I 

113TH CONGRESS 

1ST SESSION H. R. 3317 

To strengthen the Federal statutes designed to deter money laundering and 

terrorism financing, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 23, 2013 

Ms. WATERS (for herself, Mrs. CAROLYN B. MALONEY of New York, Mr. AL

GREEN of Texas, Mr. CLAY, Mr. CAPUANO, Mr. MEEKS, Ms. MOORE, and 

Mr. LYNCH) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on the 

Judiciary, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To strengthen the Federal statutes designed to deter money 

laundering and terrorism financing, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Holding Individuals Accountable and Deterring Money 

6 Laundering Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—HOLDING EXECUTIVES RESPONSIBLE FOR VIOLATIONS 

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

Sec. 102. Criminal penalties. 

Sec. 103. Strengthening civil injunctive authority. 

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

Sec. 105. Independent litigation authority for FinCEN. 

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

Sec. 107. Corporate governance and the legal responsibilities. 

TITLE II—STRENGTHENING OF REGULATORY OVERSIGHT AND 

ACCOUNTABILITY 

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

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

TITLE III—CLARIFICATION OF SAFE HARBOR PROTECTIONS 

Sec. 301. Safe harbor protections. 

TITLE IV—STRENGTHENING REQUIREMENTS AND CLOSING 

LOOPHOLES 

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

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

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

TITLE V—WHISTLEBLOWER PROTECTIONS 

Sec. 501. Modernization and upgrading whistleblower protections. 

TITLE VI—SENSE OF THE CONGRESS REGARDING CRIMINAL 

PENALTIES 

Sec. 601. Sense of the Congress. 

TITLE VII—STRENGTHENING GLOBAL COMMITMENTS 

Sec. 701. International coordination. 

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

laundering. 

1 SEC. 2. FINDINGS. 

2 The Congress finds the following: 

3 (1) Money laundering is a serious threat to our 

4 national and economic security. The scale, efficiency, 

5 and complexity of the U.S. financial system make it 


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1 a prime target for those who seek to conceal and 

2 move the proceeds of illicit activity. 

3 (2) The spate of recent high-profile enforcement 

4 actions against some of the largest and most sophis5 ticated financial institutions raises troubling ques6 tions about the effectiveness of U.S. domestic anti7 money laundering and counter-terrorism financing 

8 regulatory, compliance and enforcement efforts. 

9 (3) Money launderers have proven to adapt 

10 quickly in order to avoid detection. U.S. anti-money 

11 laundering laws and regulations must be rigorously 

12 reviewed and constantly updated to close loopholes 

13 and address the changing tactics employed by bad 

14 actors. 

15 (4) Given the global nature of money laun16 dering and terrorist financing and the increasing 

17 interrelatedness of the global financial system, a se18 cure global framework is essential to the integrity of 

19 the U.S. financial system. 

20 (5) Efforts to stanch the flow of illegal money 

21 across the world to drug cartels and terrorist organi22 zations should be a top U.S. priority. To achieve this 

23 mission, extensive collaboration among financial reg24 ulators, the Department of Treasury, the DepartVerDate Mar 15 2010 06:51 Oct 24, 2013 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3317.IH H3317

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1 ment of State, the Department of Justice and state 

2 and federal law enforcement agencies is required. 

3 (6) U.S. anti-money laundering laws should 

4 meet international standards set by the Financial 

5 Action Task Force. 

6 (7) Without serious consequences for institu7 tions and individuals who fail to protect financial in8 stitutions from illicit financial activity – including 

9 significant fines, banning individuals from the indus10 try, and prison sentences for those who seek to ac11 tively evade anti-money laundering controls, finan12 cial institutions and individuals will continue to 

13 avoid compliance with U.S. anti-money laundering 

14 rules and regulations. 

15 (8) Effective anti-money laundering programs 

16 must emphasize sound corporate governance includ17 ing business line accountability and clear lines of 

18 legal responsibility for individuals, including board 

19 members and chief executive officers. 

20 (9) Avoiding money laundering risks requires 

21 an effective anti-money laundering program and a 

22 strong institutional compliance culture, with written 

23 standards, knowledgeable and adequate staff, strong 

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1 dering training, and compensation structures that 

2 reward compliance. 

3 (10) Anti-money laundering deficiencies often 

4 reflect weaknesses in the management of a financial 

5 firm, which can in turn adversely affect the firm’s 

6 overall safety and soundness. Failure to account for 

7 management deficiencies in this context may perpet8 uate a false perception of the stability of financial 

9 firms. 

10 (11) Anti-money laundering examinations in re11 cent years at times failed to recognize the cumu12 lative effect of the violations they cited, instead nar13 rowly focusing their attention on individual banking 

14 units. The failure to review the cumulative effect of 

15 such violations permitted national banks to avoid 

16 and delay correcting problems, which allowed mas17 sive problems to occur before serious enforcement 

18 actions were taken. 

19 (12) Independent contractors often play a cen20 tral role in monitoring and auditing the overall ade21 quacy and effectiveness of a bank’s compliance pro22 gram under the Bank Secrecy Act. Any failure to 

23 hold these independent entities to the same standard 

24 as any other party who participates in the affairs of 


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1 a bank may jeopardize the efficacy of a bank’s anti2 money laundering program. 

3 (13) Collaboration is an essential component of 

4 the U.S. strategy against money laundering, and is 

5 critical to our national security. U.S. law enforce6 ment agencies are most effective when they work to7 gether by sharing information, insight, and data. 

8 (14) The flow of information related to sus9 picious activity from financial institutions to law en10 forcement plays a key role in facilitating the disrup11 tion of terrorist networks that seek to harm the 

12 United States. The flow of such information depends 

13 on a high degree of certainty that financial institu14 tions will be protected from civil liability when shar15 ing such information with federal law enforcement 

16 agencies. 

17 (15) Whistleblower rights and protections play 

18 an important role in helping to ensure corporate in19 tegrity. Robust protections for whistleblowers and 

20 enhanced rewards for informants will incentivize 

21 compliance with anti-money laundering rules and 

22 procedures, and encourage the provision of valuable 

23 information to regulators and law enforcement agen24 cies. 


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1 TITLE I—HOLDING EXECUTIVES 

2 RESPONSIBLE FOR VIOLATIONS 

3 SEC. 101. PENALTIES FOR VIOLATIONS OF THE BANK SE4 CRECY ACT. 

5 (a) CIVIL MONETARY PENALTIES FOR WILLFUL VIO6 LATIONS.—Section 5321(a) of title 31, United States 

7 Code, is amended— 

8 (1) by striking ‘‘(a)(1) A domestic financial in9 stitution’’ and inserting the following: 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) CIVIL MONETARY PENALTIES FOR WILL12 FUL VIOLATIONS.—A domestic financial institution’’; 

13 (2) in paragraph (1)— 

14 (A) by striking ‘‘willfully violating’’ each 

15 place such term appears and inserting ‘‘willfully 

16 violating, or willfully causing any violation of,’’; 

17 (B) by striking ‘‘the amount (not to exceed 

18 $100,000) involved in the transaction (if any) 

19 or $25,000’’ and inserting ‘‘10 times the 

20 amount (not to exceed $10,000,000) involved in 

21 the transaction (if any) or $250,000’’; and 

22 (C) by adding at the end the following: ‘‘In 

23 determining appropriate monetary penalty 

24 amounts under this paragraph, the Secretary 

25 has the authority to ensure that penalty 


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1 amounts are commensurate with the nature of 

2 the violations, any patterns of violations, and, 

3 with respect to a financial institution or non4 financial trade or business, the size, capitaliza5 tion and market share of such institution or 

6 trade or business.’’; and 

7 (3) in paragraph (4)(A), by inserting after 

8 ‘‘who violates’’ the following: ‘‘, or causes any viola9 tion of,’’. 

10 (b) CIVIL MONETARY PENALTIES FOR NEGLIGENT

11 VIOLATIONS.—Section 5321(a)(6) of title 31, United 

12 States Code, is amended to read as follows: 

13 ‘‘(6) NEGLIGENCE.— 

14 ‘‘(A) IN GENERAL.—The Secretary of the 

15 Treasury may impose a civil money penalty, for neg16 ligent violations of any provision of this subchapter 

17 or any regulation prescribed under this subchapter, 

18 of not more than— 

19 ‘‘(i) $50,000, with respect to a financial in20 stitution or nonfinancial trade or business; and 

21 ‘‘(ii) $5,000, with respect to any partner, 

22 director, officer, or employee of an institution, 

23 trade, or business. 

24 ‘‘(B) VIOLATIONS OF THE REQUIREMENT TO

25 MAINTAIN PROCEDURES TO ENSURE COMPLIANCE.— 


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1 For a violation of a regulation prescribed under sec2 tion 5318(a)(2), a separate violation occurs for each 

3 day the violation continues and at each office, 

4 branch, or place of business at which a violation oc5 curs or continues. 

6 ‘‘(C) DETERMINATION OF PENALTY AMOUNT.— 

7 In determining appropriate monetary penalty 

8 amounts under this paragraph, the Secretary has 

9 the authority to ensure that penalty amounts are 

10 commensurate with the nature of the violations, any 

11 patterns of violations, and, with respect to a finan12 cial institution or nonfinancial trade or business, the 

13 size, capitalization and market share of such institu14 tion or trade or business.’’. 

15 SEC. 102. CRIMINAL PENALTIES. 

16 (a) IN GENERAL.—Section 5322 of title 31, United 

17 States Code, is amended— 

18 (1) by redesignating subsections (c) and (d) as 

19 subsections (d) and (e), respectively; 

20 (2) by inserting after subsection (b) the fol21 lowing: 

22 ‘‘(c) FACILITATING EVASION.—In the case of a per23 son described under subsection (a) or (b) who additionally 

24 takes steps to facilitate evasion of a program or controls 

25 under a regulation prescribed or order issued under this 


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1 subchapter (except section 5315 or 5324 of this title or 

2 a regulation prescribed under section 5315 or 5324), sec3 tion 21 of the Federal Deposit Insurance Act, or section 

4 123 of Public Law 91–508, the maximum prison terms 

5 under such subsections shall be treated as 20 years.’’; and 

6 (3) by adding at the end the following: 

7 ‘‘(f) REPORT.—In any case in which the Department 

8 of Justice settles a case with an individual or institution 

9 for violations under the this subchapter in exchange for 

10 a monetary penalty, the Department shall report to the 

11 Congress on why it did or did not pursue prison sentences 

12 in conjunction with the monetary penalty.’’. 

13 (b) GAO REVIEW OF BANK SECRECY ACT CRIMINAL

14 SENTENCES AND MANDATORY MINIMUM SENTENCING.— 

15 (1) STUDY.—The Comptroller General of the 

16 United States shall carry out a study of the manda17 tory minimum sentencing laws and guidelines for 

18 narcotics-related offenses and the prosecutorial dis19 cretion provided to the Department of Justice in de20 termining criminal penalties for persons found guilty 

21 of violating Federal anti-money laundering laws. In 

22 carrying out such study, the Comptroller General 

23 shall compare and contrast the severity of the two 

24 sets of felonies. 


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1 (2) REPORT.—Not later than the end of the 6- 

2 month period following the date of the enactment of 

3 this Act, the Comptroller General shall issue a re4 port to the Congress containing all findings and de5 terminations made in carrying out the study re6 quired by subsection (a), including any disparities 

7 identified in the appropriateness of the differing sen8 tencing procedures and recommendations for estab9 lishing a more balanced sentencing system for Fed10 eral felonious acts. 

11 SEC. 103. STRENGTHENING CIVIL INJUNCTIVE AUTHORITY. 

12 Section 5320 of title 31, United States Code, is 

13 amended— 

14 (1) by striking ‘‘When the Secretary’’ and in15 serting the following: 

16 ‘‘(a) IN GENERAL.—When the Secretary’’; and 

17 (2) by inserting after ‘‘will violate’’ the fol18 lowing: ‘‘or has caused, is causing, or will cause a 

19 violation of’’; and 

20 (3) by inserting at the end the following: 

21 ‘‘(b) PROHIBITION ON CERTAIN INDIVIDUALS.—In 

22 any proceeding under subsection (a), the court may pro23 hibit, conditionally or unconditionally, and permanently or 

24 for such period of time as it shall determine, any indi25 vidual who violated this subchapter, or a regulation preVerDate Mar 15 2010 06:51 Oct 24, 2013 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3317.IH H3317

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1 scribed or order issued under this subchapter, from acting 

2 as an officer or director of a financial institution if the 

3 person’s conduct demonstrates unfitness to serve as an of4 ficer or director of a financial institution.’’. 

5 SEC. 104. CLARIFICATION OF REMOVAL AND PROHIBITION 

6 AUTHORITY UNDER THE FDIA. 

7 Section 8(e)(2)(A) of the Federal Deposit Insurance 

8 Act (12 U.S.C. 1818(e)(2)(A)) is amended— 

9 (1) in clause (i), by striking ‘‘was not inad10 vertent or unintentional’’ and inserting ‘‘involved a 

11 reckless disregard for the law or any applicable regu12 lations or prior order of the appropriate Federal 

13 banking agency’’; and 

14 (2) in clause (ii), by striking ‘‘has knowledge’’ 

15 and inserting ‘‘knew, or should have known,’’. 

16 SEC. 105. INDEPENDENT LITIGATION AUTHORITY FOR 

17 FINCEN. 

18 Section 310 of title 31, United States Code, is 

19 amended— 

20 (1) by redesignating subsection (d) as sub21 section (e); and 

22 (2) by inserting after subsection (c) the fol23 lowing: 

24 ‘‘(d) INDEPENDENT LITIGATION AUTHORITY.— 

25 FinCEN may act in its own name and through its own 


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1 attorneys in enforcing any provision of subchapter II of 

2 chapter 53, section 21 of the Federal Deposit Insurance 

3 Act, section 123 of Public Law 91–508, any rules there4 under, or any other law or regulation, or in any action, 

5 suit, or proceeding relating to such laws or regulations to 

6 which the Financial Crimes Enforcement Network is a 

7 party.’’. 

8 SEC. 106. TREATMENT OF EXECUTIVE COMPENSATION AND 

9 PERSONAL LIABILITY. 

10 (a) CERTAIN EXECUTIVE COMPENSATION INCEN11 TIVES BARRED.—The appropriate Federal banking agen12 cies, the Securities and Exchange Commission, the Com13 modities Futures Trading Commission, and the Financial 

14 Crimes Enforcement Network shall issue regulations pro15 hibiting financial institutions that are subject to an anti16 money laundering program requirement under chapter X 

17 of title 31, Code of Federal Regulations, from providing 

18 executive compensation based on any criteria that could 

19 undermine compliance by individuals with the require20 ments of subchapter II of chapter 53 of title 31, United 

21 States Code, section 21 of the Federal Deposit Insurance 

22 Act (12 U.S.C. 1829b), or section 123 of Public Law 91– 

23 508. 

24 (b) NO AVOIDANCE OF PERSONAL LIABILITY.— 


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1 (1) IN GENERAL.—An officer, director, em2 ployee, or other institution-affiliated party of a fi3 nancial institution that is subject to an anti-money 

4 laundering program requirement under chapter X of 

5 title 31, Code of Federal Regulations, who is re6 quired by a Federal bank secrecy law that provides 

7 for personal liability, or any rule or order promul8 gated by an appropriate Federal banking agency, the 

9 Securities and Exchange Commission, the Com10 modity Futures Trading Commission, or the Finan11 cial Crimes Enforcement Network thereunder, to 

12 repay previously earned executive compensation or 

13 pay a civil money penalty— 

14 (A) shall be personally liable for the 

15 amounts so owed; and 

16 (B) may not, directly or indirectly, insure 

17 or hedge against, or otherwise transfer the risks 

18 associated with, personal liability for the 

19 amounts so owed. 

20 (2) RULE OF CONSTRUCTION.—Paragraph (1) 

21 shall not preclude a person from being provided 

22 funds necessary to defend against an action to re23 cover previously earned executive compensation or a 

24 civil money penalty described under paragraph (1)— 


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1 (A) from the relevant financial institution 

2 subject to an anti-money laundering program 

3 under chapter X of title 31, Code of Federal 

4 Regulations; 

5 (B) under an insurance policy; or 

6 (C) pursuant to court order. 

7 (c) DEFINITIONS.—For purposes of this section: 

8 (1) APPROPRIATE FEDERAL BANKING AGEN9 CY.—The term ‘‘appropriate Federal banking agen10 cy’’ has the meaning given such term under section 

11 3 of the Federal Deposit Insurance Act (12 U.S.C. 

12 1813). 

13 (2) EXECUTIVE COMPENSATION.—The term 

14 ‘‘executive compensation’’ means anything of value, 

15 regardless of the form in which provided, that is 

16 given by any institution subject to subsection (a) or 

17 its parent company to an officer, director, employee, 

18 or other institution-affiliated party in return for that 

19 individual’s service to such entity. 

20 (3) FEDERAL BANK SECRECY LAW.—The term 

21 ‘‘Federal bank secrecy law’’ means— 

22 (A) the reporting requirements set forth in 

23 section 21 of the Federal Deposit Insurance Act 

24 (12 U.S.C. 1829b); 


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

2 and 

3 (C) subchapter II of chapter 53 of title 31, 

4 United States Code. 

5 (4) INSTITUTION-AFFILIATED PARTY.—The 

6 term ‘‘institution-affiliated party’’— 

7 (A) has the meaning given such term 

8 under subsection (u) of section 3 of the Federal 

9 Deposit Insurance Act (12 U.S.C. 1813); and 

10 (B) shall apply with respect to an institu11 tion subject to subsection (a) and its parent 

12 company to the same extent as such subsection 

13 applies to an insured depository institution. 

14 SEC. 107. CORPORATE GOVERNANCE AND THE LEGAL RE15 SPONSIBILITIES. 

16 (a) IN GENERAL.—Chapter 53 of title 31, United 

17 States Code, is amended— 

18 (1) by inserting after section 5322, the fol19 lowing: 

20 ‘‘§ 5322A. Corporate governance and the legal respon21 sibility of officers and employees 

22 ‘‘(a) ENSURING COMPLIANCE.—The Secretary of the 

23 Treasury, in consultation with the appropriate Federal 

24 banking agencies, the Securities and Exchange Commis25 sion, and the Commodities Futures Trading Commission, 


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1 shall issue regulations requiring each financial institution 

2 that is subject to an anti-money laundering program re3 quirement under chapter X of title 31, Code of Federal 

4 Regulations, to ensure compliance with the anti-money 

5 laundering program requirements described under section 

6 5318(h) by establishing written policies, procedures, and 

7 risk management standards for ensuring compliance with 

8 the requirements of this subtitle that— 

9 ‘‘(1) require the head of compliance for each 

10 business line of such institution to make regular re11 ports directly to the board of directors and the chief 

12 executive officer of such institution on the business 

13 line’s compliance activities; 

14 ‘‘(2) require the board to certify each report re15 ceived pursuant to paragraph (1); 

16 ‘‘(3) ensure adequate staffing and funding for 

17 entities within the institution responsible for compli18 ance with the requirements of this subtitle; and 

19 ‘‘(4) periodically test the effectiveness of the in20 stitution’s programs for compliance with the require21 ments of this subtitle. 

22 ‘‘(b) LEGAL RESPONSIBILITY OF CERTAIN OFFICERS

23 AND EMPLOYEES.—With respect to any violation of this 

24 subtitle by a each financial institution that is subject to 

25 an anti-money laundering program requirement under 


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1 chapter X of title 31, Code of Federal Regulations, any 

2 officer or other employee who was in a position that would 

3 have enabled such officer or employee to materially affect 

4 compliance with the requirements of this subtitle shall also 

5 be in violation of this subtitle, if such officer or other em6 ployee knew, or should have known, that such violation 

7 was being committed and did not take meaningful steps 

8 to stop such violation. 

9 ‘‘(c) CLAWBACK EMPLOYMENT PROVISION.—Each fi10 nancial institution that is subject to an anti-money laun11 dering program requirement under chapter X of title 31, 

12 Code of Federal Regulations, shall, in each employment 

13 agreement entered into by such institution, include a pro14 vision that gives the institution the right to require the 

15 repayment of any bonus or other compensation paid to the 

16 employee in any case where such employee was violating 

17 a provision of this subchapter and knew, or should have 

18 known, of such violation. 

19 ‘‘(d) DEFINITION.—For purposes of this section, the 

20 term ‘appropriate Federal banking agency’ has the mean21 ing given such term under section 3 of the Federal Deposit 

22 Insurance Act (12 U.S.C.1813).’’; and 

23 (2) in the table of contents for such chapter, by 

24 inserting after the item relating to section 5322 the 

25 following new item: 


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

1 (b) EFFECTIVE DATE.—The amendments made by 

2 subsection (a) shall apply to a financial institution (as 

3 such term is defined under section 5312 of title 31, United 

4 States Code) after the end of the 6-month period begin5 ning on the date of the enactment of this Act. 

6 TITLE II—STRENGTHENING OF 

7 REGULATORY OVERSIGHT 

8 AND ACCOUNTABILITY 

9 SEC. 201. REPORTING AND OVERSIGHT OF BANK SECRECY 

10 ACT-RELATED ENFORCEMENT ACTIONS. 

11 (a) IN GENERAL.—Chapter 53 of title 31, United 

12 States Code, is amended— 

13 (1) by inserting after section 5326 the fol14 lowing: 

15 ‘‘§ 5327. Oversight of examination and enforcement 

16 activities 

17 ‘‘(a) REPORTING OF ENFORCEMENT ACTIVITIES TO

18 FINCEN.—Each appropriate Federal banking agency, the 

19 Securities and Exchange Commission, and the Commodity 

20 Futures Trading Commission shall report to FinCEN on 

21 each formal and informal enforcement or supervisory ac22 tion, including each matter requiring attention, and each 

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1 ciency, taken by such agency to enforce the requirements 

2 of this subchapter, including, for each such action— 

3 ‘‘(1) the type of violation or deficiency with re4 spect to which the enforcement or supervisory action 

5 was taken; and 

6 ‘‘(2) the specific type of formal or informal en7 forcement or supervisory action taken. 

8 ‘‘(b) REVIEW OF REPORTS BY FINCEN.— 

9 ‘‘(1) IN GENERAL.—FinCEN shall review all re10 ports submitted by agencies under subsection (a) to 

11 identify systemic or repeated instances of non-com12 pliance and, if FinCEN determines that an agency 

13 has failed to adequately or appropriately carry out 

14 the agency’s enforcement responsibilities with re15 spect to the requirements of this subchapter, 

16 FinCEN shall issue a report to such agency con17 taining an explanation of FinCEN’s determination. 

18 ‘‘(2) REPORT TO THE CONGRESS.—FinCEN 

19 shall issue an annual report to the Congress con20 taining— 

21 ‘‘(A) a summary of all formal and informal 

22 enforcement or supervisory actions for which 

23 FinCEN received notification from the agencies 

24 under subsection (a), but without any privileged 

25 or confidential information contained in such 


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1 report, as identified by the agency submitting 

2 the report; and 

3 ‘‘(B) any recommendations made by 

4 FinCEN to such agencies in response to a de5 termination by FinCEN that the agency failed 

6 to adequately or appropriately carry out the 

7 agency’s enforcement or supervisory responsi8 bility or failed to take adequate or appropriate 

9 corrective action in response to any individual 

10 violation or pattern of violations. 

11 ‘‘(c) INSPECTOR GENERAL REVIEW OF PROCE12 DURES.—The Inspector General of each appropriate Fed13 eral banking agency shall— 

14 ‘‘(1) carry out at least one review each year of 

15 the agency’s examination and enforcement activities 

16 with respect to ensuring compliance with the re17 quirements of this subchapter and ensuring ade18 quate resources are being devoted to such enforce19 ment; and 

20 ‘‘(2) make such reviews available to the public, 

21 including on the website of the Inspector General. 

22 ‘‘(d) DEFINITIONS.—For purposes of this section: 

23 ‘‘(1) FINCEN.—The term ‘FinCEN’ means the 

24 Financial Crimes Enforcement Network. 


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1 ‘‘(2) OTHER TERMS.—The terms ‘appropriate 

2 Federal banking agency’ and ‘insured depository in3 stitution’ have the meaning given those terms, re4 spectively, under section 3 of the Federal Deposit 

5 Insurance Act (12 U.S.C.1813).’’; and 

6 (2) in the table of contents for such chapter, by 

7 inserting after the item relating to section 5326 the 

8 following new item: 

‘‘5327. Oversight of examination and enforcement activities.’’. 

9 (b) CONFIDENTIALITY OF INFORMATION SUBMITTED

10 TO FINCEN.—Section 310 of title 31, United States 

11 Code, is amended— 

12 (1) by redesignating subsection (d) as sub13 section (e); and 

14 (2) by inserting after subsection (c) the fol15 lowing: 

16 ‘‘(d) CONFIDENTIALITY OF INFORMATION SUB17 MITTED TO FINCEN.—The submission by any appro18 priate Federal banking agency (as such term is defined 

19 under section 3 of the Federal Deposit Insurance Act) of 

20 any information to FinCEN for any purpose in the course 

21 of any supervisory or regulatory process of such agency 

22 shall not be construed as waiving, destroying, or otherwise 

23 affecting any privilege, including confidentiality of super24 visory information, that any agency or person may claim 


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1 with respect to such information under Federal or State 

2 law.’’. 

3 SEC. 202. CONSIDERATION OF BSA COMPLIANCE IN MAN4 AGEMENT RATINGS. 

5 (a) IN GENERAL.—To the extent there are ratings 

6 of a depository institution’s management and internal con7 trols, the appropriate Federal banking agencies shall con8 sider the extent to which the institution complies with the 

9 requirements of the Bank Secrecy Act. 

10 (b) DEFINITIONS.— 

11 (1) BANK SECRECY ACT.—The term ‘‘Bank Se12 crecy Act’’ has the meaning given the term ‘‘Federal 

13 bank secrecy law’’ under section 106(c)(5). 

14 (2) OTHER DEFINITIONS.—The terms ‘‘appro15 priate Federal banking agency’’ and ‘‘depository in16 stitution’’ have the meaning given those terms, re17 spectively, under section 3 of the Federal Deposit 

18 Insurance Act (12 U.S.C. 1813). 

19 TITLE III—CLARIFICATION OF 

20 SAFE HARBOR PROTECTIONS 

21 SEC. 301. SAFE HARBOR PROTECTIONS. 

22 (a) DISCLOSURE TO GOVERNMENT AGENCIES.—Sec23 tion 5318(g)(3)(B) of title 31, United States Code, is 

24 amended— 

25 (1) in clause (i), by striking ‘‘or’’ at the end; 


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1 (2) in clause (ii), by striking the period and in2 serting ‘‘; or’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(iii) any duty or requirement of a fi5 nancial institution or any director, officer, 

6 employee, or agent of such institution to 

7 demonstrate that a disclosure described in 

8 subparagraph (A) is made in good faith.’’. 

9 (b) DISCLOSURE TO FINANCIAL INSTITUTIONS.— 

10 Section 314 of the USA PATRIOT Act (31 U.S.C. 5311 

11 note) is amended— 

12 (1) in subsection (b)— 

13 (A) by striking ‘‘terrorist or money laun14 dering activities’’ and inserting ‘‘terrorist or 

15 money laundering activities or a specified un16 lawful activity (as defined in section 1956(c)(7) 

17 of title 18, United States Code)’’; and 

18 (B) by striking ‘‘terrorist acts or money 

19 laundering activities’’ and inserting ‘‘such acts 

20 or activities’’; and 

21 (2) in subsection (c), by striking ‘‘terrorist acts 

22 or money laundering activities’’ and inserting ‘‘ter23 rorist or money laundering activities or a specified 

24 unlawful activity (as defined in section 1956(c)(7) of 

25 title 18, United States Code)’’. 


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1 TITLE IV—STRENGTHENING RE2 QUIREMENTS AND CLOSING 

3 LOOPHOLES 

4 SEC. 401. EXPANDING THE CRIMES THAT CAN BE A PREDI5 CATE OFFENSE TO MONEY LAUNDERING. 

6 Section 1956(c)(7) of title 18, United States Code, 

7 is amended to read as follows: 

8 ‘‘(7) the term ‘specified unlawful activity’ 

9 means any act or activity constituting an offense in 

10 violation of the laws of the United States punishable 

11 by imprisonment for a term exceeding 1 year;’’. 

12 SEC. 402. CLOSING LOOPHOLES IN BANK SECRECY ACT RE13 PORTING. 

14 (a) REPORT TO CONGRESS ON THE STATUS OF THE

15 TEMPORARY EXEMPTIONS.—FinCEN shall issue a report 

16 to Congress on the status of the temporary exemptions 

17 under section 1010.205(b) of title 31, Code of Federal 

18 Regulations, including any reviews, studies, or proposed 

19 or notice of a rulemaking that FinCEN has undertaken 

20 with regard to each financial institution that is exempted 

21 from the requirement concerning the establishment of 

22 anti-money laundering programs. The report shall also in23 clude a justification for the exemption of each category 

24 of financial institution exempted under the regulation. 


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1 (b) REPORTING BY CERTAIN TRANSPORTERS.—Not 

2 later than the end of the 270-day period beginning on the 

3 date of the enactment of this Act, the Secretary of the 

4 Treasury shall issue final regulations to establish the man5 ner in which operators of armored cars and other commer6 cial monetary instrument transport enterprises are to 

7 comply with the reporting requirements under section 

8 5316 of title 31, United States Code. 

9 SEC. 403. DEFINITION OF AN INSTITUTION-AFFILIATED 

10 PARTY. 

11 (a) DEFINITION.—Section 3 of the Federal Deposit 

12 Insurance Act (12 U.S.C. 1813(u)) is amended— 

13 (1) in subsection (u)(4), by striking ‘‘know14 ingly’’ and all that follows through the end of the 

15 paragraph and inserting ‘‘participates in the conduct 

16 of, the affairs of, or conducts the business of an in17 sured depository institution.’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(aa) UNSAFE OR UNSOUND PRACTICE.—The term 

20 ‘unsafe or unsound practice’ means, any action, or lack 

21 of action, which is contrary to generally accepted stand22 ards of prudent operation, the possible consequences of 

23 which, if continued, would be abnormal risk or loss or 

24 damage to an institution, its shareholders, or the Deposit 

25 Insurance Fund.’’. 


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1 (b) RULE OF CONSTRUCTION RELATED TO INDE2 PENDENT CONTRACTORS.—Section 8 of the Federal De3 posit Insurance Act (12 U.S.C. 1818) is amended by add4 ing at the end the following: 

5 ‘‘(x) RULE OF CONSTRUCTION RELATED TO INDE6 PENDENT CONTRACTORS.—For purposes of this Act, an 

7 independent contractor participates in the conduct of the 

8 affairs of, or conducts the business of, an insured deposi9 tory institution by performing services for the institu10 tion.’’. 

11 TITLE V—WHISTLEBLOWER 

12 PROTECTIONS 

13 SEC. 501. MODERNIZATION AND UPGRADING WHISTLE14 BLOWER PROTECTIONS. 

15 (a) IN GENERAL.—Section 5328 of title 31, United 

16 States Code, is amended— 

17 (1) by striking subsections (a) and (b) and in18 serting the following: 

19 ‘‘(a) PROHIBITION AGAINST DISCRIMINATION.—No 

20 financial institution or nonfinancial trade or business may 

21 discharge or otherwise discriminate against any applicant 

22 for employment, employee, or former employee with re23 spect to compensation, terms, conditions, or privileges of 

24 employment because the applicant, employee, or former 


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1 employee (or any person acting pursuant to the request 

2 of the employee)— 

3 ‘‘(1) provided, was about to provide, assisted in 

4 providing, or was perceived as providing information 

5 to the Secretary of the Treasury, the Attorney Gen6 eral, any Federal supervisory agency, or the Con7 gress regarding a possible violation of any provision 

8 of this subchapter or section 1956, 1957, or 1960 of 

9 title 18, or any regulation under any such provision, 

10 by the financial institution or nonfinancial trade or 

11 business or any director, officer, or employee of the 

12 financial institution or nonfinancial trade or busi13 ness; or 

14 ‘‘(2) objected to, or refused to participate in, 

15 any activity, policy, practice, or assigned task that 

16 the applicant, employee, former employee (or other 

17 such person) reasonably believed to be in violation of 

18 any provision of this subchapter or any other Act 

19 enforced by the Secretary of the Treasury, the At20 torney General, a Federal supervisory agency, or any 

21 order, rule, regulation, standard, or ban under this 

22 subchapter of any of such Acts. 

23 ‘‘(b) ENFORCEMENT.—Within the 2-year period be24 ginning on the date an applicant, employee, or former em25 ployee who believes that such applicant, employee, or 


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1 former employee has been discharged or discriminated 

2 against in violation of subsection (a), such applicant, em3 ployee, or former employee may— 

4 ‘‘(1) file a civil action in the appropriate United 

5 States district court, in accordance with the burdens 

6 of proof and remedies set forth in section 1057 of 

7 the Consumer Financial Protection Act of 2010 (12 

8 U.S.C. 5567); or 

9 ‘‘(2) file a complaint with the Secretary of 

10 Labor with regards to a violation of subsection (a) 

11 to seek relief in accordance with the procedures, bur12 dens of proof, and remedies set forth in section 1057 

13 of the Consumer Financial Protection Act of 2010 

14 (12 U.S.C. 5567) for a violation of subsection (a) of 

15 such section, except that for purposes of such a com16 plaint, the time period specified under subsection 

17 (c)(1)(A) of such section shall be deemed to be a 2- 

18 year period.’’; 

19 (2) in subsection (c), by inserting after ‘‘district 

20 court’’ the following: ‘‘or the Secretary, as applica21 ble,’’; and 

22 (3) by amending subsection (e) to read as fol23 lows: 

24 ‘‘(e) EDUCATION.—The Secretary of the Treasury 

25 shall issue regulations requiring each financial institution 


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1 and nonfinancial trade or business to provide education 

2 and training to its employees on the rights and remedies 

3 provided under this section, including through individual 

4 notice to its employees, posting information on its website 

5 home page, and providing mandatory training for its em6 ployees. Such education and training may be incorporated 

7 into existing education or training on the requirements of 

8 this subtitle provided by such institution or trade or busi9 ness. 

10 ‘‘(f) INDEPENDENT LINES OF COMMUNICATION.— 

11 The Secretary of the Treasury shall issue regulations re12 quiring each financial institution and nonfinancial trade 

13 or business— 

14 ‘‘(1) to have a procedure in place for an em15 ployee or former employee to report directly to the 

16 chief executive officer, a representative appointed by 

17 and reporting directly to the chief executive officer 

18 who is specifically designated to receive such a re19 port, or through a hotline consistent with profes20 sional best practices to the audit committee of the 

21 board of directors, if such employee or former em22 ployee believes that violations of this subchapter 

23 have occurred or are occurring at such institution, 

24 trade, or business; and 


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1 ‘‘(2) to not discriminate against an employee or 

2 former employee for such reports.’’. 

3 (b) REWARDS.—Section 5323(d) of title 31, United 

4 States Code, is amended to read as follows: 

5 ‘‘(d) SOURCE OF REWARDS.—For the purposes of 

6 paying an award under this section, there are authorized 

7 to be appropriated such sums as may be necessary, and 

8 the Secretary may also use funds from the Department 

9 of the Treasury Forfeiture Fund and the Department of 

10 Justice Assets Forfeiture Fund.’’. 

11 (c) WHISTLEBLOWER INCENTIVES.— 

12 Chapter 53 of title 31, United States Code, is 

13 amended— 

14 (1) by inserting after section 5323 the fol15 lowing: 

16 ‘‘§ 5323A. Whistleblower incentives 

17 ‘‘(a) DEFINITIONS.—For purposes of this section: 

18 ‘‘(1) BANK SECRECY ACT.—The term ‘Bank Se19 crecy Act’ means this subchapter, section 21 of the 

20 Federal Deposit Insurance Act (12 U.S.C. 1829b), 

21 and section 123 of Public Law 91–508. 

22 ‘‘(2) COVERED JUDICIAL OR ADMINISTRATIVE

23 ACTION.—The term ‘covered judicial or administra24 tive action’ means any judicial or administrative ac25 tion brought by FinCEN under the Bank Secrecy 


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1 Act that results in monetary sanctions exceeding 

2 $1,000,000. 

3 ‘‘(3) FINCEN.—The term ‘FinCEN’ means the 

4 Financial Crimes Enforcement Network. 

5 ‘‘(4) MONETARY SANCTIONS.—The term ‘mone6 tary sanctions’, when used with respect to any judi7 cial or administrative action, means— 

8 ‘‘(A) any monies, including penalties, 

9 disgorgement, and interest, ordered to be paid; 

10 and 

11 ‘‘(B) any monies deposited into a 

12 disgorgement fund as a result of such action or 

13 any settlement of such action. 

14 ‘‘(5) ORIGINAL INFORMATION.—The term 

15 ‘original information’ means information that— 

16 ‘‘(A) is derived from the independent 

17 knowledge or analysis of a whistleblower; 

18 ‘‘(B) is not known to FinCEN from any 

19 other source, unless the whistleblower is the 

20 original source of the information; and 

21 ‘‘(C) is not exclusively derived from an al22 legation made in a judicial or administrative 

23 hearing, in a governmental report, hearing, 

24 audit, or investigation, or from the news media, 


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1 unless the whistleblower is a source of the infor2 mation. 

3 ‘‘(6) RELATED ACTION.—The term ‘related ac4 tion’, when used with respect to any judicial or ad5 ministrative action brought by FinCEN, means any 

6 judicial or administrative action that is based upon 

7 original information provided by a whistleblower that 

8 led to the successful enforcement of the action. 

9 ‘‘(7) WHISTLEBLOWER.—The term ‘whistle10 blower’ means any individual who provides, or 2 or 

11 more individuals acting jointly who provide, informa12 tion relating to a violation of laws enforced by 

13 FinCEN, in a manner established, by rule or regula14 tion, by FinCEN. 

15 ‘‘(b) AWARDS.— 

16 ‘‘(1) IN GENERAL.—In any covered judicial or 

17 administrative action, or related action, FinCEN, 

18 under regulations it prescribes and subject to sub19 section (c), shall pay an award or awards to 1 or 

20 more whistleblowers who voluntarily provided origi21 nal information to FinCEN that led to the success22 ful enforcement of the covered judicial or adminis23 trative action, or related action, in an aggregate 

24 amount equal to— 


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1 ‘‘(A) not less than 10 percent, in total, of 

2 what has been collected of the monetary sanc3 tions imposed in the action or related actions; 

4 and 

5 ‘‘(B) not more than 30 percent, in total, of 

6 what has been collected of the monetary sanc7 tions imposed in the action or related actions. 

8 ‘‘(2) SOURCE OF AWARDS.—For the purposes of 

9 paying any award under paragraph (1) there are au10 thorized to be appropriated such sums as may be 

11 necessary, and the Secretary may also use funds 

12 from the Department of the Treasury Forfeiture 

13 Fund and the Department of Justice Assets For14 feiture Fund. 

15 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE16 NIAL OF AWARD.— 

17 ‘‘(1) DETERMINATION OF AMOUNT OF

18 AWARD.— 

19 ‘‘(A) DISCRETION.—The determination of 

20 the amount of an award made under subsection 

21 (b) shall be in the discretion of FinCEN. 

22 ‘‘(B) CRITERIA.—In responding to a dis23 closure and determining the amount of an 

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1 tleblower to discuss evidence disclosed and 

2 rebuttals to the disclosure, and— 

3 ‘‘(i) shall take into consideration— 

4 ‘‘(I) the significance of the infor5 mation provided by the whistleblower 

6 to the success of the covered judicial 

7 or administrative action; 

8 ‘‘(II) the degree of assistance 

9 provided by the whistleblower and any 

10 legal representative of the whistle11 blower in a covered judicial or admin12 istrative action; 

13 ‘‘(III) the mission of FinCEN in 

14 deterring violations of the law by 

15 making awards to whistleblowers who 

16 provide information that lead to the 

17 successful enforcement of such laws; 

18 and 

19 ‘‘(IV) such additional relevant 

20 factors as FinCEN may establish by 

21 rule or regulation; and 

22 ‘‘(ii) shall not take into consideration 

23 the balance of any fund described under 

24 section 5323(d). 


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1 ‘‘(2) DENIAL OF AWARD.—No award under 

2 subsection (b) shall be made— 

3 ‘‘(A) to any whistleblower who is, or was at 

4 the time the whistleblower acquired the original 

5 information submitted to FinCEN, a member, 

6 officer, or employee of— 

7 ‘‘(i) an appropriate regulatory agency; 

8 ‘‘(ii) the Department of Justice; 

9 ‘‘(iii) a self-regulatory organization; or 

10 ‘‘(iv) a law enforcement organization; 

11 ‘‘(B) to any whistleblower who is convicted 

12 of a criminal violation related to the judicial or 

13 administrative action for which the whistle14 blower otherwise could receive an award under 

15 this section; 

16 ‘‘(C) to any whistleblower who gains the 

17 information through the performance of an 

18 audit of financial statements required under the 

19 Bank Secrecy Act and for whom such submis20 sion would be contrary to its requirements; or 

21 ‘‘(D) to any whistleblower who fails to sub22 mit information to FinCEN in such form as 

23 FinCEN may, by rule, require. 

24 ‘‘(3) STATEMENT OF REASONS.—For any deci25 sion granting or denying an award, FinCEN shall 


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1 provide to the whistleblower a statement of reasons 

2 that includes findings of fact and conclusions of law 

3 for all material issues 

4 ‘‘(d) REPRESENTATION.— 

5 ‘‘(1) PERMITTED REPRESENTATION.—Any 

6 whistleblower who makes a claim for an award under 

7 subsection (b) may be represented by counsel. 

8 ‘‘(2) REQUIRED REPRESENTATION.— 

9 ‘‘(A) IN GENERAL.—Any whistleblower 

10 who anonymously makes a claim for an award 

11 under subsection (b) shall be represented by 

12 counsel if the whistleblower anonymously sub13 mits the information upon which the claim is 

14 based. 

15 ‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 

16 the payment of an award, a whistleblower shall 

17 disclose their identity and provide such other 

18 information as FinCEN may require, directly or 

19 through counsel for the whistleblower. 

20 ‘‘(e) APPEALS.—Any determination made under this 

21 section, including whether, to whom, or in what amount 

22 to make awards, shall be in the discretion of FinCEN. 

23 Any such determination, except the determination of the 

24 amount of an award if the award was made in accordance 

25 with subsection (b), may be appealed to the appropriate 


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1 court of appeals of the United States not more than 30 

2 days after the determination is issued by FinCEN. The 

3 court shall review the determination made by FinCEN in 

4 accordance with section 706 of title 5.’’; and 

5 (2) in the table of contents for such chapter, by 

6 inserting after the item relating to section 5323 the 

7 following new item: 

‘‘5323A. Whistleblower incentives’’. 

8 TITLE VI—SENSE OF THE CON9 GRESS REGARDING CRIMINAL 

10 PENALTIES 

11 SEC. 601. SENSE OF THE CONGRESS. 

12 It is the sense of Congress that the Department of 

13 Justice should vigorously pursue criminal penalties to the 

14 maximum extent of the law, including prison sentences, 

15 for individuals who willfully violate Bank Secrecy Act anti16 money laundering laws, thereby exposing the U.S. finan17 cial system to a wide array of money laundering, drug 

18 trafficking and terrorism financing risks. 

19 TITLE VII—STRENGTHENING 

20 GLOBAL COMMITMENTS 

21 SEC. 701. INTERNATIONAL COORDINATION. 

22 The Secretary of the Treasury shall work with the 

23 Secretary’s foreign counterparts, including through the 

24 Financial Action Task Force, the International Monetary 

25 Fund, the World Bank, and the United Nations, to proVerDate Mar 15 2010 06:51 Oct 24, 2013 Jkt 039200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H3317.IH H3317

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1 mote stronger anti-money laundering frameworks and en2 forcement of anti-money laundering laws. 

3 SEC. 702. SENSE OF CONGRESS REGARDING LIST OF COUN4 TRIES AT HIGH RISK FOR MONEY LAUN5 DERING. 

6 It is the sense of Congress that when Treasury identi7 fies countries or jurisdictions as a primary money laun8 dering concern under section 311 of the USA Patriot Act, 

9 it should consider— 

10 (1) countries and jurisdictions identified by the 

11 Department of State in its annual International 

12 Narcotics Control Strategy Report as Jurisdictions 

13 of Primary Concern or jurisdiction’s subject to 

14 heightened scrutiny; 

15 (2) whether the Financial Action Task Force 

16 has identified a country or jurisdiction as having 

17 anti-money laundering or counter-terrorism financ18 ing deficiencies and to which countermeasures apply; 

19 and 

20 (3) countries and jurisdictions that have not 

21 made sufficient progress in addressing the defi22 ciencies identified by the Financial Action Task 

23 Force or have not committed to an action plan deVerDate Mar 15 2010 06:51 Oct 24, 2013 Jkt 039200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\H3317.IH H3317

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1 veloped with the Financial Action Task Force to ad2 dress the deficiencies. 

Æ 


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