
---------------------------------------------------------------------------
    \15\``The First Line of Defense and Financial Crime'' Speech by 
Michael Held at the 1LoD Summit, Federal Reserve Bank of New York, 
April 2, 2019. https://www.newyorkfed.org/newsevents/speeches/2019/
hel190402.
    \16\``Special Contributor Report: A Complete Guide to Understanding 
AML KYC Compliance.'' Deepak Amirtha Raj, ACFCS Website, September 8, 
2017. https://www.acfcs.org/news/362763/Special-Contributor-Report-The-
Complete-Guide-to-Understanding-AML-KYC-requirements.htm (last accessed 
on May 3, 2019).
    \17\``Index to Topics for The SAR Activity Review Volumes 1-23'' 
FinCEN website. https://www.fincen.gov/index-topics-sar-activity-
review-volumes-1-23 (Last accessed May 2, 2019).
    \18\Interagency Statement on Sharing Bank Secrecy Act Resources, 
FinCEN (October 03, 2018), https://www.fincen.gov/news/news-releases/
interagency-statement-sharing-bank-secrecy-act-resources.
---------------------------------------------------------------------------
    Despite ongoing efforts to improve compliance by financial 
institutions with the law, regulators and law enforcement 
continue to bring civil and criminal BSA-violations.\19\ The 
COUNTER Act would create incentives for whistleblowers to 
report BSA violations by establishing a Treasury-based rewards 
program for those who come forward with significant information 
that leads to an enforcement action. The COUNTER Act would also 
heighten penalties for BSA violators by preventing the return 
of profits or bonuses for those convicted of crimes, and by 
authorizing Treasury to impose treble damages for repeat BSA 
offenders.
---------------------------------------------------------------------------
    \19\``BSA-AML Civil Money Penalties'' BankersOnline.com https://
www.bankersonline.com/penalty/penalty-type/bsa-aml-civil-money-
penalties (last accessed May 3, 2019).
---------------------------------------------------------------------------
    The financial industry is adopting increasingly advanced 
tools to improve data quality and analysis, and to conserve 
limited resources.\20\ This innovation can contribute to better 
detection as well as more comprehensive investigations which, 
in turn, may lead to timelier and more useful SARs for law 
enforcement. The industry is also adopting or adapting to new 
products and services in the marketplace, such as 
cryptocurrencies, payments platforms, and blockchain 
technologies. Bad actors actively seek opportunities to 
leverage, abuse, or trick these tools. One financial innovation 
expert, FinClusive CEO Amit Sharma, at a hearing before the 
Committee, testified that regulators need to understand this 
changing environment to regulate in a manner that encourages 
innovation while limiting negative impacts to our financial 
system and national security.\21\ The COUNTER Act would 
establish Innovation Labs in FinCEN and other financial 
regulators to provide outreach and to support implementation of 
responsible innovation relating to BSA requirements. The 
Committee intends that the Innovation Labs will serve as a one-
stop shop for FI and industry BSA/AML innovation-related 
questions and concerns. The COUNTER Act also requires the 
federal financial regulators to coordinate agency consideration 
of new technology and the standards by which regulated entities 
may use them.
---------------------------------------------------------------------------
    \20\``How Fintech is Changing the Compliance Landscape'' Carol 
Stabile, ACAMS Today, March 6, 2017. https://www.acamstoday.org/how-
fintech-is-changing-the-compliance-landscape/.
    \21\Amit Sharma, March 13, 2019. Available at: https://
financialservices.house.gov/uploadedfiles/hhrg-116-ba10-wstate-sharmaa-
20190313.pdf.
---------------------------------------------------------------------------
    The COUNTER Act would also codify the regulators' joint 
innovation statement of December 2018, which encourages 
financial institutions to responsibly explore and invest in new 
BSA/AML technologies.\22\ The COUNTER Act further requires 
regulators to define the criteria by which financial 
institutions may discard outdated BSA/AML technologies, 
allowing them to fully shift resources to newer and more 
effective and efficient options.
---------------------------------------------------------------------------
    \22\Treasury's FinCEN and Federal Banking Agencies Issue Joint 
Statement Encouraging Innovative Industry Approaches to AML Compliance, 
FinCEN (December 03, 2018), https://www.fincen.gov/news/news-releases/
treasurys-fincen-and-federal-banking-agencies-issue-joint-statement-
encouraging.
---------------------------------------------------------------------------
    The BSA/AML regime is a balance between the protection of 
civil liberties and privacy, and efforts to secure the nation 
and our financial system. Civil liberties and privacy advocacy 
groups, however, have raised concerns that as efforts to combat 
diverse threats grow, so does the government's monitoring of 
private individuals' economic activities. The COUNTER Act would 
address these concerns by requiring the FinCEN and each 
financial regulator to hire a dedicated Civil Liberties and 
Privacy Officer, who would engage on the development and review 
of BSA/AML regulation and provide input on program-level 
information-sharing activities (government-to-government, 
government-to-private-sector, and private-sector-to-private-
sector), especially where there may be access to personally 
identifiable information. The COUNTER Act also establishes a 
standing Civil Liberties and Privacy Council across the 
agencies to facilitate the sharing of best practices and 
discussion of these issues.
    In addition to making changes to the ways FinCEN 
collaborates with international and domestic partners, Jacob 
Cohen, who formerly served at FinCEN, testified before the 
Committee that ``one of the greatest challenges for FinCEN has 
been its ability to hire and retain mission critical 
staff.''\23\ The COUNTER Act would address this concern by 
authorizing FinCEN to have direct hiring authority, thus 
allowing the agency to better compete for top talent.
---------------------------------------------------------------------------
    \23\``Promoting Corporate Transparency: Examining Legislative 
Proposals to Detect and Deter Financial Crimes'' Testimony of Jacob 
Cohen Before the United States House of Representatives Committee on 
Financial Services Subcommittee on National Security, International 
Development, and Monetary Policy, March 13, 2019. https://
financialservices.house.gov/uploadedfiles/hhrg-116-ba10-wstate-cohenj-
20190313-u1.pdf.
---------------------------------------------------------------------------
    Finally, the currency transaction report (CTR) threshold 
has been set at $10,000 since 1972 and because it has not yet 
been adjusted for inflation, effectively, every year, the 
threshold has decreased. Law enforcement routinely uses 
information from CTRs for investigations and prosecutions, 
while financial institutions have expressed concerns with the 
burden of the unindexed $10,000 number. The COUNTER Act aims to 
address stakeholders concerns by requiring FinCEN to initiate 
raises to the CTR threshold for domestic coin and currency 
transactions, every five (5) years, indexed to inflation--with 
the original base amount being $10,000 at the legislation's 
enactment.

                      Section-by-Section Analysis


Sec. 1. Short Title and Table of Contents

    This section provides for the Short Title and provides the 
Table of Contents for the bill.

Sec. 2. Bank Secrecy Act definition

    This section adds a definition of the Bank Secrecy Act 
(BSA) to title 31, United States Code.

                    TITLE I--STRENGTHENING TREASURY

Sec. 101. Improving the definition and purpose of the Bank Secrecy Act

    This section amends section 5311 of Title 31 to expand the 
purpose of the BSA to also ``protect our national security to 
safeguard the integrity of the international financial 
system.'' It also amends the purpose to specifically require 
BSA records to have a high degree of usefulness ``to law 
enforcement.''

Sec. 102. Special Hiring Authority

    Subsection (a) amends section 310 of Title 31 to grant the 
Financial Crimes Enforcement Network (FinCEN) Special Hiring 
Authority to allow it to expedite the hiring of employees with 
critical, specialized skills.
    Subsection (b) requires the Director of FinCEN to submit an 
annual report to Congress on the use of this Authority for the 
first seven years.

Sec. 103. Civil Liberties and Privacy Officer

    Subsection (a) requires that FinCEN, each of the federal 
functional regulators and other entities appoint a dedicated 
Civil Liberties and Privacy Officer, who must be an attorney 
with expertise in data privacy laws.
    Subsection (b) describes the duties of the Officers, 
including that requiring that the Officers would be consulted 
each time the BSA or anti-money laundering (AML) regulations 
affecting privacy or civil liberties are developed or reviewed; 
be consulted on information-sharing activities and programs, 
including activities that provide access to personally 
identifiable information; ensure coordination and clarity 
between AML, civil liberties, and privacy laws; contribute to 
the evaluation and regulation of new technologies and 
protection of personally identifiable information collected by 
Federal functional regulators; and develop metrics for program 
success.
    Subsection (c) defines certain terms used in the section.

Sec. 104. Civil Liberties and Privacy Council

    This section requires the establishment of a Civil 
Liberties and Privacy Council, comprised of the Civil Liberties 
and Privacy Officers in Sec. 103, to coordinate on activities 
and best practices related to their duties. The Council is 
intended to facilitate coordination and not to supplant the 
individual agency determinations on civil liberties and 
privacy.
    This section provides that the Director of FinCEN will 
serve as the Chair, and the meetings, not less than quarterly, 
must include participation by public and private entities and 
law enforcement agencies but may include open and partially 
closed sessions at the discretion of the Council. The Council 
must develop an annual report on its activities, including any 
legislative recommendations. This section also provides that 
the Federal Advisory Committee Act does not apply to the 
Council.

Sec. 105. International coordination

    Subsection (a) requires the Secretary of the Treasury to 
work with foreign counterparts including but not limited to the 
Financial Action Task Force, the International Monetary Fund, 
the World Bank, the Egmont Group of Financial Intelligence 
Units, the Organisation for Economic Co-operation and 
Development, and the United Nations, to promote stronger AML 
frameworks and enforcement of AML laws.
    Subsection (b) provides that the Secretary of the Treasury 
may work directly with foreign counterparts and other 
organizations where goal cooperation can be met.
    Subsection (c) amends Title XVI of the International 
Financial Institutions Act by adding a new section 1629 to 
support the capacity of the International Monetary Fund members 
to prevent money laundering and financing of terrorism by 
increasing the administrative budget of the Fund for technical 
assistance. Subsection (c) also provides that the Chairman of 
the National Advisory Council on International Monetary and 
Financial Policies must develop an annual report to Congress on 
technical assistance activities provided by the Fund for 
prevention of money laundering and financing of terrorism and 
the efficacy of providing technical assistance support through 
the administrative budget of the Fund.
    Finally, subsection (c) also provides that the amendment to 
the International Financial Institutions Act sunsets at the end 
of four years.

Sec. 106. Treasury Attaches Program

    This section amends Title 31 to add a new section 316 which 
establishes in statute the Treasury's Attaches Program and 
augments that program with six additional liaisons who, among 
other matters, have knowledge of BSA/AML to promote adoption of 
U.S. interests internationally, as described in the new section 
316. Attaches appointed under this section are required to 
receive compensation at the higher of the rate of: (1) 
compensation provided to a comparable Foreign Service officer 
serving at the same embassy or; (2) the rate of compensation 
they would otherwise have received.

Sec. 107. Increasing technical assistance for international cooperation

    Subsection (a) doubles the authorization of appropriations 
for the Treasury Department's technical assistance program for 
fiscal years 2020-2024 from the amount authorized in fiscal 
year 2019. Subsection (a) also provides that the funds are to 
be used for providing technical assistance that promotes 
compliance with international standards and best practices, 
including those aimed at the establishment of effective anti-
money laundering and countering the financing of terrorism 
(AML/CFT) regimes.
    Subsection (b) provides that for five years after enactment 
of this section the Secretary of the Treasury must produce an 
annual report to Congress on AML/CFT technical assistance 
activities including strategic goals and how technical 
assistance will advance the goals, descriptions of technical 
assistance provided, a list of beneficiaries, and how the 
technical assistance complements, duplicates, or affects 
technical assistance provided by international financial 
institutions.

Sec. 108. FinCEN Domestic Liaisons

    This section amends section 310 of Title 31 to stablish a 
new outreach mechanism, the FinCEN Domestic Liaison program, 
through which six senior FinCEN employees will perform regional 
outreach and education among financial institutions and non-
financial institutions. The Liaisons must:
          1. Each be assigned to focus on a specific region of 
        the US;
          2. Be located at an office in such region (or co-
        located at an office of another Federal agency in such 
        region); and
          3. Perform outreach to the BSA officers at financial 
        institutions and persons who are not financial 
        institutions, especially with respect to actions taken 
        by FinCEN that require specific actions by, or have 
        specific effects on, such institutions or persons, as 
        determined by the Director.

Sec. 109. FinCEN Exchange

    This section further amends section 310 to codify the 
FinCEN Exchange program, a voluntary public-private 
information-sharing partnership among law enforcement, 
financial institutions, and FinCEN. The purpose of facilitating 
such information sharing is to:
          1. ``effectively and efficiently combat money 
        laundering, terrorism financing, organized crime, and 
        other financial crimes:
          2. protect the financial system from illicit use; and
          3. promote national security.''
    This program includes targeted information and broader 
typologies. This section does not create new information-
sharing authorities related to the BSA; all information sharing 
must be performed within the parameters of existing laws and 
regulations.
    The amendment to section 310 provides that for five years 
after the enactment of this section, the Secretary of the 
Treasury must provide an annual report to the House Financial 
Services Committee and Senate Committee on Banking, Housing and 
Urban Affairs on the extent and the effectiveness of this 
partnership, an analysis of efforts taken by the partnership 
and results of the efforts, and legislative or administrative 
recommendations to strengthen FinCEN Exchange efforts.

Sec. 110. Study and strategy on trade-based money laundering

    This section requires the Secretary of the Treasury, in 
consultation with appropriate stakeholders, to carry out a 
study on trade-based money laundering (TBML). Within one year 
of this section's enactment, a report to Congress must be 
issued containing all findings and determinations, and proposed 
strategies to combat TBML.

Sec. 111. National strategy on de-risking

    This section requires the Secretary of the Treasury, in 
consultation with the private sector, examiners, and other 
regulators, to carry out a formal review examining the reasons 
why financial institutions engage in de-risking, the impact of 
de-risking on financial crime, the most appropriate ways to 
promote financial inclusion, formal and informal feedback 
provided by examiners that may have led to de-risking, and the 
relationship between a financial institution's resources and 
de-risking. Within one year of this section's enactment, a 
report to Congress must be issued containing all findings and 
strategies to reduce de-risking and adverse consequences 
related to de-risking.

Sec. 112. AML examination authority delegation study

    This section requires the Secretary of the Treasury to 
conduct a study on the Secretary's delegation of examination 
authority under the BSA, including an evaluation of the 
efficacy of the delegation, especially with respect to mission 
of the BSA; whether the delegated agencies have appropriate 
resources to perform their delegated responsibilities; and 
whether the examiners in delegated agencies have sufficient 
training and support to perform their responsibilities. This 
section also provides that one year after the date of 
enactment, the Secretary shall issue a report to Congress which 
contains all findings and determinations; and recommendations 
to improve the efficacy of delegation authority, including the 
potential for de-delegation where it may be appropriate.

Sec. 113. Study and strategy on Chinese money laundering

    This section requires the Secretary of the Treasury to 
conduct a study on the extent and effect of Chinese money 
laundering activities in the U.S. and worldwide. Working in 
partnership with appropriate federal agencies, it must develop 
strategies to combat these criminal activities and report its 
results to Congress. This section also provides that one year 
after the date of enactment, the Secretary shall issue a report 
to Congress which contains all findings and determinations; and 
the strategy developed to combat Chinese money laundering 
activities.

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

Sec. 201. OECD pilot program on sharing of suspicious activity reports 
        within a financial group

    This section amends section 5318 of title 31 to require 
FinCEN to undertake pilot program that allows financial 
institutions to share Suspicious Activity Reports (SARs) with 
their foreign affiliates in OECD member jurisdictions. It 
provides that the Secretary of the Treasury issue regulations 
to implement this section not later than 180 days after the 
enactment of the Counter Act. However, this section prohibits 
the sharing of SARs with a foreign affiliate if they are in a 
jurisdiction that is subject to countermeasures imposed by the 
Federal Government or the Secretary of the Treasury has 
determined the jurisdiction cannot reasonably protect the 
privacy and confidentiality of such information. Foreign 
jurisdiction-originated reports received by a financial 
institution from a foreign affiliate shall be subject to the 
same protections as other SARs. This section also provides that 
within one year of the date of enactment and annually for three 
years the Secretary or their designee shall brief the House 
Financial Services Committee and Senate Committee on Banking, 
Housing, and Urban Affairs on the degree of information sharing 
under the program and the criteria used, the effectiveness of 
the pilot in identifying or preventing violations to U.S. law 
or regulations, and recommendations to amend the pilot design 
or inclusion of specific non-OECD jurisdictions in the program.
    The amendments to section 531 made by this section provides 
that this pilot program terminates five years after the date of 
enactment, though the Secretary of the Treasury can extend the 
pilot an additional two years upon submission of a report to 
the House Financial Services Committee and Senate Committee on 
Banking, Housing, and Urban Affairs which contains:
          1. Certification that the extension is in the 
        national interest;
          2. Evaluation of utility of pilot including analysis 
        of illicit activity identified and prevented by the 
        program; and
          3. A legislative proposal for long term extension of 
        program activities and expected budgetary resources.

Sec. 202. Training for examiners on AML/CFT

    This section amends title 31 by adding a new section 5333, 
which requires each examiner reviewing compliance with the Bank 
Secrecy Act to attend at least 10 annual hours of AML/CFT 
training, including on risk profiles and red flags, financial 
crime patterns and trends, and de-risking. The Secretary of the 
Treasury must establish the training material in consultation 
with FinCEN, the FFIEC, and law enforcement partners.

Sec. 203. Sharing of compliance resources

    This section amends section 5318 of title 31 by adding a 
new subsection (o) which codifies October 2018 joint guidance 
from FinCEN and other financial regulators that permits 
financial institutions, particularly community banks, to share 
compliance resources, such as sharing the same training or BSA 
officer. This section also requires the Secretary of the 
Treasury and the appropriate supervising agencies to carry out 
an outreach program to provide financial institutions with 
information, including on best practices, with respect to 
resource sharing. A Rule of Construction clarifies that this 
section does not require financial institutions to share 
resources.

Sec. 204. GAO Study on feedback loops

    Subsection (a) requires the GAO to conduct a study and 
report on: (1) Best practices within the U.S. Government for 
providing feedback to relevant parties (including regulated 
private entities) on the usage and usefulness of personally 
identifiable information (``PII''), sensitive-but-unclassified 
(``SBU'') data, information provided pursuant to the Bank 
Secrecy Act, or similar information provided by such parties to 
Government users of such information and data (including law 
enforcement or regulators); and (2) any practices or standards 
inside or outside the United States for providing feedback 
through information-sharing efforts, specifically related to 
efforts that combat illicit finance.
    Subsection (b) provides that within 18 months of enactment 
of this section, the GAO must issue a report to the House 
Financial Services Committee and Senate Committee on Banking, 
Housing, and Urban Affairs on findings, best practices and 
potential concerns, and recommendations to reduce or eliminate 
unnecessary government collection of PII and SBU data.

Sec. 205. FinCEN study on BSA value

    This section requires the Director of FinCEN to carry out a 
study on the value to law enforcement and national security of 
the Bank Secrecy Act. FinCEN is currently performing this 
study, but this section ensures that it is completed and 
provides findings to Congress.

Sec. 206. Sharing of threat pattern and trend information

    This section amends section 5318 of Title 31 to require 
that, not less than semi-annually, FinCEN shall begin re-
issuing the previously discontinued ``SAR Activity Review--
Trends, Tips & Issues'' to provide financial institutions with 
typologies and case studies on emerging money laundering and 
terror financing threat patterns. In this section, 
``typologies'' means the various techniques used to launder 
money or finance terrorism. The information shall also include 
data that can be adapted in algorithms, including for 
artificial intelligence and machine learning programs, where 
appropriate.

Sec. 207. Modernization and upgrading whistleblower protections

    This section enhances protections for whistleblowers who 
provide original information related to BSA violations that 
leads to the successful enforcement of the covered action. 
Subsection (a) amends section 5323(d) of Title 31 to authorize 
forfeited funds to be used for awards to whistleblowers.
    Subsection (b) adds a new section 5323A to title 31, which 
provides that an award to a whistleblower will be, in aggregate 
amount, equal to not less than 10% but not more than 30%, in 
total, of what has been collected of the monetary sanctions 
imposed in the action or related actions. The new section 5323A 
provides that the Secretary of the Treasury must take several 
factors into consideration when determining the award, 
including the significance of the information, the degree of 
assistance provided by the whistleblower, and the mission of 
FinCEN. It further provides that no awards may be granted to 
certain employees who have a legal obligation to provide the 
information and whistleblowers who are convicted of a criminal 
violation related to the action. The new section 5323A also 
establishes a process for collection of any award. Finally, the 
new section 5323A provides that the Secretary of the Treasury 
shall issue employee-protection regulations to protect 
whistleblowers from retaliation, and retaliation is 
specifically prohibited.

Sec. 208. Certain violators barred from serving on public company 
        boards

    This section amends section 5321 of Title 31 by adding a 
new subsection (f) that would prohibit individuals who 
committed egregious BSA violations from serving on a public 
company board for 10 years. ``Egregious'' means a felony 
criminal violation for which the individual was convicted, and 
a civil violation where the individual willfully committed such 
and the violation facilitated money laundering or the financing 
of terrorism.

Sec. 209. Additional damages for repeat Bank Secrecy Act violators

    Subsection (a) further amends section 5321 of Title 31 by 
adding a new subsection (g) that would increase monetary 
damages for repeat, violations of a criminal provision, or when 
as part of a deferred- or non-prosecution agreement they agreed 
they have committed a criminal violation, of the BSA. For each 
additional violation, an additional civil penalty may be 
imposed in an amount equal to up to three times the profit 
gained or loss avoided by such person as a result of the 
violation.
    Subsection (b) provides that this section is prospective, 
not retrospective

Sec. 210. Justice annual report on deferred and non-prosecution 
        agreements

    This section requires the Department of Justice to report 
to Congress annually, for five years after enactment, on its 
use of deferred-prosecution agreements (DPAs) or non-
prosecution agreements (NPAs) with a financial institution 
alleged to have violated the BSA. The report would include:
          1. A list of DPAs and NPAs that the Attorney General 
        (AG) has entered into during the previous year with any 
        person with respect to a violation or suspected 
        violation of the Bank Secrecy Act;
          2. the justification for entering into each such 
        agreement;
          3. the list of factors that were considered in 
        determining that the AG should enter into each such 
        agreement; and
          4. the extent of coordination the AG conducted with 
        FinCEN prior to entering into the agreement.
    This section provides that the report may include a 
classified annex.

Sec. 211. Return of profits and bonuses

    Subsection (a) amends section 5322 of Title 31 by adding a 
new subsection (d) that requires individuals convicted of BSA 
violations to be fined in an amount equal to the profit gained 
by such person by reason of such violation, in addition to 
other applicable fines. This section also requires such 
individual to return their profits and bonuses they received 
during every year the violation occurred.
    Subsection (b) provides that the section shall not be 
construed to prohibit a financial institution from requiring 
the repayment of a bonus paid to one engaged in unethical, but 
non-criminal, activities.

Sec. 212. Prohibition on tax deductions for attorney's fees related to 
        Bank Secrecy Act settlements and court costs

    This section would prohibit persons from taking a tax 
deduction on their attorney's fees related to a BSA violation, 
if there is a legal finding against the individual as it 
relates to the BSA violation.

Sec. 213. Application of Bank Secrecy Act to dealers in art or 
        antiquities

    Subsection (a) amends section 5312(a) of title 31 by adding 
``a person trading or acting as an intermediary in the trade of 
works of art or antiquities, including an advisor, consultant 
or any other person who engages as a business in the 
solicitation of the sale of art'' to the BSA definition of 
``financial institutions.''
    Subsection (b) provides that the Secretary of the Treasury, 
in coordination with law enforcement, shall perform a study to 
be submitted to Congress within 180 days of the enactment of 
this Act on the facilitation of money laundering and terror 
finance through the trade of works of art or antiquities, 
including an analysis of:
          1. how the term ``art'' should be defined for the 
        purposes of the Bank Secrecy Act (as defined under 
        section 5312 of title 31, United States Code);
          2. the extent to which the facilitation of money 
        laundering and terror finance through the trade of 
        works of art or antiquities enters or affects the 
        financial system of the United States, including any 
        qualitative data or statistics;
          3. whether thresholds should apply in determining 
        which entities to regulate;
          4. an evaluation of which markets, by size, domestic 
        or international geographical locations, or otherwise, 
        should be subject to regulations;
          5. an evaluation of whether certain exemptions should 
        apply; and
          6. any other points of study or analysis the 
        Secretary determines necessary or appropriate.
    Subsection (c) provides that the Secretary shall promulgate 
regulations to implement this section no later than 180 days 
following the completion of the report.

Sec. 214. Geographic Targeting Order

    This section requires FinCEN to issue a Geographic 
Targeting Order (GTO) with an appropriate threshold that 
applies to commercial real estate transactions. GTOs are orders 
requiring financial institutions that exist within a geographic 
area to report to FinCEN on transactions which are greater than 
a specified value.

Sec. 215. Study and revisions to currency transaction reports and 
        suspicious activity reports

    Subsection (a) provides that the Secretary of the Treasury 
shall update each threshold amount for Currency Transaction 
Reports (CTRs) to reflect changes in the Consumer Price Index 
every five years. This subsection also provides that the 
Secretary may make appropriate adjustments to threshold amounts 
in high-risk areas if there is demonstrable evidence that an 
increase in the threshold would increase serious crimes such as 
trafficking or endanger national security.
    Subsection (a) also provides that the Comptroller General 
of the United States shall carry out a study of the existing 
currency transaction reporting regime including:
          1. A review, in consultation with relevant 
        stakeholders, of the effectiveness of the current 
        reporting regime;
          2. An analysis of the importance of CTRs to law 
        enforcement; and
          3. An analysis of the effects of raising the CTR 
        thresholds.
    Subsection (a) also provides that within one year of the 
date of enactment, the Comptroller General of the United States 
shall issue a report to the Secretary of Treasury and Congress 
containing study findings and determinations and 
recommendations for improving the current currency transaction 
reporting regime.
    Subsection (b) provides that the Director of FinCEN shall 
carry out a study, in consultation with relevant industry, 
regulatory, and law enforcement regulators, of the design of a 
modified SAR form. The Director has the authority to contract 
with a private third-party to carry out the study. The purpose 
of the study is to balance law enforcement priorities, 
regulatory burden on financial institutions, and BSA reporting 
requirements for reports to provide a ``high degree of 
usefulness'' to law enforcement. The study shall:
          1. Examine optimal SAR thresholds to determine the 
        level at which a modified SAR form could be 
        implemented;
          2. Evaluate appropriate customers or transactions for 
        a modified SAR; and
          3. Analyze the most effective methods for reducing 
        regulatory burden for financial institutions in 
        complying with the BSA including modifying thresholds, 
        shortening forms, combining BSA forms, filing reports 
        in periodic batches, and other regulatory burden-
        reducing methods.
    Subsection (b) also provides that within one year of the 
date of enactment, the Director shall issue a report to 
Congress containing study findings and sample modified SAR 
forms.
    Subsection (c) defines certain terms included in this 
section.

Sec. 216. Streamlining requirements for currency transaction reports 
        and suspicious activity reports

    Subsection (a) requires the Secretary of the Treasury, in 
consultation with relevant stakeholders, to undertake a formal 
review of existing reporting requirements for financial 
institutions under the BSA and propose changes to reduce 
regulatory burdens and ensure information provided is of a 
``high degree of usefulness'' to law enforcement.
    Subsection (b) provides that the review includes a study 
of:
          1. Whether to increase the 3- day timeframe for 
        filing SARs;
          2. Whether to tie thresholds for currency transaction 
        reports and SARs to inflation or other periodic 
        adjustment;
          3. Whether to narrow the circumstances under or the 
        processes by which a financial institution determines 
        whether to file a ``continuing suspicious activity 
        report'';
          4. An analysis of fields designated as ``critical'' 
        on SAR forms and whether the number of fields should be 
        reduced;
          5. Increased use of exemption provisions to reduce 
        the number of low-utility currency transaction reports;
          6. Current financial institution reporting 
        requirements under the BSA and its implementing 
        regulations and guidance; and
          7. Other items as deemed appropriate by the 
        Secretary.
    Subsection (c) provides that not later than one year from 
the date of enactment of this Act, the Secretary, in 
consultation with law enforcement and stakeholders subject to 
the BSA, shall issue a report to Congress containing required 
findings and determinations of the review required under 
subsection (a).

                 TITLE III--MODERNIZING THE AML SYSTEM

Sec. 301. Encouraging innovation in BSA compliance

    This section further amends section 5318 of title 31 by 
adding a new subsection (p) which codifies a joint innovation-
related statement, released by FinCEN and financial regulators 
in December 2018, that requires the financial regulators to 
encourage financial institutions to consider, evaluate, and, 
where appropriate, responsibly implement innovative approaches 
to meet the requirements of the BSA, including through the use 
of innovation pilot programs. The Secretary of the Treasury may 
provide exemptions from the requirements of the BSA if the 
Secretary determines such exemptions are necessary to 
facilitate the testing and potential use of new technologies 
and other innovations. The new section 5318(p) includes a rule 
of construction to clarify that this section does not require 
financial institutions to engage in innovation.

Sec. 302. Innovation Labs

    This section amends title 31 to add a new section 5334, 
which codifies a joint innovation-related statement, released 
by FinCEN and fellow regulators in December 2018, that required 
the establishment of BSA-related Innovation projects or offices 
within each regulator. Subsection (a) of the new section 5334 
statutorily mandates the establishment of these units, which 
would be called ``Innovation Labs.'' Subsection (b) of the new 
section 5334 establishes that each Innovation Lab be headed by 
a director.
    Subsection (c) provides that the duties for the Labs shall 
be to:
          1. to provide outreach to law enforcement agencies, 
        financial institutions, and other persons (including 
        vendors and technology companies) with respect to 
        innovation and new technologies used to comply with the 
        requirements of the BSA;
          2. to support the implementation of responsible 
        innovation and new technology, in a manner that 
        complies with the requirements of the BSA;
          3. to explore opportunities for public-private 
        partnerships; and
          4. to develop metrics of success.

Sec. 303. Innovation Council

    This section amends title 31 to add a new section 5335, 
which requires Directors of the Innovation Labs established in 
the new section 5334 added by Section 302 of this Act to meet 
via a standing regulatory Innovation Council to discuss and 
coordinate action. The Council is intended to facilitate 
coordination and not to supplant the individual agency 
determinations on innovation. The new section 5335 provides 
that the Council must meet at least semi-annually and must 
include participation by public and private entities and law 
enforcement agencies. The new section 5335 also provides that 
for each of the seven years after the enactment of this 
section, the Council must issue an annual report to the 
Secretary of the Treasury on the activities of the Council 
during the previous year, including the success of programs as 
measured by metrics of success developed pursuant to Section 
302, and any legislative recommendations.

Sec. 304. Parallel runs rulemaking

    Subsection (a) further amends section 5318 of title 31 by 
adding a new subsection (q) that requires the Secretary of the 
Treasury to issue a rule to specify:
          1. with respect to technology and processes designed 
        to facilitate compliance with the BSA requirements, 
        under what circumstances it is necessary for a 
        financial institution to test new technology and 
        processes alongside legacy technology and processes 
        (`parallel runs');
          2. if parallel runs are required, what tests must be 
        completed; and
          3. in what instances or under what circumstances and 
        criteria a financial institution may replace or 
        terminate such legacy technology and processes for any 
        examinable technology or process without the 
        replacement or termination being determined an 
        examination deficiency.
    The new subsection (q) provides that the standards for 
determining parallel runs may include an emphasis on innovative 
approaches, risk-based back-testing of the regime, requirements 
for appropriate data privacy and security, and a requirement 
that algorithms used by the regime be disclosed to FinCEN. The 
new subsection (q) provides that algorithms and materials 
associated disclosed to a government agency are to be 
considered confidential and not subject to public disclosure.
    Subsection (b) requires that the Financial Institutions 
Examination Council (FFIEC) manual must be updated accordingly 
to reflect the changed policy and to ensure that institutions 
are not penalized for the associated decisions to replace or 
terminate their BSA-AML technology.

Sec. 305. FinCEN study on use of emerging technologies

    Subsection (a) directs the Director of FinCEN to carry out 
a study, in consultation with the Directors of the Innovation 
Labs from sec. 302, on:
          1. The status of implementation and use of emerging 
        technologies including artificial intelligence (AI), 
        digital identity, blockchain, and other innovative 
        technologies within FinCEN;
          2. Whether these emerging technologies can be 
        leveraged for more efficient and effective data 
        analysis by FinCEN; and
          3. How FinCEN could better utilize the technologies 
        to actively analyze and disseminate information 
        collected to support investigations by federal 
        agencies, state, tribal, and local law enforcement and 
        better support its ongoing investigations.
    The study shall include data collected through the 
Geographic Targeting Orders program from sec 214.
    Subsection (b) provides that within six months of the date 
of enactment of this Act, the Director of FinCEN shall issue a 
report to the House Financial Services Committee and the Senate 
Committee on Banking, Housing, and Urban Affairs containing 
study findings and determinations, best practices or concerns 
identified by the Director with respect to innovative 
technologies and U.S. efforts to combat money laundering and 
illicit finance, and policy recommendations to improve 
communication and coordination between the private sector, 
FinCEN and federal agencies to meet BSA AML/CFT.

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 for the 
116th Congress--
          1. The Committee on Financial Services held a hearing 
        to consider a discussion draft of H.R. 2513 entitled 
        `Promoting Corporate Transparency: Examining 
        Legislative Proposals to Detect and Deter Financial 
        Crime' on March 13, 2019. Testifying on the panel was: 
        Mr. Jacob Cohen, former Director, Office of Stakeholder 
        Engagement, FinCEN; Mr. Dennis M. Lormel, President and 
        Chief Executive Officer, DML Associates, LLC; Mr. Amit 
        Sharma, Chief Executive Officer, FinClusive; and Dr. 
        Gary Shiffman, Founder and Chief Executive Officer, 
        Giant Oak, Inc.
          2. In addition, the following related hearing was 
        held--In the 115th Congress, the Committee held a joint 
        hearing with the Subcommittee on Terrorism and Illicit 
        Finance to consider H.R. 2219, the ``Counter Terrorism 
        and Illicit Finance Act'' entitled, `Legislative 
        Proposals to Counter Terrorism and Illicit Finance' on 
        November 29, 2017. Testifying on the panel was: Mr. 
        Daniel H. Bley, Executive Vice President and Chief Risk 
        Officer, Webster Bank, on behalf of the Mid-Size Bank 
        Coalition of America; Mr. John J. Byrne, President, 
        Condor Consulting LLC; Mr. William J. Fox, Managing 
        Director, Global Head of Financial Crimes Compliance, 
        Bank of America, on behalf of The Clearing House; Ms. 
        Stefanie Ostfeld, Deputy Head of US Office, Global 
        Witness; and Mr. Chip Poncy, President and Co-Founder, 
        Financial Integrity Network.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 9, 2019, and ordered H.R. 2514 to be reported favorably to 
the House with an amendment in the nature of a substitute by a 
vote of 55 yeas and 0 nays, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following roll call votes occurred during the Committee's 
consideration of H.R. 2514.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 2514 are to amend 
the Bank Secrecy Act and current anti-money laundering/
countering the financing of terrorism (AML/CFT) laws and 
regulations in the United States.

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 2514 from the Director of the Congressional Budget Office:
                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 16, 2019.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2514, the COUNTER 
Act of 2019.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    Bill Summary: H.R. 2514 would change how the government 
enforces the Bank Secrecy Act. The bill also would direct the 
staff of the federal financial regulators to attend additional 
training on enforcing the BSA and on efforts to counter money 
laundering.\1\
---------------------------------------------------------------------------
    \1\Federal financial regulators include the Board of Governors of 
the Federal Reserve System, the Commodity Futures Trading Commission 
(CFTC), the Federal Deposit Insurance Corporation (FDIC), the National 
Credit Union Administration (NCUA), the Office of the Comptroller of 
the Currency (OCC), and the Securities and Exchange Commission (SEC).
---------------------------------------------------------------------------
    Estimated Federal Cost: The estimated budgetary effect of 
H.R. 2514 is shown in Table 1. The costs of the legislation 
fall within budget functions 150 (international affairs), 370 
(commerce and housing credit), 750 (administration of justice), 
and 800 (general government).

                                                   TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2514
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2020    2021    2022    2023    2024    2025    2026    2027    2028    2029   2020-2024  2020-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Increases in Direct Spending
 
Estimated Budget Authority........................       3       3       2       2       2       3       3       4       4       4        13         30
Estimated Outlays.................................       1       3       3       2       2       2       3       4       4       4        11         28
 
                                                                  Increases in Revenues
 
Estimated Revenues................................      19      20      21      21      22      23      24      24      25      25       104        226
 
                                                               Net Decrease in the Deficit
                                                      From Changes in Direct Spending and Revenues
 
Effect on the Deficit.............................     -18     -17     -18     -19     -20     -21     -21     -20     -21     -21       -93       -198
 
                                                     Increases in Spending Subject to Appropriation
 
Estimated Authorization...........................      72      67      67      68      68    n.e.    n.e.    n.e.    n.e.    n.e.       342       n.e.
Estimated Outlays.................................      16      41      61      64      65    n.e.    n.e.    n.e.    n.e.    n.e.       247       n.e.
Memorandum:
    Increases in Revenues from Whistleblower             0       0       0       1       1       2       3       3       3       3         2         16
     Program\a\...................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Congressional Budget Office; staff of the Joint Committee on Taxation
Components may not sum to totals because of rounding; n.e. = not estimated.
\a\The Conference Report for the Balanced Budget Act of 1997 (Public Law 105-33) established a series of scorekeeping rules that guide what budget
  effects are attributed to proposed legislation. Rule 14 states that no increase in receipts or decrease in direct spending will be scored as a result
  of a provision of a law that provides direct spending for administrative or program management activities. Thus, any estimated additional penalties
  that may be collected under the proposed expansion to the Whistleblower program cannot be attributed to this bill for Congressional scorekeeping
  purposes.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2514 will be enacted near the end of 2019.
    Direct spending: CBO estimates that enacting H.R. 2514 
would increase direct spending by $28 million over the 2020-
2029 period mostly for costs to federal financial regulators.
    The operating costs for several financial regulators (the 
FDIC, the NCUA, and the OCC) are classified in the federal 
budget as direct spending. The NCUA and the OCC collect fees 
from financial institutions to offset their operating costs; 
those fees are considered reductions in direct spending. The 
FDIC pays its operating costs from the Deposit Insurance Fund 
(DIF). Costs incurred by the Federal Reserve reduce remittances 
to the Treasury (such remittances are recorded as revenues). 
Costs for the CFTC, the SEC, and the Treasury are subject to 
the availability of annual appropriations. However, the SEC is 
authorized under current law to collect fees sufficient to 
offset its annual appropriation.
    Federal Financial Regulators. In total, CBO estimates that 
enacting H.R. 2514 would increase gross direct spending by $87 
million over the 2020-2029 period for the FDIC, the NCUA and 
the OCC to implement the bill. Of that spending, $62 million 
would be offset by fees levied by the NCUA and the OCC. CBO 
estimates that, on net, budget deficits would increase by $25 
million under the bill over the 2020-2029 period.
    Examiner Training. H.R. 2514 would require federal 
financial examiners who review compliance with the BSA to 
attend at least 10 hours of annual training on enforcing laws 
that prohibit money laundering and laws related to the 
financing of terrorism. Together, those agencies and the 
Federal Reserve employ approximately 7,000 examiners who would 
require additional training under the bill. Using information 
from several of the affected agencies, CBO estimates that 
additional staff would be needed by the FDIC, the NCUA, and the 
OCC to fulfill duties that otherwise would have been completed 
by examiners while they were being trained. CBO estimates that 
each agency would require, on average, five additional staff at 
an average cost of $250,000 to implement the requirement. Thus, 
enacting the bill would increase gross direct spending by $36 
million and net direct spending by $10 million over the 2020-
2029 period.
    Innovation Labs. H.R. 2514 would require each federal 
financial regulator to establish an innovation lab to provide 
information and support to private entities regarding new 
approaches that may be used to comply with the BSA. Using 
information from the affected agencies, CBO estimates that they 
each would require, on average, about four additional employees 
to meet those requirements increasing gross direct spending by 
$33 million and net direct spending by $10 million over the 
2020-2029 period.
    Other Costs. The bill would require federal financial 
regulators to consult with the Treasury on several reports, 
update bank examination manuals, and appoint a civil liberties 
and privacy officer. CBO estimates that implementing those 
requirements would increase gross direct spending by $18 
million and net direct spending by $5 million over the 2020-
2029 period.
    Whistleblower Program. H.R. 2514 would direct the Financial 
Crimes Enforcement Network to establish a new whistleblower 
program that would award a portion of penalties collected for 
violation of the BSA to people who provide information leading 
to the imposition of penalties. Based on information from 
FinCEN and an analysis of similar programs at the SEC and the 
CFTC, CBO estimates enacting the program would cost about $1 
million each year starting in 2027, the year in which CBO 
expects the final regulations would be in place and the 
whistleblower program would be fully operational. Over the 
2020-2029 period, CBO estimates, the award program would 
increase direct spending by $3 million.
    Revenues: CBO and the staff of the Joint Committee on 
Taxation (JCT) estimate that enacting H.R. 2514 would, on net, 
increase revenues by $226 million over the 2020-2029 period.
    Tax Deductions. The bill would prohibit businesses and 
individuals from deducting attorney's fees and court costs 
related to Bank Secrecy Act settlements on their tax returns. 
JCT estimates that enacting this provision would increase 
revenues by $256 million over the 2020-2029 period.
    Federal Reserve. The Federal Reserve would be subject to 
the same requirements under H.R. 2514 as other federal 
financial regulators as discussed earlier. Using information 
from the Federal Reserve, CBO estimates that the additional 
training and creating an innovation lab would cost about $3 
million each year and would thus decrease revenues by $30 
million over the 2020-2029 period.
    Whistleblower Program. CBO expects that implementing the 
proposed FinCEN whistleblower program would increase revenues 
from penalties. However, under Congressional scorekeeping 
rules, the estimated increase in revenues from whistleblower 
rewards that we estimate would result from providing additional 
mandatory funds cannot be used to offset that increased 
spending.\2\ CBO estimates that the ``nonscoreable'' revenues 
from this provision would total $16 million over the 2020-2029 
period. That estimate is based on an assessment of past FinCEN 
enforcement actions and on an evaluation of similar 
whistleblower programs at the SEC and the CFTC.
---------------------------------------------------------------------------
    \2\The Conference Report for the Balanced Budget Act of 1997 
(Public Law 105-33) established a series of scorekeeping rules that 
guide what budgetary effects are attributed to proposed legislation. 
Rule 14 states that ``no increase in receipts or decrease in direct 
spending will be scored as a result of a provision of a law that 
provides direct spending for administrative or program management 
activities.''
---------------------------------------------------------------------------
    Spending subject to appropriation: CBO estimates that 
implementing H.R. 2514 would cost $247 million over the 2019-
2024 period, assuming appropriation of the necessary amounts 
(see Table 2).

               TABLE 2.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 2514
----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, millions of dollars--
                                                         -------------------------------------------------------
                                                            2020     2021     2022     2023     2024   2020-2024
----------------------------------------------------------------------------------------------------------------
Technical Assistance
    Estimated Authorization.............................       60       60       60       60       60        300
    Estimated Outlays...................................        5       34       54       57       57        207
FinCEN
    Estimated Authorization.............................        6        6        6        7        7         32
    Estimated Outlays...................................        5        6        6        7        7         31
Reports
    Estimated Authorization.............................        6        *        *        *        *          7
    Estimated Outlays...................................        5        1        *        *        *          7
CFTC and SEC
    Estimated Authorization.............................        *        *        *        *        *          2
    Estimated Outlays...................................        *        *        *        *        *          2
    Total Changes
        Estimated Authorization.........................       72       67       67       68       68        342
        Estimated Outlays...............................       16       41       61       64       65        247
----------------------------------------------------------------------------------------------------------------
Components may not sum to totals because of rounding.
CFTC = Commodity Futures Trading Commission; FinCEN = Financial Crimes Enforcement Network; SEC = Securities and
  Exchange Commission.

    Technical Assistance. Over the 2020-2024 period the bill 
would authorize the appropriation of twice the amount 
appropriated in 2019 to the Treasury ($30 million) to help 
foster international cooperation in combating money laundering 
and terrorism. Based on the funding for the current program, 
CBO estimates that the legislation would authorize the 
appropriation of $60 million annually and cost $207 million 
over the 2020-2024 period and $93 million after 2024, assuming 
appropriation of the authorized amounts.
    FinCEN. H.R. 2514 would require FinCEN to increase outreach 
to financial institutions, publish information about its use of 
reports filed by those institutions, and initiate a project to 
support the use of new technology to improve compliance with 
the BSA. Using information from FinCEN, CBO estimates that 
implementing those provisions would cost $31 million over the 
2020-2024 period, mostly to hire additional staff.
    Reports. H.R. 2514 would require FinCEN, the Department of 
the Treasury, and other agencies to prepare a total of 15 
reports to the Congress on money laundering and financial 
reporting. Based on the cost of similar activities, CBO 
estimates preparing those reports would cost about $7 million 
over the 2020-2024 period.
    CFTC and SEC. CBO estimates that the CFTC would spend about 
$2 million over the 2020-2024 period to hire two employees at 
an annual cost of $240,000 per employee. Such spending would be 
subject to the availability of appropriated funds.
    CBO estimates that the SEC would spend about $3 million 
over the 2020-2024 period to hire two employees at 
approximately $260,000 per employee. Such spending would be 
subject to the availability of discretionary funds. However, 
the SEC is authorized to collect fees sufficient to offset its 
annual appropriation. Assuming future appropriation actions 
consistent with that authority, CBO estimates that that the net 
effect on discretionary spending would be negligible.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in Table 3.

                                      TABLE 3.--CBO's ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 2514
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2020    2021    2022    2023    2024    2025    2026    2027    2028    2029   2020-2024  2020-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Net Decrease in the Deficit
 
Pay-As-You-Go Effect..............................     -18     -17     -18     -19     -20     -21     -21     -20     -21     -21       -93       -198
Memorandum:
    Changes in Outlays............................       1       3       3       2       2       2       3       4       4       4        11         28
    Changes in Revenues...........................      19      20      21      21      22      23      24      24      25      25       104        226
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term deficits: None.
    Mandates: CBO has determined that the nontax provisions of 
H.R. 2514 contain private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA). CBO cannot determine 
whether the aggregate cost of those mandates would exceed the 
threshold established in UMRA for private-sector mandates ($164 
million in 2019, adjusted annually for inflation).
    H.R. 2514 would direct the Department of Treasury to issue 
several rules that would impose mandates on private-sector 
entities subject to the BSA. The costs to comply with the 
mandates would include expenses incurred to meet new reporting 
and other requirements set out in the bill. Because the 
Treasury Department has not yet established those rules, CBO 
cannot determine whether the cost to comply with the mandates 
would exceed UMRA's private-sector threshold.
    Specifically, H.R. 2514 would require the Treasury 
Department to issue regulations establishing:
           Protections for some whistleblowing 
        employees by prohibiting employers from dismissing or 
        disciplining employees for disclosing violations of 
        laws enforced by FinCEN;
           Requirements that antiquities dealers comply 
        with the BSA;
           Requirements that some commercial real 
        estate companies report beneficial ownership 
        information to FinCEN for transactions within a 
        geographic region and over a specific dollar threshold, 
        which would be determined by the department; and
           Requirements for how to install new 
        technology designed by financial institutions to 
        facilitate compliance with the BSA.
    If federal regulatory agencies increased fees to offset the 
costs associated with implementing the bill, H.R. 2514 would 
increase the cost of an existing mandate on financial 
institutions required to pay those assessments and fees. CBO 
estimates that the incremental cost of the mandate would 
average less than $10 million annually over the 2019-2024 
period.
    H.R. 2514 contains no intergovernmental mandates as defined 
in UMRA.
    Estimate prepared by: Federal costs: Mark Grabowicz 
(Financial Crimes Enforcement Network); David Hughes (Commodity 
Futures Trading Commission, Securities and Exchange 
Commission); Matthew Pickford (Department of the Treasury); 
Stephen Rabent (Federal Deposit Insurance Corporation, National 
Credit Union Administration, Office of the Comptroller of the 
Currency); Ellen Steele (Financial Crimes Enforcement Network 
whistleblower).
    Revenues: The staff of the Joint Committee on Taxation; 
Nathaniel Frentz (Federal Reserve); Ellen Steele (Financial 
Crimes Enforcement Network whistleblower).
    Mandates: Rachel Austin.
    Estimate reviewed by: Kim Cawley, Chief, Natural and 
Physical Resources Cost Estimating Unit; Susan Willie, Chief, 
Mandates Unit; H. Samuel Papenfuss, Deputy Assistant Director 
for Budget Analysis; John McClelland, Assistant Director for 
Tax Analysis; Theresa Gullo, Assistant Director for Budget 
Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 2514. 
However, clause 3(d)(2)(B) of that rule provides that this 
requirement does not apply when the committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 2514, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 2514, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2514 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R. 2514 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                        Changes to Existing Law

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 2514, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 31, UNITED STATES CODE




           *       *       *       *       *       *       *
SUBTITLE I--GENERAL

           *       *       *       *       *       *       *


                 CHAPTER 3--DEPARTMENT OF THE TREASURY


                       SUBCHAPTER I--ORGANIZATION

Sec.
301. Department of the Treasury.
     * * * * * * *
315. Continuing in office.
316. Treasury Attaches Program.
     * * * * * * *

SUBCHAPTER I--ORGANIZATION

           *       *       *       *       *       *       *



Sec. 310. Financial Crimes Enforcement Network

  (a) In General.--The Financial Crimes Enforcement Network 
established by order of the Secretary of the Treasury (Treasury 
Order Numbered 105-08, in this section referred to as 
``FinCEN'') on April 25, 1990, shall be a bureau in the 
Department of the Treasury.
  (b) Director.--
          (1) Appointment.--The head of FinCEN shall be the 
        Director, who shall be appointed by the Secretary of 
        the Treasury.
          (2) Duties and powers.--The duties and powers of the 
        Director are as follows:
                  (A) Advise and make recommendations on 
                matters relating to financial intelligence, 
                financial criminal activities, and other 
                financial activities to the Under Secretary of 
                the Treasury for Enforcement.
                  (B) Maintain a government-wide data access 
                service, with access, in accordance with 
                applicable legal requirements, to the 
                following:
                          (i) Information collected by the 
                        Department of the Treasury, including 
                        report information filed under 
                        subchapter II of chapter 53 of this 
                        title (such as reports on cash 
                        transactions, foreign financial agency 
                        transactions and relationships, foreign 
                        currency transactions, exporting and 
                        importing monetary instruments, and 
                        suspicious activities), chapter 2 of 
                        title I of Public Law 91-508, and 
                        section 21 of the Federal Deposit 
                        Insurance Act.
                          (ii) Information regarding national 
                        and international currency flows.
                          (iii) Other records and data 
                        maintained by other Federal, State, 
                        local, and foreign agencies, including 
                        financial and other records developed 
                        in specific cases.
                          (iv) Other privately and publicly 
                        available information.
                  (C) Analyze and disseminate the available 
                data in accordance with applicable legal 
                requirements and policies and guidelines 
                established by the Secretary of the Treasury 
                and the Under Secretary of the Treasury for 
                Enforcement to--
                          (i) identify possible criminal 
                        activity to appropriate Federal, State, 
                        local, and foreign law enforcement 
                        agencies;
                          (ii) support ongoing criminal 
                        financial investigations and 
                        prosecutions and related proceedings, 
                        including civil and criminal tax and 
                        forfeiture proceedings;
                          (iii) identify possible instances of 
                        noncompliance with subchapter II of 
                        chapter 53 of this title, chapter 2 of 
                        title I of Public Law 91-508, and 
                        section 21 of the Federal Deposit 
                        Insurance Act to Federal agencies with 
                        statutory responsibility for enforcing 
                        compliance with such provisions and 
                        other appropriate Federal regulatory 
                        agencies;
                          (iv) evaluate and recommend possible 
                        uses of special currency reporting 
                        requirements under section 5326;
                          (v) determine emerging trends and 
                        methods in money laundering and other 
                        financial crimes;
                          (vi) support the conduct of 
                        intelligence or counterintelligence 
                        activities, including analysis, to 
                        protect against international 
                        terrorism; and
                          (vii) support government initiatives 
                        against money laundering.
                  (D) Establish and maintain a financial crimes 
                communications center to furnish law 
                enforcement authorities with intelligence 
                information related to emerging or ongoing 
                investigations and undercover operations.
                  (E) Furnish research, analytical, and 
                informational services to financial 
                institutions, appropriate Federal regulatory 
                agencies with regard to financial institutions, 
                and appropriate Federal, State, local, and 
                foreign law enforcement authorities, in 
                accordance with policies and guidelines 
                established by the Secretary of the Treasury or 
                the Under Secretary of the Treasury for 
                Enforcement, in the interest of detection, 
                prevention, and prosecution of terrorism, 
                organized crime, money laundering, and other 
                financial crimes.
                  (F) Assist Federal, State, local, and foreign 
                law enforcement and regulatory authorities in 
                combatting the use of informal, nonbank 
                networks and payment and barter system 
                mechanisms that permit the transfer of funds or 
                the equivalent of funds without records and 
                without compliance with criminal and tax laws.
                  (G) Provide computer and data support and 
                data analysis to the Secretary of the Treasury 
                for tracking and controlling foreign assets.
                  (H) Coordinate with financial intelligence 
                units in other countries on anti-terrorism and 
                anti-money laundering initiatives, and similar 
                efforts.
                  (I) Administer the requirements of subchapter 
                II of chapter 53 of this title, chapter 2 of 
                title I of Public Law 91-508, and section 21 of 
                the Federal Deposit Insurance Act, to the 
                extent delegated such authority by the 
                Secretary of the Treasury.
                  (J) Such other duties and powers as the 
                Secretary of the Treasury may delegate or 
                prescribe.
  (c) Requirements Relating to Maintenance and Use of Data 
Banks.--The Secretary of the Treasury shall establish and 
maintain operating procedures with respect to the government-
wide data access service and the financial crimes 
communications center maintained by FinCEN which provide--
          (1) for the coordinated and efficient transmittal of 
        information to, entry of information into, and 
        withdrawal of information from, the data maintenance 
        system maintained by FinCEN, including--
                  (A) the submission of reports through the 
                Internet or other secure network, whenever 
                possible;
                  (B) the cataloguing of information in a 
                manner that facilitates rapid retrieval by law 
                enforcement personnel of meaningful data; and
                  (C) a procedure that provides for a prompt 
                initial review of suspicious activity reports 
                and other reports, or such other means as the 
                Secretary may provide, to identify information 
                that warrants immediate action; and
          (2) in accordance with section 552a of title 5 and 
        the Right to Financial Privacy Act of 1978, appropriate 
        standards and guidelines for determining--
                  (A) who is to be given access to the 
                information maintained by FinCEN;
                  (B) what limits are to be imposed on the use 
                of such information; and
                  (C) how information about activities or 
                relationships which involve or are closely 
                associated with the exercise of constitutional 
                rights is to be screened out of the data 
                maintenance system.
  (d) Special Hiring Authority.--
          (1) In general.--The Secretary of the Treasury may 
        appoint, without regard to the provisions of sections 
        3309 through 3318 of title 5, candidates directly to 
        positions in the competitive service (as defined in 
        section 2102 of that title) in FinCEN.
          (2) Primary responsibilities.--The primary 
        responsibility of candidates appointed pursuant to 
        paragraph (1) shall be to provide substantive support 
        in support of the duties described in subparagraphs 
        (A), (B), (E), and (F) of subsection (b)(2).
  (e) FinCEN Domestic Liaisons.--
          (1) In general.--The Director of FinCEN shall appoint 
        at least 6 senior FinCEN employees as FinCEN Domestic 
        Liaisons, who shall--
                  (A) each be assigned to focus on a specific 
                region of the United States;
                  (B) be located at an office in such region 
                (or co-located at an office of the Board of 
                Governors of the Federal Reserve System in such 
                region); and
                  (C) perform outreach to BSA officers at 
                financial institutions (including non-bank 
                financial institutions) and persons who are not 
                financial institutions, especially with respect 
                to actions taken by FinCEN that require 
                specific actions by, or have specific effects 
                on, such institutions or persons, as determined 
                by the Director.
          (2) Definitions.--In this subsection:
                  (A) BSA officer.--The term ``BSA officer'' 
                means an employee of a financial institution 
                whose primary job responsibility involves 
                compliance with the Bank Secrecy Act, as such 
                term is defined under section 5312.
                  (B) Financial institution.--The term 
                ``financial institution'' has the meaning given 
                that term under section 5312.
  (f) FinCEN Exchange.--
          (1) Establishment.--The FinCEN Exchange is hereby 
        established within FinCEN, which shall consist of the 
        FinCEN Exchange program of FinCEN in existence on the 
        day before the date of enactment of this paragraph.
          (2) Purpose.--The FinCEN Exchange shall facilitate a 
        voluntary public-private information sharing 
        partnership among law enforcement, financial 
        institutions, and FinCEN to--
                  (A) effectively and efficiently combat money 
                laundering, terrorism financing, organized 
                crime, and other financial crimes;
                  (B) protect the financial system from illicit 
                use; and
                  (C) promote national security.
          (3) Report.--
                  (A) In general.--Not later than one year 
                after the date of enactment of this subsection, 
                and annually thereafter for the next five 
                years, the Secretary of the Treasury shall 
                submit to the Committee on Financial Services 
                of the House of Representatives and the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate a report containing--
                          (i) an analysis of the efforts 
                        undertaken by the FinCEN Exchange and 
                        the results of such efforts;
                          (ii) an analysis of the extent and 
                        effectiveness of the FinCEN Exchange, 
                        including any benefits realized by law 
                        enforcement from partnership with 
                        financial institutions; and
                          (iii) any legislative, 
                        administrative, or other 
                        recommendations the Secretary may have 
                        to strengthen FinCEN Exchange efforts.
                  (B) Classified annex.--Each report under 
                subparagraph (A) may include a classified 
                annex.
          (4) Information sharing requirement.--Information 
        shared pursuant to this subsection shall be shared in 
        compliance with all other applicable Federal laws and 
        regulations.
          (5) Rule of construction.--Nothing under this 
        subsection may be construed to create new information 
        sharing authorities related to the Bank Secrecy Act (as 
        such term is defined under section 5312 of title 31, 
        United States Code).
          (6) Financial institution defined.--In this 
        subsection, the term ``financial institution'' has the 
        meaning given that term under section 5312.
  [(d)] (g) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated for FinCEN $100,419,000 for fiscal year 
        2011 and such sums as may be necessary for each of the 
        fiscal years 2012 and 2013.
          (2) Authorization for funding key technological 
        improvements in mission-critical fincen systems.--There 
        are authorized to be appropriated for fiscal year 2005 
        the following amounts, which are authorized to remain 
        available until expended:
                  (A) BSA direct.--For technological 
                improvements to provide authorized law 
                enforcement and financial regulatory agencies 
                with Web-based access to FinCEN data, to fully 
                develop and implement the highly secure network 
                required under section 362 of Public Law 107-56 
                to expedite the filing of, and reduce the 
                filing costs for, financial institution 
                reports, including suspicious activity reports, 
                collected by FinCEN under chapter 53 and 
                related provisions of law, and enable FinCEN to 
                immediately alert financial institutions about 
                suspicious activities that warrant immediate 
                and enhanced scrutiny, and to provide and 
                upgrade advanced information-sharing 
                technologies to materially improve the 
                Government's ability to exploit the information 
                in the FinCEN data banks, $16,500,000.
                  (B) Advanced analytical technologies.--To 
                provide advanced analytical tools needed to 
                ensure that the data collected by FinCEN under 
                chapter 53 and related provisions of law are 
                utilized fully and appropriately in 
                safeguarding financial institutions and 
                supporting the war on terrorism, $5,000,000.
                  (C) Data networking modernization.--To 
                improve the telecommunications infrastructure 
                to support the improved capabilities of the 
                FinCEN systems, $3,000,000.
                  (D) Enhanced compliance capability.--To 
                improve the effectiveness of the Office of 
                Compliance in FinCEN, $3,000,000.
                  (E) Detection and prevention of financial 
                crimes and terrorism.--To provide development 
                of, and training in the use of, technology to 
                detect and prevent financial crimes and 
                terrorism within and without the United States, 
                $8,000,000.

           *       *       *       *       *       *       *


Sec. 316. Treasury Attaches Program

  (a) In General.--There is established the Treasury Attaches 
Program, under which the Secretary of the Treasury shall 
appoint employees of the Department of the Treasury, after 
nomination by the Director of the Financial Crimes Enforcement 
Network (``FinCEN''), as a Treasury attache, who shall--
          (1) be knowledgeable about the Bank Secrecy Act and 
        anti-money laundering issues;
          (2) be co-located in a United States embassy;
          (3) perform outreach with respect to Bank Secrecy Act 
        and anti-money laundering issues;
          (4) establish and maintain relationships with foreign 
        counterparts, including employees of ministries of 
        finance, central banks, and other relevant official 
        entities;
          (5) conduct outreach to local and foreign financial 
        institutions and other commercial actors, including--
                  (A) information exchanges through FinCEN and 
                FinCEN programs; and
                  (B) soliciting buy-in and cooperation for the 
                implementation of--
                          (i) United States and multilateral 
                        sanctions; and
                          (ii) international standards on anti-
                        money laundering and the countering of 
                        the financing of terrorism; and
          (6) perform such other actions as the Secretary 
        determines appropriate.
  (b) Number of Attaches.--The number of Treasury attaches 
appointed under this section at any one time shall be not fewer 
than 6 more employees than the number of employees of the 
Department of the Treasury serving as Treasury attaches on 
March 1, 2019.
  (c) Compensation.--Each Treasury attache appointed under this 
section and located at a United States embassy shall receive 
compensation at the higher of--
          (1) the rate of compensation provided to a Foreign 
        Service officer at a comparable career level serving at 
        the same embassy; or
          (2) the rate of compensation the Treasury attache 
        would otherwise have received, absent the application 
        of this subsection.
  (d) Bank Secrecy Act Defined.--In this section, the term 
``Bank Secrecy Act'' has the meaning given that term under 
section 5312.

           *       *       *       *       *       *       *


SUBTITLE IV--MONEY

           *       *       *       *       *       *       *


                   CHAPTER 53--MONETARY TRANSACTIONS


               SUBCHAPTER I--CREDIT AND MONETARY EXPANSION

Sec.
5301. Buying obligations of the United States Government.
     * * * * * * *

 SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

     * * * * * * *
5323A. Whistleblower incentives.
     * * * * * * *
5333. AML/CFT Training.
5334. Innovation Labs.
5335. Innovation Council.
     * * * * * * *

SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS


Sec. 5311. Declaration of purpose

  It is the purpose of this subchapter (except section 5315) to 
protect our national security, to safeguard the integrity of 
the international financial system, and to require certain 
reports or records where they have a high degree of usefulness 
to law enforcement in criminal, tax, or regulatory 
investigations or proceedings, or in the conduct of 
intelligence or counterintelligence activities, including 
analysis, to protect against international terrorism.

Sec. 5312. Definitions and application

  (a) In this subchapter--
          (1) ``financial agency'' means a person acting for a 
        person (except for a country, a monetary or financial 
        authority acting as a monetary or financial authority, 
        or an international financial institution of which the 
        United States Government is a member) as a financial 
        institution, bailee, depository trustee, or agent, or 
        acting in a similar way related to money, credit, 
        securities, gold, or a transaction in money, credit, 
        securities, or gold.
          (2) ``financial institution'' means--
                  (A) an insured bank (as defined in section 
                3(h) of the Federal Deposit Insurance Act (12 
                U.S.C. 1813(h)));
                  (B) a commercial bank or trust company;
                  (C) a private banker;
                  (D) an agency or branch of a foreign bank in 
                the United States;
                  (E) any credit union;
                  (F) a thrift institution;
                  (G) a broker or dealer registered with the 
                Securities and Exchange Commission under the 
                Securities Exchange Act of 1934 (15 U.S.C. 78a 
                et seq.);
                  (H) a broker or dealer in securities or 
                commodities;
                  (I) an investment banker or investment 
                company;
                  (J) a currency exchange;
                  (K) an issuer, redeemer, or cashier of 
                travelers' checks, checks, money orders, or 
                similar instruments;
                  (L) an operator of a credit card system;
                  (M) an insurance company;
                  (N) a dealer in precious metals, stones, or 
                jewels;
                  (O) a pawnbroker;
                  (P) a loan or finance company;
                  (Q) a travel agency;
                  (R) a licensed sender of money or any other 
                person who engages as a business in the 
                transmission of funds, including any person who 
                engages as a business in an informal money 
                transfer system or any network of people who 
                engage as a business in facilitating the 
                transfer of money domestically or 
                internationally outside of the conventional 
                financial institutions system;
                  (S) a telegraph company;
                  (T) a business engaged in vehicle sales, 
                including automobile, airplane, and boat sales;
                  (U) persons involved in real estate closings 
                and settlements;
                  (V) the United States Postal Service;
                  (W) an agency of the United States Government 
                or of a State or local government carrying out 
                a duty or power of a business described in this 
                paragraph;
                  (X) a casino, gambling casino, or gaming 
                establishment with an annual gaming revenue of 
                more than $1,000,000 which--
                          (i) is licensed as a casino, gambling 
                        casino, or gaming establishment under 
                        the laws of any State or any political 
                        subdivision of any State; or
                          (ii) is an Indian gaming operation 
                        conducted under or pursuant to the 
                        Indian Gaming Regulatory Act other than 
                        an operation which is limited to class 
                        I gaming (as defined in section 4(6) of 
                        such Act);
                  (Y) any business or agency which engages in 
                any activity which the Secretary of the 
                Treasury determines, by regulation, to be an 
                activity which is similar to, related to, or a 
                substitute for any activity in which any 
                business described in this paragraph is 
                authorized to engage; [or]
                  (Z) a person trading or acting as an 
                intermediary in the trade of antiquities, 
                including an advisor, consultant or any other 
                person who engages as a business in the 
                solicitation of the sale of antiquities; or
                  [(Z)] (AA) any other business designated by 
                the Secretary whose cash transactions have a 
                high degree of usefulness in criminal, tax, or 
                regulatory matters.
          (3) ``monetary instruments'' means--
                  (A) United States coins and currency;
                  (B) as the Secretary may prescribe by 
                regulation, coins and currency of a foreign 
                country, travelers' checks, bearer negotiable 
                instruments, bearer investment securities, 
                bearer securities, stock on which title is 
                passed on delivery, and similar material; and
                  (C) as the Secretary of the Treasury shall 
                provide by regulation for purposes of sections 
                5316 and 5331, checks, drafts, notes, money 
                orders, and other similar instruments which are 
                drawn on or by a foreign financial institution 
                and are not in bearer form.
          (4) Nonfinancial trade or business.--The term 
        ``nonfinancial trade or business'' means any trade or 
        business other than a financial institution that is 
        subject to the reporting requirements of section 5313 
        and regulations prescribed under such section.
          (5) ``person'', in addition to its meaning under 
        section 1 of title 1, includes a trustee, a 
        representative of an estate and, when the Secretary 
        prescribes, a governmental entity.
          (6) ``United States'' means the States of the United 
        States, the District of Columbia, and, when the 
        Secretary prescribes by regulation, the Commonwealth of 
        Puerto Rico, the Virgin Islands, Guam, the Northern 
        Mariana Islands, American Samoa, the Trust Territory of 
        the Pacific Islands, a territory or possession of the 
        United States, or a military or diplomatic 
        establishment.
          (7) Bank secrecy act.--The term ``Bank Secrecy act'' 
        means--
                  (A) section 21 of the Federal Deposit 
                Insurance Act;
                  (B) chapter 2 of title I of Public Law 91-
                508; and
                  (C) this subchapter.
  (b) In this subchapter--
          (1) ``domestic financial agency'' and ``domestic 
        financial institution'' apply to an action in the 
        United States of a financial agency or institution.
          (2) ``foreign financial agency'' and ``foreign 
        financial institution'' apply to an action outside the 
        United States of a financial agency or institution.
  (c) Additional Definitions.--For purposes of this subchapter, 
the following definitions shall apply:
          (1)  Certain institutions included in definition.--
        The term ``financial institution'' (as defined in 
        subsection (a)) includes the following:
                  (A) Any futures commission merchant, 
                commodity trading advisor, or commodity pool 
                operator registered, or required to register, 
                under the Commodity Exchange Act.

           *       *       *       *       *       *       *


Sec. 5318. Compliance, exemptions, and summons authority

  (a) General Powers of Secretary.--The Secretary of the 
Treasury may (except under section 5315 of this title and 
regulations prescribed under section 5315)--
          (1) except as provided in subsection (b)(2), delegate 
        duties and powers under this subchapter to an 
        appropriate supervising agency and the United States 
        Postal Service;
          (2) require a class of domestic financial 
        institutions or nonfinancial trades or businesses to 
        maintain appropriate procedures to ensure compliance 
        with this subchapter and regulations prescribed under 
        this subchapter or to guard against money laundering;
          (3) examine any books, papers, records, or other data 
        of domestic financial institutions or nonfinancial 
        trades or businesses relevant to the recordkeeping or 
        reporting requirements of this subchapter;
          (4) summon a financial institution or nonfinancial 
        trade or business, an officer or employee of a 
        financial institution or nonfinancial trade or business 
        (including a former officer or employee), or any person 
        having possession, custody, or care of the reports and 
        records required under this subchapter, to appear 
        before the Secretary of the Treasury or his delegate at 
        a time and place named in the summons and to produce 
        such books, papers, records, or other data, and to give 
        testimony, under oath, as may be relevant or material 
        to an investigation described in subsection (b);
          (5) exempt from the requirements of this subchapter 
        any class of transactions within any State if the 
        Secretary determines that--
                  (A) under the laws of such State, that class 
                of transactions is subject to requirements 
                substantially similar to those imposed under 
                this subchapter; and
                  (B) there is adequate provision for the 
                enforcement of such requirements;
          (6) rely on examinations conducted by a State 
        supervisory agency of a category of financial 
        institution, if the Secretary determines that--
                  (A) the category of financial institution is 
                required to comply with this subchapter and 
                regulations prescribed under this subchapter; 
                or
                  (B) the State supervisory agency examines the 
                category of financial institution for 
                compliance with this subchapter and regulations 
                prescribed under this subchapter; and
          (7) prescribe an appropriate exemption from a 
        requirement under this subchapter and regulations 
        prescribed under this subchapter. The Secretary may 
        revoke an exemption under this paragraph or paragraph 
        (5) by actually or constructively notifying the parties 
        affected. A revocation is effective during judicial 
        review.
  (b) Limitations on Summons Power.--
          (1) Scope of power.--The Secretary of the Treasury 
        may take any action described in paragraph (3) or (4) 
        of subsection (a) only in connection with 
        investigations for the purpose of civil enforcement of 
        violations of this subchapter, section 21 of the 
        Federal Deposit Insurance Act, section 411 of the 
        National Housing Act, or chapter 2 of Public Law 91-508 
        (12 U.S.C. 1951 et seq.) or any regulation under any 
        such provision.
          (2) Authority to issue.--A summons may be issued 
        under subsection (a)(4) only by, or with the approval 
        of, the Secretary of the Treasury or a supervisory 
        level delegate of the Secretary of the Treasury.
  (c) Administrative Aspects of Summons.--
          (1) Production at designated site.--A summons issued 
        pursuant to this section may require that books, 
        papers, records, or other data stored or maintained at 
        any place be produced at any designated location in any 
        State or in any territory or other place subject to the 
        jurisdiction of the United States not more than 500 
        miles distant from any place where the financial 
        institution or nonfinancial trade or business operates 
        or conducts business in the United States.
          (2) Fees and travel expenses.--Persons summoned under 
        this section shall be paid the same fees and mileage 
        for travel in the United States that are paid witnesses 
        in the courts of the United States.
          (3) No liability for expenses.--The United States 
        shall not be liable for any expense, other than an 
        expense described in paragraph (2), incurred in 
        connection with the production of books, papers, 
        records, or other data under this section.
  (d) Service of Summons.--Service of a summons issued under 
this section may be by registered mail or in such other manner 
calculated to give actual notice as the Secretary may prescribe 
by regulation.
  (e) Contumacy or Refusal.--
          (1) Referral to attorney general.--In case of 
        contumacy by a person issued a summons under paragraph 
        (3) or (4) of subsection (a) or a refusal by such 
        person to obey such summons, the Secretary of the 
        Treasury shall refer the matter to the Attorney 
        General.
          (2) Jurisdiction of court.--The Attorney General may 
        invoke the aid of any court of the United States within 
        the jurisdiction of which--
                  (A) the investigation which gave rise to the 
                summons is being or has been carried on;
                  (B) the person summoned is an inhabitant; or
                  (C) the person summoned carries on business 
                or may be found,
        to compel compliance with the summons.
          (3) Court order.--The court may issue an order 
        requiring the person summoned to appear before the 
        Secretary or his delegate to produce books, papers, 
        records, and other data, to give testimony as may be 
        necessary to explain how such material was compiled and 
        maintained, and to pay the costs of the proceeding.
          (4) Failure to comply with order.--Any failure to 
        obey the order of the court may be punished by the 
        court as a contempt thereof.
          (5) Service of process.--All process in any case 
        under this subsection may be served in any judicial 
        district in which such person may be found.
  (f) Written and Signed Statement Required.--No person shall 
qualify for an exemption under subsection (a)(5) 1 
unless the relevant financial institution or nonfinancial trade 
or business prepares and maintains a statement which--
          (1) describes in detail the reasons why such person 
        is qualified for such exemption; and
          (2) contains the signature of such person.
  (g) Reporting of Suspicious Transactions.--
          (1) In general.--The Secretary may require any 
        financial institution, and any director, officer, 
        employee, or agent of any financial institution, to 
        report any suspicious transaction relevant to a 
        possible violation of law or regulation.
          (2) Notification prohibited.--
                  (A) In general.--If a financial institution 
                or any director, officer, employee, or agent of 
                any financial institution, voluntarily or 
                pursuant to this section or any other 
                authority, reports a suspicious transaction to 
                a government agency--
                          (i) neither the financial 
                        institution, director, officer, 
                        employee, or agent of such institution 
                        (whether or not any such person is 
                        still employed by the institution), nor 
                        any other current or former director, 
                        officer, or employee of, or contractor 
                        for, the financial institution or other 
                        reporting person, may notify any person 
                        involved in the transaction that the 
                        transaction has been reported or 
                        otherwise reveal any information that 
                        would reveal that the transaction has 
                        been reported, including materials 
                        prepared or used by the financial 
                        institution for the purpose of 
                        identifying and detecting potentially 
                        suspicious activity; and
                          (ii) no current or former officer or 
                        employee of or contractor for the 
                        Federal Government or of or for any 
                        State, local, tribal, or territorial 
                        government within the United States, 
                        who has any knowledge that such report 
                        was made may disclose to any person 
                        involved in the transaction that the 
                        transaction has been reported, or 
                        otherwise reveal any information that 
                        would reveal that the transaction has 
                        been reported, including materials 
                        prepared or used by the financial 
                        institution for the purpose of 
                        identifying and detecting potentially 
                        suspicious activity, other than as 
                        necessary to fulfill the official 
                        duties of such officer or employee.
                  (B) Disclosures in certain employment 
                references.--
                          (i) Rule of construction.--
                        Notwithstanding the application of 
                        subparagraph (A) in any other context, 
                        subparagraph (A) shall not be construed 
                        as prohibiting any financial 
                        institution, or any director, officer, 
                        employee, or agent of such institution, 
                        from including information that was 
                        included in a report to which 
                        subparagraph (A) applies--
                                  (I) in a written employment 
                                reference that is provided in 
                                accordance with section 18(w) 
                                of the Federal Deposit 
                                Insurance Act in response to a 
                                request from another financial 
                                institution; or
                                  (II) in a written termination 
                                notice or employment reference 
                                that is provided in accordance 
                                with the rules of a self-
                                regulatory organization 
                                registered with the Securities 
                                and Exchange Commission or the 
                                Commodity Futures Trading 
                                Commission,
                 except that such written reference or notice 
                may not disclose that such information was also 
                included in any such report, or that such 
                report was made.
                          (ii) Information not required.--
                        Clause (i) shall not be construed, by 
                        itself, to create any affirmative duty 
                        to include any information described in 
                        clause (i) in any employment reference 
                        or termination notice referred to in 
                        clause (i).
          (3) Liability for disclosures.--
                  (A) In general.--Any financial institution 
                that makes a voluntary disclosure of any 
                possible violation of law or regulation to a 
                government agency or makes a disclosure 
                pursuant to this subsection or any other 
                authority, and any director, officer, employee, 
                or agent of such institution who makes, or 
                requires another to make any such disclosure, 
                shall not be liable to any person under any law 
                or regulation of the United States, any 
                constitution, law, or regulation of any State 
                or political subdivision of any State, or under 
                any contract or other legally enforceable 
                agreement (including any arbitration 
                agreement), for such disclosure or for any 
                failure to provide notice of such disclosure to 
                the person who is the subject of such 
                disclosure or any other person identified in 
                the disclosure.
                  (B) Rule of construction.--Subparagraph (A) 
                shall not be construed as creating--
                          (i) any inference that the term 
                        ``person'', as used in such 
                        subparagraph, may be construed more 
                        broadly than its ordinary usage so as 
                        to include any government or agency of 
                        government; or
                          (ii) any immunity against, or 
                        otherwise affecting, any civil or 
                        criminal action brought by any 
                        government or agency of government to 
                        enforce any constitution, law, or 
                        regulation of such government or 
                        agency.
          (4) Single designee for reporting suspicious 
        transactions.--
                  (A) In general.--In requiring reports under 
                paragraph (1) of suspicious transactions, the 
                Secretary of the Treasury shall designate, to 
                the extent practicable and appropriate, a 
                single officer or agency of the United States 
                to whom such reports shall be made.
                  (B) Duty of designee.--The officer or agency 
                of the United States designated by the 
                Secretary of the Treasury pursuant to 
                subparagraph (A) shall refer any report of a 
                suspicious transaction to any appropriate law 
                enforcement, supervisory agency, or United 
                States intelligence agency for use in the 
                conduct of intelligence or counterintelligence 
                activities, including analysis, to protect 
                against international terrorism.
                  (C) Coordination with other reporting 
                requirements.--Subparagraph (A) shall not be 
                construed as precluding any supervisory agency 
                for any financial institution from requiring 
                the financial institution to submit any 
                information or report to the agency or another 
                agency pursuant to any other applicable 
                provision of law.
          (5) OECD pilot program on sharing with foreign 
        branches, subsidiaries, and affiliates.--
                  (A) In general.--Not later than 180 days 
                after the date of the enactment of this 
                paragraph, the Secretary of the Treasury shall 
                issue rules, subject to such controls and 
                restrictions as the Director of the Financial 
                Crimes Enforcement Network determines 
                appropriate, establishing the pilot program 
                described under subparagraph (B). In 
                prescribing such rules, the Secretary shall 
                ensure that the sharing of information 
                described under such subparagraph (B) is 
                subject to appropriate standards and 
                requirements regarding data security and the 
                confidentiality of personally identifiable 
                information.
                  (B) Pilot program described.--The pilot 
                program required under this paragraph shall--
                          (i) permit any financial institution 
                        with a reporting obligation under this 
                        subsection to share reports (and 
                        information on such reports) under this 
                        subsection with the institution's 
                        foreign branches, subsidiaries, and 
                        affiliates for the purpose of combating 
                        illicit finance risks, notwithstanding 
                        any other provision of law except 
                        subparagraph (C), but only if such 
                        foreign branch, subsidiary, or 
                        affiliate is located in a jurisdiction 
                        that is a member of the Organisation 
                        for Economic Co-operation and 
                        Development;
                          (ii) terminate on the date that is 
                        five years after the date of enactment 
                        of this paragraph, except that the 
                        Secretary may extend the pilot program 
                        for up to two years upon submitting a 
                        report to the Committee on Financial 
                        Services of the House of 
                        Representatives and the Committee on 
                        Banking, Housing, and Urban Affairs of 
                        the Senate that includes--
                                  (I) a certification that the 
                                extension is in the national 
                                interest of the United States, 
                                with a detailed explanation of 
                                the reasons therefor;
                                  (II) an evaluation of the 
                                usefulness of the pilot 
                                program, including a detailed 
                                analysis of any illicit 
                                activity identified or 
                                prevented as a result of the 
                                program; and
                                  (III) a detailed legislative 
                                proposal providing for a long-
                                term extension of the pilot 
                                program activities, including 
                                expected budgetary resources 
                                for the activities, if the 
                                Secretary determines that a 
                                long-term extension is 
                                appropriate.
                  (C) Prohibition involving certain 
                jurisdictions.--In issuing the regulations 
                required under subparagraph (A), the Secretary 
                may not permit a financial institution to share 
                information on reports under this subsection 
                with a foreign branch, subsidiary, or affiliate 
                located in a jurisdiction that--
                          (i) is subject to countermeasures 
                        imposed by the Federal Government; or
                          (ii) the Secretary has determined 
                        cannot reasonably protect the privacy 
                        and confidentiality of such 
                        information.
                  (D) Implementation updates.--Not later than 
                360 days after the date rules are issued under 
                subparagraph (A), and annually thereafter for 
                three years, the Secretary, or the Secretary's 
                designee, shall brief the Committee on 
                Financial Services of the House of 
                Representatives and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate on--
                          (i) the degree of any information 
                        sharing permitted under the pilot 
                        program, and a description of criteria 
                        used by the Secretary to evaluate the 
                        appropriateness of the information 
                        sharing;
                          (ii) the effectiveness of the pilot 
                        program in identifying or preventing 
                        the violation of a United States law or 
                        regulation, and mechanisms that may 
                        improve such effectiveness; and
                          (iii) any recommendations to amend 
                        the design of the pilot program, or to 
                        include specific non-OECD jurisdictions 
                        in the program.
          (6) Treatment of foreign jurisdiction-originated 
        reports.--A report received by a financial institution 
        from a foreign affiliate with respect to a suspicious 
        transaction relevant to a possible violation of law or 
        regulation shall be subject to the same confidentiality 
        requirements provided under this subsection for a 
        report of a suspicious transaction described under 
        paragraph (1).
          (7) Sharing of threat pattern and trend 
        information.--
                  (A) SAR activity review.--The Director of the 
                Financial Crimes Enforcement Network shall 
                restart publication of the ``SAR Activity 
                Review - Trends, Tips & Issues'', on not less 
                than a semi-annual basis, to provide meaningful 
                information about the preparation, use, and 
                value of reports filed under this subsection by 
                financial institutions, as well as other 
                reports filed by financial institutions under 
                the Bank Secrecy Act.
                  (B) Inclusion of typologies.--In each 
                publication described under subparagraph (A), 
                the Director shall provide financial 
                institutions with typologies, including data 
                that can be adapted in algorithms (including 
                for artificial intelligence and machine 
                learning programs) where appropriate, on 
                emerging money laundering and counter terror 
                financing threat patterns and trends.
                  (C) Typology defined.--For purposes of this 
                paragraph, the term ``typology'' means the 
                various techniques used to launder money or 
                finance terrorism.
  (h) Anti-Money Laundering Programs.--
          (1) In general.--In order to guard against money 
        laundering through financial institutions, each 
        financial institution shall establish anti-money 
        laundering programs, including, at a minimum--
                  (A) the development of internal policies, 
                procedures, and controls;
                  (B) the designation of a compliance officer;
                  (C) an ongoing employee training program; and
                  (D) an independent audit function to test 
                programs.
          (2) Regulations.--The Secretary of the Treasury, 
        after consultation with the appropriate Federal 
        functional regulator (as defined in section 509 of the 
        Gramm-Leach-Bliley Act), may prescribe minimum 
        standards for programs established under paragraph (1), 
        and may exempt from the application of those standards 
        any financial institution that is not subject to the 
        provisions of the rules contained in part 103 of title 
        31, of the Code of Federal Regulations, or any 
        successor rule thereto, for so long as such financial 
        institution is not subject to the provisions of such 
        rules.
          (3) Concentration accounts.--The Secretary may 
        prescribe regulations under this subsection that govern 
        maintenance of concentration accounts by financial 
        institutions, in order to ensure that such accounts are 
        not used to prevent association of the identity of an 
        individual customer with the movement of funds of which 
        the customer is the direct or beneficial owner, which 
        regulations shall, at a minimum--
                  (A) prohibit financial institutions from 
                allowing clients to direct transactions that 
                move their funds into, out of, or through the 
                concentration accounts of the financial 
                institution;
                  (B) prohibit financial institutions and their 
                employees from informing customers of the 
                existence of, or the means of identifying, the 
                concentration accounts of the institution; and
                  (C) require each financial institution to 
                establish written procedures governing the 
                documentation of all transactions involving a 
                concentration account, which procedures shall 
                ensure that, any time a transaction involving a 
                concentration account commingles funds 
                belonging to 1 or more customers, the identity 
                of, and specific amount belonging to, each 
                customer is documented.
  (i) 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 money laundering 
        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 anti-money 
                                laundering principles or 
                                procedures by 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 of the 
                                Treasury as warranting special 
                                measures due to money 
                                laundering concerns.
                  (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 guard against money 
                        laundering and report any suspicious 
                        transactions under subsection (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 money laundering and report any 
                suspicious transactions under subsection (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 foreign corruption.
          (4) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (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 
                        deposits of funds or other assets of 
                        not less than $1,000,000;
                          (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.
  (j) Prohibition on United States Correspondent Accounts With 
Foreign Shell Banks.--
          (1) In general.--A financial institution described in 
        subparagraphs (A) through (G) of section 5312(a)(2) (in 
        this subsection referred to as a ``covered financial 
        institution'') shall not establish, maintain, 
        administer, or manage a correspondent account in the 
        United States for, or on behalf of, a foreign bank that 
        does not have a physical presence in any country.
          (2) Prevention of indirect service to foreign shell 
        banks.--A covered financial institution shall take 
        reasonable steps to ensure that any correspondent 
        account established, maintained, administered, or 
        managed by that covered financial institution in the 
        United States for a foreign bank is not being used by 
        that foreign bank to indirectly provide banking 
        services to another foreign bank that does not have a 
        physical presence in any country. The Secretary of the 
        Treasury shall, by regulation, delineate the reasonable 
        steps necessary to comply with this paragraph.
          (3) Exception.--Paragraphs (1) and (2) do not 
        prohibit a covered financial institution from providing 
        a correspondent account to a foreign bank, if the 
        foreign bank--
                  (A) is an affiliate of a depository 
                institution, credit union, or foreign bank that 
                maintains a physical presence in the United 
                States or a foreign country, as applicable; and
                  (B) is subject to supervision by a banking 
                authority in the country regulating the 
                affiliated depository institution, credit 
                union, or foreign bank described in 
                subparagraph (A), as applicable.
          (4) Definitions.--For purposes of this subsection--
                  (A) the term ``affiliate'' means a foreign 
                bank that is controlled by or is under common 
                control with a depository institution, credit 
                union, or foreign bank; and
                  (B) the term ``physical presence'' means a 
                place of business that--
                          (i) is maintained by a foreign bank;
                          (ii) is located at a fixed address 
                        (other than solely an electronic 
                        address) in a country in which the 
                        foreign bank is authorized to conduct 
                        banking activities, at which location 
                        the foreign bank--
                                  (I) employs 1 or more 
                                individuals on a full-time 
                                basis; and
                                  (II) maintains operating 
                                records related to its banking 
                                activities; and
                          (iii) is subject to inspection by the 
                        banking authority which licensed the 
                        foreign bank to conduct banking 
                        activities.
  (k) Bank Records Related to Anti-Money Laundering Programs.--
          (1) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Appropriate federal banking agency.--The 
                term ``appropriate Federal banking agency'' has 
                the same meaning as in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813).
                  (B) Incorporated term.--The term 
                ``correspondent account'' has the same meaning 
                as in section 5318A(e)(1)(B).
          (2) 120-hour rule.--Not later than 120 hours after 
        receiving a request by an appropriate Federal banking 
        agency for information related to anti-money laundering 
        compliance by a covered financial institution or a 
        customer of such institution, a covered financial 
        institution shall provide to the appropriate Federal 
        banking agency, or make available at a location 
        specified by the representative of the appropriate 
        Federal banking agency, information and account 
        documentation for any account opened, maintained, 
        administered or managed in the United States by the 
        covered financial institution.
          (3) Foreign bank records.--
                  (A) Summons or subpoena of records.--
                          (i) In general.--The Secretary of the 
                        Treasury or the Attorney General may 
                        issue a summons or subpoena to any 
                        foreign bank that maintains a 
                        correspondent account in the United 
                        States and request records related to 
                        such correspondent account, including 
                        records maintained outside of the 
                        United States relating to the deposit 
                        of funds into the foreign bank.
                          (ii) Service of summons or 
                        subpoena.--A summons or subpoena 
                        referred to in clause (i) may be served 
                        on the foreign bank in the United 
                        States if the foreign bank has a 
                        representative in the United States, or 
                        in a foreign country pursuant to any 
                        mutual legal assistance treaty, 
                        multilateral agreement, or other 
                        request for international law 
                        enforcement assistance.
                  (B) Acceptance of service.--
                          (i) Maintaining records in the united 
                        states.--Any covered financial 
                        institution which maintains a 
                        correspondent account in the United 
                        States for a foreign bank shall 
                        maintain records in the United States 
                        identifying the owners of such foreign 
                        bank and the name and address of a 
                        person who resides in the United States 
                        and is authorized to accept service of 
                        legal process for records regarding the 
                        correspondent account.
                          (ii) Law enforcement request.--Upon 
                        receipt of a written request from a 
                        Federal law enforcement officer for 
                        information required to be maintained 
                        under this paragraph, the covered 
                        financial institution shall provide the 
                        information to the requesting officer 
                        not later than 7 days after receipt of 
                        the request.
                  (C) Termination of correspondent 
                relationship.--
                          (i) Termination upon receipt of 
                        notice.--A covered financial 
                        institution shall terminate any 
                        correspondent relationship with a 
                        foreign bank not later than 10 business 
                        days after receipt of written notice 
                        from the Secretary or the Attorney 
                        General (in each case, after 
                        consultation with the other) that the 
                        foreign bank has failed--
                                  (I) to comply with a summons 
                                or subpoena issued under 
                                subparagraph (A); or
                                  (II) to initiate proceedings 
                                in a United States court 
                                contesting such summons or 
                                subpoena.
                          (ii) Limitation on liability.--A 
                        covered financial institution shall not 
                        be liable to any person in any court or 
                        arbitration proceeding for terminating 
                        a correspondent relationship in 
                        accordance with this subsection.
                          (iii) Failure to terminate 
                        relationship.--Failure to terminate a 
                        correspondent relationship in 
                        accordance with this subsection shall 
                        render the covered financial 
                        institution liable for a civil penalty 
                        of up to $10,000 per day until the 
                        correspondent relationship is so 
                        terminated.
  (l) Identification and Verification of Accountholders.--
          (1) In general.--Subject to the requirements of this 
        subsection, the Secretary of the Treasury shall 
        prescribe regulations setting forth the minimum 
        standards for financial institutions and their 
        customers regarding the identity of the customer that 
        shall apply in connection with the opening of an 
        account at a financial institution.
          (2) Minimum requirements.--The regulations shall, at 
        a minimum, require financial institutions to implement, 
        and customers (after being given adequate notice) to 
        comply with, reasonable procedures for--
                  (A) verifying the identity of any person 
                seeking to open an account to the extent 
                reasonable and practicable;
                  (B) maintaining records of the information 
                used to verify a person's identity, including 
                name, address, and other identifying 
                information; and
                  (C) consulting lists of known or suspected 
                terrorists or terrorist organizations provided 
                to the financial institution by any government 
                agency to determine whether a person seeking to 
                open an account appears on any such list.
          (3) Factors to be considered.--In prescribing 
        regulations under this subsection, the Secretary shall 
        take into consideration the various types of accounts 
        maintained by various types of financial institutions, 
        the various methods of opening accounts, and the 
        various types of identifying information available.
          (4) Certain financial institutions.--In the case of 
        any financial institution the business of which is 
        engaging in financial activities described in section 
        4(k) of the Bank Holding Company Act of 1956 (including 
        financial activities subject to the jurisdiction of the 
        Commodity Futures Trading Commission), the regulations 
        prescribed by the Secretary under paragraph (1) shall 
        be prescribed jointly with each Federal functional 
        regulator (as defined in section 509 of the Gramm-
        Leach-Bliley Act, including the Commodity Futures 
        Trading Commission) appropriate for such financial 
        institution.
          (5) Exemptions.--The Secretary (and, in the case of 
        any financial institution described in paragraph (4), 
        any Federal agency described in such paragraph) may, by 
        regulation or order, exempt any financial institution 
        or type of account from the requirements of any 
        regulation prescribed under this subsection in 
        accordance with such standards and procedures as the 
        Secretary may prescribe.
          (6) Effective date.--Final regulations prescribed 
        under this subsection shall take effect before the end 
        of the 1-year period beginning on the date of enactment 
        of the International Money Laundering Abatement and 
        Financial Anti-Terrorism Act of 2001.
  (m) Applicability of Rules.--Any rules promulgated pursuant 
to the authority contained in section 21 of the Federal Deposit 
Insurance Act (12 U.S.C. 1829b) shall apply, in addition to any 
other financial institution to which such rules apply, to any 
person that engages as a business in the transmission of funds, 
including any person who engages as a business in an informal 
money transfer system or any network of people who engage as a 
business in facilitating the transfer of money domestically or 
internationally outside of the conventional financial 
institutions system.
  (n) Reporting of Certain Cross-Border Transmittals of 
Funds.--
          (1) In general.--Subject to paragraphs (3) and (4), 
        the Secretary shall prescribe regulations requiring 
        such financial institutions as the Secretary determines 
        to be appropriate to report to the Financial Crimes 
        Enforcement Network certain cross-border electronic 
        transmittals of funds, if the Secretary determines that 
        reporting of such transmittals is reasonably necessary 
        to conduct the efforts of the Secretary against money 
        laundering and terrorist financing.
          (2) Limitation on reporting requirements.--
        Information required to be reported by the regulations 
        prescribed under paragraph (1) shall not exceed the 
        information required to be retained by the reporting 
        financial institution pursuant to section 21 of the 
        Federal Deposit Insurance Act and the regulations 
        promulgated thereunder, unless--
                  (A) the Board of Governors of the Federal 
                Reserve System and the Secretary jointly 
                determine that a particular item or items of 
                information are not currently required to be 
                retained under such section or such 
                regulations; and
                  (B) the Secretary determines, after 
                consultation with the Board of Governors of the 
                Federal Reserve System, that the reporting of 
                such information is reasonably necessary to 
                conduct the efforts of the Secretary to 
                identify cross-border money laundering and 
                terrorist financing.
          (3) Form and manner of reports.--In prescribing the 
        regulations required under paragraph (1), the Secretary 
        shall, subject to paragraph (2), determine the 
        appropriate form, manner, content, and frequency of 
        filing of the required reports.
          (4) Feasibility report.--
                  (A) In general.--Before prescribing the 
                regulations required under paragraph (1), and 
                as soon as is practicable after the date of 
                enactment of the Intelligence Reform and 
                Terrorism Prevention Act of 2004, the Secretary 
                shall submit a report to the Committee on 
                Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services 
                of the House of Representatives that--
                          (i) identifies the information in 
                        cross-border electronic transmittals of 
                        funds that may be found in particular 
                        cases to be reasonably necessary to 
                        conduct the efforts of the Secretary to 
                        identify money laundering and terrorist 
                        financing, and outlines the criteria to 
                        be used by the Secretary to select the 
                        situations in which reporting under 
                        this subsection may be required;
                          (ii) outlines the appropriate form, 
                        manner, content, and frequency of 
                        filing of the reports that may be 
                        required under such regulations;
                          (iii) identifies the technology 
                        necessary for the Financial Crimes 
                        Enforcement Network to receive, keep, 
                        exploit, protect the security of, and 
                        disseminate information from reports of 
                        cross-border electronic transmittals of 
                        funds to law enforcement and other 
                        entities engaged in efforts against 
                        money laundering and terrorist 
                        financing; and
                          (iv) discusses the information 
                        security protections required by the 
                        exercise of the Secretary's authority 
                        under this subsection.
                  (B) Consultation.--In reporting the 
                feasibility report under subparagraph (A), the 
                Secretary may consult with the Bank Secrecy Act 
                Advisory Group established by the Secretary, 
                and any other group considered by the Secretary 
                to be relevant.
          (5) Regulations.--
                  (A) In general.--Subject to subparagraph (B), 
                the regulations required by paragraph (1) shall 
                be prescribed in final form by the Secretary, 
                in consultation with the Board of Governors of 
                the Federal Reserve System, before the end of 
                the 3-year period beginning on the date of 
                enactment of the National Intelligence Reform 
                Act of 2004.
                  (B) Technological feasibility.--No 
                regulations shall be prescribed under this 
                subsection before the Secretary certifies to 
                the Congress that the Financial Crimes 
                Enforcement Network has the technological 
                systems in place to effectively and efficiently 
                receive, keep, exploit, protect the security 
                of, and disseminate information from reports of 
                cross-border electronic transmittals of funds 
                to law enforcement and other entities engaged 
                in efforts against money laundering and 
                terrorist financing.
  (o) Sharing of Compliance Resources.--
          (1) Sharing permitted.--Two or more financial 
        institutions may enter into collaborative arrangements 
        in order to more efficiently comply with the 
        requirements of this subchapter.
          (2) Outreach.--The Secretary of the Treasury and the 
        appropriate supervising agencies shall carry out an 
        outreach program to provide financial institutions with 
        information, including best practices, with respect to 
        the sharing of resources described under paragraph (1).
  (p) Encouraging Innovation in Compliance.--
          (1) In general.--The Federal functional regulators 
        shall encourage financial institutions to consider, 
        evaluate, and, where appropriate, responsibly implement 
        innovative approaches to meet the requirements of this 
        subchapter, including through the use of innovation 
        pilot programs.
          (2) Exemptive relief.--The Secretary, pursuant to 
        subsection (a), may provide exemptions from the 
        requirements of this subchapter if the Secretary 
        determines such exemptions are necessary to facilitate 
        the testing and potential use of new technologies and 
        other innovations.
          (3) Rule of construction.--This subsection may not be 
        construed to require financial institutions to 
        consider, evaluate, or implement innovative approaches 
        to meet the requirements of the Bank Secrecy Act.
          (4) Federal functional regulator defined.--In this 
        subsection, the term ``Federal functional regulator'' 
        means the Board of Governors of the Federal Reserve 
        System, the Comptroller of the Currency, the Federal 
        Deposit Insurance Corporation, the National Credit 
        Union Administration, the Securities and Exchange 
        Commission, and the Commodity Futures Trading 
        Commission.
  (q) Parallel Runs Rulemaking.--
          (1) In general.--The Secretary of the Treasury, in 
        consultation with the head of each agency to which the 
        Secretary has delegated duties or powers under 
        subsection (a), shall issue a rule to specify--
                  (A) with respect to technology and processes 
                designed to facilitate compliance with the Bank 
                Secrecy Act requirements, under what 
                circumstances it is necessary for a financial 
                institution to test new technology and 
                processes alongside legacy technology and 
                processes (``parallel runs'');
                  (B) if parallel runs are required, what 
                standards must be met; and
                  (C) in what instances or under what 
                circumstance and criteria a financial 
                institution may replace or terminate such 
                legacy technology and processes for any 
                examinable technology or process without the 
                replacement or termination being determined an 
                examination deficiency.
          (2) Standards.--The standards described under 
        paragraph (1)(B) may include--
                  (A) an emphasis on using innovative 
                approaches, such as machine learning, rather 
                than rules-based systems;
                  (B) risk-based back-testing of the regime to 
                facilitate calibration of relevant systems;
                  (C) requirements for appropriate data privacy 
                and security; and
                  (D) a requirement that the algorithms used by 
                the regime be disclosed to the Financial Crimes 
                Enforcement Network.
          (3) Confidentiality of algorithms.--If a financial 
        institution or any director, officer, employee, or 
        agent of any financial institution, voluntarily or 
        pursuant to this subsection or any other authority, 
        discloses the institution's algorithms to a Government 
        agency, such algorithms and any materials associated 
        with the creation of such algorithms shall be 
        considered confidential and not subject to public 
        disclosure.

           *       *       *       *       *       *       *


Sec. 5321. Civil penalties

  (a)(1) A domestic financial institution or nonfinancial trade 
or business, and a partner, director, officer, or employee of a 
domestic financial institution or nonfinancial trade or 
business, willfully violating this subchapter or a regulation 
prescribed or order issued under this subchapter (except 
sections 5314 and 5315 of this title or a regulation prescribed 
under sections 5314 and 5315), or willfully violating a 
regulation prescribed under section 21 of the Federal Deposit 
Insurance Act or section 123 of Public Law 91-508, is liable to 
the United States Government for a civil penalty of not more 
than the greater of the amount (not to exceed $100,000) 
involved in the transaction (if any) or $25,000. For a 
violation of section 5318(a)(2) of this title or 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.
  (2) The Secretary of the Treasury may impose an additional 
civil penalty on a person not filing a report, or filing a 
report containing a material omission or misstatement, under 
section 5316 of this title or a regulation prescribed under 
section 5316. A civil penalty under this paragraph may not be 
more than the amount of the monetary instrument for which the 
report was required. A civil penalty under this paragraph is 
reduced by an amount forfeited under section 5317(b) of this 
title.
  (3) A person not filing a report under a regulation 
prescribed under section 5315 of this title or not complying 
with an injunction under section 5320 of this title enjoining a 
violation of, or enforcing compliance with, section 5315 or a 
regulation prescribed under section 5315, is liable to the 
Government for a civil penalty of not more than $10,000.
  (4) Structured Transaction Violation.--
          (A) Penalty authorized.--The Secretary of the 
        Treasury may impose a civil money penalty on any person 
        who violates any provision of section 5324.
          (B) Maximum amount limitation.--The amount of any 
        civil money penalty imposed under subparagraph (A) 
        shall not exceed the amount of the coins and currency 
        (or such other monetary instruments as the Secretary 
        may prescribe) involved in the transaction with respect 
        to which such penalty is imposed.
          (C) Coordination with forfeiture provision.--The 
        amount of any civil money penalty imposed by the 
        Secretary under subparagraph (A) shall be reduced by 
        the amount of any forfeiture to the United States in 
        connection with the transaction with respect to which 
        such penalty is imposed.
  (5) Foreign financial agency transaction violation.--
          (A) Penalty authorized.--The Secretary of the 
        Treasury may impose a civil money penalty on any person 
        who violates, or causes any violation of, any provision 
        of section 5314.
          (B) Amount of penalty.--
                  (i) In general.--Except as provided in 
                subparagraph (C), the amount of any civil 
                penalty imposed under subparagraph (A) shall 
                not exceed $10,000.
                  (ii) Reasonable cause exception.--No penalty 
                shall be imposed under subparagraph (A) with 
                respect to any violation if--
                          (I) such violation was due to 
                        reasonable cause, and
                          (II) the amount of the transaction or 
                        the balance in the account at the time 
                        of the transaction was properly 
                        reported.
          (C) Willful violations.--In the case of any person 
        willfully violating, or willfully causing any violation 
        of, any provision of section 5314--
                  (i) the maximum penalty under subparagraph 
                (B)(i) shall be increased to the greater of--
                          (I) $100,000, or
                          (II) 50 percent of the amount 
                        determined under subparagraph (D), and
                  (ii) subparagraph (B)(ii) shall not apply.
          (D) Amount.--The amount determined under this 
        subparagraph is--
                  (i) in the case of a violation involving a 
                transaction, the amount of the transaction, or
                  (ii) in the case of a violation involving a 
                failure to report the existence of an account 
                or any identifying information required to be 
                provided with respect to an account, the 
                balance in the account at the time of the 
                violation.
  (6) Negligence.--
          (A) In general.--The Secretary of the Treasury may 
        impose a civil money penalty of not more than $500 on 
        any financial institution or nonfinancial trade or 
        business which negligently violates any provision of 
        this subchapter or any regulation prescribed under this 
        subchapter.
          (B) Pattern of negligent activity.--If any financial 
        institution or nonfinancial trade or business engages 
        in a pattern of negligent violations of any provision 
        of this subchapter or any regulation prescribed under 
        this subchapter, the Secretary of the Treasury may, in 
        addition to any penalty imposed under subparagraph (A) 
        with respect to any such violation, impose a civil 
        money penalty of not more than $50,000 on the financial 
        institution or nonfinancial trade or business.
  (7) Penalties for international counter money laundering 
violations.--The Secretary may impose a civil money penalty in 
an amount equal to not less than 2 times the amount of the 
transaction, but not more than $1,000,000, on any financial 
institution or agency that violates any provision of subsection 
(i) or (j) of section 5318 or any special measures imposed 
under section 5318A.
  (b) Time Limitations for Assessments and Commencement of 
Civil Actions.--
          (1) Assessments.--The Secretary of the Treasury may 
        assess a civil penalty under subsection (a) at any time 
        before the end of the 6-year period beginning on the 
        date of the transaction with respect to which the 
        penalty is assessed.
          (2) Civil actions.--The Secretary may commence a 
        civil action to recover a civil penalty assessed under 
        subsection (a) at any time before the end of the 2-year 
        period beginning on the later of--
                  (A) the date the penalty was assessed; or
                  (B) the date any judgment becomes final in 
                any criminal action under section 5322 in 
                connection with the same transaction with 
                respect to which the penalty is assessed.
  (c) The Secretary may remit any part of a forfeiture under 
subsection (c) or (d) of section 5317 of this title or civil 
penalty under subsection (a)(2) of this section.
  (d) Criminal Penalty Not Exclusive of Civil Penalty.--A civil 
money penalty may be imposed under subsection (a) with respect 
to any violation of this subchapter notwithstanding the fact 
that a criminal penalty is imposed with respect to the same 
violation.
  (e) Delegation of Assessment Authority to Banking Agencies.--
          (1) In general.--The Secretary of the Treasury shall 
        delegate, in accordance with section 5318(a)(1) and 
        subject to such terms and conditions as the Secretary 
        may impose in accordance with paragraph (3), any 
        authority of the Secretary to assess a civil money 
        penalty under this section on depository institutions 
        (as defined in section 3 of the Federal Deposit 
        Insurance Act) to the appropriate Federal banking 
        agencies (as defined in such section 3).
          (2) Authority of agencies.--Subject to any term or 
        condition imposed by the Secretary of the Treasury 
        under paragraph (3), the provisions of this section 
        shall apply to an appropriate Federal banking agency to 
        which is delegated any authority of the Secretary under 
        this section in the same manner such provisions apply 
        to the Secretary.
          (3) Terms and conditions.--
                  (A) In general.--The Secretary of the 
                Treasury shall prescribe by regulation the 
                terms and conditions which shall apply to any 
                delegation under paragraph (1).
                  (B) Maximum dollar amount.--The terms and 
                conditions authorized under subparagraph (A) 
                may include, in the Secretary's sole 
                discretion, a limitation on the amount of any 
                civil penalty which may be assessed by an 
                appropriate Federal banking agency pursuant to 
                a delegation under paragraph (1).
  (f) Certain Violators Barred From Serving on Boards of United 
States Financial Institutions.--
          (1) In general.--An individual found to have 
        committed an egregious violation of a provision of (or 
        rule issued under) the Bank Secrecy Act shall be barred 
        from serving on the board of directors of a United 
        States financial institution for a 10-year period 
        beginning on the date of such finding.
          (2) Egregious violation defined.--With respect to an 
        individual, the term ``egregious violation'' means--
                  (A) a felony criminal violation for which the 
                individual was convicted; and
                  (B) a civil violation where the individual 
                willfully committed such violation and the 
                violation facilitated money laundering or the 
                financing of terrorism.
  (g) Additional Damages for Repeat Violators.--In addition to 
any other fines permitted by this section and section 5322, 
with respect to a person who has previously been convicted of a 
criminal provision of (or rule issued under) the Bank Secrecy 
Act or who has admitted, as part of a deferred- or non-
prosecution agreement, to having previously committed a 
violation of a criminal provision of (or rule issued under) the 
Bank Secrecy Act, the Secretary may impose an additional civil 
penalty against such person for each additional such violation 
in an amount equal to up three times the profit gained or loss 
avoided by such person as a result of the violation.

Sec. 5322. Criminal penalties

  (a) A person willfully violating this subchapter or 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), or willfully violating 
a regulation prescribed under section 21 of the Federal Deposit 
Insurance Act or section 123 of Public Law 91-508, shall be 
fined not more than $250,000, or imprisoned for not more than 
five years, or both.
  (b) A person willfully violating this subchapter or 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), or willfully violating 
a regulation prescribed under section 21 of the Federal Deposit 
Insurance Act or section 123 of Public Law 91-508, while 
violating another law of the United States or as part of a 
pattern of any illegal activity involving more than $100,000 in 
a 12-month period, shall be fined not more than $500,000, 
imprisoned for not more than 10 years, or both.
  (c) For a violation of section 5318(a)(2) of this title or 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.
  (d) A financial institution or agency that violates any 
provision of subsection (i) or (j) of section 5318, or any 
special measures imposed under section 5318A, or any regulation 
prescribed under subsection (i) or (j) of section 5318 or 
section 5318A, shall be fined in an amount equal to not less 
than 2 times the amount of the transaction, but not more than 
$1,000,000.
  (e) Return of Profits and Bonuses.--A person convicted of 
violating a provision of (or rule issued under) the Bank 
Secrecy Act shall--
          (1) in addition to any other fine under this section, 
        be fined in an amount equal to the profit gained by 
        such person by reason of such violation, as determined 
        by the court; and
          (2) if such person is an individual who was a 
        partner, director, officer, or employee of a financial 
        institution at the time the violation occurred, repay 
        to such financial institution any bonus paid to such 
        individual during the Federal fiscal year in which the 
        violation occurred or the Federal fiscal year after 
        which the violation occurred.

Sec. 5323. Rewards for informants

  (a) The Secretary may pay a reward to an individual who 
provides original information which leads to a recovery of a 
criminal fine, civil penalty, or forfeiture, which exceeds 
$50,000, for a violation of this chapter.
  (b) The Secretary shall determine the amount of a reward 
under this section. The Secretary may not award more than 25 
per centum of the net amount of the fine, penalty, or 
forfeiture collected or $150,000, whichever is less.
  (c) An officer or employee of the United States, a State, or 
a local government who provides information described in 
subsection (a) in the performance of official duties is not 
eligible for a reward under this section.
  [(d) There are authorized to be appropriated such sums as may 
be necessary to carry out the provisions of this section.]
  (d) Source of Rewards.--For the purposes of paying a reward 
under this section, the Secretary may use, without further 
appropriation, criminal fine, civil penalty, or forfeiture 
amounts recovered based on the original information with 
respect to which the reward is being paid.

Sec. 5323A. Whistleblower incentives

  (a) Definitions.--In this section:
          (1) 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.
          (2) Fincen.--The term ``FinCEN'' means the Financial 
        Crimes Enforcement Network.
          (3) 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.
          (4) 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.
          (5) 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.
          (6) Secretary.--The term ``Secretary'' means the 
        Secretary of the Treasury.
          (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, the 
        Secretary, under such rules as the Secretary may issue 
        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 not more than 30 percent, in 
        total, of what has been collected of the monetary 
        sanctions imposed in the action.
          (2) Source of awards.--For the purposes of paying any 
        award under paragraph (1), the Secretary may use, 
        without further appropriation, monetary sanction 
        amounts recovered based on the original information 
        with respect to which the award is being paid.
  (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 the Secretary.
                  (B) Criteria.--In responding to a disclosure 
                and determining the amount of an award made, 
                FinCEN staff shall meet with the whistleblower 
                to discuss evidence disclosed and rebuttals to 
                the disclosure, and 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 the Secretary may establish by rule.
          (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, or who the Secretary has 
                a reasonable basis to believe committed 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 the 
                Secretary may, by rule, require.
          (3) Statement of reasons.--For any decision granting 
        or denying an award, the Secretary 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 the Secretary 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 the Secretary. 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 the Secretary. The court shall review the 
determination made by the Secretary in accordance with section 
706 of title 5.
  (f) Employee Protections.--The Secretary of the Treasury 
shall issue regulations protecting a whistleblower from 
retaliation, which shall be as close as practicable to the 
employee protections provided for under section 1057 of the 
Consumer Financial Protection Act of 2010.

           *       *       *       *       *       *       *


Sec. 5333. AML/CFT Training

  (a) Training Requirement.--Each Federal examiner reviewing 
compliance with the Bank Secrecy Act shall attend at least 10 
hours of annual training on anti-money laundering (AML) and the 
countering of the financing of terrorism (CFT), including--
          (1) potential risk profiles and red flags that may be 
        encountered during examinations;
          (2) financial crime patterns and trends;
          (3) the high-level context for why AML and CFT 
        programs are necessary for law enforcement agencies and 
        other national security agencies, and what risks the 
        programs seek to mitigate; and
          (4) de-risking and its effect on the provision of 
        financial services.
  (b) Training Materials and Standards.--The Secretary of the 
Treasury shall, in consultation with the Financial Institutions 
Examination Council, the Financial Crimes Enforcement Network, 
and State, Federal, and Tribal law enforcement agencies, 
establish appropriate training materials and standards for use 
in the training required under subsection (a).

Sec. 5334. Innovation Labs

  (a) Establishment.--There is established within the 
Department of the Treasury and each Federal functional 
regulator an Innovation Lab.
  (b) Director.--The head of each Innovation Lab shall be a 
Director, to be appointed by the Secretary of the Treasury or 
the head of the Federal functional regulator, as applicable.
  (c) Duties.--The duties of the Innovation Lab shall be--
          (1) to provide outreach to law enforcement agencies, 
        financial institutions, and other persons (including 
        vendors and technology companies) with respect to 
        innovation and new technologies that may be used to 
        comply with the requirements of the Bank Secrecy Act;
          (2) to support the implementation of responsible 
        innovation and new technology, in a manner that 
        complies with the requirements of the Bank Secrecy Act;
          (3) to explore opportunities for public-private 
        partnerships; and
          (4) to develop metrics of success.
  (d) FinCEN Lab.--The Innovation Lab established under 
subsection (a) within the Department of the Treasury shall be a 
lab within the Financial Crimes Enforcement Network.
  (e) Federal Functional Regulator Defined.--In this 
subsection, the term ``Federal functional regulator'' means the 
Board of Governors of the Federal Reserve System, the 
Comptroller of the Currency, the Federal Deposit Insurance 
Corporation, the National Credit Union Administration, the 
Securities and Exchange Commission, and the Commodity Futures 
Trading Commission.

Sec. 5335. Innovation Council

  (a) Establishment.--There is established the Innovation 
Council (hereinafter in this section referred to as the 
``Council''), which shall consist of each Director of an 
Innovation Lab established under section 5334 and the Director 
of the Financial Crimes Enforcement Network.
  (b) Chair.--The Director of the Innovation Lab of the 
Department of the Treasury shall serve as the Chair of the 
Council.
  (c) Duty.--The members of the Council shall coordinate on 
activities related to innovation under the Bank Secrecy Act, 
but may not supplant individual agency determinations on 
innovation.
  (d) Meetings.--The meetings of the Council--
          (1) shall be at the call of the Chair, but in no case 
        may the Council meet less than semi-annually;
          (2) may include open and closed sessions, as 
        determined necessary by the Council; and
          (3) shall include participation by public and private 
        entities and law enforcement agencies.
  (e) Report.--The Council shall issue an annual report, for 
each of the 7 years beginning on the date of enactment of this 
section, to the Secretary of the Treasury on the activities of 
the Council during the previous year, including the success of 
programs as measured by metrics of success developed pursuant 
to section 5334(c)(4), and any regulatory or legislative 
recommendations that the Council may have.

           *       *       *       *       *       *       *

                              ----------                              


                INTERNATIONAL FINANCIAL INSTITUTIONS ACT




           *       *       *       *       *       *       *
TITLE XVI--HUMAN WELFARE

           *       *       *       *       *       *       *



SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO 
                    PREVENT MONEY LAUNDERING AND FINANCING OF 
                    TERRORISM.

  The Secretary of the Treasury shall instruct the United 
States Executive Director at the International Monetary Fund to 
support the increased use of the administrative budget of the 
Fund for technical assistance that strengthens the capacity of 
Fund members to prevent money laundering and the financing of 
terrorism.
[Section 105(c)(1) of H.R. 2514 (as reported) provides for an 
amendment to title XVI of the International Financial 
Institutions Act by adding at the end a new section 1629, which 
appears immediately above in italic typeface. Paragraph (3) of 
such section 105(c), provides: ``effective on the date that is 
the end of the 4-year period beginning on the date of enactment 
of this Act, section 1629 of the International Financial 
Institutions Act, as added by paragraph (1), is repealed.''.]

[SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL MONETARY FUND TO 
                    PREVENT MONEY LAUNDERING AND FINANCING OF 
                    TERRORISM.

  [The Secretary of the Treasury shall instruct the United 
States Executive Director at the International Monetary Fund to 
support the increased use of the administrative budget of the 
Fund for technical assistance that strengthens the capacity of 
Fund members to prevent money laundering and the financing of 
terrorism.]

           *       *       *       *       *       *       *

                              ----------                              


                     INTERNAL REVENUE CODE OF 1986




           *       *       *       *       *       *       *
                        Subtitle A--Income Taxes

                  CHAPTER 1--NORMAL TAXES AND SURTAXES

Subchapter B--COMPUTATION OF TAXABLE INCOME

           *       *       *       *       *       *       *


PART VI--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS

           *       *       *       *       *       *       *



SEC. 162. TRADE OR BUSINESS EXPENSES.

  (a) In general.--There shall be allowed as a deduction all 
the ordinary and necessary expenses paid or incurred during the 
taxable year in carrying on any trade or business, including--
          (1) a reasonable allowance for salaries or other 
        compensation for personal services actually rendered;
          (2) traveling expenses (including amounts expended 
        for meals and lodging other than amounts which are 
        lavish or extravagant under the circumstances) while 
        away from home in the pursuit of a trade or business; 
        and
          (3) rentals or other payments required to be made as 
        a condition to the continued use or possession, for 
        purposes of the trade or business, of property to which 
        the taxpayer has not taken or is not taking title or in 
        which he has no equity.
For purposes of the preceding sentence, the place of residence 
of a Member of Congress (including any Delegate and Resident 
Commissioner) within the State, congressional district, or 
possession which he represents in Congress shall be considered 
his home, but amounts expended by such Members within each 
taxable year for living expenses shall not be deductible for 
income tax purposes. For purposes of paragraph (2), the 
taxpayer shall not be treated as being temporarily away from 
home during any period of employment if such period exceeds 1 
year. The preceding sentence shall not apply to any Federal 
employee during any period for which such employee is certified 
by the Attorney General (or the designee thereof) as traveling 
on behalf of the United States in temporary duty status to 
investigate or prosecute, or provide support services for the 
investigation or prosecution of, a Federal crime.
  (b) Charitable contributions and gifts excepted.--No 
deduction shall be allowed under subsection (a) for any 
contribution or gift which would be allowable as a deduction 
under section 170 were it not for the percentage limitations, 
the dollar limitations, or the requirements as to the time of 
payment, set forth in such section.
  (c) Illegal bribes, kickbacks, and other payments.--
          (1) Illegal payments to government officials or 
        employees.--No deduction shall be allowed under 
        subsection (a) for any payment made, directly or 
        indirectly, to an official or employee of any 
        government, or of any agency or instrumentality of any 
        government, if the payment constitutes an illegal bribe 
        or kickback or, if the payment is to an official or 
        employee of a foreign government, the payment is 
        unlawful under the Foreign Corrupt Practices Act of 
        1977. The burden of proof in respect of the issue, for 
        the purposes of this paragraph, as to whether a payment 
        constitutes an illegal bribe or kickback (or is 
        unlawful under the Foreign Corrupt Practices Act of 
        1977) shall be upon the Secretary to the same extent as 
        he bears the burden of proof under section 7454 
        (concerning the burden of proof when the issue relates 
        to fraud).
          (2) Other illegal payments.--No deduction shall be 
        allowed under subsection (a) for any payment (other 
        than a payment described in paragraph (1)) made, 
        directly or indirectly, to any person, if the payment 
        constitutes an illegal bribe, illegal kickback, or 
        other illegal payment under any law of the United 
        States, or under any law of a State (but only if such 
        State law is generally enforced), which subjects the 
        payor to a criminal penalty or the loss of license or 
        privilege to engage in a trade or business. For 
        purposes of this paragraph, a kickback includes a 
        payment in consideration of the referral of a client, 
        patient, or customer. The burden of proof in respect of 
        the issue, for purposes of this paragraph, as to 
        whether a payment constitutes an illegal bribe, illegal 
        kickback, or other illegal payment shall be upon the 
        Secretary to the same extent as he bears the burden of 
        proof under section 7454 (concerning the burden of 
        proof when the issue relates to fraud).
          (3) Kickbacks, rebates, and bribes under medicare and 
        medicaid.--No deduction shall be allowed under 
        subsection (a) for any kickback, rebate, or bribe made 
        by any provider of services, supplier, physician, or 
        other person who furnishes items or services for which 
        payment is or may be made under the Social Security 
        Act, or in whole or in part out of Federal funds under 
        a State plan approved under such Act, if such kickback, 
        rebate, or bribe is made in connection with the 
        furnishing of such items or services or the making or 
        receipt of such payments. For purposes of this 
        paragraph, a kickback includes a payment in 
        consideration of the referral of a client, patient, or 
        customer.
  (d) Capital contributions to Federal National Mortgage 
Association.--For purposes of this subtitle, whenever the 
amount of capital contributions evidenced by a share of stock 
issued pursuant to section 303(c) of the Federal National 
Mortgage Association Charter Act (12 U.S.C., sec. 1718) exceeds 
the fair market value of the stock as of the issue date of such 
stock, the initial holder of the stock shall treat the excess 
as ordinary and necessary expenses paid or incurred during the 
taxable year in carrying on a trade or business.
  (e) Denial of deduction for certain lobbying and political 
expenditures.--
          (1) In general.--No deduction shall be allowed under 
        subsection (a) for any amount paid or incurred in 
        connection with--
                  (A) influencing legislation,
                  (B) participation in, or intervention in, any 
                political campaign on behalf of (or in 
                opposition to) any candidate for public office,
                  (C) any attempt to influence the general 
                public, or segments thereof, with respect to 
                elections, legislative matters, or referendums, 
                or
                  (D) any direct communication with a covered 
                executive branch official in an attempt to 
                influence the official actions or positions of 
                such official.
          (2) Application to dues of tax-exempt 
        organizations.--No deduction shall be allowed under 
        subsection (a) for the portion of dues or other similar 
        amounts paid by the taxpayer to an organization which 
        is exempt from tax under this subtitle which the 
        organization notifies the taxpayer under section 
        6033(e)(1)(A)(ii) is allocable to expenditures to which 
        paragraph (1) applies.
          (3) Influencing legislation.--For purposes of this 
        subsection--
                  (A) In general.--The term ``influencing 
                legislation'' means any attempt to influence 
                any legislation through communication with any 
                member or employee of a legislative body, or 
                with any government official or employee who 
                may participate in the formulation of 
                legislation.
                  (B) Legislation.--The term ``legislation'' 
                has the meaning given such term by section 
                4911(e)(2).
          (4) Other special rules.--
                  (A) Exception for certain taxpayers.--In the 
                case of any taxpayer engaged in the trade or 
                business of conducting activities described in 
                paragraph (1), paragraph (1) shall not apply to 
                expenditures of the taxpayer in conducting such 
                activities directly on behalf of another person 
                (but shall apply to payments by such other 
                person to the taxpayer for conducting such 
                activities).
                  (B) De minimis exception.--
                          (i) In general.--Paragraph (1) shall 
                        not apply to any in-house expenditures 
                        for any taxable year if such 
                        expenditures do not exceed $2,000. In 
                        determining whether a taxpayer exceeds 
                        the $2,000 limit under this clause, 
                        there shall not be taken into account 
                        overhead costs otherwise allocable to 
                        activities described in paragraphs 
                        (1)(A) and (D).
                          (ii) In-house expenditures.--For 
                        purposes of clause (i), the term ``in-
                        house expenditures'' means expenditures 
                        described in paragraphs (1)(A) and (D) 
                        other than--
                                  (I) payments by the taxpayer 
                                to a person engaged in the 
                                trade or business of conducting 
                                activities described in 
                                paragraph (1) for the conduct 
                                of such activities on behalf of 
                                the taxpayer, or
                                  (II) dues or other similar 
                                amounts paid or incurred by the 
                                taxpayer which are allocable to 
                                activities described in 
                                paragraph (1).
                  (C) Expenses incurred in connection with 
                lobbying and political activities.--Any amount 
                paid or incurred for research for, or 
                preparation, planning, or coordination of, any 
                activity described in paragraph (1) shall be 
                treated as paid or incurred in connection with 
                such activity.
          (5) Covered executive branch official.--For purposes 
        of this subsection, the term ``covered executive branch 
        official'' means--
                  (A) the President,
                  (B) the Vice President,
                  (C) any officer or employee of the White 
                House Office of the Executive Office of the 
                President, and the 2 most senior level officers 
                of each of the other agencies in such Executive 
                Office, and
                  (D)(i) any individual serving in a position 
                in level I of the Executive Schedule under 
                section 5312 of title 5, United States Code, 
                (ii) any other individual designated by the 
                President as having Cabinet level status, and 
                (iii) any immediate deputy of an individual 
                described in clause (i) or (ii).
          (6) Cross reference.--For reporting requirements and 
        alternative taxes related to this subsection, see 
        section 6033(e).
  (f) Fines, penalties, and other amounts.--
          (1) In general.--Except as provided in the following 
        paragraphs of this subsection, no deduction otherwise 
        allowable shall be allowed under this chapter for any 
        amount paid or incurred (whether by suit, agreement, or 
        otherwise) to, or at the direction of, a government or 
        governmental entity in relation to the violation of any 
        law or the investigation or inquiry by such government 
        or entity into the potential violation of any law.
          (2) Exception for amounts constituting restitution or 
        paid to come into compliance with law.--
                  (A) In general.--Paragraph (1) shall not 
                apply to any amount that--
                          (i) the taxpayer establishes--
                                  (I) constitutes restitution 
                                (including remediation of 
                                property) for damage or harm 
                                which was or may be caused by 
                                the violation of any law or the 
                                potential violation of any law, 
                                or
                                  (II) is paid to come into 
                                compliance with any law which 
                                was violated or otherwise 
                                involved in the investigation 
                                or inquiry described in 
                                paragraph (1),
                          (ii) is identified as restitution or 
                        as an amount paid to come into 
                        compliance with such law, as the case 
                        may be, in the court order or 
                        settlement agreement, and
                          (iii) in the case of any amount of 
                        restitution for failure to pay any tax 
                        imposed under this title in the same 
                        manner as if such amount were such tax, 
                        would have been allowed as a deduction 
                        under this chapter if it had been 
                        timely paid.
                The identification under clause (ii) alone 
                shall not be sufficient to make the 
                establishment required under clause (i).
                  (B) Limitation.--Subparagraph (A) shall not 
                apply to any amount paid or incurred as 
                reimbursement to the government or entity for 
                the costs of any investigation or litigation.
          (3) Exception for amounts paid or incurred as the 
        result of certain court orders.--Paragraph (1) shall 
        not apply to any amount paid or incurred by reason of 
        any order of a court in a suit in which no government 
        or governmental entity is a party.
          (4) Exception for taxes due.--Paragraph (1) shall not 
        apply to any amount paid or incurred as taxes due.
          (5) Treatment of certain nongovernmental regulatory 
        entities.--For purposes of this subsection, the 
        following nongovernmental entities shall be treated as 
        governmental entities:
                  (A) Any nongovernmental entity which 
                exercises self-regulatory powers (including 
                imposing sanctions) in connection with a 
                qualified board or exchange (as defined in 
                section 1256(g)(7)).
                  (B) To the extent provided in regulations, 
                any nongovernmental entity which exercises 
                self-regulatory powers (including imposing 
                sanctions) as part of performing an essential 
                governmental function.
          (6) Violations of the bank secrecy act.--In the case 
        of a payment described in paragraph (1) that is in 
        relation to any violation of the Bank Secrecy Act (as 
        defined under section 5312 of title 31, United States 
        Code), no deduction shall be allowed under this chapter 
        for attorney's fees related to such payment.
  (g) Treble damage payments under the antitrust laws.--If in a 
criminal proceeding a taxpayer is convicted of a violation of 
the antitrust laws, or his plea of guilty or nolo contendere to 
an indictment or information charging such a violation is 
entered or accepted in such a proceeding, no deduction shall be 
allowed under subsection (a) for two-thirds of any amount paid 
or incurred--
          (1) on any judgment for damages entered against the 
        taxpayer under section 4 of the Act entitled ``An Act 
        to supplement existing laws against unlawful restraints 
        and monopolies, and for other purposes'', approved 
        October 15, 1914 (commonly known as the Clayton Act), 
        on account of such violation or any related violation 
        of the antitrust laws which occurred prior to the date 
        of the final judgment of such conviction, or
          (2) in settlement of any action brought under such 
        section 4 on account of such violation or related 
        violation.
  (h) State legislators' travel expenses away from home.--
          (1) In general.--For purposes of subsection (a), in 
        the case of any individual who is a State legislator at 
        any time during the taxable year and who makes an 
        election under this subsection for the taxable year--
                  (A) the place of residence of such individual 
                within the legislative district which he 
                represented shall be considered his home,
                  (B) he shall be deemed to have expended for 
                living expenses (in connection with his trade 
                or business as a legislator) an amount equal to 
                the sum of the amounts determined by 
                multiplying each legislative day of such 
                individual during the taxable year by the 
                greater of--
                          (i) the amount generally allowable 
                        with respect to such day to employees 
                        of the State of which he is a 
                        legislator for per diem while away from 
                        home, to the extent such amount does 
                        not exceed 110 percent of the amount 
                        described in clause (ii) with respect 
                        to such day, or
                          (ii) the amount generally allowable 
                        with respect to such day to employees 
                        of the executive branch of the Federal 
                        Government for per diem while away from 
                        home but serving in the United States, 
                        and
                  (C) he shall be deemed to be away from home 
                in the pursuit of a trade or business on each 
                legislative day.
          (2) Legislative days.--For purposes of paragraph (1), 
        a legislative day during any taxable year for any 
        individual shall be any day during such year on which--
                  (A) the legislature was in session (including 
                any day in which the legislature was not in 
                session for a period of 4 consecutive days or 
                less), or
                  (B) the legislature was not in session but 
                the physical presence of the individual was 
                formally recorded at a meeting of a committee 
                of such legislature.
          (3) Election.--An election under this subsection for 
        any taxable year shall be made at such time and in such 
        manner as the Secretary shall by regulations prescribe.
          (4) Section not to apply to legislators who reside 
        near capitol.--This subsection shall not apply to any 
        legislator whose place of residence within the 
        legislative district which he represents is 50 or fewer 
        miles from the capitol building of the State.
  (j) Certain foreign advertising expenses.--
          (1) In general.--No deduction shall be allowed under 
        subsection (a) for any expenses of an advertisement 
        carried by a foreign broadcast undertaking and directed 
        primarily to a market in the United States. This 
        paragraph shall apply only to foreign broadcast 
        undertakings located in a country which denies a 
        similar deduction for the cost of advertising directed 
        primarily to a market in the foreign country when 
        placed with a United States broadcast undertaking.
          (2) Broadcast undertaking.--For purposes of paragraph 
        (1), the term ``broadcast undertaking'' includes (but 
        is not limited to) radio and television stations.
  (k) Stock reacquisition expenses.--
          (1) In general.--Except as provided in paragraph (2), 
        no deduction otherwise allowable shall be allowed under 
        this chapter for any amount paid or incurred by a 
        corporation in connection with the reacquisition of its 
        stock or of the stock of any related person (as defined 
        in section 465(b)(3)(C)).
          (2) Exceptions.--Paragraph (1) shall not apply to--
                  (A) Certain specific deductions.--Any--
                          (i) deduction allowable under section 
                        163 (relating to interest),
                          (ii) deduction for amounts which are 
                        properly allocable to indebtedness and 
                        amortized over the term of such 
                        indebtedness, or
                          (iii) deduction for dividends paid 
                        (within the meaning of section 561).
                  (B) Stock of certain regulated investment 
                companies.--Any amount paid or incurred in 
                connection with the redemption of any stock in 
                a regulated investment company which issues 
                only stock which is redeemable upon the demand 
                of the shareholder.
  (l) Special rules for health insurance costs of self-employed 
individuals.--
          (1) Allowance of deduction.--In the case of a 
        taxpayer who is an employee within the meaning of 
        section 401(c)(1), there shall be allowed as a 
        deduction under this section an amount equal to the 
        amount paid during the taxable year for insurance which 
        constitutes medical care for--
                  (A) the taxpayer,
                  (B) the taxpayer's spouse,
                  (C) the taxpayer's dependents, and
                  (D) any child (as defined in section 
                152(f)(1)) of the taxpayer who as of the end of 
                the taxable year has not attained age 27.
          (2) Limitations.--
                  (A) Dollar amount.--No deduction shall be 
                allowed under paragraph (1) to the extent that 
                the amount of such deduction exceeds the 
                taxpayer's earned income (within the meaning of 
                section 401(c)) derived by the taxpayer from 
                the trade or business with respect to which the 
                plan providing the medical care coverage is 
                established.
                  (B) Other coverage.--Paragraph (1) shall not 
                apply to any taxpayer for any calendar month 
                for which the taxpayer is eligible to 
                participate in any subsidized health plan 
                maintained by any employer of the taxpayer or 
                of the spouse of, or any dependent, or 
                individual described in subparagraph (D) of 
                paragraph (1) with respect to, the taxpayer. 
                The preceding sentence shall be applied 
                separately with respect to--
                          (i) plans which include coverage for 
                        qualified long-term care services (as 
                        defined in section 7702B(c)) or are 
                        qualified long-term care insurance 
                        contracts (as defined in section 
                        7702B(b)), and
                          (ii) plans which do not include such 
                        coverage and are not such contracts.
                  (C) Long-term care premiums.--In the case of 
                a qualified long-term care insurance contract 
                (as defined in section 7702B(b)), only eligible 
                long-term care premiums (as defined in section 
                213(d)(10)) shall be taken into account under 
                paragraph (1).
          (3) Coordination with medical deduction.--Any amount 
        paid by a taxpayer for insurance to which paragraph (1) 
        applies shall not be taken into account in computing 
        the amount allowable to the taxpayer as a deduction 
        under section 213(a).
          (4) Deduction not allowed for self-employment tax 
        purposes.--The deduction allowable by reason of this 
        subsection shall not be taken into account in 
        determining an individual's net earnings from self-
        employment (within the meaning of section 1402(a)) for 
        purposes of chapter 2 for taxable years beginning 
        before January 1, 2010, or after December 31, 2010.
          (5) Treatment of certain S corporation 
        shareholders.--This subsection shall apply in the case 
        of any individual treated as a partner under section 
        1372(a), except that--
                  (A) for purposes of this subsection, such 
                individual's wages (as defined in section 3121) 
                from the S corporation shall be treated as such 
                individual's earned income (within the meaning 
                of section 401(c)(1)), and
                  (B) there shall be such adjustments in the 
                application of this subsection as the Secretary 
                may by regulations prescribe.
  (m) Certain excessive employee remuneration.--
          (1) In general.--In the case of any publicly held 
        corporation, no deduction shall be allowed under this 
        chapter for applicable employee remuneration with 
        respect to any covered employee to the extent that the 
        amount of such remuneration for the taxable year with 
        respect to such employee exceeds $1,000,000.
          (2) Publicly held corporation.--For purposes of this 
        subsection, the term ``publicly held corporation'' 
        means any corporation which is an issuer (as defined in 
        section 3 of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c))--
                  (A) the securities of which are required to 
                be registered under section 12 of such Act (15 
                U.S.C. 78l), or
                  (B) that is required to file reports under 
                section 15(d) of such Act (15 U.S.C. 78o(d)).
          (3) Covered employee.--For purposes of this 
        subsection, the term ``covered employee'' means any 
        employee of the taxpayer if--
                  (A) such employee is the principal executive 
                officer or principal financial officer of the 
                taxpayer at any time during the taxable year, 
                or was an individual acting in such a capacity,
                  (B) the total compensation of such employee 
                for the taxable year is required to be reported 
                to shareholders under the Securities Exchange 
                Act of 1934 by reason of such employee being 
                among the 3 highest compensated officers for 
                the taxable year (other than any individual 
                described in subparagraph (A)), or
                  (C) was a covered employee of the taxpayer 
                (or any predecessor) for any preceding taxable 
                year beginning after December 31, 2016.
        Such term shall include any employee who would be 
        described in subparagraph (B) if the reporting 
        described in such subparagraph were required as so 
        described.
          (4) Applicable employee remuneration.--For purposes 
        of this subsection--
                  (A) In general.--Except as otherwise provided 
                in this paragraph, the term ``applicable 
                employee remuneration'' means, with respect to 
                any covered employee for any taxable year, the 
                aggregate amount allowable as a deduction under 
                this chapter for such taxable year (determined 
                without regard to this subsection) for 
                remuneration for services performed by such 
                employee (whether or not during the taxable 
                year).
                  (B) Exception for existing binding 
                contracts.--The term ``applicable employee 
                remuneration'' shall not include any 
                remuneration payable under a written binding 
                contract which was in effect on February 17, 
                1993, and which was not modified thereafter in 
                any material respect before such remuneration 
                is paid.
                  (C) Remuneration.--For purposes of this 
                paragraph, the term ``remuneration'' includes 
                any remuneration (including benefits) in any 
                medium other than cash, but shall not include--
                          (i) any payment referred to in so 
                        much of section 3121(a)(5) as precedes 
                        subparagraph (E) thereof, and
                          (ii) any benefit provided to or on 
                        behalf of an employee if at the time 
                        such benefit is provided it is 
                        reasonable to believe that the employee 
                        will be able to exclude such benefit 
                        from gross income under this chapter.
                For purposes of clause (i), section 3121(a)(5) 
                shall be applied without regard to section 
                3121(v)(1).
                  (D) Coordination with disallowed golden 
                parachute payments.--The dollar limitation 
                contained in paragraph (1) shall be reduced 
                (but not below zero) by the amount (if any) 
                which would have been included in the 
                applicable employee remuneration of the covered 
                employee for the taxable year but for being 
                disallowed under section 280G.
                  (E) Coordination with excise tax on specified 
                stock compensation.--The dollar limitation 
                contained in paragraph (1) with respect to any 
                covered employee shall be reduced (but not 
                below zero) by the amount of any payment (with 
                respect to such employee) of the tax imposed by 
                section 4985 directly or indirectly by the 
                expatriated corporation (as defined in such 
                section) or by any member of the expanded 
                affiliated group (as defined in such section) 
                which includes such corporation.
                  (F) Special rule for remuneration paid to 
                beneficiaries, etc..--Remuneration shall not 
                fail to be applicable employee remuneration 
                merely because it is includible in the income 
                of, or paid to, a person other than the covered 
                employee, including after the death of the 
                covered employee.
          (5) Special rule for application to employers 
        participating in the Troubled Assets Relief Program.--
                  (A) In general.--In the case of an applicable 
                employer, no deduction shall be allowed under 
                this chapter--
                          (i) in the case of executive 
                        remuneration for any applicable taxable 
                        year which is attributable to services 
                        performed by a covered executive during 
                        such applicable taxable year, to the 
                        extent that the amount of such 
                        remuneration exceeds $500,000, or
                          (ii) in the case of deferred 
                        deduction executive remuneration for 
                        any taxable year for services performed 
                        during any applicable taxable year by a 
                        covered executive, to the extent that 
                        the amount of such remuneration exceeds 
                        $500,000 reduced (but not below zero) 
                        by the sum of--
                                  (I) the executive 
                                remuneration for such 
                                applicable taxable year, plus
                                  (II) the portion of the 
                                deferred deduction executive 
                                remuneration for such services 
                                which was taken into account 
                                under this clause in a 
                                preceding taxable year.
                  (B) Applicable employer.--For purposes of 
                this paragraph--
                          (i) In general.--Except as provided 
                        in clause (ii), the term ``applicable 
                        employer'' means any employer from whom 
                        1 or more troubled assets are acquired 
                        under a program established by the 
                        Secretary under section 101(a) of the 
                        Emergency Economic Stabilization Act of 
                        2008 if the aggregate amount of the 
                        assets so acquired for all taxable 
                        years exceeds $300,000,000.
                          (ii) Disregard of certain assets sold 
                        through direct purchase.--If the only 
                        sales of troubled assets by an employer 
                        under the program described in clause 
                        (i) are through 1 or more direct 
                        purchases (within the meaning of 
                        section 113(c) of the Emergency 
                        Economic Stabilization Act of 2008), 
                        such assets shall not be taken into 
                        account under clause (i) in determining 
                        whether the employer is an applicable 
                        employer for purposes of this 
                        paragraph.
                          (iii) Aggregation rules.--Two or more 
                        persons who are treated as a single 
                        employer under subsection (b) or (c) of 
                        section 414 shall be treated as a 
                        single employer, except that in 
                        applying section 1563(a) for purposes 
                        of either such subsection, paragraphs 
                        (2) and (3) thereof shall be 
                        disregarded.
                  (C) Applicable taxable year.--For purposes of 
                this paragraph, the term ``applicable taxable 
                year'' means, with respect to any employer--
                          (i) the first taxable year of the 
                        employer--
                                  (I) which includes any 
                                portion of the period during 
                                which the authorities under 
                                section 101(a) of the Emergency 
                                Economic Stabilization Act of 
                                2008 are in effect (determined 
                                under section 120 thereof), and
                                  (II) in which the aggregate 
                                amount of troubled assets 
                                acquired from the employer 
                                during the taxable year 
                                pursuant to such authorities 
                                (other than assets to which 
                                subparagraph (B)(ii) applies), 
                                when added to the aggregate 
                                amount so acquired for all 
                                preceding taxable years, 
                                exceeds $300,000,000, and
                          (ii) any subsequent taxable year 
                        which includes any portion of such 
                        period.
                  (D) Covered executive.--For purposes of this 
                paragraph--
                          (i) In general.--The term ``covered 
                        executive'' means, with respect to any 
                        applicable taxable year, any employee--
                                  (I) who, at any time during 
                                the portion of the taxable year 
                                during which the authorities 
                                under section 101(a) of the 
                                Emergency Economic 
                                Stabilization Act of 2008 are 
                                in effect (determined under 
                                section 120 thereof), is the 
                                chief executive officer of the 
                                applicable employer or the 
                                chief financial officer of the 
                                applicable employer, or an 
                                individual acting in either 
                                such capacity, or
                                  (II) who is described in 
                                clause (ii).
                          (ii) Highest compensated employees.--
                        An employee is described in this clause 
                        if the employee is 1 of the 3 highest 
                        compensated officers of the applicable 
                        employer for the taxable year (other 
                        than an individual described in clause 
                        (i)(I)), determined--
                                  (I) on the basis of the 
                                shareholder disclosure rules 
                                for compensation under the 
                                Securities Exchange Act of 1934 
                                (without regard to whether 
                                those rules apply to the 
                                employer), and
                                  (II) by only taking into 
                                account employees employed 
                                during the portion of the 
                                taxable year described in 
                                clause (i)(I).
                          (iii) Employee remains covered 
                        executive.--If an employee is a covered 
                        executive with respect to an applicable 
                        employer for any applicable taxable 
                        year, such employee shall be treated as 
                        a covered executive with respect to 
                        such employer for all subsequent 
                        applicable taxable years and for all 
                        subsequent taxable years in which 
                        deferred deduction executive 
                        remuneration with respect to services 
                        performed in all such applicable 
                        taxable years would (but for this 
                        paragraph) be deductible.
                  (E) Executive remuneration.--For purposes of 
                this paragraph, the term ``executive 
                remuneration'' means the applicable employee 
                remuneration of the covered executive, as 
                determined under paragraph (4) without regard 
                to subparagraph (B) thereof. Such term shall 
                not include any deferred deduction executive 
                remuneration with respect to services performed 
                in a prior applicable taxable year.
                  (F) Deferred deduction executive 
                remuneration.--For purposes of this paragraph, 
                the term ``deferred deduction executive 
                remuneration'' means remuneration which would 
                be executive remuneration for services 
                performed in an applicable taxable year but for 
                the fact that the deduction under this chapter 
                (determined without regard to this paragraph) 
                for such remuneration is allowable in a 
                subsequent taxable year.
                  (G) Coordination.--Rules similar to the rules 
                of subparagraphs (D) and (E) of paragraph (4) 
                shall apply for purposes of this paragraph.
                  (H) Regulatory authority.--The Secretary may 
                prescribe such guidance, rules, or regulations 
                as are necessary to carry out the purposes of 
                this paragraph and the Emergency Economic 
                Stabilization Act of 2008, including the extent 
                to which this paragraph applies in the case of 
                any acquisition, merger, or reorganization of 
                an applicable employer.
          (6) Special rule for application to certain health 
        insurance providers.--
                  (A) In general.--No deduction shall be 
                allowed under this chapter--
                          (i) in the case of applicable 
                        individual remuneration which is for 
                        any disqualified taxable year beginning 
                        after December 31, 2012, and which is 
                        attributable to services performed by 
                        an applicable individual during such 
                        taxable year, to the extent that the 
                        amount of such remuneration exceeds 
                        $500,000, or
                          (ii) in the case of deferred 
                        deduction remuneration for any taxable 
                        year beginning after December 31, 2012, 
                        which is attributable to services 
                        performed by an applicable individual 
                        during any disqualified taxable year 
                        beginning after December 31, 2009, to 
                        the extent that the amount of such 
                        remuneration exceeds $500,000 reduced 
                        (but not below zero) by the sum of--
                                  (I) the applicable individual 
                                remuneration for such 
                                disqualified taxable year, plus
                                  (II) the portion of the 
                                deferred deduction remuneration 
                                for such services which was 
                                taken into account under this 
                                clause in a preceding taxable 
                                year (or which would have been 
                                taken into account under this 
                                clause in a preceding taxable 
                                year if this clause were 
                                applied by substituting 
                                ``December 31, 2009'' for 
                                ``December 31, 2012'' in the 
                                matter preceding subclause 
                                (I)).
                  (B) Disqualified taxable year.--For purposes 
                of this paragraph, the term ``disqualified 
                taxable year'' means, with respect to any 
                employer, any taxable year for which such 
                employer is a covered health insurance 
                provider.
                  (C) Covered health insurance provider.--For 
                purposes of this paragraph--
                          (i) In general.--The term ``covered 
                        health insurance provider'' means--
                                  (I) with respect to taxable 
                                years beginning after December 
                                31, 2009, and before January 1, 
                                2013, any employer which is a 
                                health insurance issuer (as 
                                defined in section 9832(b)(2)) 
                                and which receives premiums 
                                from providing health insurance 
                                coverage (as defined in section 
                                9832(b)(1)), and
                                  (II) with respect to taxable 
                                years beginning after December 
                                31, 2012, any employer which is 
                                a health insurance issuer (as 
                                defined in section 9832(b)(2)) 
                                and with respect to which not 
                                less than 25 percent of the 
                                gross premiums received from 
                                providing health insurance 
                                coverage (as defined in section 
                                9832(b)(1)) is from minimum 
                                essential coverage (as defined 
                                in section 5000A(f)).
                          (ii) Aggregation rules.--Two or more 
                        persons who are treated as a single 
                        employer under subsection (b), (c), 
                        (m), or (o) of section 414 shall be 
                        treated as a single employer, except 
                        that in applying section 1563(a) for 
                        purposes of any such subsection, 
                        paragraphs (2) and (3) thereof shall be 
                        disregarded.
                  (D) Applicable individual remuneration.--For 
                purposes of this paragraph, the term 
                ``applicable individual remuneration'' means, 
                with respect to any applicable individual for 
                any disqualified taxable year, the aggregate 
                amount allowable as a deduction under this 
                chapter for such taxable year (determined 
                without regard to this subsection) for 
                remuneration (as defined in paragraph (4) 
                without regard to subparagraph (B) thereof) for 
                services performed by such individual (whether 
                or not during the taxable year). Such term 
                shall not include any deferred deduction 
                remuneration with respect to services performed 
                during the disqualified taxable year.
                  (E) Deferred deduction remuneration.--For 
                purposes of this paragraph, the term ``deferred 
                deduction remuneration'' means remuneration 
                which would be applicable individual 
                remuneration for services performed in a 
                disqualified taxable year but for the fact that 
                the deduction under this chapter (determined 
                without regard to this paragraph) for such 
                remuneration is allowable in a subsequent 
                taxable year.
                  (F) Applicable individual.--For purposes of 
                this paragraph, the term ``applicable 
                individual'' means, with respect to any covered 
                health insurance provider for any disqualified 
                taxable year, any individual--
                          (i) who is an officer, director, or 
                        employee in such taxable year, or
                          (ii) who provides services for or on 
                        behalf of such covered health insurance 
                        provider during such taxable year.
                  (G) Coordination.--Rules similar to the rules 
                of subparagraphs (D) and (E) of paragraph (4) 
                shall apply for purposes of this paragraph.
                  (H) Regulatory authority.--The Secretary may 
                prescribe such guidance, rules, or regulations 
                as are necessary to carry out the purposes of 
                this paragraph.
  (n) Special rule for certain group health plans.--
          (1) In general.--No deduction shall be allowed under 
        this chapter to an employer for any amount paid or 
        incurred in connection with a group health plan if the 
        plan does not reimburse for inpatient hospital care 
        services provided in the State of New York--
                  (A) except as provided in subparagraphs (B) 
                and (C), at the same rate as licensed 
                commercial insurers are required to reimburse 
                hospitals for such services when such 
                reimbursement is not through such a plan,
                  (B) in the case of any reimbursement through 
                a health maintenance organization, at the same 
                rate as health maintenance organizations are 
                required to reimburse hospitals for such 
                services for individuals not covered by such a 
                plan (determined without regard to any 
                government-supported individuals exempt from 
                such rate), or
                  (C) in the case of any reimbursement through 
                any corporation organized under Article 43 of 
                the New York State Insurance Law, at the same 
                rate as any such corporation is required to 
                reimburse hospitals for such services for 
                individuals not covered by such a plan.
          (2) State law exception.--Paragraph (1) shall not 
        apply to any group health plan which is not required 
        under the laws of the State of New York (determined 
        without regard to this subsection or other provisions 
        of Federal law) to reimburse at the rates provided in 
        paragraph (1).
          (3) Group health plan.--For purposes of this 
        subsection, the term ``group health plan'' means a plan 
        of, or contributed to by, an employer or employee 
        organization (including a self-insured plan) to provide 
        health care (directly or otherwise) to any employee, 
        any former employee, the employer, or any other 
        individual associated or formerly associated with the 
        employer in a business relationship, or any member of 
        their family.
  (o) Treatment of certain expenses of rural mail carriers.--
          (1) General rule.--In the case of any employee of the 
        United States Postal Service who performs services 
        involving the collection and delivery of mail on a 
        rural route and who receives qualified reimbursements 
        for the expenses incurred by such employee for the use 
        of a vehicle in performing such services--
                  (A) the amount allowable as a deduction under 
                this chapter for the use of a vehicle in 
                performing such services shall be equal to the 
                amount of such qualified reimbursements; and
                  (B) such qualified reimbursements shall be 
                treated as paid under a reimbursement or other 
                expense allowance arrangement for purposes of 
                section 62(a)(2)(A) (and section 62(c) shall 
                not apply to such qualified reimbursements).
          (2) Special rule where expenses exceed 
        reimbursements.--Notwithstanding paragraph (1)(A), if 
        the expenses incurred by an employee for the use of a 
        vehicle in performing services described in paragraph 
        (1) exceed the qualified reimbursements for such 
        expenses, such excess shall be taken into account in 
        computing the miscellaneous itemized deductions of the 
        employee under section 67.
          (3) Definition of qualified reimbursements.--For 
        purposes of this subsection, the term ``qualified 
        reimbursements'' means the amounts paid by the United 
        States Postal Service to employees as an equipment 
        maintenance allowance under the 1991 collective 
        bargaining agreement between the United States Postal 
        Service and the National Rural Letter Carriers' 
        Association. Amounts paid as an equipment maintenance 
        allowance by such Postal Service under later collective 
        bargaining agreements that supersede the 1991 agreement 
        shall be considered qualified reimbursements if such 
        amounts do not exceed the amounts that would have been 
        paid under the 1991 agreement, adjusted by increasing 
        any such amount under the 1991 agreement by an amount 
        equal to--
                  (A) such amount, multiplied by
                  (B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in 
                which the taxable year begins, by substituting 
                ``calendar year 1990'' for ``calendar year 
                2016'' in subparagraph (A)(ii) thereof.
  (p) Treatment of expenses of members of reserve component of 
Armed Forces of the United States.--For purposes of subsection 
(a)(2), in the case of an individual who performs services as a 
member of a reserve component of the Armed Forces of the United 
States at any time during the taxable year, such individual 
shall be deemed to be away from home in the pursuit of a trade 
or business for any period during which such individual is away 
from home in connection with such service.
  (q) Payments related to sexual harassment and sexual abuse.--
No deduction shall be allowed under this chapter for--
          (1) any settlement or payment related to sexual 
        harassment or sexual abuse if such settlement or 
        payment is subject to a nondisclosure agreement, or
          (2) attorney's fees related to such a settlement or 
        payment.
  (r) Disallowance of FDIC premiums paid by certain large 
financial institutions.--
          (1) In general.--No deduction shall be allowed for 
        the applicable percentage of any FDIC premium paid or 
        incurred by the taxpayer.
          (2) Exception for small institutions.--Paragraph (1) 
        shall not apply to any taxpayer for any taxable year if 
        the total consolidated assets of such taxpayer 
        (determined as of the close of such taxable year) do 
        not exceed $10,000,000,000.
          (3) Applicable percentage.--For purposes of this 
        subsection, the term ``applicable percentage'' means, 
        with respect to any taxpayer for any taxable year, the 
        ratio (expressed as a percentage but not greater than 
        100 percent) which--
                  (A) the excess of--
                          (i) the total consolidated assets of 
                        such taxpayer (determined as of the 
                        close of such taxable year), over
                          (ii) $10,000,000,000, bears to
                  (B) $40,000,000,000.
          (4) FDIC premiums.--For purposes of this subsection, 
        the term ``FDIC premium'' means any assessment imposed 
        under section 7(b) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)).
          (5) Total consolidated assets.--For purposes of this 
        subsection, the term ``total consolidated assets'' has 
        the meaning given such term under section 165 of the 
        Dodd-Frank Wall Street Reform and Consumer Protection 
        Act (12 U.S.C. 5365).
          (6) Aggregation rule.--
                  (A) In general.--Members of an expanded 
                affiliated group shall be treated as a single 
                taxpayer for purposes of applying this 
                subsection.
                  (B) Expanded affiliated group.--
                          (i) In general.--For purposes of this 
                        paragraph, the term ``expanded 
                        affiliated group'' means an affiliated 
                        group as defined in section 1504(a), 
                        determined--
                                  (I) by substituting ``more 
                                than 50 percent'' for ``at 
                                least 80 percent'' each place 
                                it appears, and
                                  (II) without regard to 
                                paragraphs (2) and (3) of 
                                section 1504(b).
                          (ii) Control of non-corporate 
                        entities.--A partnership or any other 
                        entity (other than a corporation) shall 
                        be treated as a member of an expanded 
                        affiliated group if such entity is 
                        controlled (within the meaning of 
                        section 954(d)(3)) by members of such 
                        group (including any entity treated as 
                        a member of such group by reason of 
                        this clause).
  (s) Cross reference.--
                  (1) For special rule relating to expenses in 
                connection with subdividing real property for 
                sale, see section 1237.
                  (2) For special rule relating to the 
                treatment of payments by a transferee of a 
                franchise, trademark, or trade name, see 
                section 1253.
                  (3) For special rules relating to--
                          (A) funded welfare benefit plans, see 
                        section 419, and
                          (B) deferred compensation and other 
                        deferred benefits, see section 404.

           *       *       *       *       *       *       *


                                  [all]