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116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-247
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 2513) TO ENSURE THAT
PERSONS WHO FORM CORPORATIONS OR LIMITED LIABILITY COMPANIES IN THE
UNITED STATES DISCLOSE THE BENEFICIAL OWNERS OF THOSE CORPORATIONS OR
LIMITED LIABILITY COMPANIES, IN ORDER TO PREVENT WRONGDOERS FROM
EXPLOITING UNITED STATES CORPORATIONS AND LIMITED LIABILITY COMPANIES
FOR CRIMINAL GAIN, TO ASSIST LAW ENFORCEMENT IN DETECTING, PREVENTING,
AND PUNISHING TERRORISM, MONEY LAUNDERING, AND OTHER MISCONDUCT
INVOLVING UNITED STATES CORPORATIONS AND LIMITED LIABILITY COMPANIES,
AND FOR OTHER PURPOSES
_______
October 21, 2019.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Perlmutter, from the Committee on Rules,
submitted the following
R E P O R T
[To accompany H. Res. 646]
The Committee on Rules, having had under consideration
House Resolution 646, by a record vote of 9 to 4, report the
same to the House with the recommendation that the resolution
be adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 2513, the
Corporate Transparency Act of 2019, under a structured rule.
The resolution provides one hour of general debate on the bill
equally divided and controlled by the chair and ranking
minority member of the Committee on Financial Services. The
resolution waives all points of order against consideration of
the bill. The resolution provides that the amendment in the
nature of a substitute recommended by the Committee on
Financial Services now printed in the bill, modified by the
amendment printed in Part A of this report, shall be considered
as adopted and the bill as amended shall be considered as read.
The resolution waives all points of order against provisions in
H.R. 2513, as amended. The resolution makes in order only those
amendments printed in Part B of this report. Each such
amendment may be offered only in the order printed in this
report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of
the question in the House or in the Committee of the Whole. The
resolution waives all points of order against the amendments
printed in Part B of this report. The resolution provides one
motion to recommit with or without instructions.
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
H.R. 2513 includes waivers of the following:
Clause 12(a)(1) of rule XXI, which prohibits
consideration of a bill unless there is a searchable
electronic comparative print that shows how the bill
proposes to change current law.
Clause 12(b) of rule XXI, which prohibits
consideration of a bill unless there is a searchable
electronic comparative print that shows how the text of
the bill as proposed to be considered differs from the
text of the bill as reported.
Clause 10 of rule XXI, which prohibits
consideration of a measure that has a net effect of
increasing the deficit or reducing the surplus over the
five- or 10-year period; however, the budgetary effects
of the bill are fully offset over the 10-year period.
Section 302(f) of the Congressional Budget
Act, which prohibits consideration of legislation
providing new budget authority in excess of a 302(a) or
302(b) allocation of such authority.
Although the resolution waives all points of order against
provisions in H.R. 2513, as amended, the Committee is not aware
of any points of order. The waiver is prophylactic in nature.
Although the resolution waives all points of order against
the amendments printed in part B of this report, the Committee
is not aware of any points of order. The waiver is prophylactic
in nature.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 180
Motion by Mr. Cole to report an open rule. Defeated: 4-9
----------------------------------------------------------------------------------------------------------------
Majority Members Vote Minority Members Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings.................................... Nay Mr. Cole.......................... Yea
Mrs. Torres..................................... Nay Mr. Woodall....................... Yea
Mr. Perlmutter.................................. Nay Mr. Burgess....................... Yea
Mr. Raskin...................................... Nay Mrs. Lesko........................ Yea
Ms. Scanlon..................................... Nay
Mr. Morelle..................................... Nay
Ms. Shalala..................................... Nay
Mr. DeSaulnier.................................. Nay
Mr. McGovern, Chairman.......................... Nay
----------------------------------------------------------------------------------------------------------------
Rules Committee record vote No. 181
Motion by Mr. Perlmutter to report the rule. Adopted: 9-4
----------------------------------------------------------------------------------------------------------------
Majority Members Vote Minority Members Vote
----------------------------------------------------------------------------------------------------------------
Mr. Hastings.................................... Yea Mr. Cole.......................... Nay
Mrs. Torres..................................... Yea Mr. Woodall....................... Nay
Mr. Perlmutter.................................. Yea Mr. Burgess....................... Nay
Mr. Raskin...................................... Yea Mrs. Lesko........................ Nay
Ms. Scanlon..................................... Yea
Mr. Morelle..................................... Yea
Ms. Shalala..................................... Yea
Mr. DeSaulnier.................................. Yea
Mr. McGovern, Chairman.......................... Yea
----------------------------------------------------------------------------------------------------------------
SUMMARY OF THE AMENDMENT TO H.R. 2513 IN PART A CONSIDERED AS ADOPTED
1. Waters (CA): Adds the text of H.R. 2514, ``The COUNTER
Act of 2019,'' into the underlying bill and makes necessary
conforming and technical changes. H.R. 2514 closes significant
loopholes that are commonly abused by bad actors and will make
it harder for terrorists, traffickers, corrupt officials, and
other criminals to hide, launder, move, and use their illicitly
gained assets. H.R. 2514 also imposes new penalties for
egregious acts and creates a whistleblower program to encourage
those who identify bad actors, among other matters.
SUMMARY OF THE AMENDMENTS TO H.R. 2513 IN PART B MADE IN ORDER
1. Burgess (TX): Requires an annual report to Congress of
anonymized data on the number of beneficial owners per
reporting corporation or LLC, the industry of each reporting
corporation or LLC, and the location of the beneficial owners.
(10 minutes)
2. Hill, French (AR): Requires FinCEN to develop a regime
by which entities may gain access to the beneficial ownership
database. Also requires FinCEN to report to Congress annually
on: 1) the number of times law enforcement, banks, or other
third parties have accessed the beneficial ownership database;
2) the number of times the database was inappropriately
accessed; and 3) the number of subpoenas obtained to gain
access to the database. (10 minutes)
3. Brown (MD): Adds refresher training no less than every 2
years for local, Tribal, State, or Federal law enforcement
agencies who have access to beneficial ownership information to
ensure the privacy of beneficial owners. (10 minutes)
4. Levin, Andy (MI): Ensures FinCEN may use the information
obtained by this bill to notify industry and the public about
criminal trends, while maintaining safeguards on personal
privacy. (10 minutes)
5. Davidson (OH): Strikes the bill's reporting mandate on
small businesses, terminates the Customer Due Diligence Rule,
and requires Treasury to conduct a study about all existing
federal information databases available to law enforcement to
discern the beneficial ownership of companies. (10 minutes)
PART A--TEXT OF AMENDMENT TO H.R. 2513 CONSIDERED AS ADOPTED
Page 3, before line 3, insert the following:
DIVISION A--CORPORATE TRANSPARENCY ACT OF 2019
Page 3, line 4, strike ``This Act'' and insert the following:
(a) In General.--This Act
Page 3, after line 5, insert the following:
(b) References to This Act.--In this division--
(1) any reference to ``this Act'' shall be deemed a
reference to ``this division''; and
(2) except as otherwise expressly provided, any
reference to a section or other provision shall be
deemed a reference to that section or other provision
of this division.
Page 26, after line 23, insert the following (and redesignate
subsequent clauses accordingly):
``(xvi) any pooled investment vehicle
that is operated or advised by a person
described in clause (iii), (iv), (v),
(vi), (viii), (ix), or (xi);''.
Page 30, strike line 20 and all that follows through page 32,
line 8, and insert the following:
(b) Authorization of Appropriations.--There is authorized to
be appropriated $20,000,000 for each of fiscal years 2020 and
2021 to the Financial Crimes Enforcement Network to carry out
this Act and the amendments made by this Act.
Add at the end the following:
DIVISION B--COUNTER ACT OF 2019
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:
DIVISION B--COUNTER ACT OF 2019
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 J--IMPROVING AML/CFT OVERSIGHT
Sec. 201. Pilot program on sharing of suspicious activity reports within
a financial group.
Sec. 202. Sharing of compliance resources.
Sec. 203. GAO Study on feedback loops.
Sec. 204. FinCEN study on BSA value.
Sec. 205. Sharing of threat pattern and trend information.
Sec. 206. Modernization and upgrading whistleblower protections.
Sec. 207. Certain violators barred from serving on boards of United
States financial institutions.
Sec. 208. Additional damages for repeat Bank Secrecy Act violators.
Sec. 209. Justice annual report on deferred and non-prosecution
agreements.
Sec. 210. Return of profits and bonuses.
Sec. 211. Application of Bank Secrecy Act to dealers in antiquities.
Sec. 212. Geographic targeting order.
Sec. 213. Study and revisions to currency transaction reports and
suspicious activity reports.
Sec. 214. Streamlining requirements for currency transaction reports and
suspicious activity reports.
TITLE K--MODERNIZING THE AML SYSTEM
Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Testing methods rulemaking.
Sec. 305. FinCEN study on use of emerging technologies.
Sec. 306. Discretionary surplus funds.
(c) References to This Act.--In this division--
(1) any reference to ``this Act'' shall be deemed a
reference to ``this division''; and
(2) except as otherwise expressly provided, any
reference to a section or other provision shall be
deemed a reference to that section or other provision
of this division.
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 and'' 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. The authority of the Secretary to enter into contracts
under this subsection shall be in effect for each fiscal year
only to the extent and in the amounts as are provided in
advance in appropriations Acts.
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;
(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; and
(7) any best practices from the private sector that
facilitate correspondent bank relationships.
(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, including territories and
possessions of 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 J--IMPROVING AML/CFT OVERSIGHT
SEC. 201. 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) Pilot program on sharing with foreign branches,
subsidiaries, and affiliates.--
``(A) In general.--The Secretary of the
Treasury shall issue rules establishing the
pilot program described under subparagraph (B),
subject to such controls and restrictions as
the Director of the Financial Crimes
Enforcement Network determines appropriate,
including controls and restrictions regarding
participation by financial institutions and
jurisdictions in the pilot program. 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 a 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
subparagraphs (A) and (C);
``(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--
``(i) the People's Republic of China;
``(ii) the Russian Federation; or
``(iii) a jurisdiction that--
``(I) is subject to
countermeasures imposed by the
Federal Government;
``(II) is a state sponsor of
terrorism; or
``(III) the Secretary has
determined cannot reasonably
protect the privacy and
confidentiality of such
information or would otherwise
use such information in a
manner that is not consistent
with the national interest of
the United States.
``(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.
``(E) Rule of construction.--Nothing in this
paragraph shall be construed as limiting the
Secretary's authority under provisions of law
other than this paragraph to establish other
permissible purposes or methods for a financial
institution sharing reports (and information on
such reports) under this subsection with the
institution's foreign headquarters or with
other branches of the same institution.
``(F) Notice of use of other authority.--If
the Secretary, pursuant to any authority other
than that provided under this paragraph,
permits a financial institution to share
information on reports under this subsection
with a foreign branch, subsidiary, or affiliate
located in a foreign jurisdiction, the
Secretary shall notify the Committee on
Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of such permission
and the applicable foreign jurisdiction.
``(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''; 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,''.
(b) Rulemaking.--Not later than the end of the 360-day 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. 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. 203. 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. 204. 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. 205. 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. 206. 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, subject to amounts made
available in advance by appropriation Acts, use 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,
subject to amounts made available in advance by
appropriation Acts, use 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. 207. 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. 208. 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. 209. 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. 210. 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. 211. 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 and definitions should
apply in determining which entities to
regulate;
(C) an evaluation of which markets, by size,
entity type, domestic or international
geographical locations, or otherwise, should be
subject to regulations, but only to the extent
such markets are not already required to report
on the trade of works of art or antiquities to
the Federal Government;
(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. 212. 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. 213. 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
money services businesses, 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. The authority of the
Director to enter into contracts under this paragraph
shall be in effect for each fiscal year only to the
extent and in the amounts as are provided in advance in
appropriations Acts.
(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. 214. 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 K--MODERNIZING THE AML SYSTEM
SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.
Section 5318 of title 31, United States Code, as amended by
section 202, 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.--Subchapter II of chapter 53 of title 31,
United States Code, is amended by adding at the end the
following:
``Sec. 5333. 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:
``5333. 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. 5334. 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 the end the following:
``5334. Innovation Council.''.
SEC. 304. TESTING METHODS 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) Testing.--
``(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 related
technology-internal processes (`new
technology') designed to facilitate compliance
with the Bank Secrecy Act requirements, the
standards by which financial institutions are
to test new technology; and
``(B) in what instances or under what
circumstance and criteria a financial
institution may replace or terminate 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) 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, upon request.
``(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.
SEC. 306. DISCRETIONARY SURPLUS FUNDS.
(a) In General.--Section 7(a)(3)(A) of the Federal Reserve
Act (12 U.S.C. 289(a)(3)(A)) is amended by striking
``$6,825,000,000'' and inserting ``$6,798,000,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on September 30, 2029.
----------
PART B--TEXT OF AMENDMENTS TO H.R. 2513 MADE IN ORDER
1. An Amendment To Be Offered by Representative Burgess of Texas or His
Designee, Debatable for 10 Minutes
Page 36, after line 8, insert the following:
(d) Annual Report on Beneficial Ownership Information.--
(1) Report.--The Secretary of the Treasury shall
issue an annual report to the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate with respect to the beneficial ownership
information collected pursuant to section 5333 of title
31, United States Code, that contains--
(A) aggregate data on the number of
beneficial owners per reporting corporation or
limited liability company;
(B) the industries or type of business of
each reporting corporation or limited liability
company; and
(C) the locations of the beneficial owners.
(2) Privacy.--In issuing reports under paragraph (1),
the Secretary shall not reveal the identities of
beneficial owners or names of the reporting
corporations or limited liability companies.
----------
2. An Amendment To Be Offered by Representative Hill of Arkansas or His
Designee, Debatable for 10 Minutes
Page 17, after line 19, insert the following:
``(D) Access procedures.--FinCEN shall
establish stringent procedures for the
protection and proper use of beneficial
ownership information disclosed pursuant to
subparagraph (B), including procedures to
ensure such information is not being
inappropriately accessed or misused by law
enforcement agencies.
``(E) Report to congress.--FinCEN shall issue
an annual report to Congress stating--
``(i) the number of times law
enforcement agencies and financial
institutions have accessed beneficial
ownership information pursuant to
subparagraph (B);
``(ii) the number of times beneficial
ownership information reported to
FinCEN pursuant to this section was
inappropriately accessed, and by whom;
and
``(iii) the number of times
beneficial ownership information was
disclosed under subparagraph (B)
pursuant to a subpoena.''.
----------
3. An Amendment To Be Offered by Representative Brown of Maryland or
His Designee, Debatable for 10 Minutes
Page 16, line 8, after ``training,'' insert the following:
``and refresher training no less than every two years,''.
----------
4. An Amendment To Be Offered by Representative Levin of Michigan or
His Designee, Debatable for 10 Minutes
Page 17, after line 19, insert the following:
``(D) Disclosure of non-pii data.--
Notwithstanding subparagraph (B), FinCEN may
issue guidance and otherwise make materials
available to financial institutions and the
public using beneficial ownership information
reported pursuant to this section if such
information is aggregated in a manner that
removes all personally identifiable
information. For purposes of this subparagraph,
`personally identifiable information' includes
information that would allow for the
identification of a particular corporation or
limited liability company.''.
----------
5. An Amendment To Be Offered by Representative Davidson of Ohio or His
Designee, Debatable for 10 Minutes
Strike sections 1 through 5 and insert the following:
SECTION 1. TERMINATION OF CDD RULE.
The final rule of the Department of the Treasury titled
``Customer Due Diligence Requirements for Financial
Institutions'' (published May 11, 2016; 81 Fed. Reg. 29397)
shall have no force or effect.
SEC. 2. FINCEN STUDY.
(a) Study.--FinCEN shall carry out a study that shall
include--
(1) a review of all existing data collected by the
Department of the Treasury (including the Internal
Revenue Service), by State Secretaries of State, by
financial institutions due to current statutory and
regulatory mandates (excluding the CDD rule), or by
other Federal Government entities, that in whole or in
part would allow FinCEN to discern the beneficial
owners of companies operating in the United States
financial system;
(2) recommendations for the sharing of information
described under paragraph (1) with FinCEN along with
proposed safeguards for protecting personally
identifiable information from unauthorized access,
including by Federal intelligence and law enforcement
officials, as well as internal risk control mechanisms
for prevention of unauthorized access through a cyber
breach; and
(3) an estimation of the cost of the compliance
burden for the CDD rule.
(b) Report.--Not later than September 30, 2019, FinCEN shall
issue a report to the Congress containing all findings and
determinations made in carrying out the study required under
subsection (a).
(c) Definitions.--For purposes of this section:
(1) CDD rule.--The term ``CDD rule'' means the final
rule of the Department of the Treasury described under
section 1.
(2) Financial institution.--The term ``financial
institution'' has the meaning given that tem under
section 5312 of title 31, United States Code.
(3) FinCEN.--The term ``FinCEN'' means the Financial
Crimes Enforcement Network.
