[Congressional Record Volume 163, Number 131 (Wednesday, August 2, 2017)]
[Senate]
[Pages S4769-S4775]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. CORNYN (for himself and Mr. Wyden):
S. 1701. A bill to provide for Federal agencies to develop public
access policies relating to research conducted by employees of that
agency or from funds administered by that agency; to the Committee on
Homeland Security and Governmental Affairs.
Mr. CORNYN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1701
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Access to Science and
Technology Research Act of 2017''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Federal Government funds basic and applied research
with the expectation that new ideas and discoveries that
result from the research, if shared and effectively
disseminated, will advance science and improve the lives and
welfare of people of the United States and around the world;
(2) the Internet makes it possible for this information to
be promptly available to every scientist, physician,
educator, and citizen at home, in school, or in a library;
(3) the United States has a substantial interest in
maximizing the impact and utility of the research it funds by
enabling a wide range of reuses of the peer-reviewed
literature that reports the results of such research,
including by enabling computational analysis by state-of-the-
art technologies;
(4) the Office of Science and Technology Policy issued a
policy memorandum dated February 22, 2013, which established
the commitment of the executive branch of the Federal
Government to ensuring that ``the direct results of Federally
funded scientific research are made available to and useful
for the public, industry, and the scientific community''; and
(5) the executive branch advises that such public access
should be implemented ``with the fewest constraints
possible''.
SEC. 3. DEFINITION OF FEDERAL AGENCY.
In this Act, the term ``Federal agency'' means an Executive
agency, as defined under section 105 of title 5, United
States Code.
SEC. 4. FEDERAL RESEARCH PUBLIC ACCESS POLICY.
(a) Requirement To Develop Policy.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, each Federal agency with annual
extramural research expenditures of over $100,000,000 shall
develop a Federal research public access policy that is
consistent with and advances the purposes of the Federal
agency.
(2) Common procedures.--To the extent practicable, Federal
agencies required to develop a policy under paragraph (1)
shall follow common procedures for the collection and
depositing of research papers.
(b) Content.--Each Federal research public access policy
shall provide for--
(1) submission to a digital repository designated or
maintained by the Federal agency of an electronic version of
the author's final manuscript of original research papers
that have been accepted for publication in peer-reviewed
journals and that result from research supported, in whole or
in part, from funding by the Federal Government;
(2) the incorporation of all changes resulting from the
peer review publication process in the manuscript described
under paragraph (1);
(3) the replacement of the final manuscript with the final
published version if--
(A) the publisher consents to the replacement; and
(B) the goals of the Federal agency for functionality and
interoperability are retained;
[[Page S4770]]
(4) free online public access to such final peer-reviewed
manuscripts or published versions within a time period that
is appropriate for each type of research conducted or
sponsored by the Federal agency, not later than 12 months
after publication in peer-reviewed journals, preferably
sooner, or as adjusted under established mechanisms;
(5) a means, using established mechanisms for making
requests to the applicable Federal agency, for members of the
public and other stakeholders to request to adjust the period
before such a final peer-reviewed manuscript or published
version is made publicly available by presenting evidence
demonstrating that the period is inconsistent with the
objectives of the Federal research public access policy or
the needs of the public, industry, or the scientific
community;
(6) providing research papers as described in paragraph (4)
in formats and under terms that enable productive reuse of
the research and computational analysis by state-of-the-art
technologies;
(7) improving the ability of the public to locate and
access research papers made accessible under the Federal
research public access policy; and
(8) long-term preservation of, and free public access to,
published research findings--
(A) in a stable digital repository maintained by the
Federal agency; or
(B) if consistent with the purposes of the Federal agency,
in any repository meeting conditions determined favorable by
the Federal agency (including free public access),
interoperability, and long-term preservation.
(c) Application of Policy.--Each Federal research public
access policy shall--
(1) apply to--
(A) researchers employed by the Federal agency whose works
remain in the public domain; and
(B) researchers funded by the Federal agency;
(2) provide that works described under paragraph (1)(A)
shall be--
(A) marked as being public domain material when published;
and
(B) made available at the same time such works are made
available under subsection (b)(4); and
(3) make effective use of any law or guidance relating to
the creation and reservation of a Government license that
provides for the reproduction, publication, release, or other
uses of a final manuscript for Federal purposes.
(d) Exclusions.--Each Federal research public access policy
shall not apply to--
(1) research progress reports presented at professional
meetings or conferences;
(2) laboratory notes, preliminary data analyses, notes of
the author, phone logs, or other information used to produce
final manuscripts;
(3) classified research, research resulting in works that
generate revenue or royalties for authors (such as books) or
patentable discoveries, to the extent necessary to protect a
copyright or patent; or
(4) authors who do not submit their work to a journal or
works that are rejected by journals.
(e) Patent or Copyright Law.--Nothing in this Act shall be
construed to affect any right under the provisions of title
17 or 35, United States Code.
(f) GAO Report.--Not later than 3 years after the date of
enactment of this Act, and every 5 years thereafter, the
Comptroller General of the United States shall submit to
Congress a report that--
(1) includes an analysis of the period between the date on
which each paper becomes publicly available in a journal and
the date on which the paper is in the online repository of
the applicable Federal agency; and
(2) examines the effectiveness of the Federal research
public access policy in providing the public with free online
access to papers on research funded by each Federal agency
required to develop a policy under subsection (a)(1),
including--
(A) whether the terms of use applicable to such research
papers in effect are effective in enabling productive reuse
of the research and computational analysis by state-of-the-
art technologies; and
(B) examines whether such research papers should include a
royalty-free copyright license that is available to the
public and that permits the reuse of those research papers,
on the condition that attribution is given to the author or
authors of the research and any others designated by the
copyright owner.
______
By Mr. WYDEN (for himself and Mr. Rubio):
S. 1717. A bill to amend title 31, United States Code, to ensure that
persons who form corporations or limited liability companies in the
United States disclose the beneficial owners of those corporations or
limited liability companies, in order to prevent wrongdoers from
exploiting United States corporations and limited liability companies
for criminal gain, to assist law enforcement in detecting, preventing,
and punishing terrorism, money laundering, and other misconduct
involving United States corporations and limited liability companies,
and for other purposes; to the Committee on Banking, Housing, and Urban
Affairs.
Mr. WYDEN. Mr. President, today I am, along with Senator Rubio,
introducing the Corporate Transparency Act of 2017. This bill will help
us end the abuse of anonymous shell companies by criminals who use
these entities to launder money, finance terrorism, promote sex
trafficking, and evade taxes.
Each year criminals use anonymous shell companies to carry out their
elicit schemes. Viktor Bout, the so-called ``merchant of death,''
utilized a vast network of shell corporations, several of which were in
the United States, including one suspected of having provided weapons
to the Taliban. Another anonymous U.S. company owned a large share of a
Manhattan skyscraper and used its anonymity to facilitate $4.5 million
in payments to an Iranian bank that was designated by OFAC as a key
financier to Iran's nuclear and ballistic missiles program. Anonymous
shell companies have been used to rip off taxpayers as well. In 2010,
Michel Huarte was sentenced to 22 years in prison after using a network
of 29 shell companies in several States to defraud Medicare, using the
entities to submit claims of more than $50 million.
Last year, the release of documents known as the Panama Papers leaked
from the Panamanian law firm Mossack Fonseca highlighted the use of
American shell companies to carry out potential crimes. Shell company
abuse is not just in occurring in offshore tax havens, but right here
in the United States, and this bill seeks to put a stop to that.
In the United States, company registrations take place at the State-
level. The Corporate Transparency Act of 2017 directs the Treasury
Department to issue regulations requiring entities formed in the United
States to declare their beneficial owners--the real, natural persons
who control each company and benefit from it financially. The bill
would do this by setting minimum disclosure standards for States to
follow. If individual States choose to collect this information on
behalf of businesses formed there, then that's all that a new business
would need to do to comply. Participation by the States is completely
voluntary. If companies are formed in States that do not collect this
information consistent with the new minimum standards, they will need
to disclose their beneficial owners directly to the U.S. Treasury
Department's Financial Crimes Enforcement Network.
Collecting beneficial ownership information at the time a company is
formed will offer the transparency law enforcement needs to investigate
these kinds of financial crimes. Under the bill, the new beneficial
ownership information would not be available to the public, but
available only to appropriate state and federal authorities. Finally,
the bill provides civil and criminal penalties for improper disclosure.
The bill is constructed to exempt many legitimate businesses, and the
information requested is already provided by most companies in the
normal course of business. Collecting beneficial ownership information
at the time of incorporation relieves later compliance burdens for
legitimate businesses, while at the same time prevents illegitimate
businesses from operating in secrecy.
The House companion to this bill, H.R. 3089, was introduced with
bipartisan support and efforts to identify the true owners of shell
companies have the support of business groups like the Clearing House
Association and the B-Team, law enforcement groups like the Fraternal
Order of Police, and anti-corruption advocacy groups like the Financial
Accountability and Corporate Transparency (FACT) Coalition and Global
Witness.
The Corporate Transparency Act of 2017 is a much needed step in
stopping financial crimes and the abuse of anonymous shell companies. I
thank Senator Rubio for joining me in introducing this bill, and I ask
my colleagues to join me in supporting this bipartisan bill.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1717
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Corporate Transparency Act
of 2017''.
SEC. 2. FINDINGS.
Congress finds the following:
[[Page S4771]]
(1) Nearly 2,000,000 corporations and limited liability
companies are being formed under the laws of the States each
year.
(2) Very few States obtain meaningful information about the
beneficial owners of the corporations and limited liability
companies formed under their laws.
(3) A person forming a corporation or limited liability
company within the United States typically provides less
information to the State of incorporation than is needed to
obtain a bank account or driver's license and typically does
not name a single beneficial owner.
(4) Criminals have exploited the weaknesses in State
formation procedures to conceal their identities when forming
corporations or limited liability companies in the United
States, and have then used the newly created entities to
commit crimes affecting interstate and international commerce
such as terrorism, drug trafficking, money laundering, tax
evasion, securities fraud, financial fraud, and acts of
foreign corruption.
(5) Law enforcement efforts to investigate corporations and
limited liability companies suspected of committing crimes
have been impeded by the lack of available beneficial
ownership information, as documented in reports and testimony
by officials from the Department of Justice, the Department
of Homeland Security, the Financial Crimes Enforcement
Network of the Department of the Treasury, the Internal
Revenue Service, and the Government Accountability Office,
and others.
(6) In July 2006, a leading international anti-money
laundering organization, the Financial Action Task Force on
Money Laundering (in this section referred to as the
``FATF''), of which the United States is a member, issued a
report that criticizes the United States for failing to
comply with a FATF standard on the need to collect beneficial
ownership information and urged the United States to correct
this deficiency by July 2008. In December 2016, FATF issued
another evaluation of the U.S., which found that little
progress has been made over the last ten years to address
this problem. It identified the ``lack of timely access to
adequate, accurate and current beneficial ownership
information'' as a fundamental gap in U.S. efforts to combat
money laundering and terrorist finance.
(7) In response to the 2006 FATF report, the United States
has repeatedly urged the States to strengthen their
incorporation practices by obtaining beneficial ownership
information for the corporations and limited liability
companies formed under the laws of such States.
(8) Many States have established automated procedures that
allow a person to form a new corporation or limited liability
company within the State within 24 hours of filing an online
application, without any prior review of the application by a
State official. In exchange for a substantial fee, 2 States
will form a corporation within 1 hour of a request.
(9) Dozens of Internet Web sites highlight the anonymity of
beneficial owners allowed under the incorporation practices
of some States, point to those practices as a reason to
incorporate in those States, and list those States together
with offshore jurisdictions as preferred locations for the
formation of new corporations, essentially providing an open
invitation to criminals and other wrongdoers to form entities
within the United States.
(10) In contrast to practices in the United States, all 28
countries in the European Union are required to have
formation agents identify the beneficial owners of the
corporations formed under the laws of the country.
(11) To reduce the vulnerability of the United States to
wrongdoing by United States corporations and limited
liability companies with hidden owners, to protect interstate
and international commerce from criminals misusing United
States corporations and limited liability companies, to
strengthen law enforcement investigations of suspect
corporations and limited liability companies, to set minimum
standards for and level the playing field among State
incorporation practices, and to bring the United States into
compliance with its international anti-money laundering
standards, Federal legislation is needed to require the
collection of beneficial ownership information for the
corporations and limited liability companies formed under the
laws of such States.
SEC. 3. TRANSPARENT INCORPORATION PRACTICES.
(a) Transparent Incorporation Practices.--
(1) In general.--Chapter 53 of title 31, United States
Code, is amended by inserting after section 5332 the
following new section:
``Sec. 5333. Transparent incorporation practices
``(a) Reporting Requirements.--
``(1) In general.--Not later than the beginning of fiscal
year 2019, the Secretary of the Treasury shall issue
regulations requiring each corporation and limited liability
company formed in a State that does not have a formation
system described under subsection (b) to file with the
Financial Crimes Enforcement Network such information as the
corporation or limited liability company would be required to
provide the State if such State had a formation system
described under subsection (b).
``(2) Disclosure of beneficial ownership information.--
Beneficial ownership information reported to the Financial
Crimes Enforcement Network pursuant to paragraph (1) shall be
provided by the Financial Crimes Enforcement Network upon
receipt of--
``(A) a civil or criminal subpoena or summons from a State
agency, Federal agency, or congressional committee or
subcommittee requesting such information;
``(B) a written request made by a Federal agency on behalf
of another country under an international treaty, agreement,
or convention, or an order under section 3512 of title 18 or
section 1782 of title 28 issued in response to a request for
assistance from a foreign country; or
``(C) a written request made by a financial institution,
with customer consent, as part of the institution's
compliance with due diligence requirements imposed under the
Bank Secrecy Act (Public Law 91508; 84 Stat. 1114), the USA
PATRIOT Act (Public Law 10756; 115 Stat. 272), or other
applicable Federal or State law.
``(3) Limitation.--In issuing regulations pursuant to
paragraph (1), the Secretary shall not require such
information to be filed with the Internal Revenue Service.
``(b) Formation System.--
``(1) In general.--With respect to a State, a formation
system is described under this subsection if it meets the
following requirements:
``(A) Identification of beneficial owners.--Except as
provided in paragraphs (2) and (4), and subject to paragraph
(3), each applicant to form a corporation or limited
liability company under the laws of the State is required to
provide to the State during the formation process a list of
the beneficial owners of the corporation or limited liability
company that--
``(i) except as provided in subparagraph (F), identifies
each beneficial owner by--
``(I) name;
``(II) current residential or business street address; and
``(III) a unique identifying number from a non-expired
passport issued by the United States or a non-expired
driver's license issued by a State; and
``(ii) if the applicant is not the beneficial owner,
provides the identification information described in clause
(i) relating to the applicant.
``(B) Updated information.--For each corporation or limited
liability company formed under the laws of the State--
``(i) the corporation or limited liability company is
required by the State to update the list of the beneficial
owners of the corporation or limited liability company by
providing the information described in subparagraph (A) to
the State not later than 60 days after the date of any change
in the list of beneficial owners or the information required
to be provided relating to each beneficial owner;
``(ii) in the case of a corporation or limited liability
company formed or acquired by a formation agent and retained
by the formation agent as a beneficial owner for transfer to
another person, the formation agent is required by the State
to submit to the State an updated list of the beneficial
owners and the information described in subparagraph (A) for
each such beneficial owner not later than 10 days after date
on which the formation agent transfers the corporation or
limited liability company to another person; and
``(iii) the corporation or limited liability company is
required by the State to submit to the State an annual filing
containing the list of the beneficial owners of the
corporation or limited liability company and the information
described in subparagraph (A) for each such beneficial owner.
``(C) Retention of information.--Beneficial ownership
information relating to each corporation or limited liability
company formed under the laws of the State is required to be
maintained by the State until the end of the 5-year period
beginning on the date that the corporation or limited
liability company terminates under the laws of the State.
``(D) Information requests.--Beneficial ownership
information relating to each corporation or limited liability
company formed under the laws of the State shall be provided
by the State upon receipt of--
``(i) a civil or criminal subpoena or summons from a State
agency, Federal agency, or congressional committee or
subcommittee requesting such information;
``(ii) a written request made by a Federal agency on behalf
of another country under an international treaty, agreement,
or convention, or section 1782 of title 28;
``(iii) a written request made by the Financial Crimes
Enforcement Network; or
``(iv) a written request made by a financial institution,
with customer consent, as part of the institution's
compliance with due diligence requirements imposed under the
Bank Secrecy Act (Public Law 91508; 84 Stat. 1114), the USA
PATRIOT Act (Public Law 10756; 115 Stat. 272), or other
applicable Federal or State law.
``(E) Notice.--The State discloses clearly and
conspicuously that the beneficial ownership information
collected under the formation system may be provided to the
entities described in subparagraph (D), pursuant to the
requirements of such subparagraph.
``(F) No bearer share corporations or limited liability
companies.--A corporation or limited liability company formed
under the laws of the State may not issue a certificate in
bearer form evidencing either a whole or fractional interest
in the corporation or limited liability company.
``(2) States that license formation agents.--
[[Page S4772]]
``(A) In general.--Notwithstanding paragraph (1), a State
described in subparagraph (B) may permit an applicant to form
a corporation or limited liability company under the laws of
the State, or a corporation or limited liability company
formed under the laws of the State, to provide the required
information to a licensed formation agent residing in the
State, instead of to the State directly, if the application
under paragraph (1)(A) or the update under paragraph (1)(B)
contains--
``(i) the name, current business address, contact
information, and licensing number of the licensed formation
agent that has agreed to maintain the information required
under this subsection; and
``(ii) a certification by the licensed formation agent that
the licensed formation agent has possession of the
information required under this subsection and will maintain
the information in the State licensing the licensed formation
agent in accordance with State law.
``(B) States described.--A State described in this
subparagraph is a State that maintains a formal licensing
system for formation agents that requires a formation agent
to register with the State, meet standards for fitness and
honesty, maintain a physical office and records within the
State, undergo regular monitoring, and be subject to
sanctions for noncompliance with State requirements.
``(C) Licensed formation agent duties.--A licensed
formation agent that receives beneficial ownership
information under State law in accordance with this paragraph
shall--
``(i) maintain the information in the State in which the
corporation or limited liability company is being or has been
formed in the same manner as required for States under
paragraph (1)(C);
``(ii) provide the information under the same circumstances
as required for States under paragraph (1)(D); and
``(iii) perform the duties of a formation agent under
paragraph (3).
``(D) Termination of relationship.--
``(i) In general.--Except as provided in clause (ii), a
licensed formation agent that receives beneficial ownership
information relating to a corporation or limited liability
company under State law in accordance with this paragraph and
that resigns, dissolves, or otherwise ends a relationship
with the corporation or limited liability company shall
promptly--
``(I) notify the State in writing that the licensed
formation agent has resigned or ended the relationship; and
``(II) transmit all beneficial ownership information
relating to the corporation or limited liability company in
the possession of the licensed formation agent to the
licensing State.
``(ii) Exception.--If a licensed formation agent receives
written instructions from a corporation or limited liability
company, the licensed formation agent may transmit the
beneficial ownership information relating to the corporation
or limited liability company to another licensed formation
agent that is within the same State and has agreed to
maintain the information in accordance with this section.
``(iii) Notice to state.--If a licensed formation agent
provides beneficial ownership information to another licensed
formation agent under clause (ii), the licensed formation
agent providing the information shall promptly notify in
writing the State under the laws of which the corporation or
limited liability company is formed of the identity of the
licensed formation agent receiving the information.
``(3) Certain beneficial owners.--If an applicant to form a
corporation or limited liability company or a beneficial
owner, officer, director, or similar agent of a corporation
or limited liability company who is required to provide
identification information under this subsection does not
have a non-expired passport issued by the United States or a
non-expired driver's license or identification card issued by
a State, each application described in paragraph (1)(A) and
each update described in paragraph (1)(B) shall include a
certification by a formation agent residing in the State that
the formation agent--
``(A) has obtained for each such person a current
residential or business street address and a legible and
credible copy of the pages of a non-expired passport issued
by the government of a foreign country bearing a photograph,
date of birth, and unique identifying information for the
person;
``(B) has verified the name, address, and identity of each
such person;
``(C) will provide the information described in
subparagraph (A) and the proof of verification described in
subparagraph (B) upon request under the same circumstances as
required for States under paragraph (1)(D); and
``(D) will retain the information and proof of verification
under this paragraph in the State in which the corporation or
limited liability company is being or has been formed until
the end of the 5-year period beginning on the date that the
corporation or limited liability company terminates under the
laws of the State.
``(4) Exempt entities.--
``(A) In general.--A formation system described in
paragraph (1) shall require that an application for an entity
described in subparagraph (C) or (D) of subsection (d)(2)
that is proposed to be formed under the laws of a State and
that will be exempt from the beneficial ownership disclosure
requirements under this subsection shall include in the
application a certification by the applicant, or a
prospective officer, director, or similar agent of the
entity--
``(i) identifying the specific provision of subsection
(d)(2) under which the entity proposed to be formed would be
exempt from the beneficial ownership disclosure requirements
under paragraphs (1), (2), and (3);
``(ii) stating that the entity proposed to be formed meets
the requirements for an entity described under such provision
of subsection (d)(2); and
``(iii) providing identification information for the
applicant or prospective officer, director, or similar agent
making the certification in the same manner as provided under
paragraph (1) or (3).
``(B) Existing entities.--On and after the date that is 2
years after the effective date of the amendments to the
formation system of a State made to comply with this section,
an entity formed under the laws of the State before such
effective date shall be considered to be a corporation or
limited liability company for purposes of, and shall be
subject to the requirements of, this subsection unless an
officer, director, or similar agent of the entity submits to
the State a certification--
``(i) identifying the specific provision of subsection
(d)(2) under which the entity is exempt from the requirements
under paragraphs (1), (2), and (3);
``(ii) stating that the entity meets the requirements for
an entity described under such provision of subsection
(d)(2); and
``(iii) providing identification information for the
officer, director, or similar agent making the certification
in the same manner as provided under paragraph (1) or (3).
``(C) Exempt entities having ownership interest.--If an
entity described in subparagraph (C) or (D) of subsection
(d)(2) has or will have an ownership interest in a
corporation or limited liability company formed or to be
formed under the laws of a State, the applicant, corporation,
or limited liability company in which the entity has or will
have the ownership interest shall provide the information
required under this subsection relating to the entity, except
that the entity shall not be required to provide information
regarding any natural person who has an ownership interest
in, exercises substantial control over, or receives
substantial economic benefits from the entity.
``(c) Penalties.--
``(1) In general.--It shall be unlawful for--
``(A) any person to affect interstate or foreign commerce
by--
``(i) knowingly providing, or attempting to provide, false
or fraudulent beneficial ownership information, including a
false or fraudulent identifying photograph, to a State or
licensed formation agent under State law in accordance with
this section;
``(ii) willfully failing to provide complete or updated
beneficial ownership information to a State or licensed
formation agent under State law in accordance with this
section; or
``(iii) knowingly disclosing the existence of a subpoena,
summons, or other request for beneficial ownership
information, except--
``(I) to the extent necessary to fulfill the authorized
request;
``(II) as authorized by the entity that issued the
subpoena, summons, or other request; or
``(III) as prescribed by a State; or
``(B) in the case of a formation agent, knowingly failing
to obtain or maintain credible, legible, and updated
beneficial ownership information, including any required
identifying photograph.
``(2) Civil and criminal penalties.--In addition to any
civil or criminal penalty that may be imposed by a State, any
person who violates paragraph (1)--
``(A) shall be liable to the United States for a civil
penalty of not more than $10,000; and
``(B) may be fined under title 18, imprisoned for not more
than 3 years, or both.
``(d) Definitions.--For the purposes of this section:
``(1) Beneficial owner.--The term `beneficial owner'--
``(A) means a natural person who, directly or indirectly--
``(i) exercises substantial control over a corporation or
limited liability company; or
``(ii) has a substantial interest in or receives
substantial economic benefits from the assets of a
corporation or limited liability company; and
``(B) does not include--
``(i) a minor child;
``(ii) a person acting as a nominee, intermediary,
custodian, or agent on behalf of another person;
``(iii) a person acting solely as an employee of a
corporation or limited liability company and whose control
over or economic benefits from the corporation or limited
liability company derives solely from the employment status
of the person;
``(iv) a person whose only interest in a corporation or
limited liability company is through a right of inheritance,
unless the person also meets the requirements of subparagraph
(A); or
``(v) a creditor of a corporation or limited liability
company, unless the creditor also meets the requirements of
subparagraph (A).
``(2) Corporation; limited liability company.--The terms
`corporation' and `limited liability company'--
``(A) have the meanings given such terms under the laws of
the applicable State;
``(B) include any non-United States entity eligible for
registration or registered to do business as a corporation or
limited liability
[[Page S4773]]
company under the laws of the applicable State;
``(C) do not include any entity that is, and discloses in
the application by the entity to form under the laws of the
State or, if the entity was formed before the date of the
enactment of this section, in a filing with the State under
State law--
``(i) a business concern that is an issuer of a class of
securities registered under section 12 of the Securities
Exchange Act of 1934 (15 U.S.C. 78l) or that is required to
file reports under section 15(d) of that Act (15 U.S.C.
78o(d));
``(ii) a business concern constituted or sponsored by a
State, a political subdivision of a State, under an
interstate compact between 2 or more States, by a department
or agency of the United States, or under the laws of the
United States;
``(iii) a depository institution (as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813));
``(iv) a credit union (as defined in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752));
``(v) a bank holding company (as defined in section 2 of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841));
``(vi) a broker or dealer (as defined in section 3 of the
Securities Exchange Act of 1934 (15 U.S.C. 78c)) that is
registered under section 15 of the Securities Exchange Act of
1934 (15 U.S.C. 78o);
``(vii) an exchange or clearing agency (as defined in
section 3 of the Securities Exchange Act of 1934 (15 U.S.C.
78c)) that is registered under section 6 or 17A of the
Securities Exchange Act of 1934 (15 U.S.C. 78f and 78q-1);
``(viii) an investment company (as defined in section 3 of
the Investment Company Act of 1940 (15 U.S.C. 80a-3)) or an
investment advisor (as defined in section 202 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2)), if the
company or adviser is registered with the Securities and
Exchange Commission, or has filed an application for
registration which has not been denied, under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or the
Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.);
``(ix) an insurance company (as defined in section 2 of the
Investment Company Act of 1940 (15 U.S.C. 80a-2));
``(x) a registered entity (as defined in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a)), or a futures
commission merchant, introducing broker, commodity pool
operator, or commodity trading advisor (as defined in section
1a of the Commodity Exchange Act (7 U.S.C. 1a)) that is
registered with the Commodity Futures Trading Commission;
``(xi) a public accounting firm registered in accordance
with section 102 of the Sarbanes-Oxley Act (15 U.S.C. 7212);
``(xii) a public utility that provides telecommunications
service, electrical power, natural gas, or water and sewer
services, within the United States;
``(xiii) a church, charity, or nonprofit entity that is
described in section 501(c), 527, or 4947(a)(1) of the
Internal Revenue Code of 1986, has not been denied tax exempt
status, and has filed the most recently due annual
information return with the Internal Revenue Service, if
required to file such a return;
``(xiv) any business concern that--
``(I) employs more than 20 employees on a full-time basis
in the United States;
``(II) files income tax returns in the United States
demonstrating more than $5,000,000 in gross receipts or
sales; and
``(III) has an operating presence at a physical office
within the United States; or
``(xv) any corporation or limited liability company formed
and owned by an entity described in clause (i), (ii), (iii),
(iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii),
(xiii), or (xiv); and
``(D) do not include any individual business concern or
class of business concerns which the Secretary of the
Treasury, with the written concurrence of the Attorney
General of the United States, has determined in writing
should be exempt from the requirements of subsection (a),
because requiring beneficial ownership information from the
business concern would not serve the public interest and
would not assist law enforcement efforts to detect, prevent,
or punish terrorism, money laundering, tax evasion, or other
misconduct.
``(3) Formation agent.--The term `formation agent' means a
person who, for compensation--
``(A) acts on behalf of another person to assist in the
formation of a corporation or limited liability company under
the laws of a State; or
``(B) purchases, sells, or transfers the public records
that form a corporation or limited liability company.''.
(2) Rulemaking.--To carry out this Act and the amendments
made by this Act, the Secretary of the Treasury, in
consultation with the Secretary of Homeland Security and the
Attorney General of the United States, may issue guidance or
a rule to--
(A) clarify the definitions under section 5333(d) of title
31, United States Code, as added by paragraph (1); and
(B) specify how to verify beneficial ownership information
or other identification information for purposes of such
section 5333, including whether the verification procedures
specified in section 5333(b)(3) should apply to all
applicants under section 5333(b)(1) or whether such
verification process should require the notarization of
signatures.
(3) Conforming amendments.--Title 31, United States Code,
is amended--
(A) in section 5321(a)--
(i) in paragraph (1), by striking ``sections 5314 and
5315'' each place it appears and inserting ``sections 5314,
5315, and 5333''; and
(ii) in paragraph (6), by inserting ``(except section
5333)'' after ``subchapter'' each place it appears; and
(B) in section 5322, by striking ``section 5315 or 5324''
each place it appears and inserting ``section 5315, 5324, or
5333''.
(4) Table of contents.--The table of contents of chapter 53
of title 31, United States Code, is amended by inserting
after the item relating to section 5332 the following:
``Sec. 5333. Transparent incorporation practices.''.
(5) Restrictions on public access.--A State may--
(A) restrict public access to all or any portion of the
beneficial ownership information provided to the State as
described under section 5332 of title 31, United States Code,
as added by this Act; and
(B) by statute, regulation, order, or interpretation
adopted or issued by the State after the date of enactment of
this Act, provide for public access to all or any portion of
such information.
(6) No duty of verification.--This Act and the amendments
made by this Act do not impose any obligation on a State to
verify the name, address, or identity of a beneficial owner
whose information is submitted to such State under section
5333 of title 31, United States Code, as added by this Act.
(b) Funding Authorization.--
(1) In general.--To carry out section 5333 of title 31,
United States Code, during the 3-year period beginning on the
date of enactment of this Act, funds shall be made available
to each State to pay reasonable costs relating to compliance
with the requirements of such section.
(2) Funding sources.--To protect the United States against
the misuse of United States corporations and limited
liability companies with hidden owners, funds shall be
provided to each State to carry out the purposes described in
paragraph (1) from one or more of the following sources:
(A) Upon application by a State, and without further
appropriation, the Secretary of the Treasury shall make
available to the State unobligated balances described in
section 9703(g)(4)(B) of title 31, United States Code, in the
Department of the Treasury Forfeiture Fund established under
section 9703(a) of title 31, United States Code.
(B) Upon application by a State, after consultation with
the Secretary of the Treasury, and without further
appropriation, the Attorney General of the United States
shall make available to the State excess unobligated balances
(as defined in section 524(c)(8)(D) of title 28, United
States Code) in the Department of Justice Assets Forfeiture
Fund established under section 524(c) of title 28, United
States Code.
(3) Maximum amounts.--
(A) Department of the treasury.--The Secretary of the
Treasury may not make available to States a total of more
than $30,000,000 under paragraph (2)(A).
(B) Department of justice.--The Attorney General of the
United States may not make available to States a total of
more than $10,000,000 under paragraph (2)(B).
(4) Rulemaking.--Not later than the end of the 180-day
period beginning on the date of the enactment of this Act,
the Secretary of the Treasury and the Attorney General shall,
jointly, issue regulations setting forth the procedures for
States to apply for funds under this subsection, including
determining which State measures should be funded to assess,
plan, develop, test, or implement relevant policies,
procedures, or system modifications.
(c) Compliance Report.--Nothing in this section or the
amendments made by this section authorizes the Secretary of
the Treasury to withhold from a State any funding otherwise
available to the State because of a failure by that State to
comply with section 5333 of title 31, United States Code. Not
later than the end of the 42-month period beginning on the
date of the enactment of this Act, the Comptroller General of
the United States shall submit to the Committee on Financial
Services of the House of Representatives and the Committee on
Homeland Security and Governmental Affairs of the Senate a
report--
(1) identifying which States obtain beneficial ownership
information as described in such section 5333;
(2) with respect to each State that does not obtain such
information, whether corporations and limited liability
companies formed under the laws of such State are in
compliance with such section 5333 and providing the specified
beneficial ownership information to the Financial Crimes
Enforcement Network; and
(3) whether the Department of the Treasury is in compliance
with such section 5333 and, if not, what steps it must take
to come into compliance with this section.
(d) Federal Contractors.--Not later than the first day of
the first full fiscal year beginning at least 1 year after
the date of the enactment of this Act, the Administrator for
Federal Procurement Policy shall revise the Federal
Acquisition Regulation maintained under section 1303(a)(1) of
title 41, United States Code, to require any contractor who
[[Page S4774]]
is subject to the requirement to disclose beneficial
ownership information under section 5333 of title 31, United
States Code, to provide the information required to be
disclosed under such section to the Federal Government as
part of any bid or proposal for a contract with a value
threshold in excess of the simplified acquisition threshold
under section 134 of title 41, United States Code.
(e) Anti-Money Laundering Obligations of Formation
Agents.--
(1) In general.--Section 5312(a)(2) of title 31, United
States Code, is amended--
(A) in subparagraph (Y), by striking ``or'' at the end;
(B) by redesignating subparagraph (Z) as subparagraph (AA);
and
(C) by inserting after subparagraph (Y) the following:
``(Z) any person who, for compensation--
``(i) acts on behalf of another person to form, or assist
in formation of, a corporation or limited liability company
under the laws of a State; or
``(ii) purchases, sells, or transfers the public records
that form a corporation or limited liability company; or''.
(2) Deadline for anti-money laundering rule for formation
agents.--
(A) Proposed rule.--Not later than 120 days after the date
of enactment of this Act, the Secretary of the Treasury, in
consultation with the Attorney General of the United States
and the Commissioner of the Internal Revenue Service, shall
publish a proposed rule in the Federal Register requiring
persons described in section 5312(a)(2)(Z) of title 31,
United States Code, as amended by this subsection, to
establish anti-money laundering programs under subsection (h)
of section 5318 of that title.
(B) Final rule.--Not later than 270 days after the date of
enactment of this Act, the Secretary of the Treasury shall
publish the rule described in this subsection in final form
in the Federal Register.
(C) Exclusions.--Any rule promulgated under this subsection
shall exclude from the category of persons involved in
forming a corporation or limited liability company--
(i) any government agency; and
(ii) any attorney or law firm that uses a paid formation
agent operating within the United States to form the
corporation or limited liability company.
SEC. 4. STUDIES AND REPORTS.
(a) Other Legal Entities.--Not later than 2 years after the
date of enactment of this Act, the Comptroller General of the
United States shall conduct a study and submit to Congress a
report--
(1) identifying each State that has procedures that enable
persons to form or register under the laws of the State
partnerships, trusts, or other legal entities, and the nature
of those procedures;
(2) identifying each State that requires persons seeking to
form or register partnerships, trusts, or other legal
entities under the laws of the State to provide information
about the beneficial owners (as that term is defined in
section 5333(d)(1) of title 31, United States Code, as added
by this Act) or beneficiaries of such entities, and the
nature of the required information;
(3) evaluating whether the lack of available beneficial
ownership information for partnerships, trusts, or other
legal entities--
(A) raises concerns about the involvement of such entities
in terrorism, money laundering, tax evasion, securities
fraud, or other misconduct; and
(B) has impeded investigations into entities suspected of
such misconduct; and
(4) evaluating whether the failure of the United States to
require beneficial ownership information for partnerships and
trusts formed or registered in the United States has elicited
international criticism and what steps, if any, the United
States has taken or is planning to take in response.
(b) Effectiveness of Incorporation Practices.--Not later
than 5 years after the date of enactment of this Act, the
Comptroller General of the United States shall conduct a
study and submit to the Congress a report assessing the
effectiveness of incorporation practices implemented under
this Act and the amendments made by this Act in--
(1) providing law enforcement agencies with prompt access
to reliable, useful, and complete beneficial ownership
information; and
(2) strengthening the capability of law enforcement
agencies to combat incorporation abuses, civil and criminal
misconduct, and detect, prevent, or punish terrorism, money
laundering, tax evasion, or other misconduct.
______
By Ms. COLLINS (for herself, Mr. Coons, Mr. Moran, Mrs. Shaheen,
Mr. Rubio, Mr. Blumenthal, Mr. Enzi, Mr. Isakson, Mr. Durbin,
and Mr. Murphy):
S. 1730. A bill to implement policies to end preventable maternal,
newborn, and child deaths globally; to the Committee on Foreign
Relations.
Ms. COLLINS. Mr. President, today I am pleased to be joined by my
friend and colleague from Delaware, Senator Chris Coons, in introducing
the Reach Every Mother and Child Act of 2017. Our legislation would
make it the policy of the United States to lead an effort to end
preventable deaths of mothers, newborns, and young children in the
developing world by 2030.
Due in part to American leadership and generosity, many lives have
already been saved. Since 1990, the annual number of deaths of children
under the age of five has been cut in half. Nevertheless, far too many
mothers, newborns, and young children under the age of five still
succumb to disease and malnutrition that could easily be prevented, if
only we could reach the mothers and children with simple, proven, cost-
effective interventions that we know will help them survive.
Every day approximately 800 women will die from preventable causes
related to pregnancy and childbirth. In addition, more than 16,000
children under the age of five will die each day of treatable
conditions such as prematurity, pneumonia, and diarrhea--with
malnutrition being the underlying cause in nearly half those deaths.
According to USAID, a concentrated effort could end preventable
maternal and child deaths worldwide by the year 2030; however, U.S.
leadership and support of the international community are critical to
success.
To achieve this ambitious goal, our bill would require the
implementation of a strategy to scale up the most effective
interventions to save as many lives as possible. This idea is central
to our bill. We do not have to guess at what interventions will work--
the reality is that more than 16,000 children under 5 years old die
each day of conditions we know today how to treat.
These life-saving interventions include clean birthing practices,
vaccines, nutritional supplements, hand-washing with soap, and other
basic needs that remain elusive for far too many women and children in
developing countries. This must change.
In addition, our bill would establish a Maternal and Child Survival
Coordinator at USAID who would focus on implementing the ten-year
strategy and verifying that the most effective interventions are being
scaled up in target countries.
The bill would also establish an interagency working group to assist
the Coordinator in promoting greater collaboration among all the
federal agencies involved in this effort.
To promote transparency and greater accountability, our bill requires
that detailed reporting be published on the Foreign Assistance
Dashboard, where it can be assessed by the public, Congress, and non-
governmental organizations to track the implementation of the strategy
and the progress being made.
Finally, our bill would encourage USAID to pay for successful
programs run by non-governmental entities. The message we want to send
to all our partners in the private sector, the non-profit sector, the
faith community, and in local and international civil society groups is
this: if you can figure out a way to increase the likelihood that
mothers and their children will survive childbirth and the first five
years of life, we want to reward you for your contribution.
Improving the health and well-being of mothers and children around
the world has far-reaching social and economic benefits as well. An
independent group of economists and global health experts from around
the world, known as the Lancet Commission, found that for every $1
invested in health initiatives in the developing world, there is a
return of $9 to $20 in growing the gross domestic product of the
country receiving the investment.
Other bipartisan initiatives, such as the successful President's
Emergency Plan for AIDS Relief, or PEPFAR, which was started by
President George W. Bush, demonstrate that results-driven interventions
can turn the tide for global health challenges. Applying lessons
learned from past initiatives, our bill would provide the focus and the
tools necessary to accelerate progress toward ending preventable
maternal and child deaths.
I urge my colleagues to join Senator Coons and me in supporting this
bill to save the lives of mothers and children around the world.
[[Page S4775]]
____________________