116 HR 2514 : Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019
U.S. House of Representatives
2019-10-29
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of contents
(a)This Act may be cited as the Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019
or the COUNTER Act of 2019
. (b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.
Sec. 3. Determination of Budgetary Effects.
Title I—Strengthening Treasury
Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. Special hiring authority.
Sec. 103. Civil Liberties and Privacy Officer.
Sec. 104. Civil Liberties and Privacy Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attachés 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. Study and strategy on de-risking.
Sec. 112. AML examination authority delegation study.
Sec. 113. Study and strategy on Chinese money laundering.
Title II—Improving AML/CFT Oversight
Sec. 201. Pilot program on sharing of suspicious activity reports within a financial group.
Sec. 202. Sharing of compliance resources.
Sec. 203. GAO Study on feedback loops.
Sec. 204. FinCEN study on BSA value.
Sec. 205. Sharing of threat pattern and trend information.
Sec. 206. Modernization and upgrading whistleblower protections.
Sec. 207. Certain violators barred from serving on boards of United States financial institutions.
Sec. 208. Additional damages for repeat Bank Secrecy Act violators.
Sec. 209. Justice annual report on deferred and non-prosecution agreements.
Sec. 210. Return of profits and bonuses.
Sec. 211. Application of Bank Secrecy Act to dealers in antiquities.
Sec. 212. Geographic targeting order.
Sec. 213. Study and revisions to currency transaction reports and suspicious activity reports.
Sec. 214. Streamlining requirements for currency transaction reports and suspicious activity
reports.
Title III—Modernizing the AML System
Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Testing methods rulemaking.
Sec. 305. FinCEN study on use of emerging technologies.
Sec. 306. Discretionary surplus funds.
2.Bank Secrecy Act definitionSection 5312(a) of title 31, United States Code, is amended by adding at the end the following: (7)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.. 3.Determination of Budgetary EffectsThe budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled Budgetary Effects of PAYGO Legislation
for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
<enum>I</enum><header>Strengthening Treasury</header>
<section id="H5E509D657F7A44A2B5FF57C40230B9B0"><enum>101.</enum><header>Improving the definition and purpose of the Bank Secrecy Act</header><text display-inline="no-display-inline">Section 5311 of title 31, United States Code, is amended—</text> <paragraph id="H4CF41ACBDE2145808D04A8EE780CA813"><enum>(1)</enum><text>by inserting <quote>to protect our national security, to safeguard the integrity of the international financial system, and</quote> before <quote>to require</quote>; and</text>
</paragraph><paragraph id="H776CE707699E427A8A14B0CD7F275968"><enum>(2)</enum><text>by inserting <quote>to law enforcement and</quote> before <quote>in criminal</quote>.</text> </paragraph></section><section id="HB674127D862C4774AA649A2E84781151"><enum>102.</enum><header>Special hiring authority</header> <subsection id="H0B53FD4CA18E4453820B14208C606137"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 310 of title 31, United States Code, is amended—</text>
<paragraph id="HB942CAC09DB84733A4A9755637DA32E9"><enum>(1)</enum><text>by redesignating subsection (d) as subsection (g); and</text> </paragraph><paragraph id="HE89013CF7BD24BE29DEB9FC7B601CED4"><enum>(2)</enum><text>by inserting after subsection (c) the following:</text>
<quoted-block display-inline="no-display-inline" id="H413D9BAB14DB4BBE8A39FEF5426A2937" style="USC">
<subsection id="H671519CA20E64328BB0C1678A3E1FA7C"><enum>(d)</enum><header>Special hiring authority</header>
<paragraph id="H0A7E2A55060142FF983D840B7DB742BB"><enum>(1)</enum><header>In general</header><text>The Secretary of the Treasury may appoint, without regard to the provisions of sections 3309 through 3318 of title 5, candidates directly to positions in the competitive service (as defined in section 2102 of that title) in FinCEN.</text>
</paragraph><paragraph id="HBEC3EC6CB7A24C7E8EC57C24DABC5A23"><enum>(2)</enum><header>Primary responsibilities</header><text>The primary responsibility of candidates appointed pursuant to paragraph (1) shall be to provide substantive support in support of the duties described in subparagraphs (A), (B), (E), and (F) of subsection (b)(2).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HA8E2F09043F84BC7BB5183F85C62A08F"><enum>(b)</enum><header>Report</header><text>Not later than 360 days after the date of enactment of this Act, and every year thereafter for 7 years, the Director of the Financial Crimes Enforcement Network shall submit 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 that includes—</text>
<paragraph id="H93FD8202E3644DF9890C96B7C699BA3E"><enum>(1)</enum><text>the number of new employees hired since the preceding report through the authorities described under section 310(d) of title 31, United States Code, along with position titles and associated pay grades for such hires; and</text>
</paragraph><paragraph id="HBE25EDF1D67D4E57B7827047AF1AF032"><enum>(2)</enum><text display-inline="yes-display-inline">a copy of any Federal Government survey of staff perspectives at the Office of Terrorism and Financial Intelligence, including findings regarding the Office and the Financial Crimes Enforcement Network from the most recently administered Federal Employee Viewpoint Survey.</text>
</paragraph></subsection></section><section id="H5E61E79C00F2423BB36A84B55CFA5231"><enum>103.</enum><header>Civil Liberties and Privacy Officer</header>
<subsection id="H791252F523BB4382885790BB42E306FD"><enum>(a)</enum><header>Appointment of Officers</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H3628AD25F9FB4589BEE61C4FEEB2864C"><enum>(1)</enum><text>within each Federal functional regulator, by the head of the Federal functional regulator;</text> </paragraph><paragraph id="H97025EC40BA549E5814BDAE9290304C2"><enum>(2)</enum><text display-inline="yes-display-inline">within the Financial Crimes Enforcement Network, by the Secretary of the Treasury; and</text>
</paragraph><paragraph id="H116B5F9A08E044FB9FE3FBECFC0A8B14"><enum>(3)</enum><text display-inline="yes-display-inline">within the Internal Revenue Service Small Business and Self-Employed Tax Center, by the Secretary of the Treasury.</text>
</paragraph></subsection><subsection id="H1228FD93818645F5AB841DDAA8173B75"><enum>(b)</enum><header>Duties</header><text display-inline="yes-display-inline">Each Civil Liberties and Privacy Officer shall, with respect to the applicable regulator, Network, or Center within which the Officer is located—</text>
<paragraph id="HF84597535BA04B089C790B86F49DB73A"><enum>(1)</enum><text display-inline="yes-display-inline">be consulted each time Bank Secrecy Act or anti-money laundering regulations affecting civil liberties or privacy are developed or reviewed;</text>
</paragraph><paragraph id="H2CC1C945E5944E2FBE28C4969C397ECF"><enum>(2)</enum><text>be consulted on information-sharing programs, including those that provide access to personally identifiable information;</text>
</paragraph><paragraph id="HCB01F89C92D74E208EAC2977D98A4C2B"><enum>(3)</enum><text display-inline="yes-display-inline">ensure coordination and clarity between anti-money laundering, civil liberties, and privacy regulations;</text>
</paragraph><paragraph id="HB4DB3974906C4203B49CDE4A1479B4C1"><enum>(4)</enum><text display-inline="yes-display-inline">contribute to the evaluation and regulation of new technologies that may strengthen data privacy and the protection of personally identifiable information collected by each Federal functional regulator; and</text>
</paragraph><paragraph id="H3499C6992B2E4F5CBDA405A96DDFA9C4"><enum>(5)</enum><text display-inline="yes-display-inline">develop metrics of program success.</text> </paragraph></subsection><subsection id="H4157DE0676D94E799127127D906875A7"><enum>(c)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section:</text>
<paragraph id="HA6582A9186224591B7FF0850A8B8B322"><enum>(1)</enum><header>Bank Secrecy Act</header><text display-inline="yes-display-inline">The term <quote>Bank Secrecy Act</quote> has the meaning given that term under section 5312 of title 31, United States Code.</text> </paragraph><paragraph id="H9D480B1269E3400DA442F33D62517ABF"><enum>(2)</enum><header>Federal functional regulator</header><text display-inline="yes-display-inline">The term <term>Federal functional regulator</term> means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.</text>
</paragraph></subsection></section><section id="H3AA28888FA10461ABD28191A362A5DDF"><enum>104.</enum><header>Civil Liberties and Privacy Council</header>
<subsection id="H47882CCE14744DD4A570128E3B770BAF"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established the Civil Liberties and Privacy Council (hereinafter in this section referred to as the <quote>Council</quote>), which shall consist of the Civil Liberties and Privacy Officers appointed pursuant to section 103.</text>
</subsection><subsection commented="no" id="HEFEF2191D0114BA7BC937F04C0B094FB"><enum>(b)</enum><header>Chair</header><text display-inline="yes-display-inline">The Director of the Financial Crimes Enforcement Network shall serve as the Chair of the Council.</text> </subsection><subsection id="HCD05CBFD0B7C4C61850896235BD9BBD9"><enum>(c)</enum><header>Duty</header><text display-inline="yes-display-inline">The members of the Council shall coordinate on activities related to their duties as Civil Liberties Privacy Officers, but may not supplant the individual agency determinations on civil liberties and privacy.</text>
</subsection><subsection id="H971AF430AB424BABBAB0CC80DDD02AE7"><enum>(d)</enum><header>Meetings</header><text display-inline="yes-display-inline">The meetings of the Council—</text> <paragraph id="H7593D2D37EDB4AEDAE296A17162B5F44"><enum>(1)</enum><text>shall be at the call of the Chair, but in no case may the Council meet less than quarterly;</text>
</paragraph><paragraph id="HD3AEBBA9958B4FE1898E6EC664149606"><enum>(2)</enum><text>may include open and partially closed sessions, as determined necessary by the Council; and</text> </paragraph><paragraph id="H92711DB4268343B6A02D4327FC55E8B9"><enum>(3)</enum><text display-inline="yes-display-inline">shall include participation by public and private entities, law enforcement agencies, and a representative of State bank supervisors (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)).</text>
</paragraph></subsection><subsection id="H4C5C8EB25EF04197B5A6D889502BEB9E"><enum>(e)</enum><header>Report</header><text display-inline="yes-display-inline">The Chair of the Council shall issue an annual report to the Congress on the program and policy activities, including the success of programs as measured by metrics of program success developed pursuant to section 103(b)(5), of the Council during the previous year and any legislative recommendations that the Council may have.</text>
</subsection><subsection id="HDBCA039DAB214F5A9B9C779994BFBFE5"><enum>(f)</enum><header>Nonapplicability of FACA</header><text display-inline="yes-display-inline">The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the Council.</text> </subsection></section><section id="HEA518D9C7DAD42B798897868B360C5B8"><enum>105.</enum><header>International coordination</header> <subsection id="H38E2DEE7CBC34445ADAE925C60AE5201"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall work with the Secretary’s foreign counterparts, including through the Financial Action Task Force, the International Monetary Fund, the World Bank, the Egmont Group of Financial Intelligence Units, the Organisation for Economic Co-operation and Development, and the United Nations, to promote stronger anti-money laundering frameworks and enforcement of anti-money laundering laws.</text>
</subsection><subsection id="HB889183FBC07424CB84B115E8FB675B0"><enum>(b)</enum><header>Cooperation goal</header><text display-inline="yes-display-inline">In carrying out subsection (a), the Secretary of the Treasury may work directly with foreign counterparts and other organizations where the goal of cooperation can best be met.</text>
</subsection><subsection id="HF85EB209FFE34248884898EEDCB61B0A"><enum>(c)</enum><header>International Monetary Fund</header>
<paragraph id="HDFA80E3342A74D058FBA0513013761E5"><enum>(1)</enum><header>Support for capacity of the International Monetary Fund to prevent money laundering and financing
of terrorism</header><text>Title XVI of the International Financial Institutions Act (<external-xref legal-doc="usc" parsable-cite="usc/22/262p">22 U.S.C. 262p</external-xref> et seq.) is amended by adding at the end the following:</text>
<quoted-block id="H2F02D8E85C344CECB2B41FDDDB816FFB" style="OLC">
<section id="H1ECFDCE60BA147379FC98A051E8E9E59"><enum>1629.</enum><header>Support for capacity of the International Monetary Fund to prevent money laundering and financing
of terrorism</header><text display-inline="no-display-inline">The Secretary of the Treasury shall instruct the United States Executive Director at the International Monetary Fund to support the increased use of the administrative budget of the Fund for technical assistance that strengthens the capacity of Fund members to prevent money laundering and the financing of terrorism.</text></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H6C6E6DC50EE04CFB9F92D7F5C38A7C1B"><enum>(2)</enum><header>National Advisory Council report to Congress</header><text>The Chairman of the National Advisory Council on International Monetary and Financial Policies shall include in the report required by section 1701 of the International Financial Institutions Act (<external-xref legal-doc="usc" parsable-cite="usc/22/262r">22 U.S.C. 262r</external-xref>) a description of—</text>
<subparagraph id="HCDEEA684E6E44FB3A125BEA42DED87A5"><enum>(A)</enum><text>the activities of the International Monetary Fund in the most recently completed fiscal year to provide technical assistance that strengthens the capacity of Fund members to prevent money laundering and the financing of terrorism, and the effectiveness of the assistance; and</text>
</subparagraph><subparagraph id="H7C1F8F296BE54DB2AF0D4FD6F40A4587"><enum>(B)</enum><text>the efficacy of efforts by the United States to support such technical assistance through the use of the Fund’s administrative budget, and the level of such support.</text>
</subparagraph></paragraph><paragraph id="H0531CDE700CA46D3AAF2BE57A13525C3"><enum>(3)</enum><header>Sunset</header><text display-inline="yes-display-inline">Effective on the date that is the end of the 4-year period beginning on the date of enactment of this Act, section 1629 of the International Financial Institutions Act, as added by paragraph (1), is repealed.</text>
</paragraph></subsection></section><section id="H03F54A225ED940009DDC4B95367CC494"><enum>106.</enum><header>Treasury Attachés Program</header>
<subsection id="HA898F36B1C62499297E92A6D19F877B3"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Title 31, United States Code, is amended by inserting after section 315 the following:</text> <quoted-block display-inline="no-display-inline" id="H49B0EFB3639A44349B62FE99EAF7040D" style="USC"> <section id="HB874301A56444947A676C98FC62C561A"><enum>316.</enum><header>Treasury Attachés Program</header> <subsection id="H298B88CA29974729BE32A92CBEDB6D13"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">There is established the Treasury Attachés Program, under which the Secretary of the Treasury shall appoint employees of the Department of the Treasury, after nomination by the Director of the Financial Crimes Enforcement Network (<quote>FinCEN</quote>), as a Treasury attaché, who shall—</text>
<paragraph id="H067C9CC541364F1793129856D96BF61F"><enum>(1)</enum><text display-inline="yes-display-inline">be knowledgeable about the Bank Secrecy Act and anti-money laundering issues;</text> </paragraph><paragraph id="HB1BE96ACFA0F401A9D24B8EA9190F8FD"><enum>(2)</enum><text>be co-located in a United States embassy;</text>
</paragraph><paragraph id="HB1F939C871CD4D4ABCDB34727ABC7494"><enum>(3)</enum><text display-inline="yes-display-inline">perform outreach with respect to Bank Secrecy Act and anti-money laundering issues;</text> </paragraph><paragraph id="H25D4D245909643B3949FD63AF7F8E360"><enum>(4)</enum><text>establish and maintain relationships with foreign counterparts, including employees of ministries of finance, central banks, and other relevant official entities;</text>
</paragraph><paragraph id="H19683B113F134FC1A7833A5FB6A50992"><enum>(5)</enum><text>conduct outreach to local and foreign financial institutions and other commercial actors, including—</text>
<subparagraph id="HEFCA9D5753BE41559A982B6370DB0814"><enum>(A)</enum><text>information exchanges through FinCEN and FinCEN programs; and</text> </subparagraph><subparagraph id="H1292E0F5D6484D268AFA29DAE40B0C0F"><enum>(B)</enum><text>soliciting buy-in and cooperation for the implementation of—</text>
<clause id="H776F1673029248F0A5291231F42AE6B5"><enum>(i)</enum><text>United States and multilateral sanctions; and</text> </clause><clause id="H61DEF354624F4755B1B61A241571A746"><enum>(ii)</enum><text>international standards on anti-money laundering and the countering of the financing of terrorism; and</text>
</clause></subparagraph></paragraph><paragraph id="H24BE8208C36F40F2B1A5B5AAC4160783"><enum>(6)</enum><text>perform such other actions as the Secretary determines appropriate.</text> </paragraph></subsection><subsection id="HE228A3D91D8C4C678983B3E1CE3CDB0A"><enum>(b)</enum><header>Number of attachés</header><text display-inline="yes-display-inline">The number of Treasury attachés appointed under this section at any one time shall be not fewer than six more employees than the number of employees of the Department of the Treasury serving as Treasury attachés on March 1, 2019.</text>
</subsection><subsection id="HF8F070F4164F4DA8A7E7AB54F3C24057"><enum>(c)</enum><header>Compensation</header><text display-inline="yes-display-inline">Each Treasury attaché appointed under this section and located at a United States embassy shall receive compensation at the higher of—</text>
<paragraph id="HE718F939548842E69C99DD2F5FE1B1E7"><enum>(1)</enum><text display-inline="yes-display-inline">the rate of compensation provided to a Foreign Service officer at a comparable career level serving at the same embassy; or</text>
</paragraph><paragraph id="HB03B25FE6B674B58B80F123915A16616"><enum>(2)</enum><text display-inline="yes-display-inline">the rate of compensation the Treasury attaché would otherwise have received, absent the application of this subsection.</text>
</paragraph></subsection><subsection id="H3126E605CCEE4D7DA1B35EC1194780F5"><enum>(d)</enum><header>Bank Secrecy Act defined</header><text display-inline="yes-display-inline">In this section, the term <term>Bank Secrecy Act</term> has the meaning given that term under section 5312.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection><subsection id="H473BC4626B3A4D7F8EC29369CB9A0B9B"><enum>(b)</enum><header>Clerical amendment</header><text>The table of contents for <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/3">chapter 3</external-xref> of title 31, United States Code, is amended by inserting after the item relating to <external-xref legal-doc="usc" parsable-cite="usc/31/315">section 315</external-xref> the following:</text>
<quoted-block display-inline="no-display-inline" id="HFC9E09105AA54EFBA5A20F727CAF2367" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">316. Treasury Attachés Program.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HDEF7BB3EB578472E8E25DB0CD0FEB5AE"><enum>107.</enum><header>Increasing technical assistance for international cooperation</header>
<subsection id="H9B0AA37C45A84AA09527C7623F305E84"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">There is authorized to be appropriated for each of fiscal years 2020 through 2024 to the Secretary of the Treasury for purposes of providing technical assistance that promotes compliance with international standards and best practices, including in particular those aimed at the establishment of effective anti-money laundering and countering the financing of terrorism regimes, in an amount equal to twice the amount authorized for such purpose for fiscal year 2019.</text>
</subsection><subsection id="H1E5D959340E54641A46B0C842C98D581"><enum>(b)</enum><header>Activity and evaluation report</header><text display-inline="yes-display-inline">Not later than 360 days after enactment of this Act, and every year thereafter for 5 years, the Secretary of the Treasury shall issue a report to the Congress on the assistance (as described under subsection (a)) of the Office of Technical Assistance of the Department of the Treasury containing—</text>
<paragraph id="HD01CBF4562834F2E9B8A7F71AD86BB97"><enum>(1)</enum><text>a narrative detailing the strategic goals of the Office in the previous year, with an explanation of how technical assistance provided in the previous year advances the goals;</text>
</paragraph><paragraph id="H19F8CB594F924EE5B60410C34A07B838"><enum>(2)</enum><text>a description of technical assistance provided by the Office in the previous year, including the objectives and delivery methods of the assistance;</text>
</paragraph><paragraph id="HE75CAF42D9134D67BF6E32BD5900A83D"><enum>(3)</enum><text>a list of beneficiaries and providers (other than Office staff) of the technical assistance;</text> </paragraph><paragraph id="HA28B148B86E7411FA2EA84E5EE48C1CE"><enum>(4)</enum><text>a description of how technical assistance provided by the Office complements, duplicates, or otherwise affects or is affected by technical assistance provided by the international financial institutions (as defined under section 1701(c) of the International Financial Institutions Act); and</text>
</paragraph><paragraph id="HB93693B8306748739EF2083045FD422F"><enum>(5)</enum><text>a copy of any Federal Government survey of staff perspectives at the Office of Technical Assistance, including any findings regarding the Office from the most recently administered Federal Employee Viewpoint Survey.</text>
</paragraph></subsection></section><section id="H2507E04BBC204A99B946D709CFE0FD23"><enum>108.</enum><header>FinCEN Domestic Liaisons</header><text display-inline="no-display-inline">Section 310 of title 31, United States Code, as amended by section 102, is further amended by inserting after subsection (d) the following:</text>
<quoted-block display-inline="no-display-inline" id="HFF36061217804DE78AA259266C80049C" style="USC">
<subsection id="H3886F9BC89A148D4B6178203CB0B40E5"><enum>(e)</enum><header>FinCEN Domestic Liaisons</header>
<paragraph id="H8B01461A655C458AAA04A89615C4F2F9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Director of FinCEN shall appoint at least six senior FinCEN employees as FinCEN Domestic Liaisons, who shall—</text>
<subparagraph id="HD6EC39CAC5814506BD0D4C55ED3F804D"><enum>(A)</enum><text display-inline="yes-display-inline">each be assigned to focus on a specific region of the United States;</text> </subparagraph><subparagraph id="HAB37A60BC38C4992A948D4F57A5CAD7D"><enum>(B)</enum><text>be located at an office in such region (or co-located at an office of the Board of Governors of the Federal Reserve System in such region); and</text>
</subparagraph><subparagraph id="H5790408E19954E66A193862CD6388E2C"><enum>(C)</enum><text display-inline="yes-display-inline">perform outreach to BSA officers at 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.</text>
</subparagraph></paragraph><paragraph id="H17E70D2D1E3D46C58E8C568A94E88CED"><enum>(2)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this subsection:</text> <subparagraph id="H1BF08D56E2F0436499C952690AA3E525"><enum>(A)</enum><header>BSA officer</header><text>The term <quote>BSA officer</quote> means an employee of a financial institution whose primary job responsibility involves compliance with the Bank Secrecy Act, as such term is defined under section 5312.</text>
</subparagraph><subparagraph id="HBA06ADD079B6429E9D6622649CF0E45D"><enum>(B)</enum><header>Financial institution</header><text>The term <term>financial institution</term> has the meaning given that term under section 5312.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HD14C226CF27C4CEBB2B167DE81925A2E"><enum>109.</enum><header>FinCEN Exchange</header><text display-inline="no-display-inline">Section 310 of title 31, United States Code, as amended by section 108, is further amended by inserting after subsection (e) the following:</text>
<quoted-block display-inline="no-display-inline" id="H13A028126D014A3CA59900038C6E3011" style="USC">
<subsection id="HDB2A0FB0822C45F8BE14A182B40F7F4B"><enum>(f)</enum><header>FinCEN Exchange</header>
<paragraph id="HCF78E57D205C46CC87BE7A8501747553"><enum>(1)</enum><header>Establishment</header><text>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.</text>
</paragraph><paragraph id="H84C2EE7B70824C08B656831B05BEBA84"><enum>(2)</enum><header>Purpose</header><text display-inline="yes-display-inline">The FinCEN Exchange shall facilitate a voluntary public-private information sharing partnership among law enforcement, financial institutions, and FinCEN to—</text>
<subparagraph id="H6E23A9B3C0EB40CBB59F8A3360F341F5"><enum>(A)</enum><text>effectively and efficiently combat money laundering, terrorism financing, organized crime, and other financial crimes;</text>
</subparagraph><subparagraph id="H2B17565B67E74C1C807449D672DEBB1D"><enum>(B)</enum><text>protect the financial system from illicit use; and</text> </subparagraph><subparagraph id="H46910DFD9E2641799804F05F0A4E5170"><enum>(C)</enum><text>promote national security.</text>
</subparagraph></paragraph><paragraph id="H83094A5523EC49D7957BB9603FF8A5D2"><enum>(3)</enum><header>Report</header>
<subparagraph id="H1B53203E6A4A4DDD9636CB572BD4A387"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this subsection, and annually thereafter for the next 5 years, the Secretary of the Treasury 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—</text>
<clause id="H48F8C44F713F48048D319E643D855B84"><enum>(i)</enum><text>an analysis of the efforts undertaken by the FinCEN Exchange and the results of such efforts;</text> </clause><clause id="HB0688EAB58224731AF0613F24FC0AD3A"><enum>(ii)</enum><text>an analysis of the extent and effectiveness of the FinCEN Exchange, including any benefits realized by law enforcement from partnership with financial institutions; and</text>
</clause><clause id="H05EE33D8C2F34FAEBE0BFC837EA9303D"><enum>(iii)</enum><text>any legislative, administrative, or other recommendations the Secretary may have to strengthen FinCEN Exchange efforts.</text>
</clause></subparagraph><subparagraph id="HE96007BA1FF14F7C9B98F9AD14A2332B"><enum>(B)</enum><header>Classified annex</header><text>Each report under subparagraph (A) may include a classified annex.</text> </subparagraph></paragraph><paragraph id="H8A2D3A1E239F4C21A707FDE20D6FBD10"><enum>(4)</enum><header>Information sharing requirement</header><text>Information shared pursuant to this subsection shall be shared in compliance with all other applicable Federal laws and regulations.</text>
</paragraph><paragraph id="H1552A96D323840A0B51813352D64E76F"><enum>(5)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing under this subsection may be construed to create new information sharing authorities related to the Bank Secrecy Act (as such term is defined under section 5312 of title 31, United States Code).</text>
</paragraph><paragraph id="H4A63EE4245164A5FB64D7CEED9672B27"><enum>(6)</enum><header>Financial institution defined</header><text>In this subsection, the term <quote>financial institution</quote> has the meaning given that term under section 5312.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H22AB2F4AB161467B8393F17C5F69FC8C"><enum>110.</enum><header>Study and strategy on trade-based money laundering</header> <subsection id="HFB86DEFCE8F547C78A846D71C00CA3A9"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall carry out a study, in consultation with appropriate private sector stakeholders and Federal departments and agencies, on trade-based money laundering.</text>
</subsection><subsection id="HC10A05346B704B25846B9DD03201F652"><enum>(b)</enum><header>Report</header><text>Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary shall issue a report to the Congress containing—</text>
<paragraph id="H4B8058FB410E47FF950F7332D0CF2487"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a); and</text> </paragraph><paragraph id="H52B000292C2E4B3EAA50CE761AE7AB77"><enum>(2)</enum><text display-inline="yes-display-inline">proposed strategies to combat trade-based money laundering.</text>
</paragraph></subsection><subsection id="H9F48FD1AF8634A3480AE0FF6A1E6F324"><enum>(c)</enum><header>Classified annex</header><text display-inline="yes-display-inline">The report required under this section may include a classified annex.</text> </subsection><subsection id="HFDB1F5789CEC4D9D9A705C8AD01C918B"><enum>(d)</enum><header>Contracting authority</header><text display-inline="yes-display-inline">The Secretary may contract with a private third-party to carry out the study required under this section. The authority of the Secretary to enter into contracts under this subsection shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts.</text>
</subsection></section><section id="H8B3FE03D303443ABBE8AA952CC6D4D5E"><enum>111.</enum><header>Study and strategy on de-risking</header>
<subsection id="H15512150E2134CA99465A26312C8C8FC"><enum>(a)</enum><header>Review</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in consultation with appropriate private sector stakeholders, examiners, the Federal functional regulators (as defined under section 103), State bank supervisors, and other relevant stakeholders, shall undertake a formal review of—</text>
<paragraph id="H334CE8E8D2AC4884B3E853F83EEAC228"><enum>(1)</enum><text>any 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) and their agents, countries, international and domestic regions, and respondent banks;</text>
</paragraph><paragraph id="H161DB836A8B441929C07E29D33A8BCB4"><enum>(2)</enum><text>the reasons why financial institutions are engaging in de-risking;</text> </paragraph><paragraph id="H57958EB0729F4A848229D6B4D60D3318"><enum>(3)</enum><text>the association with and effects of de-risking on money laundering and financial crime actors and activities;</text>
</paragraph><paragraph id="H97D19AC635CC498DA6778C0940776F36"><enum>(4)</enum><text display-inline="yes-display-inline">the most appropriate ways to promote financial inclusion, particularly with respect to developing countries, while maintaining compliance with the Bank Secrecy Act, including an assessment of policy options to—</text>
<subparagraph id="HB67F86E503154FCAB09717615BA0B1BB"><enum>(A)</enum><text>more effectively tailor Federal actions and penalties to the size of foreign financial institutions and any capacity limitations of foreign governments; and</text>
</subparagraph><subparagraph id="H79725A365F81421E9E8D98C9CCBE54DC"><enum>(B)</enum><text>reduce compliance costs that may lead to the adverse consequences described in paragraph (1);</text> </subparagraph></paragraph><paragraph id="H3552ACE849A342DCBBDBC5498C8FC6BE"><enum>(5)</enum><text display-inline="yes-display-inline">formal and informal feedback provided by examiners that may have led to de-risking;</text>
</paragraph><paragraph id="H59B104A95E1B49CF9C32930C6CF03F27"><enum>(6)</enum><text>the relationship between resources dedicated to compliance and overall sophistication of compliance efforts at entities that may be experiencing de-risking versus those that have not experienced de-risking; and</text>
</paragraph><paragraph id="HA94E14A36384422E80B98E6C4538C43E"><enum>(7)</enum><text>any best practices from the private sector that facilitate correspondent bank relationships.</text> </paragraph></subsection><subsection id="HC4161FD7BAD249EB846B6017CFBF92BB"><enum>(b)</enum><header>De-Risking strategy</header><text display-inline="yes-display-inline">The Secretary shall develop a strategy to reduce de-risking and adverse consequences related to de-risking.</text>
</subsection><subsection id="H063FCCC0ED1C4153AF6F7B5E607B3815"><enum>(c)</enum><header>Report</header><text display-inline="yes-display-inline">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, State bank supervisors, and other relevant stakeholders, shall issue a report to the Congress containing—</text>
<paragraph id="HF6A37E01148248D694456DDDDE7876AE"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a); and</text> </paragraph><paragraph id="HCF3A6A6366F54881BA7591C13392FF09"><enum>(2)</enum><text>the strategy developed pursuant to subsection (b).</text>
</paragraph></subsection><subsection id="H1E936C91258A43D98446B75BF7184355"><enum>(d)</enum><header>Definitions</header><text>In this section:</text> <paragraph id="H4D07E51A5BEF4A43A879417859C6C8BE"><enum>(1)</enum><header>De-risking</header><text display-inline="yes-display-inline">The term <term>de-risking</term> means the wholesale closing of accounts or limiting of financial services for a category of customer due to unsubstantiated risk as it relates to compliance with the Bank Secrecy Act.</text>
</paragraph><paragraph id="H91B38903840F440DA74B63BE5A89B2A7"><enum>(2)</enum><header>BSA terms</header><text>The terms <term>Bank Secrecy Act</term> and <term>financial institution</term> have the meaning given those terms, respectively, under section 5312 off title 31, United States Code.</text>
</paragraph><paragraph id="HDC133AFE99D547FCBD363B5156CF75FE"><enum>(3)</enum><header>State bank supervisor</header><text display-inline="yes-display-inline">The term <quote>State bank supervisor</quote> has the meaning given that term under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text>
</paragraph></subsection></section><section id="H7A66A0A0BD864A58B71CD8914DB76EF3"><enum>112.</enum><header>AML examination authority delegation study</header>
<subsection id="H710F07D5A5BF4706B93E3D7C1A453A35"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall carry out a study, in consultation with State bank supervisors (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), and other relevant stakeholders, on the Secretary’s delegation of examination authority under the Bank Secrecy Act, including—</text>
<paragraph id="H8449F6915C0E4E5FAE2B3602F61FB6B3"><enum>(1)</enum><text>an evaluation of the efficacy of the delegation, especially with respect to the mission of the Bank Secrecy Act;</text>
</paragraph><paragraph id="H1E2CD3DFF72442729FA0B35CF70AAF1D"><enum>(2)</enum><text>whether the delegated agencies have appropriate resources to perform their delegated responsibilities; and</text>
</paragraph><paragraph id="H65F0E70821FC409187D0C610B6D13EAD"><enum>(3)</enum><text>whether the examiners in delegated agencies have sufficient training and support to perform their responsibilities.</text>
</paragraph></subsection><subsection id="H7A48699CE5174E5AAF0E631085A415F7"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 1 year after the date of enactment of this Act, the Secretary of the Treasury 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—</text>
<paragraph id="H1E48C5FB0C3F40878FE0F35BF3D6E0B6"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a); and</text> </paragraph><paragraph id="H7CA748AE0A9844AE8949DDF6F297FFBC"><enum>(2)</enum><text>recommendations to improve the efficacy of delegation authority, including the potential for de-delegation of any or all such authority where it may be appropriate.</text>
</paragraph></subsection><subsection id="H42C1DD2CBDD64675A6B643173D6E8112"><enum>(c)</enum><header>Bank Secrecy Act defined</header><text>The term <term>Bank Secrecy Act</term> has the meaning given that term under section 5312 off title 31, United States Code.</text> </subsection></section><section id="H05569F7D70934725ABFBAA3DDE3EE2C5"><enum>113.</enum><header>Study and strategy on Chinese money laundering</header> <subsection id="H846C5791B60F4AEFA0F7D41626DCF594"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall carry out a study on the extent and effect of Chinese money laundering activities in the United States, including territories and possessions of the United States, and worldwide.</text>
</subsection><subsection id="HF741C5680F1B479C93B52C6255569C19"><enum>(b)</enum><header>Strategy To combat Chinese money laundering</header><text display-inline="yes-display-inline">Upon the completion of the study required under subsection (a), the Secretary shall, in consultation with such other Federal departments and agencies as the Secretary determines appropriate, develop a strategy to combat Chinese money laundering activities.</text>
</subsection><subsection id="H662908C5C502495FB65101CC34C4DB50"><enum>(c)</enum><header>Report</header><text>Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Secretary of the Treasury shall issue a report to Congress containing—</text>
<paragraph id="H7F013022D623478780AB0C11EA3CC26B"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a); and</text> </paragraph><paragraph id="HBF91B4BA84584112A0E376D656D8AE3F"><enum>(2)</enum><text>the strategy developed under subsection (b).</text>
</paragraph></subsection></section><enum>II</enum><header>Improving AML/CFT Oversight</header>
<section id="H7F7BA22B149A4D99A99A4ECA13289188"><enum>201.</enum><header>Pilot program on sharing of suspicious activity reports within a financial group</header>
<subsection id="H3284BDADFABA4A598C33A8D09E8C3A47"><enum>(a)</enum><header>In general</header>
<paragraph id="HA81516B77A8340EBB0C8C7FC8DFA05E9"><enum>(1)</enum><header>Sharing with foreign branches and affiliates</header><text>Section 5318(g) of title 31, United States Code, is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HD6C8589D601249F88B55A9ECE504B334" style="USC"> <paragraph id="H4CCE3E2515E04ADEA7FC94E97BDA478F"><enum>(5)</enum><header>Pilot program on sharing with foreign branches, subsidiaries, and affiliates</header> <subparagraph id="H0AC73EF0C7AC4D049A11B15E546E3363"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall issue rules establishing the pilot program described under subparagraph (B), subject to such controls and restrictions as the Director of the Financial Crimes Enforcement Network determines appropriate, including controls and restrictions regarding participation by financial institutions and jurisdictions in the pilot program. In prescribing such rules, the Secretary shall ensure that the sharing of information described under such subparagraph (B) is subject to appropriate standards and requirements regarding data security and the confidentiality of personally identifiable information.</text>
</subparagraph><subparagraph id="H714D702EA1FB41ACA8230F239B76B3B0"><enum>(B)</enum><header>Pilot program described</header><text>The pilot program required under this paragraph shall—</text> <clause id="HA0407AB21AB74DD59B0E0FDB2DF7D9BD"><enum>(i)</enum><text display-inline="yes-display-inline">permit a financial institution with a reporting obligation under this subsection to share reports (and information on such reports) under this subsection with the institution’s foreign branches, subsidiaries, and affiliates for the purpose of combating illicit finance risks, notwithstanding any other provision of law except subparagraphs (A) and (C);</text>
</clause><clause id="H4CF1F6E53F70423E9EC419A92D8C39F8"><enum>(ii)</enum><text display-inline="yes-display-inline">terminate on the date that is 5 years after the date of enactment of this paragraph, except that the Secretary may extend the pilot program for up to 2 years upon submitting 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 that includes—</text>
<subclause id="HBA307025A4C94053BB0E96465AC476B2"><enum>(I)</enum><text>a certification that the extension is in the national interest of the United States, with a detailed explanation of the reasons therefor;</text>
</subclause><subclause id="HFBAB4A241D4A4E53888006D78E564546"><enum>(II)</enum><text>an evaluation of the usefulness of the pilot program, including a detailed analysis of any illicit activity identified or prevented as a result of the program; and</text>
</subclause><subclause id="H9C4F4E2B387B44AD8935D3E7E8FF1649"><enum>(III)</enum><text>a detailed legislative proposal providing for a long-term extension of the pilot program activities, including expected budgetary resources for the activities, if the Secretary determines that a long-term extension is appropriate.</text>
</subclause></clause></subparagraph><subparagraph id="HF1FAC7691070448DBF22814DBDFC0C39"><enum>(C)</enum><header>Prohibition involving certain jurisdictions</header><text display-inline="yes-display-inline">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—</text>
<clause id="HB255A8609F2A45C98F906612EE43ED10"><enum>(i)</enum><text>the People’s Republic of China;</text> </clause><clause id="HE46CF8F357014EA69244979AE54AA64F"><enum>(ii)</enum><text>the Russian Federation; or</text>
</clause><clause id="H8F54EC831F0C42ABA0C2757B7BD97468"><enum>(iii)</enum><text>a jurisdiction that—</text> <subclause id="H1828D76A7C3241349FEC7E8D7DA9A4FA"><enum>(I)</enum><text display-inline="yes-display-inline">is subject to countermeasures imposed by the Federal Government;</text>
</subclause><subclause id="H43ECFF6063CB4E9AB17AE27CA595B360"><enum>(II)</enum><text>is a state sponsor of terrorism; or</text> </subclause><subclause id="H23EDC510AE8F496DB37198080CA1CD82"><enum>(III)</enum><text display-inline="yes-display-inline">the Secretary has determined cannot reasonably protect the privacy and confidentiality of such information or would otherwise use such information in a manner that is not consistent with the national interest of the United States.</text>
</subclause></clause></subparagraph><subparagraph id="H6D36E7C9D2504324AED5A9F4F7D51D1D"><enum>(D)</enum><header>Implementation updates</header><text display-inline="yes-display-inline">Not later than 360 days after the date rules are issued under subparagraph (A), and annually thereafter for 3 years, the Secretary, or the Secretary’s designee, shall brief the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on—</text>
<clause id="H816D44E8BA3741E68365037B124E7005"><enum>(i)</enum><text>the degree of any information sharing permitted under the pilot program, and a description of criteria used by the Secretary to evaluate the appropriateness of the information sharing;</text>
</clause><clause id="H436515E258C344F6B8F794EFE14DAB26"><enum>(ii)</enum><text>the effectiveness of the pilot program in identifying or preventing the violation of a United States law or regulation, and mechanisms that may improve such effectiveness; and</text>
</clause><clause id="H95A9FAA1EE614322A442F47FD2E5CFDD"><enum>(iii)</enum><text>any recommendations to amend the design of the pilot program.</text> </clause></subparagraph><subparagraph id="H8A8CEF73733C462284320D7EECD2805B"><enum>(E)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">Nothing in this paragraph shall be construed as limiting the Secretary’s authority under provisions of law other than this paragraph to establish other permissible purposes or methods for a financial institution sharing reports (and information on such reports) under this subsection with the institution’s foreign headquarters or with other branches of the same institution.</text>
</subparagraph><subparagraph id="H0C6B3067E963405782C6714EBFD6A24E"><enum>(F)</enum><header>Notice of use of other authority</header><text display-inline="yes-display-inline">If the Secretary, pursuant to any authority other than that provided under this paragraph, permits a financial institution to share information on reports under this subsection with a foreign branch, subsidiary, or affiliate located in a foreign jurisdiction, the Secretary shall notify the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of such permission and the applicable foreign jurisdiction.</text>
</subparagraph></paragraph><paragraph id="H15B3665FEFD848CC8EB8D0C0050A195D"><enum>(6)</enum><header>Treatment of foreign jurisdiction-originated reports</header><text display-inline="yes-display-inline">A report received by a financial institution from a foreign affiliate with respect to a suspicious transaction relevant to a possible violation of law or regulation shall be subject to the same confidentiality requirements provided under this subsection for a report of a suspicious transaction described under paragraph (1).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HBF9E07ED7846421A8BDBDB9714012DEA"><enum>(2)</enum><header>Notification prohibitions</header><text>Section 5318(g)(2)(A) of title 31, United States Code, is amended—</text> <subparagraph id="HFDDC16070DAC496D8688E445802C882C"><enum>(A)</enum><text>in clause (i), by inserting after <quote>transaction has been reported</quote> the following: <quote>or otherwise reveal any information that would reveal that the transaction has been reported</quote>; and</text>
</subparagraph><subparagraph id="HDDA7E170B6814DB5989E8A4F88B0BF2A"><enum>(B)</enum><text>in clause (ii), by inserting after <quote>transaction has been reported,</quote> the following: <quote>or otherwise reveal any information that would reveal that the transaction has been reported,</quote>.</text> </subparagraph></paragraph></subsection><subsection id="H0C974DBD08BC4867A26C5428BA25FD11"><enum>(b)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">Not later than the end of the 360-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.</text>
</subsection></section><section id="H2AFE7608B5894EA984E44A300AD4C6C5"><enum>202.</enum><header>Sharing of compliance resources</header>
<subsection id="H59F92021175545528D4A90BEC976C7A6"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5318 of title 31, United States Code, is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H001684EC8B664921BA30953E9B743B65" style="USC"> <subsection id="HFD74D50FD2C0428DB6C754B1D518550F"><enum>(o)</enum><header>Sharing of compliance resources</header> <paragraph id="HF3851F8D51954ADEBEFE4115A17EC534"><enum>(1)</enum><header>Sharing permitted</header><text display-inline="yes-display-inline">Two or more financial institutions may enter into collaborative arrangements in order to more efficiently comply with the requirements of this subchapter.</text>
</paragraph><paragraph id="HE02E435795B14656A98FA215B468617D"><enum>(2)</enum><header>Outreach</header><text>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).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H64ABFC99651B4D429D205463606DCD83"><enum>(b)</enum><header>Rule of construction</header><text>The amendment made by subsection (a) may not be construed to require financial institutions to share resources.</text>
</subsection></section><section commented="no" id="HE2E1996D22AA497FB0C7EFA9A30D69DB"><enum>203.</enum><header>GAO Study on feedback loops</header>
<subsection commented="no" id="HF6F2FF9339A240A6AFE789E012EC6F3F"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall carry out a study on—</text> <paragraph id="HC02E4936803E40D09BDDB8D4F35E7FB9"><enum>(1)</enum><text display-inline="yes-display-inline">best practices within the United States Government for providing feedback (<quote>feedback loop</quote>) to relevant parties (including regulated private entities) on the usage and usefulness of personally identifiable information (<quote>PII</quote>), sensitive-but-unclassified (<quote>SBU</quote>) data, or similar information provided by such parties to Government users of such information and data (including law enforcement or regulators); and</text>
</paragraph><paragraph id="HC4200393972D497294ED9534CDF19527"><enum>(2)</enum><text>any practices or standards inside or outside the United States for providing feedback through sensitive information and public-private partnership information sharing efforts, specifically related to efforts to combat money laundering and other forms of illicit finance.</text>
</paragraph></subsection><subsection commented="no" id="H1376C43FAC4B4F77B6C3BC26A2C033C3"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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—</text>
<paragraph commented="no" id="HA0C8ECD418D7466B80FA3F6261ACC2DE"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a);</text> </paragraph><paragraph commented="no" id="H221775BA8D2249C5B8B4039BBCAD65E3"><enum>(2)</enum><text display-inline="yes-display-inline">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 United States efforts to combat money laundering and other forms of illicit finance; and</text>
</paragraph><paragraph id="HE81F5CE9FC55445D81A12164D5F307F2"><enum>(3)</enum><text display-inline="yes-display-inline">recommendations to reduce or eliminate any unnecessary Government collection of the information described under subsection (a)(1).</text>
</paragraph></subsection></section><section id="H7F4655D862484C3799B2D8241B5771D7"><enum>204.</enum><header>FinCEN study on BSA value</header>
<subsection id="H051F30A9FB104FB581C5EA5C8D25B17B"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Director of the Financial Crimes Enforcement Network shall carry out a study on Bank Secrecy Act value.</text>
</subsection><subsection id="H345FB778498440E982A379D3FE0800D6"><enum>(b)</enum><header>Report</header><text>Not later than the end of the 30-day period beginning on the date the study under subsection (a) is completed, 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.</text>
</subsection><subsection display-inline="no-display-inline" id="H37401C71EC634FF1BB847D08D65871C9"><enum>(c)</enum><header>Classified annex</header><text display-inline="yes-display-inline">The report required under this section may include a classified annex, if the Director determines it appropriate.</text>
</subsection><subsection id="HBF58ED98A10147C580C1EA8E74E500DB"><enum>(d)</enum><header>Bank Secrecy Act defined</header><text>For purposes of this section, the term <term>Bank Secrecy Act</term> has the meaning given that term under section 5312 of title 31, United States Code.</text> </subsection></section><section id="H8E21E9ECB2F34624B88CC97FF0FD0F31"><enum>205.</enum><header>Sharing of threat pattern and trend information</header><text display-inline="no-display-inline">Section 5318(g) of title 31, United States Code, as amended by section 201(a)(1), is further amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HCDDAD939D68146DE8A3950085B7EAB29" style="OLC">
<paragraph id="H20827573274242A5979A2A875C6D80F0"><enum>(7)</enum><header>Sharing of threat pattern and trend information</header>
<subparagraph id="H21998CFBEBC24E3D84CCF0DB528177F6"><enum>(A)</enum><header>SAR Activity Review</header><text display-inline="yes-display-inline">The Director of the Financial Crimes Enforcement Network shall restart publication of the <quote>SAR Activity Review – Trends, Tips & Issues</quote>, on not less than a semi-annual basis, to provide meaningful information about the preparation, use, and value of reports filed under this subsection by financial institutions, as well as other reports filed by financial institutions under the Bank Secrecy Act.</text>
</subparagraph><subparagraph id="H3C8781CEF22F48B1955FC80DE35BCC40"><enum>(B)</enum><header>Inclusion of typologies</header><text display-inline="yes-display-inline">In each publication described under subparagraph (A), the Director shall provide financial institutions with typologies, including data that can be adapted in algorithms (including for artificial intelligence and machine learning programs) where appropriate, on emerging money laundering and counter terror financing threat patterns and trends.</text>
</subparagraph><subparagraph id="HD87BC516B9B94A15B7FF5445AE2B8ED8"><enum>(C)</enum><header>Typology defined</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <quote>typology</quote> means the various techniques used to launder money or finance terrorism.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="H432FBBC7A6C6449990BB8B726B5A0E31"><enum>206.</enum><header>Modernization and upgrading whistleblower protections</header> <subsection commented="no" id="H3113890589C14A6C963241BDBB15DC45"><enum>(a)</enum><header>Rewards</header><text display-inline="yes-display-inline">Section 5323(d) of title 31, United States Code, is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF46F23E8E3E6459EAC8F8B6AEE0CB1B3" style="USC">
<subsection commented="no" id="HAFB954DA603249E2A4C819A88B05C0AA"><enum>(d)</enum><header>Source of rewards</header><text display-inline="yes-display-inline">For the purposes of paying a reward under this section, the Secretary may, subject to amounts made available in advance by appropriation Acts, use criminal fine, civil penalty, or forfeiture amounts recovered based on the original information with respect to which the reward is being paid.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H61C5ED395F3945B489145A8EA17ACE95"><enum>(b)</enum><header>Whistleblower incentives</header><text display-inline="no-display-inline"><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">Chapter 53</external-xref> of title 31, United States Code, is amended—</text> <paragraph id="HA1734C37A7CC44CC9948652F9F6AD268"><enum>(1)</enum><text>by inserting after section 5323 the following:</text>
<quoted-block display-inline="no-display-inline" id="H2C5C2591A8B74BD98D339CF3CBCAE6F7" style="USC">
<section id="H4FACE966724D47F4BA7C29B665F5F48D"><enum>5323A.</enum><header>Whistleblower incentives</header>
<subsection id="H6A4341A039B0454C8A6B06DFB746A1BA"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section:</text> <paragraph id="H168AADBF1EEA42CE865ADBB340084A9A"><enum>(1)</enum><header>Covered judicial or administrative action</header><text>The term <term>covered judicial or administrative action</term> means any judicial or administrative action brought by FinCEN under the Bank Secrecy Act that results in monetary sanctions exceeding $1,000,000.</text>
</paragraph><paragraph id="H20270927BCBB442B86B580BBC444698A"><enum>(2)</enum><header>FinCEN</header><text>The term <term>FinCEN</term> means the Financial Crimes Enforcement Network.</text> </paragraph><paragraph id="H235B6030CC8B4191BD8B598D35327D56"><enum>(3)</enum><header>Monetary sanctions</header><text>The term <term>monetary sanctions</term>, when used with respect to any judicial or administrative action, means—</text>
<subparagraph id="H2D9F87243AD94BC99B5A7557397D60D9"><enum>(A)</enum><text>any monies, including penalties, disgorgement, and interest, ordered to be paid; and</text> </subparagraph><subparagraph id="H7E134C4F7A274179B0A0C2B6BF7A5A62"><enum>(B)</enum><text>any monies deposited into a disgorgement fund as a result of such action or any settlement of such action.</text>
</subparagraph></paragraph><paragraph id="H4411EDF30A0E4863B3AE0B4C44051AEA"><enum>(4)</enum><header>Original information</header><text>The term <term>original information</term> means information that—</text> <subparagraph id="HD56C53EBBBA4484286C1F95830048DD9"><enum>(A)</enum><text>is derived from the independent knowledge or analysis of a whistleblower;</text>
</subparagraph><subparagraph id="H5342BE029F284695B0E3DA6AAC9633F6"><enum>(B)</enum><text>is not known to FinCEN from any other source, unless the whistleblower is the original source of the information; and</text>
</subparagraph><subparagraph id="H0F8DF40B5A3D4791BE4FE84FC2A801A5"><enum>(C)</enum><text>is not exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information.</text>
</subparagraph></paragraph><paragraph id="HBDE6071A0FAF4D9B8C89D79AC2FB3A9A"><enum>(5)</enum><header>Related action</header><text>The term <term>related action</term>, when used with respect to any judicial or administrative action brought by FinCEN, means any judicial or administrative action that is based upon original information provided by a whistleblower that led to the successful enforcement of the action.</text>
</paragraph><paragraph id="HCE035DA65B9C4D8F99AB2D3820A34BF6"><enum>(6)</enum><header>Secretary</header><text>The term <term>Secretary</term> means the Secretary of the Treasury.</text> </paragraph><paragraph id="H141E83858557490F8347E7B01DF70181"><enum>(7)</enum><header>Whistleblower</header><text>The term <term>whistleblower</term> means any individual who provides, or two or more individuals acting jointly who provide, information relating to a violation of laws enforced by FinCEN, in a manner established, by rule or regulation, by FinCEN.</text>
</paragraph></subsection><subsection id="H62E454F239E74B4F937411BEAA15F4D4"><enum>(b)</enum><header>Awards</header>
<paragraph id="HF305A42322734115B53256DA6D33AC7F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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 one 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 not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action.</text>
</paragraph><paragraph id="H8643265695EC479AB28E9A9DFC6B8AD9"><enum>(2)</enum><header>Source of awards</header><text display-inline="yes-display-inline">For the purposes of paying any award under paragraph (1), the Secretary may, subject to amounts made available in advance by appropriation Acts, use monetary sanction amounts recovered based on the original information with respect to which the award is being paid.</text>
</paragraph></subsection><subsection id="H56988DC7A56346CC85BAE60224CDF341"><enum>(c)</enum><header>Determination of amount of award; denial of award</header>
<paragraph id="H7C26605D219D45B9B4404C8D30FB1ED4"><enum>(1)</enum><header>Determination of amount of award</header>
<subparagraph id="HCABC948F4329406AA168561DC460D37C"><enum>(A)</enum><header>Discretion</header><text display-inline="yes-display-inline">The determination of the amount of an award made under subsection (b) shall be in the discretion of the Secretary.</text>
</subparagraph><subparagraph id="HFABE7466D8D949168B91F7B3E02833C4"><enum>(B)</enum><header>Criteria</header><text>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 shall take into consideration—</text>
<clause id="H4C2259973A884162BB119AA2A1E20AB3"><enum>(i)</enum><text>the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;</text>
</clause><clause id="H7D5FDADA4B784B47A5D8EE350EDBD85D"><enum>(ii)</enum><text>the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;</text>
</clause><clause id="HA2B0F41EEDC04381AC4F35F2118B2A70"><enum>(iii)</enum><text>the mission of FinCEN in deterring violations of the law by making awards to whistleblowers who provide information that lead to the successful enforcement of such laws; and</text>
</clause><clause id="H3DB8F3F146A54C8C93393EF28747A014"><enum>(iv)</enum><text display-inline="yes-display-inline">such additional relevant factors as the Secretary may establish by rule.</text> </clause></subparagraph></paragraph><paragraph id="HA6080EE86D81489FA10CBE4B67EA2044"><enum>(2)</enum><header>Denial of award</header><text>No award under subsection (b) shall be made—</text>
<subparagraph id="HCF8D4B7559F14C8BAD14D403DB598F33"><enum>(A)</enum><text>to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to FinCEN, a member, officer, or employee of—</text>
<clause id="H11EFEFA2D32845D68346C7759A611509"><enum>(i)</enum><text>an appropriate regulatory agency;</text> </clause><clause id="HC2BB456820A747E3986525E88BB78DEE"><enum>(ii)</enum><text>the Department of Justice;</text>
</clause><clause id="HE8D04BD1896042DEA17CC8FAEE183B0D"><enum>(iii)</enum><text>a self-regulatory organization; or</text> </clause><clause id="HE46ED984DDD040868E7938B0A340AC6E"><enum>(iv)</enum><text>a law enforcement organization;</text>
</clause></subparagraph><subparagraph id="H486013C8EB4F4E0889A704198E9F82F2"><enum>(B)</enum><text display-inline="yes-display-inline">to any whistleblower who is convicted of a criminal violation, or who the Secretary has a reasonable basis to believe committed a criminal violation, related to the judicial or administrative action for which the whistleblower otherwise could receive an award under this section;</text>
</subparagraph><subparagraph id="H9181DB98792B4BC4A1BD84DADED3FE2F"><enum>(C)</enum><text display-inline="yes-display-inline">to any whistleblower who gains the information through the performance of an audit of financial statements required under the Bank Secrecy Act and for whom such submission would be contrary to its requirements; or</text>
</subparagraph><subparagraph id="HEB7289032AC74F38AB85D1B473A1BA8A"><enum>(D)</enum><text display-inline="yes-display-inline">to any whistleblower who fails to submit information to FinCEN in such form as the Secretary may, by rule, require.</text>
</subparagraph></paragraph><paragraph id="H8B40CA02754C401F81CEFC58534EAFCE"><enum>(3)</enum><header>Statement of reasons</header><text display-inline="yes-display-inline">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.</text>
</paragraph></subsection><subsection id="HEC5D4E1C1910493394DA8CCB3D50E71B"><enum>(d)</enum><header>Representation</header>
<paragraph id="H1B02732685534B08B3653383307A23AB"><enum>(1)</enum><header>Permitted representation</header><text>Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.</text>
</paragraph><paragraph id="H095F590E8EE64B4EB8C9722AECB33198"><enum>(2)</enum><header>Required representation</header>
<subparagraph id="HFEED0B965BE449EB8ED5B3A180F7B218"><enum>(A)</enum><header>In general</header><text>Any whistleblower who anonymously makes a claim for an award under subsection (b) shall be represented by counsel if the whistleblower anonymously submits the information upon which the claim is based.</text>
</subparagraph><subparagraph id="H9012C111CE2F4D0C93D0A86C7236F5A5"><enum>(B)</enum><header>Disclosure of identity</header><text display-inline="yes-display-inline">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.</text>
</subparagraph></paragraph></subsection><subsection id="H83396EDDB20C46D5A50BB4D063AFB52C"><enum>(e)</enum><header>Appeals</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection id="H552F7281B456482D8578CA771C4AAC2B"><enum>(f)</enum><header>Employee protections</header><text>The Secretary of the Treasury shall issue regulations protecting a whistleblower from retaliation, which shall be as close as practicable to the employee protections provided for under section 1057 of the Consumer Financial Protection Act of 2010.</text></subsection></section><after-quoted-block>; and</after-quoted-block></quoted-block>
</paragraph><paragraph id="HCABE8A9C75044C38BE873859277F7CD7"><enum>(2)</enum><text display-inline="yes-display-inline">in the table of contents for such chapter, by inserting after the item relating to section 5323 the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HFCC6A660439D41A59D5D1FD98832AAE6" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">5323A. Whistleblower incentives.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section id="H7E37E9F438D241559BE433C98320D731"><enum>207.</enum><header>Certain violators barred from serving on boards of United States financial institutions</header><text display-inline="no-display-inline">Section 5321 of title 31, United States Code, is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HC5AE06762B7D4A958CAEEC8F28DA9BD9" style="USC"> <subsection id="HFB978560F55C4EFF9D777A8BF1CAEEA0"><enum>(f)</enum><header>Certain violators barred from serving on boards of United States financial institutions</header> <paragraph id="HB43718D77FDA448CBDF05F8285BCAD92"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">An individual found to have committed an egregious violation of a provision of (or rule issued under) the Bank Secrecy Act shall be barred from serving on the board of directors of a United States financial institution for a 10-year period beginning on the date of such finding.</text>
</paragraph><paragraph id="H6F4892CF90874FF794661235864F0A82"><enum>(2)</enum><header>Egregious violation defined</header><text>With respect to an individual, the term <term>egregious violation</term> means—</text> <subparagraph id="HBF37EFE04A3242429FA15DBD8D40930A"><enum>(A)</enum><text>a felony criminal violation for which the individual was convicted; and</text>
</subparagraph><subparagraph id="HA1A3DF771B32422086B701420C886FA0"><enum>(B)</enum><text>a civil violation where the individual willfully committed such violation and the violation facilitated money laundering or the financing of terrorism.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H9AB80E60EB36448685B18CDCEEA4230A"><enum>208.</enum><header>Additional damages for repeat Bank Secrecy Act violators</header>
<subsection id="H238C2C153A3B4288AD0DF1E8D257FED5"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5321 of title 31, United States Code, as amended by section 208, is further amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H81DF1A95F2C5420998183E62449887AA" style="USC">
<subsection id="H5A773A7AE96F4AB88B946A03AEC6271A"><enum>(g)</enum><header>Additional damages for repeat violators</header><text display-inline="yes-display-inline">In addition to any other fines permitted by this section and section 5322, with respect to a person who has previously been convicted of a criminal provision of (or rule issued under) the Bank Secrecy Act or who has admitted, as part of a deferred- or non-prosecution agreement, to having previously committed a violation of a criminal provision of (or rule issued under) the Bank Secrecy Act, the Secretary may impose an additional civil penalty against such person for each additional such violation in an amount equal to up three times the profit gained or loss avoided by such person as a result of the violation.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB86C59532B8545A687E25A027A759C2F"><enum>(b)</enum><header>Prospective application of amendment</header><text>For purposes of determining whether a person has committed a previous violation under section 5321(g) of title 31, United States Code, such determination shall only include violations occurring after the date of enactment of this Act.</text>
</subsection></section><section id="H349B7077706D4E048DD70CB78433E5BD"><enum>209.</enum><header>Justice annual report on deferred and non-prosecution agreements</header>
<subsection id="H0A880EB63F8748CFB7815553506D8969"><enum>(a)</enum><header>Annual report</header><text display-inline="yes-display-inline">The Attorney General shall issue an annual report, every year for the 5 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—</text>
<paragraph id="HC5A6646632F74D44A13C3E388B8ACFEC"><enum>(1)</enum><text>a list of deferred prosecution agreements and non-prosecution 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;</text>
</paragraph><paragraph id="H431028923CF14FDAB7046126AC9D7719"><enum>(2)</enum><text display-inline="yes-display-inline">the justification for entering into each such agreement;</text> </paragraph><paragraph id="H76EDEFE57DF744FEA37256582D937E1A"><enum>(3)</enum><text>the list of factors that were taken into account in determining that the Attorney General should enter into each such agreement; and</text>
</paragraph><paragraph id="HEBA3995D154B4DCA83BC87A5C9C64124"><enum>(4)</enum><text display-inline="yes-display-inline">the extent of coordination the Attorney General conducted with the Financial Crimes Enforcement Network prior to entering into each such agreement.</text>
</paragraph></subsection><subsection id="H178EBA3C1BAC478A91CFA6D2A186AFB0"><enum>(b)</enum><header>Classified annex</header><text>Each report under subsection (a) may include a classified annex.</text> </subsection><subsection id="H273F548BDA8E478FBF07BB67DDA9CC55"><enum>(c)</enum><header>Bank Secrecy Act defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>Bank Secrecy Act</term> has the meaning given that term under section 5312 of title 31, United States Code.</text>
</subsection></section><section id="H07D9B1A0FC2E4DDA921F2561BA56BC4E"><enum>210.</enum><header>Return of profits and bonuses</header>
<subsection id="HF77EBF4CCB1E4EBABAF120EE7BC42433"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5322 of title 31, United States Code, is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HB741FAD3A05749A6935AF574BDE31D83" style="USC"> <subsection id="H4F705E34CDC24187828C2DACBB923496"><enum>(e)</enum><header>Return of profits and bonuses</header><text display-inline="yes-display-inline">A person convicted of violating a provision of (or rule issued under) the Bank Secrecy Act shall—</text>
<paragraph id="H1D63FD3BAD384A498428E94F34B877A5"><enum>(1)</enum><text>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</text>
</paragraph><paragraph id="H2B45C2BC4510405CB2D165C6052A1E6E"><enum>(2)</enum><text display-inline="yes-display-inline">if such person is an individual who was a partner, director, officer, or employee of a financial institution at the time the violation occurred, repay to such financial institution any bonus paid to such individual during the Federal fiscal year in which the violation occurred or the Federal fiscal year after which the violation occurred.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H2E7F2F2A8B804A118E71E9230BBD0F1D"><enum>(b)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">The amendment made by subsection (a) may not be construed to prohibit a financial institution from requiring the repayment of a bonus paid to a partner, director, officer, or employee if the financial institution determines that the partner, director, officer, or employee engaged in unethical, but non-criminal, activities.</text>
</subsection></section><section id="H35D94F8FEC464D3992007999C51E3936"><enum>211.</enum><header>Application of Bank Secrecy Act to dealers in antiquities</header>
<subsection id="H9B9ADDCDA3254A0FAC0163A1EACA98EC"><enum>(a)</enum><header>In general</header><text>Section 5312(a)(2) of title 31, United States Code, is amended—</text> <paragraph id="HD53BE7342EA145268C2587605F8B9B4B"><enum>(1)</enum><text>in subparagraph (Y), by striking <quote>or</quote> at the end;</text>
</paragraph><paragraph id="H6EC8D7679B014D608322A5C561A97C90"><enum>(2)</enum><text>by redesignating subparagraph (Z) as subparagraph (AA); and</text> </paragraph><paragraph id="H6943721418DE4157957533F5CABB7B6C"><enum>(3)</enum><text>by inserting after subsection (Y) the following:</text>
<quoted-block id="HED398214C7A34442931273B6DA02ABD7" style="OLC">
<subparagraph id="HD12D416F23664242ACBFAB0D058FC557"><enum>(Z)</enum><text display-inline="yes-display-inline">a person trading or acting as an intermediary in the trade of antiquities, including an advisor, consultant or any other person who engages as a business in the solicitation of the sale of antiquities; or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HE9E4801C27324D01930F8937709F8293"><enum>(b)</enum><header>Study on the facilitation of money laundering and terror finance through the trade of works of art
or antiquities</header>
<paragraph id="HE691F3EE20924EEF93B06E3CCB4D1EE6"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in coordination with Federal Bureau of Investigation, the Attorney General, and Homeland Security Investigations, shall perform a study on the facilitation of money laundering and terror finance through the trade of works of art or antiquities, including an analysis of—</text>
<subparagraph id="H35B1C6ED762E4F7EB2EAB7928AC2B2BD"><enum>(A)</enum><text display-inline="yes-display-inline">the extent to which the facilitation of money laundering and terror finance through the trade of works of art or antiquities may enter or affect the financial system of the United States, including any qualitative data or statistics;</text>
</subparagraph><subparagraph id="H803A302487FC45A587D0F9FD3E708071"><enum>(B)</enum><text>whether thresholds and definitions should apply in determining which entities to regulate;</text> </subparagraph><subparagraph id="HD1553D0DCB4140E488330C70F8D0EE1D"><enum>(C)</enum><text display-inline="yes-display-inline">an evaluation of which markets, by size, entity type, domestic or international geographical locations, or otherwise, should be subject to regulations, but only to the extent such markets are not already required to report on the trade of works of art or antiquities to the Federal Government;</text>
</subparagraph><subparagraph id="HF76E0CFC8E3142DCA29ADA7101313A65"><enum>(D)</enum><text>an evaluation of whether certain exemptions should apply; and</text> </subparagraph><subparagraph id="HDBDF7E31DB1147169093D911CD84FFA7"><enum>(E)</enum><text>any other points of study or analysis the Secretary determines necessary or appropriate.</text>
</subparagraph></paragraph><paragraph id="H22966A9BD7674EF890CAF605E28E55C0"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">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 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 paragraph (1).</text>
</paragraph></subsection><subsection id="HF1AC8E7769184BBC95A34AD05ED9528D"><enum>(c)</enum><header>Rulemaking</header><text>Not later than the end of the 180-day period beginning on the date the Secretary issues the report required under subsection (b)(2), the Secretary shall issue regulations to carry out the amendments made by subsection (a).</text>
</subsection></section><section display-inline="no-display-inline" id="H5C724D91FC144B4DA1835A2273227E86" section-type="subsequent-section"><enum>212.</enum><header>Geographic targeting order</header><text display-inline="no-display-inline">The Secretary of the Treasury shall issue a geographic targeting order, similar to the order issued by the Financial Crimes Enforcement Network on November 15, 2018, that—</text>
<paragraph id="H70F429C5851A42D0BA72EAE43D5BAC11"><enum>(1)</enum><text display-inline="yes-display-inline">applies to commercial real estate to the same extent, with the exception of having the same thresholds, as the order issued by FinCEN on November 15, 2018, applies to residential real estate; and</text>
</paragraph><paragraph id="HE8B7C84665354BFFA295AC0483C16D46"><enum>(2)</enum><text display-inline="yes-display-inline">establishes a specific threshold for commercial real estate.</text> </paragraph></section><section id="H8E515331D5444B38BB5ECCA1C0FB7F70"><enum>213.</enum><header>Study and revisions to currency transaction reports and suspicious activity reports</header> <subsection id="H2C08257081414FB6BF6A85EAB5DD5940"><enum>(a)</enum><header>Currency transaction reports</header> <paragraph id="HFB5AD5C1455042FF922941BE568AB2B5"><enum>(1)</enum><header>CTR indexed for inflation</header> <subparagraph id="H4E0CD0F1909949A3B615DE61C72B4E74"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Every 5 years after the date of 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 regulation to reflect the change in the Consumer Price Index for All Urban Consumers published by the Department of Labor, rounded to the nearest $100. For purposes of calculating the change described in the previous sentence, the Secretary shall use $10,000 as the base amount and the date of enactment of this Act as the base date.</text>
</subparagraph><subparagraph id="HEDEC1A25E5B64BF6A636BCA9860D7589"><enum>(B)</enum><header>Exception</header><text>Notwithstanding subparagraph (A), the Secretary may make appropriate adjustments to the threshold amounts described under subparagraph (A) in high-risk areas (e.g., High Intensity Financial Crime Areas or HIFCAs), if the Secretary has demonstrable evidence that shows a threshold raise would increase serious crimes, such as trafficking, or endanger national security.</text>
</subparagraph></paragraph><paragraph id="H8A461E7FB1984FD59C45CC9C0D3B5C5D"><enum>(2)</enum><header>GAO CTR study</header>
<subparagraph id="H8EDB2D7DAE8F49BE9B63270A73E697A5"><enum>(A)</enum><header>Study</header><text>The Comptroller General of the United States shall carry out a study of currency transaction reports. Such study shall include—</text>
<clause id="H0EEE1C199B7B4B1DA9C1D408A43E8D09"><enum>(i)</enum><text>a review (carried out in consultation with the Secretary of the Treasury, the Financial Crimes Enforcement Network, the United States Attorney General, the State Attorneys General, and State, Tribal, and local law enforcement) of the effectiveness of the current currency transaction reporting regime;</text>
</clause><clause id="H36E6E23715FD44C0A05659479CA24C1F"><enum>(ii)</enum><text>an analysis of the importance of currency transaction reports to law enforcement; and</text> </clause><clause id="H047C167F78B844C3B4D653C2674624A4"><enum>(iii)</enum><text>an analysis of the effects of raising the currency transaction report threshold.</text>
</clause></subparagraph><subparagraph id="H20232ADA8243413D90EC1F6D9870E5BE"><enum>(B)</enum><header>Report</header><text>Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Comptroller General shall issue a report to the Secretary of the Treasury and the Congress containing—</text>
<clause id="H78AFDDF9A4364F1DB209C4F3AF094294"><enum>(i)</enum><text>all findings and determinations made in carrying out the study required under subparagraph (A); and</text> </clause><clause id="H48E608ADD13F4150A9C8BCF36778ACF4"><enum>(ii)</enum><text>recommendations for improving the current currency transaction reporting regime.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H1221BCA3B14A4E3694E626A757AE487D"><enum>(b)</enum><header>Modified SARs study and design</header>
<paragraph id="HC6EBD302E5A143D78CF363687A3FB7EA"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">The Director of the Financial Crimes Enforcement Network shall carry out a study, in consultation with industry stakeholders (including money services businesses, community banks, and credit unions), the Federal functional regulators, State bank supervisors, and law enforcement, of the design of a modified suspicious activity report form for certain customers and activities. Such study shall include—</text>
<subparagraph id="HCA8FAF1F68F84B5989CCD7779D6CBD29"><enum>(A)</enum><text>an examination of appropriate optimal SARs thresholds to determine the level at which a modified SARs form could be employed;</text>
</subparagraph><subparagraph id="H3F9FD09FDDA64A8F84B86CEE57B405BC"><enum>(B)</enum><text>an evaluation of which customers or transactions would be appropriate for a modified SAR, including—</text>
<clause id="HC0B4B0CFA57B4D1286767D104E766E4F"><enum>(i)</enum><text>seasoned business customers;</text> </clause><clause id="H814A928657074E42BF4AB73FF66E04DD"><enum>(ii)</enum><text>financial technology (Fintech) firms;</text>
</clause><clause id="HC4A1E0711F904A0FBEEA57B70F30C972"><enum>(iii)</enum><text>structuring transactions; and</text> </clause><clause id="H7A524C76AEA84998B15508E0CBA3177D"><enum>(iv)</enum><text>any other customer or transaction that may be appropriate for a modified SAR; and</text>
</clause></subparagraph><subparagraph id="H2BF1825B5FE74A5F9AB7AB34161615B5"><enum>(C)</enum><text>an analysis of the most effective methods to reduce the regulatory burden imposed on financial institutions in complying with the Bank Secrecy Act, including an analysis of the effect of—</text>
<clause id="HD74E11D297034E54BB767C9FF000D548"><enum>(i)</enum><text>modifying thresholds;</text> </clause><clause id="H69C4A8F918804EB09071912E661F6FB3"><enum>(ii)</enum><text>shortening forms;</text>
</clause><clause id="H70E4119E8EDC44F1BF5AD3C6E88EBBB4"><enum>(iii)</enum><text>combining Bank Secrecy Act forms;</text> </clause><clause id="H5CF3B3431E9F4F029E66F4288C81B080"><enum>(iv)</enum><text>filing reports in periodic batches; and</text>
</clause><clause id="H6248D24FF3CB428FAA3592BC3B6A3503"><enum>(v)</enum><text>any other method that may reduce the regulatory burden.</text> </clause></subparagraph></paragraph><paragraph id="HE032067C83FB4301A7CD4DE90CF207AB"><enum>(2)</enum><header>Study considerations</header><text display-inline="yes-display-inline">In carrying out the study required under paragraph (1), the Director shall seek to balance law enforcement priorities, regulatory burdens experienced by financial institutions, and the requirement for reports to have a <quote>high degree of usefulness to law enforcement</quote> under the Bank Secrecy Act.</text>
</paragraph><paragraph id="HF18BCD819D9F474FB94A497A6E6742B5"><enum>(3)</enum><header>Report</header><text display-inline="yes-display-inline">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 Congress containing—</text>
<subparagraph id="H540886B703CB48649E59B0B6CEEFCAC7"><enum>(A)</enum><text>all findings and determinations made in carrying out the study required under subsection (a); and</text> </subparagraph><subparagraph id="H34043396C3EF477C823AEC22698A20E6"><enum>(B)</enum><text display-inline="yes-display-inline">sample designs of modified SARs forms based on the study results.</text>
</subparagraph></paragraph><paragraph id="H22015D86ADA54BD88609B1D0F36AFB6C"><enum>(4)</enum><header>Contracting authority</header><text display-inline="yes-display-inline">The Director may contract with a private third-party to carry out the study required under this subsection. The authority of the Director to enter into contracts under this paragraph shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts.</text>
</paragraph></subsection><subsection id="H8DF0138A907043AEB1627183A819493A"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section:</text> <paragraph id="HC485A8045DD84A6AB8BAED9FCEB61AA7"><enum>(1)</enum><header>Bank Secrecy Act</header><text>The term <quote>Bank Secrecy Act</quote> has the meaning given that term under section 5312 of title 31, United States Code.</text>
</paragraph><paragraph id="H65DC6801734A4F9BA9D3076EC19524FD"><enum>(2)</enum><header>Federal functional regulator</header><text>The term <quote>Federal functional regulator</quote> has the meaning given that term under section 103.</text> </paragraph><paragraph id="H78ACA6F1257144FDA526E1EA5A5F3EC1"><enum>(3)</enum><header>Regulatory burden</header><text display-inline="yes-display-inline">The term <quote>regulatory burden</quote> means the man-hours to complete filings, cost of data collection and analysis, and other considerations of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/44/35">chapter 35</external-xref> of title 44, United States Code (commonly referred to as the Paperwork Reduction Act).</text>
</paragraph><paragraph id="H35CBFD34C8C04B028D6D9D7C516DF371"><enum>(4)</enum><header>SAR; suspicious activity report</header><text display-inline="yes-display-inline">The term <quote>SAR</quote> and <quote>suspicious activity report</quote> mean a report of a suspicious transaction under section 5318(g) of title 31, United States Code.</text> </paragraph><paragraph id="H815837158F68497E9C9E5A63B316A376"><enum>(5)</enum><header>Seasoned Business Customer</header><text display-inline="yes-display-inline">The term <quote>seasoned business customer</quote>, shall have such meaning as the Secretary of the Treasury shall prescribe, which shall include any person that—</text>
<subparagraph id="H20DF9D9517F0476887FE80AAF32E1659"><enum>(A)</enum><text>is incorporated or organized under the laws of the United States or any State, or is registered as, licensed by, or otherwise eligible to do business within the United States, a State, or political subdivision of a State;</text>
</subparagraph><subparagraph id="HF64A2E405C9B4BC2814B67FFE155EA5D"><enum>(B)</enum><text>has maintained an account with a financial institution for a length of time as determined by the Secretary; and</text>
</subparagraph><subparagraph id="HF9CD239DE41D4EAAA7AC36303A199455"><enum>(C)</enum><text>meet such other requirements as the Secretary may determine necessary or appropriate.</text> </subparagraph></paragraph><paragraph id="H86D24D9A6BA04EE5AF3166507C935A28"><enum>(6)</enum><header>State bank supervisor</header><text display-inline="yes-display-inline">The term <quote>State bank supervisor</quote> has the meaning given that term under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text>
</paragraph></subsection></section><section id="HC0A2EE96612041BB95113D2B358A4BA3" section-type="subsequent-section"><enum>214.</enum><header>Streamlining requirements for currency transaction reports and suspicious activity reports</header>
<subsection id="H0AFD2137EAF5423BA6A97A60B7474F83"><enum>(a)</enum><header>Review</header><text display-inline="yes-display-inline">The Secretary of the Treasury (in consultation with Federal law enforcement agencies, the Director of National Intelligence, the Federal functional regulators, and State bank supervisors 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 <quote>high degree of usefulness</quote> to law enforcement, as set forth under section 5311 of title 31, United States Code.</text>
</subsection><subsection id="H9B35B7D31B5B4A0B8940F6BC76035A91"><enum>(b)</enum><header>Contents</header><text>The review required under subsection (a) shall include a study of—</text> <paragraph id="HDD2BDF3C015A4799BAE0A96DFA835BEF"><enum>(1)</enum><text display-inline="yes-display-inline">whether the timeframe for filing a suspicious activity report should be increased from 30 days;</text>
</paragraph><paragraph id="H239B957B09B64A1CBE149168F514B84F"><enum>(2)</enum><text display-inline="yes-display-inline">whether or not currency transaction report and suspicious activity report thresholds should be tied to inflation or otherwise periodically be adjusted;</text>
</paragraph><paragraph commented="no" id="HDC3C3642581E4492AAA1855013CC06D6"><enum>(3)</enum><text display-inline="yes-display-inline">whether the circumstances under which a financial institution determines whether to file a <quote>continuing suspicious activity report</quote>, or the processes followed by a financial institution in determining whether to file a <quote>continuing suspicious activity report</quote> (or both) can be narrowed;</text> </paragraph><paragraph id="H3D1D56928C7D49B49585C086A2D4EF75"><enum>(4)</enum><text display-inline="yes-display-inline">analyzing the fields designated as <quote>critical</quote> on the suspicious activity report form and whether the number of fields should be reduced;</text>
</paragraph><paragraph id="H03F426F7D84644498ACB82610E8CE7A2"><enum>(5)</enum><text display-inline="yes-display-inline">the increased use of exemption provisions to reduce currency transaction reports that are of little or no value to law enforcement efforts;</text>
</paragraph><paragraph id="H9D0B3836055443DA93A347A2FCB71047"><enum>(6)</enum><text display-inline="yes-display-inline">the current financial institution reporting requirements under the Bank Secrecy Act and its implementing regulations and guidance; and</text>
</paragraph><paragraph id="HA7301F11F5E34B8486FCF38A186F16AE"><enum>(7)</enum><text>such other items as the Secretary determines appropriate.</text> </paragraph></subsection><subsection id="HA86E3DD2A82C4015BD3334AD46D1AAC7"><enum>(c)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than the end of the 1 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).</text>
</subsection><subsection id="HB980BAE0AA4A4EA692B5C030AD7E5AF5"><enum>(d)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section:</text> <paragraph id="H81E51F48626C439FBCCFEA3B90241C4F"><enum>(1)</enum><header>Federal functional regulator</header><text>The term <quote>Federal functional regulator</quote> has the meaning given that term under section 103.</text>
</paragraph><paragraph display-inline="no-display-inline" id="HE67F3BF3A5654A27840FC77CCC388B4C"><enum>(2)</enum><header>State bank supervisor</header><text display-inline="yes-display-inline">The term <quote>State bank supervisor</quote> has the meaning given that term under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text>
</paragraph><paragraph id="H8293B88AFAC041D783F2E1DDCF0610D2"><enum>(3)</enum><header>Other terms</header><text>The terms <quote>Bank Secrecy Act</quote> and <quote>financial institution</quote> have the meaning given those terms, respectively, under section 5312 of title 31, United States Code.</text>
</paragraph></subsection></section><enum>III</enum><header>Modernizing the AML System</header>
<section id="HF93CE0CEFB7244D6ACA0FDEFE7202BDB"><enum>301.</enum><header>Encouraging innovation in BSA compliance</header><text display-inline="no-display-inline">Section 5318 of title 31, United States Code, as amended by section 202, is further amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H539A3D85691F4C1EB803E1413627D2CB" style="USC">
<subsection id="H26977625C75745538BE4E715380CD327"><enum>(p)</enum><header>Encouraging innovation in compliance</header>
<paragraph id="H1275A43783794E988DCA8D4807BEB557"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Federal functional regulators 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.</text>
</paragraph><paragraph id="H0CBB235D0C40426E8482514CF15FA7A3"><enum>(2)</enum><header>Exemptive relief</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="H9CBF7CEBAEA4458DA232EE316322C76E"><enum>(3)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">This subsection may not be construed to require financial institutions to consider, evaluate, or implement innovative approaches to meet the requirements of the Bank Secrecy Act.</text>
</paragraph><paragraph id="HF983E90FBF7A47E0B0C14FA5B12C7BE8"><enum>(4)</enum><header>Federal functional regulator defined</header><text display-inline="yes-display-inline">In this subsection, the term <term>Federal functional regulator</term> means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HDE42D939E444498F99760C412E9FB861"><enum>302.</enum><header>Innovation Labs</header>
<subsection id="H3B4C4E69ED33436AA201031E6551A744"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code, is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HBDE6E144166A4D898A48A4D52AE01E35" style="USC">
<section id="H288EAA27EA634735AE6C324E8CEED318"><enum>5333.</enum><header>Innovation Labs</header>
<subsection id="H3D4803B93CC9400E8A63B71299F1CA86"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established within the Department of the Treasury and each Federal functional regulator an Innovation Lab.</text>
</subsection><subsection id="HFE2784251187404C8A44268251AD9838"><enum>(b)</enum><header>Director</header><text display-inline="yes-display-inline">The head of each Innovation Lab shall be a Director, to be appointed by the Secretary of the Treasury or the head of the Federal functional regulator, as applicable.</text>
</subsection><subsection id="HDBD627ADEAEE4109B1B9A6ADA1073F72"><enum>(c)</enum><header>Duties</header><text>The duties of the Innovation Lab shall be—</text> <paragraph id="HF9E1F196BC954BA48F4AB6A6FBC09268"><enum>(1)</enum><text>to provide outreach to law enforcement agencies, State bank supervisors, financial institutions, and other persons (including vendors and technology companies) with respect to innovation and new technologies that may be used to comply with the requirements of the Bank Secrecy Act;</text>
</paragraph><paragraph id="H4F4148F0CD004080836CE0C5DE659287"><enum>(2)</enum><text display-inline="yes-display-inline">to support the implementation of responsible innovation and new technology, in a manner that complies with the requirements of the Bank Secrecy Act;</text>
</paragraph><paragraph id="H1613BE17F5414659B23208DBFC21BC17"><enum>(3)</enum><text display-inline="yes-display-inline">to explore opportunities for public-private partnerships; and</text> </paragraph><paragraph id="HED308CE0E47A4EAC98DFB3146EAF846A"><enum>(4)</enum><text>to develop metrics of success.</text>
</paragraph></subsection><subsection id="H2FBFDB3C243E4A7389E8002AB5004E34"><enum>(d)</enum><header>FinCEN lab</header><text display-inline="yes-display-inline">The Innovation Lab established under subsection (a) within the Department of the Treasury shall be a lab within the Financial Crimes Enforcement Network.</text>
</subsection><subsection id="H031178A46F5C4B5DBDC73166C29FC1A6"><enum>(e)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this subsection:</text> <paragraph id="H722D78EF33E14943A08585097A9E5140"><enum>(1)</enum><header>Federal functional regulator</header><text>The term <term>Federal functional regulator</term> means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Commodity Futures Trading Commission.</text>
</paragraph><paragraph id="HCEE769A642CE4549A94DF24E668E52DD"><enum>(2)</enum><header>State bank supervisor</header><text display-inline="yes-display-inline">The term <quote>State bank supervisor</quote> has the meaning given that term under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HEEA26B6527B7406E8DA99B6679D5F740"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of contents for subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code, is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HDFA51AFF719940E489D7D5C534356BAC" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">5333. Innovation Labs.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HB01D48C80B7A4A4CA3B65AF136974A0A"><enum>303.</enum><header>Innovation Council</header>
<subsection id="H038B45912245413182C63CA3AA159C9B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subchapter II of chapter 53 of Title 31, United States Code, as amended by section 302, is further amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H782D9FD083DF4AA0AAB9E600FA2C47B5" style="USC">
<section id="HF34892FE38BB4BE5AEFF3799CDA6F4A7"><enum>5334.</enum><header>Innovation Council</header>
<subsection id="H9361055B90444DF7AD47DEA75ECA7E33"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is established the Innovation Council (hereinafter in this section referred to as the <quote>Council</quote>), which shall consist of each Director of an Innovation Lab established under section 5334, a representative of State bank supervisors (as defined under section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)), and the Director of the Financial Crimes Enforcement Network.</text>
</subsection><subsection commented="no" id="HC880325718B04DFEA94C5FF5BB80EAA7"><enum>(b)</enum><header>Chair</header><text>The Director of the Innovation Lab of the Department of the Treasury shall serve as the Chair of the Council.</text>
</subsection><subsection id="HEE310D300C1A40A38CEE1C889B5C4643"><enum>(c)</enum><header>Duty</header><text display-inline="yes-display-inline">The members of the Council shall coordinate on activities related to innovation under the Bank Secrecy Act, but may not supplant individual agency determinations on innovation.</text>
</subsection><subsection id="HA280F16B387C46C7BDEA7357B8F2771C"><enum>(d)</enum><header>Meetings</header><text display-inline="yes-display-inline">The meetings of the Council—</text> <paragraph id="HE71A0E0C10574817BF6148F9C4BDE2B2"><enum>(1)</enum><text>shall be at the call of the Chair, but in no case may the Council meet less than semi-annually;</text>
</paragraph><paragraph id="H3E0FDBBB15FD48ADAD8370BE535676DA"><enum>(2)</enum><text>may include open and closed sessions, as determined necessary by the Council; and</text> </paragraph><paragraph id="HF3CD35CBDD0F46E38A835A6382B24798"><enum>(3)</enum><text>shall include participation by public and private entities and law enforcement agencies.</text>
</paragraph></subsection><subsection id="H8DEDBD412A564DA59F23811905C61E83"><enum>(e)</enum><header>Report</header><text display-inline="yes-display-inline">The Council shall issue an annual report, for each of the 7 years beginning on the date of enactment of this section, to the Secretary of the Treasury on the activities of the Council during the previous year, including the success of programs as measured by metrics of success developed pursuant to section 5334(c)(4), and any regulatory or legislative recommendations that the Council may have.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H12C6F18B3EA747AC9A8CE2D5B455C2FC"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of contents for subchapter II of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/31/53">chapter 53</external-xref> of title 31, United States Code, is amended by adding the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H3054A414992749B68C4294682B89DD66" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">5334. Innovation Council.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H5BC7B657B24E409285F88F09B727F557"><enum>304.</enum><header>Testing methods rulemaking</header>
<subsection id="H8F54AA1CB89E43DE9852B9187DE0FCE3"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 5318 of title 31, United States Code, as amended by section 301, is further amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HE7C6FD2D9EB04082A7FB7DC2E55427F1" style="USC">
<subsection id="H674732FC70DB4244A087DB8E6C020C9C"><enum>(q)</enum><header>Testing</header>
<paragraph id="HAB019E274BF943A4AD9D5EF6760630AA"><enum>(1)</enum><header>In general</header><text>The Secretary of the Treasury, in consultation with the head of each agency to which the Secretary has delegated duties or powers under subsection (a), shall issue a rule to specify—</text>
<subparagraph id="H467941EBC0B94019B00AD491D9EE99DE"><enum>(A)</enum><text>with respect to technology and related technology-internal processes (<quote>new technology</quote>) designed to facilitate compliance with the Bank Secrecy Act requirements, the standards by which financial institutions are to test new technology; and</text>
</subparagraph><subparagraph id="HD907B014DF914C0BA9DAFD17E729719A"><enum>(B)</enum><text display-inline="yes-display-inline">in what instances or under what circumstance and criteria a financial institution may replace or terminate legacy technology and processes for any examinable technology or process without the replacement or termination being determined an examination deficiency.</text>
</subparagraph></paragraph><paragraph id="HFB93B6A6F85048D790090861DFB051C5"><enum>(2)</enum><header>Standards</header><text display-inline="yes-display-inline">The standards described under paragraph (1) may include—</text> <subparagraph id="H96F81B9A75E9431B95D6B369B4D6F7FA"><enum>(A)</enum><text>an emphasis on using innovative approaches, such as machine learning, rather than rules-based systems;</text>
</subparagraph><subparagraph id="HF127E88385974A99B185281678E3863A"><enum>(B)</enum><text>risk-based back-testing of the regime to facilitate calibration of relevant systems;</text> </subparagraph><subparagraph id="H7748F13597F141D9AFD912591AEDAC07"><enum>(C)</enum><text>requirements for appropriate data privacy and security; and</text>
</subparagraph><subparagraph id="HC2186F486BDA457AB9DDCF408DBB1350"><enum>(D)</enum><text>a requirement that the algorithms used by the regime be disclosed to the Financial Crimes Enforcement Network, upon request.</text>
</subparagraph></paragraph><paragraph id="HEF2D8D2C639D4FB0BE1F4508F5636B44"><enum>(3)</enum><header>Confidentiality of algorithms</header><text display-inline="yes-display-inline">If a financial institution or any director, officer, employee, or agent of any financial institution, voluntarily or pursuant to this subsection or any other authority, discloses the institution’s algorithms to a Government agency, such algorithms and any materials associated with the creation of such algorithms shall be considered confidential and not subject to public disclosure.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H602769C5053645BDA73670B6482A52CE"><enum>(b)</enum><header>Update of manual</header><text display-inline="yes-display-inline">The Financial Institutions Examination Council shall ensure—</text> <paragraph id="H4F1FAFA570574FAEBB0CB583A460B5F1"><enum>(1)</enum><text>that any manual prepared by the Council is updated to reflect the rulemaking required by the amendment made by subsection (a); and</text>
</paragraph><paragraph id="H1570CEA9D4584426A3E9DB7F08EED528"><enum>(2)</enum><text>that financial institutions are not penalized for the decisions based on such rulemaking to replace or terminate technology used for compliance with the Bank Secrecy Act (as defined under section 5312 of title 31, United States Code) or other anti-money laundering laws.</text>
</paragraph></subsection></section><section id="H15CDE0158EA3445CAFF2FF8D3D08F701"><enum>305.</enum><header>FinCEN study on use of emerging technologies</header>
<subsection id="H84CE01A56BA94C82B6DE097B0F3E03F7"><enum>(a)</enum><header>Study</header>
<paragraph id="HAE617C5B7EB444158B99F888EC10B6B3"><enum>(1)</enum><header>In general</header><text>The Director of the Financial Crimes Enforcement Network (<quote>FinCEN</quote>) shall carry out a study on—</text> <subparagraph id="HBBDEC91709FC495D985BE595359219E0"><enum>(A)</enum><text display-inline="yes-display-inline">the status of implementation and internal use of emerging technologies, including artificial intelligence (<quote>AI</quote>), digital identity technologies, blockchain technologies, and other innovative technologies within FinCEN;</text>
</subparagraph><subparagraph id="H54E6BE98144B441B9279CF8E9AC87EFE"><enum>(B)</enum><text display-inline="yes-display-inline">whether AI, digital identity technologies, blockchain technologies, and other innovative technologies can be further leveraged to make FinCEN’s data analysis more efficient and effective; and</text>
</subparagraph><subparagraph id="H4029FAC7F80548F894755D3EC122A256"><enum>(C)</enum><text display-inline="yes-display-inline">how FinCEN could better utilize AI, digital identity technologies, blockchain technologies, and other innovative technologies to more actively analyze and disseminate the information it collects and stores to provide investigative leads to Federal, State, Tribal, and local law enforcement, and other Federal agencies (collective, <quote>Agencies</quote>), and better support its ongoing investigations when referring a case to the Agencies.</text>
</subparagraph></paragraph><paragraph id="HC9C78218BC85464991409A69C2C49D92"><enum>(2)</enum><header>Inclusion of GTO data</header><text>The study required under this subsection shall include data collected through the Geographic Targeting Orders (<quote>GTO</quote>) program.</text>
</paragraph><paragraph id="HEBE3F474AF6145819CC932913EC0F205"><enum>(3)</enum><header>Consultation</header><text display-inline="yes-display-inline">In conducting the study required under this subsection, FinCEN shall consult with the Directors of the Innovations Labs established in section 302.</text>
</paragraph></subsection><subsection id="H8E044A4B92D8411BAF01FB6BBF2D8D14"><enum>(b)</enum><header>Report</header><text>Not later than the end of the 6-month period beginning on the date of the enactment of this Act, the Director 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—</text>
<paragraph id="HBD16229E64B44BEE9AC779421694998F"><enum>(1)</enum><text>all findings and determinations made in carrying out the study required under subsection (a);</text> </paragraph><paragraph id="H2F77FFBE69D5401A98289AA50BB0E645"><enum>(2)</enum><text display-inline="yes-display-inline">with respect to each of subparagraphs (A), (B) and (C) of subsection (a)(1), any best practices or significant concerns identified by the Director, and their applicability to AI, digital identity technologies, blockchain technologies, and other innovative technologies with respect to United States efforts to combat money laundering and other forms of illicit finance; and</text>
</paragraph><paragraph id="H39C71D5958A242E3BB8147E6BCB56F56"><enum>(3)</enum><text display-inline="yes-display-inline">any policy recommendations that could facilitate and improve communication and coordination between the private sector, FinCEN, and Agencies through the implementation of innovative approaches, in order to meet their Bank Secrecy Act (as defined under section 5312 of title 31, United States Code) and anti-money laundering compliance obligations.</text>
</paragraph></subsection></section><section id="HCF77557373ED43EFB6C778B3891BF2E7"><enum>306.</enum><header>Discretionary surplus funds</header>
<subsection id="HC2C3CD561CAA4BDEBB4F402588D67476"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The dollar amount specified under section 7(a)(3)(A) of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/289">12 U.S.C. 289(a)(3)(A)</external-xref>) is reduced by $27,000,000.</text>
</subsection><subsection id="H5AAF5C8155F6424FB38C5755729C515B"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall take effect on September 30, 2029.</text> </subsection></section> Passed the House of Representatives October 28, 2019.Cheryl L. Johnson,Clerk