[House Report 118-304]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {      118-304

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



 
         FOREIGN AFFILIATES SHARING PILOT PROGRAM EXTENSION ACT

                                _______
                                

 December 11, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. McHenry, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5524]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 5524) to amend the start date of the pilot 
program on sharing with foreign branches, subsidiaries and 
affiliates, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Foreign Affiliates Sharing Pilot 
Program Extension Act''.

SEC. 2. FOREIGN AFFILIATES SHARING PILOT PROGRAM.

  Section 5318(g)(8)(B)(iii) of title 31, United States Code, is 
amended by striking ``3 years after the date of enactment of this 
paragraph'' and inserting ``3 years after the date on which the 
Secretary of the Treasury issues rules pursuant to subparagraph (A)''.

                          Purpose and Summary

    Introduced on September 18, 2023, by Representative Sylvia 
Garcia, H.R. 5524, the Foreign Affiliates Sharing Pilot Program 
Extension Act, would change the tolling date of the referenced 
anti-money laundering pilot program from three years after the 
date of enactment (January 1, 2021) to three years after the 
date that the Secretary of the Department of the Treasury 
starts the program.

                  Background and Need for Legislation

    The foreign affiliates sharing pilot program was 
established in Section 6212 of the Anti-Money Laundering Act of 
2020 (AMLA 2020). The pilot program would permit a financial 
institution with a suspicious activity report (SAR) obligation 
to share SARs and information related to SARs with the 
institution's foreign branches, subsidiaries, and affiliates 
for the purpose of combating illicit finance risks, subject to 
approval and conditions set by the Department of the Treasury. 
The proposed rule aims to ensure that the sharing of 
information is limited by the requirements of federal and state 
law enforcement, takes into account potential concerns of the 
intelligence community, and is subject to appropriate standards 
and requirements regarding data security and the 
confidentiality of personally identifiable information.
    The foreign affiliates sharing pilot program terminates 
three years after enactment of AMLA 2020 (January 1, 2021). 
However, FinCEN only published the notice of proposed 
rulemaking for the foreign affiliates program on January 25, 
2022. Thus, the program has not yet been fully established. 
Without this adjustment, the program will not have had the full 
three years to operate as intended in AMLA. This legislation 
will ensure the program is in place and operating for three 
full years as intended by Congress.

                                Hearing

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 5524: The Subcommittee on 
National Security, Illicit Finance, and International Financial 
Institutions of the Committee on Financial Services held a 
hearing on April 27, 2023, titled ``Oversight of the Financial 
Crimes Enforcement Network (FinCEN) and the Office of Terrorism 
and Financial Intelligence (TFI).''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
September 20, 2023, and ordered H.R. 5524 to be reported 
favorably to the House as amended by a recorded vote of 47 ayes 
to 0 nays (Record vote no. FC-105), a quorum being present. 
Before the question was called to order the bill favorably 
reported, the Committee adopted an amendment in the nature of a 
substitute offered by Ms. Garcia by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the order to report legislation and amendments thereto. H.R. 
5524 was ordered reported favorably to the House as amended by 
a recorded vote of 47 ayes to 0 nays (Record vote no. FC-105), 
a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the goal of H.R. 5524 is to change 
the tolling date of the referenced anti-money laundering pilot 
program from three years after the date of enactment (January 
1, 2021) to three years after the date that the Secretary of 
the Department of the Treasury starts the program.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the Committee adopts the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1973.

                       Federal Mandates Statement

    Pursuant to section 423 of the Unfunded Mandates Reform 
Act, the Committee adopts as its own the estimate of the 
Federal mandates prepared by the Director of the Congressional 
Budget Office.

                      Advisory Committee Statement

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

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    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 the bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, including any program that was included in a 
report to Congress pursuant to section 21 of the Public Law 
111-139 or the most recent Catalog of Federal Domestic 
Assistance.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This Act may be cited as the ``Foreign Affiliates Sharing 
Pilot Program Extension Act''.

Section 2. Foreign affiliates sharing pilot program

    Section 2 amends U.S. Code Section from three years after 
enactment to three years after the date that the Secretary of 
the Treasury starts the program.

         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 (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 31, UNITED STATES CODE




           *       *       *       *       *       *       *
SUBTITLE IV--MONEY

           *       *       *       *       *       *       *


CHAPTER 53--MONETARY TRANSACTIONS

           *       *       *       *       *       *       *



SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

           *       *       *       *       *       *       *



Sec. 5318. Compliance, exemptions, and summons authority

  (a) General Powers of Secretary.--The Secretary of the 
Treasury may (except under section 5315 of this title and 
regulations prescribed under section 5315)--
          (1) except as provided in subsections (b)(2) and 
        (h)(4), delegate duties and powers under this 
        subchapter to an appropriate supervising agency and the 
        United States Postal Service;
          (2) require a class of domestic financial 
        institutions or nonfinancial trades or businesses to 
        maintain appropriate procedures, including the 
        collection and reporting of certain information as the 
        Secretary of the Treasury may prescribe by regulation, 
        to ensure compliance with this subchapter and 
        regulations prescribed under this subchapter or to 
        guard against money laundering, the financing of 
        terrorism, or other forms of illicit finance;
          (3) examine any books, papers, records, or other data 
        of domestic financial institutions or nonfinancial 
        trades or businesses relevant to the recordkeeping or 
        reporting requirements of this subchapter;
          (4) summon a financial institution or nonfinancial 
        trade or business, an officer or employee of a 
        financial institution or nonfinancial trade or business 
        (including a former officer or employee), or any person 
        having possession, custody, or care of the reports and 
        records required under this subchapter, to appear 
        before the Secretary of the Treasury or his delegate at 
        a time and place named in the summons and to produce 
        such books, papers, records, or other data, and to give 
        testimony, under oath, as may be relevant or material 
        to an investigation described in subsection (b);
          (5) exempt from the requirements of this subchapter 
        any class of transactions within any State if the 
        Secretary determines that--
                  (A) under the laws of such State, that class 
                of transactions is subject to requirements 
                substantially similar to those imposed under 
                this subchapter; and
                  (B) there is adequate provision for the 
                enforcement of such requirements;
          (6) rely on examinations conducted by a State 
        supervisory agency of a category of financial 
        institution, if the Secretary determines that--
                  (A) the category of financial institution is 
                required to comply with this subchapter and 
                regulations prescribed under this subchapter; 
                or
                  (B) the State supervisory agency examines the 
                category of financial institution for 
                compliance with this subchapter and regulations 
                prescribed under this subchapter; and
          (7) prescribe an appropriate exemption from a 
        requirement under this subchapter and regulations 
        prescribed under this subchapter. The Secretary may 
        revoke an exemption under this paragraph or paragraph 
        (5) by actually or constructively notifying the parties 
        affected. A revocation is effective during judicial 
        review.
  (b) Limitations on Summons Power.--
          (1) Scope of power.--The Secretary of the Treasury 
        may take any action described in paragraph (3) or (4) 
        of subsection (a) only in connection with 
        investigations for the purpose of civil enforcement of 
        violations of this subchapter, section 21 of the 
        Federal Deposit Insurance Act, section 411 of the 
        National Housing Act, or chapter 2 of Public Law 91-508 
        (12 U.S.C. 1951 et seq.) or any regulation under any 
        such provision.
          (2) Authority to issue.--A summons may be issued 
        under subsection (a)(4) only by, or with the approval 
        of, the Secretary of the Treasury or a supervisory 
        level delegate of the Secretary of the Treasury.
  (c) Administrative Aspects of Summons.--
          (1) Production at designated site.--A summons issued 
        pursuant to this section may require that books, 
        papers, records, or other data stored or maintained at 
        any place be produced at any designated location in any 
        State or in any territory or other place subject to the 
        jurisdiction of the United States not more than 500 
        miles distant from any place where the financial 
        institution or nonfinancial trade or business operates 
        or conducts business in the United States.
          (2) Fees and travel expenses.--Persons summoned under 
        this section shall be paid the same fees and mileage 
        for travel in the United States that are paid witnesses 
        in the courts of the United States.
          (3) No liability for expenses.--The United States 
        shall not be liable for any expense, other than an 
        expense described in paragraph (2), incurred in 
        connection with the production of books, papers, 
        records, or other data under this section.
  (d) Service of Summons.--Service of a summons issued under 
this section may be by registered mail or in such other manner 
calculated to give actual notice as the Secretary may prescribe 
by regulation.
  (e) Contumacy or Refusal.--
          (1) Referral to attorney general.--In case of 
        contumacy by a person issued a summons under paragraph 
        (3) or (4) of subsection (a) or a refusal by such 
        person to obey such summons, the Secretary of the 
        Treasury shall refer the matter to the Attorney 
        General.
          (2) Jurisdiction of court.--The Attorney General may 
        invoke the aid of any court of the United States within 
        the jurisdiction of which--
                  (A) the investigation which gave rise to the 
                summons is being or has been carried on;
                  (B) the person summoned is an inhabitant; or
                  (C) the person summoned carries on business 
                or may be found,
        to compel compliance with the summons.
          (3) Court order.--The court may issue an order 
        requiring the person summoned to appear before the 
        Secretary or his delegate to produce books, papers, 
        records, and other data, to give testimony as may be 
        necessary to explain how such material was compiled and 
        maintained, and to pay the costs of the proceeding.
          (4) Failure to comply with order.--Any failure to 
        obey the order of the court may be punished by the 
        court as a contempt thereof.
          (5) Service of process.--All process in any case 
        under this subsection may be served in any judicial 
        district in which such person may be found.
  (f) Written and Signed Statement Required.--No person shall 
qualify for an exemption under subsection (a)(5) 1 
unless the relevant financial institution or nonfinancial trade 
or business prepares and maintains a statement which--
          (1) describes in detail the reasons why such person 
        is qualified for such exemption; and
          (2) contains the signature of such person.
  (g) Reporting of Suspicious Transactions.--
          (1) In general.--The Secretary may require any 
        financial institution, and any director, officer, 
        employee, or agent of any financial institution, to 
        report any suspicious transaction relevant to a 
        possible violation of law or regulation.
          (2) Notification prohibited.--
                  (A) In general.--If a financial institution 
                or any director, officer, employee, or agent of 
                any financial institution, voluntarily or 
                pursuant to this section or any other 
                authority, reports a suspicious transaction to 
                a government agency--
                          (i) neither the financial 
                        institution, director, officer, 
                        employee, or agent of such institution 
                        (whether or not any such person is 
                        still employed by the institution), nor 
                        any other current or former director, 
                        officer, or employee of, or contractor 
                        for, the financial institution or other 
                        reporting person, may notify any person 
                        involved in the transaction that the 
                        transaction has been reported or 
                        otherwise reveal any information that 
                        would reveal that the transaction has 
                        been reported,; and
                          (ii) no current or former officer or 
                        employee of or contractor for the 
                        Federal Government or of or for any 
                        State, local, tribal, or territorial 
                        government within the United States, 
                        who has any knowledge that such report 
                        was made may disclose to any person 
                        involved in the transaction that the 
                        transaction has been reported, or 
                        otherwise reveal any information that 
                        would reveal that the transaction has 
                        been reported, other than as necessary 
                        to fulfill the official duties of such 
                        officer or employee.
                  (B) Disclosures in certain employment 
                references.--
                          (i) Rule of construction.--
                        Notwithstanding the application of 
                        subparagraph (A) in any other context, 
                        subparagraph (A) shall not be construed 
                        as prohibiting any financial 
                        institution, or any director, officer, 
                        employee, or agent of such institution, 
                        from including information that was 
                        included in a report to which 
                        subparagraph (A) applies--
                                  (I) in a written employment 
                                reference that is provided in 
                                accordance with section 18(w) 
                                of the Federal Deposit 
                                Insurance Act in response to a 
                                request from another financial 
                                institution; or
                                  (II) in a written termination 
                                notice or employment reference 
                                that is provided in accordance 
                                with the rules of a self-
                                regulatory organization 
                                registered with the Securities 
                                and Exchange Commission or the 
                                Commodity Futures Trading 
                                Commission,
                 except that such written reference or notice 
                may not disclose that such information was also 
                included in any such report, or that such 
                report was made.
                          (ii) Information not required.--
                        Clause (i) shall not be construed, by 
                        itself, to create any affirmative duty 
                        to include any information described in 
                        clause (i) in any employment reference 
                        or termination notice referred to in 
                        clause (i).
          (3) Liability for disclosures.--
                  (A) In general.--Any financial institution 
                that makes a voluntary disclosure of any 
                possible violation of law or regulation to a 
                government agency or makes a disclosure 
                pursuant to this subsection or any other 
                authority, and any director, officer, employee, 
                or agent of such institution who makes, or 
                requires another to make any such disclosure, 
                shall not be liable to any person under any law 
                or regulation of the United States, any 
                constitution, law, or regulation of any State 
                or political subdivision of any State, or under 
                any contract or other legally enforceable 
                agreement (including any arbitration 
                agreement), for such disclosure or for any 
                failure to provide notice of such disclosure to 
                the person who is the subject of such 
                disclosure or any other person identified in 
                the disclosure.
                  (B) Rule of construction.--Subparagraph (A) 
                shall not be construed as creating--
                          (i) any inference that the term 
                        ``person'', as used in such 
                        subparagraph, may be construed more 
                        broadly than its ordinary usage so as 
                        to include any government or agency of 
                        government; or
                          (ii) any immunity against, or 
                        otherwise affecting, any civil or 
                        criminal action brought by any 
                        government or agency of government to 
                        enforce any constitution, law, or 
                        regulation of such government or 
                        agency.
          (4) Single designee for reporting suspicious 
        transactions.--
                  (A) In general.--In requiring reports under 
                paragraph (1) of suspicious transactions, the 
                Secretary of the Treasury shall designate, to 
                the extent practicable and appropriate, a 
                single officer or agency of the United States 
                to whom such reports shall be made.
                  (B) Duty of designee.--The officer or agency 
                of the United States designated by the 
                Secretary of the Treasury pursuant to 
                subparagraph (A) shall refer any report of a 
                suspicious transaction to any appropriate law 
                enforcement, supervisory agency, or United 
                States intelligence agency for use in the 
                conduct of intelligence or counterintelligence 
                activities, including analysis, to protect 
                against international terrorism.
                  (C) Coordination with other reporting 
                requirements.--Subparagraph (A) shall not be 
                construed as precluding any supervisory agency 
                for any financial institution from requiring 
                the financial institution to submit any 
                information or report to the agency or another 
                agency pursuant to any other applicable 
                provision of law.
          (5) Considerations in imposing reporting 
        requirements.--
                  (A) Definitions.--In this paragraph, the 
                terms ``Bank Secrecy Act'', ``Federal 
                functional regulator'', ``State bank 
                supervisor'', and ``State credit union 
                supervisor'' have the meanings given the terms 
                in section 6003 of the Anti-Money Laundering 
                Act of 2020.
                  (B) Requirements.--In imposing any 
                requirement to report any suspicious 
                transaction under this subsection, the 
                Secretary of the Treasury, in consultation with 
                the Attorney General, appropriate 
                representatives of State bank supervisors, 
                State credit union supervisors, and the Federal 
                functional regulators, shall consider items 
                that include--
                          (i) the national priorities 
                        established by the Secretary;
                          (ii) the purposes described in 
                        section 5311; and
                          (iii) the means by or form in which 
                        the Secretary shall receive such 
                        reporting, including the burdens 
                        imposed by such means or form of 
                        reporting on persons required to 
                        provide such reporting, the efficiency 
                        of the means or form, and the benefits 
                        derived by the means or form of 
                        reporting by Federal law enforcement 
                        agencies and the intelligence community 
                        in countering financial crime, 
                        including money laundering and the 
                        financing of terrorism.
                  (C) Compliance program.--Reports filed under 
                this subsection shall be guided by the 
                compliance program of a covered financial 
                institution with respect to the Bank Secrecy 
                Act, including the risk assessment processes of 
                the covered institution that should include a 
                consideration of priorities established by the 
                Secretary of the Treasury under section 5318.
                  (D) Streamlined data and real-time 
                reporting.--
                          (i) Requirement to establish 
                        system.--In considering the means by or 
                        form in which the Secretary of the 
                        Treasury shall receive reporting 
                        pursuant to subparagraph (B)(iii), the 
                        Secretary of the Treasury, acting 
                        through the Director of the Financial 
                        Crimes Enforcement Network, and in 
                        consultation with appropriate 
                        representatives of the State bank 
                        supervisors, State credit union 
                        supervisors, and Federal functional 
                        regulators, shall--
                                  (I) establish streamlined, 
                                including automated, processes 
                                to, as appropriate, permit the 
                                filing of noncomplex categories 
                                of reports that--
                                          (aa) reduce burdens 
                                        imposed on persons 
                                        required to report; and
                                          (bb) do not diminish 
                                        the usefulness of the 
                                        reporting to Federal 
                                        law enforcement 
                                        agencies, national 
                                        security officials, and 
                                        the intelligence 
                                        community in combating 
                                        financial crime, 
                                        including the financing 
                                        of terrorism;
                                  (II) subject to clause (ii)--
                                          (aa) permit 
                                        streamlined, including 
                                        automated, reporting 
                                        for the categories 
                                        described in subclause 
                                        (I); and
                                          (bb) establish the 
                                        conditions under which 
                                        the reporting described 
                                        in item (aa) is 
                                        permitted; and
                                  (III) establish additional 
                                systems and processes as 
                                necessary to allow for the 
                                reporting described in 
                                subclause (II)(aa).
                          (ii) Standards.--The Secretary of the 
                        Treasury--
                                  (I) in carrying out clause 
                                (i), shall establish standards 
                                to ensure that streamlined 
                                reports relate to suspicious 
                                transactions relevant to 
                                potential violations of law 
                                (including regulations); and
                                  (II) in establishing the 
                                standards under subclause (I), 
                                shall consider transactions, 
                                including structured 
                                transactions, designed to evade 
                                any regulation promulgated 
                                under this subchapter, certain 
                                fund and asset transfers with 
                                little or no apparent economic 
                                or business purpose, 
                                transactions without lawful 
                                purposes, and any other 
                                transaction that the Secretary 
                                determines to be appropriate.
                          (iii) Rule of construction.--Nothing 
                        in this subparagraph may be construed 
                        to preclude the Secretary of the 
                        Treasury from--
                                  (I) requiring reporting as 
                                provided for in subparagraphs 
                                (B) and (C); or
                                  (II) notifying Federal law 
                                enforcement with respect to any 
                                transaction that the Secretary 
                                has determined implicates a 
                                national priority established 
                                by the Secretary.
          (6) Sharing of threat pattern and trend 
        information.--
                  (A) Definitions.--In this paragraph--
                          (i) the terms ``Bank Secrecy Act'' 
                        and ``Federal functional regulator'' 
                        have the meanings given the terms in 
                        section 6003 of the Anti-Money 
                        Laundering Act of 2020; and
                          (ii) the term ``typology'' means a 
                        technique to launder money or finance 
                        terrorism.
                  (B) Suspicious activity report activity 
                review.--Not less frequently than semiannually, 
                the Director of the Financial Crimes 
                Enforcement Network shall publish threat 
                pattern and trend information 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.
                  (C) Inclusion of typologies.--In each 
                publication published under subparagraph (B), 
                the Director shall provide financial 
                institutions and the Federal functional 
                regulators with typologies, including data that 
                can be adapted in algorithms if appropriate, 
                relating to emerging money laundering and 
                terrorist financing threat patterns and trends.
          (7) Rules of construction.--Nothing in this 
        subsection may be construed as precluding the Secretary 
        of the Treasury from--
                  (A) requiring reporting as provided under 
                subparagraphs (A) and (B) of paragraph (6); or
                  (B) notifying a Federal law enforcement 
                agency with respect to any transaction that the 
                Secretary has determined directly implicates a 
                national priority established by the Secretary.
          (8) Pilot program on sharing with foreign branches, 
        subsidiaries, and affiliates.--
                  (A) In general.--
                          (i) Issuance of rules.--Not later 
                        than 1 year after the date of enactment 
                        of this paragraph, the Secretary of the 
                        Treasury shall issue rules, in 
                        coordination with the Director of the 
                        Financial Crimes Enforcement Network, 
                        establishing the pilot program 
                        described in subparagraph (B).
                          (ii) Considerations.--In issuing the 
                        rules required under clause (i), the 
                        Secretary shall ensure that the sharing 
                        of information described in 
                        subparagraph (B)--
                                  (I) is limited by the 
                                requirements of Federal and 
                                State law enforcement 
                                operations;
                                  (II) takes into account 
                                potential concerns of the 
                                intelligence community; and
                                  (III) is subject to 
                                appropriate standards and 
                                requirements regarding data 
                                security and the 
                                confidentiality of personally 
                                identifiable information.
                  (B) Pilot program described.--The pilot 
                program described in this paragraph shall--
                          (i) permit a financial institution 
                        with a reporting obligation under this 
                        subsection to share information related 
                        to reports under this subsection, 
                        including that such a report has been 
                        filed, with the institution's foreign 
                        branches, subsidiaries, and affiliates 
                        for the purpose of combating illicit 
                        finance risks, notwithstanding any 
                        other provision of law except 
                        subparagraph (A) or (C);
                          (ii) permit the Secretary to 
                        consider, implement, and enforce 
                        provisions that would hold a foreign 
                        affiliate of a United States financial 
                        institution liable for the disclosure 
                        of information related to reports under 
                        this section;
                          (iii) terminate on the date that is 
                        [3 years after the date of enactment of 
                        this paragraph] 3 years after the date 
                        on which the Secretary of the Treasury 
                        issues rules pursuant to subparagraph 
                        (A), except that the Secretary of the 
                        Treasury may extend the pilot program 
                        for not more than 2 years upon 
                        submitting to the Committee on Banking, 
                        Housing, and Urban Affairs of the 
                        Senate and the Committee on Financial 
                        Services of the House of 
                        Representatives a report that 
                        includes--
                                  (I) a certification that the 
                                extension is in the national 
                                interest of the United States, 
                                with a detailed explanation of 
                                the reasons that the extension 
                                is in the national interest of 
                                the United States;
                                  (II) after appropriate 
                                consultation by the Secretary 
                                with participants in the pilot 
                                program, 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 activities 
                                under the pilot program, 
                                measures to ensure data 
                                security, and confidentiality 
                                of personally identifiable 
                                information, including expected 
                                budgetary resources for those 
                                activities, if the Secretary of 
                                the Treasury determines that a 
                                long-term extension is 
                                appropriate.
                  (C) Prohibition involving certain 
                jurisdictions.--
                          (i) In general.--In issuing the rules 
                        required under subparagraph (A), the 
                        Secretary of the Treasury 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--
                                          (aa) is a state 
                                        sponsor of terrorism;
                                          (bb) is subject to 
                                        sanctions imposed by 
                                        the Federal Government; 
                                        or
                                          (cc) the Secretary 
                                        has determined cannot 
                                        reasonably protect the 
                                        security and 
                                        confidentiality of such 
                                        information.
                          (ii) Exceptions.--The Secretary is 
                        authorized to make exceptions, on a 
                        case-by-case basis, for a financial 
                        institution located in a jurisdiction 
                        listed in subclause (I) or (II) of 
                        clause (i), if the Secretary notifies 
                        the Committee on Banking, Housing, and 
                        Urban Affairs of the Senate and the 
                        Committee on Financial Services of the 
                        House of Representatives that such an 
                        exception is in the national security 
                        interest of the United States.
                  (D) Implementation updates.--Not later than 
                360 days after the date on which rules are 
                issued under subparagraph (A), and annually 
                thereafter for 3 years, the Secretary of the 
                Treasury, or the designee of the Secretary, 
                shall brief the Committee on Banking, Housing, 
                and Urban Affairs of the Senate and the 
                Committee on Financial Services of the House of 
                Representatives 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 that effectiveness; and
                          (iii) any recommendations to amend 
                        the design of the pilot program.
          (9) Treatment of foreign jurisdiction-originated 
        reports.--Information related to 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 in paragraph (1).
          (10) No offshoring compliance.--No financial 
        institution may establish or maintain any operation 
        located outside of the United States the primary 
        purpose of which is to ensure compliance with the Bank 
        Secrecy Act as a result of the sharing granted under 
        this subsection.
          (11) Definitions.--In this subsection:
                  (A) Affiliate.--The term ``affiliate'' means 
                an entity that controls, is controlled by, or 
                is under common control with another entity.
                  (B) Bank secrecy act; state bank supervisor; 
                state credit union supervisor.--The terms 
                ``Bank Secrecy Act'', ``State bank 
                supervisor'', and ``State credit union 
                supervisor'' have the meanings given the terms 
                in section 6003 of the Anti-Money Laundering 
                Act of 2020.
  (h) Anti-Money Laundering Programs.--
          (1) In general.--In order to guard against money 
        laundering and the financing of terrorism through 
        financial institutions, each financial institution 
        shall establish anti-money laundering and countering 
        the financing of terrorism programs, including, at a 
        minimum--
                  (A) the development of internal policies, 
                procedures, and controls;
                  (B) the designation of a compliance officer;
                  (C) an ongoing employee training program; and
                  (D) an independent audit function to test 
                programs.
          (2) Regulations.--
                  (A) In general.--The Secretary of the 
                Treasury, after consultation with the 
                appropriate Federal functional regulator (as 
                defined in section 509 of the Gramm-Leach-
                Bliley Act), may prescribe minimum standards 
                for programs established under paragraph (1), 
                and may exempt from the application of those 
                standards any financial institution that is not 
                subject to the provisions of the rules 
                contained in part 103 of title 31, of the Code 
                of Federal Regulations, or any successor rule 
                thereto, for so long as such financial 
                institution is not subject to the provisions of 
                such rules.
                  (B) Factors.--In prescribing the minimum 
                standards under subparagraph (A), and in 
                supervising and examining compliance with those 
                standards, the Secretary of the Treasury, and 
                the appropriate Federal functional regulator 
                (as defined in section 509 of the Gramm-Leach-
                Bliley Act (12 U.S.C. 6809)) shall take into 
                account the following:
                          (i) Financial institutions are 
                        spending private compliance funds for a 
                        public and private benefit, including 
                        protecting the United States financial 
                        system from illicit finance risks.
                          (ii) The extension of financial 
                        services to the underbanked and the 
                        facilitation of financial transactions, 
                        including remittances, coming from the 
                        United States and abroad in ways that 
                        simultaneously prevent criminal persons 
                        from abusing formal or informal 
                        financial services networks are key 
                        policy goals of the United States.
                          (iii) Effective anti-money laundering 
                        and countering the financing of 
                        terrorism programs safeguard national 
                        security and generate significant 
                        public benefits by preventing the flow 
                        of illicit funds in the financial 
                        system and by assisting law enforcement 
                        and national security agencies with the 
                        identification and prosecution of 
                        persons attempting to launder money and 
                        undertake other illicit activity 
                        through the financial system.
                          (iv) Anti-money laundering and 
                        countering the financing of terrorism 
                        programs described in paragraph (1) 
                        should be--
                                  (I) reasonably designed to 
                                assure and monitor compliance 
                                with the requirements of this 
                                subchapter and regulations 
                                promulgated under this 
                                subchapter; and
                                  (II) risk-based, including 
                                ensuring that more attention 
                                and resources of financial 
                                institutions should be directed 
                                toward higher-risk customers 
                                and activities, consistent with 
                                the risk profile of a financial 
                                institution, rather than toward 
                                lower-risk customers and 
                                activities.
          (3) Concentration accounts.--The Secretary may 
        prescribe regulations under this subsection that govern 
        maintenance of concentration accounts by financial 
        institutions, in order to ensure that such accounts are 
        not used to prevent association of the identity of an 
        individual customer with the movement of funds of which 
        the customer is the direct or beneficial owner, which 
        regulations shall, at a minimum--
                  (A) prohibit financial institutions from 
                allowing clients to direct transactions that 
                move their funds into, out of, or through the 
                concentration accounts of the financial 
                institution;
                  (B) prohibit financial institutions and their 
                employees from informing customers of the 
                existence of, or the means of identifying, the 
                concentration accounts of the institution; and
                  (C) require each financial institution to 
                establish written procedures governing the 
                documentation of all transactions involving a 
                concentration account, which procedures shall 
                ensure that, any time a transaction involving a 
                concentration account commingles funds 
                belonging to 1 or more customers, the identity 
                of, and specific amount belonging to, each 
                customer is documented.
          (4) Priorities.--
                  (A) In general.--Not later than 180 days 
                after the date of enactment of this paragraph, 
                the Secretary of the Treasury, in consultation 
                with the Attorney General, Federal functional 
                regulators (as defined in section 509 of the 
                Gramm-Leach-Bliley Act (15 U.S.C. 6809)), 
                relevant State financial regulators, and 
                relevant national security agencies, shall 
                establish and make public priorities for anti-
                money laundering and countering the financing 
                of terrorism policy.
                  (B) Updates.--Not less frequently than once 
                every 4 years, the Secretary of the Treasury, 
                in consultation with the Attorney General, 
                Federal functional regulators (as defined in 
                section 509 of the Gramm-Leach-Bliley Act (15 
                U.S.C. 6809)), relevant State financial 
                regulators, and relevant national security 
                agencies, shall update the priorities 
                established under subparagraph (A).
                  (C) Relation to national strategy.--The 
                Secretary of the Treasury shall ensure that the 
                priorities established under subparagraph (A) 
                are consistent with the national strategy for 
                countering the financing of terrorism and 
                related forms of illicit finance developed 
                under section 261 of the Countering Russian 
                Influence in Europe and Eurasia Act of 2017 
                (Public Law 115-44; 131 Stat. 934).
                  (D) Rulemaking.--Not later than 180 days 
                after the date on which the Secretary of the 
                Treasury establishes the priorities under 
                subparagraph (A), the Secretary of the 
                Treasury, acting through the Director of the 
                Financial Crimes Enforcement Network and in 
                consultation with the Federal functional 
                regulators (as defined in section 509 of the 
                Gramm-Leach-Bliley Act (15 U.S.C. 6809)) and 
                relevant State financial regulators, shall, as 
                appropriate, promulgate regulations to carry 
                out this paragraph.
                  (E) Supervision and examination.--The review 
                by a financial institution of the priorities 
                established under subparagraph (A) and the 
                incorporation of those priorities, as 
                appropriate, into the risk-based programs 
                established by the financial institution to 
                meet obligations under this subchapter, the USA 
                PATRIOT Act (Public Law 107-56; 115 Stat. 272), 
                and other anti-money laundering and countering 
                the financing of terrorism laws and regulations 
                shall be included as a measure on which a 
                financial institution is supervised and 
                examined for compliance with those obligations.
          (5) Duty.--The duty to establish, maintain and 
        enforce an anti-money laundering and countering the 
        financing of terrorism program as required by this 
        subsection shall remain the responsibility of, and be 
        performed by, persons in the United States who are 
        accessible to, and subject to oversight and supervision 
        by, the Secretary of the Treasury and the appropriate 
        Federal functional regulator (as defined in section 509 
        of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)).
  (i) Due Diligence for United States Private Banking and 
Correspondent Bank Accounts Involving Foreign Persons.--
          (1) In general.--Each financial institution that 
        establishes, maintains, administers, or manages a 
        private banking account or a correspondent account in 
        the United States for a non-United States person, 
        including a foreign individual visiting the United 
        States, or a representative of a non-United States 
        person shall establish appropriate, specific, and, 
        where necessary, enhanced, due diligence policies, 
        procedures, and controls that are reasonably designed 
        to detect and report instances of money laundering 
        through those accounts.
          (2) Additional standards for certain correspondent 
        accounts.--
                  (A) In general.--Subparagraph (B) shall apply 
                if a correspondent account is requested or 
                maintained by, or on behalf of, a foreign bank 
                operating--
                          (i) under an offshore banking 
                        license; or
                          (ii) under a banking license issued 
                        by a foreign country that has been 
                        designated--
                                  (I) as noncooperative with 
                                international anti-money 
                                laundering principles or 
                                procedures by an 
                                intergovernmental group or 
                                organization of which the 
                                United States is a member, with 
                                which designation the United 
                                States representative to the 
                                group or organization concurs; 
                                or
                                  (II) by the Secretary of the 
                                Treasury as warranting special 
                                measures due to money 
                                laundering concerns.
                  (B) Policies, procedures, and controls.--The 
                enhanced due diligence policies, procedures, 
                and controls required under paragraph (1) 
                shall, at a minimum, ensure that the financial 
                institution in the United States takes 
                reasonable steps--
                          (i) to ascertain for any such foreign 
                        bank, the shares of which are not 
                        publicly traded, the identity of each 
                        of the owners of the foreign bank, and 
                        the nature and extent of the ownership 
                        interest of each such owner;
                          (ii) to conduct enhanced scrutiny of 
                        such account to guard against money 
                        laundering and report any suspicious 
                        transactions under subsection (g); and
                          (iii) to ascertain whether such 
                        foreign bank provides correspondent 
                        accounts to other foreign banks and, if 
                        so, the identity of those foreign banks 
                        and related due diligence information, 
                        as appropriate under paragraph (1).
          (3) Minimum standards for private banking accounts.--
        If a private banking account is requested or maintained 
        by, or on behalf of, a non-United States person, then 
        the due diligence policies, procedures, and controls 
        required under paragraph (1) shall, at a minimum, 
        ensure that the financial institution takes reasonable 
        steps--
                  (A) to ascertain the identity of the nominal 
                and beneficial owners of, and the source of 
                funds deposited into, such account as needed to 
                guard against money laundering and report any 
                suspicious transactions under subsection (g); 
                and
                  (B) to conduct enhanced scrutiny of any such 
                account that is requested or maintained by, or 
                on behalf of, a senior foreign political 
                figure, or any immediate family member or close 
                associate of a senior foreign political figure, 
                that is reasonably designed to detect and 
                report transactions that may involve the 
                proceeds of foreign corruption.
          (4) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Offshore banking license.--The term 
                ``offshore banking license'' means a license to 
                conduct banking activities which, as a 
                condition of the license, prohibits the 
                licensed entity from conducting banking 
                activities with the citizens of, or with the 
                local currency of, the country which issued the 
                license.
                  (B) Private banking account.--The term 
                ``private banking account'' means an account 
                (or any combination of accounts) that--
                          (i) requires a minimum aggregate 
                        deposits of funds or other assets of 
                        not less than $1,000,000;
                          (ii) is established on behalf of 1 or 
                        more individuals who have a direct or 
                        beneficial ownership interest in the 
                        account; and
                          (iii) is assigned to, or is 
                        administered or managed by, in whole or 
                        in part, an officer, employee, or agent 
                        of a financial institution acting as a 
                        liaison between the financial 
                        institution and the direct or 
                        beneficial owner of the account.
  (j) Prohibition on United States Correspondent Accounts With 
Foreign Shell Banks.--
          (1) In general.--A financial institution described in 
        subparagraphs (A) through (G) of section 5312(a)(2) (in 
        this subsection referred to as a ``covered financial 
        institution'') shall not establish, maintain, 
        administer, or manage a correspondent account in the 
        United States for, or on behalf of, a foreign bank that 
        does not have a physical presence in any country.
          (2) Prevention of indirect service to foreign shell 
        banks.--A covered financial institution shall take 
        reasonable steps to ensure that any correspondent 
        account established, maintained, administered, or 
        managed by that covered financial institution in the 
        United States for a foreign bank is not being used by 
        that foreign bank to indirectly provide banking 
        services to another foreign bank that does not have a 
        physical presence in any country. The Secretary of the 
        Treasury shall, by regulation, delineate the reasonable 
        steps necessary to comply with this paragraph.
          (3) Exception.--Paragraphs (1) and (2) do not 
        prohibit a covered financial institution from providing 
        a correspondent account to a foreign bank, if the 
        foreign bank--
                  (A) is an affiliate of a depository 
                institution, credit union, or foreign bank that 
                maintains a physical presence in the United 
                States or a foreign country, as applicable; and
                  (B) is subject to supervision by a banking 
                authority in the country regulating the 
                affiliated depository institution, credit 
                union, or foreign bank described in 
                subparagraph (A), as applicable.
          (4) Definitions.--For purposes of this subsection--
                  (A) the term ``affiliate'' means a foreign 
                bank that is controlled by or is under common 
                control with a depository institution, credit 
                union, or foreign bank; and
                  (B) the term ``physical presence'' means a 
                place of business that--
                          (i) is maintained by a foreign bank;
                          (ii) is located at a fixed address 
                        (other than solely an electronic 
                        address) in a country in which the 
                        foreign bank is authorized to conduct 
                        banking activities, at which location 
                        the foreign bank--
                                  (I) employs 1 or more 
                                individuals on a full-time 
                                basis; and
                                  (II) maintains operating 
                                records related to its banking 
                                activities; and
                          (iii) is subject to inspection by the 
                        banking authority which licensed the 
                        foreign bank to conduct banking 
                        activities.
  (k) Bank Records Related to Anti-Money Laundering Programs.--
          (1) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Appropriate federal banking agency.--The 
                term ``appropriate Federal banking agency'' has 
                the same meaning as in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813).
                  (B) Covered financial institution.--The term 
                ``covered financial institution'' means an 
                institution referred to in subsection (j)(1).
                  (C) Incorporated term.--The term 
                ``correspondent account'' has the same meaning 
                as in section 5318A(e)(1)(B).
          (2) 120-hour rule.--Not later than 120 hours after 
        receiving a request by an appropriate Federal banking 
        agency for information related to anti-money laundering 
        compliance by a covered financial institution or a 
        customer of such institution, a covered financial 
        institution shall provide to the appropriate Federal 
        banking agency, or make available at a location 
        specified by the representative of the appropriate 
        Federal banking agency, information and account 
        documentation for any account opened, maintained, 
        administered or managed in the United States by the 
        covered financial institution.
          (3) Foreign bank records.--
                  (A) Subpoena of records.--
                          (i) In general.--Notwithstanding 
                        subsection (b), the Secretary of the 
                        Treasury or the Attorney General may 
                        issue a subpoena to any foreign bank 
                        that maintains a correspondent account 
                        in the United States and request any 
                        records relating to the correspondent 
                        account or any account at the foreign 
                        bank, including records maintained 
                        outside of the United States, that are 
                        the subject of--
                                  (I) any investigation of a 
                                violation of a criminal law of 
                                the United States;
                                  (II) any investigation of a 
                                violation of this subchapter;
                                  (III) a civil forfeiture 
                                action; or
                                  (IV) an investigation 
                                pursuant to section 5318A.
                          (ii) Production of records.--The 
                        foreign bank on which a subpoena 
                        described in clause (i) is served shall 
                        produce all requested records and 
                        authenticate all requested records with 
                        testimony in the manner described in--
                                  (I) rule 902(12) of the 
                                Federal Rules of Evidence; or
                                  (II) section 3505 of title 
                                18.
                          (iii) Issuance and service of 
                        subpoena.--A subpoena described in 
                        clause (i)--
                                  (I) shall designate--
                                          (aa) a return date; 
                                        and
                                          (bb) the judicial 
                                        district in which the 
                                        related investigation 
                                        is proceeding; and
                                  (II) may be served--
                                          (aa) in person;
                                          (bb) by mail or fax 
                                        in the United States if 
                                        the foreign bank has a 
                                        representative in the 
                                        United States; or
                                          (cc) if applicable, 
                                        in a foreign country 
                                        under any mutual legal 
                                        assistance treaty, 
                                        multilateral agreement, 
                                        or other request for 
                                        international legal or 
                                        law enforcement 
                                        assistance.
                          (iv) Relief from subpoena.--
                                  (I) In general.--At any time 
                                before the return date of a 
                                subpoena described in clause 
                                (i), the foreign bank on which 
                                the subpoena is served may 
                                petition the district court of 
                                the United States for the 
                                judicial district in which the 
                                related investigation is 
                                proceeding, as designated in 
                                the subpoena, to modify or 
                                quash--
                                          (aa) the subpoena; or
                                          (bb) the prohibition 
                                        against disclosure 
                                        described in 
                                        subparagraph (C).
                                  (II) Conflict with foreign 
                                secrecy or confidentiality.--An 
                                assertion that compliance with 
                                a subpoena described in clause 
                                (i) would conflict with a 
                                provision of foreign secrecy or 
                                confidentiality law shall not 
                                be a sole basis for quashing or 
                                modifying the subpoena.
                  (B) Acceptance of service.--
                          (i) Maintaining records in the united 
                        states.--Any covered financial 
                        institution that maintains a 
                        correspondent account in the United 
                        States for a foreign bank shall 
                        maintain records in the United States 
                        identifying--
                                  (I) the owners of record and 
                                the beneficial owners of the 
                                foreign bank; and
                                  (II) the name and address of 
                                a person who--
                                          (aa) resides in the 
                                        United States; and
                                          (bb) is authorized to 
                                        accept service of legal 
                                        process for records 
                                        covered under this 
                                        subsection.
                          (ii) Law enforcement request.--Upon 
                        receipt of a written request from a 
                        Federal law enforcement officer for 
                        information required to be maintained 
                        under this paragraph, a covered 
                        financial institution shall provide the 
                        information to the requesting officer 
                        not later than 7 days after receipt of 
                        the request.
                  (C) Nondisclosure of subpoena.--
                          (i) In general.--No officer, 
                        director, partner, employee, or 
                        shareholder of, or agent or attorney 
                        for, a foreign bank on which a subpoena 
                        is served under this paragraph shall, 
                        directly or indirectly, notify any 
                        account holder involved or any person 
                        named in the subpoena issued under 
                        subparagraph (A)(i) and served on the 
                        foreign bank about the existence or 
                        contents of the subpoena.
                          (ii) Damages.--Upon application by 
                        the Attorney General for a violation of 
                        this subparagraph, a foreign bank on 
                        which a subpoena is served under this 
                        paragraph shall be liable to the United 
                        States Government for a civil penalty 
                        in an amount equal to--
                                  (I) double the amount of the 
                                suspected criminal proceeds 
                                sent through the correspondent 
                                account of the foreign bank in 
                                the related investigation; or
                                  (II) if no such proceeds can 
                                be identified, not more than 
                                $250,000.
                  (D) Enforcement.--
                          (i) In general.--If a foreign bank 
                        fails to obey a subpoena issued under 
                        subparagraph (A)(i), the Attorney 
                        General may invoke the aid of the 
                        district court of the United States for 
                        the judicial district in which the 
                        investigation or related proceeding is 
                        occurring to compel compliance with the 
                        subpoena.
                          (ii) Court orders and contempt of 
                        court.--A court described in clause (i) 
                        may--
                                  (I) issue an order requiring 
                                the foreign bank to appear 
                                before the Secretary of the 
                                Treasury or the Attorney 
                                General to produce--
                                          (aa) certified 
                                        records, in accordance 
                                        with--
                                                  (AA) rule 
                                                902(12) of the 
                                                Federal Rules 
                                                of Evidence; or
                                                  (BB) section 
                                                3505 of title 
                                                18; or
                                          (bb) testimony 
                                        regarding the 
                                        production of the 
                                        certified records; and
                                  (II) punish any failure to 
                                obey an order issued under 
                                subclause (I) as contempt of 
                                court.
                          (iii) Service of process.--All 
                        process in a case under this 
                        subparagraph shall be served on the 
                        foreign bank in the same manner as 
                        described in subparagraph (A)(iii).
                  (E) Termination of correspondent 
                relationship.--
                          (i) Termination upon receipt of 
                        notice.--A covered financial 
                        institution shall terminate any 
                        correspondent relationship with a 
                        foreign bank not later than 10 business 
                        days after the date on which the 
                        covered financial institution receives 
                        written notice from the Secretary of 
                        the Treasury or the Attorney General 
                        if, after consultation with the other, 
                        the Secretary of the Treasury or the 
                        Attorney General, as applicable, 
                        determines that the foreign bank has 
                        failed--
                                  (I) to comply with a subpoena 
                                issued under subparagraph 
                                (A)(i); or
                                  (II) to prevail in 
                                proceedings before--
                                          (aa) the appropriate 
                                        district court of the 
                                        United States after 
                                        challenging a subpoena 
                                        described in subclause 
                                        (I) under subparagraph 
                                        (A)(iv)(I); or
                                          (bb) a court of 
                                        appeals of the United 
                                        States after appealing 
                                        a decision of a 
                                        district court of the 
                                        United States under 
                                        item (aa).
                          (ii) Limitation on liability.--A 
                        covered financial institution shall not 
                        be liable to any person in any court or 
                        arbitration proceeding for--
                                  (I) terminating a 
                                correspondent relationship 
                                under this subparagraph; or
                                  (II) complying with a 
                                nondisclosure order under 
                                subparagraph (C).
                          (iii) Failure to terminate 
                        relationship or failure to comply with 
                        a subpoena.--
                                  (I) Failure to terminate 
                                relationship.--A covered 
                                financial institution that 
                                fails to terminate a 
                                correspondent relationship 
                                under clause (i) shall be 
                                liable for a civil penalty in 
                                an amount that is not more than 
                                $25,000 for each day that the 
                                covered financial institution 
                                fails to terminate the 
                                relationship.
                                  (II) Failure to comply with a 
                                subpoena.--
                                          (aa) In general.--
                                        Upon failure to comply 
                                        with a subpoena under 
                                        subparagraph (A)(i), a 
                                        foreign bank may be 
                                        liable for a civil 
                                        penalty assessed by the 
                                        issuing agency in an 
                                        amount that is not more 
                                        than $50,000 for each 
                                        day that the foreign 
                                        bank fails to comply 
                                        with the terms of a 
                                        subpoena.
                                          (bb) Additional 
                                        penalties.--Beginning 
                                        after the date that is 
                                        60 days after a foreign 
                                        bank fails to comply 
                                        with a subpoena under 
                                        subparagraph (A)(i), 
                                        the Secretary of the 
                                        Treasury or the 
                                        Attorney General may 
                                        seek additional 
                                        penalties and compel 
                                        compliance with the 
                                        subpoena in the 
                                        appropriate district 
                                        court of the United 
                                        States.
                                          (cc) Venue for 
                                        relief.--A foreign bank 
                                        may seek review in the 
                                        appropriate district 
                                        court of the United 
                                        States of any penalty 
                                        assessed under this 
                                        clause and the issuance 
                                        of a subpoena under 
                                        subparagraph (A)(i).
                  (F) Enforcement of civil penalties.--Upon 
                application by the United States, any funds 
                held in the correspondent account of a foreign 
                bank that is maintained in the United States 
                with a covered financial institution may be 
                seized by the United States to satisfy any 
                civil penalties that are imposed--
                          (i) under subparagraph (C)(ii);
                          (ii) by a court for contempt under 
                        subparagraph (D); or
                          (iii) under subparagraph 
                        (E)(iii)(II).
  (l) Identification and Verification of Accountholders.--
          (1) In general.--Subject to the requirements of this 
        subsection, the Secretary of the Treasury shall 
        prescribe regulations setting forth the minimum 
        standards for financial institutions and their 
        customers regarding the identity of the customer that 
        shall apply in connection with the opening of an 
        account at a financial institution.
          (2) Minimum requirements.--The regulations shall, at 
        a minimum, require financial institutions to implement, 
        and customers (after being given adequate notice) to 
        comply with, reasonable procedures for--
                  (A) verifying the identity of any person 
                seeking to open an account to the extent 
                reasonable and practicable;
                  (B) maintaining records of the information 
                used to verify a person's identity, including 
                name, address, and other identifying 
                information; and
                  (C) consulting lists of known or suspected 
                terrorists or terrorist organizations provided 
                to the financial institution by any government 
                agency to determine whether a person seeking to 
                open an account appears on any such list.
          (3) Factors to be considered.--In prescribing 
        regulations under this subsection, the Secretary shall 
        take into consideration the various types of accounts 
        maintained by various types of financial institutions, 
        the various methods of opening accounts, and the 
        various types of identifying information available.
          (4) Certain financial institutions.--In the case of 
        any financial institution the business of which is 
        engaging in financial activities described in section 
        4(k) of the Bank Holding Company Act of 1956 (including 
        financial activities subject to the jurisdiction of the 
        Commodity Futures Trading Commission), the regulations 
        prescribed by the Secretary under paragraph (1) shall 
        be prescribed jointly with each Federal functional 
        regulator (as defined in section 509 of the Gramm-
        Leach-Bliley Act, including the Commodity Futures 
        Trading Commission) appropriate for such financial 
        institution.
          (5) Exemptions.--The Secretary (and, in the case of 
        any financial institution described in paragraph (4), 
        any Federal agency described in such paragraph) may, by 
        regulation or order, exempt any financial institution 
        or type of account from the requirements of any 
        regulation prescribed under this subsection in 
        accordance with such standards and procedures as the 
        Secretary may prescribe.
          (6) Effective date.--Final regulations prescribed 
        under this subsection shall take effect before the end 
        of the 1-year period beginning on the date of enactment 
        of the International Money Laundering Abatement and 
        Financial Anti-Terrorism Act of 2001.
  (m) Applicability of Rules.--Any rules promulgated pursuant 
to the authority contained in section 21 of the Federal Deposit 
Insurance Act (12 U.S.C. 1829b) shall apply, in addition to any 
other financial institution to which such rules apply, to any 
person that engages as a business in the transmission of funds, 
including any person who engages as a business in an informal 
money transfer system or any network of people who engage as a 
business in facilitating the transfer of money domestically or 
internationally outside of the conventional financial 
institutions system.
  (n) Reporting of Certain Cross-Border Transmittals of 
Funds.--
          (1) In general.--Subject to paragraphs (3) and (4), 
        the Secretary shall prescribe regulations requiring 
        such financial institutions as the Secretary determines 
        to be appropriate to report to the Financial Crimes 
        Enforcement Network certain cross-border electronic 
        transmittals of funds, if the Secretary determines that 
        reporting of such transmittals is reasonably necessary 
        to conduct the efforts of the Secretary against money 
        laundering and terrorist financing.
          (2) Limitation on reporting requirements.--
        Information required to be reported by the regulations 
        prescribed under paragraph (1) shall not exceed the 
        information required to be retained by the reporting 
        financial institution pursuant to section 21 of the 
        Federal Deposit Insurance Act and the regulations 
        promulgated thereunder, unless--
                  (A) the Board of Governors of the Federal 
                Reserve System and the Secretary jointly 
                determine that a particular item or items of 
                information are not currently required to be 
                retained under such section or such 
                regulations; and
                  (B) the Secretary determines, after 
                consultation with the Board of Governors of the 
                Federal Reserve System, that the reporting of 
                such information is reasonably necessary to 
                conduct the efforts of the Secretary to 
                identify cross-border money laundering and 
                terrorist financing.
          (3) Form and manner of reports.--In prescribing the 
        regulations required under paragraph (1), the Secretary 
        shall, subject to paragraph (2), determine the 
        appropriate form, manner, content, and frequency of 
        filing of the required reports.
          (4) Feasibility report.--
                  (A) In general.--Before prescribing the 
                regulations required under paragraph (1), and 
                as soon as is practicable after the date of 
                enactment of the Intelligence Reform and 
                Terrorism Prevention Act of 2004, the Secretary 
                shall submit 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 that--
                          (i) identifies the information in 
                        cross-border electronic transmittals of 
                        funds that may be found in particular 
                        cases to be reasonably necessary to 
                        conduct the efforts of the Secretary to 
                        identify money laundering and terrorist 
                        financing, and outlines the criteria to 
                        be used by the Secretary to select the 
                        situations in which reporting under 
                        this subsection may be required;
                          (ii) outlines the appropriate form, 
                        manner, content, and frequency of 
                        filing of the reports that may be 
                        required under such regulations;
                          (iii) identifies the technology 
                        necessary for the Financial Crimes 
                        Enforcement Network to receive, keep, 
                        exploit, protect the security of, and 
                        disseminate information from reports of 
                        cross-border electronic transmittals of 
                        funds to law enforcement and other 
                        entities engaged in efforts against 
                        money laundering and terrorist 
                        financing; and
                          (iv) discusses the information 
                        security protections required by the 
                        exercise of the Secretary's authority 
                        under this subsection.
                  (B) Consultation.--In reporting the 
                feasibility report under subparagraph (A), the 
                Secretary may consult with the Bank Secrecy Act 
                Advisory Group established by the Secretary, 
                and any other group considered by the Secretary 
                to be relevant.
          (5) Regulations.--
                  (A) In general.--Subject to subparagraph (B), 
                the regulations required by paragraph (1) shall 
                be prescribed in final form by the Secretary, 
                in consultation with the Board of Governors of 
                the Federal Reserve System, before the end of 
                the 3-year period beginning on the date of 
                enactment of the National Intelligence Reform 
                Act of 2004.
                  (B) Technological feasibility.--No 
                regulations shall be prescribed under this 
                subsection before the Secretary certifies to 
                the Congress that the Financial Crimes 
                Enforcement Network has the technological 
                systems in place to effectively and efficiently 
                receive, keep, exploit, protect the security 
                of, and disseminate information from reports of 
                cross-border electronic transmittals of funds 
                to law enforcement and other entities engaged 
                in efforts against money laundering and 
                terrorist financing.
  (o) 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 with 
        respect to technology and related technology internal 
        processes designed to facilitate compliance with the 
        requirements under this subchapter, the standards by 
        which financial institutions are to test the technology 
        and related technology internal processes.
          (2) Standards.--The standards described in paragraph 
        (1) may include--
                  (A) an emphasis on using innovative 
                approaches such as machine learning or other 
                enhanced data analytics processes;
                  (B) risk-based testing, oversight, and other 
                risk management approaches of the regime, prior 
                to and after implementation, to facilitate 
                calibration of relevant systems and prudently 
                evaluate and monitor the effectiveness of their 
                implementation;
                  (C) specific criteria for when and how risk-
                based testing against existing processes should 
                be considered to test and validate the 
                effectiveness of relevant systems and 
                situations and standards for when other risk 
                management processes, including those developed 
                by or through third party risk and compliance 
                management systems, and oversight may be more 
                appropriate;
                  (D) specific standards for a risk governance 
                framework for financial institutions to provide 
                oversight and to prudently evaluate and monitor 
                systems and testing processes both pre- and 
                post-implementation;
                  (E) requirements for appropriate data privacy 
                and information security; and
                  (F) a requirement that the system 
                configurations, including any applicable 
                algorithms and any validation of those 
                configurations used by the regime be disclosed 
                to the Financial Crimes Enforcement Network and 
                the appropriate Federal functional regulator 
                upon request.
          (3) Confidentiality of algorithms.--
                  (A) In general.--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 algorithms of the 
                financial institution to a government agency, 
                the algorithms and any materials associated 
                with the creation or adaption of such 
                algorithms shall be considered confidential and 
                not subject to public disclosure.
                  (B) Freedom of information act.--Section 
                552(a)(3) of title 5 (commonly known as the 
                ``Freedom of Information Act'') shall not apply 
                to any request for algorithms described in 
                subparagraph (A) and any materials associated 
                with the creation or adaptation of the 
                algorithms.
          (4) Definition.--In this subsection, the term 
        ``Federal functional regulator'' means--
                  (A) the Board of Governors of the Federal 
                Reserve System;
                  (B) the Office of the Comptroller of the 
                Currency;
                  (C) the Federal Deposit Insurance 
                Corporation;
                  (D) the National Credit Union Administration;
                  (E) the Securities and Exchange Commission; 
                and
                  (F) the Commodity Futures Trading Commission.
  (p) Sharing of Compliance Resources.--
          (1) Sharing permitted.--In order to more efficiently 
        comply with the requirements of this subchapter, 2 or 
        more financial institutions may enter into 
        collaborative arrangements, as described in the 
        statement entitled ``Interagency Statement on Sharing 
        Bank Secrecy Act Resources'', published on October 3, 
        2018, by the Board of Governors of the Federal Reserve 
        System, the Federal Deposit Insurance Corporation, the 
        Financial Crimes Enforcement Network, the National 
        Credit Union Administration, and the Office of the 
        Comptroller of the Currency.
          (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 collaborative arrangements described in paragraph 
        (1).
  (q) Interagency Coordination and Consultation.--
          (1) In general.--The Secretary of the Treasury shall, 
        as appropriate, invite an appropriate State bank 
        supervisor and an appropriate State credit union 
        supervisor to participate in the interagency 
        consultation and coordination with the Federal 
        depository institution regulators regarding the 
        development or modification of any rule or regulation 
        carrying out this subchapter.
          (2) Rules of construction.--Nothing in this 
        subsection may be construed to--
                  (A) affect, modify, or limit the discretion 
                of the Secretary of the Treasury with respect 
                to the methods or forms of interagency 
                consultation and coordination; or
                  (B) require the Secretary of the Treasury or 
                a Federal depository institution regulator to 
                coordinate or consult with an appropriate State 
                bank supervisor or to invite such supervisor to 
                participate in interagency consultation and 
                coordination with respect to a matter, 
                including a rule or regulation, specifically 
                affecting only Federal depository institutions 
                or Federal credit unions.
          (3) Definitions.--In this subsection:
                  (A) Appropriate state bank supervisor.--The 
                term ``appropriate State bank supervisor'' 
                means the Chairman or members of the State 
                Liaison Committee of the Financial Institutions 
                Examination Council.
                  (B) Appropriate state credit union 
                supervisor.--The term ``appropriate State 
                credit union supervisor'' means the Chairman or 
                members of the State Liaison Committee of the 
                Financial Institutions Examination Council.
                  (C) Federal credit union.--The term ``Federal 
                credit union'' has the meaning given the term 
                in section 101 of the Federal Credit Union Act 
                (12 U.S.C. 1752).
                  (D) Federal depository institution.--The term 
                ``Federal depository institution'' has the 
                meaning given the term in section 3 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1813).
                  (E) Federal depository institution 
                regulators.--The term ``Federal depository 
                institution regulator'' means a member of the 
                Financial Institutions Examination Council to 
                which is delegated any authority of the 
                Secretary under subsection (a)(1).

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