[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6068 Introduced in House (IH)]
<DOC>
115th CONGRESS
2d Session
H. R. 6068
To update dollar amount thresholds for certain currency transaction
reports and suspicious activity reports, to improve the sharing of
suspicious activity reports within a financial group, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 12, 2018
Mr. Pearce (for himself and Mr. Luetkemeyer) introduced the following
bill; which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To update dollar amount thresholds for certain currency transaction
reports and suspicious activity reports, to improve the sharing of
suspicious activity reports within a financial group, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Counter Terrorism and Illicit
Finance Act''.
SEC. 2. UPDATING THRESHOLDS FOR CERTAIN CURRENCY TRANSACTION REPORTS
AND SUSPICIOUS ACTIVITY REPORTS.
(a) Thresholds for Certain Currency Transaction Reports.--
(1) In general.--Not later than the end of the 180-day
period beginning on the date of the enactment of this Act, the
Secretary of the Treasury shall revise regulations issued with
respect to section 5313 of title 31, United States Code, to
update each $10,000 threshold amount in such regulations to
$30,000.
(2) Threshold for reports relating to coins and currency
received in nonfinancial trade or business.--Section 5331 of
title 31, United States Code, is amended by striking
``$10,000'' each place such term appears in heading or text and
inserting ``$30,000''.
(b) Thresholds for Suspicious Activity Reports.--Not later than the
end of the 180-day period beginning on the date of the enactment of
this Act, each Federal department or agency that issues regulations
with respect to reports on suspicious transactions described under
section 5318(g) of title 31, United States Code, shall update each
$5,000 threshold amount in such regulations to $10,000 and each $2,000
threshold amount in such regulation to $3,000.
(c) Updating the Money Services Business Definition Thresholds.--
Not later than the end of the 180-day period beginning on the date of
the enactment of this Act, the Secretary of the Treasury shall revise
section 1010.100(ff) of title 31, Code of Federal Regulations, to
update each $1,000 threshold amount in such regulations to $3,000.
SEC. 3. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION REPORTS AND
SUSPICIOUS ACTIVITY REPORTS.
(a) Review.--The Secretary of the Treasury (in consultation with
Federal law enforcement agencies, the Director of National
Intelligence, and the Federal functional regulators and in consultation
with other relevant stakeholders) shall undertake a formal review of
the current financial institution reporting requirements under the Bank
Secrecy Act and its implementing regulations and propose changes to
further reduce regulatory burdens, and ensure that the information
provided is of a ``high degree of usefulness'' to law enforcement, as
set forth under section 5311 of title 31, United States Code.
(b) Contents.--The review required under subsection (a) shall
include a study of--
(1) whether the timeframe for filing a suspicious activity
report should be increased from 30 days;
(2) whether or not currency transaction report and
suspicious activity report thresholds should be tied to
inflation or otherwise periodically be adjusted;
(3) whether the circumstances under which a financial
institution determines whether to file a ``continuing
suspicious activity report'', or the processes followed by a
financial institution in determining whether to file a
``continuing suspicious activity report'' (or both) can be
narrowed;
(4) analyzing the fields designated as ``critical'' on the
suspicious activity report form and whether the number of
fields should be reduced;
(5) the categories, types, and characteristics of
suspicious activity reports and currency transaction reports
that are of the greatest value to, and that best support,
investigative priorities of law enforcement and national
security personnel;
(6) the increased use of exemption provisions to reduce
currency transaction reports that are of little or no value to
law enforcement efforts;
(7) the most appropriate ways to promote financial
inclusion and address the adverse consequences of financial
institutions de-risking entire categories of high-risk
relationships, including charities, embassy accounts, money
service businesses (as defined under section 1010.100(ff) of
title 31, Code of Federal Regulations), and correspondent
banks;
(8) the current financial institution reporting
requirements under the Bank Secrecy Act and its implementing
regulations and guidance; and
(9) such other items as the Secretary determines
appropriate.
(c) Report.--Not later than the end of the one year period
beginning on the date of the enactment of this Act, the Secretary of
the Treasury, in consultation with law enforcement and persons subject
to Bank Secrecy Act requirements, shall issue a report to the Congress
containing all findings and determinations made in carrying out the
review required under subsection (a).
SEC. 4. SHARING OF SUSPICIOUS ACTIVITY REPORTS WITHIN A FINANCIAL
GROUP.
(a) In General.--
(1) Sharing with foreign branches and affiliates.--Section
5318(g) of title 31, United States Code, is amended by adding
at the end the following:
``(5) Sharing with foreign branches, subsidiaries, and
affiliates.--
``(A) In general.--Not later than 180 days after
the date of the enactment of this paragraph, the
Secretary of the Treasury shall issue rules permitting
any financial institution with a reporting obligation
under this subsection to share information on reports
under this subsection with the institution's foreign
branches, subsidiaries, and affiliates for the purposes
of combating illicit finance risks, notwithstanding any
other provision of law except subparagraph (B).
``(B) Exception.--In issuing the regulations
required under subparagraph (A), the Secretary may not
permit a financial institution to share information on
reports under this subsection with a foreign branch,
subsidiary, or affiliate located in a jurisdiction
that--
``(i) is subject to countermeasures imposed
by the Federal Government; or
``(ii) the Secretary has determined cannot
reasonably protect the privacy and
confidentiality of such information.''.
(2) Notification prohibitions.--Section 5318(g)(2)(A) of
title 31, United States Code, is amended--
(A) in clause (i), by inserting after ``transaction
has been reported'' the following: ``or otherwise
reveal any information that would reveal that the
transaction has been reported, including materials
prepared or used by the financial institution for the
purpose of identifying and detecting potentially
suspicious activity''; and
(B) in clause (ii), by inserting after
``transaction has been reported,'' the following: ``or
otherwise reveal any information that would reveal that
the transaction has been reported, including materials
prepared or used by the financial institution for the
purpose of identifying and detecting potentially
suspicious activity,''.
(b) Rulemaking.--Not later than the end of the 180-day period
beginning on the date of enactment of this Act, the Secretary of the
Treasury shall issue regulations to carry out the amendments made by
this section.
SEC. 5. FINCEN NO-ACTION LETTERS.
Section 310 of title 31, United States Code, is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d) No-Action Letters With Respect to Specific Conduct.--
``(1) In general.--The Director of FinCEN shall issue
regulations to establish a process for the issuance of a no-
action letter by FinCEN in response to an inquiry from a person
or group of persons concerning the application of the Bank
Secrecy Act, the USA PATRIOT Act, or any other anti-money
laundering and counter terrorist financing law or regulation to
specific conduct, which shall include a statement as to whether
or not FinCEN has any intention of taking an enforcement or
other regulatory action against the person or group with
respect to such conduct.
``(2) Consultation.--In issuing the regulations described
under paragraph (1), the Secretary shall consult with the
Federal functional regulators and such other Federal
departments and agencies as the Secretary determines
appropriate.
``(3) Reliance on no-action letter.--
``(A) Liability.--Notwithstanding any other
provisions of law, except for paragraph (5)(B), a
person described under subparagraph (B) who relies upon
a no-action letter issued under this subsection in
accordance with the provisions and findings of such
letter shall not, as a result, be subject to any
regulatory action or civil or criminal penalty under
the Bank Secrecy Act, the USA PATRIOT Act, or any other
anti-money laundering and counter terrorist financing
law or regulation with respect to the activity covered
in the no-action letter.
``(B) Persons covered.--A person described in this
paragraph is--
``(i) any person involved in the specific
conduct that is the subject of the no-action
letter; and
``(ii) any person involved in conduct which
is indistinguishable in all its material
aspects from the specific conduct that is the
subject of the no-action letter.
``(4) Fees.--
``(A) In general.--The Director of FinCEN shall
develop a system to charge a fee for each request for a
no-action letter made under this subsection in an
amount sufficient, in the aggregate, to pay for the
cost of carrying out this subsection. Such system shall
provide for a lower fee for small business concerns and
small financial institutions compared to other persons.
``(B) Notice and comment.--Not later than 45 days
after the date of the enactment of this paragraph, the
Director of FinCEN shall publish a description of the
fee system described in subparagraph (A) in the Federal
Register and shall solicit comments from the public for
a period of 60 days after publication.
``(C) Finalization.--The Director of FinCEN shall
publish a final description of the fee system and
implement such fee system not later than 30 days after
the end of the public comment period described in
subparagraph (B).
``(5) Modifying or rescinding a no-action letter.--
``(A) In general.--The Director of FinCEN may
modify or rescind any no-action letter issued under
this subsection if--
``(i) in light of changes in statute,
regulations, or policy the letter no longer
sets forth the interpretation of FinCEN with
respect to the content of the letter; or
``(ii) any fact or statement submitted in
the original inquiry is found to be materially
inaccurate or incomplete.
``(B) No reliance on rescinded letter.--Paragraph
(3) shall not apply to the any actions taken after the
date that a no-action letter is rescinded.
``(C) Retroactive modification or rescission.--A
no-action letter may be modified or rescinded
retroactively only with respect to one or more parties
to the original inquiry and only if the Director of
FinCEN determines that--
``(i) a fact or statement in the original
inquiry was materially inaccurate or
incomplete;
``(ii) the requestor failed to notify in
writing FinCEN of a material change to any fact
or statement in the original request; or
``(iii) a party to the original inquiry
acted in bad faith when relying upon the no-
action letter.
``(D) Notice of modification and rescission.--In
the case that the Director of FinCEN modifies or
rescinds a no-action letter under this subsection, the
Director of FinCEN shall--
``(i) provide notice of such modification
or rescission;
``(ii) establish a reasonable time period,
of not less than 90 days, in which impacted
persons may update their anti-money laundering
programs or processes to achieve compliance
with the Bank Secrecy Act, the USA PATRIOT Act,
or any other anti-money laundering and counter
terrorist financing law or regulation.
``(6) Definitions.--For purposes of this subsection:
``(A) Bank secrecy act.--The term `Bank Secrecy
Act' means--
``(i) section 21 of the Federal Deposit
Insurance Act;
``(ii) chapter 2 of title I of Public Law
91-508; and
``(iii) subchapter II of chapter 53 of this
title.
``(B) Federal functional regulator.--The term
`Federal functional regulator' has the meaning given
that term under section 5312 of title 31, United States
Code.
``(C) Small business concern.--The term `small
business concern' has the meaning given under section 3
of the Small Business Act.''.
SEC. 6. REQUIRING TREASURY TO TAKE A MORE PROMINENT ROLE IN
COORDINATING AML/CFT POLICY AND EXAMINATIONS ACROSS THE
GOVERNMENT.
(a) Priorities.--Not later than nine months after the date of the
enactment of this Act, and at least annually thereafter, the Secretary
of the Treasury, acting through the Office of Terrorism and Financial
Intelligence and the Financial Crimes Enforcement Network, in
consultation with relevant Federal law enforcement, the Director of
National Intelligence, and any other Federal departments and agencies
that the Secretary of the Treasury determines appropriate, shall
establish and make public its priorities for U.S. anti-money laundering
and counter terrorist financing policy.
(b) Supervision and Examination.--The incorporation by financial
institutions of the priorities established pursuant to subsection (a)
into the programs established by those financial institutions to meet
obligations under the Bank Secrecy Act, the USA PATRIOT Act, and other
anti-money laundering and counter terrorist financing laws and
regulations shall form the basis on which the financial institutions
are supervised and examined for compliance with those obligations.
(c) Rule of Construction.--Nothing in subsection (a) may be
construed as releasing financial institutions from the requirement to
comply with obligations under the Bank Secrecy Act and other Federal
laws and regulations.
(d) Report.--Not later than nine months after the date of enactment
of this Act, the Secretary of the Treasury (in consultation with
Federal law enforcement agencies, the Director of National
Intelligence, and the Federal functional regulators) shall submit to
the Committee on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of the Senate a
report containing--
(1) an analysis of the Secretary of the Treasury's
delegation of examination authority under the Bank Secrecy Act,
including the adequacy of the Department of the Treasury's
resources, capacity, expertise, and ability to effectively
carry out the purposes of the Bank Secrecy Act;
(2) an examination of whether the Secretary should de-
delegate that authority with regard to certain financial
institutions; and
(3) legislative, administrative, and other recommendations
to strengthen the Department of the Treasury's authority to
ensure an effective U.S. anti-money laundering and counter
terrorist financing regime.
SEC. 7. ENCOURAGING THE USE OF TECHNOLOGICAL INNOVATIONS.
Section 5318(h) of title 31, United States Code, is amended by
adding at the end the following:
``(4) Encouraging the use of technological innovations.--
``(A) In general.--The Secretary of the Treasury
shall, in carrying out this subsection, encourage but
not require the use of technological innovations that
improve anti-money laundering programs described under
paragraph (1).
``(B) Safe harbor.--An anti-money laundering
program that meets the minimum requirements described
under paragraph (1) and any minimum standards issued
pursuant to paragraph (2), shall not violate the
requirements of this subsection by reason of any
technological innovation used to carry out such
program.
``(C) Rule of construction.--Nothing in
subparagraph (A) may be construed as releasing
financial institutions from the requirement to comply
with existing obligations under the Bank Secrecy Act
and other Federal laws and regulations.''.
SEC. 8. ASSESSING THE USEFULNESS OF BANK SECRECY ACT REPORTING.
(a) Annual Report.--Not later than one year after the date of
enactment of this Act, and annually thereafter, the Attorney General,
in consultation with Federal law enforcement agencies and the Director
of National Intelligence, shall, to the extent practicable at the
discretion of the Attorney General, provide the Secretary of the
Treasury with statistics, metrics, and other information on the use of
such data, including--
(1) the extent to which such data is used for terrorism
versus non-terrorism related investigations and, with respect
to such non-terrorism related investigations, the most common
types of laws to which such investigations relate;
(2) the frequency with which such data contains
``actionable information'' which leads to further law
enforcement procedures, including the use of a subpoena,
warrant, or other legal process; and
(3) information on the extent to which arrests,
indictments, convictions, or plea bargains of actors result
from the use of such data.
(b) Use of Report Information.--The Secretary of the Treasury shall
utilize the information reported under subsection (a)--
(1) to help assess the usefulness of Bank Secrecy Act
reporting to law enforcement;
(2) to enhance feedback and communications with financial
institutions and other entities subject to Bank Secrecy Act
requirements; and
(3) for such other purposes as the Secretary determines
appropriate.
SEC. 9. 18-MONTH ENFORCEMENT SAFE HARBOR OF CDD RULE.
No person shall be liable for any violation of the final rule of
the Department of the Treasury titled ``Customer Due Diligence
Requirements for Financial Institutions'' (``CDD rule'') published May
11, 2016 (81 Fed. Reg. 29397), during the 18-month period beginning on
May 11, 2018, so long as such person has made a good faith effort to
comply with such requirements.
SEC. 10. STUDIES AND REPORTS.
(a) Beneficial Ownership.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General of the United States
shall conduct a study and submit to the Congress a report--
(1) evaluating the effectiveness of the collection of
beneficial ownership information under the CDD rule (as defined
under section 9), including--
(A) whether law enforcement agencies have had
timely access to the information;
(B) the utility of such information in law
enforcement investigations or prosecutions;
(C) an analysis of the reporting burden placed on
financial institutions versus the utility of such
information being made available to law enforcement;
and
(D) whether further legislation is required to
reduce regulatory burdens or increase the utility and
timely access of such information to law enforcement;
(2) assessing the effectiveness of incorporation practices
implemented under the CDD rule.
(b) Comprehensive Cost-Benefit Analysis.--Not later than 2 years
after the date of enactment of this Act, the Comptroller General of the
United States shall conduct a study and submit to the Congress a
report--
(1) providing a comprehensive quantitative and qualitative
estimate of the annualized costs to the private sector to
comply with the statutory and regulatory requirements of the
Bank Secrecy Act and related anti-money laundering laws and
regulations;
(2) providing a comprehensive qualitative and quantitative
analysis of the effectiveness of the current anti-money
laundering and counter terrorist financing framework in
preventing, detecting, and prosecuting terrorist and illicit
financing;
(3) providing a comprehensive qualitative and quantitative
analysis of the benefits and costs to both the private sector
and the Government of the private sector's compliance with the
statutory and regulatory requirements of the Bank Secrecy Act
and related anti-money laundering laws and regulations; and
(4) examining the costs borne and effect on access to
financial services for consumers and customers as a result of
financial institutions compliance with the statutory and
regulatory requirements of the Bank Secrecy Act and related
anti-money laundering laws and regulations.
SEC. 11. DEFINITIONS.
For purposes of this Act:
(1) Bank secrecy act.--The term ``Bank Secrecy Act''
means--
(A) section 21 of the Federal Deposit Insurance
Act;
(B) chapter 2 of title I of Public Law 91-508; and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(2) Federal functional regulator.--The term ``Federal
functional regulator'' has the meaning given that term under
section 5312 of title 31, United States Code.
(3) Financial institution.--The term ``financial
institution'' has the meaning given that term under section
5312 of title 31, United States Code.
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