II 

116TH CONGRESS 

1ST SESSION S. 1978 

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 SENATE OF THE UNITED STATES 

JUNE 26, 2019 

Mr. WYDEN (for himself, Mr. RUBIO, and Mr. WHITEHOUSE) introduced the 

following bill; which was read twice and referred to the Committee on 

Banking, Housing, and Urban Affairs 

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 Trans5 parency Act of 2019’’. 

6 SEC. 2. TRANSPARENT INCORPORATION PRACTICES. 

7 (a) IN GENERAL.— 

8 (1) AMENDMENT TO THE BANK SECRECY

9 ACT.—Chapter 53 of title 31, United States Code, is 

10 amended by inserting after section 5332 the fol11 lowing new section: 

12 ‘‘§ 5333. Transparent incorporation practices 

13 ‘‘(a) REPORTING REQUIREMENTS.— 

14 ‘‘(1) BENEFICIAL OWNERSHIP REPORTING.— 

15 ‘‘(A) IN GENERAL.—Each applicant to 

16 form a corporation or limited liability company 

17 under the laws of a State or Indian Tribe shall 

18 file a report with FinCEN containing a list of 

19 the beneficial owners of the corporation or lim20 ited liability company that— 

21 ‘‘(i) except as provided in paragraph 

22 (3), and subject to paragraph (2), identi23 fies each beneficial owner by— 

24 ‘‘(I) full legal name; 

25 ‘‘(II) date of birth; 


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1 ‘‘(III) current residential or busi2 ness street address; and 

3 ‘‘(IV) a unique identifying num4 ber from a non-expired passport 

5 issued by the United States, a non-ex6 pired personal identification card, or a 

7 non-expired driver’s license issued by 

8 a State; and 

9 ‘‘(ii) if the applicant is not a bene10 ficial owner, also provides the identification 

11 information described in clause (i) relating 

12 to such applicant. 

13 ‘‘(B) UPDATED INFORMATION.—Each cor14 poration or limited liability company formed 

15 under the laws of a State or Indian Tribe 

16 shall— 

17 ‘‘(i) submit to FinCEN an annual fil18 ing containing a list of— 

19 ‘‘(I) the current beneficial owners 

20 of the corporation or limited liability 

21 company and the information de22 scribed in subparagraph (A) for each 

23 such beneficial owner; and 

24 ‘‘(II) any changes in the bene25 ficial owners of the corporation or limVerDate Sep 11 2014 22:40 Jul 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1978.IS S1978

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1 ited liability company during the pre2 vious year; and 

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

4 the Secretary of the Treasury under sub5 paragraph (C), update the list of the bene6 ficial owners of the corporation or limited 

7 liability company within the time period 

8 prescribed by such rule. 

9 ‘‘(C) RULEMAKING ON UPDATING INFOR10 MATION.—Not later than 9 months after the 

11 completion of the study required under section 

12 3(a)(1) of the Corporate Transparency Act of 

13 2019, the Secretary of the Treasury shall con14 sider the findings of such study and, if the Sec15 retary determines it to be necessary or appro16 priate, issue a rule requiring corporations and 

17 limited liability companies to update the list of 

18 the beneficial owners of the corporation or lim19 ited liability company within a specified amount 

20 of time after the date of any change in the list 

21 of beneficial owners or the information required 

22 to be provided relating to each beneficial owner. 

23 ‘‘(D) STATE NOTIFICATION.—Each State 

24 in which a corporation or limited liability com25 pany is being formed shall notify each applicant 


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1 of the requirements listed in subparagraphs (A) 

2 and (B). 

3 ‘‘(2) CERTAIN BENEFICIAL OWNERS.—If an ap4 plicant to form a corporation or limited liability com5 pany or a beneficial owner, or similar agent of a cor6 poration or limited liability company who is required 

7 to provide identification information under this sub8 section, does not have a non-expired passport issued 

9 by the United States, a non-expired personal identi10 fication card, or a non-expired driver’s license issued 

11 by a State, each such person shall provide to 

12 FinCEN the full legal name, current residential or 

13 business street address, a unique identifying number 

14 from a non-expired passport issued by a foreign gov15 ernment, and a legible and credible copy of the 

16 pages of a non-expired passport issued by the gov17 ernment of a foreign country bearing a photograph, 

18 date of birth, and unique identifying information for 

19 each beneficial owner, and each application described 

20 in paragraph (1)(A) and each update described in 

21 paragraph (1)(B) shall include a written certification 

22 by a person residing in the State or Indian country 

23 under the jurisdiction of the Indian Tribe forming 

24 the entity that the applicant, corporation, or limited 

25 liability company— 


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

2 owner, a current residential or business street 

3 address and a legible and credible copy of the 

4 pages of a non-expired passport issued by the 

5 government of a foreign country bearing a pho6 tograph, date of birth, and unique identifying 

7 information for the person; 

8 ‘‘(B) has verified the full legal name, ad9 dress, and identity of each such person; 

10 ‘‘(C) will provide the information described 

11 in subparagraph (A) and the proof of 

12 verification described in subparagraph (B) upon 

13 request of FinCEN; and 

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

15 of verification under this paragraph until the 

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

17 that the corporation or limited liability company 

18 terminates under the laws of the State or In19 dian Tribe. 

20 ‘‘(3) EXEMPT ENTITIES.— 

21 ‘‘(A) IN GENERAL.—With respect to an ap22 plicant to form a corporation or limited liability 

23 company under the laws of a State or Indian 

24 Tribe, if such entity is described in subpara25 graph (C) or (D) of subsection (d)(4) and will 


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1 be exempt from the beneficial ownership disclo2 sure requirements under this subsection, such 

3 applicant, or a prospective officer, director, or 

4 similar agent of the applicant, shall file a writ5 ten certification with FinCEN— 

6 ‘‘(i) identifying the specific provision 

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

8 proposed to be formed would be exempt 

9 from the beneficial ownership disclosure re10 quirements under paragraphs (1) and (2); 

11 ‘‘(ii) stating that the entity proposed 

12 to be formed meets the requirements for 

13 an entity described under such provision of 

14 subsection (d)(4); and 

15 ‘‘(iii) providing identification informa16 tion for the applicant or prospective offi17 cer, director, or similar agent making the 

18 certification in the same manner as pro19 vided under paragraph (1) or (2). 

20 ‘‘(B) EXISTING CORPORATIONS OR LIM21 ITED LIABILITY COMPANIES.—On and after the 

22 date that is 2 years after the final regulations 

23 are issued to carry out this section, a corpora24 tion or limited liability company formed under 

25 the laws of the State or Indian Tribe before 


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1 such date shall be subject to the requirements 

2 of this subsection unless an officer, director, or 

3 similar agent of the entity submits to FinCEN 

4 a written certification— 

5 ‘‘(i) identifying the specific provision 

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

7 is exempt from the requirements under 

8 paragraphs (1) and (2); 

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

10 requirements for an entity described under 

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

12 ‘‘(iii) providing identification informa13 tion for the officer, director, or similar 

14 agent making the certification in the same 

15 manner as provided under paragraph (1) 

16 or (2). 

17 ‘‘(C) EXEMPT ENTITIES HAVING OWNER18 SHIP INTEREST.—If an entity described in sub19 paragraph (C) or (D) of subsection (d)(4) has 

20 or will have an ownership interest in a corpora21 tion or limited liability company formed or to be 

22 formed under the laws of a State or Indian 

23 Tribe, the applicant, corporation, or limited li24 ability company in which the entity has or will 

25 have the ownership interest shall provide the inVerDate Sep 11 2014 22:40 Jul 01, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1978.IS S1978

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1 formation required under this subsection relat2 ing to the entity, except that the entity shall 

3 not be required to provide information regard4 ing any natural person who has an ownership 

5 interest in, exercises substantial control over, or 

6 receives substantial economic benefits from the 

7 entity. 

8 ‘‘(4) RETENTION AND DISCLOSURE OF BENE9 FICIAL OWNERSHIP INFORMATION BY FINCEN.— 

10 ‘‘(A) RETENTION OF INFORMATION.—Ben11 eficial ownership information relating to each 

12 corporation or limited liability company formed 

13 under the laws of the State or Indian Tribe 

14 shall be maintained by FinCEN until the end of 

15 the 5-year period (or such other period of time 

16 as the Secretary of the Treasury may, by rule, 

17 determine) beginning on the date that the cor18 poration or limited liability company termi19 nates. 

20 ‘‘(B) DISCLOSURE OF INFORMATION.— 

21 Beneficial ownership information reported to 

22 FinCEN pursuant to this section shall be pro23 vided by FinCEN only upon receipt of— 

24 ‘‘(i) subject to subparagraph (C), a 

25 request, through appropriate protocols, by 


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1 a local, Tribal, State, or Federal law en2 forcement agency; 

3 ‘‘(ii) a request made by a Federal 

4 agency on behalf of a law enforcement 

5 agency of another country under an inter6 national treaty, agreement, or convention, 

7 or an order under section 3512 of title 18 

8 or section 1782 of title 28; or 

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

10 institution, with customer consent, as part 

11 of the institution’s compliance with due 

12 diligence requirements imposed under the 

13 Bank Secrecy Act, the USA PATRIOT 

14 Act, or other applicable Federal, State, or 

15 Tribal law. 

16 ‘‘(C) APPROPRIATE PROTOCOLS.— 

17 ‘‘(i) PRIVACY.—The protocols de18 scribed in subparagraph (B)(i) shall pro19 tect the privacy of any beneficial ownership 

20 information provided by FinCEN to a 

21 local, Tribal, State, or Federal law enforce22 ment agency. 

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

24 ownership information provided to a local, 

25 Tribal, State, or Federal law enforcement 


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1 agency under this paragraph may only be 

2 used for law enforcement, national secu3 rity, or intelligence purposes. 

4 ‘‘(b) NO BEARER SHARE CORPORATIONS OR LIM5 ITED LIABILITY COMPANIES.—A corporation or limited li6 ability company formed under the laws of a State or In7 dian Tribe may not issue a certificate in bearer form evi8 dencing either a whole or fractional interest in the cor9 poration or limited liability company. 

10 ‘‘(c) PENALTIES.— 

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

12 person to affect interstate or foreign commerce by— 

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

14 provide, false or fraudulent beneficial ownership 

15 information, including a false or fraudulent 

16 identifying photograph, to FinCEN in accord17 ance with this section; 

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

19 updated beneficial ownership information to 

20 FinCEN in accordance with this section; or 

21 ‘‘(C) knowingly disclosing the existence of 

22 a subpoena or other request for beneficial own23 ership information reported pursuant to this 

24 section, except— 


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

2 the authorized request; or 

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

4 issued the subpoena, or other request. 

5 ‘‘(2) CIVIL AND CRIMINAL PENALTIES.—Any 

6 person who violates paragraph (1)— 

7 ‘‘(A) shall be liable to the United States 

8 for a civil penalty of not more than $10,000; 

9 and 

10 ‘‘(B) may be fined under title 18, impris11 oned for not more than 3 years, or both. 

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

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

14 criminal penalties under paragraph (2). 

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

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

17 the Secretary determines that the violation was due 

18 to reasonable cause and was not due to willful ne19 glect. 

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

21 UNAUTHORIZED DISCLOSURE OF BENEFICIAL OWN22 ERSHIP INFORMATION.—The criminal penalties pro23 vided for under section 5322 shall apply to a viola24 tion of this section to the same extent as such crimi25 nal penalties apply to a violation described in section 


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1 5322, if the violation of this section consists of the 

2 misuse or unauthorized disclosure of beneficial own3 ership information. 

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

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

6 any natural person who files an application to form 

7 a corporation or limited liability company under the 

8 laws of a State or Indian Tribe. 

9 ‘‘(2) BANK SECRECY ACT.—The term ‘Bank Se10 crecy Act’ means— 

11 ‘‘(A) section 21 of the Federal Deposit In12 surance Act (12 U.S.C. 1829b); 

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

14 508 (12 U.S.C. 1951 et seq.); and 

15 ‘‘(C) this subchapter. 

16 ‘‘(3) BENEFICIAL OWNER.— 

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

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

19 means a natural person who, directly or indi20 rectly, through any contract, arrangement, un21 derstanding, relationship, or otherwise— 

22 ‘‘(i) exercises substantial control over 

23 a corporation or limited liability company; 


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

2 equity interests of a corporation or limited 

3 liability company; or 

4 ‘‘(iii) receives substantial economic 

5 benefits from the assets of a corporation or 

6 limited liability company. 

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

8 owner’ shall not include— 

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

10 State or Indian Tribe in which the entity 

11 is formed; 

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

13 intermediary, custodian, or agent on behalf 

14 of another person; 

15 ‘‘(iii) a person acting solely as an em16 ployee of a corporation or limited liability 

17 company and whose control over or eco18 nomic benefits from the corporation or lim19 ited liability company derives solely from 

20 the employment status of the person; 

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

22 a corporation or limited liability company 

23 is through a right of inheritance; 

24 ‘‘(v) a creditor of a corporation or 

25 limited liability company, unless the credVerDate Sep 11 2014 22:40 Jul 01, 2019 Jkt 089200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S1978.IS S1978

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1 itor also meets the requirements of sub2 paragraph (A); or 

3 ‘‘(vi) a person whose ownership inter4 est is below a de minimis threshold that 

5 the Secretary of the Treasury shall, by 

6 rule, establish. 

7 ‘‘(C) SUBSTANTIAL ECONOMIC BENEFITS

8 DEFINED.— 

9 ‘‘(i) IN GENERAL.—For purposes of 

10 subparagraph (A)(iii), a natural person re11 ceives substantial economic benefits from 

12 the assets of a corporation or limited liabil13 ity company if the person has an entitle14 ment to more than a specified percentage 

15 of the funds or assets of the corporation or 

16 limited liability company, which the Sec17 retary of the Treasury shall, by rule, estab18 lish. 

19 ‘‘(ii) RULEMAKING CRITERIA.—In es20 tablishing the percentage under clause (i), 

21 the Secretary of the Treasury shall seek 

22 to— 

23 ‘‘(I) provide clarity to corpora24 tions and limited liability companies 

25 with respect to the identification and 


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1 disclosure of a natural person who re2 ceives substantial economic benefits 

3 from the assets of a corporation or 

4 limited liability company; and 

5 ‘‘(II) identify those natural per6 sons who, as a result of the substan7 tial economic benefits they receive 

8 from the assets of a corporation or 

9 limited liability company, exercise a 

10 dominant influence over such corpora11 tion or limited liability company. 

12 ‘‘(4) CORPORATION; LIMITED LIABILITY COM13 PANY.—The terms ‘corporation’ and ‘limited liability 

14 company’— 

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

16 under the laws of the applicable State or Indian 

17 Tribe; 

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

19 eligible for registration or registered to do busi20 ness as a corporation or limited liability com21 pany under the laws of the applicable State or 

22 Indian Tribe; 

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

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

25 issuer of a class of securities registered 


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1 under section 12 of the Securities Ex2 change Act of 1934 (15 U.S.C. 781) or 

3 that is required to file reports under sec4 tion 15(d) of that Act (15 U.S.C. 78o(d)); 

5 ‘‘(ii) a business concern constituted, 

6 sponsored, or chartered by a State or In7 dian Tribe, a political subdivision of a 

8 State or Indian Tribe, under an interstate 

9 compact between two or more States, by a 

10 department or agency of the United 

11 States, or under the laws of the United 

12 States; 

13 ‘‘(iii) a depository institution (as de14 fined in section 3 of the Federal Deposit 

15 Insurance Act (12 U.S.C. 1813)); 

16 ‘‘(iv) a credit union (as defined in sec17 tion 101 of the Federal Credit Union Act 

18 (12 U.S.C. 1752)); 

19 ‘‘(v) a bank holding company (as de20 fined in section 2 of the Bank Holding 

21 Company Act of 1956 (12 U.S.C. 1841)); 

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

23 section 3 of the Securities Exchange Act of 

24 1934 (15 U.S.C. 78c)) that is registered 


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1 under section 15 of the Securities Ex2 change Act of 1934 (15 U.S.C. 78o); 

3 ‘‘(vii) an exchange or clearing agency 

4 (as defined in section 3 of the Securities 

5 Exchange Act of 1934 (15 U.S.C. 78c)) 

6 that is registered under section 6 or 17A 

7 of the Securities Exchange Act of 1934 

8 (15 U.S.C. 78f, 78q–1); 

9 ‘‘(viii) an investment company (as de10 fined in section 3 of the Investment Com11 pany Act of 1940 (15 U.S.C. 80a–3)) or 

12 an investment adviser (as defined in sec13 tion 202(11) of the Investment Advisers 

14 Act of 1940 (15 U.S.C. 80b–2(11))), if the 

15 company or adviser is registered with the 

16 Securities and Exchange Commission, or 

17 has filed an application for registration 

18 which has not been denied, under the In19 vestment Company Act of 1940 (15 U.S.C. 

20 80a–1 et seq.) or the Investment Advisers 

21 Act of 1940 (15 U.S.C. 80b–1 et seq.); 

22 ‘‘(ix) an insurance company (as de23 fined in section 2 of the Investment Com24 pany Act of 1940 (15 U.S.C. 80a–2)); 


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

2 section 1a of the Commodity Exchange Act 

3 (7 U.S.C. 1a)), or a futures commission 

4 merchant, introducing broker, commodity 

5 pool operator, or commodity trading advi6 sor (as defined in section 1a of the Com7 modity Exchange Act (7 U.S.C. 1a)) that 

8 is registered with the Commodity Futures 

9 Trading Commission; 

10 ‘‘(xi) a public accounting firm reg11 istered in accordance with section 102 of 

12 the Sarbanes-Oxley Act (15 U.S.C. 7212) 

13 or an entity controlling, controlled by, or 

14 under common control of such a firm; 

15 ‘‘(xii) a public utility that provides 

16 telecommunications service, electrical 

17 power, natural gas, or water and sewer 

18 services, within the United States; 

19 ‘‘(xiii) a church, charity, nonprofit en20 tity, or other organization that is described 

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

22 the Internal Revenue Code of 1986, that 

23 has not been denied tax exempt status, and 

24 that has filed the most recently due annual 

25 information return with the Internal RevVerDate Sep 11 2014 22:40 Jul 01, 2019 Jkt 089200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S1978.IS S1978

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1 enue Service, if required to file such a re2 turn; 

3 ‘‘(xiv) any business concern that— 

4 ‘‘(I) employs more than 20 em5 ployees on a full-time basis in the 

6 United States; 

7 ‘‘(II) files income tax returns in 

8 the United States demonstrating more 

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

10 sales; and 

11 ‘‘(III) has an operating presence 

12 at a physical office within the United 

13 States; or 

14 ‘‘(xv) any corporation or limited liabil15 ity company formed and owned by an enti16 ty described in clause (i), (ii), (iii), (iv), 

17 (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), 

18 (xiii), or (xiv); and 

19 ‘‘(D) do not include any individual busi20 ness concern or class of business concerns 

21 which the Secretary of the Treasury and the 

22 Attorney General of the United States have 

23 jointly determined, by rule of otherwise, to be 

24 exempt from the requirements of subsection (a), 

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1 ly determine that requiring beneficial ownership 

2 information from the business concern would 

3 not serve the public interest and would not as4 sist law enforcement efforts to detect, prevent, 

5 or prosecute terrorism, money laundering, tax 

6 evasion, or other misconduct. 

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

8 Financial Crimes Enforcement Network of the De9 partment of the Treasury. 

10 ‘‘(6) INDIAN COUNTRY.—The term ‘Indian 

11 country’ has the meaning given that term in section 

12 1151 of title 18. 

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

14 has the meaning given that term under section 102 

15 of the Federally Recognized Indian Tribe List Act of 

16 1994 (25 U.S.C. 5130). 

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

18 term ‘personal identification card’ means an identi19 fication document issued by a State, Indian Tribe, 

20 or local government to an individual solely for the 

21 purpose of identification of that individual. 

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

23 State, commonwealth, territory, or possession of the 

24 United States, the District of Columbia, the Com25 monwealth of Puerto Rico, the Commonwealth of the 


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1 Northern Mariana Islands, American Samoa, Guam, 

2 or the United States Virgin Islands.’’. 

3 (2) RULEMAKING.— 

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

5 after the date of enactment of this Act, the Sec6 retary of the Treasury shall issue regulations to 

7 carry out this Act and the amendments made 

8 by this Act, including, to the extent necessary, 

9 to clarify the definitions in section 5333(d) of 

10 title 31, United States Code. 

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

12 than 1 year after the date of enactment of this 

13 Act, the Secretary of the Treasury shall revise 

14 the final rule titled ‘‘Customer Due Diligence 

15 Requirements for Financial Institutions’’ (May 

16 11, 2016; 81 Fed. Reg. 29397) to— 

17 (i) bring the rule into conformance 

18 with this Act and the amendments made 

19 by this Act; 

20 (ii) account for financial institutions’ 

21 access to comprehensive beneficial owner22 ship information filed by corporations and 

23 limited liability companies, under threat of 

24 civil and criminal penalties, under this Act 


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1 and the amendments made by this Act; 

2 and 

3 (iii) reduce any burdens on financial 

4 institutions that are, in light of the enact5 ment of this Act and the amendments 

6 made by this Act, unnecessary or duplica7 tive. 

8 (3) CONFORMING AMENDMENTS.—Title 31, 

9 United States Code, is amended— 

10 (A) in section 5321(a)— 

11 (i) in paragraph (1), by striking ‘‘sec12 tions 5314 and 5315’’ each place it ap13 pears and inserting ‘‘sections 5314, 5315, 

14 and 5333’’; and 

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

16 ‘‘(except section 5333)’’ after ‘‘sub17 chapter’’ each place it appears; and 

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

19 5315 or 5324’’ each place it appears and insert20 ing ‘‘section 5315, 5324, or 5333’’. 

21 (4) TABLE OF CONTENTS.—The table of con22 tents of chapter 53 of title 31, United States Code, 

23 is amended by inserting after the item relating to 

24 section 5332 the following: 

‘‘Sec. 5333. Transparent incorporation practices.’’. 

25 (b) FUNDING AUTHORIZATION.— 


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

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

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

4 Crimes Enforcement Network (in this subsection re5 ferred to as ‘‘FinCEN’’) to pay reasonable costs re6 lating to compliance with the requirements of such 

7 section. 

8 (2) FUNDING SOURCES.—Funds shall be pro9 vided to FinCEN to carry out the purposes de10 scribed in paragraph (1) from one or more of the 

11 following sources: 

12 (A) Upon application by FinCEN, and 

13 without further appropriation, the Secretary of 

14 the Treasury shall make available to the 

15 FinCEN unobligated balances described in sec16 tion 9705(g)(4)(B) of title 31, United States 

17 Code, in the Department of the Treasury For18 feiture Fund established under section 9705(a) 

19 of title 31, United States Code. 

20 (B) Upon application by FinCEN, after 

21 consultation with the Secretary of the Treasury, 

22 and without further appropriation, the Attorney 

23 General of the United States shall make avail24 able to FinCEN excess unobligated balances (as 

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


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1 United States Code) in the Department of Jus2 tice Assets Forfeiture Fund established under 

3 section 524(c) of title 28, United States Code. 

4 (3) MAXIMUM AMOUNTS.— 

5 (A) DEPARTMENT OF THE TREASURY.— 

6 The Secretary of the Treasury may not make 

7 available to FinCEN a total of more than 

8 $30,000,000 under paragraph (2)(A). 

9 (B) DEPARTMENT OF JUSTICE.—The At10 torney General of the United States may not 

11 make available to FinCEN a total of more than 

12 $10,000,000 under paragraph (2)(B). 

13 (c) FEDERAL CONTRACTORS.—Not later than the 

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

15 year after the date of enactment of this Act, the Adminis16 trator for Federal Procurement Policy shall revise the 

17 Federal Acquisition Regulation maintained under section 

18 1303(a)(1) of title 41, United States Code, to require any 

19 contractor or subcontractor who is subject to the require20 ment to disclose beneficial ownership information under 

21 section 5333 of title 31, United States Code, as added by 

22 subsection (a), to provide the information required to be 

23 disclosed under such section to the Federal Government 

24 as part of any bid or proposal for a contract with a value 


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•S 1978 IS

1 threshold in excess of the simplified acquisition threshold 

2 under section 134 of title 41, United States Code. 

3 SEC. 3. STUDIES AND REPORTS. 

4 (a) UPDATING OF BENEFICIAL OWNERSHIP INFOR5 MATION.— 

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

7 consultation with the Attorney General of the United 

8 States, shall conduct a study to evaluate— 

9 (A) the necessity of a requirement for cor10 porations and limited liability companies to up11 date the list of their beneficial owners within a 

12 specified amount of time after the date of any 

13 change in the list of beneficial owners or the in14 formation required to be provided relating to 

15 each beneficial owner, taking into account the 

16 annual filings required under section 

17 5333(a)(1)(B)(i) of title 31, United States 

18 Code, as added by section (2(a), and the infor19 mation contained in such annual filings; and 

20 (B) the burden that a requirement to up21 date the list of beneficial owners within a speci22 fied period of time after a change in such list 

23 of beneficial owners would impose on corpora24 tions and limited liability companies. 


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

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

3 Treasury shall submit a report on the study required 

4 under paragraph (1) to the Committee on Banking, 

5 Housing, and Urban Affairs of the Senate and the 

6 Committee on Financial Services of the House of 

7 Representatives. 

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

9 Treasury shall seek and consider public input, com10 ments, and data in order to conduct the study re11 quired under paragraph (1). 

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

13 years after the date of enactment of this Act, the Comp14 troller General of the United States shall conduct a study 

15 and submit to Congress a report— 

16 (1) identifying each State or Indian Tribe that 

17 has procedures that enable persons to form or reg18 ister under the laws of the State or Indian Tribe 

19 partnerships, trusts, or other legal entities, and the 

20 nature of those procedures; 

21 (2) identifying each State or Indian Tribe that 

22 requires persons seeking to form or register partner23 ships, trusts, or other legal entities under the laws 

24 of the State or Indian Tribe to provide information 

25 about the beneficial owners (as that term is defined 


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•S 1978 IS

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

2 Code, as added by section 2(a)) or beneficiaries of 

3 such entities, and the nature of the required infor4 mation; 

5 (3) evaluating whether the lack of available 

6 beneficial ownership information for partnerships, 

7 trusts, or other legal entities— 

8 (A) raises concerns about the involvement 

9 of such entities in terrorism, money laundering, 

10 tax evasion, securities fraud, or other mis11 conduct; and 

12 (B) has impeded investigations into enti13 ties suspected of such misconduct; and 

14 (4) evaluating whether the failure of the United 

15 States to require beneficial ownership information 

16 for partnerships and trusts formed or registered in 

17 the United States has elicited international criticism 

18 and what steps, if any, the United States has taken 

19 or is planning to take in response. 

20 (c) EFFECTIVENESS OF INCORPORATION PRAC21 TICES.—Not later than 5 years after the date of enact22 ment of this Act, the Comptroller General of the United 

23 States shall conduct a study and submit to Congress a 

24 report assessing the effectiveness of incorporation pracVerDate Sep 11 2014 22:40 Jul 01, 2019 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S1978.IS S1978

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1 tices implemented under this Act and the amendments 

2 made by this Act in— 

3 (1) providing law enforcement agencies with 

4 prompt access to reliable, useful, and complete bene5 ficial ownership information; and 

6 (2) strengthening the capability of law enforce7 ment agencies to combat incorporation abuses, civil 

8 and criminal misconduct, and detect, prevent, or 

9 punish terrorism, money laundering, tax evasion, or 

10 other misconduct. 

11 (d) DEFINITIONS.—In this section, the terms ‘‘bene12 ficial owner’’, ‘‘corporation’’, and ‘‘limited liability com13 pany’’ have the meanings given those terms under section 

14 5333(d) of title 31, United States Code, as added by sec15 tion 2(a). 

Æ 


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