I 

116TH CONGRESS 

1ST SESSION H. R. 2514 

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 

A BILL 

To make reforms to the Federal Bank Secrecy Act and 

anti-money laundering laws, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Coordinating Oversight, Upgrading and Innovating 

6 Technology, and Examiner Reform Act of 2019’’ or the 

7 ‘‘COUNTER Act of 2019’’. 

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

9 this Act is as follows: 


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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. FinCEN Compensation. 

Sec. 103. Civil Liberties and Privacy Officer. 

Sec. 104. Privacy and Civil Liberties Council. 

Sec. 105. International coordination. 

Sec. 106. Treasury Attache ́ 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. De-risking report. 

TITLE II—IMPROVING AML/CFT OVERSIGHT 

Sec. 201. 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. Section 314(a) improvements. 

Sec. 207. Sharing of threat pattern and trend information. 

Sec. 208. Modernization and upgrading whistleblower protections. 

Sec. 209. Certain violators barred from serving on public company boards. 

Sec. 210. Additional damages for repeat Bank Secrecy Act violators. 

Sec. 211. Justice annual report on deferred and nonprosecution agreements. 

Sec. 212. Return of profits and bonuses. 

Sec. 213. Prohibition on tax deductions for attorney’s fees related to Bank Secrecy Act settlements and court costs. 

Sec. 214. Application of Bank Secrecy Act to dealers in art or antiquities. 

Sec. 215. Revision to geographic targeting order. 

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. 

1 SEC. 2. BANK SECRECY ACT DEFINITION. 

2 Section 5312(a) of title 31, United States Code, is 

3 amended by adding at the end the following: 

4 ‘‘(6) BANK SECRECY ACT.—The term ‘Bank Se5 crecy act’ means— 


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1 ‘‘(A) section 21 of the Federal Deposit In2 surance Act; 

3 ‘‘(B) chapter 2 of title I of Public Law 91– 

4 508; and 

5 ‘‘(C) this subchapter.’’. 

6 TITLE I—STRENGTHENING 

7 TREASURY 

8 SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF 

9 THE BANK SECRECY ACT. 

10 Section 5311 of title 31, United States Code, is 

11 amended— 

12 (1) by inserting ‘‘to protect our national secu13 rity, to safeguard the integrity of the international 

14 financial system, and’’ before ‘‘to require’’; and 

15 (2) by inserting ‘‘to law enforcement’’ before 

16 ‘‘in criminal’’. 

17 SEC. 102. FINCEN COMPENSATION. 

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

19 amended— 

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

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

24 ‘‘(d) EMPLOYEE COMPENSATION.—In fixing the com25 pensation for employees of FinCEN, the Secretary shall— 


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1 ‘‘(1) fix such compensation without regard to 

2 the provisions of chapter 51 or subchapter III of 

3 chapter 53 of title 5, United States Code; and 

4 ‘‘(2) ensure that such compensation is com5 parable to the compensation provided by the Board 

6 of Governors of the Federal Reserve System, the 

7 Bureau of Consumer Financial Protection, the Fed8 eral Deposit Insurance Corporation, the National 

9 Credit Union Administration, and the Office of the 

10 Comptroller of the Currency.’’. 

11 SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER. 

12 (a) APPOINTMENT OF OFFICERS.—Not later than the 

13 end of the 3-month period beginning on the date of enact14 ment of this Act, a Civil Liberties and Privacy Officer 

15 shall be appointed, from among individuals who are attor16 neys with expertise in data privacy laws— 

17 (1) within each Federal financial regulator, by 

18 the head of the Federal financial regulator; 

19 (2) within the Financial Crimes Enforcement 

20 Network, by the Secretary of the Treasury; and 

21 (3) within the Internal Revenue Service Crimi22 nal Investigation, by the Secretary of the Treasury. 

23 (b) DUTIES.—Each Civil Liberties and Privacy Offi24 cer shall, with respect to the applicable regulator, NetVerDate Sep 11 2014 22:24 May 06, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.IH H2514

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1 work, or Investigation within which the Officer is lo2 cated— 

3 (1) be consulted each time the regulations are 

4 developed or reviewed; 

5 (2) be consulted on information-sharing activi6 ties, including activities that provide access to per7 sonally identifiable information; and 

8 (3) contribute to the evaluation and regulation 

9 of new technologies. 

10 (c) FEDERAL FINANCIAL REGULATOR DEFINED.— 

11 For purposes of this section, the term ‘‘Federal financial 

12 regulator’’ means the Board of Governors of the Federal 

13 Reserve System, the Bureau of Consumer Financial Pro14 tection, the Federal Deposit Insurance Corporation, the 

15 National Credit Union Administration, and the Office of 

16 the Comptroller of the Currency. 

17 SEC. 104. PRIVACY AND CIVIL LIBERTIES COUNCIL. 

18 (a) ESTABLISHMENT.—There is established the Pri19 vacy and Civil Liberties Council (hereinafter in this sec20 tion referred to as the ‘‘Council’’), which shall consist of 

21 the Civil Liberties and Privacy Officers appointed pursu22 ant to section 103. 

23 (b) CHAIR.—The Civil Liberties and Privacy Officer 

24 of the Financial Crimes Enforcement Network shall serve 

25 as the Chair of the Council. 


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1 (c) DUTY.—The members of the Council shall coordi2 nate on activities related to their duties as Privacy and 

3 Civil Liberties Officers. 

4 (d) MEETINGS.—The meetings of the Council— 

5 (1) shall be at the call of the Chair, but in no 

6 case may the Council meet less than quarterly; 

7 (2) may include open and closed sessions, as de8 termined necessary by the Council; and 

9 (3) may include participation by public and pri10 vate entities and law enforcement agencies. 

11 (e) REPORT.—The Council shall issue an annual re12 port to the Congress on the activities of the Council during 

13 the previous year and any legislative recommendations 

14 that the Council may have. 

15 SEC. 105. INTERNATIONAL COORDINATION. 

16 The Secretary of the Treasury shall work with the 

17 Secretary’s foreign counterparts, including through the 

18 Financial Action Task Force, the International Monetary 

19 Fund, the World Bank, and the United Nations, to pro20 mote stronger anti-money laundering frameworks and en21 forcement of anti-money laundering laws. 

22 SEC. 106. TREASURY ATTACHE ́ PROGRAM. 

23 (a) IN GENERAL.—Title 31, United States Code, is 

24 amended by inserting after section 315 the following: 


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1 ‘‘§ 316. Treasury Attache ́ Program 

2 ‘‘(a) IN GENERAL.—There is established the Treas3 ury Attache ́ Program, under which the Secretary of the 

4 Treasury shall appoint employees of the Department of 

5 the Treasury as a Treasury attache ́, who shall— 

6 ‘‘(1) have expertise in Bank Secrecy Act and 

7 anti-money laundering issues; 

8 ‘‘(2) be co-located in a United States embassy; 

9 ‘‘(3) perform outreach with respect to Bank Se10 crecy Act and anti-money laundering issues; 

11 ‘‘(4) establish and maintain relationships with 

12 foreign counterparts, including employees of min13 istries of finance, central banks, and other relevant 

14 official entities; 

15 ‘‘(5) conduct outreach to local and foreign fi16 nancial institutions and other commercial actors, in17 cluding— 

18 ‘‘(A) information exchanges; and 

19 ‘‘(B) soliciting buy-in and cooperation for 

20 the implementation of— 

21 ‘‘(i) United States and multilateral 

22 sanctions; and 

23 ‘‘(ii) international standards on anti24 money laundering and the countering of 

25 the financing of terrorism; and 


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1 ‘‘(6) perform such other actions as the Sec2 retary determines appropriate. 

3 ‘‘(b) NUMBER OF ATTACHE ́S.—The number of Treas4 ury attache ́s appointed under this section at any one time 

5 shall be not fewer than 6 more employees than the number 

6 of employees of the Department of the Treasury serving 

7 as Treasury attache ́s on March 1, 2019. 

8 ‘‘(c) COMPENSATION.—Each Treasury attache ́ ap9 pointed under this section and located at a United States 

10 embassy shall receive compensation at the higher of— 

11 ‘‘(1) the rate of compensation provided to a 

12 Foreign Service officer serving at the same embassy; 

13 or 

14 ‘‘(2) the rate of compensation the Treasury 

15 attache ́ would otherwise have received, absent the 

16 application of this subsection. 

17 ‘‘(d) BANK SECRECY ACT DEFINED.—In this section, 

18 the term ‘Bank Secrecy Act’ has the meaning given that 

19 term under section 5312.’’. 

20 (b) CLERICAL AMENDMENT.—The table of contents 

21 for chapter 3 of title 31, United States Code, is amended 

22 by inserting after the item relating to section 315 the fol23 lowing: 

‘‘316. Treasury Attache ́ Program.’’. 


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1 SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR 

2 INTERNATIONAL COOPERATION. 

3 There is authorized to be appropriated for fiscal year 

4 2020 to the Secretary of the Treasury for purposes of pro5 viding technical assistance for international cooperation 

6 an amount equal to twice the amount authorized for such 

7 purpose for fiscal year 2019. 

8 SEC. 108. FINCEN DOMESTIC LIAISONS. 

9 Section 310 of title 31, United States Code, as 

10 amended by section 102, is further amended by inserting 

11 after subsection (d) the following: 

12 ‘‘(e) FINCEN DOMESTIC LIAISONS.— 

13 ‘‘(1) IN GENERAL.—The Director of FinCEN 

14 shall appoint at least 6 senior FinCEN employees as 

15 FinCEN Domestic Liaisons, who shall— 

16 ‘‘(A) each be assigned to focus on a spe17 cific region of the United States; 

18 ‘‘(B) be located at an office in such region 

19 (or co-located at an office of another Federal 

20 agency in such region); 

21 ‘‘(C) provide education to, and coordina22 tion with, both public- and private-sector enti23 ties with respect to FinCEN; and 

24 ‘‘(D) perform outreach to financial institu25 tions (including non-bank financial institutions) 

26 and persons who are not financial institutions, 


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1 especially with respect to actions taken by 

2 FinCEN that require specific actions by, or 

3 have specific effects on, such institutions or 

4 persons, as determined by the Director. 

5 ‘‘(2) FINANCIAL INSTITUTION DEFINED.—In 

6 this subsection, the term ‘financial institution’ has 

7 the meaning given that term under section 5312.’’. 

8 SEC. 109. FINCEN EXCHANGE. 

9 (a) IN GENERAL.—Section 314(a) of the USA PA10 TRIOT Act (31 U.S.C. 5311 note) is amended by adding 

11 at the end the following: 

12 ‘‘(6) FINCEN EXCHANGE.— 

13 ‘‘(A) ESTABLISHMENT.—The FinCEN Ex14 change is hereby established within FinCEN, 

15 which shall consist of the FinCEN Exchange 

16 program of FinCEN in existence on the day be17 fore the date of enactment of this paragraph. 

18 ‘‘(B) PURPOSE.—The FinCEN Exchange 

19 shall further the purpose described under para20 graph (1) by facilitating a voluntary public-pri21 vate information sharing partnership among 

22 law enforcement, financial institutions, and 

23 FinCEN to— 


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1 ‘‘(i) effectively and efficiently combat 

2 money laundering, terrorism financing, or3 ganized crime, and other financial crimes; 

4 ‘‘(ii) protect the financial system from 

5 illicit use; and 

6 ‘‘(iii) promote national security. 

7 ‘‘(C) FINCEN DEFINED.—In this para8 graph, the term ‘FinCEN’ means the Financial 

9 Crimes Enforcement Network of the Depart10 ment of the Treasury.’’. 

11 (b) AUTHORIZATION OF APPROPRIATION.—There is 

12 authorized to be appropriated such sums as may be nec13 essary to carry out the amendment made by subsection 

14 (a). 

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

16 LAUNDERING. 

17 (a) STUDY.—The Secretary of the Treasury shall 

18 carry out a study, in consultation with other appropriate 

19 Federal departments and agencies, on trade-based money 

20 laundering. 

21 (b) REPORT.—Not later than the end of the 9-month 

22 period beginning on the date of the enactment of this Act, 

23 the Secretary shall issue a report to the Congress con24 taining— 


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1 (1) all findings and determinations made in car2 rying out the study required under subsection (a); 

3 and 

4 (2) proposed strategies to combat trade-based 

5 money laundering. 

6 (c) CLASSIFIED ANNEX.—The report required under 

7 this section may include a classified annex, if the Sec8 retary determines it appropriate. 

9 SEC. 111. DE-RISKING REPORT. 

10 (a) REVIEW.—The Secretary of the Treasury, in con11 sultation with the Federal functional regulators (as de12 fined under section 103) and other relevant stakeholders, 

13 shall undertake a formal review of— 

14 (1) the adverse consequences of financial insti15 tutions de-risking entire categories of relationships, 

16 including charities, embassy accounts, money serv17 ices businesses (as defined under section 

18 1010.100(ff) of title 31, Code of Federal Regula19 tions), countries, regions, and respondent banks; 

20 (2) the reasons why financial institutions are 

21 engaging in de-risking; 

22 (3) the association with and effects of de-risk23 ing on money laundering and financial crime actors 

24 and activities; and 


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1 (4) the most appropriate ways to promote fi2 nancial inclusion while maintaining compliance with 

3 the Bank Secrecy Act. 

4 (b) REPORT.—Not later than the end of the 1-year 

5 period beginning on the date of the enactment of this Act, 

6 the Secretary, in consultation with the Federal functional 

7 regulators and other relevant stakeholders, shall issue a 

8 report to Congress containing all findings and determina9 tions made in carrying out the study required under sub10 section (a). 

11 (c) DEFINITIONS.—In this section: 

12 (1) DE-RISKING.—The term ‘‘de-risking’’ 

13 means the closing of customer accounts or limiting 

14 services of a category of customer due to perceived 

15 risk as it relates to compliance with the Bank Se16 crecy Act. 

17 (2) BSA TERMS.—The terms ‘‘Bank Secrecy 

18 Act’’ and ‘‘financial institution’’ have the meaning 

19 given those terms, respectively, under section 5312 

20 of title 31, United States Code. 

21 TITLE II—IMPROVING AML/CFT 

22 OVERSIGHT 

23 SEC. 201. SHARING OF SUSPICIOUS ACTIVITY REPORTS 

24 WITHIN A FINANCIAL GROUP. 

25 (a) IN GENERAL.— 


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1 (1) SHARING WITH FOREIGN BRANCHES AND

2 AFFILIATES.—Section 5318(g) of title 31, United 

3 States Code, is amended by adding at the end the 

4 following: 

5 ‘‘(5) SHARING WITH FOREIGN BRANCHES, SUB6 SIDIARIES, AND AFFILIATES.— 

7 ‘‘(A) IN GENERAL.—Not later than 180 

8 days after the date of the enactment of this 

9 paragraph, the Secretary of the Treasury shall 

10 issue rules permitting any financial institution 

11 with a reporting obligation under this sub12 section to share information on reports under 

13 this subsection with the institution’s foreign 

14 branches, subsidiaries, and affiliates for the 

15 purposes of combating illicit finance risks, not16 withstanding any other provision of law except 

17 subparagraph (B). 

18 ‘‘(B) EXCEPTION.—In issuing the regula19 tions required under subparagraph (A), the 

20 Secretary may not permit a financial institution 

21 to share information on reports under this sub22 section with a foreign branch, subsidiary, or af23 filiate located in a jurisdiction that— 

24 ‘‘(i) is subject to countermeasures im25 posed by the Federal Government; or 


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1 ‘‘(ii) the Secretary, in consultation 

2 with the Civil Liberties and Privacy Officer 

3 of the Financial Crimes Enforcement Net4 work, has determined cannot reasonably 

5 protect the privacy and confidentiality of 

6 such information.’’. 

7 (2) NOTIFICATION PROHIBITIONS.—Section 

8 5318(g)(2)(A) of title 31, United States Code, is 

9 amended— 

10 (A) in clause (i), by inserting after ‘‘trans11 action has been reported’’ the following: ‘‘or 

12 otherwise reveal any information that would re13 veal that the transaction has been reported, in14 cluding materials prepared or used by the fi15 nancial institution for the purpose of identifying 

16 and detecting potentially suspicious activity’’; 

17 and 

18 (B) in clause (ii), by inserting after ‘‘trans19 action has been reported,’’ the following: ‘‘or 

20 otherwise reveal any information that would re21 veal that the transaction has been reported, in22 cluding materials prepared or used by the fi23 nancial institution for the purpose of identifying 

24 and detecting potentially suspicious activity,’’. 


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1 (b) RULEMAKING.—Not later than the end of the 

2 180-day period beginning on the date of enactment of this 

3 Act, the Secretary of the Treasury shall issue regulations 

4 to carry out the amendments made by this section. 

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

6 The Federal Financial Institutions Examination 

7 Council Act of 1978 (12 U.S.C. 3301 et seq.) is amend8 ed— 

9 (1) by moving section 1009A so as to appear 

10 after section 1009; and 

11 (2) by inserting after section 1009A, as so 

12 moved, the following: 

13 ‘‘SEC. 1009B. AML/CFT TRAINING. 

14 ‘‘(a) TRAINING REQUIREMENT.—Each examiner em15 ployed by a Federal financial institutions regulatory agen16 cy shall attend at least 10 hours of annual training on 

17 anti-money laundering (AML) and the countering of the 

18 financing of terrorism (CFT), including— 

19 ‘‘(1) potential risk profiles and red flags that 

20 may be encountered during examinations; 

21 ‘‘(2) financial crime patterns and trends; 

22 ‘‘(3) the high-level context for why AML and 

23 CFT programs are necessary for law enforcement 

24 agencies and other national security agencies, and 

25 what risks the programs seek to mitigate; and 


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1 ‘‘(4) de-risking and its effect on the provision of 

2 financial services. 

3 ‘‘(b) TRAINING MATERIALS AND STANDARDS.—The 

4 Council shall establish uniform training materials and 

5 standards for use in the training required under sub6 section (a).’’. 

7 SEC. 203. SHARING OF COMPLIANCE RESOURCES. 

8 (a) IN GENERAL.—Section 5318 of title 31, United 

9 States Code, is amended by adding at the end the fol10 lowing: 

11 ‘‘(o) SHARING OF COMPLIANCE RESOURCES.— 

12 ‘‘(1) SHARING PERMITTED.—Two or more fi13 nancial institutions may enter into collaborative ar14 rangements in order to more efficiency comply with 

15 the requirements of this subchapter. 

16 ‘‘(2) OUTREACH.—The Secretary of the Treas17 ury and the appropriate supervising agencies shall 

18 carry out an outreach program to provide financial 

19 institutions with information, including best prac20 tices, with respect to the sharing of resources de21 scribed under paragraph (1).’’. 

22 (b) RULE OF CONSTRUCTION.—The amendment 

23 made by subsection (a) may not be construed to require 

24 financial institutions to share resources. 


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1 SEC. 204. GAO STUDY ON FEEDBACK LOOPS. 

2 (a) STUDY.—The Comptroller General of the United 

3 States shall carry out a study on— 

4 (1) practices within the United States Govern5 ment for providing feedback (‘‘feedback loop’’) to 

6 relevant parties (including regulated private entities) 

7 on the usage and usefulness of personally identifi8 able information (‘‘PII’’), sensitive-but-unclassified 

9 (‘‘SBU’’) data, or similar information provided by 

10 such parties to Government users of such informa11 tion and data (including law enforcement or regu12 lators); and 

13 (2) any practices or standards outside the 

14 United States for providing feedback loops on sen15 sitive information and public-private partnership in16 formation sharing efforts, specifically related to ef17 forts to combat money laundering and other forms 

18 of illicit finance. 

19 (b) REPORT.—Not later than the end of the 18- 

20 month period beginning on the date of the enactment of 

21 this Act, the Comptroller General shall issue a report to 

22 the Committee on Banking, Housing, and Urban Affairs 

23 of the Senate and the Committee on Financial Services 

24 of the House of Representatives containing— 


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1 (1) all findings and determinations made in car2 rying out the study required under subsection (a); 

3 and 

4 (2) with respect to each of paragraphs (1) and 

5 (2) of subsection (a), any best practices or signifi6 cant concerns identified by the Comptroller General, 

7 and their applicability to public-private partnerships 

8 and feedback loops with respect to U.S. efforts to 

9 combat money laundering and other forms of illicit 

10 finance. 

11 SEC. 205. FINCEN STUDY ON BSA VALUE. 

12 (a) STUDY.—The Director of the Financial Crimes 

13 Enforcement Network shall carry out a study on Bank Se14 crecy Act value. 

15 (b) REPORT.—Not later than the end of the 1-year 

16 period beginning on the date of enactment of this Act, the 

17 Director shall issue a report to the Committee on Finan18 cial Services of the House of Representatives and the 

19 Committee on Banking, Housing, and Urban Affairs of 

20 the Senate containing all findings and determinations 

21 made in carrying out the study required under this sec22 tion. 

23 (c) CLASSIFIED ANNEX.—The report required under 

24 this section may include a classified annex, if the Director 

25 determines it appropriate. 


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1 (d) BANK SECRECY ACT DEFINED.—For purposes of 

2 this section, the term ‘‘Bank Secrecy Act’’ has the mean3 ing given that term under section 5312 of title 31, United 

4 States Code. 

5 SEC. 206. SECTION 314(a) IMPROVEMENTS. 

6 Section 314(a) of the USA PATRIOT Act (31 U.S.C. 

7 5311 note), as amended by section 109, is further amend8 ed by adding at the end the following: 

9 ‘‘(7) POINT OF CONTACT LIST.— 

10 ‘‘(A) IN GENERAL.—The Secretary shall 

11 maintain a list containing contact information 

12 for with respect to a law enforcement agency, 

13 those individuals who serve as points of contact 

14 for a Suspicious Activity Report review com15 mittee. 

16 ‘‘(B) AVAILABILITY OF LIST.—The Sec17 retary shall make the list of contact information 

18 described under subparagraph (A) available to 

19 all financial institutions and law enforcement 

20 agencies.’’. 

21 SEC. 207. SHARING OF THREAT PATTERN AND TREND IN22 FORMATION. 

23 Section 314(a) of the USA PATRIOT Act (31 U.S.C. 

24 5311 note), as amended by section 206, is further amend25 ed by adding at the end the following: 


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1 ‘‘(8) SHARING OF THREAT PATTERN AND

2 TREND INFORMATION.— 

3 ‘‘(A) IN GENERAL.—Not less than month4 ly, the Secretary shall provide financial institu5 tions with typologies on emerging money laun6 dering and counter terror financing threat pat7 terns and trends. 

8 ‘‘(B) INFORMATION CLASSIFICATION.—In 

9 providing information pursuant to subpara10 graph (A), the Secretary may provide public 

11 and sensitive information to financial institu12 tions, but may not provide classified informa13 tion, unless otherwise permitted by law.’’. 

14 SEC. 208. MODERNIZATION AND UPGRADING WHISTLE15 BLOWER PROTECTIONS. 

16 (a) REWARDS.—Section 5323(d) of title 31, United 

17 States Code, is amended to read as follows: 

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

19 paying an award under this section, there are authorized 

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

21 the Secretary may also use funds from the Department 

22 of the Treasury Forfeiture Fund and the Department of 

23 Justice Assets Forfeiture Fund.’’. 

24 (b) WHISTLEBLOWER INCENTIVES.— 


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

2 amended— 

3 (1) by inserting after section 5323 the fol4 lowing: 

5 ‘‘§ 5323A. Whistleblower incentives 

6 ‘‘(a) DEFINITIONS.—In this section: 

7 ‘‘(1) COVERED JUDICIAL OR ADMINISTRATIVE

8 ACTION.—The term ‘covered judicial or administra9 tive action’ means any judicial or administrative ac10 tion brought by FinCEN under the Bank Secrecy 

11 Act that results in monetary sanctions exceeding 

12 $1,000,000. 

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

14 Financial Crimes Enforcement Network. 

15 ‘‘(3) MONETARY SANCTIONS.—The term ‘mone16 tary sanctions’, when used with respect to any judi17 cial or administrative action, means— 

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

19 disgorgement, and interest, ordered to be paid; 

20 and 

21 ‘‘(B) any monies deposited into a 

22 disgorgement fund as a result of such action or 

23 any settlement of such action. 

24 ‘‘(4) ORIGINAL INFORMATION.—The term 

25 ‘original information’ means information that— 


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1 ‘‘(A) is derived from the independent 

2 knowledge or analysis of a whistleblower; 

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

4 other source, unless the whistleblower is the 

5 original source of the information; and 

6 ‘‘(C) is not exclusively derived from an al7 legation made in a judicial or administrative 

8 hearing, in a governmental report, hearing, 

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

10 unless the whistleblower is a source of the infor11 mation. 

12 ‘‘(5) RELATED ACTION.—The term ‘related ac13 tion’, when used with respect to any judicial or ad14 ministrative action brought by FinCEN, means any 

15 judicial or administrative action that is based upon 

16 original information provided by a whistleblower that 

17 led to the successful enforcement of the action. 

18 ‘‘(6) SECRETARY.—The term ‘Secretary’ means 

19 the Secretary of the Treasury. 

20 ‘‘(7) WHISTLEBLOWER.—The term ‘whistle21 blower’ means any individual who provides, or 2 or 

22 more individuals acting jointly who provide, informa23 tion relating to a violation of laws enforced by 

24 FinCEN, in a manner established, by rule or regula25 tion, by FinCEN. 


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1 ‘‘(b) AWARDS.— 

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

3 administrative action, or related action, the Sec4 retary, under such rules as the Secretary may issue 

5 and subject to subsection (c), shall pay an award or 

6 awards to 1 or more whistleblowers who voluntarily 

7 provided original information to FinCEN that led to 

8 the successful enforcement of the covered judicial or 

9 administrative action, or related action, in an aggre10 gate amount equal to— 

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

12 what has been collected of the monetary sanc13 tions imposed in the action or related actions; 

14 and 

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

16 what has been collected of the monetary sanc17 tions imposed in the action or related actions. 

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

19 paying any award under paragraph (1) there are au20 thorized to be appropriated such sums as may be 

21 necessary, and the Secretary may also use funds 

22 from the Department of the Treasury Forfeiture 

23 Fund and the Department of Justice Assets For24 feiture Fund. 


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1 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE2 NIAL OF AWARD.— 

3 ‘‘(1) DETERMINATION OF AMOUNT OF

4 AWARD.— 

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

6 the amount of an award made under subsection 

7 (b) shall be in the discretion of the Secretary. 

8 ‘‘(B) CRITERIA.—In responding to a dis9 closure and determining the amount of an 

10 award made, FinCEN staff shall meet with the 

11 whistleblower to discuss evidence disclosed and 

12 rebuttals to the disclosure, and— 

13 ‘‘(i) shall take into consideration— 

14 ‘‘(I) the significance of the infor15 mation provided by the whistleblower 

16 to the success of the covered judicial 

17 or administrative action; 

18 ‘‘(II) the degree of assistance 

19 provided by the whistleblower and any 

20 legal representative of the whistle21 blower in a covered judicial or admin22 istrative action; 

23 ‘‘(III) the mission of FinCEN in 

24 deterring violations of the law by 

25 making awards to whistleblowers who 


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1 provide information that lead to the 

2 successful enforcement of such laws; 

3 and 

4 ‘‘(IV) such additional relevant 

5 factors as the Secretary may establish 

6 by rule; and 

7 ‘‘(ii) shall not take into consideration 

8 the balance of any fund described under 

9 section 5323(d). 

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

11 subsection (b) shall be made— 

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

13 the time the whistleblower acquired the original 

14 information submitted to FinCEN, a member, 

15 officer, or employee of— 

16 ‘‘(i) an appropriate regulatory agency; 

17 ‘‘(ii) the Department of Justice; 

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

19 ‘‘(iv) a law enforcement organization; 

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

21 of a criminal violation related to the judicial or 

22 administrative action for which the whistle23 blower otherwise could receive an award under 

24 this section; 


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

2 information through the performance of an 

3 audit of financial statements required under the 

4 Bank Secrecy Act and for whom such submis5 sion would be contrary to its requirements; or 

6 ‘‘(D) to any whistleblower who fails to sub7 mit information to FinCEN in such form as the 

8 Secretary may, by rule, require. 

9 ‘‘(3) STATEMENT OF REASONS.—For any deci10 sion granting or denying an award, the Secretary 

11 shall provide to the whistleblower a statement of rea12 sons that includes findings of fact and conclusions of 

13 law for all material issues. 

14 ‘‘(d) REPRESENTATION.— 

15 ‘‘(1) PERMITTED REPRESENTATION.—Any 

16 whistleblower who makes a claim for an award under 

17 subsection (b) may be represented by counsel. 

18 ‘‘(2) REQUIRED REPRESENTATION.— 

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

20 who anonymously makes a claim for an award 

21 under subsection (b) shall be represented by 

22 counsel if the whistleblower anonymously sub23 mits the information upon which the claim is 

24 based. 


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

2 the payment of an award, a whistleblower shall 

3 disclose their identity and provide such other 

4 information as the Secretary may require, di5 rectly or through counsel for the whistleblower. 

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

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

8 to make awards, shall be in the discretion of the Secretary. 

9 Any such determination, except the determination of the 

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

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

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

13 days after the determination is issued by the Secretary. 

14 The court shall review the determination made by the Sec15 retary in accordance with section 706 of title 5.’’; and 

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

17 inserting after the item relating to section 5323 the 

18 following new item: 

‘‘5323A. Whistleblower incentives.’’. 

19 SEC. 209. CERTAIN VIOLATORS BARRED FROM SERVING ON 

20 PUBLIC COMPANY BOARDS. 

21 Section 5321 of title 31, United States Code, is 

22 amended by adding at the end the following: 

23 ‘‘(f) CERTAIN VIOLATORS BARRED FROM SERVING

24 ON PUBLIC COMPANY BOARDS.— 


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1 ‘‘(1) IN GENERAL.—An individual found to 

2 have committed an egregious violation of a provision 

3 of (or rule issued under) this subchapter, section 21 

4 of the Federal Deposit Insurance Act, or section 123 

5 of Public Law 91–508 shall be barred from serving 

6 on the board of directors of a public company for a 

7 10-year period beginning on the date of such find8 ing. 

9 ‘‘(2) DEFINITIONS.—In this subsection: 

10 ‘‘(A) EGREGIOUS VIOLATION.—With re11 spect to an individual, the term ‘egregious viola12 tion’ means— 

13 ‘‘(i) a felony criminal violation for 

14 which the individual was convicted; and 

15 ‘‘(ii) a civil violation where the indi16 vidual knowingly committed such violation 

17 and the violation facilitated money laun18 dering or the financing of terrorism. 

19 ‘‘(B) PUBLIC COMPANY.—The term ‘public 

20 company’ means an issuer the securities of 

21 which are traded on a national securities ex22 change. 

23 ‘‘(C) OTHER SECURITIES TERMS.—The 

24 terms ‘issuer’ and ‘national securities exchange’ 

25 have the meaning given those terms, respecVerDate Sep 11 2014 22:24 May 06, 2019 Jkt 089200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.IH H2514

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1 tively, under section 3 of the Securities Ex2 change Act of 1934.’’. 

3 SEC. 210. ADDITIONAL DAMAGES FOR REPEAT BANK SE4 CRECY ACT VIOLATORS. 

5 Section 5321 of title 31, United States Code, as 

6 amended by section 209, is further amended by adding 

7 at the end the following: 

8 ‘‘(g) ADDITIONAL DAMAGES FOR REPEAT VIOLA9 TORS.—In addition to any other fines permitted by this 

10 section and section 5322, with respect to a person who 

11 has previously violated a provision of (or rule issued 

12 under) this subchapter, section 21 of the Federal Deposit 

13 Insurance Act, or section 123 of Public Law 91–508, the 

14 Secretary may impose an additional civil penalty against 

15 such person for each additional such violation in an 

16 amount equal to up to three times the profit gained or 

17 loss avoided by such person as a result of the violation.’’. 

18 SEC. 211. JUSTICE ANNUAL REPORT ON DEFERRED AND 

19 NONPROSECUTION AGREEMENTS. 

20 (a) ANNUAL REPORT.—The Attorney General shall 

21 issue an annual report, every year for the five years begin22 ning on the date of enactment of this Act, to the Commit23 tees on Financial Services and the Judiciary of the House 

24 of Representatives and the Committees on Banking, HousVerDate Sep 11 2014 22:24 May 06, 2019 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.IH H2514

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1 ing, and Urban Affairs and the Judiciary of the Senate 

2 containing— 

3 (1) a list of deferred prosecution agreements 

4 and nonprosecution agreements that the Attorney 

5 General has entered into during the previous year 

6 with any person with respect to a violation or sus7 pected violation of the Bank Secrecy Act; 

8 (2) the justification for entering into each such 

9 agreement; 

10 (3) the list of factors that were taken into ac11 count in determining that the Attorney General 

12 should enter into each such agreement; and 

13 (4) the extent of coordination the Attorney 

14 General conducted with the Financial Crimes En15 forcement Network prior to entering into each such 

16 agreement. 

17 (b) CLASSIFIED ANNEX.—Each report under sub18 section (a) may include a classified annex. 

19 (c) BANK SECRECY ACT DEFINED.—For purposes of 

20 this section, the term ‘‘Bank Secrecy Act’’ has the mean21 ing given that term under section 5312 of title 31, United 

22 States Code. 

23 SEC. 212. RETURN OF PROFITS AND BONUSES. 

24 Section 5322 of title 31, United States Code, is 

25 amended by adding at the end the following: 


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1 ‘‘(e) RETURN OF PROFITS AND BONUSES.—A person 

2 convicted of violating a provision of (or rule issued under) 

3 this subchapter, section 21 of the Federal Deposit Insur4 ance Act, or section 123 of Public Law 91–508 shall— 

5 ‘‘(1) in addition to any other fine under this 

6 section, be fined in an amount equal to the profit 

7 gained by such person by reason of such violation, 

8 as determined by the court; and 

9 ‘‘(2) if such person is an individual who was a 

10 partner, director, officer, or employee of a domestic 

11 financial institution or nonfinancial trade or busi12 ness at the time the violation occurred, repay to 

13 such domestic financial institution or nonfinancial 

14 trade or business any bonus paid to such individual 

15 during the Federal fiscal year in which the violation 

16 occurred.’’. 

17 SEC. 213. PROHIBITION ON TAX DEDUCTIONS FOR ATTOR18 NEY’S FEES RELATED TO BANK SECRECY ACT 

19 SETTLEMENTS AND COURT COSTS. 

20 Section 162(f) of the Internal Revenue Code of 1986 

21 is amended by adding at the end the following: 

22 ‘‘(6) VIOLATIONS OF THE BANK SECRECY

23 ACT.—In the case of a payment described in para24 graph (1) that is in relation to any violation of the 

25 Bank Secrecy Act (as defined under section 5312 of 


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1 title 31, United States Code), no deduction shall be 

2 allowed under this chapter for attorney’s fees related 

3 to such payment.’’. 

4 SEC. 214. APPLICATION OF BANK SECRECY ACT TO DEAL5 ERS IN ART OR ANTIQUITIES. 

6 (a) IN GENERAL.—Section 5312(a)(2) of title 31, 

7 United States Code, is amended— 

8 (1) in subparagraph (Y), by striking ‘‘or’’ at 

9 the end; 

10 (2) by redesignating subparagraph (Z) as sub11 paragraph (AA); and 

12 (3) by inserting after subsection (Y) the fol13 lowing: 

14 ‘‘(Z) dealers in art or antiquities; or’’. 

15 (b) RULEMAKING.—Not later than the end of the 

16 180-day period beginning on the date of the enactment 

17 of this Act, the Secretary of the Treasury shall issue regu18 lations to carry out the amendments made by subsection 

19 (a). 

20 (c) EFFECTIVE DATE.—Section 5312(a)(2)(Z) of 

21 title 31, United States Code, as added by subsection (a), 

22 shall take effect after the end of the 270-day period begin23 ning on the date of the enactment of this Act. 


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1 SEC. 215. REVISION TO GEOGRAPHIC TARGETING ORDER. 

2 The Secretary of the Treasury shall revise the geo3 graphic targeting order issued by the Financial Crimes 

4 Enforcement Network on November 15, 2018 (the 

5 ‘‘Order’’), so that the Order— 

6 (1) applies to commercial real estate to the 

7 same extent as the Order applies to residential real 

8 estate; and 

9 (2) applies to a purchase made, at least in part, 

10 using an in-kind transaction to the same extent as 

11 the Order applies to a purchase made, at least in 

12 part, using currency or a cashier’s check, a certified 

13 check, a traveler’s check, a personal check, a busi14 ness check, a money order in any form, a funds 

15 transfer, or virtual currency. 

16 TITLE III—MODERNIZING THE 

17 AML SYSTEM 

18 SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLI19 ANCE. 

20 Section 5318 of title 31, United States Code, as 

21 amended by section 203, is further amended by adding 

22 at the end the following: 

23 ‘‘(p) ENCOURAGING INNOVATION IN COMPLIANCE.— 

24 ‘‘(1) IN GENERAL.—The financial agencies shall 

25 encourage financial institutions to consider, evaluate, 

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1 vative approaches to meet the requirements of this 

2 subchapter, including through the use of innovation 

3 pilot programs. 

4 ‘‘(2) EXEMPTIVE RELIEF.—The Secretary, pur5 suant to subsection (a), may provide exemptions 

6 from the requirements of this subchapter if the Sec7 retary determines such exemptions are necessary to 

8 facilitate the testing and potential use of new tech9 nologies and other innovations. 

10 ‘‘(3) FINANCIAL AGENCY DEFINED.—In this 

11 subsection, the term ‘financial agency’ means the 

12 Department of the Treasury, the Board of Gov13 ernors of the Federal Reserve System, the Federal 

14 Deposit Insurance Corporation, the National Credit 

15 Union Administration, the Office of the Comptroller 

16 of the Currency, and the Securities and Exchange 

17 Commission.’’. 

18 SEC. 302. INNOVATION LABS. 

19 (a) IN GENERAL.—Title 31, United States Code, is 

20 amended by inserting after section 5326 the following: 

21 ‘‘§ 5327. Innovation Labs 

22 ‘‘(a) ESTABLISHMENT.—There is established within 

23 each financial agency an Innovation Lab. 


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1 ‘‘(b) DIRECTOR.—The head of each Innovation Lab 

2 shall be a Director, to be appointed by the head of the 

3 applicable financial agency. 

4 ‘‘(c) DUTIES.—The duties of the Innovation Lab 

5 shall be— 

6 ‘‘(1) to provide outreach to law enforcement 

7 agencies, financial institutions, and other persons 

8 (including vendors and technology companies) with 

9 respect to innovation and new technologies used to 

10 comply with the requirements of the Bank Secrecy 

11 Act; and 

12 ‘‘(2) to support the implementation of respon13 sible innovation and new technology, in a manner 

14 that complies with the requirements of the Bank Se15 crecy Act. 

16 ‘‘(d) FINCEN LAB.—The Innovation Lab established 

17 under subsection (a) within the Department of the Treas18 ury shall be a lab within the Financial Crimes Enforce19 ment Network. 

20 ‘‘(e) FINANCIAL AGENCY DEFINED.—In this section, 

21 the term ‘financial agency’ means the Department of the 

22 Treasury, the Board of Governors of the Federal Reserve 

23 System, the Federal Deposit Insurance Corporation, the 

24 National Credit Union Administration, the Office of the 


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1 Comptroller of the Currency, and the Securities and Ex2 change Commission.’’. 

3 (b) CLERICAL AMENDMENT.—The table of contents 

4 for chapter 53 of title 31, United States Code, is amended 

5 by inserting after the item relating to section 5326 the 

6 following: 

‘‘5327. Innovation Labs.’’. 

7 SEC. 303. INNOVATION COUNCIL. 

8 (a) ESTABLISHMENT.—There is established the Inno9 vation Council (hereinafter in this section referred to as 

10 the ‘‘Council’’), which shall consist of each Director of an 

11 Innovation Lab established under section 302 and the Di12 rector of the Financial Crimes Enforcement Network. 

13 (b) CHAIR.—The Director of the Innovation Lab of 

14 the Department of the Treasury shall serve as the Chair 

15 of the Council. 

16 (c) DUTY.—The members of the Council shall coordi17 nate on activities related to innovation under the Bank 

18 Secrecy Act (as defined under section 5312 of title 31, 

19 United States Code). 

20 (d) MEETINGS.—The meetings of the Council— 

21 (1) shall be at the call of the Chair, but in no 

22 case may the Council meet less than quarterly; 

23 (2) may include open and closed sessions, as de24 termined necessary by the Council; and 


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1 (3) may include participation by public and pri2 vate entities and law enforcement agencies. 

3 (e) REPORT.—The Council shall issue an annual re4 port to Congress on the activities of the Council during 

5 the previous year and any legislative recommendations 

6 that the Council may have. 

7 SEC. 304. PARALLEL RUNS RULEMAKING. 

8 Section 5318 of title 31, United States Code, as 

9 amended by section 301, is further amended by adding 

10 at the end the following: 

11 ‘‘(q) PARALLEL RUNS RULEMAKING.—The Secretary 

12 of the Treasury, in consultation with the Director of the 

13 Financial Crimes Enforcement Network and the head of 

14 each agency to which the Secretary has delegated duties 

15 or powers under subsection (a), shall issue a rule to speci16 fy— 

17 ‘‘(1) with respect to technology and processes 

18 designed to facilitate compliance with the Bank Se19 crecy Act requirements, under what circumstances it 

20 is necessary for a financial institution to test new 

21 technology and processes alongside legacy technology 

22 and processes (‘parallel runs’); 

23 ‘‘(2) if parallel runs are required, what tests 

24 must be completed; and 


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1 ‘‘(3) in what instances or under what cir2 cumstances a financial institution may replace or 

3 terminate such legacy technology and processes for 

4 any examinable technology or process.’’. 

Æ 


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