[Congressional Record Volume 165, Number 167 (Tuesday, October 22, 2019)]
[House]
[Pages H8316-H8339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                   CORPORATE TRANSPARENCY ACT OF 2019


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks on 
H.R. 2513 and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 646 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 2513.
  The Chair appoints the gentlewoman from Illinois (Ms. Underwood) to 
preside over the Committee of the Whole.

                              {time}  1355


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 2513) 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, with Ms. 
Underwood in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  General debate shall be confined to the bill and amendments specified 
in House Resolution 646 and shall not exceed 1 hour equally divided and 
controlled by the chair and ranking minority member of the Committee on 
Financial Services.
  The gentlewoman from California (Ms. Waters) and the gentleman from 
North Carolina (Mr. McHenry) each will control 30 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. WATERS. Madam Chair, I yield myself such time as I may consume.
  Madam Chair, I rise in support of H.R. 2513, the Corporate 
Transparency Act of 2019, a bill introduced by Representative Carolyn 
B. Maloney of New York.
  H.R. 2513 closes significant loopholes in the law that are commonly 
abused by bad actors and will make it harder for terrorists, 
traffickers, corrupt officials, and other criminals to hide, launder, 
move, and use their money.
  Today, anyone can create a company without providing any information 
about the company's actual owners. This ability to remain anonymous 
gives criminals and terrorists unimpeded, hidden access to our banking 
and commercial systems.
  It also makes it more difficult for law enforcement and even our 
banks, which have a duty to know their customers and evaluate risk, to 
detect illicit activity.
  For example, unbeknownst to authorities for years, the skyscraper at 
650 Fifth Avenue in New York City was owned by Iranian-controlled 
entities through shell companies. The Corporate Transparency Act closes 
these loopholes by requiring firms which do not already report 
ownership, for example through public SEC filings, to share this 
information with the Financial Crimes Enforcement Network, FinCEN.
  This beneficial ownership database created by the bill will be 
accessible only by FinCEN-approved law enforcement agencies and by 
financial institutions, with customer consent, to fulfill requirements 
to identify their beneficial owners. Unapproved sharing of this 
information would be subject to criminal penalties, as would lying on 
or intentional omission of beneficial ownership information. For most 
firms, which have only one or two owners, this process would require 
only a few lines of data. But for law enforcement agencies, the 
additional information will have great benefit, as their investigations 
will no longer be stymied by anonymous shell companies.
  The bill has also been broadened to include the entirety of H.R. 
2514, the Coordinating Oversight, Upgrading and Innovating Technology, 
and Examiner Reform Act of 2019, the COUNTER Act, a bill introduced by 
Representative Emanuel Cleaver. The COUNTER Act closes loopholes in the 
Bank Secrecy Act, the key law aimed at countering money laundering, 
terrorist financing, and other criminal uses of the banking system.

                              {time}  1400

  For example, the bill requires the identification of owners behind 
high-risk commercial real estate transactions and transactions 
involving arts and antiquities, which are often used by criminals to 
launder money.
  The COUNTER Act examines Chinese and Russian money laundering, an 
issue that is seen in opioid and methamphetamine production, as well as 
human and wildlife trafficking.
  The bill also creates a national strategy to fight trade-based money 
laundering, which is considered the most pernicious but hard-to-detect 
form of money laundering.
  Mrs. Maloney and Mr. Cleaver's bill also works to lower the 
compliance burden on financial institutions, most of which are 
community banks, by establishing several tools to allow for more 
targeted sharing of BSA-AML-related information.
  The bill makes modest increases to the currency transaction reporting 
limit and studies ways to reduce the costs associated with researching 
and writing suspicious activity reports.
  The bill also creates a new privacy and civil liberties officer, as 
well as an innovation officer in each of the Federal financial 
regulators.
  Importantly, the bill imposes new penalties on financial institutions 
and personnel that violate the law and creates a whistleblower program 
to encourage and protect those who identify such bad acts.
  H.R. 2513, as amended, has the strong support of financial 
institutions. It is also supported by NGOs like the AFL-CIO, Global 
Witness, Oxfam America, Friends of the Earth U.S., Jubilee USA Network, 
and the Small Business Majority, all of which are members of the 
transparency-focused FACT Coalition. It is widely supported by law 
enforcement organizations such as the Fraternal Order of Police, the 
National District Attorneys Association, and the Federal Law 
Enforcement Officers Association. In addition, this legislation is 
supported by the Department of the Treasury and the Federal Bureau of 
Investigation.
  I commend Congresswoman Maloney and Congressman Cleaver for their 
very hard work on the legislation, as well as their collaboration to 
put together a comprehensive bill to reform how this country fights 
against illicit finance.
  I urge passage of H.R. 2513, and I reserve the balance of my time.
  Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume. 
I am opposed to H.R. 2513, and I want to begin by outlining my 
opposition.
  This bill before us is a new small business mandate on the smallest 
businesses in America. The bill before us today requires some of the 
smallest businesses in America, those with fewer than 20 employees and 
those with less than $5 million in receipts, to file annually a list of 
all of their owners with the Financial Crimes Enforcement Network, or 
FinCEN.
  For those who are watching on C-SPAN, I have a trivia question for 
them, Mr. Chairman. I bet most of them have never heard of FinCEN. I 
bet those in the House office buildings, Mr. Chairman, have not heard 
of FinCEN. It is a little-known agency even here in Washington that 
deals with financial crimes, in the Treasury Department.
  Imagine you are a small business owner. You are getting a notice from 
the Financial Crimes Enforcement Network mandating that you disclose 
the owners of your entity. This would be the first consumer-facing 
intelligence bureau that we would have in the Federal Government.
  This bill would require small business owners and small business 
investors to submit their personal information to a new Federal 
database without adequate privacy protections. This new Federal 
database will be accessible to law enforcement without a warrant and 
without a subpoena, a disturbing violation of due process, in my view.
  This has the fewest civil liberties protections of any Federal 
intelligence

[[Page H8317]]

bureau database. It is a lower standard of accountability than what 
Congress provides in the PATRIOT Act, which largely targets foreign 
actors.
  According to the National Federation of Independent Business, this 
bill would also add more than $5.7 billion in new regulatory costs for 
America's small businesses.
  Supporters of the bill are calling for these changes without any 
direct evidence to justify the mandate. There is plenty of anecdote, 
but no data.
  For several months leading up to the committee's consideration of 
this bill, I sought data from the intelligence bureau called FinCEN and 
from the Treasury Department, along with the Department of Justice, to 
better understand the need for this legislation. They provided none. 
They gave anecdotes of very scary stories to try to compel me as a 
legislator to vote for what is a very specific threshold in law and a 
very specific new small business mandate.
  I refuse to legislate based off of anecdotes. I would like to have 
hard data. My questions have not been answered by FinCEN, the Treasury 
Department, or the Department of Justice.
  We have no information on how beneficial ownership information will 
be protected, in addition to that. We do not have information on how 
the privacy of small businesses will be preserved. In fact, we have an 
amendment here considered on the House floor that could further expose 
their data to the public, so even that determination is not in stone 
now with the bill before us.
  We don't have information on how many law enforcement agencies will 
have access to the database, how many financial institutions will have 
access to the database, or what threshold for amount of sales and the 
number of employees will yield the most effective outcome.
  In the bill, we have $5 million of revenue and under, and 20 
employees and under. We have no data to back up that that is the right 
threshold for either the dollar amount or the number of employees.
  We will have stories, and we will have Members come to the House 
floor telling us stories of bad actors, but that is anecdote. That is 
not data to provide for this threshold.
  If we are going to have such an encroachment on America's personally 
identifiable information of small businesses across this country, 
shouldn't we have solid data? I believe so.
  I believe we have a number of issues that need to be dealt with to 
make this bill sustainable and provide protections for civil liberties. 
I believe that combating illicit finance is a nonpartisan issue that 
all Members want to address. Our actions must be thoughtful and data-
driven.
  For example, in committee, we came together in support of H.R. 2514, 
the COUNTER Act, introduced by the gentleman from Missouri (Mr. 
Cleaver) and the gentleman from Ohio (Mr. Stivers). H.R. 2514 is a 
compilation of bipartisan policies that modernize and reform the Bank 
Secrecy Act and anti-money laundering regimes. It balances security and 
privacy. I think we have a nice bipartisan bill that was reported out 
of the committee without a dissenting vote. It provides the Treasury 
Department and other Federal agencies with the resources they need to 
help catch bad actors.
  There have been years of work in the production of that bill that is 
wrapped up in this larger bill. I am disappointed that the COUNTER Act 
is not being considered as a standalone bill, instead being swept into 
this bill. Because I believe as a standalone bill, we could get that 
bill through the House, through the Senate, and signed by the President 
into law this year. I think it is unfortunate that we are not 
considering that as a standalone measure.
  I thank my colleagues on the other side of the aisle for listening to 
some of our concerns on the Republican side of the aisle. We will have 
some Republican Members who vote for this bill. I, however, will not.
  The encroachment on the question of civil liberties, the lack of 
separation of powers, the lack of the use of a subpoena, and the lack 
of regulatory relief for those who are collecting this data, both in 
terms of small businesses and financial institutions, has not been 
fixed nor dealt with.
  In particular, the Rules Committee last night rejected amendments 
that would require law enforcement to obtain a subpoena before 
accessing--I am sorry, during committee, there was a rejection of a 
subpoena in our discussions, and then last night, the Rules Committee 
rejected my amendment that would provide greater certainty for small 
businesses and for community banks by repealing the customer due 
diligence rule, which requires financial institutions to collect 
similar data that is being required in this bill.
  I believe that issue still merits a more thoughtful solution that 
doesn't treat legitimate small businesses as collateral damage, like 
the current bill does.
  Mr. Chair, I am opposed to the bill, and I reserve the balance of my 
time.
  Ms. WATERS. Mr. Chair, I yield 5 minutes to the gentlewoman from New 
York (Mrs. Carolyn B. Maloney), the sponsor of the bill and chair of 
the Subcommittee on Investor Protection, Entrepreneurship, and Capital 
Markets.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I thank the 
gentlewoman for yielding and for her leadership on the Financial 
Services Committee and on this bill.
  Mr. Chair, I rise in support of H.R. 2513, the Corporate Transparency 
Act. This bill would crack down on the illicit use of anonymous shell 
companies. This is one of the most pressing national security problems 
that we face as a country because anonymous shell companies are the 
vehicle of choice for money launderers, criminals, and terrorists.
  The reason they are so popular is because they cannot be traced back 
to their true owners. Shell companies allow criminals and terrorists to 
move money around in the United States financial system and finance 
their operations freely and legally.
  Unfortunately, we know that the U.S. is one of the easiest places in 
the entire world to set up an anonymous shell company. The reason why 
these shell companies are anonymous is because States do not require 
companies to name their true beneficial owners, the individuals who are 
collecting the profits and who outright own the company.
  As any FBI agent or prosecutor will tell you, far too many of their 
investigations hit a dead-end at an anonymous shell company. They know 
there is illegal money, yet they can't pursue and stop it.
  Because they can't find out who the real owner of that shell company 
is, they can't follow the money past the shell company, past this pile 
of cash that they know is financing illegal activity. The trail goes 
cold, and the investigation is stopped dead in its tracks.
  Treasury actually conducted a pilot program a couple of years ago 
when they collected beneficial ownership information for real estate 
transactions in Manhattan and Miami over a 6-month period. The results 
were stunning.
  Treasury found that about 30 percent of the transactions reported in 
those 6 months involved a beneficial owner or purchaser representative 
that had previously been the subject of a suspicious activity report. 
In other words, these were potentially suspicious people buying these 
properties. And this was after the Treasury Department had announced to 
the world through the press that they would be collecting beneficial 
ownership information in these two cities for 6 months, so this didn't 
even capture the money launderers who simply avoided those two cities 
for that 6-month period.
  Our bill would fix this problem by requiring companies to disclose 
their true beneficial owners to the Financial Crimes Enforcement 
Network, or FinCEN, at the time the company is formed. This information 
would only be available to law enforcement and to financial 
institutions so they can comply with their know-your-customer rules.
  This bill would plug a huge hole in our national security defenses 
and would be a massive benefit to law enforcement.
  We have a very large coalition supporting the bill. We have the 
support of 127 NGOs. All of the law enforcement groups in our Nation 
support this bill, all of the banking trade associations, the credit 
union trade associations, human rights groups, antitrafficking groups, 
State secretaries of state, and

[[Page H8318]]

most of the real estate industry, and many more because law enforcement 
has said that enacting this bill will make our residents and our 
country safer.
  I want to specifically thank the FACT Coalition, Global Witness, and 
Global Financial Integrity for their support. I want to thank the Bank 
Policy Institute, which has been a strong supporter from the beginning. 
And I want to thank my personal staff, especially Ben Harney.

                              {time}  1415

  I also want to thank my Republican partners on this bill, most 
notably Peter King from New York and Blaine Luetkemeyer from Missouri. 
They have been both fantastic to work with, and I believe the changes 
that they negotiated in good faith on this bill have made it an even 
better bill.
  The two people I want to thank the most are Congresswoman Waters, who 
has been a steadfast supporter of this bill for years, and Congressman 
Cleaver, who has worked so hard on the COUNTER Act, which has been 
added to this bill. His leadership on the anti-money laundering reforms 
in the COUNTER Act have been indispensable.
  Mr. Chairman, this bill will make our country safer, and I urge a 
strong ``yes'' vote for this bill.
  Mr. McHENRY. Mr. Chair, I yield myself such time as I may consume.
  Mr. Chairman, I would like to commend the chair of the Investor 
Protection, Entrepreneurship, and Capital Markets Subcommittee, Mrs. 
Maloney, for the work that she has put into this bill. She has been 
willing to address many concerns from Republicans about her 
legislation, though we are not able to come to final terms between her 
and me; but, as she knows and as I have stated clearly, it is for lack 
of data from the Treasury Department and from FinCEN itself, and those 
issues still remain.
  It is not because of a lack of good will on her behalf or her staff's 
behalf, but an enormous amount of frustration we have from one of our 
intelligence bureaus that is not complying with reasonable oversight 
from Congress.
  So I want to commend Mrs. Maloney for her work that she put into this 
important piece of legislation, and I do wish that we were able to come 
to terms on the details in the finer points of this bill.
  Mr. Chairman, I yield 3 minutes to the gentleman from Kentucky (Mr. 
Barr), who is the Oversight and Investigations Subcommittee ranking 
member.
  Mr. BARR. Mr. Chairman, I thank my friend from North Carolina for 
yielding.
  Mr. Chairman, I rise today in opposition to H.R. 2513, the Corporate 
Transparency Act. I do so regrettably.
  While I agree with the objective of the bill to help law enforcement 
crack down on the financing of illegal operations, this bill's solution 
places undue burdens on small businesses and presents unacceptable due 
process concerns for millions of small business owners whose sensitive 
personally identifiable information will be collected and stored in a 
new Federal database accessible without a warrant or a Federal 
subpoena.
  I want to thank my friend, the sponsor of this bill, for her good 
faith attempt to streamline beneficial ownership reporting. I agree 
with her that we need to do more to combat terrorist financing, money 
laundering, drug trafficking, and other national security threats. I am 
sympathetic, also, to the needs of law enforcement to identify the 
financing sources of illicit operations and shut them down.
  That said, the bill before us today seeks to achieve these ends 
unnecessarily on the backs of America's small businesses. The bill 
would create additional regulatory reporting requirements for existing 
and newly created small businesses. These businesses do not have the 
compliance resources comparable to larger firms. This reporting 
requirement will take a toll on their productivity and their bottom 
line.
  According to the U.S. Small Business Administration, 95 percent of 
new firms begin with fewer than 20 employees and, thus, would most 
likely be subject to the reporting and compliance burdens of this bill. 
Accounting for this growth and conservative estimates of the time and 
expenses associated with completing the paperwork required by the bill, 
the National Federation of Independent Business forecasts that the bill 
would cost America's small businesses $5.7 billion over 10 years and 
result in 131 million new hours of paperwork. These are dollars that 
companies could spend on making new investments or hiring new staff and 
time they could spend on building their businesses.
  H.R. 2513 would require small business owners or officers to report 
personally identifiable information such as name, Social Security 
number, and driver's license number to a newly created Federal 
Government database operated by FinCEN. Law enforcement can access this 
database without due process, and the sensitive personal information 
contained in it is subject to the ever-growing threat of malicious 
cybercriminals.
  Even with all the new requirements and privacy concerns created by 
this bill, it still does not fully address the root issue with current 
beneficial ownership reporting rules. The supposed justification of the 
bill is to ease the burden on financial institutions associated with 
implementing FinCEN's customer due diligence rule. However, H.R. 2513 
fails to repeal and replace the CDD rule, and the rule will continue to 
coexist with the additional regulatory burdens on small businesses 
created by the bill.
  Finally, the bill falls short if the goal is to relieve financial 
institutions of burdensome reporting requirements that do not 
materially contribute to countering money laundering and illicit 
finance. That is because it fails to make inflation-adjusted changes to 
the thresholds for filing suspicious activity reports and currency 
transaction reports.
  While I recognize the need to combat financing of illicit operations, 
this bill attempts to do so by placing unjustified reporting 
requirements on our small businesses that could cost them time and 
money and hinder their growth.
  The Acting CHAIR (Mr. Cuellar). The time of the gentleman has 
expired.
  Mr. McHENRY. Mr. Chairman, I yield the gentleman from Kentucky an 
additional 30 seconds.
  Mr. BARR. So, to conclude and to summarize, Mr. Chairman, we can and 
should update our AML/BSA laws, and we can and should give FinCEN and 
law enforcement better visibility into the beneficial ownership 
information of firms vulnerable to money laundering and illicit 
finance, but this is the wrong solution. I am hopeful that the concerns 
of Main Street small businesses can be addressed if this bill moves to 
the U.S. Senate.

  Ms. WATERS. Mr. Chairman, I yield 3 minutes to the gentleman from 
Illinois (Mr. Foster), who is the chair on the Task Force on Artificial 
Intelligence.
  Mr. FOSTER. Mr. Chairman, I thank the chairwoman for yielding, and I 
thank my friend from New York, Chairwoman Maloney, for her leadership 
on this issue.
  Mr. Chairman, I rise in support of H.R. 2513, which would help to end 
the abuse of anonymous shell companies. These entities have a well-
documented history of being used to hide money in a wide variety of 
crimes, including sanctions evasion, terrorist financing, human 
trafficking, drug trafficking, illegal arms dealing, tax evasion, and 
corruption. Anonymous shell corporations are also being subverted by 
criminals in ever-evolving schemes involving emerging digital 
technologies.
  One of the many hats that I wear is being a co-chair of the 
Blockchain Caucus. Just in the past week, I have had disquieting 
updates from officials from the FBI and FinCEN about trends in the 
abuse of cryptocurrencies for nefarious purposes.
  What was clear from these briefings is that the use of anonymous 
shell companies has greatly inhibited the ability of law enforcement to 
go after criminals who use cryptocurrency to engage in illicit 
financing. The use of anonymous shell companies also makes it extremely 
difficult to uncover abusive trading practices in unregulated crypto 
exchanges.
  In short, criminals and law enforcement officers are engaged in a 
very sophisticated cat-and-mouse game in which law enforcement is 
always playing catch-up. Passing the Corporate Transparency Act will 
give law enforcement officers a significant new

[[Page H8319]]

tool that could potentially lead them to taking down more of the bad 
guys.
  Let us not forget, the use of the beneficial ownership registries is 
not some wild-eyed, crazy concept where the U.S. would be going out on 
a limb. This is an area where the U.S. is significantly behind other 
developed nations.
  The Financial Action Task Force, a respected intergovernmental 
policymaking body established by the G7 countries in 2016, gave the 
U.S. a failing grade for its efforts to prevent the laundering of 
criminal proceeds by shell companies. According to FATF's report, the 
U.S. has not done enough to rein in corporate secrecy, which presents 
serious gaps in law enforcement efforts, leaving our financial system 
vulnerable to dirty money.
  They were blunt. We were scored as noncompliant--the lowest possible 
score--on our ability to determine the true owners of shell companies. 
That is simply unacceptable.
  I would like to think that the U.S. should be a standard setter 
amongst nations when it comes to things like anti-money laundering 
enforcement. The current status quo, however, woefully fails to measure 
up to our lofty goals. We need to do better, and that is why I support 
the commonsense measures put forth in H.R. 2513.
  Mr. Chairman, I thank Congresswoman Maloney for her determined and 
dogged leadership on this issue for many years, and I urge a ``yes'' 
vote on H.R. 2513.
  Mr. McHENRY. Mr. Chairman, I yield 4 minutes to the gentleman from 
Little Rock, Arkansas (Mr. Hill).
  Mr. HILL of Arkansas. Mr. Chairman, I thank the ranking member.
  I am grateful for the opportunity to come to the floor and talk about 
H.R. 2513, the Corporate Transparency Act.
  I want to thank my good friend from New York (Mrs. Carolyn B. 
Maloney) for her leadership in this area for well over a decade, her 
hard work, and her determination on improving our anti-money laundering 
and Bank Secrecy Act rules.
  I appreciate the chair of the committee and her work as well.
  The legislation addresses how we might combat illicit finance 
activities by appropriately strengthening the collection of beneficial 
ownership information.
  Now, Mr. Chairman, a beneficial owner is a person who enjoys the 
benefits of ownership even though the title to some form of property is 
in another name. We have long debated in Congress the best way for this 
information to be collected. Let's be clear here. It is being collected 
by our financial services industry under our know-your-customer rules.
  The ability to set up legal entities without accurate beneficial 
ownership information, however, has long represented a key 
vulnerability in the U.S. financial system.
  As I say, all U.S. banks, brokerage firms, and financial services 
companies have a know-your-customer obligation to collect ownership 
information and, importantly, collect beneficial ownership information. 
This was further defined in May 2008 by a FinCEN rule.
  But not all shell companies are established for malicious purposes. 
Owners might create one temporarily to finance a company that has not 
yet started operations or to proceed with an acquisition in coming 
years. But in this instance, they would have no employees and no 
revenue, so the structure would look like a shell company, but it would 
be otherwise legal.
  It is true, though, there are too many instances of anonymous shell 
companies serving as a vehicle for ill-intended activities, including 
money laundering and terrorist financing. The anti-money laundering 
system and the sanctions system, both independently and in tandem, are 
more important than ever before, as we have seen in recent debates.
  For well over a decade, Congresswoman Maloney, author of the 
legislation, has been leading and working hard to pass a bill that 
would enhance our AML regime, including on beneficial ownership. She 
and I agree, as do all the Members of this House, Mr. Chair, that it is 
vital to U.S. national security to have a vigorous and good AML/BSA 
system.
  However, I cannot support the legislation as currently written. In my 
view, H.R. 2513 places a significant burden on small business and, in 
my view, unnecessarily. The rules have been outlined here.
  I believe there is a better path forward, which is why I have long 
supported aligning tax filing with the collection of beneficial 
ownership information. Small businesses are already familiar with 
filing taxes.
  A small business already files their taxes, which includes disclosing 
their owners, their capital, and their business structure. On their 
returns, they declare domestic and foreign aspects of their business--
all subject to common existing processes and parameters, all subject to 
privacy, and all subject to existing penalties for failure to 
accurately report.
  I think we can all agree that closing off access to illicit finance 
is laudable, necessary, and appropriate; and I expect that we can agree 
that the collection of accurate beneficial ownership information is a 
step in the right direction. I would just like to see us get there 
without subjecting small businesses to new, unnecessarily complicated 
reporting with the burden of exceedingly severe penalties for failure 
to comply.
  Mr. Chairman, I hope that we can reach a simple compromise that sees 
stronger collection without jeopardizing small business.

                              {time}  1430

  Ms. WATERS. Mr. Chairman, I yield 5 minutes to the gentleman from 
Missouri (Mr. Cleaver), who is the sponsor of the COUNTER Act which is 
part of this bill. He is also the chair of the Subcommittee on National 
Security, International Development and Monetary Policy.
  Mr. CLEAVER. Mr. Speaker, I thank the chairwoman for her work in this 
area, and for allowing those of us who are interested in this 
legislation to play a major role.
  As many of my colleagues are aware, national security is one of the 
most pressing matters facing the United States of America and the 
world. I am excited for the opportunities that this moment presents to 
address these issues head on.
  Our most profound responsibility as Members of Congress is to 
preserve America's national security and the United States' global 
position as an international leader in free and fair markets.
  Since the last major anti-money laundering reforms of 2001, the 
national security threats that face our country have evolved profoundly 
and significantly, and frighteningly. Cyber and technological attacks 
have risen to the top of our most recent worldwide threat assessment as 
a paramount national security risk.
  Underground online trafficking now allows for simplified avenues to 
transport illicit material across the Nation and around the globe, and 
cryptocurrencies now allow for streamlined means to fund criminal 
organizations. With virtual currency, dark web marketplaces and illicit 
technologies expanding to threaten citizens safety and hard-earned 
savings, it is critically important, Mr. Speaker, that our federal 
agencies evolve to meet and conquer these new challenges.
  The COUNTER Act will do just that. This legislation will empower the 
Treasury Department to protect our national security and explicitly 
safeguard our financial systems through the Bank Secrecy Act.
  It codifies a voluntary information-sharing program between law 
enforcement, financial institutions, and the Treasury Department, 
better ensuring the capture of illicit activities.
  It balances national security and personal privacy by requiring 
Treasury and financial regulators to create the position of civil 
liberty and privacy officer. This officer will ensure that policies 
being developed and implemented are not intruding or undermining 
citizens' constitutional rights.
  While the bill will close a number of loopholes that have allowed for 
financial crimes to be committed, it will also pull us into the 21st 
century by positioning the United States to face tomorrow's challenges.
  The bill encourages financial regulators to work with companies to 
implement innovative approaches to meet the requirements in complying 
with existing law and encourages the use of innovative pilot programs.
  Financial regulators will establish an innovation lab that will 
provide outreach to law enforcement, financial institutions, and 
others, to coordinate on

[[Page H8320]]

innovative and new technologies, ensuring they comply with existing law 
while fostering the implementation of new technologies. An innovation 
council will also be created, represented by the directors from each 
innovation lab, who will coordinate on active Bank Secrecy Act 
compliance.
  It is imperative that we modernize our efforts to combat financial 
crimes because our adversaries will continue to modernize. I am happy 
that this bill is coming before us, the COUNTER Act, as an amendment to 
Congresswoman Maloney's bill, the Corporate Transparency Act, which I 
know she and her team have worked very hard to produce.
  The straightforward bill, Mr. Speaker, provides needed visibility by 
requiring companies and the United States to disclose the financial 
beneficiary in order to prevent criminals and wrongdoers from 
exploiting their status as a company.
  Mr. Speaker, these are critical proposals. I urge my colleagues to 
support this legislation, and I thank Chairwoman Waters.
  Mr. McHENRY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Ohio (Mr. Stivers), the ranking member of Subcommittee on Housing, 
Community Development and Insurance.
  Mr. STIVERS. Mr. Speaker, I rise in opposition to H.R. 2513, although 
I do want to acknowledge that the sponsor has worked hard and in good 
faith to try to make the bill work, and I think the bill is well-
intended.
  There are two primary reasons why I oppose the legislation:
  Number 1, it imposes an undue burden on small business, and;
  Number 2, it doesn't adequately protect personally identifiable 
information of millions of Americans from cyberattacks.
  First, it imposes a new burden on millions of small businesses, our 
constituents, who aren't aware we are having this debate today. In 
fact, most of them don't even know what FinCen is, but they will be 
forced to provide sensitive personal information to FinCen, an agency 
almost nobody knows, and failure to do so could lead to up to 3 years 
of imprisonment.
  I feel the bill was well-intended, though, because I know that shell 
companies are used by criminals to move illicit money through our 
financial system. But there is a better way to address the problem. In 
committee, the gentleman from Arkansas (Mr. Hill), my colleague, 
offered an amendment that would transfer the information collected 
under this bill from FinCen to the IRS as part of the annual tax filing 
process. That approach will impose less burden on our constituents, the 
small businesses that create jobs in this country.
  But a bigger obstacle would be here on the Hill, because it would 
result in shared jurisdiction with the Ways and Means Committee, so 
that ``good idea'' couldn't work because of jurisdictional lines.
  Second, my issue is this agency, FinCen, will be the repository of a 
lot of data from millions of Americans with personally identifiable 
information. It is Cybersecurity Awareness Month; yet, there is not 
enough adequate protections in this bill to ensure that private data is 
secure from cyberattacks.

  For these reasons, I can't vote for the bill, but I do want to 
congratulate the gentlewoman from New York (Mrs. Carolyn B. Maloney), 
my colleague, and sponsor of this bill, for her hard work in trying to 
make the bill work.
  Finally, I want to thank and recognize my colleague, Representative 
Cleaver, whose bill, the COUNTER Act, H.R. 2514, was rolled into this 
bill. Representative Cleaver worked with Republicans and Democrats to 
ensure our anti-money laundering and Bank Secrecy Act regime was 
reformed in a bipartisan way that makes our national security stronger.
  I want to thank him and congratulate him on that work. And if that 
bill was a standalone bill, I think it would pass this institution 
nearly unanimously, if not unanimously. Again, unfortunately, I have to 
oppose H.R. 2513.
  Ms. WATERS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Lawson).
  Mr. LAWSON of Florida. Mr. Speaker, I thank the chairwoman for 
yielding me time.
  Mr. Speaker, I rise to support H.R. 2513, the Corporate Transparency 
Act.
  The bill would close loopholes that bad actors have taken advantage 
of in order to aid terrorist organizations, corrupt officials, and 
other criminal enterprises. Specifically, this bill requires that those 
who form corporations must disclose who the true beneficial owners are 
in order to thwart hidden criminal activity.
  Instilling these measures in place will benefit consumers and small 
businesses by preventing unfair contracting practices, including false 
billing, fraudulent certifications, and defrauding taxpayers.
  In addition, this bill will help to curb and prevent human 
trafficking, which is very prevalent now, by eliminating anonymous 
companies who hide the identities of criminals engaged in trafficking 
enterprises masked by a legitimate business structure.
  According to a study by the University of Texas, among over 100 
countries studied, the United States ranked the easiest place for 
suspicious individuals to incorporate an anonymous company.
  Further, according to a 2017 GAO study, it found that GAO was unable 
to identify ownership information for about one-third of the GSA's high 
security leases.
  Mr. Speaker, the Corporate Transparency Act will fix these issues and 
provide much-needed transparency into the corporate governing 
structure. I encourage my colleagues on both sides to support this 
bill.
  Mr. McHENRY. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Missouri (Mrs. Wagner), the ranking member of the Subcommittee on 
Diversity and Inclusion, and the vice ranking member of the Committee 
on Financial Services.
  Mrs. WAGNER. Mr. Speaker, I thank the gentleman from North Carolina 
(Mr. McHenry), ranking member, for yielding.
  Mr. Speaker, I rise today in support of H.R. 2513, the Corporate 
Transparency Act. I thank my friend, Carolyn Maloney, for her 
tremendous work to fight trafficking and expose criminals who make 
money for exploitation; and my friend and colleague, Blaine 
Luetkemeyer, the ranking member of the Subcommittee on Consumer 
Protection and Financial Institutions for all his work on this issue of 
beneficial ownership.
  I agree with my colleagues that we should not place unnecessary 
requirements on small businesses, and I believe that this legislation 
strikes the right balance.
  It helps hardworking law enforcement officials expose traffickers who 
are laundering money through shell companies without placing onerous 
mandates on small businesses.
  Human trafficking is an incredibly lucrative industry, with profits 
estimated at $150 billion a year. America lags behind our peers in 
other countries in collecting the beneficial ownership information that 
helps us to go after these anonymous companies that are exploiting the 
most vulnerable in our society.
  Mr. Speaker, my amendment further simplifies the reporting process, 
and prevents identity theft and fraud. It creates a fast-tracked 
process for beneficial ownership where any citizen who is a frequent 
investor can be pre-verified. I am glad to see my amendment included in 
this underlying bill today.
  Mr. Speaker, I urge my colleagues to join me in voting ``yes'' so 
that Congress can finally close the loopholes that allow criminals to 
rapidly move money and conceal illicit profits in the U.S. banking 
process.
  Ms. WATERS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Casten).
  Mr. CASTEN of Illinois. Mr. Speaker, I rise in support of H.R. 2513. 
As a member of the Committee on Financial Services, I have witnessed 
firsthand Representative Maloney's commitment to advancing this 
important piece of legislation, and I am so glad that we are discussing 
it on the floor today.
  Sunlight is the best disinfectant. The need for sunlight is 
especially urgent today as it relates to the involvement of foreign bad 
actors in our economy and our political process. We have, all of us 
here, taken an oath to support and defend the Constitution of the 
United States against all enemies, foreign and domestic, but regardless 
of whether you take that oath, I would submit to you that all patriotic 
Americans feel that obligation. I certainly

[[Page H8321]]

do, and this bill is a furtherance of that oath.
  Before I got here, I was a CEO of an LLC. In fact, I was the CEO of a 
lot of LLCs. I couldn't even tell you how many LLCs I was the CEO of. 
And the reason is, because like a lot of modern companies, we set up a 
corporate structure to have a nested set of LLCs that could isolate 
liabilities to be matched to different rounds of investors in our 
company.
  Now, that is a great feature of LLCs, but as is so often the case, a 
strength is also a weakness. It is a weakness because if it allows us 
to hide investors who want to use our financial system in a nefarious 
way--like to launder money--they can take advantage of that strength.

  And that is why this bill is so necessary. Because companies like 
mine already collect the data. Because FinCen data is already 
classified as FISMA high, which is the highest level of cybersecurity 
for government agencies. So the argument that data of all filers is not 
protected is simply not true. But ultimately, because sunlight is the 
best disinfectant, and because we are in a moment when too many 
powerful people are seeking to hide their sources of capital, putting 
the trust in our government and financial system at risk.
  This is the right bill for business. It is the right bill for our 
financial system. And it is the right bill for our country.
  Mr. McHENRY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Troy, Ohio (Mr. Davidson).
  Mr. DAVIDSON of Ohio. Mr. Speaker, I thank my colleagues for the 
important reforms that have been included in this bill, very 
thoughtfully, to reform our Bank Secrecy Act.
  The United States puts heavy burdens on banks to know their 
customers, to protect our country and our financial system, and to make 
it easier for the folks in law enforcement, and, frankly, all layers of 
national security to defend America.
  It is an important way that our sanctions regime works. It is an 
important way that we detect and prosecute crime. And it has worked 
very successfully for years in the current form.
  The biggest complaint is often that we required too much of banks. 
And so that led to this consumer due diligence rule that FinCen put out 
that put an extra burden on banks, some would say a redundant burden on 
banks, to report the beneficial ownership of their companies.
  And so that created this provision that is now blended into a single 
bill rather than a standalone bill that was known as the Corporate 
Transparency Act. This is a horrible solution to a real problem. And 
the solution is horrible because it presumes that everyone that would 
own a company that has fewer than 20 employees is somehow part of an 
illicit finance scheme in America. The smallest, least-sophisticated 
businesses are now required to report annually and more frequently if 
they change the composition of the beneficial owners.
  This is a violation of civil liberties and constitutional rights that 
our body should take seriously. Historically, that has been something 
that has united the parties.

                              {time}  1445

  When Congress did the reforms to the PATRIOT Act and the Foreign 
Intelligence Surveillance Act, they put these provisions in place with 
great hesitation because it created a big database and collected a 
great deal of information.
  This data would not be subject to subpoena or control. It is a 
horrible solution to a real problem, and I urge greater consideration 
of alternatives in opposition to this bill.
  Mr. McHENRY. May I inquire of the Chair the time remaining.
  The Acting CHAIR. The gentleman from North Carolina has 7\1/2\ 
minutes remaining. The gentlewoman from California has 8\1/2\ minutes 
remaining.
  Mr. McHENRY. Mr. Chair, I reserve the balance of my time.
  Ms. WATERS. Mr. Chair, I yield myself such time as I may consume.
  Mr. Chair, the United States is vulnerable. According to a 2017 
report by the Government Accountability Office, ``GAO was unable to 
identify ownership information for about one-third of GSA's 1,406 high-
security leases as of March 2016 because ownership information was not 
readily available for all buildings.''
  This finding was a leading factor in Congress voting to adopt a 
provision in the fiscal year 2018 National Defense Authorization Act 
for the Department of Defense to collect beneficial ownership 
information for all high-security office space it leases.
  As a matter of fact, there is more information required to obtain a 
library card. According to a 2019 Global Financial Integrity analysis, 
``The Library Card Project: The Ease of Forming Anonymous Companies in 
the United States,'' in all 50 States and the District of Columbia, 
``more personal information is needed to obtain a library card than to 
establish a legal entity that can be used to facilitate tax evasion, 
money laundering, fraud, and corruption.''
  The British model: The United Kingdom has a beneficial ownership 
directory, and an analysis found that the average number of owners per 
business in the U.K. is 1.13. Eighty-eight percent had two or fewer 
owners. The most common number of owners is one. More than 99 percent 
of businesses listed less than six owners.
  According to the U.S. Small Business Administration, approximately 78 
percent of all businesses in the U.S. are nonemployer firms, meaning 
there is only one person in the enterprise. This suggests that the 
experience in the U.S. would be similar to that in the U.K.
  Mr. Chair, I would like to share with you that this legislation has 
tremendous support, for example, from Main Street Alliance, a network 
of over 30,000 small businesses; American Bankers Association; Bank 
Policy Institute; Mid-Size Bank Coalition of America; National Foreign 
Trade Council; Consumer Bankers Association; Financial Services Forum; 
Bankers Association for Finance and Trade; American Land Title 
Association; National Association of Realtors; One; FACT Coalition, a 
collection of 100-plus NGOs, including AFL-CIO, Global Witness, Oxfam 
America, Friends of the Earth U.S., Jubilee USA Network, Public 
Citizen, and Small Business Majority.
  We could go on and on and on, but I think it is important to know 
that members of the Financial Services Committee, Representatives 
Maloney, Luetkemeyer, and Cleaver, have worked in good faith, along 
with the Department of the Treasury, nonprofit groups, and the 
financial services sector, to find consensus to close a massive 
loophole in our anti-money laundering framework.
  The resulting pieces of legislation to modernize the anti-money 
laundering processes and to create a secure financial ownership 
registry of legal entities held at the Financial Crimes Enforcement 
Network at the Department of the Treasury represent the best path 
forward to provide law enforcement with needed information to pursue 
money criminals looking to exploit our financial system.
  Mr. Chair, I reserve the balance of my time.
  Mr. McHENRY. Mr. Chair, I include in the Record a letter from the 
National Federation of Independent Businesses in opposition to this 
bill and a letter dated October 18, 2019, in opposition to the bill.


                                                         NFIB,

                                 Washington, DC, October 21, 2019.
       Dear Representative: On behalf of NFIB, the nation's 
     leading small business advocacy organization, I write in 
     strong opposition to H.R. 2513, the Corporate Transparency 
     Act of 2019. This bill saddles America's smallest businesses 
     with 131.7 million new paperwork hours at a cost of $5.7 
     billion, and treats small business owners as criminals by 
     threatening them with jail time and oppressive fines for 
     paperwork violations. To make matters even worse, the 
     legislation puts the personal information of small business 
     owners at serious risk.
       The Corporate Transparency Act of 2019 requires 
     corporations and limited liability companies with 20 or fewer 
     employees to file new reports with the Treasury Department's 
     Financial Crimes Enforcement Network (FinCEN) regarding the 
     personally identifiable information of businesses' beneficial 
     owners and update that information every year. The 
     legislation imposes its reporting mandates only on America's 
     small businesses, those least equipped to handle new 
     paperwork requirements. Moreover, the legislation makes it a 
     federal crime to fail to provide completed and updated 
     reports, with civil penalties of up to $10,000, criminal 
     penalties of up to 3 years in prison, or both.
       The nonpartisan Congressional Budget Office (CBO) agrees 
     that this legislation would

[[Page H8322]]

     impose a significant new regulatory burden on small 
     businesses. The CBO wrote, ``Because of the high volume of 
     businesses that must meet the new reporting requirements and 
     the additional administrative burden to file a new report, 
     CBO estimates that the total costs to comply with the mandate 
     would be substantial.'' The Corporate Transparency Act would 
     generate between 25 million to 30 million new reports 
     annually.
       NFIB members report that the burden of federal paperwork 
     ranks in the top 20% of the problems they encounter as small 
     business owners. While large businesses and financial 
     institutions may have access to teams of lawyers, 
     accountants, and compliance experts to gather beneficial 
     ownership information and report it to the government, small 
     business owners do not. Small business owners have difficulty 
     affording accounting and legal experts to help them 
     understand and comply with federal reporting requirements. 
     And small business owners lack the time to track and gather 
     information to fill out yet more forms for the government.
       When NFIB surveyed its membership concerning beneficial 
     ownership reporting in August 2018, 80% opposed the idea of 
     Congress requiring small business owners to file paperwork 
     with the Treasury Department each time they form or change 
     ownership of a business.
       The Corporate Transparency Act of 2019 raises serious 
     privacy concerns for small businesses. This bill would allow 
     federal, state, tribal, local, and even foreign law 
     enforcement access to business owners' personally 
     identifiable information, via the FinCEN database, without a 
     subpoena or warrant. The potential for improper disclosure or 
     misuse of private information increases as the number of 
     people with access to the information increases.
       The Corporate Transparency Act of 2019 establishes a first 
     of its kind federal registry of small business owners. While 
     this registry will not be publicly available initially, NFIB 
     has serious concerns that this legislation would be a first 
     step towards establishing a publicly accessible federal 
     registry, which can be used to name and shame small business 
     owners.
       NFIB strongly opposes H.R. 2513, the Corporate Transparency 
     Act of 2019 and will consider it a Key Vote for the 116th 
     Congress.
           Sincerely,

                                            Juanita D. Duggan,

                                                  President & CEO,
     NFIB.
                                  ____

                                                 October 18, 2019.
       Dear Representative: While we support the goal of 
     preventing wrongdoers from exploiting United States 
     corporations and limited liability companies (LLCs) for 
     criminal gain, the undersigned organizations write to express 
     our strong opposition to H.R. 2513, the Corporate 
     Transparency Act of 2019.
       The Corporate Transparency Act would impose burdensome, 
     duplicative reporting burdens on millions of small businesses 
     in the United States and threatens the privacy of law-
     abiding, legitimate small business owners.
       The Financial Crimes Enforcement Network's (FinCEN) 
     Customer Due Diligence (CDD) rule became applicable on May 
     11, 2018. The CDD rule requires financial institutions to 
     collect the ``beneficial ownership'' information of legal 
     entities with which they conduct commerce. This legislation 
     would attempt to shift the reporting requirements from large 
     banks--those best equipped to handle reporting requirements--
     to millions of small businesses--those least equipped to 
     handle reporting requirements.
       The reporting requirements in the legislation would not 
     only be duplicative, they would also be burdensome. Under 
     this legislation, millions of small businesses would be 
     required to register personally identifiable information with 
     FinCEN upon incorporation and file annual reports with FinCEN 
     for the life of the business. Failure to comply with these 
     reporting requirements would be a federal crime with civil 
     penalties up to $10,000, criminal penalties up to 3 years in 
     prison, or both.
       The Congressional Budget Office wrote, ``Because of the 
     high volume of businesses that must meet the new reporting 
     requirements and the additional administrative burden to file 
     a new report, CBO estimates that the total costs to comply 
     with the mandate would be substantial.'' The Corporate 
     Transparency Act would generate between 25 million to 30 
     million new reports annually.
       This legislation contains a definition of ``beneficial 
     ownership'' that expands upon the current CDD rule. The CDD 
     rule requires disclosure of individuals with a 25 percent 
     ownership interest in a business and an individual with 
     significant responsibilities to control a business. The 
     Corporate Transparency Act would expand that definition, 
     requiring disclosure of any individual who ``receives 
     substantial economic benefits from the assets of'' a small 
     business. The legislation defers to regulators at the 
     Department of Treasury to determine ``substantial economic 
     benefits.''
       In addition, this legislation would impose a ``look-
     through'' reporting requirement, necessitating small business 
     owners to look through every layer of corporate and LLC 
     affiliates to identify if any individuals associated with 
     such entities are qualifying beneficial owners. Ownership of 
     an entity by one or more other corporations or LLCs is 
     common. Corporate and LLC shareholders would already have 
     their own independent reporting obligation under this bill to 
     disclose any beneficial owners, making this provision 
     excessively burdensome.
       The Corporate Transparency Act raises significant privacy 
     concerns as the proposed FinCEN ``beneficial ownership'' 
     database would contain the names, dates of birth, addresses, 
     and unexpired drivers' license numbers or passport numbers of 
     millions of small business owners. This information would be 
     accessible upon request ``through appropriate protocols'' to 
     any local, state, tribal, or federal law enforcement agency 
     or to law enforcement agencies from other countries via 
     requests by U.S. federal agencies. This type of regime 
     presents unacceptable privacy risks.
       The Corporate Transparency Act also introduces serious data 
     breach and cybersecurity risks. Under the legislation, FinCEN 
     would maintain a database of private information that could 
     be hacked for nefarious reasons. As the 2015 breach of the 
     Office of Personnel Management demonstrated, the federal 
     government is not immune from cyber-attacks and harmful 
     disclosure of information. In addition, millions of American 
     companies would be required to maintain and distribute 
     information about owners and investors in the company, thus 
     creating another point of vulnerability for attack. This risk 
     is particularly acute because the Corporate Transparency Act 
     is focused only on small businesses and those entities are 
     often the least equipped to fight off cyber intrusions.
       While this letter does not enumerate every concern, it 
     highlights fundamental problems the Corporate Transparency 
     Act would cause for millions of small businesses in the 
     United States.
       Because of the new reporting requirements and privacy 
     concerns, the undersigned organizations urge a no vote on 
     H.R. 2513, the Corporate Transparency Act.
           Sincerely,
       Air Conditioning Contractors of America, American Business 
     Conference, American Farm Bureau Federation, American Foundry 
     Society, American Hotel and Lodging Association, American 
     Rental Association, Asian American Hotel Owners Association, 
     Associated Builders and Contractors, Associated General 
     Contractors of America, Auto Care Association, Family 
     Business Coalition, International Foodservice Distributors 
     Association, International Franchise Association.
       National Apartment Association, National Association for 
     the Self-Employed, National Association of Home Builders, 
     National Association of Wholesaler-Distributors, NFIB, 
     National Grocers Association, National Lumber and Building 
     Material Dealers Association, National Pest Management 
     Association, National Restaurant Association, National Retail 
     Federation, National Roofing Contractors Association.
       National Small Business Association, National Tooling and 
     Machining Association, Petroleum Equipment Institute, 
     Petroleum Marketers Association of America, Policy and 
     Taxation Group, Precision Machined Parts Association, 
     Precision Metalforming Association, Service Station Dealers 
     of America and Allied Trades, S-Corporation Association, 
     Small Business & Entrepreneurship Council, Specialty 
     Equipment Market Association, The Real Estate Roundtable, 
     Tire Industry Association.

  Mr. McHENRY. Mr. Chair, I include in the Record an article on behalf 
of the Due Process Institute, the American Civil Liberties Union, and 
FreedomWorks in opposition to this bill.

        [From the Due Process Institute, ACLU, and FreedomWorks]

 No Benefit to a Beneficial Ownership Reporting System That Increases 
 America's Over-Incarceration Problem and Fails To Adequately Protect 
                                Privacy

       H.R. 2513 would require people who form or already own 
     businesses, particularly small businesses, to submit 
     extensive personal, financial, and business-related 
     information to the government's Financial Crimes Enforcement 
     Network (FinCEN). Legislative efforts to stop international 
     crime by trying to ``follow the money'' such as H.R. 2513 
     likely have the best intentions in mind. However, the Due 
     Process Institute, the American Civil Liberties Union, and 
     FreedomWorks have serious concerns with several provisions of 
     the Corporate Transparency Act of 2019 and believe the House 
     should vote no TODAY on H.R. 2513 until these issues are 
     fully addressed.
       In sum, the creation of at least 5 new federal crimes for 
     first-time ``paperwork'' violations that are felony criminal 
     offenses calling for prison time is a dramatic step in the 
     wrong direction. No matter how well-intentioned, this bill 
     bears no real relation to combatting terrorism or money 
     laundering and instead eliminates a significant amount of 
     personal and financial privacy. On that score, the bill fails 
     to adequately address how all of the personal and financial 
     information disclosed to, and collected by, the government 
     will be used solely for legitimate purposes or specifically 
     address how privacy interests will be protected.


                        Key Terms are Too Vague

       Importantly, numerous key terms and phrases in the bill are 
     poorly defined. For example, the current definition of 
     ``beneficial owner'' includes anyone who ``directly or 
     indirectly'' exercises substantial control or receives 
     substantial economic benefit from an

[[Page H8323]]

     entity. What does it mean to indirectly control an entity? 
     The bill does not explain. We also cannot look to current 
     FinCEN regulations to divine meaning. The bill does not 
     replicate current FinCEN definitions of beneficial ownership 
     and broadens the current definition to include an individual 
     that ``receives substantial economic benefits from the assets 
     of a corporation.'' Again, the bill does not explain the 
     term. This lack of clarity has very serious consequences when 
     a bill creates at least 5 new federal criminal laws that do 
     nothing but increase this nation's overreliance on 
     criminalization as a cure for every problem. Vague or overly 
     broad statutory text leaves people vulnerable to unfair 
     criminal investigations and prosecutions.


  Complex Criminal Compliance Laws Unfairly Burden Small Businesses & 
                               Nonprofits

       Furthermore, this bill exempts most large entities with the 
     compliance teams necessary to help them navigate new and 
     burdensome requirements. Determining what is to be reported, 
     when, and by whom, in a complex regulatory scheme is 
     difficult. Large corporations are exempt--leaving the 
     reporting burdens solely to small or independent 
     businessowners as well as many nonprofits. Compounding this 
     problem, these new disclosure requirements would apply not 
     only to newly formed entities but also to those that have 
     already been in existence--yet a businessowner (even a first-
     time offender) who fails to comply with any aspect of the 
     requirements could face a prison sentence, as might a non-
     profit organization that inadvertently fails to meet all of 
     the requirements to qualify for an exemption in the bill. 
     These kinds of requirements easily set traps for honest 
     people trying to faithfully comply with complex laws, 
     particularly owners who lack experience or significant funds 
     and volunteer-based nonprofits also lacking in funds and 
     expertise to retain sophisticated business lawyers who can 
     help them.


    Beneficial Ownership Information Would Lack Sufficient Privacy 
                               Protection

       The bill currently would permit beneficial ownership 
     information to be shared with local, Tribal, State, or 
     Federal law enforcement under nearly any circumstances where 
     they may assert an existing investigatory basis and agree to 
     abide by vague privacy standards. The receiving agency may 
     then use that information, without meaningful limitation, for 
     any other law enforcement, national security, or intelligence 
     purpose. These standards are entirely too broad and leave far 
     too much personal information vulnerable to disclosure. The 
     bill should permit FinCEN to disclose beneficial ownership 
     information only when presented with a warrant based on 
     probable cause. Without a clear standard limiting information 
     disclosure, there would be few if any limits on the sharing 
     of this information. Search warrants based on probable cause 
     are the standard for obtaining information in criminal 
     investigations and it would be reasonable to require them in 
     this context. Moreover, the bill contains inadequate 
     safeguards for protecting against the improper disclosure of 
     information or for appropriately limiting the use of the 
     information disclosed. At a minimum, the bill should limit 
     use of the information to the investigative purposes for 
     which it was collected and require the deletion of 
     information after it is no longer useful for its 
     investigative purpose. And it fails to provide either.
       The truth is: there are already hundreds of federal 
     criminal laws on the books, along with a wide swath of 
     powerful investigative tools and authorities, that the 
     government can use to adequately address or prevent money 
     laundering and this bill is an unnecessary step in the wrong 
     direction.
       We hope you share our bipartisan concerns and oppose this 
     legislation when voting today unless serious amendments are 
     made.

  Mr. McHENRY. And, Mr. Chair, I include in the Record two newspaper 
pieces, or news articles, if you will, from The Wall Street Journal and 
from The Verge.
  From The Verge, it says: ``FBI violated Americans' privacy by abusing 
access to NSA surveillance data, court rules.'' And the second, from 
The Wall Street Journal, says: ``FBI's Use of Surveillance Database 
Violated Americans' Privacy Rights, Court Found.'' These are two recent 
articles that have been published in the last 10 days.

                     [From The Verge, Oct. 8, 2019]

 FBI Violated Americans' Privacy by Abusing Access to NSA Surveillance 
                           Data, Court Rules

                            (By Nick Statt)


FBI Agents made tens of thousands of unauthorized searches on American 
                                Citizens

       The Federal Bureau of Investigation made tens of thousands 
     of unauthorized searches related to US citizens between 2017 
     and 2018, a court ruled. The agency violated both the law 
     that authorized the surveillance program they used and the 
     Fourth Amendment of the US Constitution.
       The ruling was made in October 2018 by the Foreign 
     Intelligence Surveillance Court (FISC), a secret government 
     court responsible for reviewing and authorizing searches of 
     foreign individuals inside and outside the US. It was just 
     made public today.


THE FBI MADE UNAUTHORIZED, WARRANTLESS ELECTRONIC SEARCHES ON AMERICAN 
                                CITIZENS

       The program itself, called Section 702 and part of the 
     broad and aggressive expansion of US spy programs in the 
     years after 9/11, granted FBI agents the ability to search a 
     database of electronic intelligence, including phone numbers, 
     emails, and other identifying data. It's intended for use 
     primarily by the National Security Agency.
       There's a key limitation on Section 702: it can only be 
     used to search for evidence of a crime or as part of an 
     investigation into a foreign target. The idea is to monitor 
     terrorism suspects and cyberthreats.
       Yet the FBI vetted American sources using the database, 
     according to The Wall Street Journal. The agents also used 
     the database to search for information about themselves. Less 
     amusingly, they also looked up friends, family, and 
     coworkers. The court deemed this a clear violation of the 
     Fourth Amendment, which protects against unreasonable search 
     and seizure, because none of the searches of US citizens had 
     proper warrants attached.
       The FISC is responsible for evaluating the use of these spy 
     tools in secret as part of the Foreign Intelligence 
     Surveillance Act of 1978, which pushed these governmental 
     deliberations behind closed doors under the guise of 
     protecting national security. That's why this ruling went a 
     full year before seeing the light of day.
       It's public now because the government lost an appeal in a 
     separate, secret appeals court, the WSJ says. The FBI must 
     now create new oversight procedures and a compliance review 
     team to protect against further surveillance abuse.
                                  ____


                      [From WSJ, October 8, 2019]

FBI's Use of Surveillance Database Violated Americans' Privacy Rights, 
                              Court Found

                     (By Dustin Volz and Byron Tau)


 U.S. discloses ruling last year by Foreign Intelligence Surveillance 
  Court that FBI's data queries of U.S. citizens were unconstitutional

       Washington--Some of the Federal Bureau of Investigation's 
     electronic surveillance activities violated the 
     constitutional privacy rights of Americans swept up in a 
     controversial foreign intelligence program, a secretive 
     surveillance court has ruled.
       The ruling deals a rare rebuke to U.S. spying programs that 
     have generally withstood legal challenge and review since 
     they were dramatically expanded after the Sept. 11, 2001, 
     attacks. The opinion resulted in the FBI agreeing to better 
     safeguard privacy and apply new procedures, including 
     recording how the database is searched to detect possible 
     future compliance issues.
       The intelligence community disclosed Tuesday that the 
     Foreign Intelligence Surveillance Court last year found that 
     the FBI's efforts to search data about Americans ensnared in 
     a warrantless internet-surveillance program intended to 
     target foreign suspects have violated the law authorizing the 
     program, as well as the Constitution's Fourth Amendment 
     protections against unreasonable searches. The issue was made 
     public by the government only after it lost an appeal of the 
     judgment earlier this year before another secret court.
       The court concluded that in at least a handful of cases, 
     the FBI had been improperly searching a database of raw 
     intelligence for information on Americans--raising concerns 
     about oversight of the program, which as a spy program 
     operates in near total secrecy.
       The October 2018 court ruling identifies improper searches 
     of raw intelligence databases by the bureau in 2017 and 2018 
     that were deemed problematic in part because of their 
     breadth, which sometimes involved queries related to 
     thousands or tens of thousands of pieces of data, such as 
     emails or telephone numbers. In one case, the ruling 
     suggested, the FBI was using the intelligence information to 
     vet its personnel and cooperating sources. Federal law 
     requires that the database only be searched by the FBI as 
     part of seeking evidence of a crime or for foreign 
     intelligence information.
       In other instances, the court ruled that the database had 
     been improperly used by individuals. In one case, an FBI 
     contractor ran a query of an intelligence database--searching 
     information on himself, other FBI personnel and his 
     relatives, the court revealed.
       The Trump administration failed to make a persuasive 
     argument that modifying the program to better protect the 
     privacy of Americans would hinder the FBI's ability to 
     address national security threats, wrote U.S. District Judge 
     James Boasberg, who serves on the PISA Court, in the 
     partially redacted 138-page opinion released Tuesday.
       In one case central to the court's opinion, the FBI in 
     March 2017 conducted a broad search for information related 
     to more than 70,000 emails, phone numbers and other digital 
     identifiers. The bureau appeared to be looking for data to 
     conduct a security review of people with access to its 
     buildings and computers--meaning the FBI was searching for 
     data linked to its own employees.
       Judge Boasberg wrote that the case demonstrated how a 
     ``single improper decision or assessment'' resulted in a 
     search of data belonging to a large number of individuals. He 
     said the government had reported since April 2017 ``a large 
     number of FBI queries that

[[Page H8324]]

     were not reasonably likely to return foreign-intelligence 
     information or evidence of a crime,'' the standard required 
     for such searches.
       ``The court accordingly finds that the FBI's querying 
     procedures and minimization procedures are not consistent 
     with the requirements of the Fourth Amendment,'' Judge 
     Boasberg concluded.
       The legal fight over the FBI's use of the surveillance tool 
     has played out in secret since the courts that adjudicate 
     these issues under the Foreign Intelligence Surveillance Act 
     of 1978 rarely publicize their work. It was resolved last 
     month after the government created new procedures in the wake 
     of losing an appeal to the U.S. Foreign Intelligence 
     Surveillance Court of Review--a secret appeals court that is 
     rarely consulted and seldom releases opinions publicly. That 
     resolution cleared the way for the disclosure Tuesday.
       Additionally, FBI Director Chris Wray ordered the creation 
     of a compliance review team following the October decision, a 
     bureau official said.
       The program in question, known as Section 702 surveillance, 
     has roots in the national-security tools set up by the George 
     W. Bush administration following the Sept. 11, 2001, 
     terrorist attacks. It was later enshrined in law by Congress 
     to target the electronic communications of nonAmericans 
     located overseas. The program is principally used by the 
     National Security Agency to collect certain categories of 
     foreign intelligence from international phone calls and 
     emails about terrorism suspects, cyber threats and other 
     security risks.
       Information from that surveillance is often shared with 
     relevant federal government agencies with the names of any 
     U.S. persons redacted to protect their privacy, unless an 
     agency requests that identities be unmasked.
       Privacy advocates have long criticized the Section 702 law 
     for allowing broad surveillance that can implicate Americans 
     and doesn't require individualized warrants. U.S. 
     intelligence officials have defended it as among the most 
     valuable national-security tools at their disposal, even as 
     intelligence agencies have acknowledged that some 
     communications from Americans are swept up in the process.
       The court documents released Tuesday reveal unprecedented 
     detail about how communications from Americans were ensnared 
     and searched by intelligence collection programs that U.S. 
     officials have publicly said are aimed mainly at foreigners. 
     They cast doubt on whether law-enforcement and intelligence 
     agencies are carefully complying with privacy procedures 
     Congress has mandated.
       Sen. Ron Wyden (D., Ore.), a critic of U.S. surveillance 
     programs, said the disclosure ``reveals serious failings in 
     the FBI's backdoor searches, underscoring the need for the 
     government to seek a warrant before searching through 
     mountains of private data on Americans.''
       President Trump signed into law a six-year renewal of the 
     Section 702 program in early 2018. Changes to the law allowed 
     the court to review the FBI's data handling ultimately led to 
     the October ruling.
       The surveillance court opinions are the latest setback for 
     U.S. surveillance practices during the Trump administration. 
     The NSA last year turned off a program that collects domestic 
     phone metadata--the time and duration of a call but not its 
     content--amid at least two compliance issues involving the 
     overcollection of data the spy agency wasn't authorized to 
     obtain.
       The FBI has also been under intense political pressure from 
     Mr. Trump and his allies, who allege that the bureau's 
     surveillance of a Trump campaign associate was improper. That 
     surveillance of the aide, Carter Page, fell under a different 
     provision of the foreign intelligence law but has 
     nevertheless sparked a major debate about the scope of the 
     bureau's authorities.


                      Corrections & Amplifications

       U.S District Judge James Boasberg's opinion on FBI 
     surveillance was 138 pages long. An earlier version of this 
     article incorrectly called it a 167-page opinion. (Oct. 8, 
     2019)

  Mr. McHENRY. Mr. Chair, I yield 2 minutes to the gentleman from 
Tennessee (Mr. John W. Rose), from Temperance Hall.
  Mr. JOHN W. ROSE of Tennessee. Mr. Chair, I rise in opposition to 
H.R. 2513, the Corporate Transparency Act.
  As a farmer and as someone who has started a small business from the 
ground up, I know firsthand the unnecessary burden government 
regulations can place on small business owners.
  Unlike large corporations, America's 5 million small businesses do 
not have the manpower, time, or resources to comply with more undue 
regulatory burdens.
  Furthermore, it is concerning that H.R. 2513 lacks provisions that 
would ensure our small business owners' privacy. Under H.R. 2513, small 
business owners, after submitting their personal information, cannot 
trust that it would be safe or protected. As offered, H.R. 2513 lacks 
the safeguards necessary to provide our small business owners the 
confidence that their personal information will be safe and protected, 
once submitted.
  At a minimum, if Big Government demands personal information, it must 
protect that data.
  In addition, H.R. 2513 is built around arbitrary thresholds. I have 
yet to see a convincing explanation for why the threshold is a maximum 
of 20 employees or $5 million in gross receipts.
  Under this legislation, if small business owners are unable to submit 
the required personal information, they may face criminal penalties of 
$10,000 and 3 years in prison. That would kill any small business.
  Let us not forget, small businesses are the heart and drivers of job 
creation in many rural communities, as is the case for many of the 
communities I proudly represent in Tennessee's Sixth District.
  We cannot unleash innovation in our country when we continue to force 
Big Government on America's small farmers and business owners.
  The esteemed ranking member from North Carolina and I urge our fellow 
Members to join us in voting against H.R. 2513, the latest rendition of 
burdensome regulations and personal privacy invasions.
  Ms. WATERS. Mr. Chair, I yield 3 minutes to the gentlewoman from New 
York (Mrs. Carolyn B. Maloney) sponsor of the legislation, H.R. 2513.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chair, critics on the other 
side of the aisle have made wild claims about the bill costing small 
businesses millions of dollars. But in the U.K., where they already 
collect this information, the cost of compliance for the average small 
business was only about $200, and that is a one-time cost. To me, that 
is a very modest price to pay for national security.
  Every law enforcement agency in this country is asking for this 
reform, in order to make us safer.
  In the U.K., the median company had 1.1 owners, which means that the 
vast majority of small businesses only have one owner, so that these 
businesses only have to file one name.
  We are asking for only four pieces of information, and it is basic: 
name, date of birth, current address, and driver's license.
  Does that sound burdensome? For most small business owners, it would 
take less than 5 minutes to fill out the form.
  According to studies, it was pointed out earlier, you have to 
disclose more information to get a library card than you need to 
disclose to create a corporation or an LLC. And you don't hear people 
complaining about filling out forms for library cards.
  I think the idea that the disclosure would be unduly burdensome is 
simply and completely false.
  The bill also goes out of its way to exempt every category of 
business that already discloses their beneficial owners, either to 
regulators or the public filings. This includes banks, credit unions, 
insurance companies, and investment advisers, brokers, utilities, and 
nonprofits.
  The bill even exempts companies with more than 20 employees and over 
$5 million in revenues because, if you have 20 employees, you are 
actually generating a significant amount of revenues and you are, 
certainly, a real business and not a shell company that is being used 
to launder money.
  In fact, in almost all the cases where law enforcement has uncovered 
a shell company that is being used for illicit purposes, the company 
had either zero employees or one employee. That is why we felt very 
comfortable exempting companies with more than 20 employees.
  I think we have gone way out of our way to ensure that the bill is 
appropriately tailored and is not burdensome to small businesses.
  I would like to repeat that, usually, national security bills are 
bipartisan, and I am proud that we had significant support in the vote 
from our friends on the other side of the aisle. I urge my colleagues 
on both sides of the aisle to support this important bill that will 
make our citizens safer, will help law enforcement do their jobs, and, 
therefore, will save lives in our country.
  This is a serious bill. Most countries already have it, and we are 
way behind. We are the money laundering capital of the world. It is 
just plain common sense to protect our citizens.
  Vote for national security, and vote for this bill.
  Mr. McHENRY. Mr. Chair, I am prepared to close, and I yield myself 
the remainder of my time.

[[Page H8325]]

  Mr. Chair, this is a disappointing bill. According to the National 
Federation of Independent Businesses, this will create $5.7 billion in 
new regulatory costs for America's smallest businesses.
  My friend and colleague just said one or two employees, but the bill 
before us today says 20 or fewer employees. Traditionally, Congress has 
exempted small businesses from onerous government regulation, and 
Congress, in its wisdom, has set a threshold of small businesses that 
is 50 and above for most regulations that are of national import.
  This bill turns all that on its head. It turns it all on its head and 
says: No, no, no. We are going to have a special carve-out for all 
small businesses, $5 billion and under of revenue and 20 employees and 
fewer.

  The whole mindset here is absolutely wrong. We are putting a new 
small business mandate on America's smallest businesses, and we have an 
intelligence bureau that is going to go out to the public and request 
information directly from the public.
  We don't do that with NSA to look at your cell phone records. In 
fact, we require the NSA to go before a court in order to look at a 
cell phone database, and there is an enormous amount of litigation 
around that.
  What we have here is a new Federal Government database by an 
intelligence bureau most people haven't heard of, and it is a mandate 
on small businesses.
  There are no due process protections here. You don't have to go 
before a court in order to look at this. In fact, they can just peruse 
it at will.
  You have no data security standards, so we don't even know if this 
will be held to the same standard of data breaches that have already 
occurred in our intelligence bureaus and for Federal employees, nor the 
same liability standards for Federal users as the private sector has to 
protect personally identifiable information.
  Again, there is not regulatory relief. Our friends in the banks want 
this because they want to be relieved of the burden of collecting this 
information. I certainly understand that. But they are still going to 
have to collect that information.
  There is no repeal of the underlying rule that requires the banks to 
collect that type of information in order to transact business with 
those small businesses and businesses of other sizes.

                              {time}  1500

  So there is no regulatory relief, with few civil liberty protections. 
We don't have a cybersecurity standard in the database. And it is a new 
mandate on small businesses.
  But if you are content with that, vote ``yes,'' and if you don't 
think that is sufficient, vote ``no.''
  I am going to stand with the NFIB, the American Farm Bureau, the 
National Association of Home Builders, National Association of General 
Contractors of America, the National Retail Federation, the Real Estate 
Roundtable, and other organizations here in Washington, like the ACLU, 
Heritage Action for America, the FreedomWorks Foundation, and the 
American Civil Liberties Union, as I mentioned, but I want to mention 
them twice so that people hear that clearly.
  There is bipartisan opposition to this, and so I encourage my 
colleagues to vote ``no'' against this new mandate. Stand with your 
small business folks, and we will come to a better compromise than what 
we have here before us today. Please vote ``no.''
  Mr. Chair, I yield back the balance of my time.
  Ms. WATERS. Mr. Chairman, I would like to inquire as to how much time 
I have left.
  The Acting CHAIR. The gentlewoman from California has 1\1/2\ minutes 
remaining.
  Ms. WATERS. Mr. Chair, I would like to thank Representatives Maloney 
and Cleaver for their work on these reforms.
  I would like to just add that H.R. 2513 is an important, commonsense 
measure that stops criminals from being able to hide behind anonymous 
shell companies. It closes loopholes in the Bank Secrecy Act, increases 
penalties for those who break the law, and helps provide financial 
institutions with new tools to more easily and accurately fulfill their 
obligations under the law.
  Mr. Chair, I yield back the balance of my time.
  The Acting CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule.
  The amendment in the nature of a substitute recommended by the 
Committee on Financial Services, printed in the bill, modified by the 
amendment printed in part A of House Report 116-247, shall be 
considered as adopted. The bill, as amended, shall be considered as the 
original bill for the purpose of further amendment and shall be 
considered as read.
  The text of the bill, as amended, is as follows:

                               H.R. 2513

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

             DIVISION A--CORPORATE TRANSPARENCY ACT OF 2019

     SECTION 1. SHORT TITLE.

       (a) In General.--This Act may be cited as the ``Corporate 
     Transparency Act of 2019''.
       (b) References to This Act.--In this division--
       (1) any reference to ``this Act'' shall be deemed a 
     reference to ``this division''; and
       (2) except as otherwise expressly provided, any reference 
     to a section or other provision shall be deemed a reference 
     to that section or other provision of this division.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (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 require 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 at the time 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 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, 
     proliferation financing, drug and human trafficking, money 
     laundering, tax evasion, counterfeiting, piracy, 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 Department of the Treasury, and the 
     Government Accountability Office, and others.
       (6) In July 2006, the leading international antimoney 
     laundering standard-setting body, 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 United States, 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 United States efforts 
     to combat money laundering and terrorist finance.
       (7) In response to the 2006 FATF report, the United States 
     has urged the States to obtain beneficial ownership 
     information for the corporations and limited liability 
     companies formed under the laws of such States.
       (8) In contrast to practices in the United States, all 28 
     countries in the European Union are required to have 
     corporate registries that include beneficial ownership 
     information.
       (9) 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 a clear, 
     universal standard for State incorporation practices, and to 
     bring the United States into compliance with 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) In General.--
       (1) Amendment to the bank secrecy act.--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) Beneficial ownership reporting.--
       ``(A) In general.--Each applicant to form a corporation or 
     limited liability company under

[[Page H8326]]

     the laws of a State or Indian Tribe shall file a report with 
     FinCEN containing a list of the beneficial owners of the 
     corporation or limited liability company that--
       ``(i) except as provided in paragraphs (3) and (4), and 
     subject to paragraph (2), identifies each beneficial owner 
     by--

       ``(I) full legal name;
       ``(II) date of birth;
       ``(III) current residential or business street address; and
       ``(IV) a unique identifying number from a non-expired 
     passport issued by the United States, a non-expired personal 
     identification card, or a non-expired driver's license issued 
     by a State; and

       ``(ii) if the applicant is not a beneficial owner, also 
     provides the identification information described in clause 
     (i) relating to such applicant.
       ``(B) Updated information.--Each corporation or limited 
     liability company formed under the laws of a State or Indian 
     Tribe shall--
       ``(i) submit to FinCEN an annual filing containing a list 
     of--

       ``(I) the current beneficial owners of the corporation or 
     limited liability company and the information described in 
     subparagraph (A) for each such beneficial owner; and
       ``(II) any changes in the beneficial owners of the 
     corporation or limited liability company during the previous 
     year; and

       ``(ii) pursuant to any rule issued by the Secretary of the 
     Treasury under subparagraph (C), update the list of the 
     beneficial owners of the corporation or limited liability 
     company within the time period prescribed by such rule.
       ``(C) Rulemaking on updating information.--Not later than 9 
     months after the completion of the study required under 
     section 4(a)(1) of the Corporate Transparency Act of 2019, 
     the Secretary of the Treasury shall consider the findings of 
     such study and, if the Secretary determines it to be 
     necessary or appropriate, issue a rule requiring corporations 
     and limited liability companies to update the list of the 
     beneficial owners of the corporation or limited liability 
     company within a specified amount of time after the date of 
     any change in the list of beneficial owners or the 
     information required to be provided relating to each 
     beneficial owner.
       ``(D) State notification.--Each State in which a 
     corporation or limited liability company is being formed 
     shall notify each applicant of the requirements listed in 
     subparagraphs (A) and (B).
       ``(2) Certain beneficial owners.--If an applicant to form a 
     corporation or limited liability company or a beneficial 
     owner, or similar agent of a corporation or limited liability 
     company who is required to provide identification information 
     under this subsection, does not have a nonexpired passport 
     issued by the United States, a nonexpired personal 
     identification card, or a non-expired driver's license issued 
     by a State, each such person shall provide to FinCEN the full 
     legal name, current residential or business street address, a 
     unique identifying number from a non-expired passport issued 
     by a foreign government, 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 each beneficial owner, and 
     each application described in paragraph (1)(A) and each 
     update described in paragraph (1)(B) shall include a written 
     certification by a person residing in the State or Indian 
     country under the jurisdiction of the Indian Tribe forming 
     the entity that the applicant, corporation, or limited 
     liability company--
       ``(A) has obtained for each such beneficial owner, 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 full legal 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 of FinCEN; and
       ``(D) will retain the information and proof of verification 
     under this paragraph 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 or 
     Indian Tribe.
       ``(3) Exempt entities.--
       ``(A) In general.--With respect to an applicant to form a 
     corporation or limited liability company under the laws of a 
     State or Indian Tribe, if such entity is described in 
     subparagraph (C) or (D) of subsection (d)(4) and will be 
     exempt from the beneficial ownership disclosure requirements 
     under this subsection, such applicant, or a prospective 
     officer, director, or similar agent of the applicant, shall 
     file a written certification with FinCEN--
       ``(i) identifying the specific provision of subsection 
     (d)(4) under which the entity proposed to be formed would be 
     exempt from the beneficial ownership disclosure requirements 
     under paragraphs (1) and (2);
       ``(ii) stating that the entity proposed to be formed meets 
     the requirements for an entity described under such provision 
     of subsection (d)(4); 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 (2).
       ``(B) Existing corporations or limited liability 
     companies.--On and after the date that is 2 years after the 
     final regulations are issued to carry out this section, a 
     corporation or limited liability company formed under the 
     laws of the State or Indian Tribe before such date shall be 
     subject to the requirements of this subsection unless an 
     officer, director, or similar agent of the entity submits to 
     FinCEN a written certification--
       ``(i) identifying the specific provision of subsection 
     (d)(4) under which the entity is exempt from the requirements 
     under paragraphs (1) and (2);
       ``(ii) stating that the entity meets the requirements for 
     an entity described under such provision of subsection 
     (d)(4); 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 (2).
       ``(C) Exempt entities having ownership interest.--If an 
     entity described in subparagraph (C) or (D) of subsection 
     (d)(4) 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 or Indian Tribe, 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.
       ``(4) FinCEN id numbers.--
       ``(A) Issuance of fincen id number.--
       ``(i) In general.--FinCEN shall issue a FinCEN ID number to 
     any individual who requests such a number and provides FinCEN 
     with the information described under subclauses (I) through 
     (IV) of paragraph (1)(A)(i).
       ``(ii) Updating of information.--An individual with a 
     FinCEN ID number shall submit an annual filing with FinCEN 
     updating any information described under subclauses (I) 
     through (IV) of paragraph (1)(A)(i).
       ``(B) Use of fincen id number in reporting requirements.--
     Any person required to report the information described under 
     paragraph (1)(A)(i) with respect to an individual may instead 
     report the FinCEN ID number of the individual.
       ``(C) Treatment of information submitted for fincen id 
     number.--For purposes of this section, any information 
     submitted under subparagraph (A) shall be deemed to be 
     beneficial ownership information.
       ``(5) Retention and disclosure of beneficial ownership 
     information by fincen.--
       ``(A) Retention of information.--Beneficial ownership 
     information relating to each corporation or limited liability 
     company formed under the laws of the State or Indian Tribe 
     shall be maintained by FinCEN until the end of the 5-year 
     period (or such other period of time as the Secretary of the 
     Treasury may, by rule, determine) beginning on the date that 
     the corporation or limited liability company terminates.
       ``(B) Disclosure of information.--Beneficial ownership 
     information reported to FinCEN pursuant to this section shall 
     be provided by FinCEN only upon receipt of--
       ``(i) subject to subparagraph (C), a request, through 
     appropriate protocols, by a local, Tribal, State, or Federal 
     law enforcement agency;
       ``(ii) a request made by a Federal agency on behalf of a 
     law enforcement agency 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; 
     or
       ``(iii) a 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, the USA PATRIOT Act, or other applicable 
     Federal, State, or Tribal law.
       ``(C) Appropriate protocols.--
       ``(i) Privacy.--The protocols described in subparagraph 
     (B)(i) shall--

       ``(I) protect the privacy of any beneficial ownership 
     information provided by FinCEN to a local, Tribal, State, or 
     Federal law enforcement agency;
       ``(II) ensure that a local, Tribal, State, or Federal law 
     enforcement agency requesting beneficial ownership 
     information has an existing investigatory basis for 
     requesting such information;
       ``(III) ensure that access to beneficial ownership 
     information is limited to authorized users at a local, 
     Tribal, State, or Federal law enforcement agency who have 
     undergone appropriate training, and that the identity of such 
     authorized users is verified through appropriate mechanisms, 
     such as two-factor authentication;
       ``(IV) include an audit trail of requests for beneficial 
     ownership information by a local, Tribal, State, or Federal 
     law enforcement agency, including, as necessary, information 
     concerning queries made by authorized users at a local, 
     Tribal, State, or Federal law enforcement agency;
       ``(V) require that every local, Tribal, State, or Federal 
     law enforcement agency that receives beneficial ownership 
     information from FinCEN conducts an annual audit to verify 
     that the beneficial ownership information received from 
     FinCEN has been accessed and used appropriately, and 
     consistent with this paragraph; and
       ``(VI) require FinCEN to conduct an annual audit of every 
     local, Tribal, State, or Federal law enforcement agency that 
     has received beneficial ownership information to ensure that 
     such agency has requested beneficial ownership information, 
     and has used any beneficial ownership information received 
     from FinCEN, appropriately, and consistent with this 
     paragraph.

       ``(ii) Limitation on use.--Beneficial ownership information 
     provided to a local, Tribal, State, or Federal law 
     enforcement agency under this paragraph may only be used for 
     law enforcement, national security, or intelligence purposes.
       ``(b) No Bearer Share Corporations or Limited Liability 
     Companies.--A corporation or limited liability company formed 
     under the laws of a State or Indian Tribe may not issue a 
     certificate in bearer form evidencing either a whole or 
     fractional interest in the corporation or limited liability 
     company.

[[Page H8327]]

       ``(c) Penalties.--
       ``(1) In general.--It shall be unlawful for any person to 
     affect interstate or foreign commerce by--
       ``(A) knowingly providing, or attempting to provide, false 
     or fraudulent beneficial ownership information, including a 
     false or fraudulent identifying photograph, to FinCEN in 
     accordance with this section;
       ``(B) willfully failing to provide complete or updated 
     beneficial ownership information to FinCEN in accordance with 
     this section; or
       ``(C) knowingly disclosing the existence of a subpoena or 
     other request for beneficial ownership information reported 
     pursuant to this section, except--
       ``(i) to the extent necessary to fulfill the authorized 
     request; or
       ``(ii) as authorized by the entity that issued the 
     subpoena, or other request.
       ``(2) Civil and criminal penalties.--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, United States Code, 
     imprisoned for not more than 3 years, or both.
       ``(3) Limitation.--Any person who negligently violates 
     paragraph (1) shall not be subject to civil or criminal 
     penalties under paragraph (2).
       ``(4) Waiver.--The Secretary of the Treasury may waive the 
     penalty for violating paragraph (1) if the Secretary 
     determines that the violation was due to reasonable cause and 
     was not due to willful neglect.
       ``(5) Criminal penalty for the misuse or unauthorized 
     disclosure of beneficial ownership information.--The criminal 
     penalties provided for under section 5322 shall apply to a 
     violation of this section to the same extent as such criminal 
     penalties apply to a violation described in section 5322, if 
     the violation of this section consists of the misuse or 
     unauthorized disclosure of beneficial ownership information.
       ``(d) Definitions.--For the purposes of this section:
       ``(1) Applicant.--The term `applicant' means any natural 
     person who files an application to form a corporation or 
     limited liability company under the laws of a State or Indian 
     Tribe.
       ``(2) Bank secrecy act.--The term `Bank Secrecy Act' 
     means--
       ``(A) section 21 of the Federal Deposit Insurance Act;
       ``(B) chapter 2 of title I of Public Law 91-508; and
       ``(C) this subchapter.
       ``(3) Beneficial owner.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `beneficial owner' means a natural person who, 
     directly or indirectly, through any contract, arrangement, 
     understanding, relationship, or otherwise--
       ``(i) exercises substantial control over a corporation or 
     limited liability company;
       ``(ii) owns 25 percent or more of the equity interests of a 
     corporation or limited liability company; or
       ``(iii) receives substantial economic benefits from the 
     assets of a corporation or limited liability company.
       ``(B) Exceptions.--The term `beneficial owner' shall not 
     include--
       ``(i) a minor child, as defined in the State or Indian 
     Tribe in which the entity is formed;
       ``(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; 
     or
       ``(v) a creditor of a corporation or limited liability 
     company, unless the creditor also meets the requirements of 
     subparagraph (A).
       ``(C) Substantial economic benefits defined.--
       ``(i) In general.--For purposes of subparagraph (A)(ii), a 
     natural person receives substantial economic benefits from 
     the assets of a corporation or limited liability company if 
     the person has an entitlement to more than a specified 
     percentage of the funds or assets of the corporation or 
     limited liability company, which the Secretary of the 
     Treasury shall, by rule, establish.
       ``(ii) Rulemaking criteria.--In establishing the percentage 
     under clause (i), the Secretary of the Treasury shall seek 
     to--

       ``(I) provide clarity to corporations and limited liability 
     companies with respect to the identification and disclosure 
     of a natural person who receives substantial economic 
     benefits from the assets of a corporation or limited 
     liability company; and
       ``(II) identify those natural persons who, as a result of 
     the substantial economic benefits they receive from the 
     assets of a corporation or limited liability company, 
     exercise a dominant influence over such corporation or 
     limited liability company.

       ``(4) 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 or Indian Tribe;
       ``(B) include any non-United States entity eligible for 
     registration or registered to do business as a corporation or 
     limited liability company under the laws of the applicable 
     State or Indian Tribe;
       ``(C) do not include any entity that is--
       ``(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. 781) 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, sponsored, or 
     chartered by a State or Indian Tribe, a political subdivision 
     of a State or Indian Tribe, under an interstate compact 
     between two 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)) or a 
     savings and loan holding company (as defined in section 10(a) 
     of the Home Owners' Loan Act (12 U.S.C. 1467a(a));
       ``(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 adviser (as defined in section 202(11) of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-2(11))), if 
     the company or adviser is registered with the Securities and 
     Exchange Commission, 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 Adviser Act of 1940 (15 U.S.C. 80b-1 et seq.), or 
     is an investment adviser described under section 203(l) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(l));
       ``(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) 
     or an entity controlling, controlled by, or under common 
     control of such a firm;
       ``(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, nonprofit entity, or other 
     organization that is described in section 501(c), 527, or 
     4947(a)(1) of the Internal Revenue Code of 1986, that has not 
     been denied tax exempt status, and that has filed the most 
     recently due annual information return with the Internal 
     Revenue Service, if required to file such a return;
       ``(xiv) a financial market utility designated by the 
     Financial Stability Oversight Council under section 804 of 
     the Dodd-Frank Wall Street Reform and Consumer Protection 
     Act;
       ``(xv) an insurance producer (as defined in section 334 of 
     the Gramm-Leach-Bliley Act);
       ``(xvi) any pooled investment vehicle that is operated or 
     advised by a person described in clause (iii), (iv), (v), 
     (vi), (viii), (ix), or (xi);''.
       ``(xvii) 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

       ``(xviii) any corporation or limited liability company 
     formed and owned by an entity described in this clause or in 
     clause (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), 
     (ix), (x), (xi), (xii), (xiii), (xiv), (xv), or (xvi); and
       ``(D) do not include any individual business concern or 
     class of business concerns which the Secretary of the 
     Treasury and the Attorney General of the United States have 
     jointly determined, by rule of otherwise, to be exempt from 
     the requirements of subsection (a), if the Secretary and the 
     Attorney General jointly determine that 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 prosecute 
     terrorism, money laundering, tax evasion, or other 
     misconduct.
       ``(5) Fincen.--The term `FinCEN' means the Financial Crimes 
     Enforcement Network of the Department of the Treasury.
       ``(6) Indian country.--The term `Indian country' has the 
     meaning given that term in section 1151 of title 18.
       ``(7) Indian tribe.--The term `Indian Tribe' has the 
     meaning given that term under section 102 of the Federally 
     Recognized Indian Tribe List Act of 1994.
       ``(8) Personal identification card.--The term `personal 
     identification card' means an identification document issued 
     by a State, Indian Tribe, or local government to an 
     individual solely for the purpose of identification of that 
     individual.
       ``(9) State.--The term `State' means any State, 
     commonwealth, territory, or possession of the United States, 
     the District of Columbia, the Commonwealth of Puerto Rico, 
     the Commonwealth of the Northern Mariana Islands, American 
     Samoa, Guam, or the United States Virgin Islands.''.
       (2) Rulemaking.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     issue regulations to carry out this Act and the amendments 
     made by this

[[Page H8328]]

     Act, including, to the extent necessary, to clarify the 
     definitions in section 5333(d) of title 31, United States 
     Code.
       (B) Revision of final rule.--Not later than 1 year after 
     the date of enactment of this Act, the Secretary of the 
     Treasury shall revise the final rule titled ``Customer Due 
     Diligence Requirements for Financial Institutions'' (May 11, 
     2016; 81 Fed. Reg. 29397) to--
       (i) bring the rule into conformance with this Act and the 
     amendments made by this Act;
       (ii) account for financial institutions' access to 
     comprehensive beneficial ownership information filed by 
     corporations and limited liability companies, under threat of 
     civil and criminal penalties, under this Act and the 
     amendments made by this Act; and
       (iii) reduce any burdens on financial institutions that 
     are, in light of the enactment of this Act and the amendments 
     made by this Act, unnecessary or duplicative.
       (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:

``5333. Transparent incorporation practices.''.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated $20,000,000 for each of fiscal years 2020 
     and 2021 to the Financial Crimes Enforcement Network to carry 
     out this Act and the amendments made by this Act.
       (c) 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 or 
     subcontractor who 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.

     SEC. 4. STUDIES AND REPORTS.

       (a) Updating of Beneficial Ownership Information.--
       (1) Study.--The Secretary of the Treasury, in consultation 
     with the Attorney General of the United States, shall conduct 
     a study to evaluate--
       (A) the necessity of a requirement for corporations and 
     limited liability companies to update the list of their 
     beneficial owners within a specified amount of time after the 
     date of any change in the list of beneficial owners or the 
     information required to be provided relating to each 
     beneficial owner, taking into account the annual filings 
     required under section 5333(a)(1)(B)(i) of title 31, United 
     States Code, and the information contained in such annual 
     filings; and
       (B) the burden that a requirement to update the list of 
     beneficial owners within a specified period of time after a 
     change in such list of beneficial owners would impose on 
     corporations and limited liability companies.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report on the study required under paragraph (1) to 
     the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate
       (3) Public comment.--The Secretary of the Treasury shall 
     seek and consider public input, comments, and data in order 
     to conduct the study required under subparagraph paragraph 
     (1).
       (b) 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 the 
     Congress a report--
       (1) identifying each State or Indian Tribe that has 
     procedures that enable persons to form or register under the 
     laws of the State or Indian Tribe partnerships, trusts, or 
     other legal entities, and the nature of those procedures;
       (2) identifying each State or Indian Tribe that requires 
     persons seeking to form or register partnerships, trusts, or 
     other legal entities under the laws of the State or Indian 
     Tribe 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;
       (B) has impeded investigations into entities suspected of 
     such misconduct; and
       (C) increases the costs to financial institutions of 
     complying with due diligence requirements imposed under the 
     Bank Secrecy Act, the USA PATRIOT Act, or other applicable 
     Federal, State, or Tribal law; 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.
       (c) 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.

     SEC. 5. DEFINITIONS.

       In this Act, the terms ``Bank Secrecy Act'', ``beneficial 
     owner'', ``corporation'', and ``limited liability company'' 
     have the meaning given those terms, respectively, under 
     section 5333(d) of title 31, United States Code.

                    DIVISION B--COUNTER ACT OF 2019

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

                    DIVISION B--COUNTER ACT OF 2019

Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.

                    TITLE I--STRENGTHENING TREASURY

Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. Special hiring authority.
Sec. 103. Civil Liberties and Privacy Officer.
Sec. 104. Civil Liberties and Privacy Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attaches 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 J--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 K--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.
       (c) References to This Act.--In this division--
       (1) any reference to ``this Act'' shall be deemed a 
     reference to ``this division''; and
       (2) except as otherwise expressly provided, any reference 
     to a section or other provision shall be deemed a reference 
     to that section or other provision of this division.

     SEC. 2. BANK SECRECY ACT DEFINITION.

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

                    TITLE I--STRENGTHENING TREASURY

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

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

     SEC. 102. SPECIAL HIRING AUTHORITY.

       (a) In General.--Section 310 of title 31, United States 
     Code, is amended--
       (1) by redesignating subsection (d) as subsection (g); and

[[Page H8329]]

       (2) by inserting after subsection (c) the following:
       ``(d) Special Hiring Authority.--
       ``(1) In general.--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.
       ``(2) Primary responsibilities.--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).''.
       (b) Report.--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--
       (1) 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
       (2) 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.

     SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER.

       (a) Appointment of Officers.--Not later than the end of the 
     3-month period beginning on the date of enactment of this 
     Act, a Civil Liberties and Privacy Officer shall be 
     appointed, from among individuals who are attorneys with 
     expertise in data privacy laws--
       (1) within each Federal functional regulator, by the head 
     of the Federal functional regulator;
       (2) within the Financial Crimes Enforcement Network, by the 
     Secretary of the Treasury; and
       (3) within the Internal Revenue Service Small Business and 
     Self-Employed Tax Center, by the Secretary of the Treasury.
       (b) Duties.--Each Civil Liberties and Privacy Officer 
     shall, with respect to the applicable regulator, Network, or 
     Center within which the Officer is located--
       (1) be consulted each time Bank Secrecy Act or anti-money 
     laundering regulations affecting civil liberties or privacy 
     are developed or reviewed;
       (2) be consulted on information-sharing programs, including 
     those that provide access to personally identifiable 
     information;
       (3) ensure coordination and clarity between anti-money 
     laundering, civil liberties, and privacy regulations;
       (4) 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
       (5) develop metrics of program success.
       (c) Definitions.--For purposes of this section:
       (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has 
     the meaning given that term under section 5312 of title 31, 
     United States Code.
       (2) Federal functional regulator.--The term ``Federal 
     functional regulator'' 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.

     SEC. 104. CIVIL LIBERTIES AND PRIVACY COUNCIL.

       (a) Establishment.--There is established the Civil 
     Liberties and Privacy Council (hereinafter in this section 
     referred to as the ``Council''), which shall consist of the 
     Civil Liberties and Privacy Officers appointed pursuant to 
     section 103.
       (b) Chair.--The Director of the Financial Crimes 
     Enforcement Network shall serve as the Chair of the Council.
       (c) Duty.--The members of the Council shall coordinate on 
     activities related to their duties as Civil Liberties Privacy 
     Officers, but may not supplant the individual agency 
     determinations on civil liberties and privacy.
       (d) Meetings.--The meetings of the Council--
       (1) shall be at the call of the Chair, but in no case may 
     the Council meet less than quarterly;
       (2) may include open and partially closed sessions, as 
     determined necessary by the Council; and
       (3) shall include participation by public and private 
     entities and law enforcement agencies.
       (e) Report.--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.
       (f) Nonapplicability of FACA.--The Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to the Council.

     SEC. 105. INTERNATIONAL COORDINATION.

       (a) In General.--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.
       (b) Cooperation Goal.--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.
       (c) International Monetary Fund.--
       (1) Support for capacity of the international monetary fund 
     to prevent money laundering and financing of terrorism.--
     Title XVI of the International Financial Institutions Act (22 
     U.S.C. 262p et seq.) is amended by adding at the end the 
     following:

     ``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL 
                   MONETARY FUND TO PREVENT MONEY LAUNDERING AND 
                   FINANCING OF TERRORISM.

       ``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.''.
       (2) National advisory council report to congress.--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 (22 U.S.C. 262r) a description of--
       (A) 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
       (B) 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.
       (3) Sunset.--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.

     SEC. 106. TREASURY ATTACHES PROGRAM.

       (a) In General.--Title 31, United States Code, is amended 
     by inserting after section 315 the following:

     ``Sec. 316. Treasury Attaches Program

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

``316. Treasury Attaches Program.''.

     SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL 
                   COOPERATION.

       (a) In General.--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.
       (b) Activity and Evaluation Report.--Not later than 360 
     days after enactment of this Act, and every year thereafter 
     for five 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--
       (1) 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;
       (2) a description of technical assistance provided by the 
     Office in the previous year, including the objectives and 
     delivery methods of the assistance;

[[Page H8330]]

       (3) a list of beneficiaries and providers (other than 
     Office staff) of the technical assistance;
       (4) 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
       (5) 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.

     SEC. 108. FINCEN DOMESTIC LIAISONS.

       Section 310 of title 31, United States Code, as amended by 
     section 102, is further amended by inserting after subsection 
     (d) the following:
       ``(e) FinCEN Domestic Liaisons.--
       ``(1) In general.--The Director of FinCEN shall appoint at 
     least 6 senior FinCEN employees as FinCEN Domestic Liaisons, 
     who shall--
       ``(A) each be assigned to focus on a specific region of the 
     United States;
       ``(B) be located at an office in such region (or co-located 
     at an office of the Board of Governors of the Federal Reserve 
     System in such region); and
       ``(C) 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.
       ``(2) Definitions.--In this subsection:
       ``(A) BSA officer.--The term `BSA officer' 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.
       ``(B) Financial institution.--The term `financial 
     institution' has the meaning given that term under section 
     5312.''.

     SEC. 109. FINCEN EXCHANGE.

       Section 310 of title 31, United States Code, as amended by 
     section 108, is further amended by inserting after subsection 
     (e) the following:
       ``(f) FinCEN Exchange.--
       ``(1) Establishment.--The FinCEN Exchange is hereby 
     established within FinCEN, which shall consist of the FinCEN 
     Exchange program of FinCEN in existence on the day before the 
     date of enactment of this paragraph.
       ``(2) Purpose.--The FinCEN Exchange shall facilitate a 
     voluntary public-private information sharing partnership 
     among law enforcement, financial institutions, and FinCEN 
     to--
       ``(A) effectively and efficiently combat money laundering, 
     terrorism financing, organized crime, and other financial 
     crimes;
       ``(B) protect the financial system from illicit use; and
       ``(C) promote national security.
       ``(3) Report.--
       ``(A) In general.--Not later than one year after the date 
     of enactment of this subsection, and annually thereafter for 
     the next five 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--
       ``(i) an analysis of the efforts undertaken by the FinCEN 
     Exchange and the results of such efforts;
       ``(ii) an analysis of the extent and effectiveness of the 
     FinCEN Exchange, including any benefits realized by law 
     enforcement from partnership with financial institutions; and
       ``(iii) any legislative, administrative, or other 
     recommendations the Secretary may have to strengthen FinCEN 
     Exchange efforts.
       ``(B) Classified annex.--Each report under subparagraph (A) 
     may include a classified annex.
       ``(4) Information sharing requirement.--Information shared 
     pursuant to this subsection shall be shared in compliance 
     with all other applicable Federal laws and regulations.
       ``(5) Rule of construction.--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).
       ``(6) Financial institution defined.--In this subsection, 
     the term `financial institution' has the meaning given that 
     term under section 5312.''.

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

       (a) Study.--The Secretary of the Treasury shall carry out a 
     study, in consultation with appropriate private sector 
     stakeholders and Federal departments and agencies, on trade-
     based money laundering.
       (b) Report.--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--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) proposed strategies to combat trade-based money 
     laundering.
       (c) Classified Annex.--The report required under this 
     section may include a classified annex.
       (d) Contracting Authority.--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.

     SEC. 111. STUDY AND STRATEGY ON DE-RISKING.

       (a) Review.--The Secretary of the Treasury, in consultation 
     with appropriate private sector stakeholders, examiners, and 
     the Federal functional regulators (as defined under section 
     103) and other relevant stakeholders, shall undertake a 
     formal review of--
       (1) 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;
       (2) the reasons why financial institutions are engaging in 
     de-risking;
       (3) the association with and effects of de-risking on money 
     laundering and financial crime actors and activities;
       (4) 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--
       (A) more effectively tailor Federal actions and penalties 
     to the size of foreign financial institutions and any 
     capacity limitations of foreign governments; and
       (B) reduce compliance costs that may lead to the adverse 
     consequences described in paragraph (1);
       (5) formal and informal feedback provided by examiners that 
     may have led to de-risking;
       (6) 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
       (7) any best practices from the private sector that 
     facilitate correspondent bank relationships.
       (b) De-risking Strategy.--The Secretary shall develop a 
     strategy to reduce de-risking and adverse consequences 
     related to de-risking.
       (c) Report.--Not later than the end of the 1-year period 
     beginning on the date of the enactment of this Act, the 
     Secretary, in consultation with the Federal functional 
     regulators and other relevant stakeholders, shall issue a 
     report to the Congress containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) the strategy developed pursuant to subsection (b).
       (d) Definitions.--In this section:
       (1) De-risking.--The term ``de-risking'' 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.
       (2) BSA terms.--The terms ``Bank Secrecy Act'' and 
     ``financial institution'' have the meaning given those terms, 
     respectively, under section 5312 off title 31, United States 
     Code.

     SEC. 112. AML EXAMINATION AUTHORITY DELEGATION STUDY.

       (a) Study.--The Secretary of the Treasury shall carry out a 
     study on the Secretary's delegation of examination authority 
     under the Bank Secrecy Act, including--
       (1) an evaluation of the efficacy of the delegation, 
     especially with respect to the mission of the Bank Secrecy 
     Act;
       (2) whether the delegated agencies have appropriate 
     resources to perform their delegated responsibilities; and
       (3) whether the examiners in delegated agencies have 
     sufficient training and support to perform their 
     responsibilities.
       (b) Report.--Not later than one 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--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) 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.
       (c) Bank Secrecy Act Defined.--The term ``Bank Secrecy 
     Act'' has the meaning given that term under section 5312 off 
     title 31, United States Code.

     SEC. 113. STUDY AND STRATEGY ON CHINESE MONEY LAUNDERING.

       (a) Study.--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.
       (b) Strategy to Combat Chinese Money Laundering.--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.
       (c) Report.--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--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) the strategy developed under subsection (b).

                  TITLE J--IMPROVING AML/CFT OVERSIGHT

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

       (a) In General.--
       (1) Sharing with foreign branches and affiliates.--Section 
     5318(g) of title 31, United States Code, is amended by adding 
     at the end the following:
       ``(5) Pilot program on sharing with foreign branches, 
     subsidiaries, and affiliates.--
       ``(A) In general.--The Secretary of the Treasury shall 
     issue rules establishing the pilot

[[Page H8331]]

     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.
       ``(B) Pilot program described.--The pilot program required 
     under this paragraph shall--
       ``(i) 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);
       ``(ii) terminate on the date that is five years after the 
     date of enactment of this paragraph, except that the 
     Secretary may extend the pilot program for up to two 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--

       ``(I) a certification that the extension is in the national 
     interest of the United States, with a detailed explanation of 
     the reasons therefor;
       ``(II) 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
       ``(III) 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.

       ``(C) Prohibition involving certain jurisdictions.--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--
       ``(i) the People's Republic of China;
       ``(ii) the Russian Federation; or
       ``(iii) a jurisdiction that--

       ``(I) is subject to countermeasures imposed by the Federal 
     Government;
       ``(II) is a state sponsor of terrorism; or
       ``(III) 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.

       ``(D) Implementation updates.--Not later than 360 days 
     after the date rules are issued under subparagraph (A), and 
     annually thereafter for three 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--
       ``(i) 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;
       ``(ii) 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
       ``(iii) any recommendations to amend the design of the 
     pilot program.
       ``(E) Rule of construction.--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.
       ``(F) Notice of use of other authority.--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.
       ``(6) Treatment of foreign jurisdiction-originated 
     reports.--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).''.
       (2) Notification prohibitions.--Section 5318(g)(2)(A) of 
     title 31, United States Code, is amended--
       (A) in clause (i), by inserting after ``transaction has 
     been reported'' the following: ``or otherwise reveal any 
     information that would reveal that the transaction has been 
     reported''; and
       (B) in clause (ii), by inserting after ``transaction has 
     been reported,'' the following: ``or otherwise reveal any 
     information that would reveal that the transaction has been 
     reported,''.
       (b) Rulemaking.--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.

     SEC. 202. SHARING OF COMPLIANCE RESOURCES.

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

     SEC. 203. GAO STUDY ON FEEDBACK LOOPS.

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

     SEC. 204. FINCEN STUDY ON BSA VALUE.

       (a) Study.--The Director of the Financial Crimes 
     Enforcement Network shall carry out a study on Bank Secrecy 
     Act value.
       (b) Report.--Not later than the end of the 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.
       (c) Classified Annex.--The report required under this 
     section may include a classified annex, if the Director 
     determines it appropriate.
       (d) Bank Secrecy Act Defined.--For purposes of this 
     section, the term ``Bank Secrecy Act'' has the meaning given 
     that term under section 5312 of title 31, United States Code.

     SEC. 205. SHARING OF THREAT PATTERN AND TREND INFORMATION.

       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:
       ``(7) Sharing of threat pattern and trend information.--
       ``(A) SAR activity review.--The Director of the Financial 
     Crimes Enforcement Network shall restart publication of the 
     `SAR Activity Review - Trends, Tips & Issues', 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.
       ``(B) Inclusion of typologies.--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.
       ``(C) Typology defined.--For purposes of this paragraph, 
     the term `typology' means the various techniques used to 
     launder money or finance terrorism.''.

     SEC. 206. MODERNIZATION AND UPGRADING WHISTLEBLOWER 
                   PROTECTIONS.

       (a) Rewards.--Section 5323(d) of title 31, United States 
     Code, is amended to read as follows:
       ``(d) Source of Rewards.--For the purposes of paying 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.''.
       (b) Whistleblower Incentives.--
       Chapter 53 of title 31, United States Code, is amended--
       (1) by inserting after section 5323 the following:

     ``Sec. 5323A. Whistleblower incentives

       ``(a) Definitions.--In this section:
       ``(1) Covered judicial or administrative action.--The term 
     `covered judicial or administrative action' means any 
     judicial or administrative action brought by FinCEN under the 
     Bank Secrecy Act that results in monetary sanctions exceeding 
     $1,000,000.
       ``(2) FinCEN.--The term `FinCEN' means the Financial Crimes 
     Enforcement Network.
       ``(3) Monetary sanctions.--The term `monetary sanctions', 
     when used with respect to any judicial or administrative 
     action, means--
       ``(A) any monies, including penalties, disgorgement, and 
     interest, ordered to be paid; and

[[Page H8332]]

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

``5323A. Whistleblower incentives.''.

     SEC. 207. CERTAIN VIOLATORS BARRED FROM SERVING ON BOARDS OF 
                   UNITED STATES FINANCIAL INSTITUTIONS.

       Section 5321 of title 31, United States Code, is amended by 
     adding at the end the following:
       ``(f) Certain Violators Barred From Serving on Boards of 
     United States Financial Institutions.--
       ``(1) In general.--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.
       ``(2) Egregious violation defined.--With respect to an 
     individual, the term `egregious violation' means--
       ``(A) a felony criminal violation for which the individual 
     was convicted; and
       ``(B) a civil violation where the individual willfully 
     committed such violation and the violation facilitated money 
     laundering or the financing of terrorism.''.

     SEC. 208. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT 
                   VIOLATORS.

       (a) In General.--Section 5321 of title 31, United States 
     Code, as amended by section 208, is further amended by adding 
     at the end the following:
       ``(g) Additional Damages for Repeat Violators.--In addition 
     to any other fines permitted by this section and section 
     5322, with respect to a person who has previously 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.''.
       (b) Prospective Application of Amendment.--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.

     SEC. 209. JUSTICE ANNUAL REPORT ON DEFERRED AND NON-
                   PROSECUTION AGREEMENTS.

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

     SEC. 210. RETURN OF PROFITS AND BONUSES.

       (a) In General.--Section 5322 of title 31, United States 
     Code, is amended by adding at the end the following:
       ``(e) Return of Profits and Bonuses.--A person convicted of 
     violating a provision of (or rule issued under) the Bank 
     Secrecy Act shall--
       ``(1) in addition to any other fine under this section, be 
     fined in an amount equal to the profit gained by such person 
     by reason of such violation, as determined by the court; and
       ``(2) if such person is an individual who was a partner, 
     director, officer, or employee of a 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.''.
       (b) Rule of Construction.--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.

     SEC. 211. APPLICATION OF BANK SECRECY ACT TO DEALERS IN 
                   ANTIQUITIES.

       (a) In General.--Section 5312(a)(2) of title 31, United 
     States Code, is amended--
       (1) in subparagraph (Y), by striking ``or'' at the end;
       (2) by redesignating subparagraph (Z) as subparagraph (AA); 
     and

[[Page H8333]]

       (3) by inserting after subsection (Y) the following:
       ``(Z) 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''.
       (b) Study on the Facilitation of Money Laundering and 
     Terror Finance Through the Trade of Works of Art or 
     Antiquities.--
       (1) Study.--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--
       (A) 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;
       (B) whether thresholds and definitions should apply in 
     determining which entities to regulate;
       (C) 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;
       (D) an evaluation of whether certain exemptions should 
     apply; and
       (E) any other points of study or analysis the Secretary 
     determines necessary or appropriate.
       (2) Report.--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).
       (c) Rulemaking.--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).

     SEC. 212. GEOGRAPHIC TARGETING ORDER.

       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--
       (1) 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
       (2) establishes a specific threshold for commercial real 
     estate.

     SEC. 213. STUDY AND REVISIONS TO CURRENCY TRANSACTION REPORTS 
                   AND SUSPICIOUS ACTIVITY REPORTS.

       (a) Currency Transaction Reports.--
       (1) CTR indexed for inflation.--
       (A) In general.--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.
       (B) Exception.--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.
       (2) GAO ctr study.--
       (A) Study.--The Comptroller General of the United States 
     shall carry out a study of currency transaction reports. Such 
     study shall include--
       (i) 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;
       (ii) an analysis of the importance of currency transaction 
     reports to law enforcement; and
       (iii) an analysis of the effects of raising the currency 
     transaction report threshold.
       (B) Report.--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--
       (i) all findings and determinations made in carrying out 
     the study required under subparagraph (A); and
       (ii) recommendations for improving the current currency 
     transaction reporting regime.
       (b) Modified SARs Study and Design.--
       (1) Study.--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), regulators, 
     and law enforcement, of the design of a modified suspicious 
     activity report form for certain customers and activities. 
     Such study shall include--
       (A) an examination of appropriate optimal SARs thresholds 
     to determine the level at which a modified SARs form could be 
     employed;
       (B) an evaluation of which customers or transactions would 
     be appropriate for a modified SAR, including--
       (i) seasoned business customers;
       (ii) financial technology (Fintech) firms;
       (iii) structuring transactions; and
       (iv) any other customer or transaction that may be 
     appropriate for a modified SAR; and
       (C) 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--
       (i) modifying thresholds;
       (ii) shortening forms;
       (iii) combining Bank Secrecy Act forms;
       (iv) filing reports in periodic batches; and
       (v) any other method that may reduce the regulatory burden.
       (2) Study considerations.--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 ``high degree of usefulness to law 
     enforcement'' under the Bank Secrecy Act.
       (3) Report.--Not later than the end of the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     shall issue a report to Congress containing--
       (A) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (B) sample designs of modified SARs forms based on the 
     study results.
       (4) Contracting authority.--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.
       (c) Definitions.--For purposes of this section:
       (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has 
     the meaning given that term under section 5312 of title 31, 
     United States Code.
       (2) Regulatory burden.--The term ``regulatory burden'' 
     means the man-hours to complete filings, cost of data 
     collection and analysis, and other considerations of chapter 
     35 of title 44, United States Code (commonly referred to as 
     the Paperwork Reduction Act).
       (3) SAR; suspicious activity report.--The term ``SAR'' and 
     ``suspicious activity report'' mean a report of a suspicious 
     transaction under section 5318(g) of title 31, United States 
     Code.
       (4) Seasoned business customer.--The term ``seasoned 
     business customer'', shall have such meaning as the Secretary 
     of the Treasury shall prescribe, which shall include any 
     person that--
       (A) 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;
       (B) has maintained an account with a financial institution 
     for a length of time as determined by the Secretary; and
       (C) meet such other requirements as the Secretary may 
     determine necessary or appropriate.

     SEC. 214. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION 
                   REPORTS AND SUSPICIOUS ACTIVITY REPORTS.

       (a) Review.--The Secretary of the Treasury (in consultation 
     with Federal law enforcement agencies, the Director of 
     National Intelligence, and the Federal functional regulators 
     and in consultation with other relevant stakeholders) shall 
     undertake a formal review of the current financial 
     institution reporting requirements under the Bank Secrecy Act 
     and its implementing regulations and propose changes to 
     further reduce regulatory burdens, and ensure that the 
     information provided is of a ``high degree of usefulness'' to 
     law enforcement, as set forth under section 5311 of title 31, 
     United States Code.
       (b) Contents.--The review required under subsection (a) 
     shall include a study of--
       (1) whether the timeframe for filing a suspicious activity 
     report should be increased from 30 days;
       (2) whether or not currency transaction report and 
     suspicious activity report thresholds should be tied to 
     inflation or otherwise periodically be adjusted;
       (3) whether the circumstances under which a financial 
     institution determines whether to file a ``continuing 
     suspicious activity report'', or the processes followed by a 
     financial institution in determining whether to file a 
     ``continuing suspicious activity report'' (or both) can be 
     narrowed;
       (4) analyzing the fields designated as ``critical'' on the 
     suspicious activity report form and whether the number of 
     fields should be reduced;
       (5) the increased use of exemption provisions to reduce 
     currency transaction reports that are of little or no value 
     to law enforcement efforts;
       (6) the current financial institution reporting 
     requirements under the Bank Secrecy Act and its implementing 
     regulations and guidance; and
       (7) such other items as the Secretary determines 
     appropriate.
       (c) Report.--Not later than the end of the one year period 
     beginning on the date of the enactment of this Act, the 
     Secretary of the Treasury, in consultation with law 
     enforcement and persons subject to Bank Secrecy Act 
     requirements, shall issue a report to the Congress containing 
     all findings and determinations made in carrying out the 
     review required under subsection (a).
       (d) Definitions.--For purposes of this section:
       (1) Federal functional regulator.--The term ``Federal 
     functional regulator'' has the meaning given that term under 
     section 103.
       (2) Other terms.--The terms ``Bank Secrecy Act'' and 
     ``financial institution'' have the meaning given those terms, 
     respectively, under section 5312 of title 31, United States 
     Code.

[[Page H8334]]

  


                  TITLE K--MODERNIZING THE AML SYSTEM

     SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.

       Section 5318 of title 31, United States Code, as amended by 
     section 202, is further amended by adding at the end the 
     following:
       ``(p) Encouraging Innovation in Compliance.--
       ``(1) In general.--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.
       ``(2) Exemptive relief.--The Secretary, pursuant to 
     subsection (a), may provide exemptions from the requirements 
     of this subchapter if the Secretary determines such 
     exemptions are necessary to facilitate the testing and 
     potential use of new technologies and other innovations.
       ``(3) Rule of construction.--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.
       ``(4) Federal functional regulator defined.--In this 
     subsection, the term `Federal functional regulator' 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.''.

     SEC. 302. INNOVATION LABS.

       (a) In General.--Subchapter II of chapter 53 of title 31, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 5333. Innovation Labs

       ``(a) Establishment.--There is established within the 
     Department of the Treasury and each Federal functional 
     regulator an Innovation Lab.
       ``(b) Director.--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.
       ``(c) Duties.--The duties of the Innovation Lab shall be--
       ``(1) to provide outreach to law enforcement agencies, 
     financial institutions, and other persons (including vendors 
     and technology companies) with respect to innovation and new 
     technologies that may be used to comply with the requirements 
     of the Bank Secrecy Act;
       ``(2) to support the implementation of responsible 
     innovation and new technology, in a manner that complies with 
     the requirements of the Bank Secrecy Act;
       ``(3) to explore opportunities for public-private 
     partnerships; and
       ``(4) to develop metrics of success.
       ``(d) FinCEN Lab.--The Innovation Lab established under 
     subsection (a) within the Department of the Treasury shall be 
     a lab within the Financial Crimes Enforcement Network.
       ``(e) Federal Functional Regulator Defined.--In this 
     subsection, the term `Federal functional regulator' 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.''.
       (b) Clerical Amendment.--The table of contents for 
     subchapter II of chapter 53 of title 31, United States Code, 
     is amended by adding at the end the following:

``5333. Innovation Labs.''.

     SEC. 303. INNOVATION COUNCIL.

       (a) In General.--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:

     ``Sec. 5334. Innovation Council

       ``(a) Establishment.--There is established the Innovation 
     Council (hereinafter in this section referred to as the 
     `Council'), which shall consist of each Director of an 
     Innovation Lab established under section 5334 and the 
     Director of the Financial Crimes Enforcement Network.
       ``(b) Chair.--The Director of the Innovation Lab of the 
     Department of the Treasury shall serve as the Chair of the 
     Council.
       ``(c) Duty.--The members of the Council shall coordinate on 
     activities related to innovation under the Bank Secrecy Act, 
     but may not supplant individual agency determinations on 
     innovation.
       ``(d) Meetings.--The meetings of the Council--
       ``(1) shall be at the call of the Chair, but in no case may 
     the Council meet less than semi-annually;
       ``(2) may include open and closed sessions, as determined 
     necessary by the Council; and
       ``(3) shall include participation by public and private 
     entities and law enforcement agencies.
       ``(e) Report.--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.''.
       (b) Clerical Amendment.--The table of contents for 
     subchapter II of chapter 53 of title 31, United States Code, 
     is amended by adding the end the following:

``5334. Innovation Council.''.

     SEC. 304. TESTING METHODS RULEMAKING.

       (a) In General.--Section 5318 of title 31, United States 
     Code, as amended by section 301, is further amended by adding 
     at the end the following:
       ``(q) Testing.--
       ``(1) In general.--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--
       ``(A) with respect to technology and related technology-
     internal processes (`new technology') designed to facilitate 
     compliance with the Bank Secrecy Act requirements, the 
     standards by which financial institutions are to test new 
     technology; and
       ``(B) 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.
       ``(2) Standards.--The standards described under paragraph 
     (1) may include--
       ``(A) an emphasis on using innovative approaches, such as 
     machine learning, rather than rules-based systems;
       ``(B) risk-based back-testing of the regime to facilitate 
     calibration of relevant systems;
       ``(C) requirements for appropriate data privacy and 
     security; and
       ``(D) a requirement that the algorithms used by the regime 
     be disclosed to the Financial Crimes Enforcement Network, 
     upon request.
       ``(3) Confidentiality of algorithms.--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.''.
       (b) Update of Manual.--The Financial Institutions 
     Examination Council shall ensure--
       (1) that any manual prepared by the Council is updated to 
     reflect the rulemaking required by the amendment made by 
     subsection (a); and
       (2) 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.

     SEC. 305. FINCEN STUDY ON USE OF EMERGING TECHNOLOGIES.

       (a) Study.--
       (1) In general.--The Director of the Financial Crimes 
     Enforcement Network (``FinCEN'') shall carry out a study on--
       (A) the status of implementation and internal use of 
     emerging technologies, including artificial intelligence 
     (``AI''), digital identity technologies, blockchain 
     technologies, and other innovative technologies within 
     FinCEN;
       (B) 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
       (C) 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, ``Agencies''), and 
     better support its ongoing investigations when referring a 
     case to the Agencies.
       (2) Inclusion of gto data.--The study required under this 
     subsection shall include data collected through the 
     Geographic Targeting Orders (``GTO'') program.
       (3) Consultation.--In conducting the study required under 
     this subsection, FinCEN shall consult with the Directors of 
     the Innovations Labs established in section 302.
       (b) Report.--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--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a);
       (2) 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 U.S. efforts to combat money laundering and other forms of 
     illicit finance; and
       (3) 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.

     SEC. 306. DISCRETIONARY SURPLUS FUNDS.

       (a) In General.--Section 7(a)(3)(A) of the Federal Reserve 
     Act (12 U.S.C. 289(a)(3)(A)) is amended by striking 
     ``$6,825,000,000'' and inserting ``$6,798,000,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on September 30, 2029.

  The Acting CHAIR. No further amendment to the bill, as amended, shall 
be in order except those printed in part B of House Report 116-247. 
Each such further amendment may be offered only in the order printed in 
the report, may be offered only by a Member designated in the report, 
shall be considered as read, shall be debatable for the time specified 
in the report equally divided and controlled by the proponent and an 
opponent, shall not

[[Page H8335]]

be subject to amendment, and shall not be subject to a demand for 
division of the question.


                 Amendment No. 1 Offered by Mr. Burgess

  The Acting CHAIR. It is now in order to consider amendment No. 1 
printed in part B of House Report 116-247.
  Mr. BURGESS. Mr. Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 36, after line 8, insert the following:
       (d) Annual Report on Beneficial Ownership Information.--
       (1) Report.--The Secretary of the Treasury shall issue an 
     annual report to the Committee on Financial Services of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate with respect to the 
     beneficial ownership information collected pursuant to 
     section 5333 of title 31, United States Code, that contains--
       (A) aggregate data on the number of beneficial owners per 
     reporting corporation or limited liability company;
       (B) the industries or type of business of each reporting 
     corporation or limited liability company; and
       (C) the locations of the beneficial owners.
       (2) Privacy.--In issuing reports under paragraph (1), the 
     Secretary shall not reveal the identities of beneficial 
     owners or names of the reporting corporations or limited 
     liability companies.

  The Acting CHAIR. Pursuant to House Resolution 646, the gentleman 
from Texas (Mr. Burgess) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. BURGESS. Mr. Chairman, amendment No. 1 to H.R. 2513 requires an 
annual report to Congress of anonymized, aggregate data on the number 
of beneficial owners per reporting corporation or limited liability 
company, the industry of each reporting corporation or limited 
liability company, and the location of the beneficial owners.
  One of the greatest beneficiaries of the crisis on our southern 
border has been the cartels and coyotes. They charge from $6,000 to 
$10,000 to smuggle people into our country who do not have legal 
documentation.
  Despite the danger, these individuals borrow money from normal banks 
in their home country. Their family members put up collateral--their 
farms, their houses--to pay these cartels and coyotes. If the 
individual makes it into the United States, they will send remittances 
home through the same legitimate financial transaction to pay back 
those family loans.
  Throughout this process, the coyotes and cartels are making a 
significant amount of money off of these very vulnerable individuals. 
While many of them likely deal mostly in cash, the possibility exists 
that they are using shell companies to store or move this illicit 
money.
  Providing data to Congress on how many beneficial owners are behind a 
company, the industries of the reporting companies, and the locations 
of the beneficial owners will help identify trends and patterns that 
could aid in the fight to combat money laundering and the financing of 
human trafficking.
  We should not be facilitating coyotes and cartels to take advantage 
of desperate people. Providing this aggregate, anonymized data to 
Congress will provide some transparency on the networks behind the 
illicit financing of human and drug smuggling and other nefarious 
financial activities.
  I urge the support of this amendment, and I reserve the balance of my 
time.
  Ms. WATERS. Mr. Chair, I claim the time in opposition, although I do 
not oppose the amendment.
  The Acting CHAIR. Without objection, the gentlewoman from California 
is recognized for 5 minutes.
  There was no objection.
  Ms. WATERS. Mr. Chairman, the Burgess amendment would require an 
annual report to Congress that examines the aggregated submissions to 
the beneficial ownership database, thus providing a snapshot of the 
size, type, and location of reporting entities.
  I agree that an examination of this data will be helpful to FinCEN as 
it contemplates rulemakings and to Congress should we consider future 
refinements of the law. So I would encourage Members to support the 
amendment.
  I reserve the balance of my time.
  Mr. BURGESS. Mr. Chairman, I urge support of the amendment, and I 
yield back the balance of my time.
  Ms. WATERS. Mr. Chairman, I yield the balance of my time to the 
gentlewoman from New York (Mrs. Carolyn B. Maloney), the sponsor of 
this important legislation.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chair, I support this 
amendment, which would simply require Treasury to submit an annual 
report to Congress with basic statistics on the beneficial ownership 
information that is filed under the bill.
  This is very similar to a recent report that the U.K. conducted, that 
they started collecting beneficial information. The U.K.'s report was 
very helpful because it highlighted that the vast majority of companies 
have only one beneficial owner, which makes compliance with the bill 
extremely easy.
  I think that the data that Treasury would be required to report to 
Congress under this amendment would be helpful in case we decide that 
we need to tweak the bill in the future to address any unforeseeable 
future issues that arise.
  So I want to thank the gentleman from Texas for offering the 
amendment. I think it is a very good idea, and I urge my colleagues to 
support it and to support the underlying bill, which will increase 
national security for our country.
  Ms. WATERS. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Texas (Mr. Burgess).
  The question was taken; and the Acting Chair announced that the ayes 
appeared to have it.
  Ms. WATERS. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Texas will 
be postponed.


            Amendment No. 2 Offered by Mr. Hill of Arkansas

  The Acting CHAIR. It is now in order to consider amendment No. 2 
printed in part B of House Report 116-247.
  Mr. HILL of Arkansas. Mr. Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 17, after line 19, insert the following:
       ``(D) Access procedures.--FinCEN shall establish stringent 
     procedures for the protection and proper use of beneficial 
     ownership information disclosed pursuant to subparagraph (B), 
     including procedures to ensure such information is not being 
     inappropriately accessed or misused by law enforcement 
     agencies.
       ``(E) Report to congress.--FinCEN shall issue an annual 
     report to Congress stating--
       ``(i) the number of times law enforcement agencies and 
     financial institutions have accessed beneficial ownership 
     information pursuant to subparagraph (B);
       ``(ii) the number of times beneficial ownership information 
     reported to FinCEN pursuant to this section was 
     inappropriately accessed, and by whom; and
       ``(iii) the number of times beneficial ownership 
     information was disclosed under subparagraph (B) pursuant to 
     a subpoena.''.

  The Acting CHAIR. Pursuant to House Resolution 646, the gentleman 
from Arkansas (Mr. Hill) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Arkansas.
  Mr. HILL of Arkansas. Mr. Chair, I want to again thank my friend from 
New York for her hard work on crafting this legislation. While we have 
had differences along the way, it is critical that we strengthen our 
national security and AML BSA system and strengthen the transparency of 
beneficial ownership.
  As I have previously discussed, I am concerned with several aspects 
of the bill, and I am offering this amendment which I believe will help 
improve its overall purpose.
  When we heard testimony, a retired FBI agent testified to our 
committee acknowledging that law enforcement wants this data, this new 
database at FinCEN to search, essentially, without a warrant or a 
subpoena.
  My amendment would require the Financial Crimes Enforcement Network 
to develop stringent procedures around the beneficial ownership 
database pertaining to who and how it has been accessed.
  Per the bill's requirements, many businesses will be providing this 
information into a repository that will contain sensitive information. 
Who can access and how they can access it should

[[Page H8336]]

have clearer guidelines and ensure that this information is not being 
inappropriately accessed.
  Additionally, the amendment requires FinCEN to report to Congress, 
annually, the number of times law enforcement, banks, or other parties 
access the database, how many times it was inappropriately accessed, 
and the number of subpoenas obtained to gain access to the database. 
This will ensure that Congress maintains oversight of the database and 
that banks or law enforcement are not abusing this new system.
  Our committee has heard hours of testimony about Federal Government 
data breaches over these years: OPM, the SEC, IRS, CFPB. As such, we 
have to make sure this information is as secure as possible.
  As previously mentioned, this information is highly sensitive and 
should remain extremely confidential to the extent possible. As 
policymakers, we have an obligation to our constituents to ensure that 
we uphold their privacy, and this amendment will better help us achieve 
that goal.
  I urge my colleagues to support this commonsense amendment. It is 
good for businesses, good for our bankers and lawmakers, and, 
ultimately, good for our citizens.
  Mr. Chair, I reserve the balance of my time.
  Ms. WATERS. Mr. Chair, I claim the time in opposition, although I do 
not oppose.
  The Acting CHAIR. Without objection, the gentlewoman from California 
is recognized for 5 minutes.
  There was no objection.
  Ms. WATERS. Mr. Chairman, the Hill amendment requires FinCEN to 
develop protocols governing how law enforcement and others can access 
the beneficial ownership database.
  Today, in order for law enforcement to access FinCEN's Bank Secrecy 
Act database, they must comply with a stringent process requiring 
assessment, training, and review.
  H.R. 2513 also includes protocols governing access to the new 
beneficial ownership database, including creating an audit trail of the 
law enforcement agencies that access the data.
  Mr. Hill's amendment would provide an added measure of protection, 
reinforcing the importance of clear procedures to ensure that such 
information is not inappropriately accessed or misused by law 
enforcement agencies. I will vote in support of this amendment.
  Mr. Chair, I reserve the balance of my time.
  Mr. HILL of Arkansas. Mr. Chairman, may I ask how much time I have 
remaining.
  The Acting CHAIR. The gentleman from Arkansas has 2\1/2\ minutes 
remaining.
  Mr. HILL of Arkansas. I yield such time as he may consume to the 
gentleman from North Carolina (Mr. McHenry).
  Mr. McHENRY. Mr. Chair, I appreciate my colleague for yielding.
  I do believe, notwithstanding the lack of warrant or subpoena, the 
gentleman's amendment gives us greater confidence that the agency and 
law enforcement officials will be using this database more 
appropriately. I think this is a necessary amendment for this bill to 
move forward, though we still have greater issues to contend with.
  I appreciate the gentleman working in such a constructive way and 
bipartisan way.
  Ms. WATERS. Mr. Chairman, I yield the balance of my time to the 
gentlewoman from New York (Mrs. Carolyn B. Maloney), the sponsor of 
this important legislation.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I support this 
amendment, and I would like to thank Mr. Hill for offering it.
  This amendment would require FinCEN to establish stringent procedures 
to ensure the beneficial ownership information isn't being 
inappropriately accessed or misused by law enforcement agencies.
  I believe the underlying bill already addresses these issues--
certainly, it was the intent to protect against unauthorized access and 
misuse of beneficial ownership information--but I am not opposed to 
making that language even more explicit.
  His amendment would also require FinCEN to submit an annual report to 
Congress detailing the number of times beneficial ownership information 
was accessed, either by law enforcement or by financial institutions.

                              {time}  1515

  I think this information would be very helpful because it would tell 
us how useful the information is to both law enforcement and financial 
institutions. So while Mr. Hill and I have had disagreements over this 
bill, I think this amendment is a helpful addition to the bill, and I 
want to thank him for offering it.
  I urge my colleagues to support it and the underlying bill.
  Ms. WATERS. Mr. Chairman, I yield back the balance of my time.
  Mr. HILL of Arkansas. Mr. Chairman, I want to thank my friend from 
New York for her working with me on this amendment. I thank her for 
accepting it. And I want to thank the Chair of the full committee for 
its report.
  I want to just close and emphasize that under the law as drafted 
today there are about 10,000 law-enforcement qualified people that can 
access that database. That is a lot of people, Mr. Chair, that have 
access to this database that we are concerned about in making sure that 
it is maintained in a very confidential manner.
  I appreciate the consideration of the amendment, and I appreciate its 
adoption. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Arkansas (Mr. Hill).
  The amendment was agreed to.


            Amendment No. 3 Offered by Mr. Brown of Maryland

  The Acting CHAIR. It is now in order to consider amendment No. 3 
printed in part B of House Report 116-247.
  Mr. BROWN of Maryland. Mr. Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 16, line 8, after ``training,'' insert the following: 
     ``and refresher training no less than every two years,''.
  The Acting CHAIR. Pursuant to House Resolution 646, the gentleman 
from Maryland (Mr. Brown) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Maryland.
  Mr. BROWN of Maryland. Mr. Chair, I yield myself such time as I may 
consume.
  I want to thank my colleague from California, the chairwoman of the 
committee, Chairwoman Waters, for her leadership on the Financial 
Services Committee. And I want to recognize the hard work of my 
colleague and friend from New York, Chairwoman Carolyn B. Maloney, on 
the underlying bill. I also want to thank you, Representative Maloney, 
for inviting me last Congress to visit several European countries to 
explore and better understand how those countries address the problems 
that this bill seeks to address.
  Currently, no state requires companies to provide the identities of 
their true beneficial owners. This lack of oversight and transparency 
makes it easy for criminals, dictators, and kleptocrats to launder 
money, hide their illicit activities, and invade law enforcement 
through anonymous shell companies.
  These anonymous shell companies can be used for everything from 
funding terrorist organizations, supporting human traffickers, and 
helping corrupt foreign leaders evade sanctions and threaten our 
national security. These so-called companies have no employees, no 
physical offices but are established simply to access our banking 
system.
  The 2016 Panama Papers leak exposed just how powerful and corrupt 
these anonymous shell companies are. And the United States is the only 
advanced economy in the world that doesn't already require this 
disclosure. To combat this, this bill requires corporations to disclose 
their beneficial owners at the time the company is formed. This is a 
commonsense requirement, considering you often need more documentation 
to get a library card than to start a company or an LLC.
  This bill provides much needed transparency without being burdensome 
on legitimate businesses. The bill also protects the privacy of 
Americans by ensuring law enforcement officials at the State and 
Federal level with access

[[Page H8337]]

to this new information are properly trained, have an existing 
investigatory basis before searching, and maintain an audit log.
  Mr. Chair, my amendment strengthens and builds upon these 
protections. It requires law enforcement officials tasked with handling 
a beneficial owner's personal information to go through retraining at a 
minimum of every 2 years. This will ensure they are keeping up with the 
latest rules, systems, and processes and will lower the risk of misuse 
or improper disclosure.
  The retraining is critical to ensuring that our law enforcement 
officials, at all levels of government, are undertaking best practices 
when handling sensitive information during their investigations. 
Together we can finally tackle the issues surrounding shell companies 
and their opaque beneficial ownership structure and give law 
enforcement the tools they need to track the money that threatens our 
national security.
  I strongly encourage my colleagues to support the underlying bill and 
my amendment. I yield back the balance of my time
  Mr. McHENRY. Mr. Chair, I claim the time in opposition to the 
amendment, even though I am not opposed to it.
  The Acting CHAIR. Without objection, the gentleman from North 
Carolina is recognized for 5 minutes.
  There was no objection.
  Mr. McHENRY. The gentleman's amendment would ensure that law 
enforcement professionals who access the beneficial ownership's 
database understand the importance of protecting the privacy of 
beneficial owners. I think this is a necessary and proper addition to 
the bill. I think this highlights the fact that we don't have the basic 
due process rights or constitutional protections that we have under the 
FISA court or under the Patriot Act.
  The Wall Street Journal recently reported that the FISA ``court 
concluded that in at least a handful of cases, the FBI had been 
improperly searching a database of raw intelligence for information on 
Americans--raising concerns about oversight of the program.''
  This refresher training is an important step to ensure individuals 
who have access to highly sensitive and private information of millions 
of Americans are properly trained. Authorized users should only be able 
to access information for officially sanctioned uses.
  I thank the gentleman for offering this amendment. And while this 
amendment is not a sufficient replacement for a warrant or subpoena, it 
recognizes that law enforcement must know how to handle personal 
information and the need to protect that information. I urge its 
adoption.
  Mr. Chair, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Maryland (Mr. Brown).
  The amendment was agreed to.


            Amendment No. 4 Offered by Mr. Levin of Michigan

  The Acting CHAIR. It is now in order to consider amendment No. 4 
printed in part B of House Report 116-247.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chair, I rise as the 
designee of the gentleman from Michigan (Mr. Levin) to offer amendment 
No. 4.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 17, after line 19, insert the following:
       ``(D) Disclosure of non-pii data.--Notwithstanding 
     subparagraph (B), FinCEN may issue guidance and otherwise 
     make materials available to financial institutions and the 
     public using beneficial ownership information reported 
     pursuant to this section if such information is aggregated in 
     a manner that removes all personally identifiable 
     information. For purposes of this subparagraph, `personally 
     identifiable information' includes information that would 
     allow for the identification of a particular corporation or 
     limited liability company.''.

  The Acting CHAIR. Pursuant to House Resolution 646, the gentlewoman 
from New York (Mrs. Carolyn B. Maloney) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from New York.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, this amendment is 
a clarifying amendment. It would clarify that FinCEN can actually use 
the beneficial ownership information it is collecting under the bill. 
This was always our intent, but we were concerned that because FinCEN 
technically isn't a law enforcement agency, their authority to use the 
information under the bill might be unclear.
  Mr. Levin's amendment fixes this by explicitly stating that FinCEN 
can use the information to issue public advisories and to share the 
information with financial institutions in order to improve compliance 
with their know-your-customer rules. However, FinCEN would only be able 
to disclose the information in an aggregated format so that it protects 
the disclosure of personally identifiable information.
  I want to thank Mr. Levin for working closely with my office and with 
the committee on this amendment. I urge my colleagues to support the 
amendment and the underlying bill, and I reserve the balance of my 
time.
  Mr. McHENRY. Mr. Chair, I rise in opposition to the amendment.
  The Acting CHAIR. The Gentleman from North Carolina is recognized for 
5 minutes.
  Mr. McHENRY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this amendment exposes the very problem I have with 
this new governmental database. We put enormous protections into the 
collection of foreigners into our database and intelligence bureaus. We 
have granted rights to special courts and that is for information that 
is less specific than the information that will be a part of this 
beneficial owner or ownership database of America's small businesses. 
The amendment here says that basically you redact the specific 
personally identifiable information of the beneficial owners of the 
small business.
  Now, it doesn't have provision for small areas. Let's say that you 
are from my hometown or you are from the town I lived in for nearly a 
decade, a small town that only has a handful of businesses, and so, you 
aggregate the data, but you can still expose people to enormous amounts 
of unwanted targeting.
  It also exposes to me the additional issues that we have with another 
government database, that a future Congress could then take this data 
and make it public or some congressional investigator could just want 
this for partisan political reasons and try to seek it out of the 
executive branch.
  This amendment highlights to me the grave concerns I have with a mass 
collection of this type of data, no matter how justified the anecdotes 
are from law enforcement.
  The amendment specifically allows FinCEN to ``issue guidance and 
otherwise make materials available to financial institutions and the 
public using beneficial ownership information.'' That is deeply 
problematic, and I do not believe appropriate protections are in place 
for an amendment like this to be made reasonable. I think if you have 
civil liberties concerns, I would say that this amendment highlights 
the very civil liberties concerns you would have with the new Federal 
Government database.
  I would like to ask the bill's sponsor, though he is not here, about 
the intent of creating this type of information, but he is not here. I 
don't think this is a wise amendment. I think it should be rejected for 
a number of different counts. I would urge my colleagues to vote 
``no,'' and I reserve the balance of my time.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I have no further 
speakers, and I yield back the balance of my time.
  Mr. McHENRY. Mr. Chairman, I yield myself the balance of my time. I 
include in the Record a letter in opposition to this very amendment 
from the National Federation of Independent Business opposing this 
amendment.

                              [From NFIB]

 House Makes Last Minute Bait-and-Switch on Corporate Transparency Act

       In advance of today's vote, an amendment filed last night 
     shows the true motivations of those pushing the Corporate 
     Transparency Act of 2019 (H.R. 2513).
       Despite months of rhetoric about protecting the privacy of 
     small business owners, this last-minute amendment would allow 
     the Treasury Department's Financial Crimes Enforcement 
     Network to make public the individual names, addresses, birth 
     dates, and even the driver's license numbers of small 
     business owners. This is a complete reversal of what 
     promoters of this bill have been saying over the last several 
     months.
       Purportedly about national security, in reality, this bill 
     shifts a burden from big

[[Page H8338]]

     banks, something they said today is merely ``a client pain 
     point,'' to small businesses who simply cannot absorb an 
     additional 131.7 million hours of paperwork over the first 10 
     years at a cost of $5.7 billion. And, with the last-minute 
     amendment, it allows for the creation a public registry.
       ``Supporters of this bill have revealed their cards 
     today,'' said Brad Close, NFIB's Senior Vice President, 
     Public Policy. ``This amendment confirms one of small 
     business owners' greatest fears--that the true intention of 
     those pushing this bill is to establish a public registry of 
     every small business owner--something that can be used to 
     shame law-abiding small business owners for free speech 
     activities or political purposes. This is a serious breach of 
     the privacy and first amendment rights, and we urge members 
     of the United States House of Representatives to defeat this 
     amendment today.''
       The amendment filed last night would prohibit FinCEN from 
     making public the names of specific businesses but would not 
     prohibit FinCEN from listing the names of business owners or 
     the personally identifiable information of business owners 
     such as home addresses.
       This morning, The Hill published an op-ed by NFIB President 
     and CEO Juanita D. Duggan on the significant risks and 
     penalties the Corporate Transparency Act imposes on small 
     business owners. This followed on the heels of an 
     announcement by NFIB of a coalition of 38 business groups, 
     including NFIB, who joined together in strong oppositior of 
     this legislation.
       To read more on NFIB's efforts to protect small business 
     privacy, visit https://nfib.com/protectprivacy.
  Mr. McHENRY. Mr. Chair, again, I would highlight that the civil 
liberties concerns here are enormous. When you do minimal redaction of 
specific personally identifiable information, you could still expose 
data in certain jurisdictions of small business owners in a way that I 
don't think is warranted, nor do I think the bill's sponsor would like 
to seek, and I think this is deeply problematic.
  I would urge my colleagues to look at the contents of this amendment 
and then to think through the concerns that they would have if it were 
their information exposed in a minimally redacted way. I don't think 
they would be quite comfortable with it.
  Now, think of asking every small business owner in your district to 
submit this information to another Federal database and then explain to 
them that they will minimally redact their information, maybe not their 
name, maybe their address, right, and then otherwise the explanation of 
their business would be exposed to the public.
  I don't think it is a smart way to go here. I don't think this is the 
way we should be legislating. I do think it outlines the underlying 
concerns I have with this type of database, in not being required to 
get a subpoena in order to access it. And then an amendment that says 
that we are going to basically, I don't know, outline in Cherryville, 
North Carolina, every small business ownership structure in our little 
town or in Denver, North Carolina, which is an unincorporated area that 
I live in, likewise, taking a small population with a few small 
businesses and exposing the ownership structure of small businesses.
  I don't think this is a smart amendment. I don't think it is what we 
should be intending as Members of Congress, and I think both folks on 
the left and the right and in the middle can look at this and think 
this is not the way to go. So I urge you to vote against this 
amendment, and I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentlewoman from New York (Mrs. Carolyn B. Maloney).
  The question was taken; and the Acting Chair announced that the ayes 
appeared to have it.
  Mr. McHENRY. Mr. Chair, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from New York 
will be postponed.

                              {time}  1530


            Amendment No. 5 Offered by Mr. Davidson of Ohio

  The Acting CHAIR. It is now in order to consider amendment No. 5 
printed in part B of House Report 116-247.
  Mr. DAVIDSON of Ohio. Mr. Chairman, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Strike sections 1 through 5 and insert the following:

     SECTION 1. TERMINATION OF CDD RULE.

       The final rule of the Department of the Treasury titled 
     ``Customer Due Diligence Requirements for Financial 
     Institutions'' (published May 11, 2016; 81 Fed. Reg. 29397) 
     shall have no force or effect.

     SEC. 2. FINCEN STUDY.

       (a) Study.--FinCEN shall carry out a study that shall 
     include--
       (1) a review of all existing data collected by the 
     Department of the Treasury (including the Internal Revenue 
     Service), by State Secretaries of State, by financial 
     institutions due to current statutory and regulatory mandates 
     (excluding the CDD rule), or by other Federal Government 
     entities, that in whole or in part would allow FinCEN to 
     discern the beneficial owners of companies operating in the 
     United States financial system;
       (2) recommendations for the sharing of information 
     described under paragraph (1) with FinCEN along with proposed 
     safeguards for protecting personally identifiable information 
     from unauthorized access, including by Federal intelligence 
     and law enforcement officials, as well as internal risk 
     control mechanisms for prevention of unauthorized access 
     through a cyber breach; and
       (3) an estimation of the cost of the compliance burden for 
     the CDD rule.
       (b) Report.--Not later than September 30, 2019, FinCEN 
     shall issue a report to the Congress containing all findings 
     and determinations made in carrying out the study required 
     under subsection (a).
       (c) Definitions.--For purposes of this section:
       (1) CDD rule.--The term ``CDD rule'' means the final rule 
     of the Department of the Treasury described under section 1.
       (2) Financial institution.--The term ``financial 
     institution'' has the meaning given that tem under section 
     5312 of title 31, United States Code.
       (3) FinCEN.--The term ``FinCEN'' means the Financial Crimes 
     Enforcement Network.

  The Acting CHAIR. Pursuant to House Resolution 646, the gentleman 
from Ohio (Mr. Davidson) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. DAVIDSON of Ohio. Mr. Chairman, today, I offer an amendment to 
address the serious flaws within the underlying bill.
  Under the guise of tracking money laundering, this bill imposes a 
crushing paperwork burden squarely targeted at small business owners. 
It creates a massive new Federal Government database containing the 
addresses of innocent American citizens and will do nothing to track 
down criminals.
  Under the Obama administration, FinCEN issued regulations that banks 
collect the beneficial ownership information of these businesses. The 
regulations have proven so confusing, burdensome, and unnecessary that 
banks have sought relief from these regulations.
  This bill effectively shifts the reporting burden onto mom-and-pop 
businesses that have never even heard of FinCEN.
  The bill adopts a different definition of beneficial ownership that 
is even more confusing and vague than the one used by Treasury's rules, 
which has already puzzled regulators and banks for years.
  According to the Congressional Budget Office, the bill would generate 
25 to 30 million new filings every year. Failure to comply could result 
in jail time up to 3 years, thousands of dollars in fines, compromise 
of private information, and more.
  The bill also raises serious privacy concerns by creating yet another 
database that is effectively the first-of-its-kind Federal registry of 
small businesses and small business ownership. It contains no subpoena 
or warrant-type restrictions for Federal law enforcement to access.
  In the era of naming and shaming of companies and owners for 
political purposes, and findings that Federal law enforcement have 
abused their existing authorities in accessing section 702 FISA data, 
this bill should give serious pause about how we as Members of Congress 
protect civil liberties for American citizens.
  My amendment would simply strike the underlying bill's burdensome 
mandate, nullify the Obama-era regulations on banks, and instead 
require FinCEN to go back to the drawing board by reviewing how already 
existing Federal datasets from banking know-your-customer and anti-
money laundering rules can assist law enforcement in determining the 
beneficial owners of businesses.
  As my colleague French Hill has offered, the IRS already contains all 
of this information.

[[Page H8339]]

  Lastly, I would say that if we are going to criminalize private 
ownership of businesses, why not do that in the beginning rather than 
criminalize failure to report to an agency that doesn't exist.
  All of these questions have failed to be addressed directly by the 
executive branch, and they are blown through with the way this bill 
addresses the problem.
  This type of information already exists. We do not need another 
Federal database prone to be abused or a crushing mandate that will 
harm law-abiding Americans and be ignored by criminals.
  Mr. Chair, I urge support for my amendment and opposition to the bill 
without it.
  Mr. Chair, I reserve the balance of my time.
  Ms. WATERS. Mr. Chair, I claim the time in opposition to the 
amendment.
  The Acting CHAIR. The gentlewoman from California is recognized for 5 
minutes.
  Ms. WATERS. Mr. Chair, I firmly oppose the Davidson amendment because 
it would gut the bill.
  After years of working to ensure that criminals, terrorists, and 
enemies of the United States can no longer use loopholes to cloak their 
dangerous acts from law enforcement, this amendment heedlessly tries to 
jettison this significant layer of defense.
  If the amendment is adopted, there would be no requirement to share 
the identities of the beneficial owners of corporations and LLCs that 
currently do not make such disclosures.
  If adopted, there would be no ability for law enforcement to get 
information that it needs to unmask the wrongdoers who abuse State laws 
to hide their global criminal activities.
  To make things worse, the amendment would repeal the FinCEN customer 
due diligence, or CDD, rule, which currently requires banks to identify 
and verify the beneficial ownership of corporate customers. It prevents 
criminals, kleptocrats, and others looking to hide ill-gotten proceeds 
from accessing the financial system anonymously.
  The Director of FinCEN said that the CDD rule is ``but one critical 
step toward closing this national security gap. The second critical 
step . . . is collecting beneficial ownership information at the 
corporate formation stage.''
  An outright and immediate repeal of this rule endangers the financial 
system by leaving a dangerous new gap in information about bank 
customers while the implementation of H.R. 2513 gears up.
  The safer approach, and one supported by the financial institutions, 
is to require the Treasury to remove identified redundancies after the 
database becomes operational. This is precisely what H.R. 2513 already 
does.
  Mr. Chairman, the AFL-CIO, Oxfam, the FACT Coalition, FBI, Treasury, 
DOJ, FinCEN, as well as the Fraternal Order of Police, the Federal Law 
Enforcement Officers Association, and most State attorneys general have 
urged Congress to pass H.R. 2513 to develop a Federal beneficial 
ownership database.
  The Davidson amendment would undermine this effort before it can 
begin.
  Mr. Chair, I urge my colleagues to vote ``no'' on this amendment, and 
I reserve the balance of my time.
  Mr. DAVIDSON of Ohio. Mr. Chairman, may I inquire as to the balance 
of my time.
  The Acting CHAIR. The gentleman from Ohio has 2 minutes remaining.
  Mr. McHENRY. Will the gentleman yield?
  Mr. DAVIDSON of Ohio. I yield to the gentleman from North Carolina 
(Mr. McHenry).
  Mr. McHENRY. Mr. Chair, I appreciate my colleague for yielding.
  I think this highlights the very fact that this bill provides no 
regulatory relief for financial institutions to collect information 
under the customer due diligence rule. It highlights the nature of this 
obligation, especially on small businesses, and the paperwork burden on 
small businesses and, on top of that, the paperwork burden on financial 
institutions to collect enormous amounts of information.
  The very nature of this amendment highlights the missing elements of 
the underlying bill.
  Mr. Chair, I appreciate my colleague for yielding.
  Mr. DAVIDSON of Ohio. Mr. Chairman, I yield myself the balance of my 
time to close.
  In closing, I would simply say that this would presume that criminals 
are somehow going to cease their criminal activity, all because they 
have to file a report.
  The reality is this is going to criminalize business ownership, 
violate the civil liberties of business owners across America, and make 
them vulnerable to further abuse by criminals.
  Mr. Chair, I urge support for this amendment and opposition to the 
underlying bill without its adoption.
  Mr. Chair, I yield back the balance of my time.
  Ms. WATERS. Mr. Chair, I yield the balance of my time to the 
gentlewoman from New York (Mrs. Carolyn B. Maloney), the sponsor of 
this important legislation.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Chair, I thank the 
chairwoman for yielding.
  Mr. Chair, I strongly oppose this amendment, which would completely 
gut the bill and would dramatically weaken our national security.
  Right now, the only protection we have in place against bad actors 
using anonymous shell companies to launder their money through the U.S. 
is FinCEN's customer due diligence rule, which requires financial 
institutions to find out the beneficial owners of the corporations and 
the entities that open accounts with them.
  The FinCEN rule, which is very important, is still only half a 
measure. When FinCEN passed the rule, they explicitly said that 
Congress still needed to pass the bill that is before us today.
  Mr. Davidson's amendment would not only delete the underlying bill 
but would also repeal the FinCEN rule. In other words, it is worse than 
the status quo and practically invites criminals and money launderers 
to use the U.S. financial system.
  Mr. Chair, this is a deeply irresponsible amendment, and I strongly 
urge my colleagues to oppose it and to support the underlying bill.
  Ms. WATERS. Mr. Chair, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Davidson).
  The question was taken; and the Acting Chair announced that the noes 
appeared to have it.
  Ms. WATERS. Mr. Chair, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Ohio will be 
postponed.
  Ms. WATERS. Mr. Chair, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Pappas) having assumed the chair, Mr. Cuellar, Acting Chair of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 2513) 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, had come to no resolution 
thereon.

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