I 
115TH CONGRESS 
1ST SESSION H. R. 3089 
To amend title 31, United States Code, 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 corpora-
tions 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 
JUNE 28, 2017 
Mrs. CAROLYN B. MALONEY of New York (for herself, Mr. KING of New 
York, Ms. MAXINE WATERS of California, Mr. ROYCE of California, and 
Ms. MOORE) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
A BILL 
To amend title 31, United States Code, to ensure that per-
sons 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 cor-
porations 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 lim-
ited liability companies, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Corporate Trans-
parency Act of 2017’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Nearly 2,000,000 corporations and limited 
liability companies are being formed under the laws 
of the States each year. 
(2) Very few States obtain meaningful informa-
tion about the beneficial owners of the corporations 
and limited liability companies formed under their 
laws. 
(3) A person forming a corporation or limited 
liability company within the United States typically 
provides less information to the State of incorpora-
tion than is needed to obtain a bank account or driv-
er’s license and typically does not name a single ben-
eficial owner. 
(4) Criminals have exploited the weaknesses in 
State formation procedures to conceal their identi-
ties when forming corporations or limited liability 
companies in the United States, and have then used 
the newly created entities to commit crimes affecting 
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interstate and international commerce such as ter-
rorism, drug trafficking, money laundering, tax eva-
sion, securities fraud, financial fraud, and acts of 
foreign corruption. 
(5) Law enforcement efforts to investigate cor-
porations and limited liability companies suspected 
of committing crimes have been impeded by the lack 
of available beneficial ownership information, as doc-
umented in reports and testimony by officials from 
the Department of Justice, the Department of 
Homeland Security, the Financial Crimes Enforce-
ment Network of the Department of the Treasury, 
the Internal Revenue Service, and the Government 
Accountability Office, and others. 
(6) In July 2006, a leading international anti- 
money laundering organization, the Financial Action 
Task Force on Money Laundering (in this section 
referred to as the ‘‘FATF’’), of which the United 
States is a member, issued a report that criticizes 
the United States for failing to comply with a FATF 
standard on the need to collect beneficial ownership 
information and urged the United States to correct 
this deficiency by July 2008. In December 2016, 
FATF issued another evaluation of the United 
States, which found that little progress has been 
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made over the last ten years to address this problem. 
It identified the ‘‘lack of timely access to adequate, 
accurate and current beneficial ownership informa-
tion’’ as a fundamental gap in United States efforts 
to combat money laundering and terrorist finance. 
(7) In response to the 2006 FATF report, the 
United States has repeatedly urged the States to 
strengthen their incorporation practices by obtaining 
beneficial ownership information for the corporations 
and limited liability companies formed under the 
laws of such States. 
(8) Many States have established automated 
procedures that allow a person to form a new cor-
poration or limited liability company within the 
State within 24 hours of filing an online application, 
without any prior review of the application by a 
State official. In exchange for a substantial fee, 2 
States will form a corporation within 1 hour of a re-
quest. 
(9) Dozens of Internet Web sites highlight the 
anonymity of beneficial owners allowed under the in-
corporation practices of some States, point to those 
practices as a reason to incorporate in those States, 
and list those States together with offshore jurisdic-
tions as preferred locations for the formation of new 
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corporations, essentially providing an open invitation 
to criminals and other wrongdoers to form entities 
within the United States. 
(10) In contrast to practices in the United 
States, all 28 countries in the European Union are 
required to have formation agents identify the bene-
ficial owners of the corporations formed under the 
laws of the country. 
(11) To reduce the vulnerability of the United 
States to wrongdoing by United States corporations 
and limited liability companies with hidden owners, 
to protect interstate and international commerce 
from criminals misusing United States corporations 
and limited liability companies, to strengthen law en-
forcement investigations of suspect corporations and 
limited liability companies, to set minimum stand-
ards for and level the playing field among State in-
corporation practices, and to bring the United States 
into compliance with its international anti-money 
laundering standards, Federal legislation is needed 
to require the collection of beneficial ownership in-
formation for the corporations and limited liability 
companies formed under the laws of such States. 
SEC. 3. TRANSPARENT INCORPORATION PRACTICES. 
(a) TRANSPARENT INCORPORATION PRACTICES.— 
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(1) IN
GENERAL.—Chapter 53 of title 31, 
United States Code, is amended by inserting after 
section 5332 the following new section: 
‘‘§ 5333. Transparent incorporation practices 
‘‘(a) REPORTING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Not later than the begin-
ning of fiscal year 2019, the Secretary of the Treas-
ury shall issue regulations requiring each corpora-
tion and limited liability company formed in a State 
that does not have a formation system described 
under subsection (b) to file with the Financial 
Crimes Enforcement Network such information as 
the corporation or limited liability company would be 
required to provide the State if such State had a for-
mation system described under subsection (b). 
‘‘(2) DISCLOSURE OF BENEFICIAL OWNERSHIP 
INFORMATION.—Beneficial ownership information 
reported to the Financial Crimes Enforcement Net-
work pursuant to paragraph (1) shall be provided by 
the Financial Crimes Enforcement Network upon re-
ceipt of— 
‘‘(A) a civil or criminal subpoena or sum-
mons from a State agency, Federal agency, or 
congressional committee or subcommittee re-
questing such information; 
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‘‘(B) a written request made by a Federal 
agency on behalf of another country under an 
international treaty, agreement, or convention, 
or an order under section 3512 of title 18, 
United States Code, or section 1782 of title 28, 
United States Code, issued in response to a re-
quest for assistance from a foreign country; or 
‘‘(C) a written request made by a financial 
institution, with customer consent, as part of 
the institution’s compliance with due diligence 
requirements imposed under the Bank Secrecy 
Act, the USA PATRIOT Act, or other applica-
ble Federal or Sate law. 
‘‘(3) LIMITATION.—In issuing regulations pur-
suant to paragraph (1), the Secretary shall not re-
quire such information to be filed with the Internal 
Revenue Service. 
‘‘(b) FORMATION SYSTEM.— 
‘‘(1) IN GENERAL.—With respect to a State, a 
formation system is described under this subsection 
if it meets the following requirements: 
‘‘(A) IDENTIFICATION
OF
BENEFICIAL 
OWNERS.—Except as provided in paragraphs 
(2) and (4), and subject to paragraph (3), each 
applicant to form a corporation or limited liabil-
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ity company under the laws of the State is re-
quired to provide to the State during the forma-
tion process a list of the beneficial owners of 
the corporation or limited liability company 
that— 
‘‘(i) except as provided in subpara-
graph (F), identifies each beneficial owner 
by— 
‘‘(I) name; 
‘‘(II) current residential or busi-
ness street address; and 
‘‘(III) a unique identifying num-
ber from a non-expired passport 
issued by the United States or a non- 
expired driver’s license issued by a 
State; and 
‘‘(ii) if the applicant is not the bene-
ficial owner, provides the identification in-
formation described in clause (i) relating 
to the applicant. 
‘‘(B) UPDATED INFORMATION.—For each 
corporation or limited liability company formed 
under the laws of the State— 
‘‘(i) the corporation or limited liability 
company is required by the State to update 
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the list of the beneficial owners of the cor-
poration or limited liability company by 
providing the information described in sub-
paragraph (A) to the State not later than 
60 days after the date of any change in the 
list of beneficial owners or the information 
required to be provided relating to each 
beneficial owner; 
‘‘(ii) in the case of a corporation or 
limited liability company formed or ac-
quired by a formation agent and retained 
by the formation agent as a beneficial 
owner for transfer to another person, the 
formation agent is required by the State to 
submit to the State an updated list of the 
beneficial owners and the information de-
scribed in subparagraph (A) for each such 
beneficial owner not later than 10 days 
after date on which the formation agent 
transfers the corporation or limited liabil-
ity company to another person; and 
‘‘(iii) the corporation or limited liabil-
ity company is required by the State to 
submit to the State an annual filing con-
taining the list of the beneficial owners of 
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the corporation or limited liability company 
and the information described in subpara-
graph (A) for each such beneficial owner. 
‘‘(C) RETENTION OF INFORMATION.—Ben-
eficial ownership information relating to each 
corporation or limited liability company formed 
under the laws of the State is required to be 
maintained by the State until the end of the 5- 
year period beginning on the date that the cor-
poration or limited liability company terminates 
under the laws of the State. 
‘‘(D) 
INFORMATION
REQUESTS.—Bene-
ficial ownership information relating to each 
corporation or limited liability company formed 
under the laws of the State shall be provided by 
the State upon receipt of— 
‘‘(i) a civil or criminal subpoena or 
summons from a State agency, Federal 
agency, or congressional committee or sub-
committee requesting such information; 
‘‘(ii) a written request made by a Fed-
eral agency on behalf of another country 
under an international treaty, agreement, 
or convention, or section 1782 of title 28, 
United States Code; 
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‘‘(iii) a written request made by the 
Financial Crimes Enforcement Network; or 
‘‘(iv) a written request made by a fi-
nancial institution, with customer consent, 
as part of the institution’s compliance with 
due diligence requirements imposed under 
the Bank Secrecy Act, the USA PATRIOT 
Act, or other applicable Federal or Sate 
law. 
‘‘(E) NOTICE.—The State discloses clearly 
and conspicuously that the beneficial ownership 
information collected under the formation sys-
tem may be provided to the entities described in 
subparagraph (D), pursuant to the require-
ments of such subparagraph. 
‘‘(F) NO
BEARER
SHARE
CORPORATIONS 
OR
LIMITED
LIABILITY
COMPANIES.—A cor-
poration or limited liability company formed 
under the laws of the State may not issue a cer-
tificate in bearer form evidencing either a whole 
or fractional interest in the corporation or lim-
ited liability company. 
‘‘(2) 
STATES
THAT
LICENSE
FORMATION 
AGENTS.— 
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‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a State described in subparagraph 
(B) may permit an applicant to form a corpora-
tion or limited liability company under the laws 
of the State, or a corporation or limited liability 
company formed under the laws of the State, to 
provide the required information to a licensed 
formation agent residing in the State, instead 
of to the State directly, if the application under 
paragraph (1)(A) or the update under para-
graph (1)(B) contains— 
‘‘(i) the name, current business ad-
dress, contact information, and licensing 
number of the licensed formation agent 
that has agreed to maintain the informa-
tion required under this subsection; and 
‘‘(ii) a certification by the licensed 
formation agent that the licensed forma-
tion agent has possession of the informa-
tion required under this subsection and 
will maintain the information in the State 
licensing the licensed formation agent in 
accordance with State law. 
‘‘(B) STATES
DESCRIBED.—A State de-
scribed in this subparagraph is a State that 
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maintains a formal licensing system for forma-
tion agents that requires a formation agent to 
register with the State, meet standards for fit-
ness and honesty, maintain a physical office 
and records within the State, undergo regular 
monitoring, and be subject to sanctions for non-
compliance with State requirements. 
‘‘(C) LICENSED
FORMATION
AGENT
DU-
TIES.—A licensed formation agent that receives 
beneficial ownership information under State 
law in accordance with this paragraph shall— 
‘‘(i) maintain the information in the 
State in which the corporation or limited 
liability company is being or has been 
formed in the same manner as required for 
States under paragraph (1)(C); 
‘‘(ii) provide the information under 
the same circumstances as required for 
States under paragraph (1)(D); and 
‘‘(iii) perform the duties of a forma-
tion agent under paragraph (3). 
‘‘(D) TERMINATION OF RELATIONSHIP.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a licensed formation 
agent that receives beneficial ownership in-
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formation relating to a corporation or lim-
ited liability company under State law in 
accordance with this paragraph and that 
resigns, dissolves, or otherwise ends a rela-
tionship with the corporation or limited li-
ability company shall promptly— 
‘‘(I) notify the State in writing 
that the licensed formation agent has 
resigned or ended the relationship; 
and 
‘‘(II) transmit all beneficial own-
ership information relating to the cor-
poration or limited liability company 
in the possession of the licensed for-
mation agent to the licensing State. 
‘‘(ii) EXCEPTION.—If a licensed for-
mation agent receives written instructions 
from a corporation or limited liability com-
pany, the licensed formation agent may 
transmit the beneficial ownership informa-
tion relating to the corporation or limited 
liability company to another licensed for-
mation agent that is within the same State 
and has agreed to maintain the informa-
tion in accordance with this section. 
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‘‘(iii) NOTICE
TO
STATE.—If a li-
censed formation agent provides beneficial 
ownership information to another licensed 
formation agent under clause (ii), the li-
censed formation agent providing the infor-
mation shall promptly notify in writing the 
State under the laws of which the corpora-
tion or limited liability company is formed 
of the identity of the licensed formation 
agent receiving the information. 
‘‘(3) CERTAIN BENEFICIAL OWNERS.—If an ap-
plicant to form a corporation or limited liability com-
pany or a beneficial owner, officer, director, or simi-
lar agent of a corporation or limited liability com-
pany who is required to provide identification infor-
mation under this subsection does not have a non- 
expired passport issued by the United States or a 
non-expired driver’s license or identification card 
issued by a State, each application described in 
paragraph (1)(A) and each update described in 
paragraph (1)(B) shall include a certification by a 
formation agent residing in the State that the for-
mation agent— 
‘‘(A) has obtained for each such person a 
current residential or business street address 
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and a legible and credible copy of the pages of 
a non-expired passport issued by the govern-
ment of a foreign country bearing a photo-
graph, date of birth, and unique identifying in-
formation for the person; 
‘‘(B) has verified the name, address, and 
identity of each such person; 
‘‘(C) will provide the information described 
in subparagraph (A) and the proof of verifica-
tion described in subparagraph (B) upon re-
quest under the same circumstances as required 
for States under paragraph (1)(D); and 
‘‘(D) will retain the information and proof 
of verification under this paragraph in the 
State in which the corporation or limited liabil-
ity company is being or has been formed until 
the end of the 5-year period beginning on the 
date that the corporation or limited liability 
company terminates under the laws of the 
State. 
‘‘(4) EXEMPT ENTITIES.— 
‘‘(A) IN
GENERAL.—A formation system 
described in paragraph (1) shall require that an 
application for an entity described in subpara-
graph (C) or (D) of subsection (d)(2) that is 
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proposed to be formed under the laws of a 
State and that will be exempt from the bene-
ficial ownership disclosure requirements under 
this subsection shall include in the application 
a certification by the applicant, or a prospective 
officer, director, or similar agent of the entity— 
‘‘(i) identifying the specific provision 
of subsection (d)(2) under which the entity 
proposed to be formed would be exempt 
from the beneficial ownership disclosure re-
quirements under paragraphs (1), (2), and 
(3); 
‘‘(ii) stating that the entity proposed 
to be formed meets the requirements for 
an entity described under such provision of 
subsection (d)(2); and 
‘‘(iii) providing identification informa-
tion for the applicant or prospective offi-
cer, director, or similar agent making the 
certification in the same manner as pro-
vided under paragraph (1) or (3). 
‘‘(B) EXISTING ENTITIES.—On and after 
the date that is 2 years after the effective date 
of the amendments to the formation system of 
a State made to comply with this section, an 
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entity formed under the laws of the State be-
fore such effective date shall be considered to 
be a corporation or limited liability company for 
purposes of, and shall be subject to the require-
ments of, this subsection unless an officer, di-
rector, or similar agent of the entity submits to 
the State a certification— 
‘‘(i) identifying the specific provision 
of subsection (d)(2) under which the entity 
is exempt from the requirements under 
paragraphs (1), (2), and (3); 
‘‘(ii) stating that the entity meets the 
requirements for an entity described under 
such provision of subsection (d)(2); and 
‘‘(iii) providing identification informa-
tion for the officer, director, or similar 
agent making the certification in the same 
manner as provided under paragraph (1) 
or (3). 
‘‘(C) EXEMPT ENTITIES HAVING OWNER-
SHIP INTEREST.—If an entity described in sub-
paragraph (C) or (D) of subsection (d)(2) has 
or will have an ownership interest in a corpora-
tion or limited liability company formed or to be 
formed under the laws of a State, the applicant, 
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corporation, or limited liability company in 
which the entity has or will have the ownership 
interest shall provide the information required 
under this subsection relating to the entity, ex-
cept that the entity shall not be required to pro-
vide information regarding any natural person 
who has an ownership interest in, exercises sub-
stantial control over, or receives substantial eco-
nomic benefits from the entity. 
‘‘(c) PENALTIES.— 
‘‘(1) IN GENERAL.—It shall be unlawful for— 
‘‘(A) any person to affect interstate or for-
eign commerce by— 
‘‘(i) knowingly providing, or attempt-
ing to provide, false or fraudulent bene-
ficial ownership information, including a 
false or fraudulent identifying photograph, 
to a State or licensed formation agent 
under State law in accordance with this 
section; 
‘‘(ii) willfully failing to provide com-
plete or updated beneficial ownership infor-
mation to a State or licensed formation 
agent under State law in accordance with 
this section; or 
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‘‘(iii) knowingly disclosing the exist-
ence of a subpoena, summons, or other re-
quest for beneficial ownership information, 
except— 
‘‘(I) to the extent necessary to 
fulfill the authorized request; 
‘‘(II) as authorized by the entity 
that issued the subpoena, summons, 
or other request; or 
‘‘(III) as prescribed by a State; 
or 
‘‘(B) in the case of a formation agent, 
knowingly failing to obtain or maintain credible, 
legible, and updated beneficial ownership infor-
mation, including any required identifying pho-
tograph. 
‘‘(2) CIVIL AND CRIMINAL PENALTIES.—In ad-
dition to any civil or criminal penalty that may be 
imposed by a State, any person who violates para-
graph (1)— 
‘‘(A) shall be liable to the United States 
for a civil penalty of not more than $10,000; 
and 
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‘‘(B) may be fined under title 18, United 
States Code, imprisoned for not more than 3 
years, or both. 
‘‘(d) DEFINITIONS.—For the purposes of this section: 
‘‘(1) BENEFICIAL OWNER.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘beneficial owner’ 
means a natural person who, directly or indi-
rectly— 
‘‘(i) exercises substantial control over 
a corporation or limited liability company; 
or 
‘‘(ii) has a substantial interest in or 
receives substantial economic benefits from 
the assets of a corporation or limited liabil-
ity company. 
‘‘(B) EXCEPTIONS.—The term ‘beneficial 
owner’ shall not include— 
‘‘(i) a minor child; 
‘‘(ii) a person acting as a nominee, 
intermediary, custodian, or agent on behalf 
of another person; 
‘‘(iii) a person acting solely as an em-
ployee of a corporation or limited liability 
company and whose control over or eco-
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nomic benefits from the corporation or lim-
ited liability company derives solely from 
the employment status of the person; 
‘‘(iv) a person whose only interest in 
a corporation or limited liability company 
is through a right of inheritance, unless 
the person also meets the requirements of 
subparagraph (A); or 
‘‘(v) a creditor of a corporation or 
limited liability company, unless the cred-
itor also meets the requirements of sub-
paragraph (A). 
‘‘(2) CORPORATION; LIMITED LIABILITY COM-
PANY.—The terms ‘corporation’ and ‘limited liability 
company’— 
‘‘(A) have the meanings given such terms 
under the laws of the applicable State; 
‘‘(B) include any non-United States entity 
eligible for registration or registered to do busi-
ness as a corporation or limited liability com-
pany under the laws of the applicable State; 
‘‘(C) do not include any entity that is, and 
discloses in the application by the entity to 
form under the laws of the State or, if the enti-
ty was formed before the date of the enactment 
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of this section, in a filing with the State under 
State law— 
‘‘(i) a business concern that is an 
issuer of a class of securities registered 
under section 12 of the Securities Ex-
change Act of 1934 (15 U.S.C. 781) or 
that is required to file reports under sec-
tion 15(d) of that Act (15 U.S.C. 78o(d)); 
‘‘(ii) a business concern constituted or 
sponsored by a State, a political subdivi-
sion of a State, under an interstate com-
pact between two or more States, by a de-
partment or agency of the United States, 
or under the laws of the United States; 
‘‘(iii) a depository institution (as de-
fined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813)); 
‘‘(iv) a credit union (as defined in sec-
tion 101 of the Federal Credit Union Act 
(12 U.S.C. 1752)); 
‘‘(v) a bank holding company (as de-
fined in section 2 of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1841)); 
‘‘(vi) a broker or dealer (as defined in 
section 3 of the Securities Exchange Act of 
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1934 (15 U.S.C. 78c)) that is registered 
under section 15 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o); 
‘‘(vii) an exchange or clearing agency 
(as defined in section 3 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c)) 
that is registered under section 6 or 17A 
of the Securities Exchange Act of 1934 
(15 U.S.C. 78f and 78q–1); 
‘‘(viii) an investment company (as de-
fined in section 3 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–3)) or 
an investment advisor (as defined in sec-
tion 202(11) of the Investment Advisors 
Act of 1940 (15 U.S.C. 80b–2(11))), if the 
company or adviser is registered with the 
Securities and Exchange Commission, or 
has filed an application for registration 
which has not been denied, under the In-
vestment Company Act of 1940 (15 U.S.C. 
80a–1 et seq.) or the Investment Advisor 
Act of 1940 (15 U.S.C. 80b–1 et seq.); 
‘‘(ix) an insurance company (as de-
fined in section 2 of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–2)); 
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‘‘(x) a registered entity (as defined in 
section 1a of the Commodity Exchange Act 
(7 U.S.C. 1a)), or a futures commission 
merchant, introducing broker, commodity 
pool operator, or commodity trading advi-
sor (as defined in section 1a of the Com-
modity Exchange Act (7 U.S.C. 1a)) that 
is registered with the Commodity Futures 
Trading Commission; 
‘‘(xi) a public accounting firm reg-
istered in accordance with section 102 of 
the Sarbanes-Oxley Act (15 U.S.C. 7212); 
‘‘(xii) a public utility that provides 
telecommunications 
service, 
electrical 
power, natural gas, or water and sewer 
services, within the United States; 
‘‘(xiii) a church, charity, or nonprofit 
entity that is described in section 501(c), 
527, or 4947(a)(1) of the Internal Revenue 
Code of 1986, has not been denied tax ex-
empt status, and has filed the most re-
cently due annual information return with 
the Internal Revenue Service, if required to 
file such a return; 
‘‘(xiv) any business concern that— 
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‘‘(I) employs more than 20 em-
ployees on a full-time basis in the 
United States; 
‘‘(II) files income tax returns in 
the United States demonstrating more 
than $5,000,000 in gross receipts or 
sales; and 
‘‘(III) has an operating presence 
at a physical office within the United 
States; or 
‘‘(xv) any corporation or limited liabil-
ity company formed and owned by an enti-
ty described in clause (i), (ii), (iii), (iv), 
(v), (vi), (vii), (viii), (ix), (x), (xi), (xii), 
(xiii), or (xiv); and 
‘‘(D) do not include any individual busi-
ness concern or class of business concerns 
which the Secretary of the Treasury, with the 
written concurrence of the Attorney General of 
the United States, has determined in writing 
should be exempt from the requirements of sub-
section (a), because requiring beneficial owner-
ship information from the business concern 
would not serve the public interest and would 
not assist law enforcement efforts to detect, 
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prevent, or punish terrorism, money laundering, 
tax evasion, or other misconduct. 
‘‘(3) FORMATION AGENT.—The term ‘formation 
agent’ means a person who, for compensation— 
‘‘(A) acts on behalf of another person to 
assist in the formation of a corporation or lim-
ited liability company under the laws of a State; 
or 
‘‘(B) purchases, sells, or transfers the pub-
lic records that form a corporation or limited li-
ability company. 
‘‘(4) BANK SECRECY ACT.—The term ‘Bank Se-
crecy Act’ means— 
‘‘(A) section 21 of the Federal Deposit In-
surance Act; 
‘‘(B) chapter 2 of title I of Public Law 91– 
508; and 
‘‘(C) this subchapter.’’. 
(2) RULEMAKING.—To carry out this Act and 
the amendments made by this Act, the Secretary of 
the Treasury, in consultation with the Secretary of 
Homeland Security and the Attorney General of the 
United States, may issue guidance or a rule to— 
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lotter on DSKBCFDHB2PROD with BILLS
(A) clarify the definitions under section 
5333(d) of title 31, United States Code, as 
added by paragraph (1); and 
(B) specify how to verify beneficial owner-
ship information or other identification infor-
mation for purposes of such section 5333, in-
cluding whether the verification procedures 
specified in section 5333(b)(3) should apply to 
all applicants under section 5333(b)(1) or 
whether such verification process should require 
the notarization of signatures. 
(3) CONFORMING
AMENDMENTS.—Title 31, 
United States Code, is amended— 
(A) in section 5321(a)— 
(i) in paragraph (1), by striking ‘‘sec-
tions 5314 and 5315’’ each place it ap-
pears and inserting ‘‘sections 5314, 5315, 
and 5333’’; and 
(ii) in paragraph (6), by inserting 
‘‘(except 
section 
5333)’’ 
after 
‘‘sub-
chapter’’ each place it appears; and 
(B) in section 5322, by striking ‘‘section 
5315 or 5324’’ each place it appears and insert-
ing ‘‘section 5315, 5324, or 5333’’. 
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(4) TABLE OF CONTENTS.—The table of con-
tents of chapter 53 of title 31, United States Code, 
is amended by inserting after the item relating to 
section 5332 the following: 
‘‘Sec. 5333. Transparent incorporation practices.’’. 
(5) RESTRICTIONS
ON
PUBLIC
ACCESS.—A 
State may— 
(A) restrict public access to all or any por-
tion of the beneficial ownership information 
provided to the State as described under section 
5332 of title 31, United States Code, as added 
by this Act; and 
(B) by statute, regulation, order, or inter-
pretation adopted or issued by the State after 
the date of enactment of this Act, provide for 
public access to all or any portion of such infor-
mation. 
(6) NO DUTY OF VERIFICATION.—This Act and 
the amendments made by this Act do not impose 
any obligation on a State to verify the name, ad-
dress, or identity of a beneficial owner whose infor-
mation is submitted to such State under section 
5333 of title 31, United States Code, as added by 
this Act. 
(b) FUNDING AUTHORIZATION.— 
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(1) IN GENERAL.—To carry out section 5333 of 
title 31, United States Code, during the 3-year pe-
riod beginning on the date of enactment of this Act, 
funds shall be made available to each State to pay 
reasonable costs relating to compliance with the re-
quirements of such section. 
(2) FUNDING SOURCES.—To protect the United 
States against the misuse of United States corpora-
tions and limited liability companies with hidden 
owners, funds shall be provided to each State to 
carry out the purposes described in paragraph (1) 
from one or more of the following sources: 
(A) Upon application by a State, and with-
out further appropriation, the Secretary of the 
Treasury shall make available to the State un-
obligated 
balances 
described 
in 
section 
9703(g)(4)(B) of title 31, United States Code, 
in the Department of the Treasury Forfeiture 
Fund established under section 9703(a) of title 
31, United States Code. 
(B) Upon application by a State, after con-
sultation with the Secretary of the Treasury, 
and without further appropriation, the Attorney 
General of the United States shall make avail-
able to the State excess unobligated balances 
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lotter on DSKBCFDHB2PROD with BILLS
(as defined in section 524(c)(8)(D) of title 28, 
United States Code) in the Department of Jus-
tice Assets Forfeiture Fund established under 
section 524(c) of title 28, United States Code. 
(3) MAXIMUM AMOUNTS.— 
(A) DEPARTMENT OF THE TREASURY.— 
The Secretary of the Treasury may not make 
available to States a total of more than 
$30,000,000 under paragraph (2)(A). 
(B) DEPARTMENT OF JUSTICE.—The At-
torney General of the United States may not 
make available to States a total of more than 
$10,000,000 under paragraph (2)(B). 
(4) RULEMAKING.—Not later than the end of 
the 180-day period beginning on the date of the en-
actment of this Act, the Secretary of the Treasury 
and the Attorney General shall, jointly, issue regula-
tions setting forth the procedures for States to apply 
for funds under this subsection, including deter-
mining which State measures should be funded to 
assess, plan, develop, test, or implement relevant 
policies, procedures, or system modifications. 
(c) COMPLIANCE REPORT.—Nothing in this section 
or the amendments made by this section authorizes the 
Secretary of the Treasury to withhold from a State any 
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funding otherwise available to the State because of a fail-
ure by that State to comply with section 5333 of title 31, 
United States Code. Not later than the end of the 42- 
month period beginning on the date of the enactment of 
this Act, the Comptroller General of the United States 
shall submit to the Committee on Financial Services of 
the House of Representatives and the Committee on 
Homeland Security and Governmental Affairs of the Sen-
ate a report— 
(1) identifying which States obtain beneficial 
ownership information as described in such section 
5333; 
(2) with respect to each State that does not ob-
tain such information, whether corporations and lim-
ited liability companies formed under the laws of 
such State are in compliance with such section 5333 
and providing the specified beneficial ownership in-
formation to the Financial Crimes Enforcement Net-
work; and 
(3) whether the Department of the Treasury is 
in compliance with such section 5333 and, if not, 
what steps it must take to come into compliance 
with this section. 
(d) FEDERAL CONTRACTORS.—Not later than the 
first day of the first full fiscal year beginning at least one 
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lotter on DSKBCFDHB2PROD with BILLS
year after the date of the enactment of this Act, the Ad-
ministrator for Federal Procurement Policy shall revise 
the Federal Acquisition Regulation maintained under sec-
tion 1303(a)(1) of title 41, United States Code, to require 
any contractor who is subject to the requirement to dis-
close beneficial ownership information under section 5333 
of title 31, United States Code, to provide the information 
required to be disclosed under such section to the Federal 
Government as part of any bid or proposal for a contract 
with a value threshold in excess of the simplified acquisi-
tion threshold under section 134 of title 41, United States 
Code. 
(e) ANTI-MONEY LAUNDERING OBLIGATIONS
OF 
FORMATION AGENTS.— 
(1) IN GENERAL.—Section 5312(a)(2) of title 
31, United States Code, is amended— 
(A) in subparagraph (Y), by striking ‘‘or’’ 
at the end; 
(B) by redesignating subparagraph (Z) as 
subparagraph (AA); and 
(C) by inserting after subparagraph (Y) 
the following: 
‘‘(Z) any person who, for compensation— 
‘‘(i) acts on behalf of another person 
to form, or assist in formation of, a cor-
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poration or limited liability company under 
the laws of a State; or 
‘‘(ii) purchases, sells, or transfers the 
public records that form a corporation or 
limited liability company; or’’. 
(2) DEADLINE FOR ANTI-MONEY LAUNDERING 
RULE FOR FORMATION AGENTS.— 
(A) PROPOSED RULE.—Not later than 120 
days after the date of enactment of this Act, 
the Secretary of the Treasury, in consultation 
with the Attorney General of the United States 
and the Commissioner of the Internal Revenue 
Service, shall publish a proposed rule in the 
Federal Register requiring persons described in 
section 5312(a)(2)(Z) of title 31, United States 
Code, as amended by this subsection, to estab-
lish anti-money laundering programs under sub-
section (h) of section 5318 of that title. 
(B) FINAL
RULE.—Not later than 270 
days after the date of enactment of this Act, 
the Secretary of the Treasury shall publish the 
rule described in this subsection in final form in 
the Federal Register. 
(C) EXCLUSIONS.—Any rule promulgated 
under this subsection shall exclude from the 
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category of persons involved in forming a cor-
poration or limited liability company— 
(i) any government agency; and 
(ii) any attorney or law firm that uses 
a paid formation agent operating within 
the United States to form the corporation 
or limited liability company. 
SEC. 4. STUDIES AND REPORTS. 
(a) OTHER LEGAL ENTITIES.—Not later than 2 
years after the date of enactment of this Act, the Comp-
troller General of the United States shall conduct a study 
and submit to the Congress a report— 
(1) identifying each State that has procedures 
that enable persons to form or register under the 
laws of the State partnerships, trusts, or other legal 
entities, and the nature of those procedures; 
(2) identifying each State that requires persons 
seeking to form or register partnerships, trusts, or 
other legal entities under the laws of the State to 
provide information about the beneficial owners (as 
that term is defined in section 5333(d)(1) of title 
31, United States Code, as added by this Act) or 
beneficiaries of such entities, and the nature of the 
required information; 
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(3) evaluating whether the lack of available 
beneficial ownership information for partnerships, 
trusts, or other legal entities— 
(A) raises concerns about the involvement 
of such entities in terrorism, money laundering, 
tax evasion, securities fraud, or other mis-
conduct; and 
(B) has impeded investigations into enti-
ties suspected of such misconduct; and 
(4) evaluating whether the failure of the United 
States to require beneficial ownership information 
for partnerships and trusts formed or registered in 
the United States has elicited international criticism 
and what steps, if any, the United States has taken 
or is planning to take in response. 
(b) EFFECTIVENESS
OF
INCORPORATION
PRAC-
TICES.—Not later than 5 years after the date of enact-
ment of this Act, the Comptroller General of the United 
States shall conduct a study and submit to the Congress 
a report assessing the effectiveness of incorporation prac-
tices implemented under this Act and the amendments 
made by this Act in— 
(1) providing law enforcement agencies with 
prompt access to reliable, useful, and complete bene-
ficial ownership information; and 
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(2) strengthening the capability of law enforce-
ment agencies to combat incorporation abuses, civil 
and criminal misconduct, and detect, prevent, or 
punish terrorism, money laundering, tax evasion, or 
other misconduct. 
Æ 
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