[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2514 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 2514

    To make reforms to the Federal Bank Secrecy Act and anti-money 
                laundering laws, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 3, 2019

 Mr. Cleaver introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
    To make reforms to the Federal Bank Secrecy Act and anti-money 
                laundering laws, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Coordinating 
Oversight, Upgrading and Innovating Technology, and Examiner Reform Act 
of 2019'' or the ``COUNTER Act of 2019''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.
                    TITLE I--STRENGTHENING TREASURY

Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. FinCEN Compensation.
Sec. 103. Civil Liberties and Privacy Officer.
Sec. 104. Privacy and Civil Liberties Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attache Program.
Sec. 107. Increasing technical assistance for international 
                            cooperation.
Sec. 108. FinCEN Domestic Liaisons.
Sec. 109. FinCEN Exchange.
Sec. 110. Study and strategy on trade-based money laundering.
Sec. 111. De-risking report.
                 TITLE II--IMPROVING AML/CFT OVERSIGHT

Sec. 201. Sharing of suspicious activity reports within a financial 
                            group.
Sec. 202. Training for examiners on AML/CFT.
Sec. 203. Sharing of compliance resources.
Sec. 204. GAO Study on feedback loops.
Sec. 205. FinCEN study on BSA value.
Sec. 206. Section 314(a) improvements.
Sec. 207. Sharing of threat pattern and trend information.
Sec. 208. Modernization and upgrading whistleblower protections.
Sec. 209. Certain violators barred from serving on public company 
                            boards.
Sec. 210. Additional damages for repeat Bank Secrecy Act violators.
Sec. 211. Justice annual report on deferred and nonprosecution 
                            agreements.
Sec. 212. Return of profits and bonuses.
Sec. 213. Prohibition on tax deductions for attorney's fees related to 
                            Bank Secrecy Act settlements and court 
                            costs.
Sec. 214. Application of Bank Secrecy Act to dealers in art or 
                            antiquities.
Sec. 215. Revision to geographic targeting order.
                 TITLE III--MODERNIZING THE AML SYSTEM

Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Parallel runs rulemaking.

SEC. 2. BANK SECRECY ACT DEFINITION.

    Section 5312(a) of title 31, United States Code, is amended by 
adding at the end the following:
            ``(6) Bank secrecy act.--The term `Bank Secrecy act' 
        means--
                    ``(A) section 21 of the Federal Deposit Insurance 
                Act;
                    ``(B) chapter 2 of title I of Public Law 91-508; 
                and
                    ``(C) this subchapter.''.

                    TITLE I--STRENGTHENING TREASURY

SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF THE BANK SECRECY ACT.

    Section 5311 of title 31, United States Code, is amended--
            (1) by inserting ``to protect our national security, to 
        safeguard the integrity of the international financial system, 
        and'' before ``to require''; and
            (2) by inserting ``to law enforcement'' before ``in 
        criminal''.

SEC. 102. FINCEN COMPENSATION.

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

SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER.

    (a) Appointment of Officers.--Not later than the end of the 3-month 
period beginning on the date of enactment of this Act, a Civil 
Liberties and Privacy Officer shall be appointed, from among 
individuals who are attorneys with expertise in data privacy laws--
            (1) within each Federal financial regulator, by the head of 
        the Federal financial regulator;
            (2) within the Financial Crimes Enforcement Network, by the 
        Secretary of the Treasury; and
            (3) within the Internal Revenue Service Criminal 
        Investigation, by the Secretary of the Treasury.
    (b) Duties.--Each Civil Liberties and Privacy Officer shall, with 
respect to the applicable regulator, Network, or Investigation within 
which the Officer is located--
            (1) be consulted each time the regulations are developed or 
        reviewed;
            (2) be consulted on information-sharing activities, 
        including activities that provide access to personally 
        identifiable information; and
            (3) contribute to the evaluation and regulation of new 
        technologies.
    (c) Federal Financial Regulator Defined.--For purposes of this 
section, the term ``Federal financial regulator'' means the Board of 
Governors of the Federal Reserve System, the Bureau of Consumer 
Financial Protection, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration, and the Office of the Comptroller 
of the Currency.

SEC. 104. PRIVACY AND CIVIL LIBERTIES COUNCIL.

    (a) Establishment.--There is established the Privacy and Civil 
Liberties Council (hereinafter in this section referred to as the 
``Council''), which shall consist of the Civil Liberties and Privacy 
Officers appointed pursuant to section 103.
    (b) Chair.--The Civil Liberties and Privacy Officer of the 
Financial Crimes Enforcement Network shall serve as the Chair of the 
Council.
    (c) Duty.--The members of the Council shall coordinate on 
activities related to their duties as Privacy and Civil Liberties 
Officers.
    (d) Meetings.--The meetings of the Council--
            (1) shall be at the call of the Chair, but in no case may 
        the Council meet less than quarterly;
            (2) may include open and closed sessions, as determined 
        necessary by the Council; and
            (3) may include participation by public and private 
        entities and law enforcement agencies.
    (e) Report.--The Council shall issue an annual report to the 
Congress on the activities of the Council during the previous year and 
any legislative recommendations that the Council may have.

SEC. 105. INTERNATIONAL COORDINATION.

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

SEC. 106. TREASURY ATTACHE PROGRAM.

    (a) In General.--Title 31, United States Code, is amended by 
inserting after section 315 the following:
``Sec. 316. Treasury Attache Program
    ``(a) In General.--There is established the Treasury Attache 
Program, under which the Secretary of the Treasury shall appoint 
employees of the Department of the Treasury as a Treasury attache, who 
shall--
            ``(1) have expertise in Bank Secrecy Act and anti-money 
        laundering issues;
            ``(2) be co-located in a United States embassy;
            ``(3) perform outreach with respect to Bank Secrecy Act and 
        anti-money laundering issues;
            ``(4) establish and maintain relationships with foreign 
        counterparts, including employees of ministries of finance, 
        central banks, and other relevant official entities;
            ``(5) conduct outreach to local and foreign financial 
        institutions and other commercial actors, including--
                    ``(A) information exchanges; and
                    ``(B) soliciting buy-in and cooperation for the 
                implementation of--
                            ``(i) United States and multilateral 
                        sanctions; and
                            ``(ii) international standards on anti-
                        money laundering and the countering of the 
                        financing of terrorism; and
            ``(6) perform such other actions as the Secretary 
        determines appropriate.
    ``(b) Number of Attaches.--The number of Treasury attaches 
appointed under this section at any one time shall be not fewer than 6 
more employees than the number of employees of the Department of the 
Treasury serving as Treasury attaches on March 1, 2019.
    ``(c) Compensation.--Each Treasury attache appointed under this 
section and located at a United States embassy shall receive 
compensation at the higher of--
            ``(1) the rate of compensation provided to a Foreign 
        Service officer serving at the same embassy; or
            ``(2) the rate of compensation the Treasury attache would 
        otherwise have received, absent the application of this 
        subsection.
    ``(d) Bank Secrecy Act Defined.--In this section, the term `Bank 
Secrecy Act' has the meaning given that term under section 5312.''.
    (b) Clerical Amendment.--The table of contents for chapter 3 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 315 the following:

``316. Treasury Attache Program.''.

SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL 
              COOPERATION.

    There is authorized to be appropriated for fiscal year 2020 to the 
Secretary of the Treasury for purposes of providing technical 
assistance for international cooperation an amount equal to twice the 
amount authorized for such purpose for fiscal year 2019.

SEC. 108. FINCEN DOMESTIC LIAISONS.

    Section 310 of title 31, United States Code, as amended by section 
102, is further amended by inserting after subsection (d) the 
following:
    ``(e) FinCEN Domestic Liaisons.--
            ``(1) In general.--The Director of FinCEN shall appoint at 
        least 6 senior FinCEN employees as FinCEN Domestic Liaisons, 
        who shall--
                    ``(A) each be assigned to focus on a specific 
                region of the United States;
                    ``(B) be located at an office in such region (or 
                co-located at an office of another Federal agency in 
                such region);
                    ``(C) provide education to, and coordination with, 
                both public- and private-sector entities with respect 
                to FinCEN; and
                    ``(D) perform outreach to financial institutions 
                (including non-bank financial institutions) and persons 
                who are not financial institutions, especially with 
                respect to actions taken by FinCEN that require 
                specific actions by, or have specific effects on, such 
                institutions or persons, as determined by the Director.
            ``(2) Financial institution defined.--In this subsection, 
        the term `financial institution' has the meaning given that 
        term under section 5312.''.

SEC. 109. FINCEN EXCHANGE.

    (a) In General.--Section 314(a) of the USA PATRIOT Act (31 U.S.C. 
5311 note) is amended by adding at the end the following:
            ``(6) FinCEN exchange.--
                    ``(A) Establishment.--The FinCEN Exchange is hereby 
                established within FinCEN, which shall consist of the 
                FinCEN Exchange program of FinCEN in existence on the 
                day before the date of enactment of this paragraph.
                    ``(B) Purpose.--The FinCEN Exchange shall further 
                the purpose described under paragraph (1) by 
                facilitating a voluntary public-private information 
                sharing partnership among law enforcement, financial 
                institutions, and FinCEN to--
                            ``(i) effectively and efficiently combat 
                        money laundering, terrorism financing, 
                        organized crime, and other financial crimes;
                            ``(ii) protect the financial system from 
                        illicit use; and
                            ``(iii) promote national security.
                    ``(C) FinCEN defined.--In this paragraph, the term 
                `FinCEN' means the Financial Crimes Enforcement Network 
                of the Department of the Treasury.''.
    (b) Authorization of Appropriation.--There is authorized to be 
appropriated such sums as may be necessary to carry out the amendment 
made by subsection (a).

SEC. 110. STUDY AND STRATEGY ON TRADE-BASED MONEY LAUNDERING.

    (a) Study.--The Secretary of the Treasury shall carry out a study, 
in consultation with other appropriate Federal departments and 
agencies, on trade-based money laundering.
    (b) Report.--Not later than the end of the 9-month period beginning 
on the date of the enactment of this Act, the Secretary shall issue a 
report to the Congress containing--
            (1) all findings and determinations made in carrying out 
        the study required under subsection (a); and
            (2) proposed strategies to combat trade-based money 
        laundering.
    (c) Classified Annex.--The report required under this section may 
include a classified annex, if the Secretary determines it appropriate.

SEC. 111. DE-RISKING REPORT.

    (a) Review.--The Secretary of the Treasury, in consultation with 
the Federal functional regulators (as defined under section 103) and 
other relevant stakeholders, shall undertake a formal review of--
            (1) the adverse consequences of financial institutions de-
        risking entire categories of relationships, including 
        charities, embassy accounts, money services businesses (as 
        defined under section 1010.100(ff) of title 31, Code of Federal 
        Regulations), countries, regions, and respondent banks;
            (2) the reasons why financial institutions are engaging in 
        de-risking;
            (3) the association with and effects of de-risking on money 
        laundering and financial crime actors and activities; and
            (4) the most appropriate ways to promote financial 
        inclusion while maintaining compliance with the Bank Secrecy 
        Act.
    (b) Report.--Not later than the end of the 1-year period beginning 
on the date of the enactment of this Act, the Secretary, in 
consultation with the Federal functional regulators and other relevant 
stakeholders, shall issue a report to Congress containing all findings 
and determinations made in carrying out the study required under 
subsection (a).
    (c) Definitions.--In this section:
            (1) De-risking.--The term ``de-risking'' means the closing 
        of customer accounts or limiting services of a category of 
        customer due to perceived risk as it relates to compliance with 
        the Bank Secrecy Act.
            (2) BSA terms.--The terms ``Bank Secrecy Act'' and 
        ``financial institution'' have the meaning given those terms, 
        respectively, under section 5312 of title 31, United States 
        Code.

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

SEC. 201. SHARING OF SUSPICIOUS ACTIVITY REPORTS WITHIN A FINANCIAL 
              GROUP.

    (a) In General.--
            (1) Sharing with foreign branches and affiliates.--Section 
        5318(g) of title 31, United States Code, is amended by adding 
        at the end the following:
            ``(5) Sharing with foreign branches, subsidiaries, and 
        affiliates.--
                    ``(A) In general.--Not later than 180 days after 
                the date of the enactment of this paragraph, the 
                Secretary of the Treasury shall issue rules permitting 
                any financial institution with a reporting obligation 
                under this subsection to share information on reports 
                under this subsection with the institution's foreign 
                branches, subsidiaries, and affiliates for the purposes 
                of combating illicit finance risks, notwithstanding any 
                other provision of law except subparagraph (B).
                    ``(B) Exception.--In issuing the regulations 
                required under subparagraph (A), the Secretary may not 
                permit a financial institution to share information on 
                reports under this subsection with a foreign branch, 
                subsidiary, or affiliate located in a jurisdiction 
                that--
                            ``(i) is subject to countermeasures imposed 
                        by the Federal Government; or
                            ``(ii) the Secretary, in consultation with 
                        the Civil Liberties and Privacy Officer of the 
                        Financial Crimes Enforcement Network, has 
                        determined cannot reasonably protect the 
                        privacy and confidentiality of such 
                        information.''.
            (2) Notification prohibitions.--Section 5318(g)(2)(A) of 
        title 31, United States Code, is amended--
                    (A) in clause (i), by inserting after ``transaction 
                has been reported'' the following: ``or otherwise 
                reveal any information that would reveal that the 
                transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity''; and
                    (B) in clause (ii), by inserting after 
                ``transaction has been reported,'' the following: ``or 
                otherwise reveal any information that would reveal that 
                the transaction has been reported, including materials 
                prepared or used by the financial institution for the 
                purpose of identifying and detecting potentially 
                suspicious activity,''.
    (b) Rulemaking.--Not later than the end of the 180-day period 
beginning on the date of enactment of this Act, the Secretary of the 
Treasury shall issue regulations to carry out the amendments made by 
this section.

SEC. 202. TRAINING FOR EXAMINERS ON AML/CFT.

    The Federal Financial Institutions Examination Council Act of 1978 
(12 U.S.C. 3301 et seq.) is amended--
            (1) by moving section 1009A so as to appear after section 
        1009; and
            (2) by inserting after section 1009A, as so moved, the 
        following:

``SEC. 1009B. AML/CFT TRAINING.

    ``(a) Training Requirement.--Each examiner employed by a Federal 
financial institutions regulatory agency shall attend at least 10 hours 
of annual training on anti-money laundering (AML) and the countering of 
the financing of terrorism (CFT), including--
            ``(1) potential risk profiles and red flags that may be 
        encountered during examinations;
            ``(2) financial crime patterns and trends;
            ``(3) the high-level context for why AML and CFT programs 
        are necessary for law enforcement agencies and other national 
        security agencies, and what risks the programs seek to 
        mitigate; and
            ``(4) de-risking and its effect on the provision of 
        financial services.
    ``(b) Training Materials and Standards.--The Council shall 
establish uniform training materials and standards for use in the 
training required under subsection (a).''.

SEC. 203. SHARING OF COMPLIANCE RESOURCES.

    (a) In General.--Section 5318 of title 31, United States Code, is 
amended by adding at the end the following:
    ``(o) Sharing of Compliance Resources.--
            ``(1) Sharing permitted.--Two or more financial 
        institutions may enter into collaborative arrangements in order 
        to more efficiency comply with the requirements of this 
        subchapter.
            ``(2) Outreach.--The Secretary of the Treasury and the 
        appropriate supervising agencies shall carry out an outreach 
        program to provide financial institutions with information, 
        including best practices, with respect to the sharing of 
        resources described under paragraph (1).''.
    (b) Rule of Construction.--The amendment made by subsection (a) may 
not be construed to require financial institutions to share resources.

SEC. 204. GAO STUDY ON FEEDBACK LOOPS.

    (a) Study.--The Comptroller General of the United States shall 
carry out a study on--
            (1) practices within the United States Government for 
        providing feedback (``feedback loop'') to relevant parties 
        (including regulated private entities) on the usage and 
        usefulness of personally identifiable information (``PII''), 
        sensitive-but-unclassified (``SBU'') data, or similar 
        information provided by such parties to Government users of 
        such information and data (including law enforcement or 
        regulators); and
            (2) any practices or standards outside the United States 
        for providing feedback loops on sensitive information and 
        public-private partnership information sharing efforts, 
        specifically related to efforts to combat money laundering and 
        other forms of illicit finance.
    (b) Report.--Not later than the end of the 18-month period 
beginning on the date of the enactment of this Act, the Comptroller 
General shall issue a report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives containing--
            (1) all findings and determinations made in carrying out 
        the study required under subsection (a); and
            (2) with respect to each of paragraphs (1) and (2) of 
        subsection (a), any best practices or significant concerns 
        identified by the Comptroller General, and their applicability 
        to public-private partnerships and feedback loops with respect 
        to U.S. efforts to combat money laundering and other forms of 
        illicit finance.

SEC. 205. FINCEN STUDY ON BSA VALUE.

    (a) Study.--The Director of the Financial Crimes Enforcement 
Network shall carry out a study on Bank Secrecy Act value.
    (b) Report.--Not later than the end of the 1-year period beginning 
on the date of enactment of this Act, the Director shall issue a report 
to the Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the Senate 
containing all findings and determinations made in carrying out the 
study required under this section.
    (c) Classified Annex.--The report required under this section may 
include a classified annex, if the Director determines it appropriate.
    (d) Bank Secrecy Act Defined.--For purposes of this section, the 
term ``Bank Secrecy Act'' has the meaning given that term under section 
5312 of title 31, United States Code.

SEC. 206. SECTION 314(A) IMPROVEMENTS.

    Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as 
amended by section 109, is further amended by adding at the end the 
following:
            ``(7) Point of contact list.--
                    ``(A) In general.--The Secretary shall maintain a 
                list containing contact information for with respect to 
                a law enforcement agency, those individuals who serve 
                as points of contact for a Suspicious Activity Report 
                review committee.
                    ``(B) Availability of list.--The Secretary shall 
                make the list of contact information described under 
                subparagraph (A) available to all financial 
                institutions and law enforcement agencies.''.

SEC. 207. SHARING OF THREAT PATTERN AND TREND INFORMATION.

    Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as 
amended by section 206, is further amended by adding at the end the 
following:
            ``(8) Sharing of threat pattern and trend information.--
                    ``(A) In general.--Not less than monthly, the 
                Secretary shall provide financial institutions with 
                typologies on emerging money laundering and counter 
                terror financing threat patterns and trends.
                    ``(B) Information classification.--In providing 
                information pursuant to subparagraph (A), the Secretary 
                may provide public and sensitive information to 
                financial institutions, but may not provide classified 
                information, unless otherwise permitted by law.''.

SEC. 208. MODERNIZATION AND UPGRADING WHISTLEBLOWER PROTECTIONS.

    (a) Rewards.--Section 5323(d) of title 31, United States Code, is 
amended to read as follows:
    ``(d) Source of Rewards.--For the purposes of paying an award under 
this section, there are authorized to be appropriated such sums as may 
be necessary, and the Secretary may also use funds from the Department 
of the Treasury Forfeiture Fund and the Department of Justice Assets 
Forfeiture Fund.''.
    (b) Whistleblower Incentives.--
            Chapter 53 of title 31, United States Code, is amended--
            (1) by inserting after section 5323 the following:
``Sec. 5323A. Whistleblower incentives
    ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by FinCEN under the Bank 
        Secrecy Act that results in monetary sanctions exceeding 
        $1,000,000.
            ``(2) FinCEN.--The term `FinCEN' means the Financial Crimes 
        Enforcement Network.
            ``(3) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative 
        action, means--
                    ``(A) any monies, including penalties, 
                disgorgement, and interest, ordered to be paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                as a result of such action or any settlement of such 
                action.
            ``(4) Original information.--The term `original 
        information' means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to FinCEN from any other source, 
                unless the whistleblower is the original source of the 
                information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by FinCEN, means any judicial or administrative action that is 
        based upon original information provided by a whistleblower 
        that led to the successful enforcement of the action.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.
            ``(7) Whistleblower.--The term `whistleblower' means any 
        individual who provides, or 2 or more individuals acting 
        jointly who provide, information relating to a violation of 
        laws enforced by FinCEN, in a manner established, by rule or 
        regulation, by FinCEN.
    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or 
        administrative action, or related action, the Secretary, under 
        such rules as the Secretary may issue and subject to subsection 
        (c), shall pay an award or awards to 1 or more whistleblowers 
        who voluntarily provided original information to FinCEN that 
        led to the successful enforcement of the covered judicial or 
        administrative action, or related action, in an aggregate 
        amount equal to--
                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Source of awards.--For the purposes of paying any 
        award under paragraph (1) there are authorized to be 
        appropriated such sums as may be necessary, and the Secretary 
        may also use funds from the Department of the Treasury 
        Forfeiture Fund and the Department of Justice Assets Forfeiture 
        Fund.
    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Secretary.
                    ``(B) Criteria.--In responding to a disclosure and 
                determining the amount of an award made, FinCEN staff 
                shall meet with the whistleblower to discuss evidence 
                disclosed and rebuttals to the disclosure, and--
                            ``(i) shall take into consideration--
                                    ``(I) the significance of the 
                                information provided by the 
                                whistleblower to the success of the 
                                covered judicial or administrative 
                                action;
                                    ``(II) the degree of assistance 
                                provided by the whistleblower and any 
                                legal representative of the 
                                whistleblower in a covered judicial or 
                                administrative action;
                                    ``(III) the mission of FinCEN in 
                                deterring violations of the law by 
                                making awards to whistleblowers who 
                                provide information that lead to the 
                                successful enforcement of such laws; 
                                and
                                    ``(IV) such additional relevant 
                                factors as the Secretary may establish 
                                by rule; and
                            ``(ii) shall not take into consideration 
                        the balance of any fund described under section 
                        5323(d).
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original 
                information submitted to FinCEN, a member, officer, or 
                employee of--
                            ``(i) an appropriate regulatory agency;
                            ``(ii) the Department of Justice;
                            ``(iii) a self-regulatory organization; or
                            ``(iv) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section;
                    ``(C) to any whistleblower who gains the 
                information through the performance of an audit of 
                financial statements required under the Bank Secrecy 
                Act and for whom such submission would be contrary to 
                its requirements; or
                    ``(D) to any whistleblower who fails to submit 
                information to FinCEN in such form as the Secretary 
                may, by rule, require.
            ``(3) Statement of reasons.--For any decision granting or 
        denying an award, the Secretary shall provide to the 
        whistleblower a statement of reasons that includes findings of 
        fact and conclusions of law for all material issues.
    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (b) may be 
        represented by counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who 
                anonymously makes a claim for an award under subsection 
                (b) shall be represented by counsel if the 
                whistleblower anonymously submits the information upon 
                which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose their 
                identity and provide such other information as the 
                Secretary may require, directly or through counsel for 
                the whistleblower.
    ``(e) Appeals.--Any determination made under this section, 
including whether, to whom, or in what amount to make awards, shall be 
in the discretion of the Secretary. Any such determination, except the 
determination of the amount of an award if the award was made in 
accordance with subsection (b), may be appealed to the appropriate 
court of appeals of the United States not more than 30 days after the 
determination is issued by the Secretary. The court shall review the 
determination made by the Secretary in accordance with section 706 of 
title 5.''; and
            (2) in the table of contents for such chapter, by inserting 
        after the item relating to section 5323 the following new item:

``5323A. Whistleblower incentives.''.

SEC. 209. CERTAIN VIOLATORS BARRED FROM SERVING ON PUBLIC COMPANY 
              BOARDS.

    Section 5321 of title 31, United States Code, is amended by adding 
at the end the following:
    ``(f) Certain Violators Barred From Serving on Public Company 
Boards.--
            ``(1) In general.--An individual found to have committed an 
        egregious violation of a provision of (or rule issued under) 
        this subchapter, section 21 of the Federal Deposit Insurance 
        Act, or section 123 of Public Law 91-508 shall be barred from 
        serving on the board of directors of a public company for a 10-
        year period beginning on the date of such finding.
            ``(2) Definitions.--In this subsection:
                    ``(A) Egregious violation.--With respect to an 
                individual, the term `egregious violation' means--
                            ``(i) a felony criminal violation for which 
                        the individual was convicted; and
                            ``(ii) a civil violation where the 
                        individual knowingly committed such violation 
                        and the violation facilitated money laundering 
                        or the financing of terrorism.
                    ``(B) Public company.--The term `public company' 
                means an issuer the securities of which are traded on a 
                national securities exchange.
                    ``(C) Other securities terms.--The terms `issuer' 
                and `national securities exchange' have the meaning 
                given those terms, respectively, under section 3 of the 
                Securities Exchange Act of 1934.''.

SEC. 210. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT VIOLATORS.

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

SEC. 211. JUSTICE ANNUAL REPORT ON DEFERRED AND NONPROSECUTION 
              AGREEMENTS.

    (a) Annual Report.--The Attorney General shall issue an annual 
report, every year for the five years beginning on the date of 
enactment of this Act, to the Committees on Financial Services and the 
Judiciary of the House of Representatives and the Committees on 
Banking, Housing, and Urban Affairs and the Judiciary of the Senate 
containing--
            (1) a list of deferred prosecution agreements and 
        nonprosecution agreements that the Attorney General has entered 
        into during the previous year with any person with respect to a 
        violation or suspected violation of the Bank Secrecy Act;
            (2) the justification for entering into each such 
        agreement;
            (3) the list of factors that were taken into account in 
        determining that the Attorney General should enter into each 
        such agreement; and
            (4) the extent of coordination the Attorney General 
        conducted with the Financial Crimes Enforcement Network prior 
        to entering into each such agreement.
    (b) Classified Annex.--Each report under subsection (a) may include 
a classified annex.
    (c) Bank Secrecy Act Defined.--For purposes of this section, the 
term ``Bank Secrecy Act'' has the meaning given that term under section 
5312 of title 31, United States Code.

SEC. 212. RETURN OF PROFITS AND BONUSES.

    Section 5322 of title 31, United States Code, is amended by adding 
at the end the following:
    ``(e) Return of Profits and Bonuses.--A person convicted of 
violating a provision of (or rule issued under) this subchapter, 
section 21 of the Federal Deposit Insurance Act, or section 123 of 
Public Law 91-508 shall--
            ``(1) in addition to any other fine under this section, be 
        fined in an amount equal to the profit gained by such person by 
        reason of such violation, as determined by the court; and
            ``(2) if such person is an individual who was a partner, 
        director, officer, or employee of a domestic financial 
        institution or nonfinancial trade or business at the time the 
        violation occurred, repay to such domestic financial 
        institution or nonfinancial trade or business any bonus paid to 
        such individual during the Federal fiscal year in which the 
        violation occurred.''.

SEC. 213. PROHIBITION ON TAX DEDUCTIONS FOR ATTORNEY'S FEES RELATED TO 
              BANK SECRECY ACT SETTLEMENTS AND COURT COSTS.

    Section 162(f) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following:
            ``(6) Violations of the bank secrecy act.--In the case of a 
        payment described in paragraph (1) that is in relation to any 
        violation of the Bank Secrecy Act (as defined under section 
        5312 of title 31, United States Code), no deduction shall be 
        allowed under this chapter for attorney's fees related to such 
        payment.''.

SEC. 214. APPLICATION OF BANK SECRECY ACT TO DEALERS IN ART OR 
              ANTIQUITIES.

    (a) In General.--Section 5312(a)(2) of title 31, United States 
Code, is amended--
            (1) in subparagraph (Y), by striking ``or'' at the end;
            (2) by redesignating subparagraph (Z) as subparagraph (AA); 
        and
            (3) by inserting after subsection (Y) the following:
                    ``(Z) dealers in art or antiquities; or''.
    (b) Rulemaking.--Not later than the end of the 180-day period 
beginning on the date of the enactment of this Act, the Secretary of 
the Treasury shall issue regulations to carry out the amendments made 
by subsection (a).
    (c) Effective Date.--Section 5312(a)(2)(Z) of title 31, United 
States Code, as added by subsection (a), shall take effect after the 
end of the 270-day period beginning on the date of the enactment of 
this Act.

SEC. 215. REVISION TO GEOGRAPHIC TARGETING ORDER.

    The Secretary of the Treasury shall revise the geographic targeting 
order issued by the Financial Crimes Enforcement Network on November 
15, 2018 (the ``Order''), so that the Order--
            (1) applies to commercial real estate to the same extent as 
        the Order applies to residential real estate; and
            (2) applies to a purchase made, at least in part, using an 
        in-kind transaction to the same extent as the Order applies to 
        a purchase made, at least in part, using currency or a 
        cashier's check, a certified check, a traveler's check, a 
        personal check, a business check, a money order in any form, a 
        funds transfer, or virtual currency.

                 TITLE III--MODERNIZING THE AML SYSTEM

SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.

    Section 5318 of title 31, United States Code, as amended by section 
203, is further amended by adding at the end the following:
    ``(p) Encouraging Innovation in Compliance.--
            ``(1) In general.--The financial agencies shall encourage 
        financial institutions to consider, evaluate, and, where 
        appropriate, responsibly implement innovative approaches to 
        meet the requirements of this subchapter, including through the 
        use of innovation pilot programs.
            ``(2) Exemptive relief.--The Secretary, pursuant to 
        subsection (a), may provide exemptions from the requirements of 
        this subchapter if the Secretary determines such exemptions are 
        necessary to facilitate the testing and potential use of new 
        technologies and other innovations.
            ``(3) Financial agency defined.--In this subsection, the 
        term `financial agency' means the Department of the Treasury, 
        the Board of Governors of the Federal Reserve System, the 
        Federal Deposit Insurance Corporation, the National Credit 
        Union Administration, the Office of the Comptroller of the 
        Currency, and the Securities and Exchange Commission.''.

SEC. 302. INNOVATION LABS.

    (a) In General.--Title 31, United States Code, is amended by 
inserting after section 5326 the following:
``Sec. 5327. Innovation Labs
    ``(a) Establishment.--There is established within each financial 
agency an Innovation Lab.
    ``(b) Director.--The head of each Innovation Lab shall be a 
Director, to be appointed by the head of the applicable financial 
agency.
    ``(c) Duties.--The duties of the Innovation Lab shall be--
            ``(1) to provide outreach to law enforcement agencies, 
        financial institutions, and other persons (including vendors 
        and technology companies) with respect to innovation and new 
        technologies used to comply with the requirements of the Bank 
        Secrecy Act; and
            ``(2) to support the implementation of responsible 
        innovation and new technology, in a manner that complies with 
        the requirements of the Bank Secrecy Act.
    ``(d) FinCEN Lab.--The Innovation Lab established under subsection 
(a) within the Department of the Treasury shall be a lab within the 
Financial Crimes Enforcement Network.
    ``(e) Financial Agency Defined.--In this section, the term 
`financial agency' means the Department of the Treasury, the Board of 
Governors of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, the National Credit Union Administration, the Office of 
the Comptroller of the Currency, and the Securities and Exchange 
Commission.''.
    (b) Clerical Amendment.--The table of contents for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 5326 the following:

``5327. Innovation Labs.''.

SEC. 303. INNOVATION COUNCIL.

    (a) Establishment.--There is established the Innovation Council 
(hereinafter in this section referred to as the ``Council''), which 
shall consist of each Director of an Innovation Lab established under 
section 302 and the Director of the Financial Crimes Enforcement 
Network.
    (b) Chair.--The Director of the Innovation Lab of the Department of 
the Treasury shall serve as the Chair of the Council.
    (c) Duty.--The members of the Council shall coordinate on 
activities related to innovation under the Bank Secrecy Act (as defined 
under section 5312 of title 31, United States Code).
    (d) Meetings.--The meetings of the Council--
            (1) shall be at the call of the Chair, but in no case may 
        the Council meet less than quarterly;
            (2) may include open and closed sessions, as determined 
        necessary by the Council; and
            (3) may include participation by public and private 
        entities and law enforcement agencies.
    (e) Report.--The Council shall issue an annual report to Congress 
on the activities of the Council during the previous year and any 
legislative recommendations that the Council may have.

SEC. 304. PARALLEL RUNS RULEMAKING.

    Section 5318 of title 31, United States Code, as amended by section 
301, is further amended by adding at the end the following:
    ``(q) Parallel Runs Rulemaking.--The Secretary of the Treasury, in 
consultation with the Director of the Financial Crimes Enforcement 
Network and the head of each agency to which the Secretary has 
delegated duties or powers under subsection (a), shall issue a rule to 
specify--
            ``(1) with respect to technology and processes designed to 
        facilitate compliance with the Bank Secrecy Act requirements, 
        under what circumstances it is necessary for a financial 
        institution to test new technology and processes alongside 
        legacy technology and processes (`parallel runs');
            ``(2) if parallel runs are required, what tests must be 
        completed; and
            ``(3) in what instances or under what circumstances a 
        financial institution may replace or terminate such legacy 
        technology and processes for any examinable technology or 
        process.''.
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