[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3317 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 3317

 To strengthen the Federal statutes designed to deter money laundering 
            and terrorism financing, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 23, 2013

 Ms. Waters (for herself, Mrs. Carolyn B. Maloney of New York, Mr. Al 
 Green of Texas, Mr. Clay, Mr. Capuano, Mr. Meeks, Ms. Moore, and Mr. 
    Lynch) introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   the Judiciary, 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 strengthen the Federal statutes designed to deter money laundering 
            and terrorism financing, 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 ``Holding 
Individuals Accountable and Deterring Money Laundering Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
         TITLE I--HOLDING EXECUTIVES RESPONSIBLE FOR VIOLATIONS

Sec. 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 ACCOUNTABILITY

Sec. 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 PROTECTIONS

Sec. 301. Safe harbor protections.
       TITLE IV--STRENGTHENING REQUIREMENTS AND CLOSING LOOPHOLES

Sec. 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 PROTECTIONS

Sec. 501. Modernization and upgrading whistleblower protections.
      TITLE VI--SENSE OF THE CONGRESS REGARDING CRIMINAL PENALTIES

Sec. 601. Sense of the Congress.
              TITLE VII--STRENGTHENING GLOBAL COMMITMENTS

Sec. 701. International coordination.
Sec. 702. Sense of Congress regarding list of countries at high risk 
                            for money laundering.

SEC. 2. FINDINGS.

    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.

         TITLE I--HOLDING EXECUTIVES RESPONSIBLE FOR VIOLATIONS

SEC. 101. PENALTIES FOR VIOLATIONS OF THE BANK SECRECY ACT.

    (a) Civil Monetary Penalties for Willful Violations.--Section 
5321(a) of title 31, United States Code, is amended--
            (1) by striking ``(a)(1) A domestic financial institution'' 
        and inserting the following:
    ``(a) In General.--
            ``(1) Civil monetary penalties for willful violations.--A 
        domestic financial institution'';
            (2) in paragraph (1)--
                    (A) by striking ``willfully violating'' each place 
                such term appears and inserting ``willfully violating, 
                or willfully causing any violation of,'';
                    (B) by striking ``the amount (not to exceed 
                $100,000) involved in the transaction (if any) or 
                $25,000'' and inserting ``10 times the amount (not to 
                exceed $10,000,000) involved in the transaction (if 
                any) or $250,000''; and
                    (C) by adding at the end the following: ``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.''; and
            (3) in paragraph (4)(A), by inserting after ``who 
        violates'' the following: ``, or causes any violation of,''.
    (b) Civil Monetary Penalties for Negligent Violations.--Section 
5321(a)(6) of title 31, United States Code, is amended to read as 
follows:
    ``(6) Negligence.--
            ``(A) In general.--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--
                    ``(i) $50,000, with respect to a financial 
                institution or nonfinancial trade or business; and
                    ``(ii) $5,000, with respect to any partner, 
                director, officer, or employee of an institution, 
                trade, or business.
            ``(B) Violations of the requirement to maintain procedures 
        to ensure compliance.--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.
            ``(C) Determination of penalty amount.--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.''.

SEC. 102. CRIMINAL PENALTIES.

    (a) In General.--Section 5322 of title 31, United States Code, is 
amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively;
            (2) by inserting after subsection (b) the following:
    ``(c) Facilitating Evasion.--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 Public Law 91-508, 
the maximum prison terms under such subsections shall be treated as 20 
years.''; and
            (3) by adding at the end the following:
    ``(f) Report.--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.''.
    (b) GAO Review of Bank Secrecy Act Criminal Sentences and Mandatory 
Minimum Sentencing.--
            (1) Study.--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.
            (2) Report.--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.

SEC. 103. STRENGTHENING CIVIL INJUNCTIVE AUTHORITY.

    Section 5320 of title 31, United States Code, is amended--
            (1) by striking ``When the Secretary'' and inserting the 
        following:
    ``(a) In General.--When the Secretary''; and
            (2) by inserting after ``will violate'' the following: ``or 
        has caused, is causing, or will cause a violation of''; and
            (3) by inserting at the end the following:
    ``(b) Prohibition on Certain Individuals.--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.''.

SEC. 104. CLARIFICATION OF REMOVAL AND PROHIBITION AUTHORITY UNDER THE 
              FDIA.

    Section 8(e)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(e)(2)(A)) is amended--
            (1) in clause (i), by striking ``was not inadvertent or 
        unintentional'' and inserting ``involved a reckless disregard 
        for the law or any applicable regulations or prior order of the 
        appropriate Federal banking agency''; and
            (2) in clause (ii), by striking ``has knowledge'' and 
        inserting ``knew, or should have known,''.

SEC. 105. INDEPENDENT LITIGATION AUTHORITY FOR FINCEN.

    Section 310 of title 31, United States Code, is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following:
    ``(d) Independent Litigation Authority.--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 Public Law 91-508, 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.''.

SEC. 106. TREATMENT OF EXECUTIVE COMPENSATION AND PERSONAL LIABILITY.

    (a) Certain Executive Compensation Incentives Barred.--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 chapter 53 of title 31, United States 
Code, section 21 of the Federal Deposit Insurance Act (12 U.S.C. 
1829b), or section 123 of Public Law 91-508.
    (b) No Avoidance of Personal Liability.--
            (1) In general.--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--
                    (A) shall be personally liable for the amounts so 
                owed; and
                    (B) may not, directly or indirectly, insure or 
                hedge against, or otherwise transfer the risks 
                associated with, personal liability for the amounts so 
                owed.
            (2) Rule of construction.--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)--
                    (A) from the relevant financial institution subject 
                to an anti-money laundering program under chapter X of 
                title 31, Code of Federal Regulations;
                    (B) under an insurance policy; or
                    (C) pursuant to court order.
    (c) Definitions.--For purposes of this section:
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the meaning given 
        such term under section 3 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813).
            (2) Executive compensation.--The term ``executive 
        compensation'' 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.
            (3) Federal bank secrecy law.--The term ``Federal bank 
        secrecy law'' means--
                    (A) the reporting requirements set forth in section 
                21 of the Federal Deposit Insurance Act (12 U.S.C. 
                1829b);
                    (B) section 123 of Public Law 91-508; and
                    (C) subchapter II of chapter 53 of title 31, United 
                States Code.
            (4) Institution-affiliated party.--The term ``institution-
        affiliated party''--
                    (A) has the meaning given such term under 
                subsection (u) of section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813); and
                    (B) 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.

SEC. 107. CORPORATE GOVERNANCE AND THE LEGAL RESPONSIBILITIES.

    (a) In General.--Chapter 53 of title 31, United States Code, is 
amended--
            (1) by inserting after section 5322, the following:
``Sec. 5322A. Corporate governance and the legal responsibility of 
              officers and employees
    ``(a) Ensuring Compliance.--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--
            ``(1) 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;
            ``(2) require the board to certify each report received 
        pursuant to paragraph (1);
            ``(3) ensure adequate staffing and funding for entities 
        within the institution responsible for compliance with the 
        requirements of this subtitle; and
            ``(4) periodically test the effectiveness of the 
        institution's programs for compliance with the requirements of 
        this subtitle.
    ``(b) Legal Responsibility of Certain Officers and Employees.--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.
    ``(c) Clawback Employment Provision.--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.
    ``(d) Definition.--For purposes of this section, the term 
`appropriate Federal banking agency' has the meaning given such term 
under section 3 of the Federal Deposit Insurance Act (12 
U.S.C.1813).''; and
            (2) in the table of contents for such chapter, by inserting 
        after the item relating to section 5322 the following new item:

``5322A. Corporate governance and the legal responsibility of officers 
                            and employees''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to a financial institution (as such term is defined under section 
5312 of title 31, United States Code) after the end of the 6-month 
period beginning on the date of the enactment of this Act.

   TITLE II--STRENGTHENING OF REGULATORY OVERSIGHT AND ACCOUNTABILITY

SEC. 201. REPORTING AND OVERSIGHT OF BANK SECRECY ACT-RELATED 
              ENFORCEMENT ACTIONS.

    (a) In General.--Chapter 53 of title 31, United States Code, is 
amended--
            (1) by inserting after section 5326 the following:
``Sec. 5327. Oversight of examination and enforcement activities
    ``(a) Reporting of Enforcement Activities to FinCEN.--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--
            ``(1) the type of violation or deficiency with respect to 
        which the enforcement or supervisory action was taken; and
            ``(2) the specific type of formal or informal enforcement 
        or supervisory action taken.
    ``(b) Review of Reports by FinCEN.--
            ``(1) In general.--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.
            ``(2) Report to the congress.--FinCEN shall issue an annual 
        report to the Congress containing--
                    ``(A) 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
                    ``(B) 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.
    ``(c) Inspector General Review of Procedures.--The Inspector 
General of each appropriate Federal banking agency shall--
            ``(1) 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
            ``(2) make such reviews available to the public, including 
        on the website of the Inspector General.
    ``(d) Definitions.--For purposes of this section:
            ``(1) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network.
            ``(2) Other terms.--The terms `appropriate Federal banking 
        agency' and `insured depository institution' have the meaning 
        given those terms, respectively, under section 3 of the Federal 
        Deposit Insurance Act (12 U.S.C.1813).''; and
            (2) in the table of contents for such chapter, by inserting 
        after the item relating to section 5326 the following new item:

``5327. Oversight of examination and enforcement activities.''.
    (b) Confidentiality of Information Submitted to FinCEN.--Section 
310 of title 31, United States Code, is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following:
    ``(d) Confidentiality of Information Submitted to FinCEN.--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.''.

SEC. 202. CONSIDERATION OF BSA COMPLIANCE IN MANAGEMENT RATINGS.

    (a) In General.--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.
    (b) Definitions.--
            (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has 
        the meaning given the term ``Federal bank secrecy law'' under 
        section 106(c)(5).
            (2) Other definitions.--The terms ``appropriate Federal 
        banking agency'' and ``depository institution'' have the 
        meaning given those terms, respectively, under section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813).

          TITLE III--CLARIFICATION OF SAFE HARBOR PROTECTIONS

SEC. 301. SAFE HARBOR PROTECTIONS.

    (a) Disclosure to Government Agencies.--Section 5318(g)(3)(B) of 
title 31, United States Code, is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) in clause (ii), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
                            ``(iii) 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.''.
    (b) Disclosure to Financial Institutions.--Section 314 of the USA 
PATRIOT Act (31 U.S.C. 5311 note) is amended--
            (1) in subsection (b)--
                    (A) by striking ``terrorist or money laundering 
                activities'' and inserting ``terrorist or money 
                laundering activities or a specified unlawful activity 
                (as defined in section 1956(c)(7) of title 18, United 
                States Code)''; and
                    (B) by striking ``terrorist acts or money 
                laundering activities'' and inserting ``such acts or 
                activities''; and
            (2) in subsection (c), by striking ``terrorist acts or 
        money laundering activities'' and inserting ``terrorist or 
        money laundering activities or a specified unlawful activity 
        (as defined in section 1956(c)(7) of title 18, United States 
        Code)''.

       TITLE IV--STRENGTHENING REQUIREMENTS AND CLOSING LOOPHOLES

SEC. 401. EXPANDING THE CRIMES THAT CAN BE A PREDICATE OFFENSE TO MONEY 
              LAUNDERING.

    Section 1956(c)(7) of title 18, United States Code, is amended to 
read as follows:
            ``(7) the term `specified unlawful activity' 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;''.

SEC. 402. CLOSING LOOPHOLES IN BANK SECRECY ACT REPORTING.

    (a) Report to Congress on the Status of the Temporary Exemptions.--
FinCEN shall issue a report to Congress on the status of the temporary 
exemptions under section 1010.205(b) 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.
    (b) Reporting by Certain Transporters.--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 section 5316 of title 31, United 
States Code.

SEC. 403. DEFINITION OF AN INSTITUTION-AFFILIATED PARTY.

    (a) Definition.--Section 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813(u)) is amended--
            (1) in subsection (u)(4), by striking ``knowingly'' and all 
        that follows through the end of the paragraph and inserting 
        ``participates in the conduct of, the affairs of, or conducts 
        the business of an insured depository institution.''; and
            (2) by adding at the end the following:
    ``(aa) Unsafe or Unsound Practice.--The term `unsafe or unsound 
practice' 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.''.
    (b) Rule of Construction Related to Independent Contractors.--
Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is 
amended by adding at the end the following:
    ``(x) Rule of Construction Related to Independent Contractors.--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.''.

                   TITLE V--WHISTLEBLOWER PROTECTIONS

SEC. 501. MODERNIZATION AND UPGRADING WHISTLEBLOWER PROTECTIONS.

    (a) In General.--Section 5328 of title 31, United States Code, is 
amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) Prohibition Against Discrimination.--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)--
            ``(1) 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
            ``(2) 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.
    ``(b) Enforcement.--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--
            ``(1) 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 (12 U.S.C. 5567); or
            ``(2) 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 (12 U.S.C. 5567) 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.'';
            (2) in subsection (c), by inserting after ``district 
        court'' the following: ``or the Secretary, as applicable,''; 
        and
            (3) by amending subsection (e) to read as follows:
    ``(e) Education.--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.
    ``(f) Independent Lines of Communication.--The Secretary of the 
Treasury shall issue regulations requiring each financial institution 
and nonfinancial trade or business--
            ``(1) 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
            ``(2) to not discriminate against an employee or former 
        employee for such reports.''.
    (b) 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.''.
    (c) 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.--For purposes of this section:
            ``(1) Bank secrecy act.--The term `Bank Secrecy Act' means 
        this subchapter, section 21 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1829b), and section 123 of Public Law 91-508.
            ``(2) 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.
            ``(3) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network.
            ``(4) 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.
            ``(5) 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.
            ``(6) 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.
            ``(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, 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--
                    ``(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 FinCEN.
                    ``(B) Criteria.--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--
                            ``(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 FinCEN may establish by rule 
                                or regulation; 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 FinCEN may, by 
                rule, require.
            ``(3) Statement of reasons.--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
    ``(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 FinCEN 
                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 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 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''.

      TITLE VI--SENSE OF THE CONGRESS REGARDING CRIMINAL PENALTIES

SEC. 601. SENSE OF THE CONGRESS.

    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.

              TITLE VII--STRENGTHENING GLOBAL COMMITMENTS

SEC. 701. 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. 702. SENSE OF CONGRESS REGARDING LIST OF COUNTRIES AT HIGH RISK 
              FOR MONEY LAUNDERING.

    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--
            (1) 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;
            (2) 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
            (3) 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.
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