[House Report 116-60]
[From the U.S. Government Publishing Office]


116th Congress    }                                           {   Report
                           HOUSE OF REPRESENTATIVES
 1st Session      }                                           {   116-60

======================================================================



 
                 KLEPTOCRACY ASSET RECOVERY REWARDS ACT

                                _______
                                

  May 14, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Ms. Maxine Waters of California, from the Committee on Financial 
                   Services, submitted the following

                              R E P O R T

                        [To accompany H.R. 389]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 389) to authorize the Secretary of the Treasury 
to pay rewards under an asset recovery rewards program to help 
identify and recover stolen assets linked to foreign government 
corruption and the proceeds of such corruption hidden behind 
complex financial structures in the United States and abroad, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     5
Section-by-Section Analysis......................................     6
Hearings.........................................................     7
Committee Consideration..........................................     8
Committee Votes..................................................     8
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................     8
Statement of Performance Goals and Objectives....................     8
New Budget Authority and CBO Cost Estimate.......................     8
Committee Cost Estimate..........................................    10
Unfunded Mandate Statement.......................................    10
Advisory Committee...............................................    10
Application of Law to the Legislative Branch.....................    10
Earmark Statement................................................    10
Duplication of Federal Programs..................................    10
Changes to Existing Law..........................................    11

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  The Act may be cited as the ``Kleptocracy Asset Recovery Rewards 
Act''.

SEC. 2. FINDINGS; SENSE OF CONGRESS.

  (a) Findings.--Congress finds the following:
          (1) The Stolen Asset Recovery Initiative (StAR), a World Bank 
        and United Nations anti-money-laundering effort, estimates that 
        between $20 billion to $40 billion has been lost to developing 
        countries annually through corruption.
          (2) In 2014, more than $480 million in corruption proceeds 
        hidden in bank accounts around the world by former Nigerian 
        dictator Sani Abacha and his co-conspirators was forfeited 
        through efforts by the Department of Justice.
          (3) In 2010, the Department of Justice established the 
        Kleptocracy Asset Recovery Initiative, to work in partnership 
        with Federal law enforcement agencies to forfeit the proceeds 
        of foreign official corruption and, where appropriate, return 
        those proceeds to benefit the people harmed by these acts of 
        corruption and abuse of office.
          (4) Of the $20 billion to $40 billion lost by developing 
        countries annually through corruption, only about $5 billion 
        has been repatriated in the last 15 years.
          (5) Governments weakened by corruption and loss of assets due 
        to corruption have fewer resources to devote to the fight 
        against terrorism and fewer resources to devote to building 
        strong financial, law enforcement, and judicial institutions to 
        aid in the fight against the financing of terrorism.
          (6) The United States has a number of effective programs to 
        reward individuals who provide valuable information that assist 
        in the identification, arrest, and conviction of criminal 
        actors and their associates, as well as seizure and forfeiture 
        of illicitly derived assets and the proceeds of criminal 
        activity.
          (7) The Internal Revenue Service has the Whistleblower 
        Program, which pays awards to individuals who provide specific 
        and credible information to the IRS if the information results 
        in the collection of taxes, penalties, interest or other 
        amounts from noncompliant taxpayers.
          (8) The Department of State administers rewards programs on 
        international terrorism, illegal narcotics, and transnational 
        organized crime with the goal of bringing perpetrators to 
        justice.
          (9) None of these existing rewards programs specifically 
        provide monetary incentives for identifying and recovering 
        stolen assets linked solely to foreign government corruption, 
        as opposed to criminal prosecutions or civil or criminal 
        forfeitures.
          (10) The recovery of stolen assets linked to foreign 
        government corruption and the proceeds of such corruption may 
        not always involve a BSA violation or lead to a forfeiture 
        action. In such cases there would be no ability to pay rewards 
        under existing Treasury Department authorities.
          (11) Foreign government corruption can take many forms but 
        typically entails government officials stealing, 
        misappropriating, or illegally diverting assets and funds from 
        their own government treasuries to enrich their personal wealth 
        directly through embezzlement or bribes to allow government 
        resources to be expended in ways that are not transparent and 
        may not either be necessary or be the result of open 
        competition. Corruption also includes situations where public 
        officials take bribes to allow government resources to be 
        expended in ways which are not transparent and may not be 
        necessary or the result of open competition. These corrupt 
        officials often use the United States and international 
        financial system to hide their stolen assets and the proceeds 
        of corruption.
          (12) The individuals who come forward to expose foreign 
        governmental corruption and kleptocracy often do so at great 
        risk to their own safety and that of their immediate family 
        members and face retaliation from persons who exercise foreign 
        political or governmental power. Monetary rewards can provide a 
        necessary incentive to expose such corruption and provide a 
        financial means to provide for their well-being and avoid 
        retribution.
  (b) Sense of Congress.--It is the sense of Congress that a Department 
of the Treasury stolen asset recovery rewards program to help identify 
and recover stolen assets linked to foreign government corruption and 
the proceeds of such corruption hidden behind complex financial 
structures is needed in order to--
          (1) intensify the global fight against corruption; and
          (2) serve United States efforts to identify and recover such 
        stolen assets, forfeit proceeds of such corruption, and, where 
        appropriate and feasible, return the stolen assets or proceeds 
        thereof to the country harmed by the acts of corruption.

SEC. 3. IN GENERAL.

  (a) Department of the Treasury Kleptocracy Asset Recovery Rewards 
Program.--Chapter 97 of title 31, United States Code, is amended by 
adding at the end the following:

``Sec. 9706. Department of the Treasury Kleptocracy Asset Recovery 
                    Rewards Program

  ``(a) Establishment.--
          ``(1) In general.--There is established in the Department of 
        the Treasury a program to be known as the `Kleptocracy Asset 
        Recovery Rewards Program' for the payment of rewards to carry 
        out the purposes of this section.
          ``(2) Purpose.--The rewards program shall be designed to 
        support U.S. Government programs and investigations aimed at 
        restraining, seizing, forfeiting, or repatriating stolen assets 
        linked to foreign government corruption and the proceeds of 
        such corruption.
          ``(3) Implementation.--The rewards program shall be 
        administered by, and at the sole discretion of, the Secretary 
        of the Treasury, in consultation, as appropriate, with the 
        Secretary of State, the Attorney General, and the heads of such 
        other departments and agencies as the Secretary may find 
        appropriate.
  ``(b) Rewards Authorized.--In the sole discretion of the Secretary 
and in consultation, as appropriate, with the heads of other relevant 
Federal departments or agencies, the Secretary may pay a reward to any 
individual, or to any nonprofit humanitarian organization designated by 
such individual, if that individual furnishes information leading to--
          ``(1) the restraining or seizure of stolen assets in an 
        account at a U.S. financial institution (including a U.S. 
        branch of a foreign financial institution), that come within 
        the United States, or that come within the possession or 
        control of any United States person;
          ``(2) the forfeiture of stolen assets in an account at a U.S. 
        financial institution (including a U.S. branch of a foreign 
        financial institution), that come within the United States, or 
        that come within the possession or control of any United States 
        person; or
          ``(3) where appropriate, the repatriation of stolen assets in 
        an account at a U.S. financial institution (including a U.S. 
        branch of a foreign financial institution), that come within 
        the United States, or that come within the possession or 
        control of any United States person.
  ``(c) Coordination.--
          ``(1) Procedures.--To ensure that the payment of rewards 
        pursuant to this section does not duplicate or interfere with 
        any other payment authorized by the Department of Justice or 
        other Federal law enforcement agencies for the obtaining of 
        information or other evidence, the Secretary of the Treasury, 
        in consultation with the Secretary of State, the Attorney 
        General, and the heads of such other agencies as the Secretary 
        may find appropriate, shall establish procedures for the 
        offering, administration, and payment of rewards under this 
        section, including procedures for--
                  ``(A) identifying actions with respect to which 
                rewards will be offered;
                  ``(B) the receipt and analysis of data; and
                  ``(C) the payment of rewards and approval of such 
                payments.
          ``(2) Prior approval of the attorney general required.--
        Before making a reward under this section in a matter over 
        which there is Federal criminal jurisdiction, the Secretary of 
        the Treasury shall obtain the written concurrence of the 
        Attorney General.
  ``(d) Payment of Rewards.--
          ``(1) Authorization of appropriations.--For the purpose of 
        paying rewards pursuant to this section, there is authorized to 
        be appropriated $450,000 for fiscal year 2020.
          ``(2) Limitation on annual payments.--Except as provided 
        under paragraph (3), the total amount of rewards paid pursuant 
        to this section may not exceed $25,000,000 in any calendar 
        year.
          ``(3) Presidential authority.--The President may waive the 
        limitation under paragraph (2) with respect to a calendar year 
        if the President provides written notice of such waiver to the 
        appropriate committees of the Congress at least 30 days before 
        any payment in excess of such limitation is made pursuant to 
        this section.
          ``(4) Payment from stolen asset amounts.--In paying any 
        reward under this section with respect to information furnished 
        by an individual, the Secretary shall, to the extent possible, 
        make such payments using the stolen assets recovered based on 
        such information before using appropriated funds authorized 
        under paragraph (1).
  ``(e) Limitations.--
          ``(1) Submission of information.--No award may be made under 
        this section based on information submitted to the Secretary 
        unless such information is submitted under penalty of perjury.
          ``(2) Maximum amount.--No reward paid under this section may 
        exceed $5,000,000, unless the Secretary--
                  ``(A) personally authorizes such greater amount in 
                writing;
                  ``(B) determines that offer or payment of a reward of 
                a greater amount is necessary due to the exceptional 
                nature of the case; and
                  ``(C) notifies the appropriate committees of the 
                Congress of such determination.
          ``(3) Approval.--
                  ``(A) In general.--No reward amount may be paid under 
                this section without the written approval of the 
                Secretary.
                  ``(B) Delegation.--The Secretary may not delegate the 
                approval required under subparagraph (A) to anyone 
                other than an Under Secretary of the Department of the 
                Treasury.
          ``(4) Protection measures.--If the Secretary determines that 
        the identity of the recipient of a reward or of the members of 
        the recipient's immediate family must be protected, the 
        Secretary shall take such measures in connection with the 
        payment of the reward as the Secretary considers necessary to 
        effect such protection.
          ``(5) Forms of reward payment.--The Secretary may make a 
        reward under this section in the form of a monetary payment.
  ``(f) Ineligibility, Reduction in, or Denial of Reward.--
          ``(1) Officer and employees.--An officer or employee of any 
        entity of Federal, State, or local government or of a foreign 
        government who, while in the performance of official duties, 
        furnishes information described under subsection (b) shall not 
        be eligible for a reward under this section.
          ``(2) Participating individuals.--If the claim for a reward 
        is brought by an individual who the Secretary has a reasonable 
        basis to believe knowingly planned, initiated, directly 
        participated in, or facilitated the actions that led to assets 
        of a foreign state or governmental entity being stolen, 
        misappropriated, or illegally diverted or to the payment of 
        bribes or other foreign governmental corruption, the Secretary 
        shall appropriately reduce, and may deny, such award. If such 
        individual is convicted of criminal conduct arising from the 
        role described in the preceding sentence, the Secretary shall 
        deny or may seek to recover any reward, as the case may be.
  ``(g) Report.--
          ``(1) In general.--Within 180 days of the enactment of this 
        section, and annually thereafter for 5 years, the Secretary 
        shall issue a report to the appropriate committees of the 
        Congress--
                  ``(A) detailing to the greatest extent possible the 
                amount, location, and ownership or beneficial ownership 
                of any stolen assets that, on or after the date of the 
                enactment of this section, come within the United 
                States or that come within the possession or control of 
                any United States person;
                  ``(B) discussing efforts being undertaken to identify 
                more such stolen assets and their owners or beneficial 
                owners; and
                  ``(C) including a discussion of the interactions of 
                the Department of the Treasury with the international 
                financial institutions (as defined in section 
                1701(c)(2) of the International Financial Institutions 
                Act) to identify the amount, location, and ownership, 
                or beneficial ownership, of stolen assets held in 
                financial institutions outside the United States.
          ``(2) Exception for ongoing investigations.--The report 
        issued under paragraph (1) shall not include information 
        related to ongoing investigations.
  ``(h) Definitions.--For purposes of this section:
          ``(1) Appropriate committees of the congress.--The term 
        `appropriate committees of the Congress' means the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate.
          ``(2) Financial asset.--The term `financial asset' means any 
        funds, investments, or ownership interests, as defined by the 
        Secretary, that on or after the date of the enactment of this 
        section come within the United States or that come within the 
        possession or control of any United States person.
          ``(3) Foreign government corruption.--The term `foreign 
        government corruption' includes bribery of a foreign public 
        official, or the misappropriation, theft, or embezzlement of 
        public funds or property by or for the benefit of a foreign 
        public official.
          ``(4) Foreign public official.--The term `foreign public 
        official' includes any person who occupies a public office by 
        virtue of having been elected, appointed, or employed, 
        including any military, civilian, special, honorary, temporary, 
        or uncompensated official.
          ``(5) Immediate family member.--The term `immediate family 
        member', with respect to an individual, has the meaning given 
        the term `member of the immediate family' under section 36(k) 
        of the State Department Basic Authorities Act of 1956 (22 
        U.S.C. 2708(k)).
          ``(6) Rewards program.--The term `rewards program' means the 
        program established in subsection (a)(1) of this section.
          ``(7) Secretary.--The term `Secretary' means the Secretary of 
        the Treasury.
          ``(8) Stolen assets.--The term `stolen assets' means 
        financial assets within the jurisdiction of the United States, 
        constituting, derived from, or traceable to, any proceeds 
        obtained directly or indirectly from foreign government 
        corruption.''.
  (b) Report on Disposition of Recovered Assets.--Within 360 days of 
the enactment of this Act, the Secretary of the Treasury shall issue a 
report to the appropriate committees of Congress (as defined under 
section 9706(h) of title 31, United States Code) describing policy 
choices and recommendations for disposition of stolen assets recovered 
pursuant to section 9706 of title 31, United States Code.
  (c) Table of Contents Amendment.--The table of contents for chapter 
97 of title 31, United States Code, is amended by adding at the end the 
following:

``9706. Department of the Treasury Kleptocracy Asset Recovery Rewards 
Program.''.

                          Purpose and Summary

    H.R. 389, the Kleptocracy Asset Recovery Rewards Act, would 
establish a program within the U.S. Department of the Treasury 
to provide monetary incentives to individuals furnishing 
information leading to the restraining, seizure, forfeiture, or 
repatriation of stolen assets linked to foreign government 
corruption. H.R. 389 also provides for the administration of 
the program, including reward payment and eligibility.

                  Background and Need for Legislation

    According to World Bank data, more than $1 trillion in 
bribes are paid worldwide every year.\1\ This corruption has a 
significant impact on developing countries, with estimates as 
high as $40 billion per year stolen by public officials.\2\ 
Addressing such corruption and its cross-border impact has 
become an increasing focus of the international community.
---------------------------------------------------------------------------
    \1\Global Cost of Corruption at Least 5% of World GDP. United 
Nations, September 2018. https://www.un.org/press/en/2018/
sc13493.doc.htm.
    \2\Few and Far: The Hard Facts on Stolen Asset Recovery, United 
Nations Office on Drugs and Crime, The World Bank, September 2014.
---------------------------------------------------------------------------
    The United Nations Convention Against Corruption (``the 
Convention''),\3\ ratified by the United States on October 30, 
2006, introduces a comprehensive set of standards that its 140 
signatories and 186 Parties apply to strengthen domestic and 
international anticorruption regimes. Significantly, this 
multilateral agreement includes a chapter on asset recovery, 
aimed at completing the legal steps necessary to turn 
identified proceeds of crime into confiscated property and 
ultimately into assets that are recovered and returned to prior 
legitimate owners. Member states maintain confiscated property 
as custodians for those from whom the property was stolen. 
Further, the Convention is bolstered by bilateral and 
multilateral agreements to facilitate the recovery process, 
whether through Mutual Legal Assistance Treaties or other 
agreements made on a case-by-case basis pursuant to the of the 
Convention. Within the bounds of this anticorruption regime, 
countries that are part of the regimes (both the countries 
requesting and providing requested stolen asset recovery 
assistance) can determine the disposition of the recovered 
property and the parameters for allowing the government that is 
the custodian of the confiscated stolen property to keep a 
portion of the proceeds for administrative costs and other 
purposes.
---------------------------------------------------------------------------
    \3\UNGA Res. A/58/422 (Oct. 31, 2003), entered into force Dec. 14, 
2005.
---------------------------------------------------------------------------
    To assist in recovering these proceeds of crime for victims 
and to punish the bad acts of the criminals, H.R. 389 
establishes a rewards program to incentivize individuals to 
notify the U.S. government of stolen assets linked to foreign 
corruption that are found in the U.S. or within U.S. financial 
institutions, or held or controlled by U.S. persons. Rewards 
are paid with funds from the recovered stolen assets.
    On March 13, 2019, Mr. Dennis Lormel, a retired FBI agent 
who co-founded that agency's Terror Financing Operations 
Section, said in his written testimony at a Subcommittee 
hearing that H.R. 389 would ``serve as a viable tool for law 
enforcement to develop evidence for prosecution, as well as 
identify, recover and repatriate stolen funds to victim 
countries.''\4\ The FACT Coalition, a non-partisan alliance of 
more than 100 state, national, and international organizations 
promoting anti-corruption practices, wrote that rewards program 
``is a sensible tool to safeguard American citizens and 
businesses from the scourge of corruption.''\5\
---------------------------------------------------------------------------
    \4\Testimony of Dennis M. Lormel, House Financial Services 
Committee, Marsh 13, 2019. https://financialservices.house.gov/
calendar/eventsingle.aspx?EventID=402387.
    \5\Letter to HFSC Chair, Ranking Member, and Members of the House 
Financial Services Committee, March 13, 2019.
---------------------------------------------------------------------------

                      Section-by-Section Analysis


Section 1. Short title

    This section states that the title of the bill is the 
Kleptocracy Asset Recovery Rewards Act.

Section 2. Findings; sense of Congress

    Subsection (a) lays out a series of findings describing, 
among other things, U.S. and international efforts to recover 
the proceeds of foreign official corruption and, where 
appropriate return those proceeds to benefit the people harmed 
by the acts of corruption; how countries weakened by corruption 
often have fewer resources to fight corruption; how the U.S. 
Government has a number of rewards programs, but does not 
include specifically providing monetary incentives for 
identifying and recovering stolen assets linked solely to 
foreign government corruption; and how monetary rewards can 
provide necessary incentives to expose such corruption and 
provide a financial means to individuals who come forward with 
information on such corruption to provide for their well-being 
and avoid retribution.
    Subsection (b) states the sense of Congress that a 
Department of Treasury stolen asset recovery rewards program to 
help identify and recover stolen assets linked to foreign 
government corruption is needed.

Section 3. In general

    Subsection (a) amends title 31, United States Code, by 
adding a new section 9706 at the end establishing in the 
Department of the Treasury a program to be known as the 
``Kleptocracy Asset Recovery Rewards Program.''
    Subsection (a) of the new section 9706 provides that the 
rewards program is administered by and at the sole discretion 
of the Secretary of the Treasury, in consultation with other 
agency heads as the Secretary finds appropriate.
    Subsection (b) of the new section 9706 authorizes the 
Secretary to pay a reward to an individual or any nonprofit 
humanitarian organization designated by such individual, if 
that individual furnishes information leading to the 
restraining, seizure, forfeiture, or repatriation of stolen 
assets in an account at a U.S. financial institution, that come 
within the United States, or that come within the possession or 
control of any United States person.
    Subsection (c) of this new section 9706 requires the 
Secretary to establish procedures to avoid duplication or 
interference with any other payments authorized by Federal law 
enforcement.
    For the purpose of paying rewards under this program, 
subsection (d) of the new section 9706 authorizes $450,000 to 
be appropriated for fiscal year 2020. The total amount of 
rewards paid under this program may not exceed $25,000,000 
yearly, unless the President provides written notice of a 
waiver to Congress at least 30 days in advance. However, this 
subsection also provides that the Secretary must, to the extent 
possible, make rewards payments using the stolen assets 
recovered based on such information before using appropriated 
funds. The Committee expects the Treasury Department to do so 
in every possible instance. Moreover, the Committee further 
expects that funds set aside for rewards would not in any 
circumstance become U.S. funds, but would remain in accounts 
that the U.S. Government administers as a custodian until they 
were used to pay the rewards themselves. While the character of 
these rewards may change over the course of the legislative 
process, the recovered assets would continue to belong to the 
foreign nationals or entities from which the assets were 
stolen.
    Subsection (e) of new section 9706 provides that no reward 
paid under this rewards program may exceed $5,000,000 unless 
the Secretary personally authorizes a greater amount, 
determines that it is necessary due to the exceptional nature 
of the case, and notifies Congress.
    Subsection (b) of Section 3 requires a report within 360 
days of the enactment of the Act describing policy choices and 
recommendations for disposition of stolen assets recovered 
pursuant to section 9706 of title 31. The program incentivizes 
individuals to notify the U.S. government of assets in U.S. 
financial institutions that are linked to foreign corruption, 
allowing authorities to recover and return these assets and 
prevent further enabling foreign corruption and terrorist 
financing. Rewards are paid with funds taken from the recovered 
stolen assets.

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 for the 
116th Congress--
          (1) the Subcommittee on National Security, 
        International Development and Monetary Policy of the 
        Committee on Financial Services held a hearing to 
        consider H.R. 389 entitled ``Promoting Corporate 
        Transparency: Examining Legislative Proposals to Detect 
        and Deter Crime'' on Wednesday, March 13, 2019. 
        Testifying before the Subcommittee was Jacob Cohen, 
        Former Director of the Office of Stakeholder 
        Engagement, FinCEN; Dennis Lormel, President & CEO, DML 
        Associates, LLC; Amit Sharma, CEO FinClusive; and Gary 
        Shiffman, Ph.D., founder and Chief Executive Officer, 
        Gian Oak, Inc.
          (2) In addition, the Committee held a related hearing 
        entitled, ``Holding Megabanks Accountable: A Review of 
        Global Systemically Important Banks 10 years after the 
        Financial Crisis,'' on April 10, 2019. Testifying on a 
        single-panel was: Mr. Michael L. Corbat, Chief 
        Executive Officer, Citigroup; Mr. James Dimon, Chairman 
        & Chief Executive Officer, JP Morgan Chase & Co.; Mr. 
        James P. Gorman, Chairman & Chief Executive Officer, 
        Morgan Stanley; Mr. Brian T. Moynihan, Chairman & Chief 
        Executive Officer, Bank of America; Mr. Ronald P. 
        O'Hanley, President & Chief Executive Officer, State 
        Street Corporation; Mr. Charles W. Scharf, Chairman & 
        Chief Executive Officer, Bank of New York Mellon; and 
        Mr. David M. Solomon, Chairman & Chief Executive 
        Officer, Goldman Sachs.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 26-28, 2019, and ordered H.R. 389 to be reported 
favorably to the House with an amendment in the nature of a 
substitute by unanimous consent, a quorum being present.

                  Committee Votes and Roll Call Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises there were 
no roll call votes on H.R. 389.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

             Statement of Performance Goals and Objectives

    Pursuant to clause (3)(c) of rule XIII of the Rules of the 
House of Representatives, the goals of H.R. 389 are to 
establish in the Department of the Treasury a program to be 
known as the ``Kleptocracy Asset Recovery Rewards Program.''

               New Budget Authority and CBO Cost Estimate

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974, and pursuant to clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following estimate for 
H.R. 389 from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 15, 2019.
Hon. Maxine Waters,
Chairwoman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Madam Chairwoman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 389, the 
Kleptocracy Asset Recovery Rewards Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

    
    

    H.R. 389 would amend federal law to establish within the 
Department of the Treasury the Kleptocracy Asset Recovery 
Rewards Program. H.R. 389 defines kleptocracy as a government 
with corrupt leaders that use their power to exploit their 
people and natural resources to extend their personal wealth 
and political power. The bill would authorize the appropriation 
of $450,000 for rewards to individuals providing information to 
the government about such assets of a corrupt foreign 
government that are on deposit with a U.S. financial 
institution. CBO estimates that implementing H.R. 389 would 
cost less than $500,000; any spending would be subject to the 
availability of appropriated funds.
    Most of the bill's provisions would codify existing policy 
and practice. There is a Kleptocracy Asset Recovery Initiative 
within the Department of Justice that investigates and 
prosecutes corrupt foreign leaders. Since 2010 the Initiative 
has helped repatriate more than $150 million in assets to 
foreign governments that was previously lost to corruption. In 
addition, the Department of State and the Internal Revenue 
Service have similar programs.
    Under H.R. 389, any funds recovered by the Treasury from 
such corrupt governments in future years would be available for 
such rewards. Treasury also would report to the Congress on the 
implementation of the program. It is unclear whether any assets 
seized by the government from U.S. financial institutions on 
behalf of the rightful owners of those assets could be used by 
the federal government to reward informers. Generally when the 
federal government takes control of assets that belong to 
others, those amounts are considered nonbudgetary and their 
collection and disbursement do not affect the deficit.
    The CBO staff contact for this estimate is Matthew 
Pickford. The estimate was reviewed by Theresa Gullo, Assistant 
Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 389. However, 
clause 3(d)(2)(B) of that rule provides that this requirement 
does not apply when the committee has included in its report a 
timely submitted cost estimate of the bill prepared by the 
Director of the Congressional Budget Office under section 402 
of the Congressional Budget Act.

                       Unfunded Mandate Statement

    Pursuant to Section 423 of the Congressional Budget and 
Impoundment Control Act (as amended by Section 101(a)(2) of the 
Unfunded Mandates Reform Act, Pub. L. 104-4), the Committee 
adopts as its own the estimate of federal mandates regarding 
H.R. 389, as amended, prepared by the Director of the 
Congressional Budget Office.

                           Advisory Committee

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

              Application of Law to the Legislative Branch

    Pursuant to section 102(b)(3) of the Congressional 
Accountability Act, Pub. L. No. 104-1, H.R. 389, as amended, 
does not apply to terms and conditions of employment or to 
access to public services or accommodations within the 
legislative branch.

                           Earmark Statement

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 389 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as described in clauses 9(e), 9(f), and 9(g) of rule 
XXI.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of H.R.389 establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 7, as reported, are shown as follows:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                      TITLE 31, UNITED STATES CODE




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SUBTITLE VI--MISCELLANEOUS

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                       CHAPTER 97--MISCELLANEOUS


Sec.
9701. Fees and charges for Government services and things of value.
     * * * * * * *
9706. Department of the Treasury Kleptocracy Asset Recovery Rewards 
          Program.

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Sec. 9706. Department of the Treasury Kleptocracy Asset Recovery 
                    Rewards Program

  (a) Establishment.--
          (1) In general.--There is established in the 
        Department of the Treasury a program to be known as the 
        ``Kleptocracy Asset Recovery Rewards Program'' for the 
        payment of rewards to carry out the purposes of this 
        section.
          (2) Purpose.--The rewards program shall be designed 
        to support U.S. Government programs and investigations 
        aimed at restraining, seizing, forfeiting, or 
        repatriating stolen assets linked to foreign government 
        corruption and the proceeds of such corruption.
          (3) Implementation.--The rewards program shall be 
        administered by, and at the sole discretion of, the 
        Secretary of the Treasury, in consultation, as 
        appropriate, with the Secretary of State, the Attorney 
        General, and the heads of such other departments and 
        agencies as the Secretary may find appropriate.
  (b) Rewards Authorized.--In the sole discretion of the 
Secretary and in consultation, as appropriate, with the heads 
of other relevant Federal departments or agencies, the 
Secretary may pay a reward to any individual, or to any 
nonprofit humanitarian organization designated by such 
individual, if that individual furnishes information leading 
to--
          (1) the restraining or seizure of stolen assets in an 
        account at a U.S. financial institution (including a 
        U.S. branch of a foreign financial institution), that 
        come within the United States, or that come within the 
        possession or control of any United States person;
          (2) the forfeiture of stolen assets in an account at 
        a U.S. financial institution (including a U.S. branch 
        of a foreign financial institution), that come within 
        the United States, or that come within the possession 
        or control of any United States person; or
          (3) where appropriate, the repatriation of stolen 
        assets in an account at a U.S. financial institution 
        (including a U.S. branch of a foreign financial 
        institution), that come within the United States, or 
        that come within the possession or control of any 
        United States person.
  (c) Coordination.--
          (1) Procedures.--To ensure that the payment of 
        rewards pursuant to this section does not duplicate or 
        interfere with any other payment authorized by the 
        Department of Justice or other Federal law enforcement 
        agencies for the obtaining of information or other 
        evidence, the Secretary of the Treasury, in 
        consultation with the Secretary of State, the Attorney 
        General, and the heads of such other agencies as the 
        Secretary may find appropriate, shall establish 
        procedures for the offering, administration, and 
        payment of rewards under this section, including 
        procedures for--
                  (A) identifying actions with respect to which 
                rewards will be offered;
                  (B) the receipt and analysis of data; and
                  (C) the payment of rewards and approval of 
                such payments.
          (2) Prior approval of the attorney general 
        required.--Before making a reward under this section in 
        a matter over which there is Federal criminal 
        jurisdiction, the Secretary of the Treasury shall 
        obtain the written concurrence of the Attorney General.
  (d) Payment of Rewards.--
          (1) Authorization of appropriations.--For the purpose 
        of paying rewards pursuant to this section, there is 
        authorized to be appropriated $450,000 for fiscal year 
        2020.
          (2) Limitation on annual payments.--Except as 
        provided under paragraph (3), the total amount of 
        rewards paid pursuant to this section may not exceed 
        $25,000,000 in any calendar year.
          (3) Presidential authority.--The President may waive 
        the limitation under paragraph (2) with respect to a 
        calendar year if the President provides written notice 
        of such waiver to the appropriate committees of the 
        Congress at least 30 days before any payment in excess 
        of such limitation is made pursuant to this section.
          (4) Payment from stolen asset amounts.--In paying any 
        reward under this section with respect to information 
        furnished by an individual, the Secretary shall, to the 
        extent possible, make such payments using the stolen 
        assets recovered based on such information before using 
        appropriated funds authorized under paragraph (1).
  (e) Limitations.--
          (1) Submission of information.--No award may be made 
        under this section based on information submitted to 
        the Secretary unless such information is submitted 
        under penalty of perjury.
          (2) Maximum amount.--No reward paid under this 
        section may exceed $5,000,000, unless the Secretary--
                  (A) personally authorizes such greater amount 
                in writing;
                  (B) determines that offer or payment of a 
                reward of a greater amount is necessary due to 
                the exceptional nature of the case; and
                  (C) notifies the appropriate committees of 
                the Congress of such determination.
          (3) Approval.--
                  (A) In general.--No reward amount may be paid 
                under this section without the written approval 
                of the Secretary.
                  (B) Delegation.--The Secretary may not 
                delegate the approval required under 
                subparagraph (A) to anyone other than an Under 
                Secretary of the Department of the Treasury.
          (4) Protection measures.--If the Secretary determines 
        that the identity of the recipient of a reward or of 
        the members of the recipient's immediate family must be 
        protected, the Secretary shall take such measures in 
        connection with the payment of the reward as the 
        Secretary considers necessary to effect such 
        protection.
          (5) Forms of reward payment.--The Secretary may make 
        a reward under this section in the form of a monetary 
        payment.
  (f) Ineligibility, Reduction In, or Denial of Reward.--
          (1) Officer and employees.--An officer or employee of 
        any entity of Federal, State, or local government or of 
        a foreign government who, while in the performance of 
        official duties, furnishes information described under 
        subsection (b) shall not be eligible for a reward under 
        this section.
          (2) Participating individuals.--If the claim for a 
        reward is brought by an individual who the Secretary 
        has a reasonable basis to believe knowingly planned, 
        initiated, directly participated in, or facilitated the 
        actions that led to assets of a foreign state or 
        governmental entity being stolen, misappropriated, or 
        illegally diverted or to the payment of bribes or other 
        foreign governmental corruption, the Secretary shall 
        appropriately reduce, and may deny, such award. If such 
        individual is convicted of criminal conduct arising 
        from the role described in the preceding sentence, the 
        Secretary shall deny or may seek to recover any reward, 
        as the case may be.
  (g) Report.--
          (1) In general.--Within 180 days of the enactment of 
        this section, and annually thereafter for 5 years, the 
        Secretary shall issue a report to the appropriate 
        committees of the Congress--
                  (A) detailing to the greatest extent possible 
                the amount, location, and ownership or 
                beneficial ownership of any stolen assets that, 
                on or after the date of the enactment of this 
                section, come within the United States or that 
                come within the possession or control of any 
                United States person;
                  (B) discussing efforts being undertaken to 
                identify more such stolen assets and their 
                owners or beneficial owners; and
                  (C) including a discussion of the 
                interactions of the Department of the Treasury 
                with the international financial institutions 
                (as defined in section 1701(c)(2) of the 
                International Financial Institutions Act) to 
                identify the amount, location, and ownership, 
                or beneficial ownership, of stolen assets held 
                in financial institutions outside the United 
                States.
          (2) Exception for ongoing investigations.--The report 
        issued under paragraph (1) shall not include 
        information related to ongoing investigations.
  (h) Definitions.--For purposes of this section:
          (1) Appropriate committees of the congress.--The term 
        ``appropriate committees of the Congress'' means the 
        Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate.
          (2) Financial asset.--The term `financial asset' 
        means any funds, investments, or ownership interests, 
        as defined by the Secretary, that on or after the date 
        of the enactment of this section come within the United 
        States or that come within the possession or control of 
        any United States person.
          (3) Foreign government corruption.--The term 
        ``foreign government corruption'' includes bribery of a 
        foreign public official, or the misappropriation, 
        theft, or embezzlement of public funds or property by 
        or for the benefit of a foreign public official.
          (4) Foreign public official.--The term ``foreign 
        public official'' includes any person who occupies a 
        public office by virtue of having been elected, 
        appointed, or employed, including any military, 
        civilian, special, honorary, temporary, or 
        uncompensated official.
          (5) Immediate family member.--The term ``immediate 
        family member'', with respect to an individual, has the 
        meaning given the term ``member of the immediate 
        family'' under section 36(k) of the State Department 
        Basic Authorities Act of 1956 (22 U.S.C. 2708(k)).
          (6) Rewards program.--The term ``rewards program'' 
        means the program established in subsection (a)(1) of 
        this section.
          (7) Secretary.--The term ``Secretary'' means the 
        Secretary of the Treasury.
          (8) Stolen assets.--The term ``stolen assets'' means 
        financial assets within the jurisdiction of the United 
        States, constituting, derived from, or traceable to, 
        any proceeds obtained directly or indirectly from 
        foreign government corruption.