113 HR 3317 IH: Holding Individuals Accountable and Deterring Money Laundering Act
U.S. House of Representatives
2013-10-23
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EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of contents(a)This Act may be cited as the Holding Individuals Accountable and Deterring Money Laundering Act
.(b)The table of contents for this Act is as follows:Sec. 1. Short title; table of contents.Sec. 2. Findings.Title I—Holding executives responsible for violationsSec. 101. Penalties for violations of the Bank Secrecy Act.Sec. 102. Criminal penalties.Sec. 103. Strengthening civil injunctive authority.Sec. 104. Clarification of removal and prohibition authority under the FDIA.Sec. 105. Independent litigation authority for FinCEN.Sec. 106. Treatment of executive compensation and personal liability.Sec. 107. Corporate governance and the legal responsibilities.Title II—Strengthening of regulatory oversight and accountabilitySec. 201. Reporting and oversight of Bank Secrecy Act-related enforcement actions.Sec. 202. Consideration of BSA compliance in management ratings.Title III—Clarification of safe harbor protectionsSec. 301. Safe harbor protections.Title IV—Strengthening requirements and closing loopholesSec. 401. Expanding the crimes that can be a predicate offense to money laundering.Sec. 402. Closing loopholes in Bank Secrecy Act reporting.Sec. 403. Definition of an institution-affiliated party.Title V—Whistleblower protectionsSec. 501. Modernization and upgrading whistleblower protections.Title VI—Sense of the Congress regarding criminal penaltiesSec. 601. Sense of the Congress.Title VII—Strengthening global commitmentsSec. 701. International coordination.Sec. 702. Sense of Congress regarding list of countries at high risk for money laundering.2.The Congress finds the following:(1)Money laundering is a serious threat to our national and economic security. The scale, efficiency, and complexity of the U.S. financial system make it a prime target for those who seek to conceal and move the proceeds of illicit activity.(2)The spate of recent high-profile enforcement actions against some of the largest and most sophisticated financial institutions raises troubling questions about the effectiveness of U.S. domestic anti-money laundering and counter-terrorism financing regulatory, compliance and enforcement efforts.(3)Money launderers have proven to adapt quickly in order to avoid detection. U.S. anti-money laundering laws and regulations must be rigorously reviewed and constantly updated to close loopholes and address the changing tactics employed by bad actors.(4)Given the global nature of money laundering and terrorist financing and the increasing interrelatedness of the global financial system, a secure global framework is essential to the integrity of the U.S. financial system.(5)Efforts to stanch the flow of illegal money across the world to drug cartels and terrorist organizations should be a top U.S. priority. To achieve this mission, extensive collaboration among financial regulators, the Department of Treasury, the Department of State, the Department of Justice and state and federal law enforcement agencies is required.(6)U.S. anti-money laundering laws should meet international standards set by the Financial Action Task Force.(7)Without serious consequences for institutions and individuals who fail to protect financial institutions from illicit financial activity – including significant fines, banning individuals from the industry, and prison sentences for those who seek to actively evade anti-money laundering controls, financial institutions and individuals will continue to avoid compliance with U.S. anti-money laundering rules and regulations.(8)Effective anti-money laundering programs must emphasize sound corporate governance including business line accountability and clear lines of legal responsibility for individuals, including board members and chief executive officers.(9)Avoiding money laundering risks requires an effective anti-money laundering program and a strong institutional compliance culture, with written standards, knowledgeable and adequate staff, strong monitoring processes, effective anti-money laundering training, and compensation structures that reward compliance.(10)Anti-money laundering deficiencies often reflect weaknesses in the management of a financial firm, which can in turn adversely affect the firm’s overall safety and soundness. Failure to account for management deficiencies in this context may perpetuate a false perception of the stability of financial firms.(11)Anti-money laundering examinations in recent years at times failed to recognize the cumulative effect of the violations they cited, instead narrowly focusing their attention on individual banking units. The failure to review the cumulative effect of such violations permitted national banks to avoid and delay correcting problems, which allowed massive problems to occur before serious enforcement actions were taken.(12)Independent contractors often play a central role in monitoring and auditing the overall adequacy and effectiveness of a bank’s compliance program under the Bank Secrecy Act. Any failure to hold these independent entities to the same standard as any other party who participates in the affairs of a bank may jeopardize the efficacy of a bank’s anti-money laundering program.(13)Collaboration is an essential component of the U.S. strategy against money laundering, and is critical to our national security. U.S. law enforcement agencies are most effective when they work together by sharing information, insight, and data.(14)The flow of information related to suspicious activity from financial institutions to law enforcement plays a key role in facilitating the disruption of terrorist networks that seek to harm the United States. The flow of such information depends on a high degree of certainty that financial institutions will be protected from civil liability when sharing such information with federal law enforcement agencies.(15)Whistleblower rights and protections play an important role in helping to ensure corporate integrity. Robust protections for whistleblowers and enhanced rewards for informants will incentivize compliance with anti-money laundering rules and procedures, and encourage the provision of valuable information to regulators and law enforcement agencies.<enum>I</enum><header>Holding executives responsible for violations</header><section id="H264B1E57BBC846A5B4CB5D5AE5E39370"><enum>101.</enum><header>Penalties for violations of the Bank Secrecy Act</header><subsection id="H1715DB3424C14647B0FE8D4BEFEEC262"><enum>(a)</enum><header>Civil monetary penalties for willful violations</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5321">Section 5321(a)</external-xref> of title 31, United States Code, is amended—</text><paragraph id="HF96F9F90F4844AC2A107572DD40677AD"><enum>(1)</enum><text>by striking <quote><short-title>(a)(1) A domestic financial institution</short-title></quote> and inserting the following:</text><quoted-block display-inline="no-display-inline" id="HDACB05BC6BB54B73BF655F69C368FAE6" style="USC"><subsection id="H28961E120DF840E5A9CEA3E4431DC0A4"><enum>(a)</enum><header>In general</header><paragraph id="H3B655418D99544B38718CA8571B102AD"><enum>(1)</enum><header>Civil monetary penalties for willful violations</header><text display-inline="yes-display-inline">A domestic financial institution</text></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph><paragraph id="HC9BD76BC2B1841C9ADEE6C962483390C"><enum>(2)</enum><text>in paragraph (1)—</text><subparagraph id="H998146D68FE7428882B3CD7DF13A1EC0"><enum>(A)</enum><text>by striking <quote><short-title>willfully violating</short-title></quote> each place such term appears and inserting <quote><short-title>willfully violating, or willfully causing any violation of,</short-title></quote>;</text></subparagraph><subparagraph id="H1FCA64788ED54E178E721652A9142882"><enum>(B)</enum><text>by striking <quote><short-title>the amount (not to exceed $100,000) involved in the transaction (if any) or $25,000</short-title></quote> and inserting <quote><short-title>10 times the amount (not to exceed $10,000,000) involved in the transaction (if any) or $250,000</short-title></quote>; and</text></subparagraph><subparagraph id="HCF454A59B75F4147B0EB6164F672EA17"><enum>(C)</enum><text display-inline="yes-display-inline">by adding at the end the following: <quote><short-title>In determining appropriate monetary penalty amounts under this paragraph, the Secretary has the authority to ensure that penalty amounts are commensurate with the nature of the violations, any patterns of violations, and, with respect to a financial institution or nonfinancial trade or business, the size, capitalization and market share of such institution or trade or business.</short-title></quote>; and</text></subparagraph></paragraph><paragraph id="HAB1A0BDBE00F4B10B8C5FB9A154085CA"><enum>(3)</enum><text>in paragraph (4)(A), by inserting after <quote><short-title>who violates</short-title></quote> the following: <quote><short-title>, or causes any violation of,</short-title></quote>.</text></paragraph></subsection><subsection id="H063F5B4A6B174816ABD224297D2C0389"><enum>(b)</enum><header>Civil monetary penalties for negligent violations</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5321">Section 5321(a)(6)</external-xref> of title 31, United States Code, is amended to read as follows:</text><quoted-block display-inline="no-display-inline" id="HB136B80EF4DD4688864BE40D15ABF382" style="USC"><paragraph display-inline="no-display-inline" id="H5418BFD552794930AB7C9B71999DD285" indent="up1"><enum>(6)</enum><header>Negligence</header><subparagraph id="HC954FA694187437392D7C2443C9EB6E1"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury may impose a civil money penalty, for negligent violations of any provision of this subchapter or any regulation prescribed under this subchapter, of not more than—</text><clause id="H72E89251661E486D83DCB5654C730903"><enum>(i)</enum><text display-inline="yes-display-inline">$50,000, with respect to a financial institution or nonfinancial trade or business; and</text></clause><clause id="H502417906DD2459F84F7DE7260BCCB95"><enum>(ii)</enum><text display-inline="yes-display-inline">$5,000, with respect to any partner, director, officer, or employee of an institution, trade, or business.</text></clause></subparagraph><subparagraph id="H45FA9B9D2C674133A5D90628D9436A1F"><enum>(B)</enum><header>Violations of the requirement to maintain procedures to ensure compliance</header><text display-inline="yes-display-inline">For a violation of a regulation prescribed under section 5318(a)(2), a separate violation occurs for each day the violation continues and at each office, branch, or place of business at which a violation occurs or continues.</text></subparagraph><subparagraph id="H06C3BE8010FB4B2EAB2D38C8543FFEFB"><enum>(C)</enum><header>Determination of penalty amount</header><text display-inline="yes-display-inline">In determining appropriate monetary penalty amounts under this paragraph, the Secretary has the authority to ensure that penalty amounts are commensurate with the nature of the violations, any patterns of violations, and, with respect to a financial institution or nonfinancial trade or business, the size, capitalization and market share of such institution or trade or business.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="HC88CDBEBDB394C2085627F3CD64DB6B7"><enum>102.</enum><header>Criminal penalties</header><subsection id="H4FD3E7F73EDD4C86B639CC6106F3336E"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5322">Section 5322</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H25EF20F4691C4C3FADF0BAB303FAD703"><enum>(1)</enum><text>by redesignating subsections (c) and (d) as subsections (d) and (e), respectively;</text></paragraph><paragraph id="HE303B7C4CD6D461793927DD0F29DEDF5"><enum>(2)</enum><text>by inserting after subsection (b) the following:</text><quoted-block display-inline="no-display-inline" id="H97296437ACDC4E6CAA1A29BE6EAA85B4" style="USC"><subsection id="HC15486ABB6BA47FC941395FBD7235739"><enum>(c)</enum><header>Facilitating evasion</header><text display-inline="yes-display-inline">In the case of a person described under subsection (a) or (b) who additionally takes steps to facilitate evasion of a program or controls under a regulation prescribed or order issued under this subchapter (except section 5315 or 5324 of this title or a regulation prescribed under section 5315 or 5324), section 21 of the Federal Deposit Insurance Act, or section 123 of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref>, the maximum prison terms under such subsections shall be treated as 20 years.</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H6177E393ECFB48F1833493C92A3A5F4B"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="HF9F181F5A5EF454D9CA8678ED7A946D6" style="USC"><subsection id="H2090DA61DBB54DF9A51C1D7EA742BFC7"><enum>(f)</enum><header>Report</header><text display-inline="yes-display-inline">In any case in which the Department of Justice settles a case with an individual or institution for violations under the this subchapter in exchange for a monetary penalty, the Department shall report to the Congress on why it did or did not pursue prison sentences in conjunction with the monetary penalty.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HF43D441BF0924DAFBD2400BD6997AD5F"><enum>(b)</enum><header>GAO review of Bank Secrecy Act criminal sentences and mandatory minimum sentencing</header><paragraph id="HE0716CB1E3684E6082AA627F5B3BC32F"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall carry out a study of the mandatory minimum sentencing laws and guidelines for narcotics-related offenses and the prosecutorial discretion provided to the Department of Justice in determining criminal penalties for persons found guilty of violating Federal anti-money laundering laws. In carrying out such study, the Comptroller General shall compare and contrast the severity of the two sets of felonies.</text></paragraph><paragraph id="HA0222099F83C4A8ABA515642C0968351"><enum>(2)</enum><header>Report</header><text>Not later than the end of the 6-month period following the date of the enactment of this Act, the Comptroller General shall issue a report to the Congress containing all findings and determinations made in carrying out the study required by subsection (a), including any disparities identified in the appropriateness of the differing sentencing procedures and recommendations for establishing a more balanced sentencing system for Federal felonious acts.</text></paragraph></subsection></section><section id="HD1511A9706FE4417A4BB5F4F9F239A26"><enum>103.</enum><header>Strengthening civil injunctive authority</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5320">Section 5320</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H54DF7AA7394D48D0840C742F70F28869"><enum>(1)</enum><text>by striking <quote><short-title>When the Secretary</short-title></quote> and inserting the following:</text><quoted-block display-inline="no-display-inline" id="HDB19C842C9554266BEC04F1AC249DFF1" style="OLC"><subsection id="HC7CD86DE7F164683A7A839F716577A75"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">When the Secretary</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="HA60EC7A743FB455EA89436609B4828DF"><enum>(2)</enum><text>by inserting after <quote><short-title>will violate</short-title></quote> the following: <quote><short-title>or has caused, is causing, or will cause a violation of</short-title></quote>; and</text></paragraph><paragraph id="HD418B4EEE74342AE8E523C7AF288E2BF"><enum>(3)</enum><text>by inserting at the end the following:</text><quoted-block display-inline="no-display-inline" id="H8939664E24F44C0FA18359AA38BD8FBC" style="OLC"><subsection id="HB957ECCF261548BCB65CE19732E4DB1D"><enum>(b)</enum><header>Prohibition on certain individuals</header><text display-inline="yes-display-inline">In any proceeding under subsection (a), the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall determine, any individual who violated this subchapter, or a regulation prescribed or order issued under this subchapter, from acting as an officer or director of a financial institution if the person’s conduct demonstrates unfitness to serve as an officer or director of a financial institution.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="HA0B982A04ABC4928902A8B2E98B3706F"><enum>104.</enum><header>Clarification of removal and prohibition authority under the FDIA</header><text display-inline="no-display-inline">Section 8(e)(2)(A) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1818">12 U.S.C. 1818(e)(2)(A)</external-xref>) is amended—</text><paragraph id="H1EDF2B4466C6425F9AC6378D0B0916EE"><enum>(1)</enum><text>in clause (i), by striking <quote><short-title>was not inadvertent or unintentional</short-title></quote> and inserting <quote><short-title>involved a reckless disregard for the law or any applicable regulations or prior order of the appropriate Federal banking agency</short-title></quote>; and</text></paragraph><paragraph id="HE97F8C80609644C19D6FA0B0D3CF25B0"><enum>(2)</enum><text>in clause (ii), by striking <quote><short-title>has knowledge</short-title></quote> and inserting <quote><short-title>knew, or should have known,</short-title></quote>.</text></paragraph></section><section id="H6890175BFFC34D3EA326F228B63DD30E"><enum>105.</enum><header>Independent litigation authority for FinCEN</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/310">Section 310</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H7F197E3FAA724384897D1361B05EA756"><enum>(1)</enum><text>by redesignating subsection (d) as subsection (e); and</text></paragraph><paragraph id="H4010020E70DE46109E81025487DD2A43"><enum>(2)</enum><text>by inserting after subsection (c) the following:</text><quoted-block display-inline="no-display-inline" id="H36924EECD8D248478114BF36EBB79ED6" style="USC"><subsection id="H252153ED819C47CF98835A3F54BFA5D2"><enum>(d)</enum><header>Independent litigation authority</header><text>FinCEN may act in its own name and through its own attorneys in enforcing any provision of subchapter II of chapter 53, section 21 of the Federal Deposit Insurance Act, section 123 of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref>, any rules thereunder, or any other law or regulation, or in any action, suit, or proceeding relating to such laws or regulations to which the Financial Crimes Enforcement Network is a party.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="HC6F0D8E56785426693AF02430069B0D2"><enum>106.</enum><header>Treatment of executive compensation and personal liability</header><subsection id="HDCCE2A2CD9B24E7192F676773E705DA5"><enum>(a)</enum><header>Certain executive compensation incentives barred</header><text display-inline="yes-display-inline">The appropriate Federal banking agencies, the Securities and Exchange Commission, the Commodities Futures Trading Commission, and the Financial Crimes Enforcement Network shall issue regulations prohibiting financial institutions that are subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, from providing executive compensation based on any criteria that could undermine compliance by individuals with the requirements of subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code, section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>), or section 123 of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref>.</text></subsection><subsection id="H92B35B626C534B37B1F7B63FB7B233E5"><enum>(b)</enum><header>No avoidance of personal liability</header><paragraph id="HE739574D91D4419B959C935D4772E04C"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">An officer, director, employee, or other institution-affiliated party of a financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, who is required by a Federal bank secrecy law that provides for personal liability, or any rule or order promulgated by an appropriate Federal banking agency, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or the Financial Crimes Enforcement Network thereunder, to repay previously earned executive compensation or pay a civil money penalty—</text><subparagraph commented="no" id="H5061A78BE3604A7485DEEA7815CDBE8E"><enum>(A)</enum><text>shall be personally liable for the amounts so owed; and</text></subparagraph><subparagraph id="HF8FA432F4CE34104958EFE5475902615"><enum>(B)</enum><text>may not, directly or indirectly, insure or hedge against, or otherwise transfer the risks associated with, personal liability for the amounts so owed.</text></subparagraph></paragraph><paragraph id="H5B46A4EBC2FA40CE9D3DE933C2ADC0DB"><enum>(2)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Paragraph (1) shall not preclude a person from being provided funds necessary to defend against an action to recover previously earned executive compensation or a civil money penalty described under paragraph (1)—</text><subparagraph id="H49140608FBC64BE998BD12C62F29BD83"><enum>(A)</enum><text display-inline="yes-display-inline">from the relevant financial institution subject to an anti-money laundering program under chapter X of title 31, Code of Federal Regulations;</text></subparagraph><subparagraph id="H2CEE24EFD5FA47068D231FDC7F42CC0B"><enum>(B)</enum><text>under an insurance policy; or</text></subparagraph><subparagraph id="HAC5314EBB9D34440B6CC42D3E29C33FE"><enum>(C)</enum><text>pursuant to court order.</text></subparagraph></paragraph></subsection><subsection id="H9F0C9E17BB5F4BA38B195E17345A26AD"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section:</text><paragraph id="H2B063A3BB9E742D89E7721C87CE716F6"><enum>(1)</enum><header>Appropriate Federal banking agency</header><text display-inline="yes-display-inline">The term <term>appropriate Federal banking agency</term> has the meaning given such term under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph><paragraph id="H633B29DD04284851A319C880454159AF"><enum>(2)</enum><header>Executive compensation</header><text display-inline="yes-display-inline">The term <quote><short-title>executive compensation</short-title></quote> means anything of value, regardless of the form in which provided, that is given by any institution subject to subsection (a) or its parent company to an officer, director, employee, or other institution-affiliated party in return for that individual’s service to such entity.</text></paragraph><paragraph id="HEE63743413C4472DBB7C77EE0F370B09"><enum>(3)</enum><header>Federal bank secrecy law</header><text>The term <term>Federal bank secrecy law</term> means—</text><subparagraph id="H7A35420E2F31407A9052023F4BE67495"><enum>(A)</enum><text>the reporting requirements set forth in section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>);</text></subparagraph><subparagraph id="HFF14ACFBD0AB47EE886CFAC3A3B09ED9"><enum>(B)</enum><text>section 123 of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref>; and</text></subparagraph><subparagraph id="H6E9A2A858EEA489996D6B4AF8B4EA759"><enum>(C)</enum><text display-inline="yes-display-inline">subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code.</text></subparagraph></paragraph><paragraph id="H0FE24407F6F8487F8CA00E68CB9CDFF3"><enum>(4)</enum><header>Institution-affiliated party</header><text>The term <term>institution-affiliated party</term>—</text><subparagraph id="H945E133B1A98464D803D70FC15D01185"><enum>(A)</enum><text display-inline="yes-display-inline">has the meaning given such term under subsection (u) of section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>); and</text></subparagraph><subparagraph id="H8A4128A9834A4907ACF4AE5CDF371606"><enum>(B)</enum><text display-inline="yes-display-inline">shall apply with respect to an institution subject to subsection (a) and its parent company to the same extent as such subsection applies to an insured depository institution.</text></subparagraph></paragraph></subsection></section><section id="H450BB83D6EEE4628B4B7F79FB6A45E10"><enum>107.</enum><header>Corporate governance and the legal responsibilities</header><subsection id="H71D0F63FCA2A4A95B8557FAAD8959E47"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">Chapter 53</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H44B6813225E94685BC1A89649C45F326"><enum>(1)</enum><text>by inserting after section 5322, the following:</text><quoted-block display-inline="no-display-inline" id="H6B9F829AD56A4EF2ADD00FA88B1F0450" style="USC"><section id="H81DA30F9522D4098B2B4075A34BE8D6E"><enum>5322A.</enum><header>Corporate governance and the legal responsibility of officers and employees</header><subsection id="H1C62B16FCFCB42E1A3F5009EC4BC53A0"><enum>(a)</enum><header>Ensuring compliance</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in consultation with the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodities Futures Trading Commission, shall issue regulations requiring each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, to ensure compliance with the anti-money laundering program requirements described under section 5318(h) by establishing written policies, procedures, and risk management standards for ensuring compliance with the requirements of this subtitle that—</text><paragraph id="HBEBE93EA79F84971810AFB612A08F04C"><enum>(1)</enum><text display-inline="yes-display-inline">require the head of compliance for each business line of such institution to make regular reports directly to the board of directors and the chief executive officer of such institution on the business line’s compliance activities;</text></paragraph><paragraph id="H627588FB7BC14B2E98F3F69DFE4C9340"><enum>(2)</enum><text display-inline="yes-display-inline">require the board to certify each report received pursuant to paragraph (1);</text></paragraph><paragraph id="H1BA0BB2F7D1C42FF91F01B50D8602B5E"><enum>(3)</enum><text display-inline="yes-display-inline">ensure adequate staffing and funding for entities within the institution responsible for compliance with the requirements of this subtitle; and</text></paragraph><paragraph id="H9020D2091A8B4196A36CD803C6322BE4"><enum>(4)</enum><text display-inline="yes-display-inline">periodically test the effectiveness of the institution’s programs for compliance with the requirements of this subtitle.</text></paragraph></subsection><subsection id="HAF2A06CA4C8D482886479005419DD7B6"><enum>(b)</enum><header>Legal responsibility of certain officers and employees</header><text display-inline="yes-display-inline">With respect to any violation of this subtitle by a each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, any officer or other employee who was in a position that would have enabled such officer or employee to materially affect compliance with the requirements of this subtitle shall also be in violation of this subtitle, if such officer or other employee knew, or should have known, that such violation was being committed and did not take meaningful steps to stop such violation.</text></subsection><subsection id="HEC24B0AA9B0D4B8CBB0724BCD850E1A7"><enum>(c)</enum><header>Clawback employment provision</header><text display-inline="yes-display-inline">Each financial institution that is subject to an anti-money laundering program requirement under chapter X of title 31, Code of Federal Regulations, shall, in each employment agreement entered into by such institution, include a provision that gives the institution the right to require the repayment of any bonus or other compensation paid to the employee in any case where such employee was violating a provision of this subchapter and knew, or should have known, of such violation.</text></subsection><subsection id="HB08EEC027C23446A98D600DA8229691B"><enum>(d)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>appropriate Federal banking agency</term> has the meaning given such term under section 3 of the Federal Deposit Insurance Act (12 U.S.C.1813).</text></subsection></section><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H61E7255DCB6741CAA92619F8B57FCF18"><enum>(2)</enum><text>in the table of contents for such chapter, by inserting after the item relating to section 5322 the following new item:</text><quoted-block display-inline="no-display-inline" id="H38C8623421D44DDDA512B943F759573D" style="USC"><toc regeneration="no-regeneration"><toc-entry level="section">5322A. Corporate governance and the legal responsibility of officers and employees</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H4A8A8FE2B39C478EB10FCB2A80CCA05C"><enum>(b)</enum><header>Effective date</header><text>The amendments made by subsection (a) shall apply to a financial institution (as such term is defined under <external-xref legal-doc="usc" parsable-cite="usc/31/5312">section 5312</external-xref> of title 31, United States Code) after the end of the 6-month period beginning on the date of the enactment of this Act.</text></subsection></section><enum>II</enum><header>Strengthening of regulatory oversight and accountability</header><section id="HB2F89E29CC8D4E53917B5017D9F737AA"><enum>201.</enum><header>Reporting and oversight of Bank Secrecy Act-related enforcement actions</header><subsection id="HA77222C0C90A4F3993720C9FA0DC297C"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">Chapter 53</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H3B432CD1386345E287FBC1F9C373D3B5"><enum>(1)</enum><text>by inserting after section 5326 the following:</text><quoted-block display-inline="no-display-inline" id="HC19B1CAF4BE946A9BBF5DF2F4CF6D42A" style="USC"><section id="H8C523D8425844FA4B17BBE29CE1E7BDF"><enum>5327.</enum><header>Oversight of examination and enforcement activities</header><subsection id="HD204BD72F4CF4A2FBCF89778984FDBDB"><enum>(a)</enum><header>Reporting of enforcement activities to FinCEN</header><text display-inline="yes-display-inline">Each appropriate Federal banking agency, the Securities and Exchange Commission, and the Commodity Futures Trading Commission shall report to FinCEN on each formal and informal enforcement or supervisory action, including each matter requiring attention, and each matter requiring immediate attention, related to a violation of this subchapter or anti-money laundering deficiency, taken by such agency to enforce the requirements of this subchapter, including, for each such action—</text><paragraph id="HB11683F5CDF847DFAFF390496A34F8F9"><enum>(1)</enum><text>the type of violation or deficiency with respect to which the enforcement or supervisory action was taken; and</text></paragraph><paragraph id="HE769FD6AA748485AAB6DDE7637F18B09"><enum>(2)</enum><text display-inline="yes-display-inline">the specific type of formal or informal enforcement or supervisory action taken.</text></paragraph></subsection><subsection id="HF33637BFF385491E86179AD7B27D5251"><enum>(b)</enum><header>Review of reports by FinCEN</header><paragraph id="H45113E358D964B6EB9932F17A8533F93"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">FinCEN shall review all reports submitted by agencies under subsection (a) to identify systemic or repeated instances of non-compliance and, if FinCEN determines that an agency has failed to adequately or appropriately carry out the agency’s enforcement responsibilities with respect to the requirements of this subchapter, FinCEN shall issue a report to such agency containing an explanation of FinCEN’s determination.</text></paragraph><paragraph id="HFA2EC8DAF00B4DD481B135DDA6B0F218"><enum>(2)</enum><header>Report to the Congress</header><text>FinCEN shall issue an annual report to the Congress containing—</text><subparagraph id="H622855B5EA1842679559D678D8EC4427"><enum>(A)</enum><text display-inline="yes-display-inline">a summary of all formal and informal enforcement or supervisory actions for which FinCEN received notification from the agencies under subsection (a), but without any privileged or confidential information contained in such report, as identified by the agency submitting the report; and</text></subparagraph><subparagraph id="HE64BE0F826F8439CA67FED8CEE22B64F"><enum>(B)</enum><text display-inline="yes-display-inline">any recommendations made by FinCEN to such agencies in response to a determination by FinCEN that the agency failed to adequately or appropriately carry out the agency’s enforcement or supervisory responsibility or failed to take adequate or appropriate corrective action in response to any individual violation or pattern of violations.</text></subparagraph></paragraph></subsection><subsection id="H9EB28FD1D64A4C189EFB65FFF3303283"><enum>(c)</enum><header>Inspector General review of procedures</header><text display-inline="yes-display-inline">The Inspector General of each appropriate Federal banking agency shall—</text><paragraph id="HB08217F01B7A4AFE9EC8947137288A37"><enum>(1)</enum><text>carry out at least one review each year of the agency’s examination and enforcement activities with respect to ensuring compliance with the requirements of this subchapter and ensuring adequate resources are being devoted to such enforcement; and</text></paragraph><paragraph id="H589EC2B087E44F2599ADFF2B9468CFB9"><enum>(2)</enum><text>make such reviews available to the public, including on the website of the Inspector General.</text></paragraph></subsection><subsection id="HC272D4980A024D73BCEFE0782A5C3DD3"><enum>(d)</enum><header>Definitions</header><text>For purposes of this section:</text><paragraph id="H052CAF53118745028081FCE37908F9EF"><enum>(1)</enum><header>FinCEN</header><text>The term <term>FinCEN</term> means the Financial Crimes Enforcement Network.</text></paragraph><paragraph id="H55208598239C4EF6AD3A1C8C877D666C"><enum>(2)</enum><header>Other terms</header><text>The terms <term>appropriate Federal banking agency</term> and <term>insured depository institution</term> have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C.1813).</text></paragraph></subsection></section><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H51E38834ACFA45C1903FB00646286AFD"><enum>(2)</enum><text>in the table of contents for such chapter, by inserting after the item relating to section 5326 the following new item:</text><quoted-block display-inline="no-display-inline" id="H9E1E6619558E45198FA6A09882864D02" style="USC"><toc regeneration="no-regeneration"><toc-entry level="section">5327. Oversight of examination and enforcement activities.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="HC5DE8B2F245944E7AD7654B88B4EC44B"><enum>(b)</enum><header>Confidentiality of information submitted to FinCEN</header><text><external-xref legal-doc="usc" parsable-cite="usc/31/310">Section 310</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H5D76967E66644C93A4AA5B4E76C98655"><enum>(1)</enum><text>by redesignating subsection (d) as subsection (e); and</text></paragraph><paragraph id="HE42FAD2AA8C84026BADC78E2A4D7F75D"><enum>(2)</enum><text>by inserting after subsection (c) the following:</text><quoted-block display-inline="no-display-inline" id="H173D11379A944AFBAD572D0B949C6929" style="USC"><subsection id="H352FDAE83DDE461EBAB91D770C43258E"><enum>(d)</enum><header>Confidentiality of information submitted to FinCEN</header><text display-inline="yes-display-inline">The submission by any appropriate Federal banking agency (as such term is defined under section 3 of the Federal Deposit Insurance Act) of any information to FinCEN for any purpose in the course of any supervisory or regulatory process of such agency shall not be construed as waiving, destroying, or otherwise affecting any privilege, including confidentiality of supervisory information, that any agency or person may claim with respect to such information under Federal or State law.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="H8E9E443E9F2F471FAB34F5D8924823EF"><enum>202.</enum><header>Consideration of BSA compliance in management ratings</header><subsection id="H3C6EFD023FE94492AEA476138EC49CE8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">To the extent there are ratings of a depository institution’s management and internal controls, the appropriate Federal banking agencies shall consider the extent to which the institution complies with the requirements of the Bank Secrecy Act.</text></subsection><subsection id="H23797B2EC89B4D80A3EAFDBA59457498"><enum>(b)</enum><header>Definitions</header><paragraph id="HA2F5DA9B580C4C67BD71E156FE8369DE"><enum>(1)</enum><header>Bank Secrecy Act</header><text>The term <term>Bank Secrecy Act</term> has the meaning given the term <term>Federal bank secrecy law</term> under section 106(c)(5).</text></paragraph><paragraph id="H509FE31B6B634008AFF18A1F827ECA41"><enum>(2)</enum><header>Other definitions</header><text>The terms <term>appropriate Federal banking agency</term> and <term>depository institution</term> have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph></subsection></section><enum>III</enum><header>Clarification of safe harbor protections</header><section id="HC36A98D89ECE4AE3BDCF89DC4207BB9F"><enum>301.</enum><header>Safe harbor protections</header><subsection id="HC649BD4A323643F4A737A19A0264B330"><enum>(a)</enum><header>Disclosure to Government agencies</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5318">Section 5318(g)(3)(B)</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H15A41F9C5BC24AA0A53EF663D0E673A5"><enum>(1)</enum><text>in clause (i), by striking <quote><short-title>or</short-title></quote> at the end;</text></paragraph><paragraph id="HFAD8982D26DD48D9B54AC99CEB90BF1D"><enum>(2)</enum><text>in clause (ii), by striking the period and inserting <quote><short-title>; or</short-title></quote>; and</text></paragraph><paragraph id="H5B4FA9B6E1C54F8EB67094265D82B426"><enum>(3)</enum><text>by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="HEFBB9BB54BCB4EB98F40BE0D60E6DD3D" style="USC"><clause id="HDC73BBBB080B4753B1822D4435A4A66F"><enum>(iii)</enum><text display-inline="yes-display-inline">any duty or requirement of a financial institution or any director, officer, employee, or agent of such institution to demonstrate that a disclosure described in subparagraph (A) is made in good faith.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H47A8F79550EF4FB7AB9CEE020F5F840C"><enum>(b)</enum><header>Disclosure to financial institutions</header><text>Section 314 of the USA PATRIOT Act (<external-xref legal-doc="usc" parsable-cite="usc/31/5311">31 U.S.C. 5311</external-xref> note) is amended—</text><paragraph id="H132A60EC455A4F9D917EF2013013FF6B"><enum>(1)</enum><text>in subsection (b)—</text><subparagraph id="HD1F7257CC5A64D928211EABAD35163FB"><enum>(A)</enum><text>by striking <quote><short-title>terrorist or money laundering activities</short-title></quote> and inserting <quote><short-title>terrorist or money laundering activities or a specified unlawful activity (as defined in <external-xref legal-doc="usc" parsable-cite="usc/18/1956">section 1956(c)(7)</external-xref> of title 18, United States Code)</short-title></quote>; and</text></subparagraph><subparagraph id="HEAD1A82289F24427BC389691C426E18E"><enum>(B)</enum><text>by striking <quote><short-title>terrorist acts or money laundering activities</short-title></quote> and inserting <quote><short-title>such acts or activities</short-title></quote>; and</text></subparagraph></paragraph><paragraph id="HC3BE62ECC03A49C09273691A19215F39"><enum>(2)</enum><text>in subsection (c), by striking <quote><short-title>terrorist acts or money laundering activities</short-title></quote> and inserting <quote><short-title>terrorist or money laundering activities or a specified unlawful activity (as defined in <external-xref legal-doc="usc" parsable-cite="usc/18/1956">section 1956(c)(7)</external-xref> of title 18, United States Code)</short-title></quote>.</text></paragraph></subsection></section><enum>IV</enum><header>Strengthening requirements and closing loopholes</header><section commented="no" id="HD3713B02CE9B4AFCBD1B3A966AD1008B"><enum>401.</enum><header>Expanding the crimes that can be a predicate offense to money laundering</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/18/1956">Section 1956(c)(7)</external-xref> of title 18, United States Code, is amended to read as follows:</text><quoted-block display-inline="no-display-inline" id="HC9E4A540A8E949F7AE58398F87C073D5" style="USC"><paragraph commented="no" id="H34AFD153C3524860AC853ECFBCE6AB55"><enum>(7)</enum><text display-inline="yes-display-inline">the term <term>specified unlawful activity</term> means any act or activity constituting an offense in violation of the laws of the United States punishable by imprisonment for a term exceeding 1 year;</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="H4AB31BB36E194EA08BECED1EEE1C2DB6"><enum>402.</enum><header>Closing loopholes in Bank Secrecy Act reporting</header><subsection id="H793BCA73D1C44BEBBEB3BE6B67CC0DEF"><enum>(a)</enum><header>Report to Congress on the status of the temporary exemptions</header><text display-inline="yes-display-inline">FinCEN shall issue a report to Congress on the status of the temporary exemptions under <external-xref legal-doc="regulation" parsable-cite="cfr/31/1010.205">section 1010.205(b)</external-xref> of title 31, Code of Federal Regulations, including any reviews, studies, or proposed or notice of a rulemaking that FinCEN has undertaken with regard to each financial institution that is exempted from the requirement concerning the establishment of anti-money laundering programs. The report shall also include a justification for the exemption of each category of financial institution exempted under the regulation.</text></subsection><subsection id="HD9DE827AB9614A2CB4FB0C4F96D4134C"><enum>(b)</enum><header>Reporting by certain transporters</header><text>Not later than the end of the 270-day period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall issue final regulations to establish the manner in which operators of armored cars and other commercial monetary instrument transport enterprises are to comply with the reporting requirements under <external-xref legal-doc="usc" parsable-cite="usc/31/5316">section 5316</external-xref> of title 31, United States Code.</text></subsection></section><section id="H92A0FFA81E024DC687159D286345FBE0"><enum>403.</enum><header>Definition of an institution-affiliated party</header><subsection id="H796E69275C724C999FB60B3825AC52ED"><enum>(a)</enum><header>Definition</header><text display-inline="yes-display-inline">Section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813(u)</external-xref>) is amended—</text><paragraph id="HA9206FCE798F479BB63B2C3B5BFAB34D"><enum>(1)</enum><text>in subsection (u)(4), by striking <quote><short-title>knowingly</short-title></quote> and all that follows through the end of the paragraph and inserting <quote><short-title>participates in the conduct of, the affairs of, or conducts the business of an insured depository institution.</short-title></quote>; and</text></paragraph><paragraph id="H96F02E0EB1E248239905F40E788245B7"><enum>(2)</enum><text>by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="HAB75C30101E243A1B143739BEAFC25C7" style="OLC"><subsection id="HE8B7425747164A11885475049E71DDBB"><enum>(aa)</enum><header>Unsafe or unsound practice</header><text display-inline="yes-display-inline">The term <term>unsafe or unsound practice</term> means, any action, or lack of action, which is contrary to generally accepted standards of prudent operation, the possible consequences of which, if continued, would be abnormal risk or loss or damage to an institution, its shareholders, or the Deposit Insurance Fund.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" id="H20FE4926C8B7466CA78479F60D7E58FB"><enum>(b)</enum><header>Rule of construction related to independent contractors</header><text>Section 8 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1818">12 U.S.C. 1818</external-xref>) is amended by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="HFD640AE9FCCA4A858C6C3F229A7C56D1" style="OLC"><subsection commented="no" id="H209B87C7F60D4C8782AE2406C4893279"><enum>(x)</enum><header>Rule of construction related to independent contractors</header><text display-inline="yes-display-inline">For purposes of this Act, an independent contractor participates in the conduct of the affairs of, or conducts the business of, an insured depository institution by performing services for the institution.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><enum>V</enum><header>Whistleblower protections</header><section id="HE6FA12AB64EC4A1A9E79BCD664372D73"><enum>501.</enum><header>Modernization and upgrading whistleblower protections</header><subsection id="HBD1F281B01AD4479980B6DD370842407"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5328">Section 5328</external-xref> of title 31, United States Code, is amended—</text><paragraph id="H4622803B244C4526B46D6D3DD481DD31"><enum>(1)</enum><text>by striking subsections (a) and (b) and inserting the following:</text><quoted-block display-inline="no-display-inline" id="HE6B5054B48E342969DF351C7F12AE6C6" style="OLC"><subsection id="H7D58B48352A84AC6AA9E16D49980EC82"><enum>(a)</enum><header>Prohibition against discrimination</header><text display-inline="yes-display-inline">No financial institution or nonfinancial trade or business may discharge or otherwise discriminate against any applicant for employment, employee, or former employee with respect to compensation, terms, conditions, or privileges of employment because the applicant, employee, or former employee (or any person acting pursuant to the request of the employee)—</text><paragraph id="H396E2A9A129546358A9505C783230311"><enum>(1)</enum><text display-inline="yes-display-inline">provided, was about to provide, assisted in providing, or was perceived as providing information to the Secretary of the Treasury, the Attorney General, any Federal supervisory agency, or the Congress regarding a possible violation of any provision of this subchapter or section 1956, 1957, or 1960 of title 18, or any regulation under any such provision, by the financial institution or nonfinancial trade or business or any director, officer, or employee of the financial institution or nonfinancial trade or business; or</text></paragraph><paragraph id="H3CE3C5625A0843A2B6EE80B6BAC22A67"><enum>(2)</enum><text display-inline="yes-display-inline">objected to, or refused to participate in, any activity, policy, practice, or assigned task that the applicant, employee, former employee (or other such person) reasonably believed to be in violation of any provision of this subchapter or any other Act enforced by the Secretary of the Treasury, the Attorney General, a Federal supervisory agency, or any order, rule, regulation, standard, or ban under this subchapter of any of such Acts.</text></paragraph></subsection><subsection id="H4648BF74508946C1AD611CE68D3FA45A"><enum>(b)</enum><header>Enforcement</header><text display-inline="yes-display-inline">Within the 2-year period beginning on the date an applicant, employee, or former employee who believes that such applicant, employee, or former employee has been discharged or discriminated against in violation of subsection (a), such applicant, employee, or former employee may—</text><paragraph id="HE7A9685389D2460A8589C086EF7A3FAB"><enum>(1)</enum><text display-inline="yes-display-inline">file a civil action in the appropriate United States district court, in accordance with the burdens of proof and remedies set forth in section 1057 of the Consumer Financial Protection Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/12/5567">12 U.S.C. 5567</external-xref>); or</text></paragraph><paragraph id="H908BB6A340AE4CA8ADE7F4F5DD1818AF"><enum>(2)</enum><text display-inline="yes-display-inline">file a complaint with the Secretary of Labor with regards to a violation of subsection (a) to seek relief in accordance with the procedures, burdens of proof, and remedies set forth in section 1057 of the Consumer Financial Protection Act of 2010 (<external-xref legal-doc="usc" parsable-cite="usc/12/5567">12 U.S.C. 5567</external-xref>) for a violation of subsection (a) of such section, except that for purposes of such a complaint, the time period specified under subsection (c)(1)(A) of such section shall be deemed to be a 2-year period.</text></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph><paragraph id="HE2DAE2AD897C429F9736AC39A3FFEF1D"><enum>(2)</enum><text>in subsection (c), by inserting after <quote><short-title>district court</short-title></quote> the following: <quote><short-title>or the Secretary, as applicable,</short-title></quote>; and</text></paragraph><paragraph id="HAD5122375AE9452D9ADF8D629C3028EF"><enum>(3)</enum><text>by amending subsection (e) to read as follows:</text><quoted-block display-inline="no-display-inline" id="H0DDDF7FA34764FFCA35FF2891A85E92B" style="USC"><subsection id="H0A27BBB06D1540739DA18272EEDBE0B5"><enum>(e)</enum><header>Education</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall issue regulations requiring each financial institution and nonfinancial trade or business to provide education and training to its employees on the rights and remedies provided under this section, including through individual notice to its employees, posting information on its website home page, and providing mandatory training for its employees. Such education and training may be incorporated into existing education or training on the requirements of this subtitle provided by such institution or trade or business.</text></subsection><subsection id="H0E5FD0B246364B8C8BCD77242B607D5B"><enum>(f)</enum><header>Independent lines of communication</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall issue regulations requiring each financial institution and nonfinancial trade or business—</text><paragraph id="H7307D503D3434A78A25657466C17922A"><enum>(1)</enum><text>to have a procedure in place for an employee or former employee to report directly to the chief executive officer, a representative appointed by and reporting directly to the chief executive officer who is specifically designated to receive such a report, or through a hotline consistent with professional best practices to the audit committee of the board of directors, if such employee or former employee believes that violations of this subchapter have occurred or are occurring at such institution, trade, or business; and</text></paragraph><paragraph id="HB71BE75E2155499F832217F723D66A9F"><enum>(2)</enum><text display-inline="yes-display-inline">to not discriminate against an employee or former employee for such reports.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" id="HBABA694F599741CFB801FF5747649121"><enum>(b)</enum><header>Rewards</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5323">Section 5323(d)</external-xref> of title 31, United States Code, is amended to read as follows:</text><quoted-block display-inline="no-display-inline" id="HFC3D7B52159044F3BD5273B3749EBFAC" style="USC"><subsection commented="no" id="HA69B022612FA491FAE771F35CFC46F55"><enum>(d)</enum><header>Source of rewards</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HD901C2052601493F9A2197F86E0FBBBB"><enum>(c)</enum><header>Whistleblower incentives</header><text display-inline="no-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">Chapter 53</external-xref> of title 31, United States Code, is amended—</text><paragraph id="HE12D10CE8D33467995737AC88926602B"><enum>(1)</enum><text>by inserting after section 5323 the following:</text><quoted-block display-inline="no-display-inline" id="HF8767E1FD5ED44B8882023DBA58372E1" style="USC"><section id="H48A77D46D1614554B8BF6E5D36F461E0"><enum>5323A.</enum><header>Whistleblower incentives</header><subsection id="H895E84E8E961440CA357F274DFE4BFA8"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section:</text><paragraph id="H1372416A7A4648BB9350DEA05B52BBC4"><enum>(1)</enum><header>Bank Secrecy Act</header><text display-inline="yes-display-inline">The term <term>Bank Secrecy Act</term> means this subchapter, section 21 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1829b">12 U.S.C. 1829b</external-xref>), and section 123 of <external-xref legal-doc="public-law" parsable-cite="pl/91/508">Public Law 91–508</external-xref>.</text></paragraph><paragraph id="H2314D97EC7004317B83220607B5364AC"><enum>(2)</enum><header>Covered judicial or administrative action</header><text>The term <term>covered judicial or administrative action</term> means any judicial or administrative action brought by FinCEN under the Bank Secrecy Act that results in monetary sanctions exceeding $1,000,000.</text></paragraph><paragraph id="H77660C4297254E3C99285A3287EE14C7"><enum>(3)</enum><header>FinCEN</header><text>The term <term>FinCEN</term> means the Financial Crimes Enforcement Network.</text></paragraph><paragraph id="H2F66E95C01EE44ABB3856428E584C0E1"><enum>(4)</enum><header>Monetary sanctions</header><text>The term <term>monetary sanctions</term>, when used with respect to any judicial or administrative action, means—</text><subparagraph id="HCC91D3599123487AB342618DD1992201"><enum>(A)</enum><text>any monies, including penalties, disgorgement, and interest, ordered to be paid; and</text></subparagraph><subparagraph id="H5E8B316075D44302B8696F96B06937F2"><enum>(B)</enum><text>any monies deposited into a disgorgement fund as a result of such action or any settlement of such action.</text></subparagraph></paragraph><paragraph id="HE7AD5D65D9EA4BF4B0DA7074AC9815C0"><enum>(5)</enum><header>Original information</header><text>The term <term>original information</term> means information that—</text><subparagraph id="H1C5FAE44CD474E0CACCA2577BA3B2219"><enum>(A)</enum><text>is derived from the independent knowledge or analysis of a whistleblower;</text></subparagraph><subparagraph id="HDB3DF414895140E2A0A2861AA8AE4CB4"><enum>(B)</enum><text>is not known to FinCEN from any other source, unless the whistleblower is the original source of the information; and</text></subparagraph><subparagraph id="H2D11FD42F3F8407DA9B3F75C7A98D9B3"><enum>(C)</enum><text>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.</text></subparagraph></paragraph><paragraph id="HC0445FC95AFA450F8D35E549E5E1904A"><enum>(6)</enum><header>Related action</header><text>The term <term>related action</term>, 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.</text></paragraph><paragraph id="H61E2C00AF62D4BCDB2B50CFCD31484CC"><enum>(7)</enum><header>Whistleblower</header><text>The term <term>whistleblower</term> 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.</text></paragraph></subsection><subsection id="H3F1BEADDF80546FAA000B7D57E5BDACD"><enum>(b)</enum><header>Awards</header><paragraph id="H4E04E239C106430DAED223E28B6B41C7"><enum>(1)</enum><header>In general</header><text>In any covered judicial or administrative action, or related action, FinCEN, under regulations it prescribes 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—</text><subparagraph id="H2BF3B83B6F8C41C1808ECFDA69BB14A9"><enum>(A)</enum><text>not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and</text></subparagraph><subparagraph id="HD891B3FAD7034640980AC9F2077D261D"><enum>(B)</enum><text>not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions.</text></subparagraph></paragraph><paragraph id="HE1BD6232E8844D30B8A61EDA3F64224A"><enum>(2)</enum><header>Source of awards</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><subsection id="HFE184D1A3A80478E9CD04B218454B855"><enum>(c)</enum><header>Determination of amount of award; denial of award</header><paragraph id="H11D23F60AF5F463687AB538F6D38B120"><enum>(1)</enum><header>Determination of amount of award</header><subparagraph id="H02C83BCA844B4202B658C846C9D2F1ED"><enum>(A)</enum><header>Discretion</header><text>The determination of the amount of an award made under subsection (b) shall be in the discretion of FinCEN.</text></subparagraph><subparagraph id="H57D5CCB3202A4D2F8F7215167F8355BE"><enum>(B)</enum><header>Criteria</header><text>In responding to a disclosure and determining the amount of an award made, FinCEN shall meet with the whistleblower to discuss evidence disclosed and rebuttals to the disclosure, and—</text><clause id="H02DA808E197B4D5D9A8739E4422146D6"><enum>(i)</enum><text>shall take into consideration—</text><subclause id="H07BCBA06D9034B2196E09EEE950C3A2A"><enum>(I)</enum><text>the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;</text></subclause><subclause id="H0CBF3311B03244D782AFFB17ABD7BE53"><enum>(II)</enum><text>the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;</text></subclause><subclause id="H15E3E2EDBEF64CBDB76D3EAD57444AF4"><enum>(III)</enum><text>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</text></subclause><subclause id="HE165F07CF49146E0964F5032D635A5C8"><enum>(IV)</enum><text>such additional relevant factors as FinCEN may establish by rule or regulation; and</text></subclause></clause><clause id="H1ED27A88DAE8464086D443F9576FCD7A"><enum>(ii)</enum><text display-inline="yes-display-inline">shall not take into consideration the balance of any fund described under section 5323(d).</text></clause></subparagraph></paragraph><paragraph id="H758FAB525F8041E9BDD8BEC43C79D214"><enum>(2)</enum><header>Denial of award</header><text>No award under subsection (b) shall be made—</text><subparagraph id="HD9FFED2454C5406DBF85A09A790B49E0"><enum>(A)</enum><text>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—</text><clause id="H60A9B8E3820047A8BFF73EE249B42AEF"><enum>(i)</enum><text>an appropriate regulatory agency;</text></clause><clause id="H83B764F0C1B7454DBF5E8004EEC88A98"><enum>(ii)</enum><text>the Department of Justice;</text></clause><clause id="H53C113DD34164DA6989CA031E6919727"><enum>(iii)</enum><text>a self-regulatory organization; or</text></clause><clause id="HA531784068A546A7B4B4536520B5D469"><enum>(iv)</enum><text>a law enforcement organization;</text></clause></subparagraph><subparagraph id="H2C9AC31BB3C343ABB54116B47A060F03"><enum>(B)</enum><text>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;</text></subparagraph><subparagraph id="HFE91B235C39C4DCA976456ADBFC276EB"><enum>(C)</enum><text display-inline="yes-display-inline">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</text></subparagraph><subparagraph id="H6626E01EEC884192AEF7C9E324972AC2"><enum>(D)</enum><text>to any whistleblower who fails to submit information to FinCEN in such form as FinCEN may, by rule, require.</text></subparagraph></paragraph><paragraph id="H79DC2F0A173D4D609A6E7B743BE84CBA"><enum>(3)</enum><header>Statement of reasons</header><text>For any decision granting or denying an award, FinCEN shall provide to the whistleblower a statement of reasons that includes findings of fact and conclusions of law for all material issues</text></paragraph></subsection><subsection id="H496CA464342B4725A707DFD7D11022E6"><enum>(d)</enum><header>Representation</header><paragraph id="HD97A536530F34874B48A03FC28055CEC"><enum>(1)</enum><header>Permitted representation</header><text>Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.</text></paragraph><paragraph id="H0D45FE25F9EF4D9D9BB9A9C86E0D7CB4"><enum>(2)</enum><header>Required representation</header><subparagraph id="HB853836393804E7EBB36115496E425C0"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph><subparagraph id="H38ECA249186A49EB87180E02C154C9D0"><enum>(B)</enum><header>Disclosure of identity</header><text>Prior to the payment of an award, a whistleblower shall disclose their identity and provide such other information as FinCEN may require, directly or through counsel for the whistleblower.</text></subparagraph></paragraph></subsection><subsection id="H85DE286958624273AC440FB860412604"><enum>(e)</enum><header>Appeals</header><text>Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discretion of FinCEN. 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 FinCEN. The court shall review the determination made by FinCEN in accordance with <external-xref legal-doc="usc" parsable-cite="usc/5/706">section 706</external-xref> of title 5.</text></subsection></section><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph id="H33598122F47945B4AB9CDE4761740BE3"><enum>(2)</enum><text display-inline="yes-display-inline">in the table of contents for such chapter, by inserting after the item relating to section 5323 the following new item:</text><quoted-block display-inline="no-display-inline" id="HCF328974751E45B598226367FB59EBE0" style="USC"><toc regeneration="no-regeneration"><toc-entry level="section">5323A. Whistleblower incentives</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><enum>VI</enum><header>Sense of the Congress regarding criminal penalties</header><section id="H8F394F4D73194530907C4BB9CA13EFAB"><enum>601.</enum><header>Sense of the Congress</header><text display-inline="no-display-inline">It is the sense of Congress that the Department of Justice should vigorously pursue criminal penalties to the maximum extent of the law, including prison sentences, for individuals who willfully violate Bank Secrecy Act anti-money laundering laws, thereby exposing the U.S. financial system to a wide array of money laundering, drug trafficking and terrorism financing risks.</text></section><enum>VII</enum><header>Strengthening global commitments</header><section id="H06ED234EDADF459090486F931D32706A"><enum>701.</enum><header>International coordination</header><text display-inline="no-display-inline">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.</text></section><section id="HE283E52F4C3B4215ABE28ED0DE26D338"><enum>702.</enum><header>Sense of Congress regarding list of countries at high risk for money laundering</header><text display-inline="no-display-inline">It is the sense of Congress that when Treasury identifies countries or jurisdictions as a primary money laundering concern under section 311 of the USA Patriot Act, it should consider—</text><paragraph id="H7CEEC7E21DDF4A49B1B456A66D843524"><enum>(1)</enum><text>countries and jurisdictions identified by the Department of State in its annual International Narcotics Control Strategy Report as Jurisdictions of Primary Concern or jurisdiction’s subject to heightened scrutiny;</text></paragraph><paragraph id="H50CC6BA41BB44625B6433EE4C715E10A"><enum>(2)</enum><text>whether the Financial Action Task Force has identified a country or jurisdiction as having anti-money laundering or counter-terrorism financing deficiencies and to which countermeasures apply; and</text></paragraph><paragraph id="H20133010917F4B2D9F1A9DE896153BA9"><enum>(3)</enum><text>countries and jurisdictions that have not made sufficient progress in addressing the deficiencies identified by the Financial Action Task Force or have not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.</text></paragraph></section>