Title: ILLICIT CASH Act
Policy area: Finance and Financial Sector

Summary:
Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings Act or the ILLICIT CASH Act
This bill expands disclosure requirements regarding the ownership of corporations and sets forth additional requirements regarding anti-money laundering and combating the financing of terrorism programs (known as AML-CFT programs).
Corporations must disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The bill defines a beneficial owner as an individual who (1) exercises substantial control over a corporation or limited liability company, (2) owns 25% or more of the interest in a corporation or limited liability company, or (3) receives substantial economic benefits from the assets of a corporation or limited liability company.
The bill also generally expands and revises existing AML-CFT provisions, including by
The bill also requires increased communication and data sharing between law enforcement, financial regulators, and financial institutions.
The bill provides statutory authority for the Securities and Exchange Commission to seek disgorgement (i.e., repayment) as a remedy for unjust enrichment that a person gained through a securities law violation.
The bill also revises administrative requirements of FinCEN, including by revising the pay scale of employees.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2563 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2563

 To improve laws relating to money laundering, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 26, 2019

    Mr. Warner (for himself, Mr. Cotton, Mr. Jones, Mr. Rounds, Mr. 
Menendez, Mr. Kennedy, Ms. Cortez Masto, and Mr. Moran) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To improve laws relating to money laundering, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Improving 
Laundering Laws and Increasing Comprehensive Information Tracking of 
Criminal Activity in Shell Holdings Act'' or the ``ILLICIT CASH Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Sense of Congress.
   TITLE I--ANTI-MONEY LAUNDERING PROGRAMS AND THE FINANCIAL CRIMES 
                          ENFORCEMENT NETWORK

Sec. 101. Establishment of national exam and supervision priorities.
Sec. 102. FinCEN compensation.
Sec. 103. Subcommittee on Innovation; investigator research hub.
Sec. 104. Establishment of FinCEN financial institution liaison.
Sec. 105. Interagency AML-CFT personnel rotation program.
Sec. 106. Subcommittee on Privacy and Civil Liberties.
Sec. 107. International coordination.
Sec. 108. Strengthening FinCEN.
  TITLE II--IMPROVING AML-CFT COMMUNICATION, OVERSIGHT, AND PROCESSES

Sec. 201. Annual reporting requirements.
Sec. 202. Law enforcement feedback on suspicious activity reports.
Sec. 203. Streamlining requirements for currency transaction reports 
                            and suspicious activity reports.
Sec. 204. Currency transaction report and suspicious activity report 
                            thresholds review.
Sec. 205. Review of regulations and guidance.
Sec. 206. Penalty coordination.
Sec. 207. Cooperation with law enforcement.
Sec. 208. Additional damages for repeat Bank Secrecy Act violators.
Sec. 209. Encouraging information sharing and public-private 
                            partnerships.
               TITLE III--MODERNIZATION OF AML/CFT SYSTEM

Sec. 301. Approved systems for identifying suspicious activities.
Sec. 302. Financial crimes tech symposium.
Sec. 303. Deidentified AML information.
Sec. 304. No action letters.
Sec. 305. OECD pilot program on sharing of suspicious activity reports 
                            within a financial group.
Sec. 306. Foreign evidentiary requests.
Sec. 307. Updating whistleblower incentives and protection.
Sec. 308. Value that substitutes currency or funds.
Sec. 309. Fight illicit networks and detect trafficking.
Sec. 310. Study and strategy on Chinese money laundering.
Sec. 311. Financial technology task force.
Sec. 312. Study on the efforts of authoritarian regimes to exploit the 
                            financial system of the United States.
Sec. 313. Additional studies.
         TITLE IV--BENEFICIAL OWNERSHIP DISCLOSURE REQUIREMENTS

Sec. 401. Beneficial ownership.
Sec. 402. Geographic targeting order.
Sec. 403. Beneficial ownership studies.
   TITLE V--STRENGTHENING THE ABILITY OF THE SECURITIES AND EXCHANGE 
         COMMISSION TO PURSUE VIOLATIONS OF THE SECURITIES LAWS

Sec. 501. Short title.
Sec. 502. Investigations and prosecutions of violations of the 
                            securities laws.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The practice known as bank de-risking, whereby 
        financial institutions avoid rather than manage anti-money-
        laundering and countering-the-financing-of-terrorism sanctions 
        compliance risk, has negatively impacted the ability of 
        nonprofit organizations to conduct lifesaving activities around 
        the globe.
            (2) Two-thirds of nonprofit organizations based in the 
        United States with international activities face difficulties 
        with financial access, most commonly the inability to send 
        funds internationally through transparent, regulated financial 
        channels.
            (3) Without access to timely and predictable banking 
        services, nonprofit organizations cannot carry out essential 
        humanitarian activities that literally can mean life or death 
        to affected communities.
            (4) De-risking ultimately drives money into less 
        transparent channels through carrying of cash or use of 
        unlicensed or unregistered money service remitters, thus 
        reducing transparency and traceability, which are critical for 
        financial integrity, and increases the risk of money falling 
        into the wrong hands.
            (5) Federal agencies must work to address de-risking 
        through establishment of guidance enabling financial 
        institutions to bank nonprofit organizations and promoting 
        focused and proportionate measures consistent with a risk-based 
        approach.
            (6) The Federal Government should work cooperatively with 
        other donor states to promote a multi-stakeholder approach to 
        risk-sharing among governments, financial institutions, and 
        nonprofit organizations.
    (b) Purposes.--The purposes of this Act are--
            (1) to improve coordination among the agencies tasked with 
        administering anti-money-laundering and countering-the-
        financing-of-terrorism requirements, the agencies that examine 
        financial institutions for compliance with those requirements, 
        Federal law enforcement agencies, the intelligence community, 
        and financial institutions;
            (2) to establish beneficial ownership reporting 
        requirements to improve transparency concerning corporate 
        structures and insight into the flow of illicit funds through 
        such structures, discourage the use of shell corporations as a 
        tool to disguise illicit funds, assist law enforcement with the 
        pursuit of serious crimes, and protect the national security of 
        the United States;
            (3) to modernize anti-money-laundering and counter-
        financing-of-terrorism laws to adapt the government and private 
        sector response to new threats;
            (4) to encourage technological innovation and the adoption 
        of new technology by financial institutions to more effectively 
        counter money laundering and terrorist financing; and
            (5) to reinforce that the anti-money-laundering and 
        countering-the-financing-of-terrorism policies, procedures, and 
        controls of financial institutions shall be risk-based.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Bank secrecy act.--The term ``Bank Secrecy Act'' 
        means--
                    (A) section 21 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1829b);
                    (B) chapter 2 of title I of Public Law 91-508 (12 
                U.S.C. 1951 et seq.); 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 the term in 
        section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
            (3) FinCEN.--The term ``FinCEN'' means the Financial Crimes 
        Enforcement Network of the Department of the Treasury.
            (4) Financial institution.--The term ``financial 
        institution'' has the meaning given the term in section 5312 of 
        title 31, United States Code.
            (5) Secretary.--The term ``Secretary'' means Secretary of 
        the Treasury.
            (6) State bank supervisor.--The term ``State bank 
        supervisor'' has the meaning given the term in section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813).

SEC. 4. SENSE OF CONGRESS.

    It is the sense of Congress that providing vital humanitarian and 
development assistance and protecting the integrity of the 
international financial system are complementary goals. As such, 
Congress supports the following:
            (1) Effective measures to stop the flow of illicit funds 
        and that promote the goals of anti-money laundering and 
        countering the financing of terrorism and sanctions regimes.
            (2) Anti-money laundering and countering the financing of 
        terrorism and sanctions policies that do not hinder or delay 
        the efforts of legitimate humanitarian organizations in 
        providing assistance to--
                    (A) meet the needs of civilians facing humanitarian 
                crisis, including access to food, health and medical 
                care, shelter, and clean drinking water; and
                    (B) prevent or alleviate human suffering, in 
                keeping with requirements of international humanitarian 
                law.
            (3) Policies that ensure that incidental, inadvertent 
        benefits that may indirectly benefit a designated group in the 
        course of delivering life-saving aid to civilian populations, 
        are not the focus of the Federal Government enforcement 
        efforts.
            (4) All laws, regulations, policies, guidance and other 
        measures that ensure the integrity of the financial system 
        through a risk-based approach.

   TITLE I--ANTI-MONEY LAUNDERING PROGRAMS AND THE FINANCIAL CRIMES 
                          ENFORCEMENT NETWORK

SEC. 101. ESTABLISHMENT OF NATIONAL EXAM AND SUPERVISION PRIORITIES.

    (a) Declaration of Purpose.--Subchapter II of chapter 53 of title 
31, United States Code, is amended by striking section 5311 and 
inserting the following:
``Sec. 5311. Declaration of purpose
    ``It is the purpose of this subchapter (except section 5315) to--
            ``(1) prevent the laundering of money and the financing of 
        terrorism through the establishment by financial institutions 
        of reasonably designed risk-based programs to combat money 
        laundering and terrorist financing;
            ``(2) facilitate the tracking of money that has been 
        sourced through criminal activity or is intended to promote 
        criminal or terrorist activity;
            ``(3) protect the integrity of the financial system and the 
        security of the United States;
            ``(4) establish appropriate frameworks for information 
        sharing among financial institutions, their agent and service 
        providers, their regulatory authorities, associations of 
        financial institutions, the Financial Crimes Enforcement 
        Network, and law enforcement authorities to identify, stop, and 
        apprehend money launderers and those who finance terrorists; 
        and
            ``(5) require certain reports or records where they have a 
        high degree of usefulness in criminal, tax, or regulatory 
        investigations or proceedings, or in the conduct of 
        intelligence or counterintelligence activities, including 
        analysis, to protect against terrorism.''.
    (b) Anti-Money Laundering Programs.--Section 5318 of title 31, 
United States Code, is amended--
            (1) in subsection (a)(1), by striking ``subsection (b)(2)'' 
        and inserting ``subsections (b)(2) and (h)(4)''; and
            (2) in subsection (h)--
                    (A) in paragraph (1)--
                            (i) by inserting ``and terrorist 
                        financing'' after ``money laundering''; and
                            (ii) by inserting ``and combating the 
                        financing of terrorism'' after ``anti-money 
                        laundering'';
                    (B) in paragraph (2)--
                            (i) by striking ``The Secretary'' and 
                        inserting the following:
                    ``(A) In general.--The Secretary''; and
                            (ii) by adding at the end the following:
                    ``(B) Factors.--In establishing rules, regulations 
                and guidance under subparagraph (A), and in supervising 
                and examining compliance with those rules, the 
                Secretary of the Treasury, and the Federal functional 
                regulators (as defined in section 509 of the Gramm-
                Leach-Bliley Act (12 U.S.C. 6809)) shall take into 
                account the following:
                            ``(i) Financial institutions are spending 
                        private dollars for a public and private 
                        benefit.
                            ``(ii) The extension of financial services 
                        to the underbanked in the United States and 
                        abroad is a policy goal of the United States.
                            ``(iii) Effective anti-money-laundering and 
                        combating-the-financing-of-terrorism programs 
                        generate significant public benefits by 
                        preventing the flow of illicit funds in the 
                        financial system and by assisting law 
                        enforcement with the identification and 
                        prosecution of persons attempting to launder 
                        money and other illicit activity through the 
                        financial system.
                            ``(iv) Anti-money-laundering and combating-
                        the-financing-of-terrorism programs described 
                        in paragraph (1) should be reasonably designed 
                        to assure and monitor compliance with the 
                        requirements of this subchapter and regulations 
                        issued hereunder, which should be risk based, 
                        including that more financial institution 
                        attention and resources should be directed 
                        toward higher risk customers and activities, 
                        consistent with the risk profile of a financial 
                        institution, rather than lower risk customers 
                        and activities.''; and
                    (C) by adding at the end the following:
            ``(4) Priorities.--
                    ``(A) In general.--Not later than 270 days after 
                the date of enactment of this paragraph, the Secretary 
                of the Treasury, in consultation with the Attorney 
                General, Federal functional regulators (as defined in 
                section 509 of the Gramm-Leach-Bliley Act (12 U.S.C. 
                6809)), relevant State financial regulators, national 
                security agencies, and the Secretary of Homeland 
                Security, shall establish and make public priorities 
                for anti-money laundering and counter terrorist 
                financing policy.
                    ``(B) Updates.--Once every 4 years, the Secretary 
                of the Treasury shall, in consultation with the 
                Attorney General, Federal functional regulators (as 
                defined in section 509 of the Gramm-Leach-Bliley Act 
                (12 U.S.C. 6809)), relevant State financial regulators, 
                national security agencies, and the Secretary of 
                Homeland Security update the priorities established 
                under subparagraph (A).
                    ``(C) Relation to national strategy.--The Secretary 
                of the Treasury shall ensure that the priorities 
                established under subparagraph (A) are consistent with 
                the national strategy for combating the financing of 
                terrorism and related forms of illicit finance 
                developed under section 261 of the Countering Russian 
                Influence in Europe and Eurasia Act of 2017 (Public Law 
                115-44; 131 Stat. 934).
                    ``(D) Rulemaking.--Not later than 120 days after 
                the establishment of the priorities under subparagraph 
                (A), the Secretary of the Treasury acting through the 
                Office of Terrorism and Financial Intelligence, in 
                consultation with the Federal functional regulators (as 
                defined in section 509 of the Gramm-Leach-Bliley Act 
                (12 U.S.C. 6809)), and relevant State financial 
                regulators, shall issue regulations to carry out this 
                paragraph.
                    ``(E) Supervision and examination.--The review by a 
                financial institution of the priorities established 
                under subparagraph (A) and the incorporation of those 
                priorities, as appropriate, into the risk-based 
                programs established by a financial institution to meet 
                obligations under this subchapter, the USA PATRIOT Act 
                (Public Law 107-56; 115 Stat. 272), and other anti-
                money-laundering and counter-terrorist-financing laws 
                and regulations shall be included as a measure on which 
                a financial institution is supervised and examined for 
                compliance with those obligations.''.
    (c) Financial Crimes Enforcement Network.--Section 310(b)(2) of 
title 31, United States Code, is amended by adding at the end the 
following:
                    ``(K) Promulgate regulations under section 
                5318(h)(4)(D), to implement the government-wide anti-
                money-laundering and counter-terrorist-financing 
                examination and supervision priorities established by 
                the Secretary of the Treasury under section 
                5318(h)(4)(A).
                    ``(L) Communicate regularly with financial 
                institutions and Federal functional regulators that 
                examine financial institutions for compliance with 
                subchapter II of chapter 53 and regulations issued 
                thereunder and law enforcement authorities to explain 
                the Government's anti-money-laundering and counter-
                terrorist-financing exam and supervision priorities.
                    ``(M) Give and receive feedback to and from 
                financial institutions and State bank supervisors 
                regarding the matters addressed in subchapter II of 
                chapter 53 and regulations issued thereunder.
                    ``(N) Maintain a money laundering and terrorist 
                financing investigations team comprised of financial 
                experts capable of identifying, tracking, and tracing 
                financial crime networks and identifying emerging 
                threats to conduct and support Federal civil and 
                criminal investigations.
                    ``(O) Maintain an emerging technology team 
                comprised of technology experts to encourage the 
                development of and identify emerging technologies that 
                can assist the United States Government or financial 
                institutions counter money laundering and terrorist 
                financing.''.

SEC. 102. FINCEN COMPENSATION.

    Section 310 of title 31, United States Code, is amended--
            (1) by redesignating subsection (d) as subsection (h); and
            (2) by inserting after subsection (c) the following:
    ``(d) Employee Compensation.--In fixing the compensation for 
employees of FinCEN, the Secretary shall--
            ``(1) fix such compensation without regard to the 
        provisions of chapter 51 or subchapter III of chapter 53 of 
        title 5, United States Code; and
            ``(2) ensure that such compensation is comparable to the 
        compensation provided by the Board of Governors of the Federal 
        Reserve System, the Bureau of Consumer Financial Protection, 
        the Federal Deposit Insurance Corporation, the National Credit 
        Union Administration, and the Office of the Comptroller of the 
        Currency.''.

SEC. 103. SUBCOMMITTEE ON INNOVATION; INVESTIGATOR RESEARCH HUB.

    (a) Subcommittee on Innovation.--Section 1564 of the Annunzio-Wylie 
Anti-Money Laundering Act (31 U.S.C. 5311 note) is amended by adding at 
the end the following:
    ``(d) Subcommittee on Innovation.--
            ``(1) In general.--There shall be within the Bank Secrecy 
        Act Advisory Group a subcommittee to be known as the 
        `Subcommittee on Innovation' to--
                    ``(A) advise the Secretary of the Treasury 
                regarding means by which the Department of the 
                Treasury, FinCEN, and the Federal functional regulators 
                can most effectively encourage and support 
                technological innovation in the area of anti-money 
                laundering; and
                    ``(B) reduce as much as is possible obstacles to 
                innovation that may arise from existing regulations, 
                guidance, and examination practices related to 
                compliance of financial institutions with the Bank 
                Secrecy Act.
            ``(2) Membership.--
                    ``(A) In general.--The subcommittee established 
                under paragraph (1) shall consist of the 
                representatives of the heads of the Federal functional 
                regulators, a representative cross-section of financial 
                institutions subject to the Bank Secrecy Act, law 
                enforcement, and FinCEN.
                    ``(B) Requirements.--Each agency representative 
                described in subparagraph (A) shall be an individual 
                who has demonstrated knowledge and competence 
                concerning the application of the Bank Secrecy Act.''.
    (b) Investigator Research Hub.--Section 310 of title 31, United 
States Code, as amended by section 102 of this Act, is amended by 
adding after subsection (d) the following:
    ``(e) Investigative Experts.--
            ``(1) In general.--FinCEN shall hire and maintain a team of 
        financial experts capable of identifying, tracking, and tracing 
        money laundering and terrorist-financing networks in order to 
        conduct and support civil and criminal anti-money-laundering 
        and combating-the-financing-of-terrorism investigations 
        conducted by the United States Government, except that the 
        Inspector General of the Department of the Treasury shall be 
        responsible for hiring and maintaining those experts with 
        respect to audits and inspections of the access and use of data 
        described in subchapter II of chapter 53.
            ``(2) Investigative resource hub.--FinCEN shall, upon a 
        reasonable request from a United States Government agency, 
        require financial experts to, in collaboration with the 
        requesting agency, investigate the potential anti-money-
        laundering and countering-the-financing-of-terrorism activity 
        that prompted the request.
            ``(3) Staffing.--FinCEN shall hire or retain full-time 
        employees, including trained investigative personnel accorded 
        criminal authority and experienced with subchapter II of 
        chapter 53 to perform the functions contemplated by this 
        subsection, except as provided in paragraph (1).''.

SEC. 104. ESTABLISHMENT OF FINCEN FINANCIAL INSTITUTION LIAISON.

    Section 310 of title 31, United States Code, as amended by sections 
102 and 103 of this Act, is amended by adding after subsection (e) the 
following:
    ``(f) Office of the Financial Institution Liaison Established.--
There is established within FinCEN the Office of the Financial 
Institution Liaison (in this subsection referred to as the `Office').
            ``(1) In general.--The head of the Office shall be the 
        Liaison, who shall--
                    ``(A) report directly to the Director; and
                    ``(B) be appointed by the Director, from among 
                individuals having experience or familiarity with anti-
                money-laundering-program examinations, supervision and 
                enforcement, and prior employment with financial 
                institutions handling such matters.
            ``(2) Compensation.--The annual rate of pay for the Liaison 
        shall be equal to the highest rate of annual pay for other 
        senior executives who report to the Director.
            ``(3) Staff of office.--The Liaison, with the concurrence 
        of the Director, may retain or employ counsel, research staff, 
        and service staff, as the Liaison deems necessary to carry out 
        the functions, powers, and duties of the Office.
            ``(4) Functions of the liaison.--
                    ``(A) In general.--The Liaison shall--
                            ``(i) receive feedback from financial 
                        institutions and bank examiners regarding their 
                        examinations under the Bank Secrecy Act and 
                        communicate that feedback to FinCEN, the 
                        Federal functional regulators, and State bank 
                        supervisors;
                            ``(ii) help promote coordination and 
                        consistency of supervisory guidance from 
                        FinCEN, the Federal functional regulators, and 
                        State bank supervisors regarding the Bank 
                        Secrecy Act;
                            ``(iii) act as a liaison between financial 
                        institutions and their Federal functional 
                        regulators and State bank supervisors with 
                        respect to matters involving the Bank Secrecy 
                        Act and regulations issued thereunder;
                            ``(iv) establish safeguards to maintain the 
                        confidentiality of communications between the 
                        persons described in subparagraph (B) and the 
                        Liaison;
                            ``(v) analyze the potential impact on 
                        financial institutions of proposed regulations 
                        of FinCEN; and
                            ``(vi) to the extent practicable, propose 
                        to FinCEN changes in the regulations, guidance, 
                        or orders of FinCEN and to Congress any 
                        legislative or administrative changes that may 
                        be appropriate to mitigate problems identified 
                        under this paragraph.
                    ``(B) Rule of construction.--Nothing in this 
                paragraph may be construed to permit the Liaison to 
                have authority over supervision, examination, or 
                enforcement processes.
            ``(5) Access to documents.--FinCEN shall, to the extent 
        practicable and consistent with appropriate safeguards for 
        sensitive enforcement-related, pre-decisional, or deliberative 
        information, ensure that the Liaison has full access to the 
        documents of FinCEN, as necessary to carry out the functions of 
        the Office.
            ``(6) Annual reports.--
                    ``(A) In general.--Not later than June 30 of each 
                year after 2019, the Liaison shall submit to the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services of the 
                House of Representatives a report on the objectives of 
                the Liaison for the following fiscal year and the 
                activities of the Liaison during the immediately 
                preceding fiscal year.
                    ``(B) Contents.--Each report required under 
                subparagraph (A) shall include--
                            ``(i) appropriate statistical information 
                        and full and substantive analysis;
                            ``(ii) information on steps that the 
                        Liaison has taken during the reporting period 
                        to address feedback received by financial 
                        institutions and bank examination personnel 
                        related to examinations under the Bank Secrecy 
                        Act;
                            ``(iii) recommendations for such 
                        administrative and legislative actions as may 
                        be appropriate to resolve problems encountered 
                        by financial institutions or bank examination 
                        personnel; and
                            ``(iv) any other information, as determined 
                        appropriate by the Liaison.
                    ``(C) Sensitive information.--Notwithstanding 
                subparagraph (D), FinCEN shall review the report listed 
                in subparagraph (A) to ensure the report does not 
                disclose sensitive information.
                    ``(D) Independence.--
                            ``(i) In general.--Each report required 
                        under this subsection shall be provided 
                        directly to the Committees listed in 
                        subparagraph (A) without any prior review or 
                        comment from FinCEN, the Director, any Federal 
                        functional regulator, any State bank 
                        supervisor, or the Office of Management and 
                        Budget.
                            ``(ii) Rule of construction.--Nothing in 
                        clause (i) may be construed to preclude FinCEN 
                        or any other department or agency from 
                        reviewing a report required under this 
                        subsection for the sole purpose of protecting--
                                    ``(I) sensitive information 
                                obtained by a law enforcement agency; 
                                and
                                    ``(II) classified information.
                    ``(E) Classified information.--No report required 
                under subparagraph (A) may contain classified 
                information.''.

SEC. 105. INTERAGENCY AML-CFT PERSONNEL ROTATION PROGRAM.

    (a) Purpose.--The purpose of this section is to increase the 
efficiency and effectiveness of the Federal Government by fostering 
greater interagency experience among Federal Government personnel on 
anti-money laundering and counter-terrorist financing matters.
    (b) Definition.--In this section, the term ``AML-CFT Interagency 
Community of Interest'' means a set of positions in the Federal 
Government that, as designated by the Secretary, the heads of the 
Federal functional regulators, the Attorney General, the Director of 
the Federal Bureau of Investigation, the Secretary of Homeland 
Security, the Director of National Intelligence, the Secretary of 
Defense, and the heads of such other agencies as the Secretary 
determines to be appropriate--
            (1) spans multiple agencies of the Federal Government;
            (2) has significant responsibility for substantive, 
        functional, or regional subject areas related to combating 
        money laundering or financing of terrorism and would benefit 
        from an integrated approach or activities across multiple 
        agencies; and
            (3) includes positions within FinCEN, the Department of the 
        Treasury, the Department of Justice, the Federal Bureau of 
        Investigation, the Department of Homeland Security, the 
        Department of Defense, and, if agreed to by the heads of such 
        agencies, positions within any Federal functional regulator.
    (c) Program Established.--
            (1) In general.--Not later than 270 days after the date of 
        the enactment of this Act, the Secretary and representatives of 
        the Federal functional regulators, the Department of Justice, 
        the Federal Bureau of Investigation, the Department of Homeland 
        Security, the Department of Defense, and such other agencies as 
        the Secretary determines to be appropriate, shall develop and 
        issue an AML-CFT personnel strategy providing policies, 
        processes, and procedures for a program enabling the 
        interagency rotation of personnel among positions within the 
        AML-CFT Interagency Community of Interest.
            (2) Requirements.--The strategy required by paragraph (1) 
        shall, at a minimum--
                    (A) identify a specific AML-CFT Interagency 
                Community of Interest for the purpose of carrying out 
                the program;
                    (B) designate agencies to be included or excluded 
                from the program;
                    (C) define categories of positions to be covered by 
                the program;
                    (D) establish processes by which the heads of 
                relevant agencies may identify--
                            (i) positions within an AML-CFT Interagency 
                        Community of Interest that are available for 
                        rotation under the program; and
                            (ii) individual employees who are available 
                        to participate in rotational assignments under 
                        the program; and
                    (E) establish procedures for the program, 
                including--
                            (i) any minimum or maximum periods of 
                        service for participation in the program;
                            (ii) any training and educational 
                        requirements associated with participation in 
                        the program;
                            (iii) any prerequisites or requirements for 
                        participation in the program; and
                            (iv) appropriate performance measures, 
                        reporting requirements, and other 
                        accountability devices for the evaluation of 
                        the program.
    (d) Program Requirements.--The policies, processes, and procedures 
established pursuant to subsection (c) shall, at a minimum, provide 
that--
            (1) during each of the first 4 fiscal years after the 
        fiscal year in which this Act is enacted--
                    (A) the interagency rotation program shall be 
                carried out in at least 4 agencies participating in the 
                AML-CFT Interagency Community of Interest; and
                    (B) not fewer than 20 employees in the Federal 
                Government shall be assigned to participate in the 
                interagency personnel rotation program;
            (2) the participation of an employee in the interagency 
        rotation program shall require the consent of the head of the 
        agency and shall be voluntary on the part of the employee;
            (3) employees selected to perform interagency rotational 
        service are selected in a fully open and competitive manner 
        that is consistent with the merit system principles set forth 
        in paragraphs (1) and (2) of section 2301(b) of title 5, United 
        States Code, unless the AML-CFT Interagency Community of 
        Interest position is otherwise exempt under another provision 
        of law;
            (4) an employee performing service in a position in another 
        agency pursuant to the program established under this section 
        shall be entitled to return, within a reasonable period of time 
        after the end of the period of service, to the position held by 
        the employee, or a corresponding or higher position, in the 
        employing agency of the employee;
            (5) an employee performing interagency rotational service 
        shall have all the rights that would be available to the 
        employee if the employee were detailed or assigned under a 
        provision of law other than this section from the agency 
        employing the employee to the agency in which the position in 
        which the employee is serving is located; and
            (6) an employee participating in the program shall receive 
        performance evaluations from officials of the employing agency 
        of the employee that are based on input from the supervisors of 
        the employee during the service of the employee in the program 
        that are--
                    (A) based primarily on the contribution of the 
                employee to the work of the agency in which the 
                employee performed the service; and
                    (B) provided the same weight in the receipt of 
                promotions and other rewards by the employee from the 
                employing agency as performance evaluations for service 
                in the employing agency.
    (e) Selection of Individuals To Fill Senior Positions.--The head of 
each agency participating in the program established pursuant to 
subsection (c) shall ensure that, in selecting individuals to fill 
senior positions within the AML-CFT Interagency Community of Interest, 
the agency gives a strong preference to individuals who have performed 
interagency rotational service within the AML-CFT Interagency Community 
of Interest pursuant to such program.

SEC. 106. SUBCOMMITTEE ON PRIVACY AND CIVIL LIBERTIES.

    Section 1564 of the Annunzio-Wylie Anti-Money Laundering Act (31 
U.S.C. 5311 note), as amended by section 103 of this Act, is amended by 
adding at the end the following:
    ``(e) Subcommittee on Privacy and Civil Liberties.--
            ``(1) In general.--There shall be within the Bank Secrecy 
        Act Advisory Group a subcommittee to be known as the 
        `Subcommittee on Privacy and Civil Liberties', to advise the 
        Secretary of the Treasury regarding the civil liberties and 
        privacy implications of regulations, guidance, information 
        sharing programs, and the examination for compliance with and 
        enforcement of the provisions of the Bank Secrecy Act.
            ``(2) Membership.--
                    ``(A) In general.--The subcommittee established 
                under paragraph (1) shall consist of the 
                representatives of the heads of the Federal functional 
                regulators, a representative cross-section of financial 
                institutions subject to the Bank Secrecy Act, law 
                enforcement, and FinCEN.
                    ``(B) Requirements.--Each agency representative 
                described in subparagraph (A) shall be an individual 
                who has demonstrated knowledge and competence 
                concerning the application of the Bank Secrecy Act and 
                familiarity with and expertise in applicable privacy 
                laws.
    ``(f) Definitions.--In this section:
            ``(1) Bank secrecy act.--the term `Bank Secrecy Act' has 
        the meaning given the term in section 3 of the ILLICIT CASH 
        Act.
            ``(2) Federal functional regulator.--The term `Federal 
        functional regulator' has the meaning given the term in section 
        509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
            ``(3) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network of the Department of the Treasury.
            ``(4) Financial institution.--The term `financial 
        institution' has the meaning given the term in section 5312 of 
        title 31, United States Code.''.

SEC. 107. INTERNATIONAL COORDINATION.

    The Secretary shall work with the foreign counterparts of the 
Secretary, including through the Financial Action Task Force, the 
International Monetary Fund, the World Bank, and the United Nations, to 
promote stronger anti-money laundering frameworks and enforcement of 
anti-money laundering laws.

SEC. 108. STRENGTHENING FINCEN.

    (a) Findings.--Congress finds the following:
            (1) The mission of FinCEN is to safeguard the financial 
        system from illicit use, combat money laundering, and promote 
        national security through the collection, analysis, and 
        dissemination of financial intelligence and strategic use of 
        financial authorities.
            (2) In its mission to safeguard the financial system from 
        the abuses of financial crime, including terrorist financing, 
        money laundering, and other illicit activity, the United States 
        should prioritize working with partners in Federal, State, 
        local, Tribal, and foreign law enforcement authorities.
            (3) The Federal Bureau of Investigation has stated that, 
        since the terror attacks on September 11, 2001, ``The threat 
        landscape has expanded considerably, though it is important to 
        note that the more traditional threat posed by al Qaeda and its 
        affiliates is still present and active. The threat of domestic 
        terrorism also remains persistent overall, with actors crossing 
        the line from First Amendment protected rights to committing 
        crimes to further their political agenda.''.
            (4) Although the use and trading of virtual currencies are 
        legal practices, some terrorists and criminals, including 
        international criminal organizations, seek to exploit 
        vulnerabilities in the global financial system and are 
        increasingly using emerging payment methods such as virtual 
        currencies to move illicit funds.
            (5) In carrying out its mission, FinCEN should prioritize 
        all forms of terrorism and emerging methods of terrorism and 
        illicit finance.
    (b) Strengthening FinCEN.--Section 310(b)(2) of title 31, United 
States Code, is amended--
            (1) in subparagraphs (C), (E), and (F), by inserting 
        ``Tribal,'' after ``local,'' each place the term appears; and
            (2) in subparagraph (C)(vi), by striking ``international''.

  TITLE II--IMPROVING AML-CFT COMMUNICATION, OVERSIGHT, AND PROCESSES

SEC. 201. ANNUAL REPORTING REQUIREMENTS.

    (a) Annual Report.--Not later than 1 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 to the Secretary 
statistics, metrics, and other information on the use of data derived 
from financial institutions reporting under this title, including--
            (1) the frequency with which such data contains actionable 
        information that leads to further law enforcement procedures, 
        including the use of a subpoena, warrant, or other legal 
        process, or to actions taken by intelligence, defense, or 
        homeland security agencies;
            (2) calculations of the time between when data is reported 
        by a financial institution and when it is used by law 
        enforcement, intelligence, defense, or homeland security 
        agencies, whether through the use of a subpoena, warrant or 
        other legal process, or actions;
            (3) the value of the transactions associated with such 
        data, including whether the suspicious accounts were held by 
        legal entities or natural persons, and whether there are trends 
        and patterns in cross-border transactions to certain countries;
            (4) the number of legal and natural persons identified by 
        such data;
            (5) information on the extent to which arrests, 
        indictments, convictions, or criminal pleas, civil enforcement 
        or forfeiture actions, or actions by intelligence, defense, or 
        homeland security agencies result from the use of such data; 
        and
            (6) data on the investigations carried out by State and 
        Federal authorities.
    (b) Quinquennial Report.--Every 5 years after the date of enactment 
of this Act, the report described in subsection (a) shall include a 
section describing the use of data derived from financial institution 
reporting under this subchapter over the previous 5 years, including 
describing long-term trends and providing long-term statistics, 
metrics, and other information.
    (c) Trends, Patterns, and Threats.--The report described in 
subsection (a) and the section described in subsection (b) shall 
contain a description of retrospective trends and emerging patterns and 
threats in money laundering and terrorist financing, including national 
and regional trends, patterns, and threats relevant to such classes of 
financial institutions that the Attorney General determines 
appropriate.
    (d) Use of Report Information.--The Secretary shall use the 
information reported under subsections (a), (b), and (c)--
            (1) to help assess the usefulness of Bank Secrecy Act 
        reporting to criminal and civil law enforcement and to 
        intelligence, defense, and homeland security agencies;
            (2) to enhance feedback and communications with financial 
        institutions and other entities subject to Bank Secrecy Act 
        requirements, including through providing more detail in the 
        reports produced under section 314(d) of the USA PATRIOT Act 
        (31 U.S.C. 5311 note);
            (3) to assist FinCEN in considering revisions to the 
        reporting requirements promulgated under section 314(d) of the 
        USA PATRIOT Act (31 U.S.C. 5311 note); and
            (4) for any other purpose the Secretary determines is 
        appropriate.

SEC. 202. LAW ENFORCEMENT FEEDBACK ON SUSPICIOUS ACTIVITY REPORTS.

    (a) Feedback.--The staff of FinCEN shall, to the extent 
practicable, periodically solicit feedback from individuals designated 
under section 5318(h)(1) of title 31, United States Code, from a 
variety of financial institutions representing a cross-section of the 
reporting industry to review the suspicious activity reports filed by 
the financial institutions and discuss trends in suspicious activity 
observed by FinCEN.
            (1) Feedback required.--The staff of FinCEN shall disclose 
        to the persons designated under section 5318(h)(1) of title 31, 
        United States Code, what actions have been taken, if any, by 
        Federal or State criminal or civil law enforcement or by 
        defense or homeland security agencies with respect to the 
        suspicious activity reports filed by the financial institution 
        during the previous period.
            (2) Exception for ongoing investigations.--FinCEN shall not 
        be required to disclose to the financial institution any 
        information under subsection (a)(1) that could jeopardize an 
        ongoing investigation or national security.
            (3) Maintenance of statistics.--FinCEN shall keep records 
        of all such actions taken under paragraph (1) to assist with 
        the production of the reports described in section 201 and for 
        other purposes.
    (b) Coordination With Federal Functional Regulators and State Bank 
Supervisors.--Any meeting described in subsection (a) shall be 
conducted in the presence of the Federal functional regulators or the 
State bank supervisor of the financial institution and, if applicable, 
during the regularly scheduled examination of the financial institution 
by the Federal functional regulator or State bank supervisor.
    (c) Coordination With Department of Justice.--The information 
disclosed by FinCEN under subsection (a) shall include information from 
the Department of Justice regarding its review and use of suspicious 
activity reports filed by the financial institutions during the 
previous period and any trends in suspicious activity observed by the 
Department of Justice, and such information shall include information 
specifically relevant to reports filed by such financial institution in 
the previous period and other information tailored to such financial 
institution.

SEC. 203. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION REPORTS 
              AND SUSPICIOUS ACTIVITY REPORTS.

    (a) Review.--The Secretary, in consultation with the Attorney 
General, Federal law enforcement agencies, the Director of National 
Intelligence, the Secretary of Defense, the Secretary of Homeland 
Security, the Federal functional regulators, State bank supervisors, 
and other relevant stakeholders, shall undertake a formal review of the 
current financial institution reporting requirements, including the 
processes used to submit reports, under the Bank Secrecy Act, 
regulations implementing that Act, and related guidance, and make 
changes to them to reduce unnecessarily burdensome regulatory 
requirements and ensure that the information provided is highly useful 
to law enforcement, intelligence, or national security matters, as set 
forth in section 5311 of title 31, United States Code.
    (b) Contents.--The review required under subsection (a) shall 
include a study of--
            (1) whether the circumstances under which a financial 
        institution determines whether to file a continuing suspicious 
        activity report, including insider abuse, or the processes 
        followed by a financial institution in determining whether to 
        file a continuing suspicious activity report, or both, should 
        be adjusted;
            (2) whether different thresholds should apply to different 
        categories of activities;
            (3) the fields designated as critical on the suspicious 
        activity report form and whether the number or nature of the 
        fields should be adjusted;
            (4) 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;
            (5) the increased use or expansion of exemption provisions 
        to reduce currency transaction reports that are of little or no 
        value to law enforcement efforts;
            (6) 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, and money 
        service businesses, as defined in section 1010.100(ff) of title 
        31, Code of Federal Regulations, and certain groups of 
        correspondent banks;
            (7) the current financial institution reporting 
        requirements under the Bank Secrecy Act and regulations and 
        guidance implementing that Act;
            (8) whether the process for the electronic submission of 
        reports could be improved for both financial institutions and 
        law enforcement, including by allowing greater integration 
        between financial institution systems and the electronic filing 
        system to allow for automatic population of report fields and 
        the automatic submission of transaction data for suspicious 
        transactions;
            (9) the appropriate confidentiality of personal 
        information;
            (10) how to improve the cross-referencing of individuals or 
        entities operating at multiple financial institutions and 
        across international borders; and
            (11) any other item the Secretary determines is 
        appropriate.
    (c) Public Comment.--The Secretary shall solicit public comment as 
part of the review contemplated in subsection (a).
    (d) Report.--Not later than the end of the 1-year period beginning 
on the date of the enactment of this Act, the Secretary, in 
consultation with law enforcement, shall submit to Congress a report 
that contains all findings and determinations made in carrying out the 
review required under subsection (a) and propose rulemakings to 
implement their findings.

SEC. 204. CURRENCY TRANSACTION REPORT AND SUSPICIOUS ACTIVITY REPORT 
              THRESHOLDS REVIEW.

    (a) Review of Thresholds for Certain Currency Transaction and 
Suspicious Activity Reports.--The Secretary, in consultation with the 
Attorney General and the Director of National Intelligence, the 
Secretary of Defense, and the Secretary of Homeland Security, shall 
study and determine whether the dollar thresholds, including aggregate 
thresholds, contained in sections 5313, 5331, and 5318(g) of title 31, 
United States Code, including regulations issued thereunder, should be 
adjusted.
    (b) Considerations.--In making the determinations described in 
subsection (a), the Secretary and the Attorney General shall consider--
            (1) the effects on law enforcement, intelligence, defense, 
        and homeland security, from adjusting the thresholds;
            (2) the costs likely to be incurred or saved by financial 
        institutions;
            (3) the conformance of the United States with international 
        norms and standards to counter money laundering and the 
        financing of terrorism; and
            (4) any other factor the Secretary, Director of National 
        Intelligence, and the Attorney General considers relevant.
    (c) Public Comment.--The Secretary shall solicit public comment as 
part of the review contemplated in subsection (a).
    (d) Report and Rulemakings.--Not later than the end of the 1-year 
period beginning on the date of enactment of this Act, the Secretary, 
in consultation with the Attorney General, the intelligence community, 
the Secretary of Defense, and the Secretary of Homeland Security, shall 
publish a report of the findings from the review described in 
subsection (a) and recommend rulemakings to implement the findings.

SEC. 205. REVIEW OF REGULATIONS AND GUIDANCE.

    (a) In General.--The Secretary and the Federal functional 
regulators, in consultation with Federal financial regulators, the 
Federal Financial Institutions Examination Council, the Attorney 
General, Federal law enforcement agencies, the Director of National 
Intelligence, the Secretary of Defense, the Secretary of Homeland 
Security, and the Commissioner of the Internal Revenue Service, shall 
each undertake a formal review of the regulations implementing the Bank 
Secrecy Act, and guidance related to that Act, to identify those 
regulations and guidance that may be outdated, redundant, unnecessarily 
burdensome, or otherwise do not promote a risk-based anti-money-
laundering compliance and countering-the-financing-of-terrorism regime 
for financial institutions, or that do not conform with the commitments 
of the United States to meet international standards to combat money 
laundering, financing of terrorism, or tax evasion, and make 
appropriate changes to those regulations and guidance.
    (b) Public Comment.--The Secretary shall solicit public comment as 
part of the review required under subsection (a).
    (c) Report.--Not later than the end of the 1-year period beginning 
on the date of the enactment of this Act, the Secretary, the Federal 
functional regulators, the Federal Financial Institutions Examination 
Council, and the Internal Revenue Service shall submit to Congress one 
or more reports that contain all findings and determinations made in 
carrying out the review required under subsection (a).

SEC. 206. PENALTY COORDINATION.

    (a) Coordination on Penalties.--Prior to any Federal functional 
regulator, FinCEN, or the Department of Justice, including any 
organizational unit thereof, issuing a fine or civil money penalty, 
with respect to an entity to address any actual or alleged violation of 
any provision of the Bank Secrecy Act or section 8(s) of the Federal 
Deposit Insurance Act (12 U.S.C. 1818(s)) or any unsafe or unsound 
practice that resulted in any such actual or alleged violation, such 
Federal department or agency shall endeavor to coordinate its penalty 
with all relevant Federal departments and agencies and State law 
enforcement and financial regulators contemplating a penalty with 
respect to the same or similar conduct and attempt to develop a 
comprehensive or coordinated penalty or set of penalties to avoid 
duplicative fines, penalties, and other orders or actions.
    (b) Exception.--Subsection (a) shall not apply if--
            (1) a Federal or State financial regulator determines that 
        complying with subsection (a) is impractical for safety or 
        soundness reasons; or
            (2) a Federal law enforcement or a national security agency 
        determines that complying with subsection (a) is impractical 
        for Federal law enforcement or national security reasons or for 
        purposes related to the administration of the Bank Secrecy Act.
    (c) Rule of Construction.--Nothing in this section shall be 
construed as limiting the amount of a fine or the type of penalty that 
may be issued by any Federal or State entity with authority to issue a 
fine or penalty.
    (d) No Rights.--Nothing in this section provides persons with any 
rights or privileges, including a private right of action or an 
affirmative defense, and no determination or failure to make a 
determination by any Federal entity or officer under this section shall 
be reviewable by a court of law.

SEC. 207. COOPERATION WITH LAW ENFORCEMENT.

    (a) Safe Harbor With Respect to Keep Open Directives.--
            (1) In general.--
                    (A) Amendment to title 31.--Subchapter II of 
                chapter 53 of title 31, United States Code, is amended 
                by adding at the end the following:
``Sec. 5333. Safe harbor with respect to keep open directives
    ``(a) In General.--With respect to a customer account or customer 
transaction of a financial institution, if a Federal, State, Tribal, or 
local law enforcement agency requests, in writing, that the financial 
institution keep that account or transaction open--
            ``(1) the financial institution shall not be liable under 
        this subchapter for maintaining that account or transaction 
        consistent with the parameters of the request; and
            ``(2) no Federal or State department or agency may take any 
        adverse supervisory action under this subchapter with respect 
        to the financial institution for maintaining that account or 
        transaction consistent with the parameters of the request.
    ``(b) Rule of Construction.--Nothing in this section may be 
construed--
            ``(1) to prevent a Federal or State department or agency 
        from verifying the validity of a written request described in 
        subsection (a) with the Federal, State, Tribal, or local law 
        enforcement agency making that written request; or
            ``(2) to relieve a financial institution from complying 
        with any reporting requirements, including the reporting of 
        suspicious transactions under section 5318(g).
    ``(c) Letter Termination Date.--For the purposes of this section, 
any written request described in subsection (a) shall include a 
termination date after which that request shall no longer apply.''.
                    (B) Amendment to public law 91-508.--Chapter 2 of 
                title I of Public Law 91-508 (12 U.S.C. 1951 et seq.) 
                is amended by adding at the end the following:
``Sec. 130. Safe harbor with respect to keep open directives
    ``(a) Definition.--In this section, the term `financial 
institution' has the meaning given the term in section 123(b).
    ``(b) Safe Harbor.--With respect to a customer account or customer 
transaction of a financial institution, if a Federal, State, Tribal, or 
local law enforcement agency requests, in writing, the financial 
institution to keep that account or transaction open--
            ``(1) the financial institution shall not be liable under 
        this chapter for maintaining that account or transaction 
        consistent with the parameters of the request; and
            ``(2) no Federal or State department or agency may take any 
        adverse supervisory action under this chapter with respect to 
        the financial institution for maintaining that account or 
        transaction consistent with the parameters of the request.
    ``(c) Rule of Construction.--Nothing in this section may be 
construed--
            ``(1) as preventing a Federal or State department or agency 
        from verifying the validity of a written request described in 
        subsection (b) with the Federal, State, Tribal, or local law 
        enforcement agency making that written request; or
            ``(2) to relieve a financial institution from complying 
        with any reporting requirements, including the reporting of 
        suspicious transactions under section 5318(g) of title 31, 
        United States Code.
    ``(d) Letter Termination Date.--For the purposes of this section, 
any written request described in subsection (b) shall include a 
termination date after which that request shall no longer apply.''.
            (2) Clerical amendments.--
                    (A) Title 31.--The table of contents for chapter 53 
                of title 31, United States Code, is amended by 
                inserting after the item relating to section 5332 the 
                following:

``5333. Safe harbor with respect to keep open directives.''.
                    (B) Public law 91-508.--The table of contents for 
                chapter 2 of title I of Public Law 91-508 (12 U.S.C. 
                1951 et seq.) is amended by adding at the end the 
                following:

``130. Safe harbor with respect to keep open directives.''.
    (b) Determination of Budgetary Effects.--The budgetary effects of 
this section, for the purpose of complying with the Statutory Pay-As-
You-Go Act of 2010, shall be determined by reference to the latest 
statement titled ``Budgetary Effects of PAYGO Legislation'' for this 
Act, submitted for printing in the Congressional Record by the Chairman 
of the House Budget Committee, provided that such statement has been 
submitted prior to the vote on passage.

SEC. 208. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT VIOLATORS.

    Section 5321 of title 31, United States Code, is amended by adding 
at the end the following:
    ``(f) Additional Damages for Repeat Violators.--In addition to any 
other fines permitted by this section and section 5322, with respect to 
a person who has previously violated a provision of (or rule issued 
under) this subchapter, section 21 of the Federal Deposit Insurance Act 
(12 U.S.C. 1829b), or section 123 of Public Law 91-508, the Secretary 
of the Treasury may impose an additional civil penalty against such 
person for each additional such violation in an amount equal to up to 
three times the profit gained or loss avoided by such person as a 
result of the violation.''.

SEC. 209. ENCOURAGING INFORMATION SHARING AND PUBLIC-PRIVATE 
              PARTNERSHIPS.

    (a) In General.--FinCEN shall convene a supervisory team of 
relevant Federal agencies, private sector experts in banking, national 
security and law enforcement, and other stakeholders as FinCEN deems 
appropriate to examine strategies to increase public-private sector 
cooperation for purposes of countering proliferation finance and 
sanctions evasion.
    (b) Meetings.--The supervisory team shall meet periodically to 
advise on strategies to combat proliferation financing risk.

               TITLE III--MODERNIZATION OF AML/CFT SYSTEM

SEC. 301. APPROVED SYSTEMS FOR IDENTIFYING SUSPICIOUS ACTIVITIES.

    Section 5318(g) of title 31, United States Code, is amended by 
adding at the end the following:
            ``(5) Considerations in imposing reporting requirements.--
                    ``(A) In general.--In imposing any requirement to 
                report any suspicious transaction under this 
                subsection, the Secretary of the Treasury, in 
                consultation with appropriate representatives of State 
                bank supervisors and the Federal functional regulators 
                (as defined in 509 of the Gramm-Leach-Bliley Act (15 
                U.S.C. 6809)), shall address, consider, and include--
                            ``(i) the national priorities established 
                        by the Secretary;
                            ``(ii) whether the reporting is likely to 
                        have a high degree of usefulness to the Federal 
                        law enforcement community, national security, 
                        and the intelligence community in combating 
                        financial crime, including the financing of 
                        terrorism; and
                            ``(iii) the means by or form in which the 
                        Secretary shall receive such reporting, 
                        including the burdens imposed by such means or 
                        form of reporting on persons required to 
                        provide such reporting, the efficiency of the 
                        means by or form of reporting, and the benefits 
                        derived by such means or form of reporting by 
                        the Federal law enforcement community and the 
                        intelligence community in combating financial 
                        crime, including the financing of terrorism.
                    ``(B) Internal controls.--Reports filed under this 
                subsection shall be guided by the internal controls of 
                the compliance program of a covered institution with 
                respect to the Bank Secrecy Act, including the risk 
                assessment processes of the covered institution that 
                should include a consideration of priority areas as 
                established by the Secretary of the Treasury pursuant 
                to section 5311.
                    ``(C) Examinations.--Examinations of systems for 
                identifying and reporting of suspicious activities 
                shall consider, among other things, the quality of 
                information provided under this section and the 
                institution's consideration of priority areas as 
                established by the Secretary of the Treasury pursuant 
                to section 5311.
                    ``(D) Bulk-form data and real-time reporting.--
                            ``(i) Requirement to establish system.--In 
                        considering the means by or form in which the 
                        Secretary of the Treasury shall receive 
                        reporting pursuant to subparagraph (A)(iii) the 
                        Secretary of the Treasury, through the 
                        Financial Crimes Enforcement Network, and in 
                        consultation with appropriate representatives 
                        of the State bank supervisors and Federal 
                        functional regulators (as defined in 509 of the 
                        Gramm-Leach-Bliley Act (15 U.S.C. 6809)) 
                        shall--
                                    ``(I) establish streamlined 
                                processes to permit the filing of non-
                                complex categories of reports that--
                                            ``(aa) reduce burdens 
                                        imposed on persons required to 
                                        report; and
                                            ``(bb) do not diminish the 
                                        usefulness of the reporting to 
                                        Federal law enforcement 
                                        agencies and the intelligence 
                                        community in combating 
                                        financial crime, including the 
                                        financing of terrorism;
                                    ``(II) subject to clause (ii), 
                                permit bulk data reporting for such 
                                categories of reports and establish the 
                                conditions under which bulk data 
                                reporting is permitted; and
                                    ``(III) establish additional 
                                systems and processes that allow for 
                                such reporting.
                            ``(ii) Standards.--The Secretary of the 
                        Treasury--
                                    ``(I) in carrying out clause (i), 
                                shall establish standards to ensure 
                                that bulk data reports relate to 
                                suspicious transactions relevant to 
                                potential violations of law or 
                                regulation; and
                                    ``(II) in establishing the 
                                standards under subclause (I), may 
                                consider transactions designed to evade 
                                any regulation promulgated under this 
                                subchapter, certain fund and asset 
                                transfers with no apparent economic, 
                                business, or lawful purpose, and any 
                                other transaction that the Secretary 
                                determines to be appropriate.
                            ``(iii) Rule of construction.--Nothing in 
                        this subparagraph may be construed as 
                        precluding the Secretary of the Treasury from 
                        requiring reporting as provided for in 
                        subparagraphs (A) and (B) or notifying Federal 
                        law enforcement with respect to any transaction 
                        that the Secretary has determined directly 
                        implicates a national priority established by 
                        the Secretary.
            ``(6) AML technology rulemaking.--The Secretary of the 
        Treasury shall, in consultation with appropriate 
        representatives of State bank supervisors and Federal 
        functional regulators (as defined in section 509 of the Gramm-
        Leach-Bliley Act (15 U.S.C. 6809)), promulgate regulations to--
                    ``(A) specify an optional regime whereby a 
                financial institution may submit for approval by the 
                Financial Crimes Enforcement Network, in consultation 
                with the Federal banking agencies, a tailored 
                comprehensive approach to monitoring transactions for 
                the recordkeeping and reporting requirements 
                established by this subchapter and other relevant laws;
                    ``(B) standards that such an optional regime must 
                meet for approval, with those standards having the 
                primary goal of addressing anti-money-laundering-regime 
                priorities and other significant Bank Secrecy Act and 
                anti-money-laundering risks identified in a particular 
                financial institution's (or association of financial 
                institutions) risk assessment;
                    ``(C) include in the standards described in 
                subparagraph (B)--
                            ``(i) an emphasis on using innovative 
                        approaches for transaction monitoring such as 
                        machine learning rather than rules-based 
                        systems;
                            ``(ii) requirements for testing, audit, 
                        parallel runs, and ongoing quality assurance 
                        processes to ensure that these systems are 
                        working effectively, including risk-based back-
                        testing of the regime to facilitate calibration 
                        of relevant systems;
                            ``(iii) requirements for appropriate data 
                        privacy and security; and
                            ``(iv) requirements for examination of 
                        these systems by the appropriate Federal or 
                        State financial regulators; and
                    ``(D) with respect to technology and processes 
                designed to facilitate compliance with the Bank Secrecy 
                Act requirements that are not covered by subparagraph 
                (A), specify that financial institutions may not be 
                required to test new technology and processes alongside 
                legacy technology and processes, known as parallel 
                runs, in all cases, but instead--
                            ``(i) should develop a risk-based 
                        implementation and testing plan, in 
                        consultation with State and Federal financial 
                        regulators as appropriate, that accounts for 
                        legal, data privacy, and security concerns that 
                        includes a reasonable testing timeline;
                            ``(ii) should identify processes and 
                        procedures for replacing or terminating any 
                        legacy technology and process for any 
                        examinable technology or process; and
                            ``(iii) after adequately testing compliance 
                        technology, may replace or terminate any legacy 
                        technology and processes for any examinable 
                        technology or process.
            ``(7) Rule of construction.--Nothing in this subsection may 
        be construed to require a financial institution to alter its 
        risk-based approach to monitoring suspicious activities.
            ``(8) Definitions.--In this subsection:
                    ``(A) Bank secrecy act.--The term `Bank Secrecy 
                Act' has the meaning given the term in section 3 of the 
                ILLICIT CASH Act.
                    ``(B) State bank supervisor.--The term `State bank 
                supervisor' has the meaning given the term in section 3 
                of the Federal Deposit Insurance Act (12 U.S.C. 
                1813).''.

SEC. 302. FINANCIAL CRIMES TECH SYMPOSIUM.

    (a) Purpose.--The purpose of this section is to--
            (1) promote greater international collaboration in the 
        effort to prevent and detect financial crimes and suspicious 
        activities; and
            (2) facilitate the investigation and adoption of new 
        technologies aimed at preventing and detecting financial crimes 
        and other illicit activities.
    (b) Periodic Meetings.--The Secretary shall, in coordination with 
the Subcommittee on Innovation established under subsection (d) of 
section 1564 of the Annunzio-Wylie Anti-Money Laundering Act, as added 
by section 103 of this Act, periodically, but not less than once every 
3 years, convene a global anti-money laundering and financial crime 
symposium focused on how new technology can be used to more effectively 
combat financial crimes and other illicit activities.
    (c) Attendees.--Attendees at the symposium convened under this 
section shall include domestic and international financial regulators, 
senior executives from regulated firms, technology providers, law 
enforcement representatives, start ups, academic institutions, and 
other representatives as the Secretary determines are appropriate.
    (d) Panels.--The Secretary shall convene panels in order to review 
new technologies and permit attendees to demonstrate proof of concept.
    (e) Implementation and Reports.--The Secretary shall to the extent 
practicable work to provide regulatory guidance regarding innovative 
technologies and practices presented at the symposium, to the extent 
such technologies and practices further the goals of this section.

SEC. 303. DEIDENTIFIED AML INFORMATION.

    (a) Amendment to the Gramm-Leach-Bliley Act.--Title V of the Gramm-
Leach-Bliley Act (15 U.S.C. 6801 et seq.) is amended by inserting after 
section 509 (15 U.S.C. 6809) the following:

``SEC. 509A. DEIDENTIFIED AML INFORMATION.

    ``(a) Definitions.--In this section:
            ``(1) Cybersecurity purpose.--The term `cybersecurity 
        purpose' has the meaning given the term in section 102 of the 
        Cybersecurity Information Sharing Act of 2015 (6 U.S.C. 1501).
            ``(2) Deidentified information.--The term `deidentified 
        information' means information obtained by a financial 
        institution from which any information that may be used to 
        identify a person has been removed and with respect to which 
        there is no reasonable basis to believe that the information is 
        nonpublic personal information.
            ``(3) Financial institution.--The term `financial 
        institution'--
                    ``(A) has the meaning given the term in section 
                509; and
                    ``(B) includes--
                            ``(i) a subsidiary, affiliate, or other 
                        entity within the corporate organizational 
                        structure of a financial institution;
                            ``(ii) a person representing or otherwise 
                        acting as agent for a financial institution; 
                        and
                            ``(iii) a group or organization the 
                        membership of which is comprised entirely of 
                        financial institutions.
            ``(4) Exceptions.--The Secretary of the Treasury by rule 
        shall establish exceptions to paragraph (2), including setting 
        minimum standards for information that is ineligible for 
        consideration as deidentified information.
    ``(b) Process.--A financial institution may determine that 
financial institution information is deidentified information only if--
            ``(1) a person with appropriate knowledge of and experience 
        with generally accepted statistical and scientific principles 
        and methods for rendering information not individually 
        identifiable--
                    ``(A) applying such principles and methods, 
                determines that the risk is very small that the 
                information could be used, alone or in combination with 
                other reasonably available information, by an 
                anticipated recipient to identify a person who is a 
                subject of the information; and
                    ``(B) documents the methods and results of the 
                analysis that justify such determination; or
            ``(2)(A) appropriate identifiers of the person or of 
        relatives, employers, or household members of the person, are 
        removed; and
            ``(B) the financial institution does not have actual 
        knowledge that the information could be used alone or in 
        combination with other information to identify a person who is 
        a subject of the information.
    ``(c) Reidentification.--A financial institution may assign a code 
or other means of record identification to allow information 
deidentified under this section to be reidentified by the financial 
institution, provided that--
            ``(1) the code or other means of record identification is 
        not derived from or related to information about the person and 
        is not otherwise capable of being translated so as to identify 
        the person; and
            ``(2) the financial institution does not use or disclose 
        the code or other means of record identification for any other 
        purpose, and does not disclose the mechanism for 
        reidentification.
    ``(d) Permissible Use.--
            ``(1) Limited use of data.--Deidentified information sent 
        or received by a financial institution shall only be used--
                    ``(A) to identify suspicious activity that may 
                merit the filing of a suspicious activity report under 
                section 5318(g) of title 31, United States Code;
                    ``(B) for the purpose stated in section 5311 of 
                title 31, United States Code; or
                    ``(C) for a cybersecurity purpose.
            ``(2) No further communication.--A financial institution 
        may not transmit or share any deidentified information except 
        with--
                    ``(A) a financial institution in accordance with 
                this section;
                    ``(B) the Secretary of the Treasury;
                    ``(C) an agency or authority referenced in section 
                505(a) in accordance with applicable law; and
                    ``(D) a law enforcement agency.
    ``(e) Enforcement.--The owner of an approved telecommunications 
system shall be a `covered person' for purposes of section 505(a)(8).
    ``(f) Rulemaking.--No later than 1 year after the date of enactment 
of this section, the Secretary of the Treasury, in consultation with 
the Secretary of Homeland Security and each agency referenced in 
section 505(a), shall issue regulations to carry out the amendments 
made by this section.
    ``(g) Relation to Suspicious Activity Reports.--Nothing in this 
section shall be construed to modify, limit, alter, or supersede 
section 5318(g) of title 31, United States Code, or any regulation 
promulgated thereunder.
    ``(h) Rule of Construction.--
            ``(1) In general.--Compliance with the provisions of this 
        section shall not constitute a violation of other provisions of 
        this title.
            ``(2) Transmission, receipt, and sharing of information.--A 
        financial institution that transmits, receives, or shares 
        information under this section shall not be liable to any 
        person under any law, or regulation of any State or political 
        subdivision thereof, or under any contract or other legally 
        enforceable agreement (including any arbitration agreement), 
        for such disclosure or for any failure to provide notice of 
        such disclosure, or any other person identified in the 
        disclosure, except where such transmission, receipt, or sharing 
        violates this section or regulations promulgated under this 
        section.''.

SEC. 304. NO ACTION LETTERS.

    Section 310 of title 31, United States Code, as amended by sections 
102, 103, and 104 of this Act, is amended by adding at the end the 
following:
    ``(g) No-Action Letters With Respect to Specific Conduct.--
            ``(1) In general.--The Director and the Federal functional 
        regulators, in consultation with State bank supervisors, shall 
        jointly promulgate regulations and guidance to establish a 
        process for the issuance of a no-action letter by FinCEN and 
        the relevant Federal functional regulators in response to an 
        inquiry from a person described in paragraph (2) concerning the 
        application of the Bank Secrecy Act, the USA PATRIOT Act 
        (Public Law 107-56; 115 Stat. 272), section 8(s) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1818(s)), or any other anti-
        money-laundering or counter-terrorism financing law (including 
        regulations) to specific conduct, which shall include a 
        statement as to whether FinCEN or any relevant Federal 
        functional regulator intends to take an enforcement action 
        against the person with respect to such conduct.
            ``(2) Persons covered.--A person described in this 
        paragraph is--
                    ``(A) any person involved in the specific conduct 
                that is the subject of the no-action letter; or
                    ``(B) any person involved in conduct that is 
                indistinguishable in all material aspects from the 
                specific conduct that is the subject of the no-action 
                letter.
            ``(3) Reliance.--A no-action letter issued under paragraph 
        (1) shall not bind FinCEN or any Federal functional regulator 
        if the person making the inquiry provided incomplete, 
        misleading or false information, if subsequent changes are made 
        to relevant statutes, regulations, or guidance, or if a penalty 
        was assessed or enforcement action taken before the date on 
        which the no-action letter was issued.
            ``(4) Contents.--The regulations issued under paragraph (1) 
        shall contain a timeline for the process used to reach a final 
        determination by FinCEN and the relevant Federal functional 
        regulators in response to a request by a person for a no-action 
        letter.
    ``(h) Definitions.--In this section:
            ``(1) Bank secrecy act.--the term `Bank Secrecy Act' has 
        the meaning given the term in section 3 of the ILLICIT CASH 
        Act.
            ``(2) Federal functional regulator.--The term `Federal 
        functional regulator' hast the meaning given the term in 
        section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809).
            ``(3) Financial institution.--The term `financial 
        institution' has the meaning given the term in section 5312.
            ``(4) State bank supervisor.--The term `State bank 
        supervisor' has the meaning given the term in section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813).''.

SEC. 305. OECD PILOT PROGRAM ON 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, as amended by section 
        301, is amended by adding at the end the following:
            ``(6) OECD pilot program on sharing with foreign branches, 
        subsidiaries, and affiliates.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this paragraph, the Secretary 
                of the Treasury shall issue rules, subject to such 
                controls and restrictions as the Director of the 
                Financial Crimes Enforcement Network determines 
                appropriate, establishing the pilot program described 
                under subparagraph (B). In prescribing such rules, the 
                Secretary shall ensure that the sharing of information 
                described under subparagraph (B) is subject to 
                appropriate standards and requirements regarding data 
                security and the confidentiality of personally 
                identifiable information.
                    ``(B) Pilot program described.--The pilot program 
                required under this paragraph shall--
                            ``(i) permit any financial institution with 
                        a reporting obligation under this subsection to 
                        share reports (and information on such reports) 
                        under this subsection with the institution's 
                        foreign branches, subsidiaries, and affiliates 
                        for the purpose of combating illicit finance 
                        risks, notwithstanding any other provision of 
                        law except subparagraph (C), but only if such 
                        foreign branch, subsidiary, or affiliate is 
                        located in a jurisdiction that is a member of 
                        the Organisation for Economic Co-operation and 
                        Development;
                            ``(ii) terminate on the date that is 5 
                        years after the date of enactment of this 
                        paragraph, except that the Secretary of the 
                        Treasury may extend the pilot program for up to 
                        two years upon submitting a report to the 
                        Committee on Financial Services of the House of 
                        Representatives and the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate that 
                        includes--
                                    ``(I) a certification that the 
                                extension is in the national interest 
                                of the United States, with a detailed 
                                explanation of the reasons therefor;
                                    ``(II) an evaluation of the 
                                usefulness of the pilot program, 
                                including a detailed analysis of any 
                                illicit activity identified or 
                                prevented as a result of the program; 
                                and
                                    ``(III) a detailed legislative 
                                proposal providing for a long-term 
                                extension of the pilot program 
                                activities, including expected 
                                budgetary resources for the activities, 
                                if the Secretary of the Treasury 
                                determines that a long-term extension 
                                is appropriate.
                    ``(C) Prohibition involving certain 
                jurisdictions.--In issuing the regulations required 
                under subparagraph (A), the Secretary of the Treasury 
                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.
                    ``(D) Implementation updates.--Not later than 360 
                days after the date on which rules are issued under 
                subparagraph (A), and annually thereafter for 3 years, 
                the Secretary of the Treasury, or the Secretary's 
                designee, shall brief the Committee on Financial 
                Services of the House of Representatives and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate on--
                            ``(i) the degree of any information sharing 
                        permitted under the pilot program, and a 
                        description of criteria used by the Secretary 
                        to evaluate the appropriateness of the 
                        information sharing;
                            ``(ii) the effectiveness of the pilot 
                        program in identifying or preventing the 
                        violation of a United States law or regulation, 
                        and mechanisms that may improve such 
                        effectiveness; and
                            ``(iii) any recommendations to amend the 
                        design of the pilot program, or to include 
                        specific non-Organisation for Economic Co-
                        operation and Development jurisdictions in the 
                        program.
            ``(7) Treatment of foreign jurisdiction-originated 
        reports.--A report received by a financial institution from a 
        foreign affiliate with respect to a suspicious transaction 
        relevant to a possible violation of law or regulation shall be 
        subject to the same confidentiality requirements provided under 
        this subsection for a report of a suspicious transaction 
        described under paragraph (1).
            ``(8) Definition.--In this subsection, the term `affiliate' 
        means an entity that controls, is controlled by, or is under 
        common control with another entity.''.
            (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 1-year period 
beginning on the date of enactment of this Act, the Secretary shall 
issue regulations to carry out the amendments made by this section.

SEC. 306. FOREIGN EVIDENTIARY REQUESTS.

    (a) Foreign Evidentiary Requests.--Section 5318(k)(3)(A) of title 
31, United States Code, is amended by adding at the end the following:
                            ``(iii) Use as evidence.--If required by a 
                        summons or subpoena referred to in clause (i), 
                        the foreign bank on which the summons or 
                        subpoena was served shall produce the records 
                        described in the summons or subpoena in a 
                        manner that would establish their authenticity 
                        and reliability under the Federal Rules of 
                        Evidence.
                            ``(iv) Anti-tip-off.--Any foreign bank upon 
                        which a summons or subpoena referred to in 
                        clause (i) has been served, and any director, 
                        officer, employee, or agent of such foreign 
                        bank, shall not voluntarily disclose to a 
                        person not employed by the foreign bank the 
                        fact that it received a summons or subpoena or 
                        any of the information contained in that 
                        summons or subpoena.''.
    (b) Foreign Evidentiary Requests.--Section 5318(k)(3) of title 31, 
United States Code, is amended by adding at the end the following:
                    ``(D) Court orders and contempt.--
                            ``(i) Court orders.--If the Secretary of 
                        the Treasury or the Attorney General (in each 
                        case, in consultation with the other) 
                        determines that a foreign bank has failed to 
                        comply with a summons or subpoena issued under 
                        subparagraph (A), the Secretary or the Attorney 
                        General (in each case, in consultation with the 
                        other) may initiate proceedings in a United 
                        States court seeking a court order to compel 
                        compliance with such summons or subpoena.
                            ``(ii) Contempt.--If the Secretary of the 
                        Treasury or the Attorney General (in each case, 
                        in consultation with the other) determines that 
                        a foreign bank has failed to comply with a 
                        court order described in clause (i), the 
                        Secretary or the Attorney General (in each 
                        case, in consultation with the other) may 
                        petition the United States court that issued 
                        the court order to levy a civil or criminal 
                        contempt fine on the foreign bank.''.

SEC. 307. UPDATING WHISTLEBLOWER INCENTIVES AND PROTECTION.

    (a) Whistleblower Incentives and Protection.--
            (1) In general.--Section 5323 of title 31, United States 
        Code, is amended to read as follows:
``Sec. 5323. Whistleblower incentives and protections
    ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by the Treasury or the 
        Department of Justice under subchapters II and III of this 
        title that results in monetary sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Anti-Money 
        Laundering and Counter-Terrorism Financing Fund.
            ``(3) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative 
        action, means any monies, including penalties and interest, 
        ordered to be paid.
            ``(4) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to the Treasury, the Department 
                of Justice, or an appropriate regulator, unless the 
                whistleblower is the original source of the 
                information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by the Treasury or the Department of Justice under subchapters 
        II and III of this title, means any judicial action brought by 
        an entity that is based upon the original information provided 
        by a whistleblower pursuant to subsection (a) that led to the 
        successful enforcement of the Treasury or Department of Justice 
        action.
            ``(6) Whistleblower.--The term `whistleblower' means any 
        individual who provides, or 2 or more individuals acting 
        jointly who provide, information relating to a violation of the 
        laws under subchapters II and III of this title to the 
        Treasury, in a manner established, by rule or regulation, by 
        the Treasury.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial action, or 
        related action, the Treasury, under regulations prescribed by 
        the Treasury and subject to subsection (c), may pay an award or 
        awards to 1 or more whistleblowers who voluntarily provided 
        original information to the Treasury that led to the successful 
        enforcement of the covered judicial or administrative action, 
        or related action, in an aggregate amount equal to--
                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph 
        (1) shall be paid from the Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Treasury.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subsection (b), the Treasury--
                            ``(i) shall take into consideration--
                                    ``(I) the significance of the 
                                information provided by the 
                                whistleblower to the success of the 
                                covered judicial or administrative 
                                action;
                                    ``(II) the degree of assistance 
                                provided by the whistleblower and any 
                                legal representative of the 
                                whistleblower in a covered judicial or 
                                administrative action;
                                    ``(III) the programmatic interest 
                                of the Treasury in deterring violations 
                                of the laws under subchapters II and 
                                III of this title by making awards to 
                                whistleblowers who provide information 
                                that leads to the successful 
                                enforcement of such laws; and
                                    ``(IV) such additional relevant 
                                factors as the Treasury may establish 
                                by rule or regulation; and
                            ``(ii) shall not take into consideration 
                        the balance of the Fund.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original 
                information submitted to the Treasury, a member, 
                officer, or employee of--
                            ``(i) an appropriate regulatory agency;
                            ``(ii) the Department of Justice or the 
                        Treasury;
                            ``(iii) a self-regulatory organization; or
                            ``(iv) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section; or
                    ``(C) to any whistleblower who fails to submit 
                information to the Treasury in such form as the 
                Treasury may, by rule, require.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (c) may be 
        represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under subsection 
                (b) shall be represented by counsel if the 
                whistleblower anonymously submits the information upon 
                which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose the 
                identity of the whistleblower and provide such other 
                information as the Treasury may require, directly or 
                through counsel for the whistleblower.
    ``(e) No Contract Necessary.--No contract with the Treasury is 
necessary for any whistleblower to receive an award under subsection 
(b), unless otherwise required by the Treasury by rule or regulation.
    ``(f) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, shall be 
in the discretion of the Treasury. Any such determination, except the 
determination of the amount of an award if the award was made in 
accordance with subsection (b), may be appealed to the appropriate 
court of appeals of the United States not more than 30 days after the 
determination is issued by the Treasury. The court shall review the 
determination made by the Treasury in accordance with section 706 of 
title 5.
    ``(g) Anti-Money Laundering and Counter-Terrorism Financing Fund.--
            ``(1) Fund established.--There is established in the 
        Treasury of the United States a fund to be known as the `Anti-
        Money Laundering and Counter-Terrorism Financing Fund'.
            ``(2) Use of fund.--The Fund shall be available to the 
        Treasury, without further appropriation or fiscal year 
        limitation, for paying awards to whistleblowers as provided in 
        subsection (b).
            ``(3) Deposits and credits.--
                    ``(A) In general.--There shall be deposited into or 
                credited to the Fund an amount equal to any monetary 
                sanction collected by the Treasury or the Department of 
                Justice in any judicial or administrative action for 
                violations of the law under subchapters II and III of 
                this title and all income from investments made under 
                paragraph (4).
                    ``(B) Additional amounts.--If the amounts deposited 
                into or credited to the Fund under subparagraph (A) are 
                not sufficient to satisfy an award made under 
                subsection (b), there shall be deposited into or 
                credited to the Fund an amount equal to the unsatisfied 
                portion of the award from any monetary sanction 
                collected by the Treasury or the Department of Justice 
                in the covered judicial or administrative action on 
                which the award is based.
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Secretary of the Treasury may invest the portion of the 
                Fund that is not, in the discretion of the Secretary of 
                the Treasury, required to meet the current needs of the 
                Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Treasury.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the Fund shall be credited to 
                the Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each fiscal year, the Treasury shall submit to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        a report on--
                    ``(A) the whistleblower award program established 
                under this section, including--
                            ``(i) a description of the number of awards 
                        granted; and
                            ``(ii) the types of cases in which awards 
                        were granted during the preceding fiscal year;
                    ``(B) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(C) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(D) the amount of earnings on investments made 
                under paragraph (4) during the preceding fiscal year;
                    ``(E) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (b);
                    ``(F) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(G) a complete set of audited financial 
                statements, including--
                            ``(i) a balance sheet;
                            ``(ii) an income statement; and
                            ``(iii) a cash flow analysis.
    ``(h) Confidentiality.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), the Treasury and any officer or employee of the Treasury 
        shall not disclose any information, including information 
        provided by a whistleblower to the Treasury, which could 
        reasonably be expected to reveal the identity of a 
        whistleblower, except in accordance with the provisions of 
        section 552a of title 5, unless and until required to be 
        disclosed to a defendant or respondent in connection with a 
        public proceeding instituted by the Treasury or any entity 
        described in paragraph (3).
            ``(2) Exempted statute.--For purposes of section 552 of 
        title 5, paragraph (1) shall be considered a statute described 
        in subsection (b)(3)(B) of such section 552.
            ``(3) Rule of construction.--Nothing in this section is 
        intended to limit, or shall be construed to limit, the ability 
        of the Attorney General to present such evidence to a grand 
        jury or to share such evidence with potential witnesses or 
        defendants in the course of an ongoing criminal investigation.
            ``(4) Availability to government agencies.--
                    ``(A) In general.--Without the loss of its status 
                as confidential in the hands of the Treasury, all 
                information referred to in paragraph (1) may, in the 
                discretion of the Treasury, when determined by the 
                Treasury to be necessary to accomplish the purposes of 
                this chapter and to protect investors, be made 
                available to--
                            ``(i) the Attorney General of the United 
                        States or the Secretary of the Treasury;
                            ``(ii) an appropriate regulatory authority;
                            ``(iii) a self-regulatory organization;
                            ``(iv) a State attorney general in 
                        connection with any criminal investigation;
                            ``(v) any appropriate State regulatory 
                        authority;
                            ``(vi) the Public Company Accounting 
                        Oversight Board;
                            ``(vii) a foreign securities authority; and
                            ``(viii) a foreign law enforcement 
                        authority.
                    ``(B) Confidentiality.--
                            ``(i) In general.--Each of the entities 
                        described in clauses (i) through (vi) of 
                        subparagraph (A) shall maintain such 
                        information as confidential in accordance with 
                        the requirements established under paragraph 
                        (1).
                            ``(ii) Foreign authorities.--Each of the 
                        entities described in clauses (vii) and (viii) 
                        of subparagraph (A) shall maintain such 
                        information in accordance with such assurances 
                        of confidentiality as the Treasury determines 
                        appropriate.
                            ``(iii) Rights retained.--Nothing in this 
                        section shall be deemed to diminish the rights, 
                        privileges, or remedies of any whistleblower 
                        under any Federal or State law, or under any 
                        collective bargaining agreement.
    ``(i) Provision of False Information.--A whistleblower shall not be 
entitled to an award under this section if the whistleblower--
            ``(1) knowingly and willfully makes any false, fictitious, 
        or fraudulent statement or representation; or
            ``(2) uses any false writing or document knowing the 
        writing or document contains any false, fictitious, or 
        fraudulent statement or entry.
    ``(j) Rulemaking Authority.--The Treasury shall have the authority 
to issue such rules and regulations as may be necessary or appropriate 
to implement the provisions of this section consistent with the 
purposes of this section.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 53 of title 31, United States Code, is 
        amended by striking the item relating to section 5323 and 
        inserting the following:

``5323. Whistleblower incentives and protections.''.

SEC. 308. VALUE THAT SUBSTITUTES CURRENCY OR FUNDS.

    (a) Definitions.--Section 5312(a)(2) of title 31, United States 
Code, is amended--
            (1) in subparagraph (J), by inserting ``, or a business 
        engaged in the exchange of currency, funds, or value that 
        substitutes for currency or funds'' before the semicolon at the 
        end; and
            (2) in subparagraph (R), by striking ``funds,'' and 
        inserting ``currency, funds, or value that substitutes for 
        currency or funds,''.
    (b) Registration of Money Transmitting Businesses.--Section 5330(d) 
of title 31, United States Code, is amended--
            (1) in paragraph (1)(A), by striking ``funds,'' and 
        inserting ``currency, funds, or value that substitutes for 
        currency or funds,''; and
            (2) in paragraph (2)--
                    (A) by striking ``currency or funds denominated in 
                the currency of any country'' and inserting ``currency, 
                funds, or value that substitutes for currency or 
                funds''; and
                    (B) by inserting ``, including'' after ``means''.

SEC. 309. FIGHT ILLICIT NETWORKS AND DETECT TRAFFICKING.

    (a) Findings.--Congress finds the following:
            (1) According to the Drug Enforcement Administration 2017 
        National Drug Threat Assessment, transnational criminal 
        organizations are increasingly using virtual currencies.
            (2) The Department of the Treasury has recognized that 
        ``[t]he development of virtual currencies is an attempt to meet 
        a legitimate market demand. According to a Federal Reserve Bank 
        of Chicago economist, United States consumers want payment 
        options that are versatile and that provide immediate finality. 
        No United States payment method meets that description, 
        although cash may come closest. Virtual currencies can mimic 
        cash's immediate finality and anonymity and are more versatile 
        than cash for online and cross-border transactions, making 
        virtual currencies vulnerable for illicit transactions.''.
            (3) Virtual currencies have become a prominent method to 
        pay for goods and services associated with illegal human 
        trafficking and drug trafficking, which are two of the most 
        detrimental and troubling illegal activities facilitated by 
        online marketplaces.
            (4) Online marketplaces, including the dark web, have 
        become a prominent platform to buy, sell, and advertise for 
        illicit goods and services associated with human trafficking 
        and drug trafficking.
            (5) According to the International Labour Organization, in 
        2016, 4,800,000 people in the world were victims of forced 
        sexual exploitation, and in 2014, the global profit from 
        commercial sexual exploitation was $99,000,000,000.
            (6) In 2016, within the United States, the Centers for 
        Disease Control and Prevention estimated that there were 64,000 
        deaths related to drug overdose, and the most severe increase 
        in drug overdoses were those associated with fentanyl and 
        fentanyl analogs (synthetic opioids), which amounted to over 
        20,000 overdose deaths.
            (7) According to the Department of the Treasury's 2015 
        National Money Laundering Risk Assessment, an estimated 
        $64,000,000,000 is generated annually from United States drug 
        trafficking sales.
            (8) Illegal fentanyl in the United States originates 
        primarily from China, and it is readily available to purchase 
        through online marketplaces.
    (b) Definition.--In this section, the term ``human trafficking'' 
has the meaning given the term ``severe forms of trafficking in 
persons'' in section 103 of the Trafficking Victims Protection Act of 
2000 (22 U.S.C. 7102).
    (c) GAO Study.--The Comptroller General of the United States shall 
conduct a study on how virtual currencies and online marketplaces are 
used to facilitate human and drug trafficking. The study shall 
consider--
            (1) how online marketplaces, including the dark web, are 
        being used as platforms to buy, sell, or facilitate the 
        financing of goods or services associated with human 
        trafficking or drug trafficking (specifically, opioids and 
        synthetic opioids, including fentanyl, fentanyl analogs, and 
        any precursor chemicals associated with manufacturing fentanyl 
        or fentanyl analogs) destined for, originating from, or within 
        the United States;
            (2) how financial payment methods, including virtual 
        currencies and peer-to-peer mobile payment services, are being 
        utilized by online marketplaces to facilitate the buying, 
        selling, or financing of goods and services associated with 
        human or drug trafficking destined for, originating from, or 
        within the United States;
            (3) how virtual currencies are being used to facilitate the 
        buying, selling, or financing of goods and services associated 
        with human or drug trafficking, destined for, originating from, 
        or within the United States, when an online platform is not 
        otherwise involved;
            (4) how illicit funds that have been transmitted online and 
        through virtual currencies are repatriated into the formal 
        banking system of the United States through money laundering or 
        other means;
            (5) the participants (state and non-state actors) 
        throughout the entire supply chain that participate in or 
        benefit from the buying, selling, or financing of goods and 
        services associated with human or drug trafficking (either 
        through online marketplaces or virtual currencies) destined 
        for, originating from, or within the United States;
            (6) Federal and State agency efforts to impede the buying, 
        selling, or financing of goods and services associated with 
        human or drug trafficking destined for, originating from, or 
        within the United States, including efforts to prevent the 
        proceeds from human or drug trafficking from entering the 
        United States banking system;
            (7) how virtual currencies and their underlying 
        technologies can be used to detect and deter these illicit 
        activities; and
            (8) to what extent the immutable and traceable nature of 
        virtual currencies can contribute to the tracking and 
        prosecution of illicit funding.
    (d) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives a report summarizing the results of the study required 
under subsection (c), together with any recommendations for legislative 
or regulatory action that would improve the efforts of Federal agencies 
to impede the use of virtual currencies and online marketplaces in 
facilitating human and drug trafficking.

SEC. 310. STUDY AND STRATEGY ON CHINESE MONEY LAUNDERING.

    (a) Study.--The Secretary shall carry out a study on--
            (1) the extent and effect of illicit finance risk relating 
        to the Government of the People's Republic of China and Chinese 
        firms; and
            (2) the ways in which the increasing amount of global trade 
        and investment by the Government of the People's Republic of 
        China and Chinese firms expose the international financial 
        system to increased risk relating to illicit finance.
    (b) Strategy To Combat Chinese Money Laundering.--Upon the 
completion of the study required under subsection (a), the Secretary 
shall, in consultation with such other Federal departments and agencies 
as the Secretary determines appropriate, develop a strategy to combat 
Chinese money-laundering activities.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report containing--
            (1) all findings and determinations made in carrying out 
        the study required under subsection (a); and
            (2) the strategy developed under subsection (b).

SEC. 311. FINANCIAL TECHNOLOGY TASK FORCE.

    (a) In General.--The Secretary shall convene a task force, 
comprised of financial regulators, technology experts, national 
security experts, law enforcement, and any other group the Secretary 
determines is appropriate, to analyze the impact of financial 
technology on financial crimes compliance, including countering 
proliferation finance, human trafficking, and sanctions evasion.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to the Committee on Banking, 
Housing, and Urban Affairs and the Committee on Foreign Relations of 
the Senate and the Committee on Financial Services and the Committee on 
Foreign Affairs of the House of Representatives a report containing any 
findings of the task force convened under subsection (a).

SEC. 312. STUDY ON THE EFFORTS OF AUTHORITARIAN REGIMES TO EXPLOIT THE 
              FINANCIAL SYSTEM OF THE UNITED STATES.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary and the Attorney General, in consultation 
with the heads of other relevant national security, intelligence, and 
law enforcement agencies, shall conduct a study and submit to Congress 
a report that considers how authoritarian regimes in foreign countries 
and their proxies use the financial system of the United States to--
            (1) conduct political influence operations;
            (2) sustain kleptocratic methods of maintaining power;
            (3) export corruption;
            (4) fund nongovernmental organizations, media 
        organizations, or academic initiatives in the United States to 
        advance the interests of those persons; and
            (5) otherwise undermine democratic governance in the United 
        States and the partners and allies of the United States.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report that contains--
            (1) the results of the study required under subsection (a); 
        and
            (2) any recommendations for legislative or regulatory 
        action that would address exploitation of the financial system 
        of the United States by foreign authoritarian regimes.

SEC. 313. ADDITIONAL STUDIES.

    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 Congress a report--
            (1) evaluating the effect of anti-money-laundering and 
        counter-terrorism-financing requirements on individuals and 
        entities, including charities, embassy accounts, money-service 
        businesses, and correspondent banks, that have been subject to 
        categorical de-risking by financial institutions operating in 
        the United States, or otherwise have difficulty accessing or 
        maintaining--
                    (A) relationships in the United States financial 
                system; or
                    (B) certain financial services in the United 
                States, including opening and keeping open an account;
            (2) evaluating consequences of financial institutions de-
        risking entire categories of relationships with the persons 
        identified in paragraph (1); and
            (3) identifying options for financial institutions handling 
        transactions or accounts for high-risk categories of clients, 
        and options for minimizing the negative effects of anti-money-
        laundering and counter-terrorism-financing requirements on the 
        persons described in paragraph (1) without compromising the 
        effectiveness of Federal anti-money-laundering and counter-
        terrorism requirements.

         TITLE IV--BENEFICIAL OWNERSHIP DISCLOSURE REQUIREMENTS

SEC. 401. BENEFICIAL OWNERSHIP.

    (a) In General.--Chapter 53 of title 31, United States Code, as 
amended by section 207 of this Act, is amended by adding at the end the 
following:
``Sec. 5334. Transparent incorporation practices
    ``(a) Definitions.--In this section:
            ``(1) Acceptable identification document.--A natural person 
        has an acceptable identification document if that person has a 
        nonexpired passport issued by the United States, a nonexpired 
        identification document issued by a State, local government, or 
        Federally recognized Indian Tribe to an individual acting for 
        the purpose of identification of that individual, or a 
        nonexpired driver's license issued by a State, or, if the 
        natural person does not have any such document, a nonexpired 
        passport issued by a foreign government.
            ``(2) Beneficial owner.--The term `beneficial owner'--
                    ``(A) means, with respect to an entity, a natural 
                person who directly or indirectly, through any 
                contract, arrangement, understanding, relationship, or 
                otherwise--
                            ``(i) exercises substantial control over 
                        such entity; or
                            ``(ii) owns 25 percent or more of the 
                        equity interests of such entity or receives 
                        substantial economic benefits from the assets 
                        of such entity; and
                    ``(B) does not include--
                            ``(i) a minor child, as defined in the 
                        State in which the entity is formed;
                            ``(ii) a person acting as a nominee, 
                        intermediary, custodian, or agent on behalf of 
                        another person;
                            ``(iii) a person acting solely as an 
                        employee of a corporation or limited liability 
                        company and whose control over or economic 
                        benefits from the corporation or limited 
                        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; or
                            ``(v) a creditor of a corporation or 
                        limited liability company, unless the creditor 
                        meets the requirements of subparagraph (A).
            ``(3) Director.--The term `Director' means the Director of 
        FinCEN.
            ``(4) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network of the Department of the Treasury.
            ``(5) FinCEN identifier.--The term `FinCEN identifier' 
        means the unique identifying number assigned by FinCEN to a 
        person under this section.
            ``(6) Reporting company.--The term `reporting company'--
                    ``(A) means a corporation, limited liability 
                company, or other similar entity that is--
                            ``(i) created by the filing of a document 
                        with a secretary of state or a similar office 
                        under the law of a State or Indian tribe; or
                            ``(ii) formed under the law of a foreign 
                        country and registered to do business in a 
                        State by the filing of a document with a 
                        secretary of state or a similar office under 
                        the law of the State; and
                    ``(B) does not include--
                            ``(i) an issuer--
                                    ``(I) of a class of securities 
                                registered under section 12 of the 
                                Securities Exchange Act of 1934 (15 
                                U.S.C. 781); or
                                    ``(II) that is required to file 
                                reports under section 15(d) of that Act 
                                (15 U.S.C. 78o(d));
                            ``(ii) a business concern constituted or 
                        sponsored by a State, a political subdivision 
                        of a State, under an interstate compact between 
                        two or more States, by a department or agency 
                        of the United States, or under the laws of the 
                        United States;
                            ``(iii) a depository institution (as 
                        defined in section 3 of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813));
                            ``(iv) a credit union (as defined in 
                        section 101 of the Federal Credit Union Act (12 
                        U.S.C. 1752));
                            ``(v) a bank holding company (as defined 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 
                        1934 (15 U.S.C. 78c)) that is registered under 
                        section 15 of the Securities Exchange 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 defined 
                        in section 3 of the Investment Company Act of 
                        1940 (15 U.S.C. 80a-3)) or an investment 
                        adviser (as defined in section 202(11) of the 
                        Investment Advisers Act of 1940 (15 U.S.C. 80b-
                        2(11))), including an investment adviser 
                        described in section 203(l) of the Investment 
                        Advisers Act of 1940 (15 U.S.C. 80b-3(l)), 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 Investment Company 
                        Act of 1940 (15 U.S.C. 80a-1 et seq.) or the 
                        Investment Advisers Act of 1940 (15 U.S.C. 80b-
                        1 et seq.);
                            ``(ix) an insurance company (as defined in 
                        section 2 of the Investment Company Act of 1940 
                        (15 U.S.C. 80a-2));
                            ``(x) an insurance producer (as defined in 
                        section 334 of the Gramm-Leach-Bliley Act (15 
                        U.S.C. 6764));
                            ``(xi) 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 advisor (as defined in 
                        section 1a of the Commodity Exchange Act (7 
                        U.S.C. 1a)) that is registered with the 
                        Commodity Futures Trading Commission;
                            ``(xii) a public accounting firm registered 
                        in accordance with section 102 of the Sarbanes-
                        Oxley Act (15 U.S.C. 7212);
                            ``(xiii) a public utility that provides 
                        telecommunications services, electrical power, 
                        natural gas, or water and sewer services, 
                        within the United States;
                            ``(xiv) a church, charity, nonprofit 
                        entity, or other organization that is described 
                        in section 501(c), 527, 4947(a)(1), or 
                        4947(a)(2) of the Internal Revenue Code of 
                        1986, that has not been denied tax-exempt 
                        status, and that has not failed to file the 
                        most recently due annual information return 
                        with the Internal Revenue Service pursuant to 
                        section 6033(a) of the Internal Revenue Code of 
                        1986, if required to file such a return, for 3 
                        consecutive years, provided however, that an 
                        entity described in this clause shall not be 
                        considered a corporation or limited liability 
                        company until the period of time 180 days 
                        immediately following the date of its denial of 
                        tax-exempt status or failure to file its annual 
                        information return pursuant to section 6033(a) 
                        of the Internal Revenue Code of 1986 for 3 
                        consecutive years;
                            ``(xv) any business concern that--
                                    ``(I) employs more than 20 
                                employees 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;
                            ``(xvi) any corporation or limited 
                        liability company formed and owned by an entity 
                        described in clause (i), (ii), (iii), (iv), 
                        (v), (vi), (vii), (viii), (ix), (x), (xi), 
                        (xii), (xiii), or (xiv);
                            ``(xvii) any pooled investment vehicle that 
                        is operated or advised by an entity described 
                        in clause (iii), (iv), (v), (vi), (vii), 
                        (viii), (ix), or (x); or
                            ``(xviii) any business concern or class of 
                        business concerns that the Secretary of the 
                        Treasury, with the written concurrence of the 
                        Attorney General and the Secretary of Homeland 
                        Security, has determined should be exempt from 
                        the requirements of subsection (a) because 
                        requiring beneficial ownership information from 
                        the business concern or class of business 
                        concerns would not serve the public interest 
                        and would not assist law enforcement efforts to 
                        detect, prevent, or punish terrorism, money 
                        laundering, tax evasion, or other misconduct.
            ``(7) State.--The term `State' means any State, 
        commonwealth, territory, or possession of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        Guam, or the United States Virgin Islands.
            ``(8) Substantial economic benefits.--
                    ``(A) In general.--For the purposes of this 
                section, a person receives `substantial economic 
                benefits' from an entity if the person has access to 25 
                percent or more of the funds and assets of the entity.
                    ``(B) Rulemaking.--The Secretary of the Treasury 
                shall seek to provide clarity to entities with respect 
                to the identification and disclosure of an individual 
                who receives substantial economic benefits from the 
                funds and assets of an entity.
            ``(9) Unique identifying number.--The term `unique 
        identifying number' with respect to a natural person or a 
        limited liability company with a sole member means the unique 
        identifying number from a nonexpired passport issued by the 
        United States, a nonexpired personal identification card, or a 
        nonexpired driver's license issued by a State.
    ``(b) Beneficial Ownership Reporting.--
            ``(1) Reporting.--
                    ``(A) In general.--In accordance with regulations 
                prescribed by the Secretary of the Treasury, each 
                reporting company shall submit to FinCEN a report that 
                contains the information described in paragraph (2).
                    ``(B) Reporting of existing entities.--In 
                accordance with regulations prescribed by the Secretary 
                of the Treasury, any reporting company that has been 
                formed under the laws of a State or Indian Tribe prior 
                to the date of enactment of this section, shall, in a 
                timely manner, and not later than 2 years after the 
                date of enactment of this section, submit to FinCEN a 
                report that contains the information described in 
                paragraph (2).
                    ``(C) Reporting at time of incorporation.--In 
                accordance with regulations prescribed by the Secretary 
                of the Treasury, any reporting company that has been 
                formed under the laws of a State or Indian Tribe after 
                the date of enactment of this section, shall, at the 
                time of incorporation, submit to FinCEN a report that 
                contains the information described in paragraph (2).
                    ``(D) Updated reporting for changes in beneficial 
                owners.--In accordance with regulations prescribed by 
                the Secretary of the Treasury, a reporting company 
                shall, in a timely manner, and not later than 90 days 
                after the date on which there is a change with respect 
                to any beneficial owner of the reporting company, 
                deliver to FinCEN a report that includes the 
                information described in paragraph (2).
                    ``(E) Updated reporting for changes in beneficial 
                ownership information.--In accordance with regulations 
                prescribed by the Secretary of the Treasury, a 
                reporting company shall, in a timely manner, and not 
                later than 1 year after the date on which there are any 
                changes to the information described in paragraph (2), 
                deliver to FinCEN a report that includes the 
                information described in that paragraph.
                    ``(F) Other requirements.--In promulgating the 
                regulations prescribed in subparagraphs (A) through 
                (E), the Secretary of the Treasury shall endeavor, to 
                the extent practicable--
                            ``(i) to collect information through 
                        existing Federal, State, and local processes 
                        and procedures;
                            ``(ii) to minimize burdens on reporting 
                        companies associated with the collection of the 
                        information described in paragraph (2) in light 
                        of the costs placed on legitimate businesses;
                            ``(iii) to collect such information, 
                        including any updates in beneficial ownership, 
                        to ensure the usefulness of beneficial 
                        ownership information for law enforcement and 
                        national security purposes;
                            ``(iv) to establish partnerships with 
                        State, local, and Tribal governmental agencies; 
                        and
                            ``(v) to permit any entity that is not a 
                        reporting company to demand and receive from 
                        FinCEN written confirmation that the entity is 
                        not subject to the requirements of this 
                        subsection.
            ``(2) Required information.--
                    ``(A) Definition.--In this paragraph, the term 
                `applicant' means, with respect to a reporting company, 
                any individual who files an application to form a 
                corporation or limited liability company under the laws 
                of a State or Indian Tribe on behalf of the reporting 
                company.
                    ``(B) Information.--In accordance with regulations 
                prescribed by the Secretary of the Treasury, a report 
                delivered under paragraph (1) shall identify each 
                beneficial owner of the applicable reporting company 
                and each applicant with respect to that reporting 
                company by--
                            ``(i) full legal name;
                            ``(ii) date of birth;
                            ``(iii) current, as of the date on which 
                        the report is delivered, residential or 
                        business street address; and
                            ``(iv) the unique identifying number with 
                        respect to the beneficial owner from a 
                        nonexpired passport issued by the United 
                        States, a nonexpired personal identification 
                        card, or a nonexpired driver's license issued 
                        by a State.
            ``(3) FinCEN id numbers.--
                    ``(A) Issuance of fincen id number.--
                            ``(i) In general.--FinCEN shall issue a 
                        FinCEN ID number to any individual who requests 
                        such a number and provides FinCEN with the 
                        information described in paragraph (2).
                            ``(ii) Updating of information.--An 
                        individual with a FinCEN ID number shall submit 
                        filings with FinCEN pursuant to paragraph (1) 
                        updating any information described in paragraph 
                        (2).
                    ``(B) Use of fincen id number in reporting 
                requirements.--Any person required to report the 
                information described in paragraph (2) with respect to 
                an individual may instead report the FinCEN ID number 
                of the individual.
                    ``(C) Treatment of information submitted for fincen 
                id number.--For purposes of this section, any 
                information submitted under subparagraph (A) shall be 
                deemed to be beneficial ownership information.
            ``(4) Effective date.--The requirements of this subsection 
        shall take effect on the effective date of the regulations 
        prescribed by the Secretary of the Treasury under this 
        subsection, which effective date shall not be sooner than the 
        date that is 1 year after the date of enactment of this 
        section.
    ``(c) Retention and Disclosure of Beneficial Ownership Information 
by FinCEN.--
            ``(1) Retention of information.--Beneficial ownership 
        information required under subsection (b)(2) relating to each 
        corporation or limited liability company formed under the laws 
        of the State shall be maintained by FinCEN until the end of the 
        5-year period beginning on the date that the corporation or 
        limited liability company terminates.
            ``(2) Disclosure.--Beneficial ownership information 
        reported to FinCEN pursuant to this section shall be provided 
        by FinCEN only upon receipt of--
                    ``(A) a request, through appropriate protocols, by 
                a local, Tribal, State, or Federal law enforcement, 
                national security, or intelligence agency;
                    ``(B) a request made by a Federal agency on behalf 
                of a law enforcement agency of another country under an 
                international treaty, agreement, or convention, or an 
                order under section 3512 of title 18 or section 1782 of 
                title 28, issued in response to a request for 
                assistance in an investigation by such foreign country, 
                subject to the requirement that such other country 
                agrees to prevent the public disclosure of such 
                beneficial ownership information or to use it for any 
                purpose other than the specified investigation, or, if 
                upon agreement by the Federal agency and the foreign 
                country, in a criminal or civil case; or
                    ``(C) a request made by a financial institution or 
                any other entity or person subject to customer due 
                diligence requirements, with the consent of the 
                reporting company, to facilitate the compliance of the 
                financial institution or other entity or person with 
                customer due diligence requirements under applicable 
                Federal law or State law.
            ``(3) Appropriate protocols.--The protocols described in 
        paragraph (2)(A) shall--
                    ``(A) protect the privacy of any beneficial 
                ownership information provided by FinCEN to a local, 
                Tribal, State, or Federal law enforcement, national 
                security, or intelligence agency;
                    ``(B) ensure that a local, Tribal, State, or 
                Federal law enforcement, national security, or 
                intelligence agency requesting beneficial ownership 
                information has an existing investigatory basis for 
                requesting such information and that basis is not in 
                violation of a local, or city ordinance;
                    ``(C) ensure that access to beneficial ownership 
                information is limited to authorized users at a local, 
                Tribal, State, or Federal law enforcement, national 
                security, or intelligence agency who have undergone 
                appropriate training, and that the identity of such 
                authorized users is verified through appropriate 
                mechanisms such as 2-factor authentication;
                    ``(D) include an audit trail of requests for 
                beneficial ownership information by a local, Tribal, 
                State, or Federal law enforcement, national security, 
                or intelligence agency, including, as necessary, 
                information concerning queries made by authorized users 
                at a local, Tribal, State, or Federal law enforcement, 
                national security, or intelligence agency;
                    ``(E) require that every local, Tribal, State, or 
                Federal law enforcement, national security, or 
                intelligence agency that receives beneficial ownership 
                information from FinCEN conducts an annual audit to 
                verify that the beneficial ownership information 
                received from FinCEN has been accessed and used 
                appropriately, and consistent with this paragraph; and
                    ``(F) require FinCEN to conduct an annual audit of 
                every local, Tribal, State, or Federal law enforcement, 
                national security, or intelligence agency that has 
                received beneficial ownership information to ensure 
                that such agency has requested beneficial ownership 
                information and has used any beneficial ownership 
                information received from FinCEN appropriately and 
                consistent with this paragraph.
            ``(4) Violation.--A request under paragraph (2)(A) that 
        violates the protocols described in paragraph (3) shall subject 
        the requesting agency to criminal penalties under subsection 
        (g)(3).
            ``(5) Scope.--Information provided to a local, Tribal, 
        State, or Federal law enforcement, national security, or 
        intelligence agency under this paragraph may only be used for 
        law enforcement, anti-money laundering, counter-terrorism-
        financing, national security, or intelligence purposes.
    ``(d) Agency Coordination.--
            ``(1) In general.--The Secretary of the Treasury shall 
        endeavor, to the extent practicable, to update information 
        described in subsection (b)(2) by working collaboratively with 
        other relevant Federal agencies.
            ``(2) Information from relevant federal agencies.--Relevant 
        Federal agencies, as determined by the Secretary of the 
        Treasury, shall, to the extent practicable, and consistent with 
        privacy protections, provide such required information to 
        FinCEN for purposes of maintaining an accurate beneficial 
        ownership database.
            ``(3) Regulations.--The Secretary of the Treasury, in 
        consultation with the heads of other relevant agencies, may 
        promulgate regulations as necessary to carry out this 
        subsection.
    ``(e) State Notification of Federal Obligations.--
            ``(1) In general.--Each State that receives funding under 
        section 5334(c) shall, not later than 2 years after the date of 
        enactment of this section, take the following actions:
                    ``(A) The Secretary of State or a similar office in 
                each State responsible for the establishment of 
                entities created by the filing of a public document 
                with such office under the law of such State shall 
                periodically, including at the time of any renewal of 
                any license to do business in such State and in 
                connection with State corporate tax renewals, notify 
                filers of their requirements as reporting companies 
                under this section, including the requirement under 
                subparagraph (b)(1)(B), and provide them with a copy of 
                the reporting company form created by the Secretary 
                under this section or an internet link to such form.
                    ``(B) The Secretary of State or a similar office in 
                each State responsible for the establishment of 
                entities created by the filing of a public document 
                with such office under the law of such State shall 
                update its websites, forms relating to incorporation 
                and physical premises to notify filers of their 
                requirements as reporting companies under this section, 
                including providing an internet link to the reporting 
                company form created by the Secretary under this 
                section.
            ``(2) Disclosure.--A notification under subparagraph (A) or 
        (B) of paragraph (1) shall explicitly state that the 
        notification is on behalf of the Department of the Treasury for 
        the purpose of supporting a nonpublic registry of business 
        entities in the United States.
    ``(f) No Bearer Share Corporations or Limited Liability 
Companies.--A corporation or limited liability company formed under the 
laws of a State may not issue a certificate in bearer form evidencing 
either a whole or fractional interest in the corporation or limited 
liability company.
    ``(g) Penalties.--
            ``(1) In general.--It shall be unlawful for any person to 
        affect interstate or foreign commerce by--
                    ``(A) knowingly providing, or attempting to 
                provide, false or fraudulent beneficial ownership 
                information, including a false or fraudulent 
                identifying photograph, to FinCEN in accordance with 
                subsection (b);
                    ``(B) willfully failing to provide complete or 
                updated beneficial ownership information to FinCEN in 
                accordance with subsection (b);
                    ``(C) knowingly disclosing the contents of any 
                report filed with FinCEN pursuant to subsection (b), 
                except to the extent necessary to fulfill an authorized 
                request for beneficial ownership information; or
                    ``(D) knowingly using, for an unauthorized purpose, 
                the contents of any report filed with FinCEN pursuant 
                to subsection (b).
            ``(2) Civil and criminal penalties.--
                    ``(A) In general.--Any person who violates 
                subparagraph (A) or (B) of paragraph (1) shall be 
                liable to the United States for a civil penalty of not 
                more than $500 for each day that the violation 
                continues or has not been remedied, and the person may 
                be fined not more than $10,000, imprisoned for not more 
                than four years, or both.
                    ``(B) Other violations.--Any person who violates 
                subparagraph (C) or (D) of paragraph (1) shall be 
                liable to the United States for a civil penalty of not 
                more than $500 for each violation, and the criminal 
                penalties provided for in section 5322 will apply to 
                the same extent as such criminal penalties would apply 
                to a violation described in section 5322.
                    ``(C) Limitations.--Any person who negligently 
                violates paragraph (1) shall not be subject to civil or 
                criminal penalties under this paragraph.
                    ``(D) Waiver of de minimis violations.--
                            ``(i) Definitions.--
                                    ``(I) In general.--For purposes of 
                                this subsection, a de minimis violation 
                                includes any change to the information 
                                described in paragraph (2)(B) of 
                                subsection (b) that is due to--
                                            ``(aa) a change in an 
                                        address provided under clause 
                                        (iii) of such paragraph (2)(B); 
                                        or
                                            ``(bb) the expiration of an 
                                        identification document 
                                        provided under clause (iv) of 
                                        such paragraph (2)(B).
                                    ``(II) Assistance.--FinCEN shall 
                                provide assistance to, and may not 
                                impose any penalty upon, any person 
                                seeking to remedy a de minimis 
                                violation of paragraph (1) and come 
                                into compliance with this section.
                            ``(ii) Waiver.--The Secretary of the 
                        Treasury shall waive the penalty for violating 
                        paragraph (1) if the Secretary determines that 
                        the violation was de minimis and the reporting 
                        company took reasonable steps to update the 
                        information.
                            ``(iii) Repeated violations.--In 
                        determining whether a violation is de minimis, 
                        the Secretary of the Treasury may treat 
                        repeated violations as 1 violation.
            ``(3) Treasury office of inspector general investigation in 
        the event of a cybersecurity breach.--
                    ``(A) In general.--In the event of a cybersecurity 
                breach that results in substantial unauthorized access 
                and disclosure of sensitive beneficial ownership 
                information, the Inspector General of the Department of 
                the Treasury shall conduct an investigation into FinCEN 
                cybersecurity practices that, to the extent possible, 
                determines any vulnerabilities within FinCEN privacy 
                security protocols and provides recommendations for 
                fixing such deficiencies.
                    ``(B) Report.--The Inspector General of the 
                Department of the Treasury shall submit to the 
                Secretary of the Treasury a report on the investigation 
                required under this paragraph.
                    ``(C) Actions of the secretary.--Upon receiving a 
                report submitted under subparagraph (B), the Secretary 
                of the Treasury shall--
                            ``(i) determine whether the Director had 
                        any responsibility for the cybersecurity breach 
                        or whether policies, practices, or procedures 
                        implemented at the direction of the Director 
                        led to the cybersecurity breach; and
                            ``(ii) submit to Congress a written report 
                        outlining the findings of the Secretary, 
                        including a determination by the Secretary on 
                        whether to retain or dismiss the individual 
                        serving as the Director.
            ``(4) User complaint process.--
                    ``(A) In general.--The Inspector General of the 
                Department of the Treasury, in coordination with the 
                Secretary of the Treasury, shall provide contact 
                information to receive external comments or complaints 
                regarding the beneficial ownership information 
                collection process.
                    ``(B) Report.--The Inspector General shall submit 
                to Congress a periodic report summarizing external 
                complaints and related investigations by the Inspector 
                General related to the collection of beneficial 
                ownership information.''.
    (b) Conforming Amendments.--Title 31, United States Code, is 
amended--
            (1) in section 5321(a)--
                    (A) in paragraph (1), by striking ``sections 5314 
                and 5315'' each place it appears and inserting 
                ``sections 5314, 5315, and 5334''; and
                    (B) in paragraph (6), by inserting ``(except 
                section 5334)'' after ``subchapter'' each place it 
                appears;
            (2) in section 5322, by striking ``section 5315 or 5324'' 
        each place it appears and inserting ``section 5315, 5324, or 
        5334''; and
            (3) in the table of contents of chapter 53 of title 31, 
        United States Code, as amended by section 106 of this Act, by 
        adding at the end the following:

``5334. Transparent incorporation practices.''.
    (c) Funding Authorization.--
            (1) In general.--To carry out section 5334 of title 31, 
        United States Code, as added by subsection (a) of this section, 
        during the 3-year period beginning on the date of enactment of 
        this Act, funds shall be made available to FinCEN and the 
        States to pay reasonable costs relating to compliance with the 
        requirements of such section.
            (2) Funding sources.--Funds shall be provided to FinCEN and 
        the States to carry out the purposes described in paragraph (1) 
        from one or more of the following sources:
                    (A) Upon application by FinCEN or a State, and 
                without further appropriation, the Secretary shall make 
                available to FinCEN or such State unobligated 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 FinCEN or a State, after 
                consultation with the Secretary, and without further 
                appropriation, the Attorney General of the United 
                States shall make available to FinCEN or such State 
                excess unobligated balances (as defined in section 
                524(c)(8)(D) of title 28, United States Code) in the 
                Department of Justice Assets Forfeiture Fund 
                established under section 524(c) of title 28, United 
                States Code.
            (3) Maximum amounts.--
                    (A) Department of the treasury.--The Secretary may 
                not make available to FinCEN a total of more than 
                $30,000,000 and to the States a total of not more than 
                $5,000,000 under paragraph (2)(A).
                    (B) Department of justice.--The Attorney General of 
                the United States may not make available to FinCEN a 
                total of more than $10,000,000 and to the States a 
                total of not more than $5,000,000 under paragraph 
                (2)(B).
    (d) Federal Contractors.--Not later than the first day of the first 
full fiscal year beginning at least 1 year after the date of the 
enactment of this Act, the Administrator for Federal Procurement Policy 
shall revise the Federal Acquisition Regulation maintained under 
section 1303(a)(1) of title 41, United States Code, to require any 
contractor who is subject to the requirement to disclose beneficial 
ownership information under section 5334 of title 31, United States 
Code, as added by subsection (a) of this section, 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 acquisition threshold under 
section 134 of title 41, United States Code.
    (e) Revised Due Diligence Rulemaking.--Not later than 1 year after 
the date of the enactment of this Act, the Secretary shall revise the 
final rule titled ``Customer Due Diligence Requirements for Financial 
Institutions'' (May 11, 2016; 81 Fed. Reg. 29397) to--
            (1) bring the rule into conformance with this Act and the 
        amendments made by this Act;
            (2) account for financial institutions' access to 
        comprehensive beneficial ownership information filed by 
        corporations and limited liability companies, under threat of 
        civil and criminal penalties, under this Act, and the 
        amendments made by this Act; and
            (3) reduce any burdens on financial institutions that are, 
        in light of the enactment of this Act and the amendments made 
        by this Act, unnecessary or duplicative.

SEC. 402. GEOGRAPHIC TARGETING ORDER.

    The Secretary shall issue a geographic targeting order, similar to 
the order issued by the FinCEN on November 15, 2018, that--
            (1) applies to commercial real estate to the same extent, 
        with the exception of not having the same thresholds, as the 
        order issued by FinCEN on November 15, 2018, applies to 
        residential real estate; and
            (2) establishes a specific threshold for commercial real 
        estate.

SEC. 403. BENEFICIAL OWNERSHIP STUDIES.

    (a) Other Legal Entities Study.--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 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 beneficial owners (as 
        that term is defined in section 5334(a) of title 31, United 
        States Code, as added by section 401 of this Act) or 
        beneficiaries of such entities, and the nature of the required 
        information;
            (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 misconduct; and
                    (B) has impeded investigations into entities 
                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 Practices Study.--Not later than 
5 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 assessing the effectiveness of incorporation 
practices 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 beneficial ownership 
        information; and
            (2) strengthening the capability of law enforcement 
        agencies to--
                    (A) combat incorporation abuses and civil and 
                criminal misconduct; and
                    (B) detect, prevent, or punish terrorism, money 
                laundering, tax evasion, or other misconduct.
    (c) Using Technology To Avoid Duplicative Layers of Reporting 
Obligations and Increase Accuracy of Beneficial Ownership 
Information.--
            (1) In general.--The Secretary, in consultation with the 
        Attorney General of the United States shall conduct a study to 
        evaluate--
                    (A) the feasibility of adopting FinCEN identifying 
                numbers or other simplified reporting methods in order 
                to facilitate a simplified beneficial ownership regime 
                for reporting companies;
                    (B) whether a reporting regime whereby only company 
                shareholders are reported within the ownership chain of 
                a reporting company could effectively track beneficial 
                ownership information and increase information to law 
                enforcement;
                    (C) the costs associated with imposing any new 
                verification requirements on FinCEN; and
                    (D) the resources necessary to implement any such 
                changes.
            (2) Findings.--The Secretary shall present findings to the 
        relevant committees of jurisdiction and provide recommendations 
        for carrying out these findings.

   TITLE V--STRENGTHENING THE ABILITY OF THE SECURITIES AND EXCHANGE 
         COMMISSION TO PURSUE VIOLATIONS OF THE SECURITIES LAWS

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Securities Fraud Enforcement and 
Investor Compensation Act of 2019''.

SEC. 502. INVESTIGATIONS AND PROSECUTIONS OF VIOLATIONS OF THE 
              SECURITIES LAWS.

    (a) In General.--Section 21(d) of the Securities Exchange Act of 
1934 (15 U.S.C. 78u(d)) is amended--
            (1) in paragraph (3)--
                    (A) in the paragraph heading--
                            (i) by inserting ``Civil'' before ``Money 
                        penalties''; and
                            (ii) by striking ``in civil actions'' and 
                        inserting ``and authority to seek 
                        disgorgement'';
                    (B) in subparagraph (A), by striking ``jurisdiction 
                to impose'' and all that follows through the period at 
                the end and inserting the following: ``jurisdiction 
                to--
                    ``(i) impose, upon a proper showing, a civil 
                penalty to be paid by the person who committed such 
                violation; and
                    ``(ii) require disgorgement under paragraph (7) by 
                the person who received any unjust enrichment as a 
                result of such violation.''; and
                    (C) in subparagraph (B)--
                            (i) in clause (i), in the first sentence, 
                        by striking ``the penalty'' and inserting ``a 
                        civil penalty imposed under subparagraph 
                        (A)(i)'';
                            (ii) in clause (ii), by striking ``amount 
                        of penalty'' and inserting ``amount of a civil 
                        penalty imposed under subparagraph (A)(i)''; 
                        and
                            (iii) in clause (iii), in the matter 
                        preceding item (aa), by striking ``amount of 
                        penalty for each such violation'' and inserting 
                        ``amount of a civil penalty imposed under 
                        subparagraph (A)(i) for each violation 
                        described in that subparagraph'';
            (2) in paragraph (4), by inserting ``under paragraph (7)'' 
        after ``funds disgorged''; and
            (3) by adding at the end the following:
    ``(7) Disgorgement.--
            ``(A) In general.--In any action or proceeding brought by 
        the Commission under any provision of the securities laws, the 
        Commission may seek, and any Federal court may order, 
        disgorgement of any unjust enrichment that a person obtained as 
        a result of a violation of that provision.
            ``(B) Calculation.--Any disgorgement that is ordered with 
        respect to a person under subparagraph (A) shall be offset by 
        any amount of restitution that the person is ordered to pay 
        under paragraph (8).
    ``(8) Restitution.--In any proceeding brought or instituted by the 
Commission under any provision of the securities laws, the Commission 
may seek, and any Federal court, or, with respect to a proceeding 
instituted by the Commission, the Commission, may order restitution to 
an investor in the amount of the loss that the investor sustained as a 
result of a violation of that provision by a person that is--
            ``(A) registered as, or required to be registered as, a 
        broker, dealer, investment adviser, municipal securities 
        dealer, municipal advisor, or transfer agent; or
            ``(B) associated with, or, as of the date on which the 
        violation occurs, seeking to become associated with, an entity 
        described in subparagraph (A).
    ``(9) Limitations Periods.--
            ``(A) Disgorgement.--The Commission may bring a claim for 
        disgorgement under paragraph (7) not later than 5 years after 
        the date on which the person against which the claim is brought 
        receives any unjust enrichment as a result of the violation 
        that gives rise to the action or proceeding in which the 
        Commission seeks the claim.
            ``(B) Equitable remedies.--The Commission may seek a claim 
        for any equitable remedy, including for restitution under 
        paragraph (8), an injunction, or a bar, suspension, or cease 
        and desist order, not later than 12 years after the latest date 
        on which a violation that gives rise to the claim occurs.
            ``(C) Calculation.--For the purposes of calculating any 
        limitations period under this paragraph with respect to an 
        action or claim, any time in which the person against which the 
        action or claim, as applicable, is brought is outside of the 
        United States shall not count towards the accrual of that 
        period.
    ``(10) Rule of Construction.--Nothing in paragraph (7) or (8) may 
be construed as altering any right that any private party may have to 
maintain a suit for a violation of this Act.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply with respect to any action or proceeding that is commenced on or 
after the date of enactment of this Act.
                                 <all>