IB 

Union Calendar No. 180 

116TH CONGRESS 

1ST SESSION H. R. 2513 

[Report No. 116–227] 

To ensure that persons who form corporations or limited liability companies 

in the United States disclose the beneficial owners of those corporations 

or limited liability companies, in order to prevent wrongdoers from exploiting United States corporations and limited liability companies for 

criminal gain, to assist law enforcement in detecting, preventing, and 

punishing terrorism, money laundering, and other misconduct involving 

United States corporations and limited liability companies, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 3, 2019 

Mrs. CAROLYN B. MALONEY of New York (for herself, Mr. KING of New 

York, and Mr. MALINOWSKI) introduced the following bill; which was referred to the Committee on Financial Services 

OCTOBER 8, 2019 

Additional sponsors: Mr. BEYER, Mr. COOPER, Mr. HASTINGS, Mr. MEEKS, 

Mr. CLEAVER, Ms. KAPTUR, Ms. BLUNT ROCHESTER, and Mr. SHERMAN

OCTOBER 8, 2019 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on May 3, 2019] 


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A BILL 

To ensure that persons who form corporations or limited 

liability companies in the United States disclose the beneficial owners of those corporations or limited liability 

companies, in order to prevent wrongdoers from exploiting United States corporations and limited liability companies for criminal gain, to assist law enforcement in 

detecting, preventing, and punishing terrorism, money 

laundering, and other misconduct involving United States 

corporations and limited liability companies, and for 

other purposes. 


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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. 

4 This Act may be cited as the ‘‘Corporate Transparency 

5 Act of 2019’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Nearly 2,000,000 corporations and limited li9 ability companies are being formed under the laws of 

10 the States each year. 

11 (2) Very few States require information about 

12 the beneficial owners of the corporations and limited 

13 liability companies formed under their laws. 

14 (3) A person forming a corporation or limited li15 ability company within the United States typically 

16 provides less information at the time of incorporation 

17 than is needed to obtain a bank account or driver’s 

18 license and typically does not name a single bene19 ficial owner. 

20 (4) Criminals have exploited State formation 

21 procedures to conceal their identities when forming 

22 corporations or limited liability companies in the 

23 United States, and have then used the newly created 

24 entities to commit crimes affecting interstate and 

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1 tion financing, drug and human trafficking, money 

2 laundering, tax evasion, counterfeiting, piracy, secu3 rities fraud, financial fraud, and acts of foreign cor4 ruption. 

5 (5) Law enforcement efforts to investigate cor6 porations and limited liability companies suspected of 

7 committing crimes have been impeded by the lack of 

8 available beneficial ownership information, as docu9 mented in reports and testimony by officials from the 

10 Department of Justice, the Department of Homeland 

11 Security, the Department of the Treasury, and the 

12 Government Accountability Office, and others. 

13 (6) In July 2006, the leading international 

14 antimoney laundering standard-setting body, the Fi15 nancial Action Task Force on Money Laundering (in 

16 this section referred to as the ‘‘FATF’’), of which the 

17 United States is a member, issued a report that criti18 cizes the United States for failing to comply with a 

19 FATF standard on the need to collect beneficial own20 ership information and urged the United States to 

21 correct this deficiency by July 2008. In December 

22 2016, FATF issued another evaluation of the United 

23 States, which found that little progress has been made 

24 over the last ten years to address this problem. It 

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1 rate and current beneficial ownership information’’ 

2 as a fundamental gap in United States efforts to com3 bat money laundering and terrorist finance. 

4 (7) In response to the 2006 FATF report, the 

5 United States has urged the States to obtain bene6 ficial ownership information for the corporations and 

7 limited liability companies formed under the laws of 

8 such States. 

9 (8) In contrast to practices in the United States, 

10 all 28 countries in the European Union are required 

11 to have corporate registries that include beneficial 

12 ownership information. 

13 (9) To reduce the vulnerability of the United 

14 States to wrongdoing by United States corporations 

15 and limited liability companies with hidden owners, 

16 to protect interstate and international commerce from 

17 criminals misusing United States corporations and 

18 limited liability companies, to strengthen law enforce19 ment investigations of suspect corporations and lim20 ited liability companies, to set a clear, universal 

21 standard for State incorporation practices, and to 

22 bring the United States into compliance with inter23 national anti-money laundering standards, Federal 

24 legislation is needed to require the collection of bene25 ficial ownership information for the corporations and 


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1 limited liability companies formed under the laws of 

2 such States. 

3 SEC. 3. TRANSPARENT INCORPORATION PRACTICES. 

4 (a) IN GENERAL.— 

5 (1) AMENDMENT TO THE BANK SECRECY ACT.— 

6 Chapter 53 of title 31, United States Code, is amend7 ed by inserting after section 5332 the following new 

8 section: 

9 ‘‘§ 5333 Transparent incorporation practices 

10 ‘‘(a) REPORTING REQUIREMENTS.— 

11 ‘‘(1) BENEFICIAL OWNERSHIP REPORTING.— 

12 ‘‘(A) IN GENERAL.—Each applicant to form 

13 a corporation or limited liability company 

14 under the laws of a State or Indian Tribe shall 

15 file a report with FinCEN containing a list of 

16 the beneficial owners of the corporation or lim17 ited liability company that— 

18 ‘‘(i) except as provided in paragraphs 

19 (3) and (4), and subject to paragraph (2), 

20 identifies each beneficial owner by— 

21 ‘‘(I) full legal name; 

22 ‘‘(II) date of birth; 

23 ‘‘(III) current residential or busi24 ness street address; and 


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1 ‘‘(IV) a unique identifying num2 ber from a non-expired passport issued 

3 by the United States, a non-expired 

4 personal identification card, or a non5 expired driver’s license issued by a 

6 State; and 

7 ‘‘(ii) if the applicant is not a bene8 ficial owner, also provides the identification 

9 information described in clause (i) relating 

10 to such applicant. 

11 ‘‘(B) UPDATED INFORMATION.—Each cor12 poration or limited liability company formed 

13 under the laws of a State or Indian Tribe 

14 shall— 

15 ‘‘(i) submit to FinCEN an annual fil16 ing containing a list of— 

17 ‘‘(I) the current beneficial owners 

18 of the corporation or limited liability 

19 company and the information de20 scribed in subparagraph (A) for each 

21 such beneficial owner; and 

22 ‘‘(II) any changes in the bene23 ficial owners of the corporation or lim24 ited liability company during the pre25 vious year; and 


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1 ‘‘(ii) pursuant to any rule issued by 

2 the Secretary of the Treasury under sub3 paragraph (C), update the list of the bene4 ficial owners of the corporation or limited 

5 liability company within the time period 

6 prescribed by such rule. 

7 ‘‘(C) RULEMAKING ON UPDATING INFORMA8 TION.—Not later than 9 months after the comple9 tion of the study required under section 4(a)(1) 

10 of the Corporate Transparency Act of 2019, the 

11 Secretary of the Treasury shall consider the find12 ings of such study and, if the Secretary deter13 mines it to be necessary or appropriate, issue a 

14 rule requiring corporations and limited liability 

15 companies to update the list of the beneficial 

16 owners of the corporation or limited liability 

17 company within a specified amount of time after 

18 the date of any change in the list of beneficial 

19 owners or the information required to be pro20 vided relating to each beneficial owner. 

21 ‘‘(D) STATE NOTIFICATION.—Each State in 

22 which a corporation or limited liability com23 pany is being formed shall notify each applicant 

24 of the requirements listed in subparagraphs (A) 

25 and (B). 


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1 ‘‘(2) CERTAIN BENEFICIAL OWNERS.—If an ap2 plicant to form a corporation or limited liability 

3 company or a beneficial owner, or similar agent of a 

4 corporation or limited liability company who is re5 quired to provide identification information under 

6 this subsection, does not have a nonexpired passport 

7 issued by the United States, a nonexpired personal 

8 identification card, or a non-expired driver’s license 

9 issued by a State, each such person shall provide to 

10 FinCEN the full legal name, current residential or 

11 business street address, a unique identifying number 

12 from a non-expired passport issued by a foreign gov13 ernment, and a legible and credible copy of the pages 

14 of a non-expired passport issued by the government of 

15 a foreign country bearing a photograph, date of birth, 

16 and unique identifying information for each bene17 ficial owner, and each application described in para18 graph (1)(A) and each update described in paragraph 

19 (1)(B) shall include a written certification by a per20 son residing in the State or Indian country under the 

21 jurisdiction of the Indian Tribe forming the entity 

22 that the applicant, corporation, or limited liability 

23 company— 

24 ‘‘(A) has obtained for each such beneficial 

25 owner, a current residential or business street 


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1 address and a legible and credible copy of the 

2 pages of a non-expired passport issued by the 

3 government of a foreign country bearing a photo4 graph, date of birth, and unique identifying in5 formation for the person; 

6 ‘‘(B) has verified the full legal name, ad7 dress, and identity of each such person; 

8 ‘‘(C) will provide the information described 

9 in subparagraph (A) and the proof of 

10 verification described in subparagraph (B) upon 

11 request of FinCEN; and 

12 ‘‘(D) will retain the information and proof 

13 of verification under this paragraph until the 

14 end of the 5-year period beginning on the date 

15 that the corporation or limited liability company 

16 terminates under the laws of the State or Indian 

17 Tribe. 

18 ‘‘(3) EXEMPT ENTITIES.— 

19 ‘‘(A) IN GENERAL.—With respect to an ap20 plicant to form a corporation or limited liability 

21 company under the laws of a State or Indian 

22 Tribe, if such entity is described in subpara23 graph (C) or (D) of subsection (d)(4) and will be 

24 exempt from the beneficial ownership disclosure 

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1 cant, or a prospective officer, director, or similar 

2 agent of the applicant, shall file a written cer3 tification with FinCEN— 

4 ‘‘(i) identifying the specific provision 

5 of subsection (d)(4) under which the entity 

6 proposed to be formed would be exempt from 

7 the beneficial ownership disclosure require8 ments under paragraphs (1) and (2); 

9 ‘‘(ii) stating that the entity proposed to 

10 be formed meets the requirements for an en11 tity described under such provision of sub12 section (d)(4); and 

13 ‘‘(iii) providing identification infor14 mation for the applicant or prospective offi15 cer, director, or similar agent making the 

16 certification in the same manner as pro17 vided under paragraph (1) or (2). 

18 ‘‘(B) EXISTING CORPORATIONS OR LIMITED

19 LIABILITY COMPANIES.—On and after the date 

20 that is 2 years after the final regulations are 

21 issued to carry out this section, a corporation or 

22 limited liability company formed under the laws 

23 of the State or Indian Tribe before such date 

24 shall be subject to the requirements of this sub25 section unless an officer, director, or similar 


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1 agent of the entity submits to FinCEN a written 

2 certification— 

3 ‘‘(i) identifying the specific provision 

4 of subsection (d)(4) under which the entity 

5 is exempt from the requirements under 

6 paragraphs (1) and (2); 

7 ‘‘(ii) stating that the entity meets the 

8 requirements for an entity described under 

9 such provision of subsection (d)(4); and 

10 ‘‘(iii) providing identification infor11 mation for the officer, director, or similar 

12 agent making the certification in the same 

13 manner as provided under paragraph (1) or 

14 (2). 

15 ‘‘(C) EXEMPT ENTITIES HAVING OWNERSHIP

16 INTEREST.—If an entity described in subpara17 graph (C) or (D) of subsection (d)(4) has or will 

18 have an ownership interest in a corporation or 

19 limited liability company formed or to be formed 

20 under the laws of a State or Indian Tribe, the 

21 applicant, corporation, or limited liability com22 pany in which the entity has or will have the 

23 ownership interest shall provide the information 

24 required under this subsection relating to the en25 tity, except that the entity shall not be required 


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1 to provide information regarding any natural 

2 person who has an ownership interest in, exer3 cises substantial control over, or receives substan4 tial economic benefits from the entity. 

5 ‘‘(4) FINCEN ID NUMBERS.— 

6 ‘‘(A) ISSUANCE OF FINCEN ID NUMBER.— 

7 ‘‘(i) IN GENERAL.—FinCEN shall issue 

8 a FinCEN ID number to any individual 

9 who requests such a number and provides 

10 FinCEN with the information described 

11 under subclauses (I) through (IV) of para12 graph (1)(A)(i). 

13 ‘‘(ii) UPDATING OF INFORMATION.—An 

14 individual with a FinCEN ID number shall 

15 submit an annual filing with FinCEN up16 dating any information described under 

17 subclauses (I) through (IV) of paragraph 

18 (1)(A)(i). 

19 ‘‘(B) USE OF FINCEN ID NUMBER IN RE20 PORTING REQUIREMENTS.—Any person required 

21 to report the information described under para22 graph (1)(A)(i) with respect to an individual 

23 may instead report the FinCEN ID number of 

24 the individual. 


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1 ‘‘(C) TREATMENT OF INFORMATION SUB2 MITTED FOR FINCEN ID NUMBER.—For purposes 

3 of this section, any information submitted under 

4 subparagraph (A) shall be deemed to be bene5 ficial ownership information. 

6 ‘‘(5) RETENTION AND DISCLOSURE OF BENE7 FICIAL OWNERSHIP INFORMATION BY FINCEN.— 

8 ‘‘(A) RETENTION OF INFORMATION.—Bene9 ficial ownership information relating to each 

10 corporation or limited liability company formed 

11 under the laws of the State or Indian Tribe shall 

12 be maintained by FinCEN until the end of the 

13 5-year period (or such other period of time as the 

14 Secretary of the Treasury may, by rule, deter15 mine) beginning on the date that the corporation 

16 or limited liability company terminates. 

17 ‘‘(B) DISCLOSURE OF INFORMATION.—Bene18 ficial ownership information reported to 

19 FinCEN pursuant to this section shall be pro20 vided by FinCEN only upon receipt of— 

21 ‘‘(i) subject to subparagraph (C), a re22 quest, through appropriate protocols, by a 

23 local, Tribal, State, or Federal law enforce24 ment agency; 


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1 ‘‘(ii) a request made by a Federal 

2 agency on behalf of a law enforcement agen3 cy of another country under an inter4 national treaty, agreement, or convention, 

5 or an order under section 3512 of title 18 

6 or section 1782 of title 28; or 

7 ‘‘(iii) a request made by a financial 

8 institution, with customer consent, as part 

9 of the institution’s compliance with due 

10 diligence requirements imposed under the 

11 Bank Secrecy Act, the USA PATRIOT Act, 

12 or other applicable Federal, State, or Tribal 

13 law. 

14 ‘‘(C) APPROPRIATE PROTOCOLS.— 

15 ‘‘(i) PRIVACY.—The protocols described 

16 in subparagraph (B)(i) shall— 

17 ‘‘(I) protect the privacy of any 

18 beneficial ownership information pro19 vided by FinCEN to a local, Tribal, 

20 State, or Federal law enforcement 

21 agency; 

22 ‘‘(II) ensure that a local, Tribal, 

23 State, or Federal law enforcement 

24 agency requesting beneficial ownership 

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1 tory basis for requesting such informa2 tion; 

3 ‘‘(III) ensure that access to bene4 ficial ownership information is limited 

5 to authorized users at a local, Tribal, 

6 State, or Federal law enforcement 

7 agency who have undergone appro8 priate training, and that the identity 

9 of such authorized users is verified 

10 through appropriate mechanisms, such 

11 as two-factor authentication; 

12 ‘‘(IV) include an audit trail of re13 quests for beneficial ownership infor14 mation by a local, Tribal, State, or 

15 Federal law enforcement agency, in16 cluding, as necessary, information con17 cerning queries made by authorized 

18 users at a local, Tribal, State, or Fed19 eral law enforcement agency; 

20 ‘‘(V) require that every local, 

21 Tribal, State, or Federal law enforce22 ment agency that receives beneficial 

23 ownership information from FinCEN 

24 conducts an annual audit to verify 

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1 tion received from FinCEN has been 

2 accessed and used appropriately, and 

3 consistent with this paragraph; and 

4 ‘‘(VI) require FinCEN to conduct 

5 an annual audit of every local, Tribal, 

6 State, or Federal law enforcement 

7 agency that has received beneficial 

8 ownership information to ensure that 

9 such agency has requested beneficial 

10 ownership information, and has used 

11 any beneficial ownership information 

12 received from FinCEN, appropriately, 

13 and consistent with this paragraph. 

14 ‘‘(ii) LIMITATION ON USE.—Beneficial 

15 ownership information provided to a local, 

16 Tribal, State, or Federal law enforcement 

17 agency under this paragraph may only be 

18 used for law enforcement, national security, 

19 or intelligence purposes. 

20 ‘‘(b) NO BEARER SHARE CORPORATIONS OR LIMITED

21 LIABILITY COMPANIES.—A corporation or limited liability 

22 company formed under the laws of a State or Indian Tribe 

23 may not issue a certificate in bearer form evidencing either 

24 a whole or fractional interest in the corporation or limited 

25 liability company. 


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1 ‘‘(c) PENALTIES.— 

2 ‘‘(1) IN GENERAL.—It shall be unlawful for any 

3 person to affect interstate or foreign commerce by— 

4 ‘‘(A) knowingly providing, or attempting to 

5 provide, false or fraudulent beneficial ownership 

6 information, including a false or fraudulent 

7 identifying photograph, to FinCEN in accord8 ance with this section; 

9 ‘‘(B) willfully failing to provide complete or 

10 updated beneficial ownership information to 

11 FinCEN in accordance with this section; or 

12 ‘‘(C) knowingly disclosing the existence of a 

13 subpoena or other request for beneficial owner14 ship information reported pursuant to this sec15 tion, except— 

16 ‘‘(i) to the extent necessary to fulfill the 

17 authorized request; or 

18 ‘‘(ii) as authorized by the entity that 

19 issued the subpoena, or other request. 

20 ‘‘(2) CIVIL AND CRIMINAL PENALTIES.—Any per21 son who violates paragraph (1)— 

22 ‘‘(A) shall be liable to the United States for 

23 a civil penalty of not more than $10,000; and 


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1 ‘‘(B) may be fined under title 18, United 

2 States Code, imprisoned for not more than 3 

3 years, or both. 

4 ‘‘(3) LIMITATION.—Any person who negligently 

5 violates paragraph (1) shall not be subject to civil or 

6 criminal penalties under paragraph (2). 

7 ‘‘(4) WAIVER.—The Secretary of the Treasury 

8 may waive the penalty for violating paragraph (1) if 

9 the Secretary determines that the violation was due to 

10 reasonable cause and was not due to willful neglect. 

11 ‘‘(5) CRIMINAL PENALTY FOR THE MISUSE OR

12 UNAUTHORIZED DISCLOSURE OF BENEFICIAL OWNER13 SHIP INFORMATION.—The criminal penalties provided 

14 for under section 5322 shall apply to a violation of 

15 this section to the same extent as such criminal pen16 alties apply to a violation described in section 5322, 

17 if the violation of this section consists of the misuse 

18 or unauthorized disclosure of beneficial ownership in19 formation. 

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

21 ‘‘(1) APPLICANT.—The term ‘applicant’ means 

22 any natural person who files an application to form 

23 a corporation or limited liability company under the 

24 laws of a State or Indian Tribe. 


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1 ‘‘(2) BANK SECRECY ACT.—The term ‘Bank Se2 crecy Act’ means— 

3 ‘‘(A) section 21 of the Federal Deposit In4 surance Act; 

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

6 508; and 

7 ‘‘(C) this subchapter. 

8 ‘‘(3) BENEFICIAL OWNER.— 

9 ‘‘(A) IN GENERAL.—Except as provided in 

10 subparagraph (B), the term ‘beneficial owner’ 

11 means a natural person who, directly or indi12 rectly, through any contract, arrangement, un13 derstanding, relationship, or otherwise— 

14 ‘‘(i) exercises substantial control over a 

15 corporation or limited liability company; 

16 ‘‘(ii) owns 25 percent or more of the 

17 equity interests of a corporation or limited 

18 liability company; or 

19 ‘‘(iii) receives substantial economic 

20 benefits from the assets of a corporation or 

21 limited liability company. 

22 ‘‘(B) EXCEPTIONS.—The term ‘beneficial 

23 owner’ shall not include— 


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1 ‘‘(i) a minor child, as defined in the 

2 State or Indian Tribe in which the entity 

3 is formed; 

4 ‘‘(ii) a person acting as a nominee, 

5 intermediary, custodian, or agent on behalf 

6 of another person; 

7 ‘‘(iii) a person acting solely as an em8 ployee of a corporation or limited liability 

9 company and whose control over or eco10 nomic benefits from the corporation or lim11 ited liability company derives solely from 

12 the employment status of the person; 

13 ‘‘(iv) a person whose only interest in a 

14 corporation or limited liability company is 

15 through a right of inheritance; or 

16 ‘‘(v) a creditor of a corporation or lim17 ited liability company, unless the creditor 

18 also meets the requirements of subparagraph 

19 (A). 

20 ‘‘(C) SUBSTANTIAL ECONOMIC BENEFITS

21 DEFINED.— 

22 ‘‘(i) IN GENERAL.—For purposes of 

23 subparagraph (A)(ii), a natural person re24 ceives substantial economic benefits from the 

25 assets of a corporation or limited liability 


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1 company if the person has an entitlement to 

2 more than a specified percentage of the 

3 funds or assets of the corporation or limited 

4 liability company, which the Secretary of 

5 the Treasury shall, by rule, establish. 

6 ‘‘(ii) RULEMAKING CRITERIA.—In es7 tablishing the percentage under clause (i), 

8 the Secretary of the Treasury shall seek to— 

9 ‘‘(I) provide clarity to corpora10 tions and limited liability companies 

11 with respect to the identification and 

12 disclosure of a natural person who re13 ceives substantial economic benefits 

14 from the assets of a corporation or lim15 ited liability company; and 

16 ‘‘(II) identify those natural per17 sons who, as a result of the substantial 

18 economic benefits they receive from the 

19 assets of a corporation or limited li20 ability company, exercise a dominant 

21 influence over such corporation or lim22 ited liability company. 

23 ‘‘(4) CORPORATION; LIMITED LIABILITY COM24 PANY.—The terms ‘corporation’ and ‘limited liability 

25 company’— 


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1 ‘‘(A) have the meanings given such terms 

2 under the laws of the applicable State or Indian 

3 Tribe; 

4 ‘‘(B) include any non-United States entity 

5 eligible for registration or registered to do busi6 ness as a corporation or limited liability com7 pany under the laws of the applicable State or 

8 Indian Tribe; 

9 ‘‘(C) do not include any entity that is— 

10 ‘‘(i) a business concern that is an 

11 issuer of a class of securities registered 

12 under section 12 of the Securities Exchange 

13 Act of 1934 (15 U.S.C. 781) or that is re14 quired to file reports under section 15(d) of 

15 that Act (15 U.S.C. 78o(d)); 

16 ‘‘(ii) a business concern constituted, 

17 sponsored, or chartered by a State or In18 dian Tribe, a political subdivision of a 

19 State or Indian Tribe, under an interstate 

20 compact between two or more States, by a 

21 department or agency of the United States, 

22 or under the laws of the United States; 

23 ‘‘(iii) a depository institution (as de24 fined in section 3 of the Federal Deposit In25 surance Act (12 U.S.C. 1813)); 


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1 ‘‘(iv) a credit union (as defined in sec2 tion 101 of the Federal Credit Union Act 

3 (12 U.S.C. 1752)); 

4 ‘‘(v) a bank holding company (as de5 fined in section 2 of the Bank Holding 

6 Company Act of 1956 (12 U.S.C. 1841)) or 

7 a savings and loan holding company (as de8 fined in section 10(a) of the Home Owners’ 

9 Loan Act (12 U.S.C. 1467a(a)); 

10 ‘‘(vi) a broker or dealer (as defined in 

11 section 3 of the Securities Exchange Act of 

12 1934 (15 U.S.C. 78c)) that is registered 

13 under section 15 of the Securities Exchange 

14 Act of 1934 (15 U.S.C. 78o); 

15 ‘‘(vii) an exchange or clearing agency 

16 (as defined in section 3 of the Securities Ex17 change Act of 1934 (15 U.S.C. 78c)) that is 

18 registered under section 6 or 17A of the Se19 curities Exchange Act of 1934 (15 U.S.C. 

20 78f and 78q–1); 

21 ‘‘(viii) an investment company (as de22 fined in section 3 of the Investment Com23 pany Act of 1940 (15 U.S.C. 80a–3)) or an 

24 investment adviser (as defined in section 

25 202(11) of the Investment Advisers Act of 


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1 1940 (15 U.S.C. 80b–2(11))), if the com2 pany or adviser is registered with the Secu3 rities and Exchange Commission, has filed 

4 an application for registration which has 

5 not been denied, under the Investment Com6 pany Act of 1940 (15 U.S.C. 80a–1 et seq.) 

7 or the Investment Adviser Act of 1940 (15 

8 U.S.C. 80b–1 et seq.), or is an investment 

9 adviser described under section 203(l) of the 

10 Investment Advisers Act of 1940 (15 U.S.C. 

11 80b–3(l)); 

12 ‘‘(ix) an insurance company (as de13 fined in section 2 of the Investment Com14 pany Act of 1940 (15 U.S.C. 80a–2)); 

15 ‘‘(x) a registered entity (as defined in 

16 section 1a of the Commodity Exchange Act 

17 (7 U.S.C. 1a)), or a futures commission 

18 merchant, introducing broker, commodity 

19 pool operator, or commodity trading advi20 sor (as defined in section 1a of the Com21 modity Exchange Act (7 U.S.C. 1a)) that is 

22 registered with the Commodity Futures 

23 Trading Commission; 

24 ‘‘(xi) a public accounting firm reg25 istered in accordance with section 102 of the 


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1 Sarbanes-Oxley Act (15 U.S.C. 7212) or an 

2 entity controlling, controlled by, or under 

3 common control of such a firm; 

4 ‘‘(xii) a public utility that provides 

5 telecommunications service, electrical power, 

6 natural gas, or water and sewer services, 

7 within the United States; 

8 ‘‘(xiii) a church, charity, nonprofit en9 tity, or other organization that is described 

10 in section 501(c), 527, or 4947(a)(1) of the 

11 Internal Revenue Code of 1986, that has not 

12 been denied tax exempt status, and that has 

13 filed the most recently due annual informa14 tion return with the Internal Revenue Serv15 ice, if required to file such a return; 

16 ‘‘(xiv) a financial market utility des17 ignated by the Financial Stability Over18 sight Council under section 804 of the 

19 Dodd-Frank Wall Street Reform and Con20 sumer Protection Act; 

21 ‘‘(xv) an insurance producer (as de22 fined in section 334 of the Gramm-Leach23 Bliley Act); 

24 ‘‘(xvi) any business concern that— 


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1 ‘‘(I) employs more than 20 em2 ployees on a full-time basis in the 

3 United States; 

4 ‘‘(II) files income tax returns in 

5 the United States demonstrating more 

6 than $5,000,000 in gross receipts or 

7 sales; and 

8 ‘‘(III) has an operating presence 

9 at a physical office within the United 

10 States; or 

11 ‘‘(xvii) any corporation or limited li12 ability company formed and owned by an 

13 entity described in this clause or in clause 

14 (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), 

15 (ix), (x), (xi), (xii), (xiii), (xiv), (xv), or 

16 (xvi); and 

17 ‘‘(D) do not include any individual business 

18 concern or class of business concerns which the 

19 Secretary of the Treasury and the Attorney Gen20 eral of the United States have jointly deter21 mined, by rule of otherwise, to be exempt from 

22 the requirements of subsection (a), if the Sec23 retary and the Attorney General jointly deter24 mine that requiring beneficial ownership infor25 mation from the business concern would not 


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1 serve the public interest and would not assist law 

2 enforcement efforts to detect, prevent, or pros3 ecute terrorism, money laundering, tax evasion, 

4 or other misconduct. 

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

6 Financial Crimes Enforcement Network of the De7 partment of the Treasury. 

8 ‘‘(6) INDIAN COUNTRY.—The term ‘Indian coun9 try’ has the meaning given that term in section 1151 

10 of title 18. 

11 ‘‘(7) INDIAN TRIBE.—The term ‘Indian Tribe’ 

12 has the meaning given that term under section 102 of 

13 the Federally Recognized Indian Tribe List Act of 

14 1994. 

15 ‘‘(8) PERSONAL IDENTIFICATION CARD.—The 

16 term ‘personal identification card’ means an identi17 fication document issued by a State, Indian Tribe, or 

18 local government to an individual solely for the pur19 pose of identification of that individual. 

20 ‘‘(9) STATE.—The term ‘State’ means any State, 

21 commonwealth, territory, or possession of the United 

22 States, the District of Columbia, the Commonwealth 

23 of Puerto Rico, the Commonwealth of the Northern 

24 Mariana Islands, American Samoa, Guam, or the 

25 United States Virgin Islands.’’. 


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1 (2) RULEMAKING.— 

2 (A) IN GENERAL.—Not later than 1 year 

3 after the date of enactment of this Act, the Sec4 retary of the Treasury shall issue regulations to 

5 carry out this Act and the amendments made by 

6 this Act, including, to the extent necessary, to 

7 clarify the definitions in section 5333(d) of title 

8 31, United States Code. 

9 (B) REVISION OF FINAL RULE.—Not later 

10 than 1 year after the date of enactment of this 

11 Act, the Secretary of the Treasury shall revise the 

12 final rule titled ‘‘Customer Due Diligence Re13 quirements for Financial Institutions’’ (May 11, 

14 2016; 81 Fed. Reg. 29397) to— 

15 (i) bring the rule into conformance 

16 with this Act and the amendments made by 

17 this Act; 

18 (ii) account for financial institutions’ 

19 access to comprehensive beneficial ownership 

20 information filed by corporations and lim21 ited liability companies, under threat of 

22 civil and criminal penalties, under this Act 

23 and the amendments made by this Act; and 

24 (iii) reduce any burdens on financial 

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1 ment of this Act and the amendments made 

2 by this Act, unnecessary or duplicative. 

3 (3) CONFORMING AMENDMENTS.—Title 31, 

4 United States Code, is amended— 

5 (A) in section 5321(a)— 

6 (i) in paragraph (1), by striking ‘‘sec7 tions 5314 and 5315’’ each place it appears 

8 and inserting ‘‘sections 5314, 5315, and 

9 5333’’; and 

10 (ii) in paragraph (6), by inserting 

11 ‘‘(except section 5333)’’ after ‘‘subchapter’’ 

12 each place it appears; and 

13 (B) in section 5322, by striking ‘‘section 

14 5315 or 5324’’ each place it appears and insert15 ing ‘‘section 5315, 5324, or 5333’’. 

16 (4) TABLE OF CONTENTS.—The table of contents 

17 of chapter 53 of title 31, United States Code, is 

18 amended by inserting after the item relating to sec19 tion 5332 the following: 

‘‘5333. Transparent incorporation practices.’’. 

20 (b) FUNDING AUTHORIZATION.— 

21 (1) IN GENERAL.—To carry out section 5333 of 

22 title 31, United States Code, as added by subsection 

23 (a), funds shall be made available to the Financial 

24 Crimes Enforcement Network (in this subsection re25 ferred to as ‘‘FinCEN’’) to pay reasonable costs relatVerDate Sep 11 2014 20:26 Oct 08, 2019 Jkt 099200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6203 E:\BILLS\H2513.RH H2513

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1 ing to compliance with the requirements of such sec2 tion. 

3 (2) FUNDING SOURCES.—Funds shall be pro4 vided to FinCEN to carry out the purposes described 

5 in paragraph (1) from one or more of the following 

6 sources: 

7 (A) Upon application by FinCEN, and 

8 without further appropriation, the Secretary of 

9 the Treasury shall make available to the 

10 FinCEN unobligated balances described in sec11 tion 9703(g)(4)(B) of title 31, United States 

12 Code, in the Department of the Treasury For13 feiture Fund established under section 9703(a) of 

14 title 31, United States Code. 

15 (B) Upon application by FinCEN, after 

16 consultation with the Secretary of the Treasury, 

17 and without further appropriation, the Attorney 

18 General of the United States shall make avail19 able to FinCEN excess unobligated balances (as 

20 defined in section 524(c)(8)(D) of title 28, 

21 United States Code) in the Department of Jus22 tice Assets Forfeiture Fund established under sec23 tion 524(c) of title 28, United States Code. 

24 (3) MAXIMUM AMOUNTS.— 


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1 (A) DEPARTMENT OF THE TREASURY.—The 

2 Secretary of the Treasury may not make avail3 able to FinCEN a total of more than 

4 $30,000,000 under paragraph (2)(A). 

5 (B) DEPARTMENT OF JUSTICE.—The Attor6 ney General of the United States may not make 

7 available to FinCEN a total of more than 

8 $10,000,000 under paragraph (2)(B). 

9 (c) FEDERAL CONTRACTORS.—Not later than the first 

10 day of the first full fiscal year beginning at least 1 year 

11 after the date of the enactment of this Act, the Adminis12 trator for Federal Procurement Policy shall revise the Fed13 eral Acquisition Regulation maintained under section 

14 1303(a)(1) of title 41, United States Code, to require any 

15 contractor or subcontractor who is subject to the require16 ment to disclose beneficial ownership information under 

17 section 5333 of title 31, United States Code, to provide the 

18 information required to be disclosed under such section to 

19 the Federal Government as part of any bid or proposal for 

20 a contract with a value threshold in excess of the simplified 

21 acquisition threshold under section 134 of title 41, United 

22 States Code. 

23 SEC. 4. STUDIES AND REPORTS. 

24 (a) UPDATING OF BENEFICIAL OWNERSHIP INFORMA25 TION.— 


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1 (1) STUDY.—The Secretary of the Treasury, in 

2 consultation with the Attorney General of the United 

3 States, shall conduct a study to evaluate— 

4 (A) the necessity of a requirement for cor5 porations and limited liability companies to up6 date the list of their beneficial owners within a 

7 specified amount of time after the date of any 

8 change in the list of beneficial owners or the in9 formation required to be provided relating to 

10 each beneficial owner, taking into account the 

11 annual filings required under section 

12 5333(a)(1)(B)(i) of title 31, United States Code, 

13 and the information contained in such annual 

14 filings; and 

15 (B) the burden that a requirement to update 

16 the list of beneficial owners within a specified 

17 period of time after a change in such list of bene18 ficial owners would impose on corporations and 

19 limited liability companies. 

20 (2) REPORT.—Not later than 1 year after the 

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

22 Treasury shall submit a report on the study required 

23 under paragraph (1) to the Committee on Financial 

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1 mittee on Banking, Housing, and Urban Affairs of 

2 the Senate 

3 (3) PUBLIC COMMENT.—The Secretary of the 

4 Treasury shall seek and consider public input, com5 ments, and data in order to conduct the study re6 quired under subparagraph paragraph (1). 

7 (b) OTHER LEGAL ENTITIES.—Not later than 2 years 

8 after the date of enactment of this Act, the Comptroller Gen9 eral of the United States shall conduct a study and submit 

10 to the Congress a report— 

11 (1) identifying each State or Indian Tribe that 

12 has procedures that enable persons to form or register 

13 under the laws of the State or Indian Tribe partner14 ships, trusts, or other legal entities, and the nature of 

15 those procedures; 

16 (2) identifying each State or Indian Tribe that 

17 requires persons seeking to form or register partner18 ships, trusts, or other legal entities under the laws of 

19 the State or Indian Tribe to provide information 

20 about the beneficial owners (as that term is defined 

21 in section 5333(d)(1) of title 31, United States Code, 

22 as added by this Act) or beneficiaries of such entities, 

23 and the nature of the required information; 


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1 (3) evaluating whether the lack of available bene2 ficial ownership information for partnerships, trusts, 

3 or other legal entities— 

4 (A) raises concerns about the involvement of 

5 such entities in terrorism, money laundering, tax 

6 evasion, securities fraud, or other misconduct; 

7 (B) has impeded investigations into entities 

8 suspected of such misconduct; and 

9 (C) increases the costs to financial institu10 tions of complying with due diligence require11 ments imposed under the Bank Secrecy Act, the 

12 USA PATRIOT Act, or other applicable Federal, 

13 State, or Tribal law; and 

14 (4) evaluating whether the failure of the United 

15 States to require beneficial ownership information for 

16 partnerships and trusts formed or registered in the 

17 United States has elicited international criticism and 

18 what steps, if any, the United States has taken or is 

19 planning to take in response. 

20 (c) EFFECTIVENESS OF INCORPORATION PRACTICES.— 

21 Not later than 5 years after the date of enactment of this 

22 Act, the Comptroller General of the United States shall con23 duct a study and submit to the Congress a report assessing 

24 the effectiveness of incorporation practices implemented 

25 under this Act and the amendments made by this Act in— 


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1 (1) providing law enforcement agencies with 

2 prompt access to reliable, useful, and complete bene3 ficial ownership information; and 

4 (2) strengthening the capability of law enforce5 ment agencies to combat incorporation abuses, civil 

6 and criminal misconduct, and detect, prevent, or 

7 punish terrorism, money laundering, tax evasion, or 

8 other misconduct. 

9 SEC. 5. DEFINITIONS. 

10 In this Act, the terms ‘‘Bank Secrecy Act’’, ‘‘beneficial 

11 owner’’, ‘‘corporation’’, and ‘‘limited liability company’’ 

12 have the meaning given those terms, respectively, under sec13 tion 5333(d) of title 31, United States Code. 


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Union Calendar No. 180 

116TH CONGRESS 

1ST SESSION H. R. 2513 

[Report No. 116–227] 

A BILL 

To ensure that persons who form corporations or 

ity companies, and for other purposes. ing United States corporations and limited liabilmoney laundering, and other misconduct involvin detecting, preventing, and punishing terrorism, nies for criminal gain, to assist law enforcement States corporations and limited liability compaprevent wrongdoers from exploiting United tions or limited liability companies, in order to disclose the beneficial owners of those corporalimited liability companies in the United States 

OCTOBER 8, 2019 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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