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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2514 Reported in House (RH)]

<DOC>

                                                 Union Calendar No. 195
116th CONGRESS
  1st Session
                                H. R. 2514

                      [Report No. 116-245, Part I]

    To make reforms to the Federal Bank Secrecy Act and anti-money 
                laundering laws, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 3, 2019

 Mr. Cleaver introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

                            October 21, 2019

  Additional sponsors: Mr. Stivers and Mrs. Carolyn B. Maloney of New 
                                  York

                            October 21, 2019

  Reported from the Committee on Financial Services with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                            October 21, 2019

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 3, 
                                 2019]

_______________________________________________________________________

                                 A BILL

 
    To make reforms to the Federal Bank Secrecy Act and anti-money 
                laundering laws, and for other purposes.

 

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

                    TITLE I--STRENGTHENING TREASURY

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

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

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

                 TITLE III--MODERNIZING THE AML SYSTEM

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

SEC. 2. BANK SECRECY ACT DEFINITION.

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

                    TITLE I--STRENGTHENING TREASURY

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

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

SEC. 102. SPECIAL HIRING AUTHORITY.

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

SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER.

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

SEC. 104. CIVIL LIBERTIES AND PRIVACY COUNCIL.

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

SEC. 105. INTERNATIONAL COORDINATION.

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

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

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

SEC. 106. TREASURY ATTACHES PROGRAM.

    (a) In General.--Title 31, United States Code, is amended by 
inserting after section 315 the following:
``Sec. 316. Treasury Attaches Program
    ``(a) In General.--There is established the Treasury Attaches 
Program, under which the Secretary of the Treasury shall appoint 
employees of the Department of the Treasury, after nomination by the 
Director of the Financial Crimes Enforcement Network (`FinCEN'), as a 
Treasury attache, who shall--
            ``(1) be knowledgeable about the Bank Secrecy Act and anti-
        money laundering issues;
            ``(2) be co-located in a United States embassy;
            ``(3) perform outreach with respect to Bank Secrecy Act and 
        anti-money laundering issues;
            ``(4) establish and maintain relationships with foreign 
        counterparts, including employees of ministries of finance, 
        central banks, and other relevant official entities;
            ``(5) conduct outreach to local and foreign financial 
        institutions and other commercial actors, including--
                    ``(A) information exchanges through FinCEN and 
                FinCEN programs; and
                    ``(B) soliciting buy-in and cooperation for the 
                implementation of--
                            ``(i) United States and multilateral 
                        sanctions; and
                            ``(ii) international standards on anti-
                        money laundering and the countering of the 
                        financing of terrorism; and
            ``(6) perform such other actions as the Secretary 
        determines appropriate.
    ``(b) Number of Attaches.--The number of Treasury attaches 
appointed under this section at any one time shall be not fewer than 6 
more employees than the number of employees of the Department of the 
Treasury serving as Treasury attaches on March 1, 2019.
    ``(c) Compensation.--Each Treasury attache appointed under this 
section and located at a United States embassy shall receive 
compensation at the higher of--
            ``(1) the rate of compensation provided to a Foreign 
        Service officer at a comparable career level serving at the 
        same embassy; or
            ``(2) the rate of compensation the Treasury attache would 
        otherwise have received, absent the application of this 
        subsection.
    ``(d) Bank Secrecy Act Defined.--In this section, the term `Bank 
Secrecy Act' has the meaning given that term under section 5312.''.
    (b) Clerical Amendment.--The table of contents for chapter 3 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 315 the following:

``316. Treasury Attaches Program.''.

SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL 
              COOPERATION.

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

SEC. 108. FINCEN DOMESTIC LIAISONS.

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

SEC. 109. FINCEN EXCHANGE.

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

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

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

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

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

SEC. 112. AML EXAMINATION AUTHORITY DELEGATION STUDY.

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

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

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

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

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

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

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

    (a) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by adding at the end the following:
``Sec. 5333. AML/CFT Training
    ``(a) Training Requirement.--Each Federal examiner reviewing 
compliance with the Bank Secrecy Act shall attend at least 10 hours of 
annual training on anti-money laundering (AML) and the countering of 
the financing of terrorism (CFT), including--
            ``(1) potential risk profiles and red flags that may be 
        encountered during examinations;
            ``(2) financial crime patterns and trends;
            ``(3) the high-level context for why AML and CFT programs 
        are necessary for law enforcement agencies and other national 
        security agencies, and what risks the programs seek to 
        mitigate; and
            ``(4) de-risking and its effect on the provision of 
        financial services.
    ``(b) Training Materials and Standards.--The Secretary of the 
Treasury shall, in consultation with the Financial Institutions 
Examination Council, the Financial Crimes Enforcement Network, and 
State, Federal, and Tribal law enforcement agencies, establish 
appropriate training materials and standards for use in the training 
required under subsection (a).''.
    (b) Clerical Amendment.--The table of contents for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 5332 the following:

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

SEC. 203. SHARING OF COMPLIANCE RESOURCES.

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

SEC. 204. GAO STUDY ON FEEDBACK LOOPS.

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

SEC. 205. FINCEN STUDY ON BSA VALUE.

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

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

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

SEC. 207. MODERNIZATION AND UPGRADING WHISTLEBLOWER PROTECTIONS.

    (a) Rewards.--Section 5323(d) of title 31, United States Code, is 
amended to read as follows:
    ``(d) Source of Rewards.--For the purposes of paying a reward under 
this section, the Secretary may use, without further appropriation, 
criminal fine, civil penalty, or forfeiture amounts recovered based on 
the original information with respect to which the reward is being 
paid.''.
    (b) Whistleblower Incentives.--
            Chapter 53 of title 31, United States Code, is amended--
            (1) by inserting after section 5323 the following:
``Sec. 5323A. Whistleblower incentives
    ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by FinCEN under the Bank 
        Secrecy Act that results in monetary sanctions exceeding 
        $1,000,000.
            ``(2) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network.
            ``(3) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative 
        action, means--
                    ``(A) any monies, including penalties, 
                disgorgement, and interest, ordered to be paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                as a result of such action or any settlement of such 
                action.
            ``(4) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to FinCEN from any other source, 
                unless the whistleblower is the original source of the 
                information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by FinCEN, means any judicial or administrative action that is 
        based upon original information provided by a whistleblower 
        that led to the successful enforcement of the action.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.
            ``(7) Whistleblower.--The term `whistleblower' means any 
        individual who provides, or 2 or more individuals acting 
        jointly who provide, information relating to a violation of 
        laws enforced by FinCEN, in a manner established, by rule or 
        regulation, by FinCEN.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the Secretary, under 
        such rules as the Secretary may issue and subject to subsection 
        (c), shall pay an award or awards to 1 or more whistleblowers 
        who voluntarily provided original information to FinCEN that 
        led to the successful enforcement of the covered judicial or 
        administrative action, or related action, in an aggregate 
        amount equal to not more than 30 percent, in total, of what has 
        been collected of the monetary sanctions imposed in the action.
            ``(2) Source of awards.--For the purposes of paying any 
        award under paragraph (1), the Secretary may use, without 
        further appropriation, monetary sanction amounts recovered 
        based on the original information with respect to which the 
        award is being paid.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Secretary.
                    ``(B) Criteria.--In responding to a disclosure and 
                determining the amount of an award made, FinCEN staff 
                shall meet with the whistleblower to discuss evidence 
                disclosed and rebuttals to the disclosure, and shall 
                take into consideration--
                            ``(i) the significance of the information 
                        provided by the whistleblower to the success of 
                        the covered judicial or administrative action;
                            ``(ii) the degree of assistance provided by 
                        the whistleblower and any legal representative 
                        of the whistleblower in a covered judicial or 
                        administrative action;
                            ``(iii) the mission of FinCEN in deterring 
                        violations of the law by making awards to 
                        whistleblowers who provide information that 
                        lead to the successful enforcement of such 
                        laws; and
                            ``(iv) such additional relevant factors as 
                        the Secretary may establish by rule.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original 
                information submitted to FinCEN, a member, officer, or 
                employee of--
                            ``(i) an appropriate regulatory agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a self-regulatory organization; or
                            ``(iv) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation, or who the Secretary has a 
                reasonable basis to believe committed a criminal 
                violation, related to the judicial or administrative 
                action for which the whistleblower otherwise could 
                receive an award under this section;
                    ``(C) to any whistleblower who gains the 
                information through the performance of an audit of 
                financial statements required under the Bank Secrecy 
                Act and for whom such submission would be contrary to 
                its requirements; or
                    ``(D) to any whistleblower who fails to submit 
                information to FinCEN in such form as the Secretary 
                may, by rule, require.
            ``(3) Statement of reasons.--For any decision granting or 
        denying an award, the Secretary shall provide to the 
        whistleblower a statement of reasons that includes findings of 
        fact and conclusions of law for all material issues.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (b) may be 
        represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under subsection 
                (b) shall be represented by counsel if the 
                whistleblower anonymously submits the information upon 
                which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose their 
                identity and provide such other information as the 
                Secretary may require, directly or through counsel for 
                the whistleblower.
    ``(e) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, shall be 
in the discretion of the Secretary. Any such determination, except the 
determination of the amount of an award if the award was made in 
accordance with subsection (b), may be appealed to the appropriate 
court of appeals of the United States not more than 30 days after the 
determination is issued by the Secretary. The court shall review the 
determination made by the Secretary in accordance with section 706 of 
title 5.
    ``(f) Employee Protections.--The Secretary of the Treasury shall 
issue regulations protecting a whistleblower from retaliation, which 
shall be as close as practicable to the employee protections provided 
for under section 1057 of the Consumer Financial Protection Act of 
2010.''; and
            (2) in the table of contents for such chapter, by inserting 
        after the item relating to section 5323 the following new item:

``5323A. Whistleblower incentives.''.

SEC. 208. CERTAIN VIOLATORS BARRED FROM SERVING ON BOARDS OF UNITED 
              STATES FINANCIAL INSTITUTIONS.

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

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

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

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

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

SEC. 211. RETURN OF PROFITS AND BONUSES.

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

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

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

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

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

SEC. 214. GEOGRAPHIC TARGETING ORDER.

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

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

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

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

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

                 TITLE III--MODERNIZING THE AML SYSTEM

SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.

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

SEC. 302. INNOVATION LABS.

    (a) In General.--The table of contents for subchapter II of chapter 
53 of title 31, United States Code, is amended by adding at the end the 
following:
``Sec. 5334. Innovation Labs
    ``(a) Establishment.--There is established within the Department of 
the Treasury and each Federal functional regulator an Innovation Lab.
    ``(b) Director.--The head of each Innovation Lab shall be a 
Director, to be appointed by the Secretary of the Treasury or the head 
of the Federal functional regulator, as applicable.
    ``(c) Duties.--The duties of the Innovation Lab shall be--
            ``(1) to provide outreach to law enforcement agencies, 
        financial institutions, and other persons (including vendors 
        and technology companies) with respect to innovation and new 
        technologies that may be used to comply with the requirements 
        of the Bank Secrecy Act;
            ``(2) to support the implementation of responsible 
        innovation and new technology, in a manner that complies with 
        the requirements of the Bank Secrecy Act;
            ``(3) to explore opportunities for public-private 
        partnerships; and
            ``(4) to develop metrics of success.
    ``(d) FinCEN Lab.--The Innovation Lab established under subsection 
(a) within the Department of the Treasury shall be a lab within the 
Financial Crimes Enforcement Network.
    ``(e) Federal Functional Regulator Defined.--In this subsection, 
the term `Federal functional regulator' means the Board of Governors of 
the Federal Reserve System, the Comptroller of the Currency, the 
Federal Deposit Insurance Corporation, the National Credit Union 
Administration, the Securities and Exchange Commission, and the 
Commodity Futures Trading Commission.''.
    (b) Clerical Amendment.--The table of contents for subchapter II of 
chapter 53 of title 31, United States Code, is amended by adding at the 
end the following:

``5334. Innovation Labs.''.

SEC. 303. INNOVATION COUNCIL.

    (a) In General.--Subchapter II of chapter 53 of Title 31, United 
States Code, as amended by section 302, is further amended by adding at 
the end the following:
``Sec. 5335. Innovation Council
    ``(a) Establishment.--There is established the Innovation Council 
(hereinafter in this section referred to as the `Council'), which shall 
consist of each Director of an Innovation Lab established under section 
5334 and the Director of the Financial Crimes Enforcement Network.
    ``(b) Chair.--The Director of the Innovation Lab of the Department 
of the Treasury shall serve as the Chair of the Council.
    ``(c) Duty.--The members of the Council shall coordinate on 
activities related to innovation under the Bank Secrecy Act, but may 
not supplant individual agency determinations on innovation.
    ``(d) Meetings.--The meetings of the Council--
            ``(1) shall be at the call of the Chair, but in no case may 
        the Council meet less than semi-annually;
            ``(2) may include open and closed sessions, as determined 
        necessary by the Council; and
            ``(3) shall include participation by public and private 
        entities and law enforcement agencies.
    ``(e) Report.--The Council shall issue an annual report, for each 
of the 7 years beginning on the date of enactment of this section, to 
the Secretary of the Treasury on the activities of the Council during 
the previous year, including the success of programs as measured by 
metrics of success developed pursuant to section 5334(c)(4), and any 
regulatory or legislative recommendations that the Council may have.''.
    (b) Clerical Amendment.--The table of contents for subchapter II of 
chapter 53 of title 31, United States Code, is amended by adding the 
end the following:

``5335. Innovation Council.''.

SEC. 304. PARALLEL RUNS RULEMAKING.

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

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

    (a) Study.--
            (1) In general.--The Director of the Financial Crimes 
        Enforcement Network (``FinCEN'') shall carry out a study on--
                    (A) the status of implementation and internal use 
                of emerging technologies, including artificial 
                intelligence (``AI''), digital identity technologies, 
                blockchain technologies, and other innovative 
                technologies within FinCEN;
                    (B) whether AI, digital identity technologies, 
                blockchain technologies, and other innovative 
                technologies can be further leveraged to make FinCEN's 
                data analysis more efficient and effective; and
                    (C) how FinCEN could better utilize AI, digital 
                identity technologies, blockchain technologies, and 
                other innovative technologies to more actively analyze 
                and disseminate the information it collects and stores 
                to provide investigative leads to Federal, State, 
                Tribal, and local law enforcement, and other Federal 
                agencies (collective, ``Agencies''), and better support 
                its ongoing investigations when referring a case to the 
                Agencies.
            (2) Inclusion of gto data.--The study required under this 
        subsection shall include data collected through the Geographic 
        Targeting Orders (``GTO'') program.
            (3) Consultation.--In conducting the study required under 
        this subsection, FinCEN shall consult with the Directors of the 
        Innovations Labs established in section 302.
    (b) Report.--Not later than the end of the 6-month period beginning 
on the date of the enactment of this Act, the Director shall issue a 
report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives containing--
            (1) all findings and determinations made in carrying out 
        the study required under subsection (a);
            (2) with respect to each of subparagraphs (A), (B) and (C) 
        of subsection (a)(1), any best practices or significant 
        concerns identified by the Director, and their applicability to 
        AI, digital identity technologies, blockchain technologies, and 
        other innovative technologies with respect to U.S. efforts to 
        combat money laundering and other forms of illicit finance; and
            (3) any policy recommendations that could facilitate and 
        improve communication and coordination between the private 
        sector, FinCEN, and Agencies through the implementation of 
        innovative approaches, in order to meet their Bank Secrecy Act 
        (as defined under section 5312 of title 31, United States Code) 
        and anti-money laundering compliance obligations.
                                                 Union Calendar No. 195

116th CONGRESS

  1st Session

                               H. R. 2514

                      [Report No. 116-245, Part I]

_______________________________________________________________________

                                 A BILL

    To make reforms to the Federal Bank Secrecy Act and anti-money 
                laundering laws, and for other purposes.

_______________________________________________________________________

                            October 21, 2019

  Reported from the Committee on Financial Services with an amendment

                            October 21, 2019

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
```