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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2513 Engrossed in House (EH)]

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116th CONGRESS
  1st Session
                                H. R. 2513

_______________________________________________________________________

                                 AN ACT

 
   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.

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

             DIVISION A--CORPORATE TRANSPARENCY ACT OF 2019

SECTION 1. SHORT TITLE.

    (a) In General.--This Act may be cited as the ``Corporate 
Transparency Act of 2019''.
    (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.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Nearly 2,000,000 corporations and limited liability 
        companies are being formed under the laws of the States each 
        year.
            (2) Very few States require information about the 
        beneficial owners of the corporations and limited liability 
        companies formed under their laws.
            (3) A person forming a corporation or limited liability 
        company within the United States typically provides less 
        information at the time of incorporation than is needed to 
        obtain a bank account or driver's license and typically does 
        not name a single beneficial owner.
            (4) Criminals have exploited State formation procedures to 
        conceal their identities when forming corporations or limited 
        liability companies in the United States, and have then used 
        the newly created entities to commit crimes affecting 
        interstate and international commerce such as terrorism, 
        proliferation financing, drug and human trafficking, money 
        laundering, tax evasion, counterfeiting, piracy, securities 
        fraud, financial fraud, and acts of foreign corruption.
            (5) Law enforcement efforts to investigate corporations and 
        limited liability companies suspected of committing crimes have 
        been impeded by the lack of available beneficial ownership 
        information, as documented in reports and testimony by 
        officials from the Department of Justice, the Department of 
        Homeland Security, the Department of the Treasury, and the 
        Government Accountability Office, and others.
            (6) In July 2006, the leading international antimoney 
        laundering standard-setting body, the Financial Action Task 
        Force on Money Laundering (in this section referred to as the 
        ``FATF''), of which the United States is a member, issued a 
        report that criticizes the United States for failing to comply 
        with a FATF standard on the need to collect beneficial 
        ownership information and urged the United States to correct 
        this deficiency by July 2008. In December 2016, FATF issued 
        another evaluation of the United States, which found that 
        little progress has been made over the last ten years to 
        address this problem. It identified the ``lack of timely access 
        to adequate, accurate and current beneficial ownership 
        information'' as a fundamental gap in United States efforts to 
        combat money laundering and terrorist finance.
            (7) In response to the 2006 FATF report, the United States 
        has urged the States to obtain beneficial ownership information 
        for the corporations and limited liability companies formed 
        under the laws of such States.
            (8) In contrast to practices in the United States, all 28 
        countries in the European Union are required to have corporate 
        registries that include beneficial ownership information.
            (9) To reduce the vulnerability of the United States to 
        wrongdoing by United States corporations and limited liability 
        companies with hidden owners, to protect interstate and 
        international commerce from criminals misusing United States 
        corporations and limited liability companies, to strengthen law 
        enforcement investigations of suspect corporations and limited 
        liability companies, to set a clear, universal standard for 
        State incorporation practices, and to bring the United States 
        into compliance with international anti-money laundering 
        standards, Federal legislation is needed to require the 
        collection of beneficial ownership information for the 
        corporations and limited liability companies formed under the 
        laws of such States.

SEC. 3. TRANSPARENT INCORPORATION PRACTICES.

    (a) In General.--
            (1) Amendment to the bank secrecy act.--Chapter 53 of title 
        31, United States Code, is amended by inserting after section 
        5332 the following new section:
``Sec. 5333 Transparent incorporation practices
    ``(a) Reporting Requirements.--
            ``(1) Beneficial ownership reporting.--
                    ``(A) In general.--Each applicant to form a 
                corporation or limited liability company under the laws 
                of a State or Indian Tribe shall file a report with 
                FinCEN containing a list of the beneficial owners of 
                the corporation or limited liability company that--
                            ``(i) except as provided in paragraphs (3) 
                        and (4), and subject to paragraph (2), 
                        identifies each beneficial owner by--
                                    ``(I) full legal name;
                                    ``(II) date of birth;
                                    ``(III) current residential or 
                                business street address; and
                                    ``(IV) a unique identifying number 
                                from a non-expired passport issued by 
                                the United States, a non-expired 
                                personal identification card, or a non-
                                expired driver's license issued by a 
                                State; and
                            ``(ii) if the applicant is not a beneficial 
                        owner, also provides the identification 
                        information described in clause (i) relating to 
                        such applicant.
                    ``(B) Updated information.--Each corporation or 
                limited liability company formed under the laws of a 
                State or Indian Tribe shall--
                            ``(i) submit to FinCEN an annual filing 
                        containing a list of--
                                    ``(I) the current beneficial owners 
                                of the corporation or limited liability 
                                company and the information described 
                                in subparagraph (A) for each such 
                                beneficial owner; and
                                    ``(II) any changes in the 
                                beneficial owners of the corporation or 
                                limited liability company during the 
                                previous year; and
                            ``(ii) pursuant to any rule issued by the 
                        Secretary of the Treasury under subparagraph 
                        (C), update the list of the beneficial owners 
                        of the corporation or limited liability company 
                        within the time period prescribed by such rule.
                    ``(C) Rulemaking on updating information.--Not 
                later than 9 months after the completion of the study 
                required under section 4(a)(1) of the Corporate 
                Transparency Act of 2019, the Secretary of the Treasury 
                shall consider the findings of such study and, if the 
                Secretary determines it to be necessary or appropriate, 
                issue a rule requiring corporations and limited 
                liability companies to update the list of the 
                beneficial owners of the corporation or limited 
                liability company within a specified amount of time 
                after the date of any change in the list of beneficial 
                owners or the information required to be provided 
                relating to each beneficial owner.
                    ``(D) State notification.--Each State in which a 
                corporation or limited liability company is being 
                formed shall notify each applicant of the requirements 
                listed in subparagraphs (A) and (B).
            ``(2) Certain beneficial owners.--If an applicant to form a 
        corporation or limited liability company or a beneficial owner, 
        or similar agent of a corporation or limited liability company 
        who is required to provide identification information under 
        this subsection, does not have a nonexpired passport issued by 
        the United States, a nonexpired personal identification card, 
        or a non-expired driver's license issued by a State, each such 
        person shall provide to FinCEN the full legal name, current 
        residential or business street address, a unique identifying 
        number from a non-expired passport issued by a foreign 
        government, and a legible and credible copy of the pages of a 
        non-expired passport issued by the government of a foreign 
        country bearing a photograph, date of birth, and unique 
        identifying information for each beneficial owner, and each 
        application described in paragraph (1)(A) and each update 
        described in paragraph (1)(B) shall include a written 
        certification by a person residing in the State or Indian 
        country under the jurisdiction of the Indian Tribe forming the 
        entity that the applicant, corporation, or limited liability 
        company--
                    ``(A) has obtained for each such beneficial owner, 
                a current residential or business street address and a 
                legible and credible copy of the pages of a non-expired 
                passport issued by the government of a foreign country 
                bearing a photograph, date of birth, and unique 
                identifying information for the person;
                    ``(B) has verified the full legal name, address, 
                and identity of each such person;
                    ``(C) will provide the information described in 
                subparagraph (A) and the proof of verification 
                described in subparagraph (B) upon request of FinCEN; 
                and
                    ``(D) will retain the information and proof of 
                verification under this paragraph until the end of the 
                5-year period beginning on the date that the 
                corporation or limited liability company terminates 
                under the laws of the State or Indian Tribe.
            ``(3) Exempt entities.--
                    ``(A) In general.--With respect to an applicant to 
                form a corporation or limited liability company under 
                the laws of a State or Indian Tribe, if such entity is 
                described in subparagraph (C) or (D) of subsection 
                (d)(4) and will be exempt from the beneficial ownership 
                disclosure requirements under this subsection, such 
                applicant, or a prospective officer, director, or 
                similar agent of the applicant, shall file a written 
                certification with FinCEN--
                            ``(i) identifying the specific provision of 
                        subsection (d)(4) under which the entity 
                        proposed to be formed would be exempt from the 
                        beneficial ownership disclosure requirements 
                        under paragraphs (1) and (2);
                            ``(ii) stating that the entity proposed to 
                        be formed meets the requirements for an entity 
                        described under such provision of subsection 
                        (d)(4); and
                            ``(iii) providing identification 
                        information for the applicant or prospective 
                        officer, director, or similar agent making the 
                        certification in the same manner as provided 
                        under paragraph (1) or (2).
                    ``(B) Existing corporations or limited liability 
                companies.--On and after the date that is 2 years after 
                the final regulations are issued to carry out this 
                section, a corporation or limited liability company 
                formed under the laws of the State or Indian Tribe 
                before such date shall be subject to the requirements 
                of this subsection unless an officer, director, or 
                similar agent of the entity submits to FinCEN a written 
                certification--
                            ``(i) identifying the specific provision of 
                        subsection (d)(4) under which the entity is 
                        exempt from the requirements under paragraphs 
                        (1) and (2);
                            ``(ii) stating that the entity meets the 
                        requirements for an entity described under such 
                        provision of subsection (d)(4); and
                            ``(iii) providing identification 
                        information for the officer, director, or 
                        similar agent making the certification in the 
                        same manner as provided under paragraph (1) or 
                        (2).
                    ``(C) Exempt entities having ownership interest.--
                If an entity described in subparagraph (C) or (D) of 
                subsection (d)(4) has or will have an ownership 
                interest in a corporation or limited liability company 
                formed or to be formed under the laws of a State or 
                Indian Tribe, the applicant, corporation, or limited 
                liability company in which the entity has or will have 
                the ownership interest shall provide the information 
                required under this subsection relating to the entity, 
                except that the entity shall not be required to provide 
                information regarding any natural person who has an 
                ownership interest in, exercises substantial control 
                over, or receives substantial economic benefits from 
                the entity.
            ``(4) FinCEN id numbers.--
                    ``(A) Issuance of fincen id number.--
                            ``(i) In general.--FinCEN shall issue a 
                        FinCEN ID number to any individual who requests 
                        such a number and provides FinCEN with the 
                        information described under subclauses (I) 
                        through (IV) of paragraph (1)(A)(i).
                            ``(ii) Updating of information.--An 
                        individual with a FinCEN ID number shall submit 
                        an annual filing with FinCEN updating any 
                        information described under subclauses (I) 
                        through (IV) of paragraph (1)(A)(i).
                    ``(B) Use of fincen id number in reporting 
                requirements.--Any person required to report the 
                information described under paragraph (1)(A)(i) with 
                respect to an individual may instead report the FinCEN 
                ID number of the individual.
                    ``(C) Treatment of information submitted for fincen 
                id number.--For purposes of this section, any 
                information submitted under subparagraph (A) shall be 
                deemed to be beneficial ownership information.
            ``(5) Retention and disclosure of beneficial ownership 
        information by fincen.--
                    ``(A) Retention of information.--Beneficial 
                ownership information relating to each corporation or 
                limited liability company formed under the laws of the 
                State or Indian Tribe shall be maintained by FinCEN 
                until the end of the 5-year period (or such other 
                period of time as the Secretary of the Treasury may, by 
                rule, determine) beginning on the date that the 
                corporation or limited liability company terminates.
                    ``(B) Disclosure of information.--Beneficial 
                ownership information reported to FinCEN pursuant to 
                this section shall be provided by FinCEN only upon 
                receipt of--
                            ``(i) subject to subparagraph (C), a 
                        request, through appropriate protocols, by a 
                        local, Tribal, State, or Federal law 
                        enforcement agency;
                            ``(ii) a request made by a Federal agency 
                        on behalf of a law enforcement agency of 
                        another country under an international treaty, 
                        agreement, or convention, or an order under 
                        section 3512 of title 18 or section 1782 of 
                        title 28; or
                            ``(iii) a request made by a financial 
                        institution, with customer consent, as part of 
                        the institution's compliance with due diligence 
                        requirements imposed under the Bank Secrecy 
                        Act, the USA PATRIOT Act, or other applicable 
                        Federal, State, or Tribal law.
                    ``(C) Appropriate protocols.--
                            ``(i) Privacy.--The protocols described in 
                        subparagraph (B)(i) shall--
                                    ``(I) protect the privacy of any 
                                beneficial ownership information 
                                provided by FinCEN to a local, Tribal, 
                                State, or Federal law enforcement 
                                agency;
                                    ``(II) ensure that a local, Tribal, 
                                State, or Federal law enforcement 
                                agency requesting beneficial ownership 
                                information has an existing 
                                investigatory basis for requesting such 
                                information;
                                    ``(III) ensure that access to 
                                beneficial ownership information is 
                                limited to authorized users at a local, 
                                Tribal, State, or Federal law 
                                enforcement agency who have undergone 
                                appropriate training, and refresher 
                                training no less than every two years, 
                                and that the identity of such 
                                authorized users is verified through 
                                appropriate mechanisms, such as two-
                                factor authentication;
                                    ``(IV) include an audit trail of 
                                requests for beneficial ownership 
                                information by a local, Tribal, State, 
                                or Federal law enforcement agency, 
                                including, as necessary, information 
                                concerning queries made by authorized 
                                users at a local, Tribal, State, or 
                                Federal law enforcement agency;
                                    ``(V) require that every local, 
                                Tribal, State, or Federal law 
                                enforcement agency that receives 
                                beneficial ownership information from 
                                FinCEN conducts an annual audit to 
                                verify that the beneficial ownership 
                                information received from FinCEN has 
                                been accessed and used appropriately, 
                                and consistent with this paragraph; and
                                    ``(VI) require FinCEN to conduct an 
                                annual audit of every local, Tribal, 
                                State, or Federal law enforcement 
                                agency that has received beneficial 
                                ownership information to ensure that 
                                such agency has requested beneficial 
                                ownership information, and has used any 
                                beneficial ownership information 
                                received from FinCEN, appropriately, 
                                and consistent with this paragraph.
                            ``(ii) Limitation on use.--Beneficial 
                        ownership information provided to a local, 
                        Tribal, State, or Federal law enforcement 
                        agency under this paragraph may only be used 
                        for law enforcement, national security, or 
                        intelligence purposes.
                    ``(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.
                    ``(F) 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.
    ``(b) No Bearer Share Corporations or Limited Liability 
Companies.--A corporation or limited liability company formed under the 
laws of a State or Indian Tribe may not issue a certificate in bearer 
form evidencing either a whole or fractional interest in the 
corporation or limited liability company.
    ``(c) Penalties.--
            ``(1) In general.--It shall be unlawful for any person to 
        affect interstate or foreign commerce by--
                    ``(A) knowingly providing, or attempting to 
                provide, false or fraudulent beneficial ownership 
                information, including a false or fraudulent 
                identifying photograph, to FinCEN in accordance with 
                this section;
                    ``(B) willfully failing to provide complete or 
                updated beneficial ownership information to FinCEN in 
                accordance with this section; or
                    ``(C) knowingly disclosing the existence of a 
                subpoena or other request for beneficial ownership 
                information reported pursuant to this section, except--
                            ``(i) to the extent necessary to fulfill 
                        the authorized request; or
                            ``(ii) as authorized by the entity that 
                        issued the subpoena, or other request.
            ``(2) Civil and criminal penalties.--Any person who 
        violates paragraph (1)--
                    ``(A) shall be liable to the United States for a 
                civil penalty of not more than $10,000; and
                    ``(B) may be fined under title 18, United States 
                Code, imprisoned for not more than 3 years, or both.
            ``(3) Limitation.--Any person who negligently violates 
        paragraph (1) shall not be subject to civil or criminal 
        penalties under paragraph (2).
            ``(4) Waiver.--The Secretary of the Treasury may waive the 
        penalty for violating paragraph (1) if the Secretary determines 
        that the violation was due to reasonable cause and was not due 
        to willful neglect.
            ``(5) Criminal penalty for the misuse or unauthorized 
        disclosure of beneficial ownership information.--The criminal 
        penalties provided for under section 5322 shall apply to a 
        violation of this section to the same extent as such criminal 
        penalties apply to a violation described in section 5322, if 
        the violation of this section consists of the misuse or 
        unauthorized disclosure of beneficial ownership information.
    ``(d) Definitions.--For the purposes of this section:
            ``(1) Applicant.--The term `applicant' means any natural 
        person who files an application to form a corporation or 
        limited liability company under the laws of a State or Indian 
        Tribe.
            ``(2) 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.
            ``(3) Beneficial owner.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `beneficial owner' means a 
                natural person who, directly or indirectly, through any 
                contract, arrangement, understanding, relationship, or 
                otherwise--
                            ``(i) exercises substantial control over a 
                        corporation or limited liability company;
                            ``(ii) owns 25 percent or more of the 
                        equity interests of a corporation or limited 
                        liability company; or
                            ``(iii) receives substantial economic 
                        benefits from the assets of a corporation or 
                        limited liability company.
                    ``(B) Exceptions.--The term `beneficial owner' 
                shall not include--
                            ``(i) a minor child, as defined in the 
                        State or Indian Tribe in which the entity is 
                        formed;
                            ``(ii) a person acting as a nominee, 
                        intermediary, custodian, or agent on behalf of 
                        another person;
                            ``(iii) a person acting solely as an 
                        employee of a corporation or limited liability 
                        company and whose control over or economic 
                        benefits from the corporation or limited 
                        liability company derives solely from the 
                        employment status of the person;
                            ``(iv) a person whose only interest in a 
                        corporation or limited liability company is 
                        through a right of inheritance; or
                            ``(v) a creditor of a corporation or 
                        limited liability company, unless the creditor 
                        also meets the requirements of subparagraph 
                        (A).
                    ``(C) Substantial economic benefits defined.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(ii), a natural person receives 
                        substantial economic benefits from the assets 
                        of a corporation or limited liability company 
                        if the person has an entitlement to more than a 
                        specified percentage of the funds or assets of 
                        the corporation or limited liability company, 
                        which the Secretary of the Treasury shall, by 
                        rule, establish.
                            ``(ii) Rulemaking criteria.--In 
                        establishing the percentage under clause (i), 
                        the Secretary of the Treasury shall seek to--
                                    ``(I) provide clarity to 
                                corporations and limited liability 
                                companies with respect to the 
                                identification and disclosure of a 
                                natural person who receives substantial 
                                economic benefits from the assets of a 
                                corporation or limited liability 
                                company; and
                                    ``(II) identify those natural 
                                persons who, as a result of the 
                                substantial economic benefits they 
                                receive from the assets of a 
                                corporation or limited liability 
                                company, exercise a dominant influence 
                                over such corporation or limited 
                                liability company.
            ``(4) Corporation; limited liability company.--The terms 
        `corporation' and `limited liability company'--
                    ``(A) have the meanings given such terms under the 
                laws of the applicable State or Indian Tribe;
                    ``(B) include any non-United States entity eligible 
                for registration or registered to do business as a 
                corporation or limited liability company under the laws 
                of the applicable State or Indian Tribe;
                    ``(C) do not include any entity that is--
                            ``(i) a business concern that is an issuer 
                        of a class of securities registered under 
                        section 12 of the Securities Exchange Act of 
                        1934 (15 U.S.C. 781) or that is required to 
                        file reports under section 15(d) of that Act 
                        (15 U.S.C. 78o(d));
                            ``(ii) a business concern constituted, 
                        sponsored, or chartered by a State or Indian 
                        Tribe, a political subdivision of a State or 
                        Indian Tribe, under an interstate compact 
                        between two or more States, by a department or 
                        agency of the United States, or under the laws 
                        of the United States;
                            ``(iii) a depository institution (as 
                        defined in section 3 of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813));
                            ``(iv) a credit union (as defined in 
                        section 101 of the Federal Credit Union Act (12 
                        U.S.C. 1752));
                            ``(v) a bank holding company (as defined in 
                        section 2 of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1841)) or a savings and loan 
                        holding company (as defined in section 10(a) of 
                        the Home Owners' Loan Act (12 U.S.C. 1467a(a));
                            ``(vi) a broker or dealer (as defined in 
                        section 3 of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78c)) that is registered under 
                        section 15 of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78o);
                            ``(vii) an exchange or clearing agency (as 
                        defined in section 3 of the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78c)) that is registered 
                        under section 6 or 17A of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78f and 78q-1);
                            ``(viii) an investment company (as defined 
                        in section 3 of the Investment Company Act of 
                        1940 (15 U.S.C. 80a-3)) or an investment 
                        adviser (as defined in section 202(11) of the 
                        Investment Advisers Act of 1940 (15 U.S.C. 80b-
                        2(11))), if the company or adviser is 
                        registered with the Securities and Exchange 
                        Commission, has filed an application for 
                        registration which has not been denied, under 
                        the Investment Company Act of 1940 (15 U.S.C. 
                        80a-1 et seq.) or the Investment Adviser Act of 
                        1940 (15 U.S.C. 80b-1 et seq.), or is an 
                        investment adviser described under section 
                        203(l) of the Investment Advisers Act of 1940 
                        (15 U.S.C. 80b-3(l));
                            ``(ix) an insurance company (as defined in 
                        section 2 of the Investment Company Act of 1940 
                        (15 U.S.C. 80a-2));
                            ``(x) a registered entity (as defined in 
                        section 1a of the Commodity Exchange Act (7 
                        U.S.C. 1a)), or a futures commission merchant, 
                        introducing broker, commodity pool operator, or 
                        commodity trading advisor (as defined in 
                        section 1a of the Commodity Exchange Act (7 
                        U.S.C. 1a)) that is registered with the 
                        Commodity Futures Trading Commission;
                            ``(xi) a public accounting firm registered 
                        in accordance with section 102 of the Sarbanes-
                        Oxley Act (15 U.S.C. 7212) or an entity 
                        controlling, controlled by, or under common 
                        control of such a firm;
                            ``(xii) a public utility that provides 
                        telecommunications service, electrical power, 
                        natural gas, or water and sewer services, 
                        within the United States;
                            ``(xiii) a church, charity, nonprofit 
                        entity, or other organization that is described 
                        in section 501(c), 527, or 4947(a)(1) of the 
                        Internal Revenue Code of 1986, that has not 
                        been denied tax exempt status, and that has 
                        filed the most recently due annual information 
                        return with the Internal Revenue Service, if 
                        required to file such a return;
                            ``(xiv) a financial market utility 
                        designated by the Financial Stability Oversight 
                        Council under section 804 of the Dodd-Frank 
                        Wall Street Reform and Consumer Protection Act;
                            ``(xv) an insurance producer (as defined in 
                        section 334 of the Gramm-Leach-Bliley Act);
                            ``(xvi) any pooled investment vehicle that 
                        is operated or advised by a person described in 
                        clause (iii), (iv), (v), (vi), (viii), (ix), or 
                        (xi);
                            ``(xvii) any business concern that--
                                    ``(I) employs more than 20 
                                employees on a full-time basis in the 
                                United States;
                                    ``(II) files income tax returns in 
                                the United States demonstrating more 
                                than $5,000,000 in gross receipts or 
                                sales; and
                                    ``(III) has an operating presence 
                                at a physical office within the United 
                                States; or
                            ``(xviii) any corporation or limited 
                        liability company formed and owned by an entity 
                        described in this clause or in clause (i), 
                        (ii), (iii), (iv), (v), (vi), (vii), (viii), 
                        (ix), (x), (xi), (xii), (xiii), (xiv), (xv), or 
                        (xvi); and
                    ``(D) do not include any individual business 
                concern or class of business concerns which the 
                Secretary of the Treasury and the Attorney General of 
                the United States have jointly determined, by rule of 
                otherwise, to be exempt from the requirements of 
                subsection (a), if the Secretary and the Attorney 
                General jointly determine that requiring beneficial 
                ownership information from the business concern would 
                not serve the public interest and would not assist law 
                enforcement efforts to detect, prevent, or prosecute 
                terrorism, money laundering, tax evasion, or other 
                misconduct.
            ``(5) Fincen.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network of the Department of the Treasury.
            ``(6) Indian country.--The term `Indian country' has the 
        meaning given that term in section 1151 of title 18.
            ``(7) Indian tribe.--The term `Indian Tribe' has the 
        meaning given that term under section 102 of the Federally 
        Recognized Indian Tribe List Act of 1994.
            ``(8) Personal identification card.--The term `personal 
        identification card' means an identification document issued by 
        a State, Indian Tribe, or local government to an individual 
        solely for the purpose of identification of that individual.
            ``(9) State.--The term `State' means any State, 
        commonwealth, territory, or possession of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        Guam, or the United States Virgin Islands.''.
            (2) Rulemaking.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Secretary of the 
                Treasury shall issue regulations to carry out this Act 
                and the amendments made by this Act, including, to the 
                extent necessary, to clarify the definitions in section 
                5333(d) of title 31, United States Code.
                    (B) Revision of final rule.--Not later than 1 year 
                after the date of enactment of this Act, the Secretary 
                of the Treasury shall revise the final rule titled 
                ``Customer Due Diligence Requirements for Financial 
                Institutions'' (May 11, 2016; 81 Fed. Reg. 29397) to--
                            (i) bring the rule into conformance with 
                        this Act and the amendments made by this Act;
                            (ii) account for financial institutions' 
                        access to comprehensive beneficial ownership 
                        information filed by corporations and limited 
                        liability companies, under threat of civil and 
                        criminal penalties, under this Act and the 
                        amendments made by this Act; and
                            (iii) reduce any burdens on financial 
                        institutions that are, in light of the 
                        enactment of this Act and the amendments made 
                        by this Act, unnecessary or duplicative.
            (3) Conforming amendments.--Title 31, United States Code, 
        is amended--
                    (A) in section 5321(a)--
                            (i) in paragraph (1), by striking 
                        ``sections 5314 and 5315'' each place it 
                        appears and inserting ``sections 5314, 5315, 
                        and 5333''; and
                            (ii) in paragraph (6), by inserting 
                        ``(except section 5333)'' after ``subchapter'' 
                        each place it appears; and
                    (B) in section 5322, by striking ``section 5315 or 
                5324'' each place it appears and inserting ``section 
                5315, 5324, or 5333''.
            (4) Table of contents.--The table of contents of chapter 53 
        of title 31, United States Code, is amended by inserting after 
        the item relating to section 5332 the following:

``5333. Transparent incorporation practices.''.
    (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.
    (c) Federal Contractors.--Not later than the first day of the first 
full fiscal year beginning at least 1 year after the date of the 
enactment of this Act, the Administrator for Federal Procurement Policy 
shall revise the Federal Acquisition Regulation maintained under 
section 1303(a)(1) of title 41, United States Code, to require any 
contractor or subcontractor who is subject to the requirement to 
disclose beneficial ownership information under section 5333 of title 
31, United States Code, to provide the information required to be 
disclosed under such section to the Federal Government as part of any 
bid or proposal for a contract with a value threshold in excess of the 
simplified acquisition threshold under section 134 of title 41, United 
States Code.

SEC. 4. STUDIES AND REPORTS.

    (a) Updating of Beneficial Ownership Information.--
            (1) Study.--The Secretary of the Treasury, in consultation 
        with the Attorney General of the United States, shall conduct a 
        study to evaluate--
                    (A) the necessity of a requirement for corporations 
                and limited liability companies to update the list of 
                their beneficial owners within a specified amount of 
                time after the date of any change in the list of 
                beneficial owners or the information required to be 
                provided relating to each beneficial owner, taking into 
                account the annual filings required under section 
                5333(a)(1)(B)(i) of title 31, United States Code, and 
                the information contained in such annual filings; and
                    (B) the burden that a requirement to update the 
                list of beneficial owners within a specified period of 
                time after a change in such list of beneficial owners 
                would impose on corporations and limited liability 
                companies.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of the Treasury shall 
        submit a report on the study required under paragraph (1) to 
        the Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate.
            (3) Public comment.--The Secretary of the Treasury shall 
        seek and consider public input, comments, and data in order to 
        conduct the study required under subparagraph paragraph (1).
    (b) Other Legal Entities.--Not later than 2 years after the date of 
enactment of this Act, the Comptroller General of the United States 
shall conduct a study and submit to the Congress a report--
            (1) identifying each State or Indian Tribe that has 
        procedures that enable persons to form or register under the 
        laws of the State or Indian Tribe partnerships, trusts, or 
        other legal entities, and the nature of those procedures;
            (2) identifying each State or Indian Tribe that requires 
        persons seeking to form or register partnerships, trusts, or 
        other legal entities under the laws of the State or Indian 
        Tribe to provide information about the beneficial owners (as 
        that term is defined in section 5333(d)(1) of title 31, United 
        States Code, as added by this Act) or beneficiaries of such 
        entities, and the nature of the required information;
            (3) evaluating whether the lack of available beneficial 
        ownership information for partnerships, trusts, or other legal 
        entities--
                    (A) raises concerns about the involvement of such 
                entities in terrorism, money laundering, tax evasion, 
                securities fraud, or other misconduct;
                    (B) has impeded investigations into entities 
                suspected of such misconduct; and
                    (C) increases the costs to financial institutions 
                of complying with due diligence requirements imposed 
                under the Bank Secrecy Act, the USA PATRIOT Act, or 
                other applicable Federal, State, or Tribal law; and
            (4) evaluating whether the failure of the United States to 
        require beneficial ownership information for partnerships and 
        trusts formed or registered in the United States has elicited 
        international criticism and what steps, if any, the United 
        States has taken or is planning to take in response.
    (c) Effectiveness of Incorporation Practices.--Not later than 5 
years after the date of enactment of this Act, the Comptroller General 
of the United States shall conduct a study and submit to the Congress a 
report assessing the effectiveness of incorporation practices 
implemented under this Act and the amendments made by this Act in--
            (1) providing law enforcement agencies with prompt access 
        to reliable, useful, and complete beneficial ownership 
        information; and
            (2) strengthening the capability of law enforcement 
        agencies to combat incorporation abuses, civil and criminal 
        misconduct, and detect, prevent, or punish terrorism, money 
        laundering, tax evasion, or other misconduct.
    (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.

SEC. 5. DEFINITIONS.

    In this Act, the terms ``Bank Secrecy Act'', ``beneficial owner'', 
``corporation'', and ``limited liability company'' have the meaning 
given those terms, respectively, under section 5333(d) of title 31, 
United States Code.

                    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 II--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 III--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 II--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 III--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.

            Passed the House of Representatives October 22, 2019.

            Attest:

                                                                 Clerk.
116th CONGRESS

  1st Session

                               H. R. 2513

_______________________________________________________________________

                                 AN ACT

   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.
```