Title: Counter Terrorism and Illicit Finance Act
Policy area: Finance and Financial Sector

Summary:
Counter Terrorism and Illicit Finance Act
This bill (1) increases the threshold dollar amounts above which financial institutions are required to file currency-transaction and suspicious-activity reports with the Financial Crimes Enforcement Network (FinCEN), (2) directs FinCEN to establish a process for no-action letters, and (3) modifies other provisions related to anti-money laundering and counterterrorist financing.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6068 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 6068

  To update dollar amount thresholds for certain currency transaction 
  reports and suspicious activity reports, to improve the sharing of 
  suspicious activity reports within a financial group, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 12, 2018

 Mr. Pearce (for himself and Mr. Luetkemeyer) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To update dollar amount thresholds for certain currency transaction 
  reports and suspicious activity reports, to improve the sharing of 
  suspicious activity reports within a financial group, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Counter Terrorism and Illicit 
Finance Act''.

SEC. 2. UPDATING THRESHOLDS FOR CERTAIN CURRENCY TRANSACTION REPORTS 
              AND SUSPICIOUS ACTIVITY REPORTS.

    (a) Thresholds for Certain Currency Transaction Reports.--
            (1) In general.--Not later than the end of the 180-day 
        period beginning on the date of the enactment of this Act, the 
        Secretary of the Treasury shall revise regulations issued with 
        respect to section 5313 of title 31, United States Code, to 
        update each $10,000 threshold amount in such regulations to 
        $30,000.
            (2) Threshold for reports relating to coins and currency 
        received in nonfinancial trade or business.--Section 5331 of 
        title 31, United States Code, is amended by striking 
        ``$10,000'' each place such term appears in heading or text and 
        inserting ``$30,000''.
    (b) Thresholds for Suspicious Activity Reports.--Not later than the 
end of the 180-day period beginning on the date of the enactment of 
this Act, each Federal department or agency that issues regulations 
with respect to reports on suspicious transactions described under 
section 5318(g) of title 31, United States Code, shall update each 
$5,000 threshold amount in such regulations to $10,000 and each $2,000 
threshold amount in such regulation to $3,000.
    (c) Updating the Money Services Business Definition Thresholds.--
Not later than the end of the 180-day period beginning on the date of 
the enactment of this Act, the Secretary of the Treasury shall revise 
section 1010.100(ff) of title 31, Code of Federal Regulations, to 
update each $1,000 threshold amount in such regulations to $3,000.

SEC. 3. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION REPORTS AND 
              SUSPICIOUS ACTIVITY REPORTS.

    (a) Review.--The Secretary of the Treasury (in consultation with 
Federal law enforcement agencies, the Director of National 
Intelligence, and the Federal functional regulators and in consultation 
with other relevant stakeholders) shall undertake a formal review of 
the current financial institution reporting requirements under the Bank 
Secrecy Act and its implementing regulations and propose changes to 
further reduce regulatory burdens, and ensure that the information 
provided is of a ``high degree of usefulness'' to law enforcement, as 
set forth under section 5311 of title 31, United States Code.
    (b) Contents.--The review required under subsection (a) shall 
include a study of--
            (1) whether the timeframe for filing a suspicious activity 
        report should be increased from 30 days;
            (2) whether or not currency transaction report and 
        suspicious activity report thresholds should be tied to 
        inflation or otherwise periodically be adjusted;
            (3) whether the circumstances under which a financial 
        institution determines whether to file a ``continuing 
        suspicious activity report'', or the processes followed by a 
        financial institution in determining whether to file a 
        ``continuing suspicious activity report'' (or both) can be 
        narrowed;
            (4) analyzing the fields designated as ``critical'' on the 
        suspicious activity report form and whether the number of 
        fields should be reduced;
            (5) the categories, types, and characteristics of 
        suspicious activity reports and currency transaction reports 
        that are of the greatest value to, and that best support, 
        investigative priorities of law enforcement and national 
        security personnel;
            (6) the increased use of exemption provisions to reduce 
        currency transaction reports that are of little or no value to 
        law enforcement efforts;
            (7) the most appropriate ways to promote financial 
        inclusion and address the adverse consequences of financial 
        institutions de-risking entire categories of high-risk 
        relationships, including charities, embassy accounts, money 
        service businesses (as defined under section 1010.100(ff) of 
        title 31, Code of Federal Regulations), and correspondent 
        banks;
            (8) the current financial institution reporting 
        requirements under the Bank Secrecy Act and its implementing 
        regulations and guidance; and
            (9) such other items as the Secretary determines 
        appropriate.
    (c) Report.--Not later than the end of the one year period 
beginning on the date of the enactment of this Act, the Secretary of 
the Treasury, in consultation with law enforcement and persons subject 
to Bank Secrecy Act requirements, shall issue a report to the Congress 
containing all findings and determinations made in carrying out the 
review required under subsection (a).

SEC. 4. SHARING OF SUSPICIOUS ACTIVITY REPORTS WITHIN A FINANCIAL 
              GROUP.

    (a) In General.--
            (1) Sharing with foreign branches and affiliates.--Section 
        5318(g) of title 31, United States Code, is amended by adding 
        at the end the following:
            ``(5) Sharing with foreign branches, subsidiaries, and 
        affiliates.--
                    ``(A) In general.--Not later than 180 days after 
                the date of the enactment of this paragraph, the 
                Secretary of the Treasury shall issue rules permitting 
                any financial institution with a reporting obligation 
                under this subsection to share information on reports 
                under this subsection with the institution's foreign 
                branches, subsidiaries, and affiliates for the purposes 
                of combating illicit finance risks, notwithstanding any 
                other provision of law except subparagraph (B).
                    ``(B) Exception.--In issuing the regulations 
                required under subparagraph (A), the Secretary may not 
                permit a financial institution to share information on 
                reports under this subsection with a foreign branch, 
                subsidiary, or affiliate located in a jurisdiction 
                that--
                            ``(i) is subject to countermeasures imposed 
                        by the Federal Government; or
                            ``(ii) the Secretary has determined cannot 
                        reasonably protect the privacy and 
                        confidentiality of such information.''.
            (2) Notification prohibitions.--Section 5318(g)(2)(A) of 
        title 31, United States Code, is amended--
                    (A) in clause (i), by inserting after ``transaction 
                has been reported'' the following: ``or otherwise 
                reveal any information that would reveal that the 
                transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity''; and
                    (B) in clause (ii), by inserting after 
                ``transaction has been reported,'' the following: ``or 
                otherwise reveal any information that would reveal that 
                the transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity,''.
    (b) Rulemaking.--Not later than the end of the 180-day period 
beginning on the date of enactment of this Act, the Secretary of the 
Treasury shall issue regulations to carry out the amendments made by 
this section.

SEC. 5. FINCEN NO-ACTION LETTERS.

    Section 310 of title 31, United States Code, is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following:
    ``(d) No-Action Letters With Respect to Specific Conduct.--
            ``(1) In general.--The Director of FinCEN shall issue 
        regulations to establish a process for the issuance of a no-
        action letter by FinCEN in response to an inquiry from a person 
        or group of persons concerning the application of the Bank 
        Secrecy Act, the USA PATRIOT Act, or any other anti-money 
        laundering and counter terrorist financing law or regulation to 
        specific conduct, which shall include a statement as to whether 
        or not FinCEN has any intention of taking an enforcement or 
        other regulatory action against the person or group with 
        respect to such conduct.
            ``(2) Consultation.--In issuing the regulations described 
        under paragraph (1), the Secretary shall consult with the 
        Federal functional regulators and such other Federal 
        departments and agencies as the Secretary determines 
        appropriate.
            ``(3) Reliance on no-action letter.--
                    ``(A) Liability.--Notwithstanding any other 
                provisions of law, except for paragraph (5)(B), a 
                person described under subparagraph (B) who relies upon 
                a no-action letter issued under this subsection in 
                accordance with the provisions and findings of such 
                letter shall not, as a result, be subject to any 
                regulatory action or civil or criminal penalty under 
                the Bank Secrecy Act, the USA PATRIOT Act, or any other 
                anti-money laundering and counter terrorist financing 
                law or regulation with respect to the activity covered 
                in the no-action letter.
                    ``(B) Persons covered.--A person described in this 
                paragraph is--
                            ``(i) any person involved in the specific 
                        conduct that is the subject of the no-action 
                        letter; and
                            ``(ii) any person involved in conduct which 
                        is indistinguishable in all its material 
                        aspects from the specific conduct that is the 
                        subject of the no-action letter.
            ``(4) Fees.--
                    ``(A) In general.--The Director of FinCEN shall 
                develop a system to charge a fee for each request for a 
                no-action letter made under this subsection in an 
                amount sufficient, in the aggregate, to pay for the 
                cost of carrying out this subsection. Such system shall 
                provide for a lower fee for small business concerns and 
                small financial institutions compared to other persons.
                    ``(B) Notice and comment.--Not later than 45 days 
                after the date of the enactment of this paragraph, the 
                Director of FinCEN shall publish a description of the 
                fee system described in subparagraph (A) in the Federal 
                Register and shall solicit comments from the public for 
                a period of 60 days after publication.
                    ``(C) Finalization.--The Director of FinCEN shall 
                publish a final description of the fee system and 
                implement such fee system not later than 30 days after 
                the end of the public comment period described in 
                subparagraph (B).
            ``(5) Modifying or rescinding a no-action letter.--
                    ``(A) In general.--The Director of FinCEN may 
                modify or rescind any no-action letter issued under 
                this subsection if--
                            ``(i) in light of changes in statute, 
                        regulations, or policy the letter no longer 
                        sets forth the interpretation of FinCEN with 
                        respect to the content of the letter; or
                            ``(ii) any fact or statement submitted in 
                        the original inquiry is found to be materially 
                        inaccurate or incomplete.
                    ``(B) No reliance on rescinded letter.--Paragraph 
                (3) shall not apply to the any actions taken after the 
                date that a no-action letter is rescinded.
                    ``(C) Retroactive modification or rescission.--A 
                no-action letter may be modified or rescinded 
                retroactively only with respect to one or more parties 
                to the original inquiry and only if the Director of 
                FinCEN determines that--
                            ``(i) a fact or statement in the original 
                        inquiry was materially inaccurate or 
                        incomplete;
                            ``(ii) the requestor failed to notify in 
                        writing FinCEN of a material change to any fact 
                        or statement in the original request; or
                            ``(iii) a party to the original inquiry 
                        acted in bad faith when relying upon the no-
                        action letter.
                    ``(D) Notice of modification and rescission.--In 
                the case that the Director of FinCEN modifies or 
                rescinds a no-action letter under this subsection, the 
                Director of FinCEN shall--
                            ``(i) provide notice of such modification 
                        or rescission;
                            ``(ii) establish a reasonable time period, 
                        of not less than 90 days, in which impacted 
                        persons may update their anti-money laundering 
                        programs or processes to achieve compliance 
                        with the Bank Secrecy Act, the USA PATRIOT Act, 
                        or any other anti-money laundering and counter 
                        terrorist financing law or regulation.
            ``(6) Definitions.--For purposes of this subsection:
                    ``(A) Bank secrecy act.--The term `Bank Secrecy 
                Act' means--
                            ``(i) section 21 of the Federal Deposit 
                        Insurance Act;
                            ``(ii) chapter 2 of title I of Public Law 
                        91-508; and
                            ``(iii) subchapter II of chapter 53 of this 
                        title.
                    ``(B) Federal functional regulator.--The term 
                `Federal functional regulator' has the meaning given 
                that term under section 5312 of title 31, United States 
                Code.
                    ``(C) Small business concern.--The term `small 
                business concern' has the meaning given under section 3 
                of the Small Business Act.''.

SEC. 6. REQUIRING TREASURY TO TAKE A MORE PROMINENT ROLE IN 
              COORDINATING AML/CFT POLICY AND EXAMINATIONS ACROSS THE 
              GOVERNMENT.

    (a) Priorities.--Not later than nine months after the date of the 
enactment of this Act, and at least annually thereafter, the Secretary 
of the Treasury, acting through the Office of Terrorism and Financial 
Intelligence and the Financial Crimes Enforcement Network, in 
consultation with relevant Federal law enforcement, the Director of 
National Intelligence, and any other Federal departments and agencies 
that the Secretary of the Treasury determines appropriate, shall 
establish and make public its priorities for U.S. anti-money laundering 
and counter terrorist financing policy.
    (b) Supervision and Examination.--The incorporation by financial 
institutions of the priorities established pursuant to subsection (a) 
into the programs established by those financial institutions to meet 
obligations under the Bank Secrecy Act, the USA PATRIOT Act, and other 
anti-money laundering and counter terrorist financing laws and 
regulations shall form the basis on which the financial institutions 
are supervised and examined for compliance with those obligations.
    (c) Rule of Construction.--Nothing in subsection (a) may be 
construed as releasing financial institutions from the requirement to 
comply with obligations under the Bank Secrecy Act and other Federal 
laws and regulations.
    (d) Report.--Not later than nine months after the date of enactment 
of this Act, the Secretary of the Treasury (in consultation with 
Federal law enforcement agencies, the Director of National 
Intelligence, and the Federal functional regulators) shall submit to 
the Committee on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate a 
report containing--
            (1) an analysis of the Secretary of the Treasury's 
        delegation of examination authority under the Bank Secrecy Act, 
        including the adequacy of the Department of the Treasury's 
        resources, capacity, expertise, and ability to effectively 
        carry out the purposes of the Bank Secrecy Act;
            (2) an examination of whether the Secretary should de-
        delegate that authority with regard to certain financial 
        institutions; and
            (3) legislative, administrative, and other recommendations 
        to strengthen the Department of the Treasury's authority to 
        ensure an effective U.S. anti-money laundering and counter 
        terrorist financing regime.

SEC. 7. ENCOURAGING THE USE OF TECHNOLOGICAL INNOVATIONS.

    Section 5318(h) of title 31, United States Code, is amended by 
adding at the end the following:
            ``(4) Encouraging the use of technological innovations.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall, in carrying out this subsection, encourage but 
                not require the use of technological innovations that 
                improve anti-money laundering programs described under 
                paragraph (1).
                    ``(B) Safe harbor.--An anti-money laundering 
                program that meets the minimum requirements described 
                under paragraph (1) and any minimum standards issued 
                pursuant to paragraph (2), shall not violate the 
                requirements of this subsection by reason of any 
                technological innovation used to carry out such 
                program.
                    ``(C) Rule of construction.--Nothing in 
                subparagraph (A) may be construed as releasing 
                financial institutions from the requirement to comply 
                with existing obligations under the Bank Secrecy Act 
                and other Federal laws and regulations.''.

SEC. 8. ASSESSING THE USEFULNESS OF BANK SECRECY ACT REPORTING.

    (a) Annual Report.--Not later than one year after the date of 
enactment of this Act, and annually thereafter, the Attorney General, 
in consultation with Federal law enforcement agencies and the Director 
of National Intelligence, shall, to the extent practicable at the 
discretion of the Attorney General, provide the Secretary of the 
Treasury with statistics, metrics, and other information on the use of 
such data, including--
            (1) the extent to which such data is used for terrorism 
        versus non-terrorism related investigations and, with respect 
        to such non-terrorism related investigations, the most common 
        types of laws to which such investigations relate;
            (2) the frequency with which such data contains 
        ``actionable information'' which leads to further law 
        enforcement procedures, including the use of a subpoena, 
        warrant, or other legal process; and
            (3) information on the extent to which arrests, 
        indictments, convictions, or plea bargains of actors result 
        from the use of such data.
    (b) Use of Report Information.--The Secretary of the Treasury shall 
utilize the information reported under subsection (a)--
            (1) to help assess the usefulness of Bank Secrecy Act 
        reporting to law enforcement;
            (2) to enhance feedback and communications with financial 
        institutions and other entities subject to Bank Secrecy Act 
        requirements; and
            (3) for such other purposes as the Secretary determines 
        appropriate.

SEC. 9. 18-MONTH ENFORCEMENT SAFE HARBOR OF CDD RULE.

    No person shall be liable for any violation of the final rule of 
the Department of the Treasury titled ``Customer Due Diligence 
Requirements for Financial Institutions'' (``CDD rule'') published May 
11, 2016 (81 Fed. Reg. 29397), during the 18-month period beginning on 
May 11, 2018, so long as such person has made a good faith effort to 
comply with such requirements.

SEC. 10. STUDIES AND REPORTS.

    (a) Beneficial Ownership.--Not later than 2 years after the date of 
enactment of this Act, the Comptroller General of the United States 
shall conduct a study and submit to the Congress a report--
            (1) evaluating the effectiveness of the collection of 
        beneficial ownership information under the CDD rule (as defined 
        under section 9), including--
                    (A) whether law enforcement agencies have had 
                timely access to the information;
                    (B) the utility of such information in law 
                enforcement investigations or prosecutions;
                    (C) an analysis of the reporting burden placed on 
                financial institutions versus the utility of such 
                information being made available to law enforcement; 
                and
                    (D) whether further legislation is required to 
                reduce regulatory burdens or increase the utility and 
                timely access of such information to law enforcement;
            (2) assessing the effectiveness of incorporation practices 
        implemented under the CDD rule.
    (b) Comprehensive Cost-Benefit Analysis.--Not later than 2 years 
after the date of enactment of this Act, the Comptroller General of the 
United States shall conduct a study and submit to the Congress a 
report--
            (1) providing a comprehensive quantitative and qualitative 
        estimate of the annualized costs to the private sector to 
        comply with the statutory and regulatory requirements of the 
        Bank Secrecy Act and related anti-money laundering laws and 
        regulations;
            (2) providing a comprehensive qualitative and quantitative 
        analysis of the effectiveness of the current anti-money 
        laundering and counter terrorist financing framework in 
        preventing, detecting, and prosecuting terrorist and illicit 
        financing;
            (3) providing a comprehensive qualitative and quantitative 
        analysis of the benefits and costs to both the private sector 
        and the Government of the private sector's compliance with the 
        statutory and regulatory requirements of the Bank Secrecy Act 
        and related anti-money laundering laws and regulations; and
            (4) examining the costs borne and effect on access to 
        financial services for consumers and customers as a result of 
        financial institutions compliance with the statutory and 
        regulatory requirements of the Bank Secrecy Act and related 
        anti-money laundering laws and regulations.

SEC. 11. DEFINITIONS.

    For purposes of this Act:
            (1) Bank secrecy act.--The term ``Bank Secrecy Act'' 
        means--
                    (A) section 21 of the Federal Deposit Insurance 
                Act;
                    (B) chapter 2 of title I of Public Law 91-508; and
                    (C) subchapter II of chapter 53 of title 31, United 
                States Code.
            (2) Federal functional regulator.--The term ``Federal 
        functional regulator'' has the meaning given that term under 
        section 5312 of title 31, United States Code.
            (3) Financial institution.--The term ``financial 
        institution'' has the meaning given that term under section 
        5312 of title 31, United States Code.
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