Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019 or the COUNTER Act of 2019
This bill generally revises requirements related to anti-money-laundering and counter-terrorism-financing laws.
Among other things, the bill
The bill also increases penalties for violations of anti-money-laundering and counter-terrorism-financing laws, requires antiquities dealers to comply with these laws, and requires the reporting of beneficial ownership information to FinCEN in certain commercial real estate transactions.
Every five years, Treasury must update the threshold amounts for currency transaction reports to reflect inflation.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2514 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 2514
To make reforms to the Federal Bank Secrecy Act and anti-money
laundering laws, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 3, 2019
Mr. Cleaver introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committee on
Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To make reforms to the Federal Bank Secrecy Act and anti-money
laundering laws, 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 ``Coordinating
Oversight, Upgrading and Innovating Technology, and Examiner Reform Act
of 2019'' or the ``COUNTER Act of 2019''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.
TITLE I--STRENGTHENING TREASURY
Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. FinCEN Compensation.
Sec. 103. Civil Liberties and Privacy Officer.
Sec. 104. Privacy and Civil Liberties Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attache Program.
Sec. 107. Increasing technical assistance for international
cooperation.
Sec. 108. FinCEN Domestic Liaisons.
Sec. 109. FinCEN Exchange.
Sec. 110. Study and strategy on trade-based money laundering.
Sec. 111. De-risking report.
TITLE II--IMPROVING AML/CFT OVERSIGHT
Sec. 201. Sharing of suspicious activity reports within a financial
group.
Sec. 202. Training for examiners on AML/CFT.
Sec. 203. Sharing of compliance resources.
Sec. 204. GAO Study on feedback loops.
Sec. 205. FinCEN study on BSA value.
Sec. 206. Section 314(a) improvements.
Sec. 207. Sharing of threat pattern and trend information.
Sec. 208. Modernization and upgrading whistleblower protections.
Sec. 209. Certain violators barred from serving on public company
boards.
Sec. 210. Additional damages for repeat Bank Secrecy Act violators.
Sec. 211. Justice annual report on deferred and nonprosecution
agreements.
Sec. 212. Return of profits and bonuses.
Sec. 213. Prohibition on tax deductions for attorney's fees related to
Bank Secrecy Act settlements and court
costs.
Sec. 214. Application of Bank Secrecy Act to dealers in art or
antiquities.
Sec. 215. Revision to geographic targeting order.
TITLE III--MODERNIZING THE AML SYSTEM
Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Parallel runs rulemaking.
SEC. 2. BANK SECRECY ACT DEFINITION.
Section 5312(a) of title 31, United States Code, is amended by
adding at the end the following:
``(6) Bank secrecy act.--The term `Bank Secrecy act'
means--
``(A) section 21 of the Federal Deposit Insurance
Act;
``(B) chapter 2 of title I of Public Law 91-508;
and
``(C) this subchapter.''.
TITLE I--STRENGTHENING TREASURY
SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF THE BANK SECRECY ACT.
Section 5311 of title 31, United States Code, is amended--
(1) by inserting ``to protect our national security, to
safeguard the integrity of the international financial system,
and'' before ``to require''; and
(2) by inserting ``to law enforcement'' before ``in
criminal''.
SEC. 102. FINCEN COMPENSATION.
Section 310 of title 31, United States Code, is amended--
(1) by redesignating subsection (d) as subsection (f); 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. CIVIL LIBERTIES AND PRIVACY OFFICER.
(a) Appointment of Officers.--Not later than the end of the 3-month
period beginning on the date of enactment of this Act, a Civil
Liberties and Privacy Officer shall be appointed, from among
individuals who are attorneys with expertise in data privacy laws--
(1) within each Federal financial regulator, by the head of
the Federal financial regulator;
(2) within the Financial Crimes Enforcement Network, by the
Secretary of the Treasury; and
(3) within the Internal Revenue Service Criminal
Investigation, by the Secretary of the Treasury.
(b) Duties.--Each Civil Liberties and Privacy Officer shall, with
respect to the applicable regulator, Network, or Investigation within
which the Officer is located--
(1) be consulted each time the regulations are developed or
reviewed;
(2) be consulted on information-sharing activities,
including activities that provide access to personally
identifiable information; and
(3) contribute to the evaluation and regulation of new
technologies.
(c) Federal Financial Regulator Defined.--For purposes of this
section, the term ``Federal financial regulator'' means 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. 104. PRIVACY AND CIVIL LIBERTIES COUNCIL.
(a) Establishment.--There is established the Privacy and Civil
Liberties Council (hereinafter in this section referred to as the
``Council''), which shall consist of the Civil Liberties and Privacy
Officers appointed pursuant to section 103.
(b) Chair.--The Civil Liberties and Privacy Officer of the
Financial Crimes Enforcement Network shall serve as the Chair of the
Council.
(c) Duty.--The members of the Council shall coordinate on
activities related to their duties as Privacy and Civil Liberties
Officers.
(d) Meetings.--The meetings of the Council--
(1) shall be at the call of the Chair, but in no case may
the Council meet less than quarterly;
(2) may include open and closed sessions, as determined
necessary by the Council; and
(3) may include participation by public and private
entities and law enforcement agencies.
(e) Report.--The Council shall issue an annual report to the
Congress on the activities of the Council during the previous year and
any legislative recommendations that the Council may have.
SEC. 105. INTERNATIONAL COORDINATION.
The Secretary of the Treasury shall work with the Secretary's
foreign counterparts, 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. 106. TREASURY ATTACHE PROGRAM.
(a) In General.--Title 31, United States Code, is amended by
inserting after section 315 the following:
``Sec. 316. Treasury Attache Program
``(a) In General.--There is established the Treasury Attache
Program, under which the Secretary of the Treasury shall appoint
employees of the Department of the Treasury as a Treasury attache, who
shall--
``(1) have expertise in Bank Secrecy Act and anti-money
laundering issues;
``(2) be co-located in a United States embassy;
``(3) perform outreach with respect to Bank Secrecy Act and
anti-money laundering issues;
``(4) establish and maintain relationships with foreign
counterparts, including employees of ministries of finance,
central banks, and other relevant official entities;
``(5) conduct outreach to local and foreign financial
institutions and other commercial actors, including--
``(A) information exchanges; and
``(B) soliciting buy-in and cooperation for the
implementation of--
``(i) United States and multilateral
sanctions; and
``(ii) international standards on anti-
money laundering and the countering of the
financing of terrorism; and
``(6) perform such other actions as the Secretary
determines appropriate.
``(b) Number of Attaches.--The number of Treasury attaches
appointed under this section at any one time shall be not fewer than 6
more employees than the number of employees of the Department of the
Treasury serving as Treasury attaches on March 1, 2019.
``(c) Compensation.--Each Treasury attache appointed under this
section and located at a United States embassy shall receive
compensation at the higher of--
``(1) the rate of compensation provided to a Foreign
Service officer serving at the same embassy; or
``(2) the rate of compensation the Treasury attache would
otherwise have received, absent the application of this
subsection.
``(d) Bank Secrecy Act Defined.--In this section, the term `Bank
Secrecy Act' has the meaning given that term under section 5312.''.
(b) Clerical Amendment.--The table of contents for chapter 3 of
title 31, United States Code, is amended by inserting after the item
relating to section 315 the following:
``316. Treasury Attache Program.''.
SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL
COOPERATION.
There is authorized to be appropriated for fiscal year 2020 to the
Secretary of the Treasury for purposes of providing technical
assistance for international cooperation an amount equal to twice the
amount authorized for such purpose for fiscal year 2019.
SEC. 108. FINCEN DOMESTIC LIAISONS.
Section 310 of title 31, United States Code, as amended by section
102, is further amended by inserting after subsection (d) the
following:
``(e) FinCEN Domestic Liaisons.--
``(1) In general.--The Director of FinCEN shall appoint at
least 6 senior FinCEN employees as FinCEN Domestic Liaisons,
who shall--
``(A) each be assigned to focus on a specific
region of the United States;
``(B) be located at an office in such region (or
co-located at an office of another Federal agency in
such region);
``(C) provide education to, and coordination with,
both public- and private-sector entities with respect
to FinCEN; and
``(D) perform outreach to financial institutions
(including non-bank financial institutions) and persons
who are not financial institutions, especially with
respect to actions taken by FinCEN that require
specific actions by, or have specific effects on, such
institutions or persons, as determined by the Director.
``(2) Financial institution defined.--In this subsection,
the term `financial institution' has the meaning given that
term under section 5312.''.
SEC. 109. FINCEN EXCHANGE.
(a) In General.--Section 314(a) of the USA PATRIOT Act (31 U.S.C.
5311 note) is amended by adding at the end the following:
``(6) FinCEN exchange.--
``(A) Establishment.--The FinCEN Exchange is hereby
established within FinCEN, which shall consist of the
FinCEN Exchange program of FinCEN in existence on the
day before the date of enactment of this paragraph.
``(B) Purpose.--The FinCEN Exchange shall further
the purpose described under paragraph (1) by
facilitating a voluntary public-private information
sharing partnership among law enforcement, financial
institutions, and FinCEN to--
``(i) effectively and efficiently combat
money laundering, terrorism financing,
organized crime, and other financial crimes;
``(ii) protect the financial system from
illicit use; and
``(iii) promote national security.
``(C) FinCEN defined.--In this paragraph, the term
`FinCEN' means the Financial Crimes Enforcement Network
of the Department of the Treasury.''.
(b) Authorization of Appropriation.--There is authorized to be
appropriated such sums as may be necessary to carry out the amendment
made by subsection (a).
SEC. 110. STUDY AND STRATEGY ON TRADE-BASED MONEY LAUNDERING.
(a) Study.--The Secretary of the Treasury shall carry out a study,
in consultation with other appropriate Federal departments and
agencies, on trade-based money laundering.
(b) Report.--Not later than the end of the 9-month period beginning
on the date of the enactment of this Act, the Secretary shall issue a
report to the Congress containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) proposed strategies to combat trade-based money
laundering.
(c) Classified Annex.--The report required under this section may
include a classified annex, if the Secretary determines it appropriate.
SEC. 111. DE-RISKING REPORT.
(a) Review.--The Secretary of the Treasury, in consultation with
the Federal functional regulators (as defined under section 103) and
other relevant stakeholders, shall undertake a formal review of--
(1) the adverse consequences of financial institutions de-
risking entire categories of relationships, including
charities, embassy accounts, money services businesses (as
defined under section 1010.100(ff) of title 31, Code of Federal
Regulations), countries, regions, and respondent banks;
(2) the reasons why financial institutions are engaging in
de-risking;
(3) the association with and effects of de-risking on money
laundering and financial crime actors and activities; and
(4) the most appropriate ways to promote financial
inclusion while maintaining compliance with the Bank Secrecy
Act.
(b) 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 the Federal functional regulators and other relevant
stakeholders, shall issue a report to Congress containing all findings
and determinations made in carrying out the study required under
subsection (a).
(c) Definitions.--In this section:
(1) De-risking.--The term ``de-risking'' means the closing
of customer accounts or limiting services of a category of
customer due to perceived risk as it relates to compliance with
the Bank Secrecy Act.
(2) BSA terms.--The terms ``Bank Secrecy Act'' and
``financial institution'' have the meaning given those terms,
respectively, under section 5312 of title 31, United States
Code.
TITLE II--IMPROVING AML/CFT OVERSIGHT
SEC. 201. SHARING OF SUSPICIOUS ACTIVITY REPORTS WITHIN A FINANCIAL
GROUP.
(a) In General.--
(1) Sharing with foreign branches and affiliates.--Section
5318(g) of title 31, United States Code, is amended by adding
at the end the following:
``(5) Sharing with foreign branches, subsidiaries, and
affiliates.--
``(A) In general.--Not later than 180 days after
the date of the enactment of this paragraph, the
Secretary of the Treasury shall issue rules permitting
any financial institution with a reporting obligation
under this subsection to share information on reports
under this subsection with the institution's foreign
branches, subsidiaries, and affiliates for the purposes
of combating illicit finance risks, notwithstanding any
other provision of law except subparagraph (B).
``(B) Exception.--In issuing the regulations
required under subparagraph (A), the Secretary may not
permit a financial institution to share information on
reports under this subsection with a foreign branch,
subsidiary, or affiliate located in a jurisdiction
that--
``(i) is subject to countermeasures imposed
by the Federal Government; or
``(ii) the Secretary, in consultation with
the Civil Liberties and Privacy Officer of the
Financial Crimes Enforcement Network, has
determined cannot reasonably protect the
privacy and confidentiality of such
information.''.
(2) Notification prohibitions.--Section 5318(g)(2)(A) of
title 31, United States Code, is amended--
(A) in clause (i), by inserting after ``transaction
has been reported'' the following: ``or otherwise
reveal any information that would reveal that the
transaction has been reported, including materials
prepared or used by the financial institution for the
purpose of identifying and detecting potentially
suspicious activity''; and
(B) in clause (ii), by inserting after
``transaction has been reported,'' the following: ``or
otherwise reveal any information that would reveal that
the transaction has been reported, including materials
prepared or used by the financial institution for the
purpose of identifying and detecting potentially
suspicious activity,''.
(b) Rulemaking.--Not later than the end of the 180-day period
beginning on the date of enactment of this Act, the Secretary of the
Treasury shall issue regulations to carry out the amendments made by
this section.
SEC. 202. TRAINING FOR EXAMINERS ON AML/CFT.
The Federal Financial Institutions Examination Council Act of 1978
(12 U.S.C. 3301 et seq.) is amended--
(1) by moving section 1009A so as to appear after section
1009; and
(2) by inserting after section 1009A, as so moved, the
following:
``SEC. 1009B. AML/CFT TRAINING.
``(a) Training Requirement.--Each examiner employed by a Federal
financial institutions regulatory agency shall attend at least 10 hours
of annual training on anti-money laundering (AML) and the countering of
the financing of terrorism (CFT), including--
``(1) potential risk profiles and red flags that may be
encountered during examinations;
``(2) financial crime patterns and trends;
``(3) the high-level context for why AML and CFT programs
are necessary for law enforcement agencies and other national
security agencies, and what risks the programs seek to
mitigate; and
``(4) de-risking and its effect on the provision of
financial services.
``(b) Training Materials and Standards.--The Council shall
establish uniform training materials and standards for use in the
training required under subsection (a).''.
SEC. 203. SHARING OF COMPLIANCE RESOURCES.
(a) In General.--Section 5318 of title 31, United States Code, is
amended by adding at the end the following:
``(o) Sharing of Compliance Resources.--
``(1) Sharing permitted.--Two or more financial
institutions may enter into collaborative arrangements in order
to more efficiency comply with the requirements of this
subchapter.
``(2) Outreach.--The Secretary of the Treasury and the
appropriate supervising agencies shall carry out an outreach
program to provide financial institutions with information,
including best practices, with respect to the sharing of
resources described under paragraph (1).''.
(b) Rule of Construction.--The amendment made by subsection (a) may
not be construed to require financial institutions to share resources.
SEC. 204. GAO STUDY ON FEEDBACK LOOPS.
(a) Study.--The Comptroller General of the United States shall
carry out a study on--
(1) practices within the United States Government for
providing feedback (``feedback loop'') to relevant parties
(including regulated private entities) on the usage and
usefulness of personally identifiable information (``PII''),
sensitive-but-unclassified (``SBU'') data, or similar
information provided by such parties to Government users of
such information and data (including law enforcement or
regulators); and
(2) any practices or standards outside the United States
for providing feedback loops on sensitive information and
public-private partnership information sharing efforts,
specifically related to efforts to combat money laundering and
other forms of illicit finance.
(b) Report.--Not later than the end of the 18-month period
beginning on the date of the enactment of this Act, the Comptroller
General shall issue a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) with respect to each of paragraphs (1) and (2) of
subsection (a), any best practices or significant concerns
identified by the Comptroller General, and their applicability
to public-private partnerships and feedback loops with respect
to U.S. efforts to combat money laundering and other forms of
illicit finance.
SEC. 205. FINCEN STUDY ON BSA VALUE.
(a) Study.--The Director of the Financial Crimes Enforcement
Network shall carry out a study on Bank Secrecy Act value.
(b) Report.--Not later than the end of the 1-year period beginning
on the date of enactment of this Act, the Director shall issue 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
containing all findings and determinations made in carrying out the
study required under this section.
(c) Classified Annex.--The report required under this section may
include a classified annex, if the Director determines it appropriate.
(d) Bank Secrecy Act Defined.--For purposes of this section, the
term ``Bank Secrecy Act'' has the meaning given that term under section
5312 of title 31, United States Code.
SEC. 206. SECTION 314(A) IMPROVEMENTS.
Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as
amended by section 109, is further amended by adding at the end the
following:
``(7) Point of contact list.--
``(A) In general.--The Secretary shall maintain a
list containing contact information for with respect to
a law enforcement agency, those individuals who serve
as points of contact for a Suspicious Activity Report
review committee.
``(B) Availability of list.--The Secretary shall
make the list of contact information described under
subparagraph (A) available to all financial
institutions and law enforcement agencies.''.
SEC. 207. SHARING OF THREAT PATTERN AND TREND INFORMATION.
Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as
amended by section 206, is further amended by adding at the end the
following:
``(8) Sharing of threat pattern and trend information.--
``(A) In general.--Not less than monthly, the
Secretary shall provide financial institutions with
typologies on emerging money laundering and counter
terror financing threat patterns and trends.
``(B) Information classification.--In providing
information pursuant to subparagraph (A), the Secretary
may provide public and sensitive information to
financial institutions, but may not provide classified
information, unless otherwise permitted by law.''.
SEC. 208. MODERNIZATION AND UPGRADING WHISTLEBLOWER PROTECTIONS.
(a) Rewards.--Section 5323(d) of title 31, United States Code, is
amended to read as follows:
``(d) Source of Rewards.--For the purposes of paying an award under
this section, there are authorized to be appropriated such sums as may
be necessary, and the Secretary may also use funds from the Department
of the Treasury Forfeiture Fund and the Department of Justice Assets
Forfeiture Fund.''.
(b) Whistleblower Incentives.--
Chapter 53 of title 31, United States Code, is amended--
(1) by inserting after section 5323 the following:
``Sec. 5323A. Whistleblower incentives
``(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 FinCEN under the Bank
Secrecy Act that results in monetary sanctions exceeding
$1,000,000.
``(2) FinCEN.--The term `FinCEN' means the Financial Crimes
Enforcement Network.
``(3) Monetary sanctions.--The term `monetary sanctions',
when used with respect to any judicial or administrative
action, means--
``(A) any monies, including penalties,
disgorgement, and interest, ordered to be paid; and
``(B) any monies deposited into a disgorgement fund
as a result of such action or any settlement of such
action.
``(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 FinCEN from any other source,
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 FinCEN, means any judicial or administrative action that is
based upon original information provided by a whistleblower
that led to the successful enforcement of the action.
``(6) Secretary.--The term `Secretary' means the Secretary
of the Treasury.
``(7) Whistleblower.--The term `whistleblower' means any
individual who provides, or 2 or more individuals acting
jointly who provide, information relating to a violation of
laws enforced by FinCEN, in a manner established, by rule or
regulation, by FinCEN.
``(b) Awards.--
``(1) In general.--In any covered judicial or
administrative action, or related action, the Secretary, under
such rules as the Secretary may issue and subject to subsection
(c), shall pay an award or awards to 1 or more whistleblowers
who voluntarily provided original information to FinCEN 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) Source of awards.--For the purposes of paying any
award under paragraph (1) there are authorized to be
appropriated such sums as may be necessary, and the Secretary
may also use funds from the Department of the Treasury
Forfeiture Fund and the Department of Justice Assets Forfeiture
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 Secretary.
``(B) Criteria.--In responding to a disclosure and
determining the amount of an award made, FinCEN staff
shall meet with the whistleblower to discuss evidence
disclosed and rebuttals to the disclosure, and--
``(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 mission of FinCEN in
deterring violations of the law by
making awards to whistleblowers who
provide information that lead to the
successful enforcement of such laws;
and
``(IV) such additional relevant
factors as the Secretary may establish
by rule; and
``(ii) shall not take into consideration
the balance of any fund described under section
5323(d).
``(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 FinCEN, a member, officer, or
employee of--
``(i) an appropriate regulatory agency;
``(ii) the Department of Justice;
``(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;
``(C) to any whistleblower who gains the
information through the performance of an audit of
financial statements required under the Bank Secrecy
Act and for whom such submission would be contrary to
its requirements; or
``(D) to any whistleblower who fails to submit
information to FinCEN in such form as the Secretary
may, by rule, require.
``(3) Statement of reasons.--For any decision granting or
denying an award, the Secretary shall provide to the
whistleblower a statement of reasons that includes findings of
fact and conclusions of law for all material issues.
``(d) Representation.--
``(1) Permitted representation.--Any whistleblower who
makes a claim for an award under subsection (b) 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 their
identity and provide such other information as the
Secretary may require, directly or through counsel for
the whistleblower.
``(e) 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 Secretary. 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 Secretary. The court shall review the
determination made by the Secretary in accordance with section 706 of
title 5.''; and
(2) in the table of contents for such chapter, by inserting
after the item relating to section 5323 the following new item:
``5323A. Whistleblower incentives.''.
SEC. 209. CERTAIN VIOLATORS BARRED FROM SERVING ON PUBLIC COMPANY
BOARDS.
Section 5321 of title 31, United States Code, is amended by adding
at the end the following:
``(f) Certain Violators Barred From Serving on Public Company
Boards.--
``(1) In general.--An individual found to have committed an
egregious violation of a provision of (or rule issued under)
this subchapter, section 21 of the Federal Deposit Insurance
Act, or section 123 of Public Law 91-508 shall be barred from
serving on the board of directors of a public company for a 10-
year period beginning on the date of such finding.
``(2) Definitions.--In this subsection:
``(A) Egregious violation.--With respect to an
individual, the term `egregious violation' means--
``(i) a felony criminal violation for which
the individual was convicted; and
``(ii) a civil violation where the
individual knowingly committed such violation
and the violation facilitated money laundering
or the financing of terrorism.
``(B) Public company.--The term `public company'
means an issuer the securities of which are traded on a
national securities exchange.
``(C) Other securities terms.--The terms `issuer'
and `national securities exchange' have the meaning
given those terms, respectively, under section 3 of the
Securities Exchange Act of 1934.''.
SEC. 210. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT VIOLATORS.
Section 5321 of title 31, United States Code, as amended by section
209, is further amended by adding at the end the following:
``(g) 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, or section 123 of Public Law 91-508, the Secretary 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. 211. JUSTICE ANNUAL REPORT ON DEFERRED AND NONPROSECUTION
AGREEMENTS.
(a) Annual Report.--The Attorney General shall issue an annual
report, every year for the five years beginning on the date of
enactment of this Act, to the Committees on Financial Services and the
Judiciary of the House of Representatives and the Committees on
Banking, Housing, and Urban Affairs and the Judiciary of the Senate
containing--
(1) a list of deferred prosecution agreements and
nonprosecution agreements that the Attorney General has entered
into during the previous year with any person with respect to a
violation or suspected violation of the Bank Secrecy Act;
(2) the justification for entering into each such
agreement;
(3) the list of factors that were taken into account in
determining that the Attorney General should enter into each
such agreement; and
(4) the extent of coordination the Attorney General
conducted with the Financial Crimes Enforcement Network prior
to entering into each such agreement.
(b) Classified Annex.--Each report under subsection (a) may include
a classified annex.
(c) Bank Secrecy Act Defined.--For purposes of this section, the
term ``Bank Secrecy Act'' has the meaning given that term under section
5312 of title 31, United States Code.
SEC. 212. RETURN OF PROFITS AND BONUSES.
Section 5322 of title 31, United States Code, is amended by adding
at the end the following:
``(e) Return of Profits and Bonuses.--A person convicted of
violating a provision of (or rule issued under) this subchapter,
section 21 of the Federal Deposit Insurance Act, or section 123 of
Public Law 91-508 shall--
``(1) in addition to any other fine under this section, be
fined in an amount equal to the profit gained by such person by
reason of such violation, as determined by the court; and
``(2) if such person is an individual who was a partner,
director, officer, or employee of a domestic financial
institution or nonfinancial trade or business at the time the
violation occurred, repay to such domestic financial
institution or nonfinancial trade or business any bonus paid to
such individual during the Federal fiscal year in which the
violation occurred.''.
SEC. 213. PROHIBITION ON TAX DEDUCTIONS FOR ATTORNEY'S FEES RELATED TO
BANK SECRECY ACT SETTLEMENTS AND COURT COSTS.
Section 162(f) of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``(6) Violations of the bank secrecy act.--In the case of a
payment described in paragraph (1) that is in relation to any
violation of the Bank Secrecy Act (as defined under section
5312 of title 31, United States Code), no deduction shall be
allowed under this chapter for attorney's fees related to such
payment.''.
SEC. 214. APPLICATION OF BANK SECRECY ACT TO DEALERS IN ART OR
ANTIQUITIES.
(a) In General.--Section 5312(a)(2) of title 31, United States
Code, is amended--
(1) in subparagraph (Y), by striking ``or'' at the end;
(2) by redesignating subparagraph (Z) as subparagraph (AA);
and
(3) by inserting after subsection (Y) the following:
``(Z) dealers in art or antiquities; or''.
(b) Rulemaking.--Not later than the end of the 180-day period
beginning on the date of the enactment of this Act, the Secretary of
the Treasury shall issue regulations to carry out the amendments made
by subsection (a).
(c) Effective Date.--Section 5312(a)(2)(Z) of title 31, United
States Code, as added by subsection (a), shall take effect after the
end of the 270-day period beginning on the date of the enactment of
this Act.
SEC. 215. REVISION TO GEOGRAPHIC TARGETING ORDER.
The Secretary of the Treasury shall revise the geographic targeting
order issued by the Financial Crimes Enforcement Network on November
15, 2018 (the ``Order''), so that the Order--
(1) applies to commercial real estate to the same extent as
the Order applies to residential real estate; and
(2) applies to a purchase made, at least in part, using an
in-kind transaction to the same extent as the Order applies to
a purchase made, at least in part, using currency or a
cashier's check, a certified check, a traveler's check, a
personal check, a business check, a money order in any form, a
funds transfer, or virtual currency.
TITLE III--MODERNIZING THE AML SYSTEM
SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.
Section 5318 of title 31, United States Code, as amended by section
203, is further amended by adding at the end the following:
``(p) Encouraging Innovation in Compliance.--
``(1) In general.--The financial agencies shall encourage
financial institutions to consider, evaluate, and, where
appropriate, responsibly implement innovative approaches to
meet the requirements of this subchapter, including through the
use of innovation pilot programs.
``(2) Exemptive relief.--The Secretary, pursuant to
subsection (a), may provide exemptions from the requirements of
this subchapter if the Secretary determines such exemptions are
necessary to facilitate the testing and potential use of new
technologies and other innovations.
``(3) Financial agency defined.--In this subsection, the
term `financial agency' means the Department of the Treasury,
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the National Credit
Union Administration, the Office of the Comptroller of the
Currency, and the Securities and Exchange Commission.''.
SEC. 302. INNOVATION LABS.
(a) In General.--Title 31, United States Code, is amended by
inserting after section 5326 the following:
``Sec. 5327. Innovation Labs
``(a) Establishment.--There is established within each financial
agency an Innovation Lab.
``(b) Director.--The head of each Innovation Lab shall be a
Director, to be appointed by the head of the applicable financial
agency.
``(c) Duties.--The duties of the Innovation Lab shall be--
``(1) to provide outreach to law enforcement agencies,
financial institutions, and other persons (including vendors
and technology companies) with respect to innovation and new
technologies used to comply with the requirements of the Bank
Secrecy Act; and
``(2) to support the implementation of responsible
innovation and new technology, in a manner that complies with
the requirements of the Bank Secrecy Act.
``(d) FinCEN Lab.--The Innovation Lab established under subsection
(a) within the Department of the Treasury shall be a lab within the
Financial Crimes Enforcement Network.
``(e) Financial Agency Defined.--In this section, the term
`financial agency' means the Department of the Treasury, the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the National Credit Union Administration, the Office of
the Comptroller of the Currency, and the Securities and Exchange
Commission.''.
(b) Clerical Amendment.--The table of contents for chapter 53 of
title 31, United States Code, is amended by inserting after the item
relating to section 5326 the following:
``5327. Innovation Labs.''.
SEC. 303. INNOVATION COUNCIL.
(a) Establishment.--There is established the Innovation Council
(hereinafter in this section referred to as the ``Council''), which
shall consist of each Director of an Innovation Lab established under
section 302 and the Director of the Financial Crimes Enforcement
Network.
(b) Chair.--The Director of the Innovation Lab of the Department of
the Treasury shall serve as the Chair of the Council.
(c) Duty.--The members of the Council shall coordinate on
activities related to innovation under the Bank Secrecy Act (as defined
under section 5312 of title 31, United States Code).
(d) Meetings.--The meetings of the Council--
(1) shall be at the call of the Chair, but in no case may
the Council meet less than quarterly;
(2) may include open and closed sessions, as determined
necessary by the Council; and
(3) may include participation by public and private
entities and law enforcement agencies.
(e) Report.--The Council shall issue an annual report to Congress
on the activities of the Council during the previous year and any
legislative recommendations that the Council may have.
SEC. 304. PARALLEL RUNS RULEMAKING.
Section 5318 of title 31, United States Code, as amended by section
301, is further amended by adding at the end the following:
``(q) Parallel Runs Rulemaking.--The Secretary of the Treasury, in
consultation with the Director of the Financial Crimes Enforcement
Network and the head of each agency to which the Secretary has
delegated duties or powers under subsection (a), shall issue a rule to
specify--
``(1) with respect to technology and processes designed to
facilitate compliance with the Bank Secrecy Act requirements,
under what circumstances it is necessary for a financial
institution to test new technology and processes alongside
legacy technology and processes (`parallel runs');
``(2) if parallel runs are required, what tests must be
completed; and
``(3) in what instances or under what circumstances a
financial institution may replace or terminate such legacy
technology and processes for any examinable technology or
process.''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Trade.
Reported (Amended) by the Committee on Financial Services. H. Rept. 116-245, Part I.
Reported (Amended) by the Committee on Financial Services. H. Rept. 116-245, Part I.
Committee on Ways and Means discharged.
Committee on Ways and Means discharged.
Placed on the Union Calendar, Calendar No. 195.
Mr. Scott, David moved to suspend the rules and pass the bill, as amended.
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Considered under suspension of the rules. (consideration: CR H8494-8503)
DEBATE - The House proceeded with forty minutes of debate on H.R. 2514.
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H8494-8501)
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H8494-8501)
Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.