[House Report 118-315]
[From the U.S. Government Publishing Office]


118th Congress   }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                      {      118-315

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



 
            FINCEN OVERSIGHT AND ACCOUNTABILITY ACT OF 2023

                                _______
                                

 December 13, 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. 5472]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 5472) to make improvements to the Financial 
Crimes Enforcement Network, and for other purposes, 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; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``FinCEN Oversight and 
Accountability Act of 2023''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                    TITLE I--CONGRESSIONAL OVERSIGHT

Sec. 101. Information for constitutional functions of Congress.

                    TITLE II--FINCEN ACCOUNTABILITY

Sec. 201. Transparency with controlling documents.
Sec. 202. Testimony by the Director of FinCEN.

                TITLE III--SMALL BUSINESS WORKING GROUP

Sec. 301. Small Business Working Groups.

                    TITLE I--CONGRESSIONAL OVERSIGHT

SEC. 101. INFORMATION FOR CONSTITUTIONAL FUNCTIONS OF CONGRESS.

  (a) Keeping Congress Informed.--The Secretary of the Treasury shall 
keep the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate fully and currently informed of the activities of 
the Financial Crimes Enforcement Network, including any significant 
anticipated activity of such Network.
  (b) Report of Unlawful Activity and Corrective Action.--The Secretary 
of the Treasury shall report promptly to the Committee on Financial 
Services of the House of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate any unlawful activity of the 
Financial Crimes Enforcement Network and any corrective action taken or 
planned to address that activity and prevent such activity in the 
future.

                    TITLE II--FINCEN ACCOUNTABILITY

SEC. 201. TRANSPARENCY WITH CONTROLLING DOCUMENTS.

  (a) Definition of Controlling Document.--As used in this section, the 
term ``controlling document'' refers to any record (as defined in 
section 3301 of title 44, United States Code) issued by or under the 
authority of the Secretary, Deputy Secretary, Under Secretary for 
Enforcement, or any other officer or employee of the Department of the 
Treasury, that delegates authority to the Financial Crimes Enforcement 
Network or its Director in the implementation of section 310 of title 
31, United States Code, or the Bank Secrecy Act.
  (b) Disclosure to Congress.--The Secretary of the Treasury shall 
promptly provide to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate--
          (1) controlling documents in force as of the date of the 
        enactment of this Act;
          (2) any controlling documents issued thereafter; and
          (3) any changes to controlling documents described in 
        paragraphs (1) and (2) made thereafter, including any 
        revocations thereof.
  (c) Disclosure to the Public.--The Secretary of the Treasury shall 
make available promptly to the public the controlling documents and 
changes that the Secretary is required to provide to the committees 
listed in subsection (b), excluding such reasonably segregable portions 
of controlling documents or changes as would fall within an exemption 
in section 552(b) of title 5, United States Code.
  (d) Bank Secrecy Act Defined.--In this section, the term ``Bank 
Secrecy Act'' means--
          (1) section 21 of the Federal Deposit Insurance Act (12 
        U.S.C. 1829b);
          (2) chapter 2 of title I of Public Law 91-508 (12 U.S.C. 1951 
        et seq.); and
          (3) subchapter II of chapter 53 of title 31, United States 
        Code.

SEC. 202. TESTIMONY BY THE DIRECTOR OF FINCEN.

  Section 5336(c)(11)(A) of title 31, United States Code, is amended by 
striking ``5 years'' and inserting ``10 years''.

                TITLE III--SMALL BUSINESS WORKING GROUP

SEC. 301. SMALL BUSINESS WORKING GROUPS.

  (a) In General.--Section 310(g)(5)(A) of title 31, United States 
Code, is amended--
          (1) in clause (vi) by striking ``and'' at the end;
          (2) in clause (vii) by striking the period at the end and 
        inserting ``; and''; and
          (3) by inserting the following at the end:
                          ``(viii) each year, hold a small business 
                        working group to--
                                  ``(I) share information about the 
                                effectiveness of beneficial ownership 
                                information;
                                  ``(II) promote coordination between 
                                FinCEN and the small business 
                                community; and
                                  ``(III) provide guidance to small 
                                businesses about beneficial ownership 
                                reporting obligations.''.
  (b) Appropriations.--No amounts may be appropriated to carry out the 
amendments made by subsection (a).

                          Purpose and Summary

    Introduced on September 14, 2023, by Representative Warren 
Davidson, H.R. 5472, the FinCEN Oversight and Accountability 
Act of 2023, would provide the House Financial Services 
Committee (Committee) with prompt notification of any unlawful 
activity, such as security breaches, carried out by the 
Financial Crimes Enforcement Network (FinCEN) or employees of 
FinCEN. This includes any corrective action taken by the 
Director of FinCEN or the Secretary of the Department of the 
Treasury (Treasury). Prompt notification will ensure that the 
Committee can act accordingly and not learn about unlawful 
activity, such as leaks of protected financial information, 
from the media.
    Additionally, this legislation would require Treasury to 
provide the essential controlling documents to help the 
Committee better understand the powers that the Treasury 
Department has delegated to FinCEN and how FinCEN utilizes 
these authorities.
    Finally, to properly prepare small businesses for their 
forthcoming compliance with the beneficial ownership reporting 
regime, H.R. 5472 would require FinCEN to hold an annual Small 
Business Working Group that will meet to share information 
about the effectiveness of beneficial ownership practices and 
promote coordination between FinCEN and the small business 
community. The working group would help provide guidance to 
small businesses about beneficial ownership reporting 
obligations. This work would be carried out without any 
additional appropriations.

                  Background and Need for Legislation

    H.R. 5472 is comprised of parts of following bills:
          H.R. 4107, the Civil Liberties Protection Act of 
        2023, introduced by Representative Warren Davidson
          H.R. 2963, the FinCEN Accountability Act of 2023, 
        introduced by Representative Barry Loudermilk
          H.R. 5422, the Small Business Working Group Act, 
        introduced by Representative Roger Williams

Title I--Title I consists of Section 3 of H.R. 4107, the Civil 
        Liberties Protection Act of 2023

    Title I requires the Secretary of the Treasury to keep the 
House Financial Services and Senate Banking Committees informed 
of FinCEN activities. Additionally, the Secretary of the 
Treasury must promptly report to the House Financial Services 
and Senate Banking Committees any unlawful activity occurring 
at FinCEN along with any corrective activity taken or planned.

Title II--Title II consists of H.R. 2963, the FinCEN Accountability Act 
        of 2023

    Title II ensures that the House Financial Services and the 
Senate Banking Committees have access to Department of the 
Treasury documents providing authorization or instructions to 
FinCEN or its Director, including any changes made to such 
documents from time to time.
    Subsection (a) defines the controlling documents that 
FinCEN must provide to the House Financial Services and the 
Senate Banking Committees. It incorporates the definition of 
``record'' used in administering statutes governing federal 
records (44 U.S.C. 3301). The subsection identifies the 
controlling documents as records issued by the Secretary of the 
Treasury or other officials of the Treasury Department that 
delegate authority, or give instructions, to FinCEN or the 
Director of FinCEN when implementing the statute establishing 
FinCEN as a Treasury bureau (31 U.S.C. 310) or the Bank Secrecy 
Act (section 21 of the Federal Deposit Insurance Act (12 U.S.C. 
1829b), chapter 2 of title I of Public Law 91-508 (12 U.S.C. 
1951 et seq.), and subchapter II of chapter 53 of title 31 of 
the U.S. Code).
    Subsection (b) requires the Secretary of the Treasury to 
provide to the House Financial Services and the Senate Banking 
Committees copies of all ``controlling documents'' as defined 
in subsection (a), and any changes to the controlling 
documents, including revocations. Subsection (b) ensures that 
both the House Financial Services and the Senate Banking 
Committees will have full and timely information of 
departmental delegations of authority, and departmental 
instructions, to FinCEN or its Director. Such information will 
assist the Committees in ensuring that FinCEN activities remain 
within its appropriate limits and in formulating any 
legislation needed to govern such activities.

Title III--Title III consists of H.R. 5422, the Small Business Working 
        Group Act

    Title III will create the Small Business Working Group that 
will be carried out annually by the newly established domestic 
liaisons. The working group will provide an opportunity for 
small businesses to understand the purpose and benefit of 
beneficial ownership and promote coordination between FinCEN 
and the small business community.

                                Hearing

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearings were used to develop H.R. 5472: 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).''
    The Subcommittee on National Security, Illicit Finance, and 
International Financial Institutions of the Committee on 
Financial Services held a hearing on July 18, 2023, titled 
``Potential Consequences of FinCEN's Beneficial Ownership 
Rulemaking.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
September 20, 2023, and ordered H.R. 5472 to be reported 
favorably to the House as amended by a recorded vote of 46 ayes 
to 0 nays (Record vote no. FC-99), 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 Mr. Davidson 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. 
5472 was ordered reported favorably to the House as amended by 
a recorded vote of 46 ayes to 0 nays (Record vote no. FC-99), a 
quorum being present.


                      Committee Overisght 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. 5472 is to provide 
the House Financial Services Committee with prompt notification 
of any unlawful activity carried out by FinCEN or employees of 
FinCEN. Further, it will provide essential controlling 
documents to help the Committee better understand the powers 
that the Treasury Department has delegated to FinCEN, and how 
FinCEN utilizes these authorities. Finally, H.R. 5472 will 
require FinCEN to hold an annual Small Business Working Group 
that will meet to share information about the effectiveness of 
beneficial ownership practices and promote coordination between 
FinCEN and the small business community.

                 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

    Pursuant 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 ``FinCEN Oversight and 
Accountability Act of 2023''.

                    TITLE I--CONGRESSIONAL OVERSIGHT

Sec. 101. Information for constitutional functions of Congress

    The Secretary of the Treasury must keep the House Financial 
Services and Senate Banking Committees informed of FinCEN 
activities.
    The Secretary of the Treasury must promptly report to the 
House Financial Services and Senate Banking Committees any 
unlawful activity of FinCEN, along with any corrective activity 
taken or planned.

                    TITLE II--FINCEN ACCOUNTABILITY

Sec. 201. Transparency with controlling documents

    The Secretary of the Treasury must promptly provide to the 
House Financial Services and Senate Banking Committees 
controlling documents in force at the enactment of this Act, 
future controlling documents, and any changes to controlling 
documents.
    The Secretary of the Treasury shall make controlling 
documents and changes available to the public, excluding those 
that fall within an exception in section 552(b) of title 5, 
U.S. Code.

Sec. 202. Testimony by the Director of FinCEN

    Amends existing legislation, extending the requirement of 
the FinCEN Director to testify annually before the House 
Financial Services and the Senate Banking Committees from 2026 
to 2031.

                TITLE III--SMALL BUSINESS WORKING GROUP

Sec. 301. Small Business Working Group

    Amends Title 31 U.S. Code, Section 310 to require FinCEN to 
hold an annual Small Business Working Group to share 
information about the effectiveness of beneficial ownership and 
promote coordination between FinCEN and the small business 
community and provide guidance to small businesses about 
beneficial ownership reporting obligations. No amounts may be 
appropriated for this purpose.

         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 I--GENERAL

           *       *       *       *       *       *       *


CHAPTER 3--DEPARTMENT OF THE TREASURY

           *       *       *       *       *       *       *


SUBCHAPTER I--ORGANIZATION

           *       *       *       *       *       *       *


Sec. 310. Financial Crimes Enforcement Network

  (a) In General.--The Financial Crimes Enforcement Network 
established by order of the Secretary of the Treasury (Treasury 
Order Numbered 105-08, in this section referred to as 
``FinCEN'') on April 25, 1990, shall be a bureau in the 
Department of the Treasury.
  (b) Director.--
          (1) Appointment.--The head of FinCEN shall be the 
        Director, who shall be appointed by the Secretary of 
        the Treasury.
          (2) Duties and powers.--The duties and powers of the 
        Director are as follows:
                  (A) Advise and make recommendations on 
                matters relating to financial intelligence, 
                financial criminal activities, and other 
                financial activities to the Under Secretary of 
                the Treasury for Enforcement.
                  (B) Maintain a government-wide data access 
                service, with access, in accordance with 
                applicable legal requirements, to the 
                following:
                          (i) Information collected by the 
                        Department of the Treasury, including 
                        report information filed under 
                        subchapter II of chapter 53 of this 
                        title (such as reports on cash 
                        transactions, foreign financial agency 
                        transactions and relationships, foreign 
                        currency transactions, exporting and 
                        importing monetary instruments, and 
                        suspicious activities), chapter 2 of 
                        title I of Public Law 91-508, and 
                        section 21 of the Federal Deposit 
                        Insurance Act.
                          (ii) Information regarding national 
                        and international currency flows.
                          (iii) Other records and data 
                        maintained by other Federal, State, 
                        local, and foreign agencies, including 
                        financial and other records developed 
                        in specific cases.
                          (iv) Other privately and publicly 
                        available information.
                  (C) Analyze and disseminate the available 
                data in accordance with applicable legal 
                requirements and policies and guidelines 
                established by the Secretary of the Treasury 
                and the Under Secretary of the Treasury for 
                Enforcement to--
                          (i) identify possible criminal 
                        activity to appropriate Federal, State, 
                        local, Tribal, and foreign law 
                        enforcement agencies;
                          (ii) support ongoing criminal 
                        financial investigations and 
                        prosecutions and related proceedings, 
                        including civil and criminal tax and 
                        forfeiture proceedings;
                          (iii) identify possible instances of 
                        noncompliance with subchapter II of 
                        chapter 53 of this title, chapter 2 of 
                        title I of Public Law 91-508, and 
                        section 21 of the Federal Deposit 
                        Insurance Act to Federal agencies with 
                        statutory responsibility for enforcing 
                        compliance with such provisions and 
                        other appropriate Federal regulatory 
                        agencies;
                          (iv) evaluate and recommend possible 
                        uses of special currency reporting 
                        requirements under section 5326;
                          (v) determine emerging trends and 
                        methods in money laundering and other 
                        financial crimes;
                          (vi) support the conduct of 
                        intelligence or counterintelligence 
                        activities, including analysis, to 
                        protect against terrorism; and
                          (vii) support government initiatives 
                        against money laundering.
                  (D) Establish and maintain a financial crimes 
                communications center to furnish law 
                enforcement authorities with intelligence 
                information related to emerging or ongoing 
                investigations and undercover operations.
                  (E) Furnish research, analytical, and 
                informational services to financial 
                institutions, appropriate Federal regulatory 
                agencies with regard to financial institutions, 
                and appropriate Federal, State, local, Tribal, 
                and foreign law enforcement authorities, in 
                accordance with policies and guidelines 
                established by the Secretary of the Treasury or 
                the Under Secretary of the Treasury for 
                Enforcement, in the interest of detection, 
                prevention, and prosecution of terrorism, 
                organized crime, money laundering, and other 
                financial crimes.
                  (F) Assist Federal, State, local, Tribal, and 
                foreign law enforcement and regulatory 
                authorities in combatting the use of informal, 
                nonbank networks and payment and barter system 
                mechanisms that permit the transfer of funds or 
                the equivalent of funds without records and 
                without compliance with criminal and tax laws.
                  (G) Provide computer and data support and 
                data analysis to the Secretary of the Treasury 
                for tracking and controlling foreign assets.
                  (H) Coordinate with financial intelligence 
                units in other countries on anti-terrorism and 
                anti-money laundering initiatives, and similar 
                efforts.
                  (I) Administer the requirements of subchapter 
                II of chapter 53 of this title, chapter 2 of 
                title I of Public Law 91-508, and section 21 of 
                the Federal Deposit Insurance Act, to the 
                extent delegated such authority by the 
                Secretary of the Treasury.
                  (J) Promulgate regulations under section 
                5318(h)(4)(D), as appropriate, to implement the 
                government-wide anti-money laundering and 
                countering the financing of terrorism 
                priorities established by the Secretary of the 
                Treasury under section 5318(h)(4)(A).
                  (K) Communicate regularly with financial 
                institutions and Federal functional regulators 
                that examine financial institutions for 
                compliance with subchapter II of chapter 53 and 
                regulations promulgated under that subchapter 
                and law enforcement authorities to explain the 
                United States Government's anti-money 
                laundering and countering the financing of 
                terrorism priorities.
                  (L) Give and receive feedback to and from 
                financial institutions, State bank supervisors, 
                and State credit union supervisors (as those 
                terms are defined in section 6003 of the Anti-
                Money Laundering Act of 2020) regarding the 
                matters addressed in subchapter II of chapter 
                53 and regulations promulgated under that 
                subchapter.
                  (M) Maintain money laundering and terrorist 
                financing investigation financial experts 
                capable of identifying, tracking, and analyzing 
                financial crime networks and identifying 
                emerging threats to support Federal civil and 
                criminal investigations.
                  (N) Maintain emerging technology experts to 
                encourage the development of and identify 
                emerging technologies that can assist the 
                United States Government or financial 
                institutions in countering money laundering and 
                the financing of terrorism.
                  (O) Such other duties and powers as the 
                Secretary of the Treasury may delegate or 
                prescribe.
  (c) Requirements Relating to Maintenance and Use of Data 
Banks.--The Secretary of the Treasury shall establish and 
maintain operating procedures with respect to the government-
wide data access service and the financial crimes 
communications center maintained by FinCEN which provide--
          (1) for the coordinated and efficient transmittal of 
        information to, entry of information into, and 
        withdrawal of information from, the data maintenance 
        system maintained by FinCEN, including--
                  (A) the submission of reports through the 
                Internet or other secure network, whenever 
                possible;
                  (B) the cataloguing of information in a 
                manner that facilitates rapid retrieval by law 
                enforcement personnel of meaningful data; and
                  (C) a procedure that provides for a prompt 
                initial review of suspicious activity reports 
                and other reports, or such other means as the 
                Secretary may provide, to identify information 
                that warrants immediate action; and
          (2) in accordance with section 552a of title 5 and 
        the Right to Financial Privacy Act of 1978, appropriate 
        standards and guidelines for determining--
                  (A) who is to be given access to the 
                information maintained by FinCEN;
                  (B) what limits are to be imposed on the use 
                of such information; and
                  (C) how information about activities or 
                relationships which involve or are closely 
                associated with the exercise of constitutional 
                rights is to be screened out of the data 
                maintenance system.
  (d) FinCEN Exchange.--
          (1) Establishment.--The FinCEN Exchange is hereby 
        established within FinCEN.
          (2) Purpose.--The FinCEN Exchange shall facilitate a 
        voluntary public-private information sharing 
        partnership among law enforcement agencies, national 
        security agencies, financial institutions, other 
        relevant private sector entities, and FinCEN to--
                  (A) effectively and efficiently combat money 
                laundering, terrorism financing, organized 
                crime, and other financial crimes, including by 
                promoting innovation and technical advances in 
                reporting--
                          (i) under subchapter II of chapter 53 
                        and the regulations promulgated under 
                        that subchapter; and
                          (ii) with respect to other anti-money 
                        laundering requirements;
                  (B) protect the financial system from illicit 
                use; and
                  (C) promote national security.
          (3) Report.--
                  (A) In general.--Not later than 1 year after 
                the date of enactment of this subsection, and 
                once every 2 years thereafter for the next 5 
                years, the Secretary of the Treasury shall 
                submit 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 containing--
                          (i) an analysis of the efforts 
                        undertaken by the FinCEN Exchange, 
                        which shall include an analysis of--
                                  (I) the results of those 
                                efforts; and
                                  (II) the extent and 
                                effectiveness of those efforts, 
                                including any benefits realized 
                                by law enforcement agencies 
                                from partnering with financial 
                                institutions and other relevant 
                                private sector entities, which 
                                shall be consistent with 
                                standards protecting sensitive 
                                information; and
                          (ii) any legislative, administrative, 
                        or other recommendations the Secretary 
                        may have to strengthen the efforts of 
                        the FinCEN Exchange.
                  (B) Classified annex.--Each report under 
                subparagraph (A) may include a classified 
                annex.
          (4) Information sharing requirement.--Information 
        shared under this subsection shall be shared--
                  (A) in compliance with all other applicable 
                Federal laws and regulations;
                  (B) in such a manner as to ensure the 
                appropriate confidentiality of personal 
                information; and
                  (C) at the discretion of the Director, with 
                the appropriate Federal functional regulator, 
                as defined in section 6003 of the Anti-Money 
                Laundering Act of 2020.
          (5) Protection of shared information.--
                  (A) Regulations.--FinCEN shall, as 
                appropriate, promulgate regulations that 
                establish procedures for the protection of 
                information shared and exchanged between FinCEN 
                and the private sector in accordance with this 
                section, consistent with the capacity, size, 
                and nature of the financial institution or 
                other relevant private sector entity to which 
                the particular procedures apply.
                  (B) Use of information.--
                          (i) Use by financial institutions.--
                        Information received by a financial 
                        institution pursuant to this section 
                        shall not be used for any purpose other 
                        than identifying and reporting on 
                        activities that may involve the 
                        financing of terrorism, money 
                        laundering, proliferation financing, or 
                        other financial crimes.
                          (ii) Use by other relevant private 
                        sector entities.--Information received 
                        by a relevant private sector entity 
                        that is not a financial institution 
                        pursuant to this section shall not be 
                        used for any purpose other than 
                        assisting a financial institution in 
                        identifying and reporting on activities 
                        that may involve the financing of 
                        terrorism, money laundering, 
                        proliferation financing, or other 
                        financial crimes, or in assisting 
                        FinCEN or another agency of the Federal 
                        Government in mitigating the risk of 
                        the financing of terrorism, money 
                        laundering, proliferation financing, or 
                        other criminal activities.
          (6) Rule of construction.--Nothing in this subsection 
        may be construed to create new information sharing 
        authorities or requirements relating to the Bank 
        Secrecy Act.
  (e) Special Hiring Authority.--
          (1) In general.--The Secretary of the Treasury may 
        appoint, without regard to the provisions of sections 
        3309 through 3318 of title 5, candidates directly to 
        positions in the competitive service, as defined in 
        section 2102 of that title, in FinCEN.
          (2) Primary responsibilities.--The primary 
        responsibility of candidates appointed under paragraph 
        (1) shall be to provide substantive support in support 
        of the duties described in subparagraphs (A) through 
        (O) of subsection (b)(2).
  (f) FinCEN Domestic Liaisons.--
          (1) Establishment of office.--There is established in 
        FinCEN an Office of Domestic Liaison, which shall be 
        headed by the Chief Domestic Liaison.
          (2) Location.--The Office of the Domestic Liaison 
        shall be located in the District of Columbia.
  (g) Chief Domestic Liaison.--
          (1) In general.--The Chief Domestic Liaison, shall--
                  (A) report directly to the Director; and
                  (B) be appointed by the Director, from among 
                individuals with experience or familiarity with 
                anti-money laundering program examinations, 
                supervision, and enforcement.
          (2) Compensation.--The annual rate of pay for the 
        Chief Domestic Liaison shall be equal to the highest 
        rate of annual pay for similarly situated senior 
        executives who report to the Director.
          (3) Staff of office.--The Chief Domestic Liaison, 
        with the concurrence of the Director, may retain or 
        employ counsel, research staff, and service staff, as 
        the Liaison determines necessary to carry out the 
        functions, powers, and duties under this subsection.
          (4) Domestic liaisons.--The Chief Domestic Liaison, 
        with the concurrence of the Director, shall appoint not 
        fewer than 6 senior FinCEN employees as FinCEN Domestic 
        Liaisons, who shall--
                  (A) report to the Chief Domestic Liaison;
                  (B) each be assigned to focus on a specific 
                region of the United States; and
                  (C) be located at an office in such region or 
                co-located at an office of the Board of 
                Governors of the Federal Reserve System in such 
                region.
          (5) Functions of the domestic liaisons.--
                  (A) In general.--Each Domestic Liaison 
                shall--
                          (i) in coordination with relevant 
                        Federal functional regulators, perform 
                        outreach to BSA officers at financial 
                        institutions, including nonbank 
                        financial institutions, and persons 
                        that are not financial institutions, 
                        especially with respect to actions 
                        taken by FinCEN that require specific 
                        actions by, or have specific effects 
                        on, such institutions or persons, as 
                        determined by the Director;
                          (ii) in accordance with applicable 
                        agreements, receive feedback from 
                        financial institutions and examiners of 
                        Federal functional regulators regarding 
                        their examinations under the Bank 
                        Secrecy Act and communicate that 
                        feedback to FinCEN, the Federal 
                        functional regulators, and State bank 
                        supervisors;
                          (iii) promote coordination and 
                        consistency of supervisory guidance 
                        from FinCEN, the Federal functional 
                        regulators, State bank supervisors, and 
                        State credit union supervisors 
                        regarding the Bank Secrecy Act;
                          (iv) act as a liaison between 
                        financial institutions and their 
                        Federal functional regulators, State 
                        bank supervisors, and State credit 
                        union supervisors with respect to 
                        information sharing matters involving 
                        the Bank Secrecy Act and regulations 
                        promulgated thereunder;
                          (v) establish safeguards to maintain 
                        the confidentiality of communications 
                        between the persons described in clause 
                        (ii) and the Office of Domestic 
                        Liaison;
                          (vi) to the extent practicable, 
                        periodically propose to the Director 
                        changes in the regulations, guidance, 
                        or orders of FinCEN, including any 
                        legislative or administrative changes 
                        that may be appropriate to ensure 
                        improved coordination and expand 
                        information sharing under this 
                        paragraph; [and]
                          (vii) perform such other duties as 
                        the Director determines to be 
                        appropriate[.]; and
                          (viii) each year, hold a small 
                        business working group to--
                                  (I) share information about 
                                the effectiveness of beneficial 
                                ownership information;
                                  (II) promote coordination 
                                between FinCEN and the small 
                                business community; and
                                  (III) provide guidance to 
                                small businesses about 
                                beneficial ownership reporting 
                                obligations.
                  (B) Rule of construction.--Nothing in this 
                paragraph may be construed to permit the 
                Domestic Liaisons to have authority over 
                supervision, examination, or enforcement 
                processes.
          (6) Access to documents.--FinCEN, to the extent 
        practicable and consistent with appropriate safeguards 
        for sensitive enforcement-related, pre-decisional, or 
        deliberative information, shall ensure that the 
        Domestic Liaisons have full access to the documents of 
        FinCEN, as necessary to carry out the functions of the 
        Office of Domestic Liaison.
          (7) Annual reports.--
                  (A) In general.--Not later than 1 year after 
                the date of enactment of this subsection and 
                every 2 years thereafter for 5 years, the 
                Director shall submit 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 on the 
                objectives of the Office of Domestic Liaison 
                for the following fiscal year and the 
                activities of the Office during the immediately 
                preceding fiscal year.
                  (B) Contents.--Each report required under 
                subparagraph (A) shall include--
                          (i) appropriate statistical 
                        information and full and substantive 
                        analysis;
                          (ii) information on steps that the 
                        Office of Domestic Liaison has taken 
                        during the reporting period to address 
                        feedback received by financial 
                        institutions and examiners of Federal 
                        functional regulators relating to 
                        examinations under the Bank Secrecy 
                        Act;
                          (iii) recommendations to the Director 
                        for such administrative and legislative 
                        actions as may be appropriate to 
                        address information sharing and 
                        coordination issues encountered by 
                        financial institutions or examiners of 
                        Federal functional regulators; and
                          (iv) any other information, as 
                        determined appropriate by the Director.
                  (C) Sensitive information.--Notwithstanding 
                subparagraph (D), FinCEN shall review each 
                report required under subparagraph (A) before 
                the report is submitted to ensure the report 
                does not disclose sensitive information.
                  (D) Independence.--
                          (i) In general.--Each report required 
                        under subparagraph (A) shall be 
                        provided directly to the committees 
                        listed in that subparagraph, except 
                        that a relevant Federal functional 
                        regulator, State bank supervisor, 
                        Office of Management and Budget, or 
                        State credit union supervisor shall 
                        have an opportunity for review and 
                        comment before the submission of the 
                        report.
                          (ii) Rule of construction.--Nothing 
                        in clause (i) may be construed to 
                        preclude FinCEN or any other department 
                        or agency from reviewing a report 
                        required under subparagraph (A) for the 
                        sole purpose of protecting--
                                  (I) sensitive information 
                                obtained by a law enforcement 
                                agency; and
                                  (II) classified information.
                  (E) Classified information.--No report 
                required under subparagraph (A) may contain 
                classified information.
          (8) Definition.--In this subsection, the term 
        ``Federal functional regulator'' has the meaning given 
        the term in section 6003 of the Anti-Money Laundering 
        Act of 2020.
  (h) FinCEN Foreign Financial Intelligence Unit Liaisons.--
          (1) In general.--The Director of FinCEN shall appoint 
        not fewer than 6 Foreign Financial Intelligence Unit 
        Liaisons, who shall--
                  (A) be knowledgeable about domestic or 
                international anti-money laundering or 
                countering the financing of terrorism laws and 
                regulations;
                  (B) possess a technical understanding of the 
                Bank Secrecy Act, the protocols of the Egmont 
                Group of Financial Intelligence Units, and the 
                Financial Action Task Force and the 
                recommendations issued by that Task Force;
                  (C) be co-located in a United States embassy, 
                a similar United States Government facility, or 
                a foreign government facility, as appropriate;
                  (D) facilitate capacity building and perform 
                outreach with respect to anti-money laundering 
                and countering the financing of terrorism 
                regulatory and analytical frameworks;
                  (E) establish and maintain relationships with 
                officials from foreign intelligence units, 
                regulatory authorities, ministries of finance, 
                central banks, law enforcement agencies, and 
                other competent authorities;
                  (F) participate in industry outreach 
                engagements with foreign financial institutions 
                and other commercial actors on anti-money 
                laundering and countering the financing of 
                terrorism issues;
                  (G) coordinate with representatives of the 
                Department of Justice at United States 
                Embassies who perform similar functions on 
                behalf of the United States Government; and
                  (H) perform such other duties as the Director 
                determines to be appropriate.
          (2) Compensation.--Each Foreign Financial 
        Intelligence Unit Liaison appointed under paragraph (1) 
        shall receive compensation at the higher of--
                  (A) the rate of compensation paid to a 
                Foreign Service officer at a comparable career 
                level serving at the same embassy or facility, 
                as applicable; or
                  (B) the rate of compensation that the Liaison 
                would have otherwise received.
  (i) Protection of Information Obtained by Foreign Law 
Enforcement and Financial Intelligence Units; Freedom of 
Information Act.--
          (1) Definitions.--In this subsection:
                  (A) Foreign anti-money laundering and 
                countering the financing of terrorism 
                authority.--The term ``foreign anti-money 
                laundering and countering the financing of 
                terrorism authority'' means any foreign agency 
                or authority that is empowered under foreign 
                law to regulate or supervise foreign financial 
                institutions (or designated non-financial 
                businesses and professions) with respect to 
                laws concerning anti-money laundering and 
                countering the financing of terrorism and 
                proliferation.
                  (B) Foreign financial intelligence unit.--The 
                term ``foreign financial intelligence unit'' 
                means any foreign agency or authority, 
                including a foreign financial intelligence unit 
                that is a member of the Egmont Group of 
                Financial Intelligence Units, that is empowered 
                under foreign law as a jurisdiction's national 
                center for--
                          (i) receipt and analysis of 
                        suspicious transaction reports and 
                        other information relevant to money 
                        laundering, associated predicate 
                        offenses, and the financing of 
                        terrorism; and
                          (ii) the dissemination of the results 
                        of the analysis described in clause 
                        (i).
                  (C) Foreign law enforcement authority.--The 
                term ``foreign law enforcement authority'' 
                means any foreign agency or authority that is 
                empowered under foreign law to detect, 
                investigate, or prosecute potential violations 
                of law.
          (2) Information exchanged with foreign law 
        enforcement authorities, foreign financial intelligence 
        units, and foreign anti-money laundering and countering 
        the financing of terrorism authorities.--
                  (A) In general.--The Department of the 
                Treasury may not be compelled to search for or 
                disclose information exchanged with a foreign 
                law enforcement authority, foreign financial 
                intelligence unit, or foreign anti-money 
                laundering and countering the financing of 
                terrorism authority.
                  (B) Inapplicability of freedom of information 
                act.--
                          (i) In general.--Section 552(a)(3) of 
                        title 5 (commonly known as the 
                        ``Freedom of Information Act'') shall 
                        not apply to any request for records or 
                        information exchanged between the 
                        Department of the Treasury and a 
                        foreign law enforcement authority, 
                        foreign financial intelligence unit, or 
                        foreign anti-money laundering and 
                        countering the financing of terrorism 
                        authority.
                          (ii) Specifically exempted by 
                        statute.--For purposes of section 552 
                        of title 5, this paragraph shall be 
                        considered a statute described in 
                        subsection (b)(3)(B) of that section.
                  (C) Clarification on information limitations 
                and protections.--
                          (i) In general.--The provisions of 
                        this paragraph shall apply only to 
                        information necessary to exercise the 
                        duties and powers described under 
                        subsection (b).
                          (ii) Appropriate confidentiality, 
                        classification, and data security 
                        requirements.--The Secretary, in 
                        consultation with the Director, shall 
                        ensure that information provided to a 
                        foreign law enforcement authority, 
                        foreign financial intelligence unit, or 
                        foreign anti-money laundering and 
                        countering the financing of terrorism 
                        authority, is subject to appropriate 
                        confidentiality, classification, and 
                        data security requirements.
          (3) Savings provision.--Nothing in this section shall 
        authorize the Department of the Treasury to withhold 
        information from Congress, decline to carry out a 
        search for information requested by Congress, or 
        prevent the Department of the Treasury from complying 
        with an order of a court of the United States in an 
        action commenced by the United States.
  (j) Analytical Experts.--
          (1) In general.--FinCEN shall maintain financial 
        experts capable of identifying, tracking, and tracing 
        money laundering and terrorist-financing networks in 
        order to conduct and support civil and criminal anti-
        money laundering and countering the financing of 
        terrorism investigations conducted by the United States 
        Government.
          (2) FinCEN analytical hub.--FinCEN, upon a reasonable 
        request from a Federal agency, shall, in collaboration 
        with the requesting agency and the appropriate Federal 
        functional regulator, analyze the potential anti-money 
        laundering and countering the financing of terrorism 
        activity that prompted the request.
  (k) Definitions.--In this section:
          (1) Bank secrecy act.--The term ``Bank Secrecy Act'' 
        has the meaning given the term in section 6003 of the 
        Anti-Money Laundering Act of 2020.
          (2) Federal functional regulator.--The term ``Federal 
        functional regulator'' has the meaning given the term 
        in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 
        6809).
          (3) Financial institution.--The term ``financial 
        institution'' has the meaning given the term in section 
        5312 of this title.
          (4) State bank supervisor.--The term ``State bank 
        supervisor'' has the meaning given the term in section 
        3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).
          (5) State credit union supervisor.--The term ``State 
        credit union supervisor'' means a State official 
        described in section 107A(e) of the Federal Credit 
        Union Act (12 U.S.C. 1757a(e)).
  (l) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated to FinCEN to carry out this section, to 
        remain available until expended--
                  (A) $136,000,000 for fiscal year 2021;
                  (B) $60,000,000 for fiscal year 2022; and
                  (C) $35,000,000 for each of fiscal years 2023 
                through 2026.
          (2) Authorization for funding key technological 
        improvements in mission-critical fincen systems.--There 
        are authorized to be appropriated for fiscal year 2005 
        the following amounts, which are authorized to remain 
        available until expended:
                  (A) BSA direct.--For technological 
                improvements to provide authorized law 
                enforcement and financial regulatory agencies 
                with Web-based access to FinCEN data, to fully 
                develop and implement the highly secure network 
                required under section 362 of Public Law 107-56 
                to expedite the filing of, and reduce the 
                filing costs for, financial institution 
                reports, including suspicious activity reports, 
                collected by FinCEN under chapter 53 and 
                related provisions of law, and enable FinCEN to 
                immediately alert financial institutions about 
                suspicious activities that warrant immediate 
                and enhanced scrutiny, and to provide and 
                upgrade advanced information-sharing 
                technologies to materially improve the 
                Government's ability to exploit the information 
                in the FinCEN data banks, $16,500,000.
                  (B) Advanced analytical technologies.--To 
                provide advanced analytical tools needed to 
                ensure that the data collected by FinCEN under 
                chapter 53 and related provisions of law are 
                utilized fully and appropriately in 
                safeguarding financial institutions and 
                supporting the war on terrorism, $5,000,000.
                  (C) Data networking modernization.--To 
                improve the telecommunications infrastructure 
                to support the improved capabilities of the 
                FinCEN systems, $3,000,000.
                  (D) Enhanced compliance capability.--To 
                improve the effectiveness of the Office of 
                Compliance in FinCEN, $3,000,000.
                  (E) Detection and prevention of financial 
                crimes and terrorism.--To provide development 
                of, and training in the use of, technology to 
                detect and prevent financial crimes and 
                terrorism within and without the United States, 
                $8,000,000.

           *       *       *       *       *       *       *


SUBTITLE IV--MONEY

           *       *       *       *       *       *       *


CHAPTER 53--MONETARY TRANSACTIONS

           *       *       *       *       *       *       *


SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

           *       *       *       *       *       *       *


Sec. 5336. Beneficial ownership information reporting requirements

  (a) Definitions.--In this section:
          (1) Acceptable identification document.--The term 
        ``acceptable identification document'' means, with 
        respect to an individual--
                  (A) a nonexpired passport issued by the 
                United States;
                  (B) a nonexpired identification document 
                issued by a State, local government, or Indian 
                Tribe to the individual acting for the purpose 
                of identification of that individual;
                  (C) a nonexpired driver's license issued by a 
                State; or
                  (D) if the individual does not have a 
                document described in subparagraph (A), (B), or 
                (C), a nonexpired passport issued by a foreign 
                government.
          (2) Applicant.--The term ``applicant'' means any 
        individual who--
                  (A) files an application to form a 
                corporation, limited liability company, or 
                other similar entity under the laws of a State 
                or Indian Tribe; or
                  (B) registers or files an application to 
                register a corporation, limited liability 
                company, or other similar entity formed under 
                the laws of a foreign country to do business in 
                the United States by filing a document with the 
                secretary of state or similar office under the 
                laws of a State or Indian Tribe.
          (3) Beneficial owner.--The term ``beneficial 
        owner''--
                  (A) means, with respect to an entity, an 
                individual who, directly or indirectly, through 
                any contract, arrangement, understanding, 
                relationship, or otherwise--
                          (i) exercises substantial control 
                        over the entity; or
                          (ii) owns or controls not less than 
                        25 percent of the ownership interests 
                        of the entity; and
                  (B) does not include--
                          (i) a minor child, as defined in the 
                        State in which the entity is formed, if 
                        the information of the parent or 
                        guardian of the minor child is reported 
                        in accordance with this section;
                          (ii) an individual acting as a 
                        nominee, intermediary, custodian, or 
                        agent on behalf of another individual;
                          (iii) an individual acting solely as 
                        an employee of a corporation, limited 
                        liability company, or other similar 
                        entity and whose control over or 
                        economic benefits from such entity is 
                        derived solely from the employment 
                        status of the person;
                          (iv) an individual whose only 
                        interest in a corporation, limited 
                        liability company, or other similar 
                        entity is through a right of 
                        inheritance; or
                          (v) a creditor of a corporation, 
                        limited liability company, or other 
                        similar entity, unless the creditor 
                        meets the requirements of subparagraph 
                        (A).
          (4) Director.--The term ``Director'' means the 
        Director of FinCEN.
          (5) FinCEN.--The term ``FinCEN'' means the Financial 
        Crimes Enforcement Network of the Department of the 
        Treasury.
          (6) FinCEN identifier.--The term ``FinCEN 
        identifier'' means the unique identifying number 
        assigned by FinCEN to a person under this section.
          (7) Foreign person.--The term ``foreign person'' 
        means a person who is not a United States person, as 
        defined in section 7701(a) of the Internal Revenue Code 
        of 1986.
          (8) Indian tribe.--The term ``Indian Tribe'' has the 
        meaning given the term ``Indian tribe'' in section 102 
        of the Federally Recognized Indian Tribe List Act of 
        1994 (25 U.S.C. 5130).
          (9) Lawfully admitted for permanent residence.--The 
        term ``lawfully admitted for permanent residence'' has 
        the meaning given the term in section 101(a) of the 
        Immigration and Nationality Act (8 U.S.C. 1101(a)).
          (10) Pooled investment vehicle.--The term ``pooled 
        investment vehicle'' means--
                  (A) any investment company, as defined in 
                section 3(a) of the Investment Company Act of 
                1940 (15 U.S.C. 80a-3(a)); or
                  (B) any company that--
                          (i) would be an investment company 
                        under that section but for the 
                        exclusion provided from that definition 
                        by paragraph (1) or (7) of section 3(c) 
                        of that Act (15 U.S.C. 80a-3(c)); and
                          (ii) is identified by its legal name 
                        by the applicable investment adviser in 
                        its Form ADV (or successor form) filed 
                        with the Securities and Exchange 
                        Commission.
          (11) Reporting company.--The term ``reporting 
        company''--
                  (A) means a corporation, limited liability 
                company, or other similar entity that is--
                          (i) created by the filing of a 
                        document with a secretary of state or a 
                        similar office under the law of a State 
                        or Indian Tribe; or
                          (ii) formed under the law of a 
                        foreign country and registered to do 
                        business in the United States by the 
                        filing of a document with a secretary 
                        of state or a similar office under the 
                        laws of a State or Indian Tribe; and
                  (B) does not include--
                          (i) an issuer--
                                  (I) of a class of securities 
                                registered under section 12 of 
                                the Securities Exchange Act of 
                                1934 (15 U.S.C. 78l); or
                                  (II) that is required to file 
                                supplementary and periodic 
                                information under section 15(d) 
                                of the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78o(d));
                          (ii) an entity--
                                  (I) established under the 
                                laws of the United States, an 
                                Indian Tribe, a State, or a 
                                political subdivision of a 
                                State, or under an interstate 
                                compact between 2 or more 
                                States; and
                                  (II) that exercises 
                                governmental authority on 
                                behalf of the United States or 
                                any such Indian Tribe, State, 
                                or political subdivision;
                          (iii) a bank, as defined in--
                                  (I) section 3 of the Federal 
                                Deposit Insurance Act (12 
                                U.S.C. 1813);
                                  (II) section 2(a) of the 
                                Investment Company Act of 1940 
                                (15 U.S.C. 80a-2(a)); or
                                  (III) section 202(a) of the 
                                Investment Advisers Act of 1940 
                                (15 U.S.C. 80b-2(a));
                          (iv) a Federal credit union or a 
                        State credit union (as those terms are 
                        defined in section 101 of the Federal 
                        Credit Union Act (12 U.S.C. 1752));
                          (v) a bank holding company (as 
                        defined in section 2 of the Bank 
                        Holding Company Act of 1956 (12 U.S.C. 
                        1841)) or a savings and loan holding 
                        company (as defined in section 10(a) of 
                        the Home Owners' Loan Act (12 U.S.C. 
                        1467a(a)));
                          (vi) a money transmitting business 
                        registered with the Secretary of the 
                        Treasury under section 5330;
                          (vii) a broker or dealer (as those 
                        terms are defined in section 3 of the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78c)) that is registered under 
                        section 15 of that Act (15 U.S.C. 78o);
                          (viii) an exchange or clearing agency 
                        (as those terms are defined in section 
                        3 of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78c)) that is 
                        registered under section 6 or 17A of 
                        that Act (15 U.S.C. 78f, 78q-1);
                          (ix) any other entity not described 
                        in clause (i), (vii), or (viii) that is 
                        registered with the Securities and 
                        Exchange Commission under the 
                        Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.);
                          (x) an entity that--
                                  (I) is an investment company 
                                (as defined in section 3 of the 
                                Investment Company Act of 1940 
                                (15 U.S.C. 80a-3)) or an 
                                investment adviser (as defined 
                                in section 202 of the 
                                Investment Advisers Act of 1940 
                                (15 U.S.C. 80b-2)); and
                                  (II) is registered with the 
                                Securities and Exchange 
                                Commission under the Investment 
                                Company Act of 1940 (15 U.S.C. 
                                80a-1 et seq.) or the 
                                Investment Advisers Act of 1940 
                                (15 U.S.C. 80b-1 et seq.);
                          (xi) an investment adviser--
                                  (I) described in section 
                                203(l) of the Investment 
                                Advisers Act of 1940 (15 U.S.C. 
                                80b-3(l)); and
                                  (II) that has filed Item 10, 
                                Schedule A, and Schedule B of 
                                Part 1A of Form ADV, or any 
                                successor thereto, with the 
                                Securities and Exchange 
                                Commission;
                          (xii) an insurance company (as 
                        defined in section 2 of the Investment 
                        Company Act of 1940 (15 U.S.C. 80a-2));
                          (xiii) an entity that--
                                  (I) is an insurance producer 
                                that is authorized by a State 
                                and subject to supervision by 
                                the insurance commissioner or a 
                                similar official or agency of a 
                                State; and
                                  (II) has an operating 
                                presence at a physical office 
                                within the United States;
                          (xiv)(I) a registered entity (as 
                        defined in section 1a of the Commodity 
                        Exchange Act (7 U.S.C. 1a)); or
                          (II) an entity that is--
                                  (aa)(AA) a futures commission 
                                merchant, introducing broker, 
                                swap dealer, major swap 
                                participant, commodity pool 
                                operator, or commodity trading 
                                advisor (as those terms are 
                                defined in section 1a of the 
                                Commodity Exchange Act (7 
                                U.S.C. 1a)); or
                                  (BB) a retail foreign 
                                exchange dealer, as described 
                                in section 2(c)(2)(B) of that 
                                Act (7 U.S.C. 2(c)(2)(B)); and
                                  (bb) registered with the 
                                Commodity Futures Trading 
                                Commission under the Commodity 
                                Exchange Act (7 U.S.C. 1 et 
                                seq.);
                          (xv) a public accounting firm 
                        registered in accordance with section 
                        102 of the Sarbanes-Oxley Act of 2002 
                        (15 U.S.C. 7212);
                          (xvi) a public utility that provides 
                        telecommunications services, electrical 
                        power, natural gas, or water and sewer 
                        services within the United States;
                          (xvii) a financial market utility 
                        designated by the Financial Stability 
                        Oversight Council under section 804 of 
                        the Payment, Clearing, and Settlement 
                        Supervision Act of 2010 (12 U.S.C. 
                        5463);
                          (xviii) any pooled investment vehicle 
                        that is operated or advised by a person 
                        described in clause (iii), (iv), (vii), 
                        (x), or (xi);
                          (xix) any--
                                  (I) organization that is 
                                described in section 501(c) of 
                                the Internal Revenue Code of 
                                1986 (determined without regard 
                                to section 508(a) of such Code) 
                                and exempt from tax under 
                                section 501(a) of such Code, 
                                except that in the case of any 
                                such organization that loses an 
                                exemption from tax, such 
                                organization shall be 
                                considered to be continued to 
                                be described in this subclause 
                                for the 180-day period 
                                beginning on the date of the 
                                loss of such tax-exempt status;
                                  (II) political organization 
                                (as defined in section 
                                527(e)(1) of such Code) that is 
                                exempt from tax under section 
                                527(a) of such Code; or
                                  (III) trust described in 
                                paragraph (1) or (2) of section 
                                4947(a) of such Code;
                          (xx) any corporation, limited 
                        liability company, or other similar 
                        entity that--
                                  (I) operates exclusively to 
                                provide financial assistance 
                                to, or hold governance rights 
                                over, any entity described in 
                                clause (xix);
                                  (II) is a United States 
                                person;
                                  (III) is beneficially owned 
                                or controlled exclusively by 1 
                                or more United States persons 
                                that are United States citizens 
                                or lawfully admitted for 
                                permanent residence; and
                                  (IV) derives at least a 
                                majority of its funding or 
                                revenue from 1 or more United 
                                States persons that are United 
                                States citizens or lawfully 
                                admitted for permanent 
                                residence;
                          (xxi) any entity that--
                                  (I) employs more than 20 
                                employees on a full-time basis 
                                in the United States;
                                  (II) filed in the previous 
                                year Federal income tax returns 
                                in the United States 
                                demonstrating more than 
                                $5,000,000 in gross receipts or 
                                sales in the aggregate, 
                                including the receipts or sales 
                                of--
                                          (aa) other entities 
                                        owned by the entity; 
                                        and
                                          (bb) other entities 
                                        through which the 
                                        entity operates; and
                                  (III) has an operating 
                                presence at a physical office 
                                within the United States;
                          (xxii) any corporation, limited 
                        liability company, or other similar 
                        entity of which the ownership interests 
                        are owned or controlled, directly or 
                        indirectly, by 1 or more entities 
                        described in clause (i), (ii), (iii), 
                        (iv), (v), (vii), (viii), (ix), (x), 
                        (xi), (xii), (xiii), (xiv), (xv), 
                        (xvi), (xvii) (xix), or (xxi);
                          (xxiii) any corporation, limited 
                        liability company, or other similar 
                        entity--
                                  (I) in existence for over 1 
                                year;
                                  (II) that is not engaged in 
                                active business;
                                  (III) that is not owned, 
                                directly or indirectly, by a 
                                foreign person;
                                  (IV) that has not, in the 
                                preceding 12-month period, 
                                experienced a change in 
                                ownership or sent or received 
                                funds in an amount greater than 
                                $1,000 (including all funds 
                                sent to or received from any 
                                source through a financial 
                                account or accounts in which 
                                the entity, or an affiliate of 
                                the entity, maintains an 
                                interest); and
                                  (V) that does not otherwise 
                                hold any kind or type of 
                                assets, including an ownership 
                                interest in any corporation, 
                                limited liability company, or 
                                other similar entity;
                          (xxiv) any entity or class of 
                        entities that the Secretary of the 
                        Treasury, with the written concurrence 
                        of the Attorney General and the 
                        Secretary of Homeland Security, has, by 
                        regulation, determined should be exempt 
                        from the requirements of subsection (b) 
                        because requiring beneficial ownership 
                        information from the entity or class of 
                        entities--
                                  (I) would not serve the 
                                public interest; and
                                  (II) would not be highly 
                                useful in national security, 
                                intelligence, and law 
                                enforcement agency efforts to 
                                detect, prevent, or prosecute 
                                money laundering, the financing 
                                of terrorism, proliferation 
                                finance, serious tax fraud, or 
                                other crimes.
          (12) State.--The term ``State'' means any State of 
        the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Commonwealth of the 
        Northern Mariana Islands, American Samoa, Guam, the 
        United States Virgin Islands, and any other 
        commonwealth, territory, or possession of the United 
        States.
          (13) Unique identifying number.--The term ``unique 
        identifying number'' means, with respect to an 
        individual or an entity with a sole member, the unique 
        identifying number from an acceptable identification 
        document.
          (14) United states person.--The term ``United States 
        person'' has the meaning given the term in section 
        7701(a) of the Internal Revenue Code of 1986.
  (b) Beneficial Ownership Information Reporting.--
          (1) Reporting.--
                  (A) In general.--In accordance with 
                regulations prescribed by the Secretary of the 
                Treasury, each reporting company shall submit 
                to FinCEN a report that contains the 
                information described in paragraph (2).
                  (B) Reporting of existing entities.--In 
                accordance with regulations prescribed by the 
                Secretary of the Treasury, any reporting 
                company that has been formed or registered 
                before the effective date of the regulations 
                prescribed under this subsection shall, in a 
                timely manner, and not later than 2 years after 
                the effective date of the regulations 
                prescribed under this subsection, submit to 
                FinCEN a report that contains the information 
                described in paragraph (2).
                  (C) Reporting at time of formation or 
                registration.--In accordance with regulations 
                prescribed by the Secretary of the Treasury, 
                any reporting company that has been formed or 
                registered after the effective date of the 
                regulations promulgated under this subsection 
                shall, at the time of formation or 
                registration, submit to FinCEN a report that 
                contains the information described in paragraph 
                (2).
                  (D) Updated reporting for changes in 
                beneficial ownership.--In accordance with 
                regulations prescribed by the Secretary of the 
                Treasury, a reporting company shall, in a 
                timely manner, and not later than 1 year after 
                the date on which there is a change with 
                respect to any information described in 
                paragraph (2), submit to FinCEN a report that 
                updates the information relating to the change.
                  (E) Treasury review of updated reporting for 
                changes in beneficial ownership.--The Secretary 
                of the Treasury, in consultation with the 
                Attorney General and the Secretary of Homeland 
                Security, shall conduct a review to evaluate--
                          (i) the necessity of a requirement 
                        for corporations, limited liability 
                        companies, or other similar entities to 
                        update the report on beneficial 
                        ownership information in paragraph (2), 
                        related to a change in ownership, 
                        within a shorter period of time than 
                        required under subparagraph (D), taking 
                        into account the updating requirements 
                        under subparagraph (D) and the 
                        information contained in the reports;
                          (ii) the benefit to law enforcement 
                        and national security officials that 
                        might be derived from, and the burden 
                        that a requirement to update the list 
                        of beneficial owners within a shorter 
                        period of time after a change in the 
                        list of beneficial owners would impose 
                        on corporations, limited liability 
                        companies, or other similar entities; 
                        and
                          (iii) not later than 2 years after 
                        the date of enactment of this section, 
                        incorporate 2 into the 
                        regulations, as appropriate, any 
                        changes necessary to implement the 
                        findings and determinations based on 
                        the review required under this 
                        subparagraph.
                  (F) Regulation requirements.--In promulgating 
                the regulations required under subparagraphs 
                (A) through (D), the Secretary of the Treasury 
                shall, to the greatest extent practicable--
                          (i) establish partnerships with 
                        State, local, and Tribal governmental 
                        agencies;
                          (ii) collect information described in 
                        paragraph (2) through existing Federal, 
                        State, and local processes and 
                        procedures;
                          (iii) minimize burdens on reporting 
                        companies associated with the 
                        collection of the information described 
                        in paragraph (2), in light of the 
                        private compliance costs placed on 
                        legitimate businesses, including by 
                        identifying any steps taken to mitigate 
                        the costs relating to compliance with 
                        the collection of information; and
                          (iv) collect information described in 
                        paragraph (2) in a form and manner that 
                        ensures the information is highly 
                        useful in--
                                  (I) facilitating important 
                                national security, 
                                intelligence, and law 
                                enforcement activities; and
                                  (II) confirming beneficial 
                                ownership information provided 
                                to financial institutions to 
                                facilitate the compliance of 
                                the financial institutions with 
                                anti-money laundering, 
                                countering the financing of 
                                terrorism, and customer due 
                                diligence requirements under 
                                applicable law.
                  (G) Regulatory simplification.--To simplify 
                compliance with this section for reporting 
                companies and financial institutions, the 
                Secretary of the Treasury shall ensure that the 
                regulations prescribed by the Secretary under 
                this subsection are added to part 1010 of title 
                31, Code of Federal Regulations, or any 
                successor thereto.
          (2) Required information.--
                  (A) In general.--In accordance with 
                regulations prescribed by the Secretary of the 
                Treasury, a report delivered under paragraph 
                (1) shall, except as provided in subparagraph 
                (B), identify each beneficial owner of the 
                applicable reporting company and each applicant 
                with respect to that reporting company by--
                          (i) full legal name;
                          (ii) date of birth;
                          (iii) current, as of the date on 
                        which the report is delivered, 
                        residential or business street address; 
                        and
                          (iv)(I) unique identifying number 
                        from an acceptable identification 
                        document; or
                          (II) FinCEN identifier in accordance 
                        with requirements in paragraph (3).
                  (B) Reporting requirement for exempt entities 
                having an ownership interest.--If an exempt 
                entity described in subsection (a)(11)(B) has 
                or will have a direct or indirect ownership 
                interest in a reporting company, the reporting 
                company or the applicant--
                          (i) shall, with respect to the exempt 
                        entity, only list the name of the 
                        exempt entity; and
                          (ii) shall not be required to report 
                        the information with respect to the 
                        exempt entity otherwise required under 
                        subparagraph (A).
                  (C) Reporting requirement for certain pooled 
                investment vehicles.--Any corporation, limited 
                liability company, or other similar entity that 
                is an exempt entity described in subsection 
                (a)(11)(B)(xviii) and is formed under the laws 
                of a foreign country shall file with FinCEN a 
                written certification that provides 
                identification information of an individual 
                that exercises substantial control over the 
                pooled investment vehicle in the same manner as 
                required under this subsection.
                  (D) Reporting requirement for exempt 
                subsidiaries.--In accordance with the 
                regulations promulgated by the Secretary, any 
                corporation, limited liability company, or 
                other similar entity that is an exempt entity 
                described in subsection (a)(11)(B)(xxii), 
                shall, at the time such entity no longer meets 
                the criteria described in subsection 
                (a)(11)(B)(xxii), submit to FinCEN a report 
                containing the information required under 
                subparagraph (A).
                  (E) Reporting requirement for exempt 
                grandfathered entities.--In accordance with the 
                regulations promulgated by the Secretary, any 
                corporation, limited liability company, or 
                other similar entity that is an exempt entity 
                described in subsection (a)(11)(B)(xxiii), 
                shall, at the time such entity no longer meets 
                the criteria described in subsection 
                (a)(11)(B)(xxiii), submit to FinCEN a report 
                containing the information required under 
                subparagraph (A).
          (3) FinCEN identifier.--
                  (A) Issuance of fincen identifier.--
                          (i) In general.--Upon request by an 
                        individual who has provided FinCEN with 
                        the information described in paragraph 
                        (2)(A) pertaining to the individual, or 
                        by an entity that has reported its 
                        beneficial ownership information to 
                        FinCEN in accordance with this section, 
                        FinCEN shall issue a FinCEN identifier 
                        to such individual or entity.
                          (ii) Updating of information.--An 
                        individual or entity with a FinCEN 
                        identifier shall submit filings with 
                        FinCEN pursuant to paragraph (1) 
                        updating any information described in 
                        paragraph (2) in a timely manner 
                        consistent with paragraph (1)(D).
                          (iii) Exclusive identifier.--FinCEN 
                        shall not issue more than 1 FinCEN 
                        identifier to the same individual or to 
                        the same entity (including any 
                        successor entity).
                  (B) Use of fincen identifier for 
                individuals.--Any person required to report the 
                information described in paragraph (2) with 
                respect to an individual may instead report the 
                FinCEN identifier of the individual.
                  (C) Use of fincen identifier for entities.--
                If an individual is or may be a beneficial 
                owner of a reporting company by an interest 
                held by the individual in an entity that, 
                directly or indirectly, holds an interest in 
                the reporting company, the reporting company 
                may report the FinCEN identifier of the entity 
                in lieu of providing the information required 
                by paragraph (2)(A) with respect to the 
                individual.
          (4) Regulations.--The Secretary of the Treasury 
        shall--
                  (A) by regulation prescribe procedures and 
                standards governing any report under paragraph 
                (2) and any FinCEN identifier under paragraph 
                (3); and
                  (B) in promulgating the regulations under 
                subparagraph (A) to the extent practicable, 
                consistent with the purposes of this section--
                          (i) minimize burdens on reporting 
                        companies associated with the 
                        collection of beneficial ownership 
                        information, including by eliminating 
                        duplicative requirements; and
                          (ii) ensure the beneficial ownership 
                        information reported to FinCEN is 
                        accurate, complete, and highly useful.
          (5) Effective date.--The requirements of this 
        subsection shall take effect on the effective date of 
        the regulations prescribed by the Secretary of the 
        Treasury under this subsection, which shall be 
        promulgated not later than 1 year after the date of 
        enactment of this section.
          (6) Report.--Not later than 1 year after the 
        effective date described in paragraph (5), and annually 
        thereafter for 2 years, the Secretary of the Treasury 
        shall submit to Congress a report describing the 
        procedures and standards prescribed to carry out 
        paragraph (2), which shall include an assessment of--
                  (A) the effectiveness of those procedures and 
                standards in minimizing reporting burdens 
                (including through the elimination of 
                duplicative requirements) and strengthening the 
                accuracy of reports submitted under paragraph 
                (2); and
                  (B) any alternative procedures and standards 
                prescribed to carry out paragraph (2).
  (c) Retention and Disclosure of Beneficial Ownership 
Information by FinCEN.--
          (1) Retention of information.--Beneficial ownership 
        information required under subsection (b) relating to 
        each reporting company shall be maintained by FinCEN 
        for not fewer than 5 years after the date on which the 
        reporting company terminates.
          (2) Disclosure.--
                  (A) Prohibition.--Except as authorized by 
                this subsection and the protocols promulgated 
                under this subsection, beneficial ownership 
                information reported under this section shall 
                be confidential and may not be disclosed by--
                          (i) an officer or employee of the 
                        United States;
                          (ii) an officer or employee of any 
                        State, local, or Tribal agency; or
                          (iii) an officer or employee of any 
                        financial institution or regulatory 
                        agency receiving information under this 
                        subsection.
                  (B) Scope of disclosure by fincen.--FinCEN 
                may disclose beneficial ownership information 
                reported pursuant to this section only upon 
                receipt of--
                          (i) a request, through appropriate 
                        protocols--
                                  (I) from a Federal agency 
                                engaged in national security, 
                                intelligence, or law 
                                enforcement activity, for use 
                                in furtherance of such 
                                activity; or
                                  (II) from a State, local, or 
                                Tribal law enforcement agency, 
                                if a court of competent 
                                jurisdiction, including any 
                                officer of such a court, has 
                                authorized the law enforcement 
                                agency to seek the information 
                                in a criminal or civil 
                                investigation;
                          (ii) a request from a Federal agency 
                        on behalf of a law enforcement agency, 
                        prosecutor, or judge of another 
                        country, including a foreign central 
                        authority or competent authority (or 
                        like designation), under an 
                        international treaty, agreement, 
                        convention, or official request made by 
                        law enforcement, judicial, or 
                        prosecutorial authorities in trusted 
                        foreign countries when no treaty, 
                        agreement, or convention is available--
                                  (I) issued in response to a 
                                request for assistance in an 
                                investigation or prosecution by 
                                such foreign country; and
                                  (II) that--
                                          (aa) requires 
                                        compliance with the 
                                        disclosure and use 
                                        provisions of the 
                                        treaty, agreement, or 
                                        convention, publicly 
                                        disclosing any 
                                        beneficial ownership 
                                        information received; 
                                        or
                                          (bb) limits the use 
                                        of the information for 
                                        any purpose other than 
                                        the authorized 
                                        investigation or 
                                        national security or 
                                        intelligence activity;
                          (iii) a request made by a financial 
                        institution subject to customer due 
                        diligence requirements, with the 
                        consent of the reporting company, to 
                        facilitate the compliance of the 
                        financial institution with customer due 
                        diligence requirements under applicable 
                        law; or
                          (iv) a request made by a Federal 
                        functional regulator or other 
                        appropriate regulatory agency 
                        consistent with the requirements of 
                        subparagraph (C).
                  (C) Form and manner of disclosure to 
                financial institutions and regulatory 
                agencies.--The Secretary of the Treasury shall, 
                by regulation, prescribe the form and manner in 
                which information shall be provided to a 
                financial institution under subparagraph 
                (B)(iii), which regulation shall include that 
                the information shall also be available to a 
                Federal functional regulator or other 
                appropriate regulatory agency, as determined by 
                the Secretary, if the agency--
                          (i) is authorized by law to assess, 
                        supervise, enforce, or otherwise 
                        determine the compliance of the 
                        financial institution with the 
                        requirements described in that 
                        subparagraph;
                          (ii) uses the information solely for 
                        the purpose of conducting the 
                        assessment, supervision, or authorized 
                        investigation or activity described in 
                        clause (i); and
                          (iii) enters into an agreement with 
                        the Secretary providing for appropriate 
                        protocols governing the safekeeping of 
                        the information.
          (3) Appropriate protocols.--The Secretary of the 
        Treasury shall establish by regulation protocols 
        described in paragraph (2)(A) that--
                  (A) protect the security and confidentiality 
                of any beneficial ownership information 
                provided directly by the Secretary;
                  (B) require the head of any requesting 
                agency, on a non-delegable basis, to approve 
                the standards and procedures utilized by the 
                requesting agency and certify to the Secretary 
                semi-annually that such standards and 
                procedures are in compliance with the 
                requirements of this paragraph;
                  (C) require the requesting agency to 
                establish and maintain, to the satisfaction of 
                the Secretary, a secure system in which such 
                beneficial ownership information provided 
                directly by the Secretary shall be stored;
                  (D) require the requesting agency to furnish 
                a report to the Secretary, at such time and 
                containing such information as the Secretary 
                may prescribe, that describes the procedures 
                established and utilized by such agency to 
                ensure the confidentiality of the beneficial 
                ownership information provided directly by the 
                Secretary;
                  (E) require a written certification for each 
                authorized investigation or other activity 
                described in paragraph (2) from the head of an 
                agency described in paragraph (2)(B)(i)(I), or 
                their designees, that--
                          (i) states that applicable 
                        requirements have been met, in such 
                        form and manner as the Secretary may 
                        prescribe; and
                          (ii) at a minimum, sets forth the 
                        specific reason or reasons why the 
                        beneficial ownership information is 
                        relevant to an authorized investigation 
                        or other activity described in 
                        paragraph (2);
                  (F) require the requesting agency to limit, 
                to the greatest extent practicable, the scope 
                of information sought, consistent with the 
                purposes for seeking beneficial ownership 
                information;
                  (G) restrict, to the satisfaction of the 
                Secretary, access to beneficial ownership 
                information to whom disclosure may be made 
                under the provisions of this section to only 
                users at the requesting agency--
                          (i) who are directly engaged in the 
                        authorized investigation or activity 
                        described in paragraph (2);
                          (ii) whose duties or responsibilities 
                        require such access;
                          (iii) who--
                                  (I) have undergone 
                                appropriate training; or
                                  (II) use staff to access the 
                                database who have undergone 
                                appropriate training;
                          (iv) who use appropriate identity 
                        verification mechanisms to obtain 
                        access to the information; and
                          (v) who are authorized by agreement 
                        with the Secretary to access the 
                        information;
                  (H) require the requesting agency to 
                establish and maintain, to the satisfaction of 
                the Secretary, a permanent system of 
                standardized records with respect to an 
                auditable trail of each request for beneficial 
                ownership information submitted to the 
                Secretary by the agency, including the reason 
                for the request, the name of the individual who 
                made the request, the date of the request, any 
                disclosure of beneficial ownership information 
                made by or to the agency, and any other 
                information the Secretary of the Treasury 
                determines is appropriate;
                  (I) require that the requesting agency 
                receiving beneficial ownership information from 
                the Secretary conduct an annual audit to verify 
                that the beneficial ownership information 
                received from the Secretary has been accessed 
                and used appropriately, and in a manner 
                consistent with this paragraph and provide the 
                results of that audit to the Secretary upon 
                request;
                  (J) require the Secretary to conduct an 
                annual audit of the adherence of the agencies 
                to the protocols established under this 
                paragraph to ensure that agencies are 
                requesting and using beneficial ownership 
                information appropriately; and
                  (K) provide such other safeguards which the 
                Secretary determines (and which the Secretary 
                prescribes in regulations) to be necessary or 
                appropriate to protect the confidentiality of 
                the beneficial ownership information.
          (4) Violation of protocols.--Any employee or officer 
        of a requesting agency under paragraph (2)(B) that 
        violates the protocols described in paragraph (3), 
        including unauthorized disclosure or use, shall be 
        subject to criminal and civil penalties under 
        subsection (h)(3)(B).
          (5) Department of the treasury access.--
                  (A) In general.--Beneficial ownership 
                information shall be accessible for inspection 
                or disclosure to officers and employees of the 
                Department of the Treasury whose official 
                duties require such inspection or disclosure 
                subject to procedures and safeguards prescribed 
                by the Secretary of the Treasury.
                  (B) Tax administration purposes.--Officers 
                and employees of the Department of the Treasury 
                may obtain access to beneficial ownership 
                information for tax administration purposes in 
                accordance with this subsection.
          (6) Rejection of request.--The Secretary of the 
        Treasury--
                  (A) shall reject a request not submitted in 
                the form and manner prescribed by the Secretary 
                under paragraph (2)(C); and
                  (B) may decline to provide information 
                requested under this subsection upon finding 
                that--
                          (i) the requesting agency has failed 
                        to meet any other requirement of this 
                        subsection;
                          (ii) the information is being 
                        requested for an unlawful purpose; or
                          (iii) other good cause exists to deny 
                        the request.
          (7) Suspension.--The Secretary of the Treasury may 
        suspend or debar a requesting agency from access for 
        any of the grounds set forth in paragraph (6), 
        including for repeated or serious violations of any 
        requirement under paragraph (2).
          (8) Security protections.--The Secretary of the 
        Treasury shall maintain information security 
        protections, including encryption, for information 
        reported to FinCEN under subsection (b) and ensure that 
        the protections--
                  (A) are consistent with standards and 
                guidelines developed under subchapter II of 
                chapter 35 of title 44; and
                  (B) incorporate Federal information system 
                security controls for high-impact systems, 
                excluding national security systems, consistent 
                with applicable law to prevent the loss of 
                confidentiality, integrity, or availability of 
                information that may have a severe or 
                catastrophic adverse effect.
          (9) Report by the secretary.--Not later than 1 year 
        after the effective date of the regulations prescribed 
        under this subsection, and annually thereafter for 5 
        years, the Secretary of the Treasury shall submit 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, which--
                  (A) may include a classified annex; and
                  (B) shall, with respect to each request 
                submitted under paragraph (2)(B)(i)(II) during 
                the period covered by the report, and 
                consistent with protocols established by the 
                Secretary that are necessary to protect law 
                enforcement sensitive, tax-related, or 
                classified information, include--
                          (i) the date on which the request was 
                        submitted;
                          (ii) the source of the request;
                          (iii) whether the request was 
                        accepted or rejected or is pending; and
                          (iv) a general description of the 
                        basis for rejecting the such request, 
                        if applicable.
          (10) Audit by the comptroller general.--Not later 
        than 1 year after the effective date of the regulations 
        prescribed under this subsection, and annually 
        thereafter for 6 years, the Comptroller General of the 
        United States shall--
                  (A) audit the procedures and safeguards 
                established by the Secretary of the Treasury 
                under those regulations, including duties for 
                verification of requesting agencies systems and 
                adherence to the protocols established under 
                this subsection, to determine whether such 
                safeguards and procedures meet the requirements 
                of this subsection and that the Department of 
                the Treasury is using beneficial ownership 
                information appropriately in a manner 
                consistent with this subsection; and
                  (B) submit to the Secretary of the Treasury, 
                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 contains the 
                findings and determinations with respect to any 
                audit conducted under this paragraph.
          (11) Department of the treasury testimony.--
                  (A) In general.--Not later than March 31 of 
                each year for [5 years] 10 years beginning in 
                2022, the Director shall be made available to 
                testify before the Committee on Banking, 
                Housing, and Urban Affairs of the Senate and 
                the Committee on Financial Services of the 
                House of Representatives, or an appropriate 
                subcommittee thereof, regarding FinCEN issues, 
                including, specifically, issues relating to--
                          (i) anticipated plans, goals, and 
                        resources necessary for operations of 
                        FinCEN in implementing the requirements 
                        of the Anti-Money Laundering Act of 
                        2020 and the amendments made by that 
                        Act;
                          (ii) the adequacy of appropriations 
                        for FinCEN in the current and the 
                        previous fiscal year to--
                                  (I) ensure that the 
                                requirements and obligations 
                                imposed upon FinCEN by the 
                                Anti-Money Laundering Act of 
                                2020 and the amendments made by 
                                that Act are completed as 
                                efficiently, effectively, and 
                                expeditiously as possible; and
                                  (II) provide for robust and 
                                effective implementation and 
                                enforcement of the provisions 
                                of the Anti-Money Laundering 
                                Act of 2020 and the amendments 
                                made by that Act;
                          (iii) strengthen FinCEN management 
                        efforts, as necessary and as identified 
                        by the Director, to meet the 
                        requirements of the Anti-Money 
                        Laundering Act of 2020 and the 
                        amendments made by that Act;
                          (iv) provide for the necessary public 
                        outreach to ensure the broad 
                        dissemination of information regarding 
                        any new program requirements provided 
                        for in the Anti-Money Laundering Act of 
                        2020 and the amendments made by that 
                        Act, including--
                                  (I) educating the business 
                                community on the goals and 
                                operations of the new 
                                beneficial ownership database; 
                                and
                                  (II) disseminating to the 
                                governments of countries that 
                                are allies or partners of the 
                                United States information on 
                                best practices developed by 
                                FinCEN related to beneficial 
                                ownership information retention 
                                and use;
                          (v) any policy recommendations that 
                        could facilitate and improve 
                        communication and coordination between 
                        the private sector, FinCEN, and the 
                        Federal, State, and local agencies and 
                        entities involved in implementing 
                        innovative approaches to meet their 
                        obligations under the Anti-Money 
                        Laundering Act of 2020 and the 
                        amendments made by that Act, the Bank 
                        Secrecy Act (as defined in section 6003 
                        of the Anti-Money Laundering Act of 
                        2020), and other anti-money laundering 
                        compliance laws; and
                          (vi) any other matter that the 
                        Director determines is appropriate.
                  (B) Testimony classification.--The testimony 
                required under subparagraph (A)--
                          (i) shall be submitted in 
                        unclassified form; and
                          (ii) may include a classified 
                        portion.
  (d) Agency Coordination.--
          (1) In general.--The Secretary of the Treasury shall, 
        to the greatest extent practicable, update the 
        information described in subsection (b) by working 
        collaboratively with other relevant Federal, State, and 
        Tribal agencies.
          (2) Information from relevant federal, state, and 
        tribal agencies.--Relevant Federal, State, and Tribal 
        agencies, as determined by the Secretary of the 
        Treasury, shall, to the extent practicable, and 
        consistent with applicable legal protections, cooperate 
        with and provide information requested by FinCEN for 
        purposes of maintaining an accurate, complete, and 
        highly useful database for beneficial ownership 
        information.
          (3) Regulations.--The Secretary of the Treasury, in 
        consultation with the heads of other relevant Federal 
        agencies, may promulgate regulations as necessary to 
        carry out this subsection.
  (e) Notification of Federal Obligations.--
          (1) Federal.--The Secretary of the Treasury shall 
        take reasonable steps to provide notice to persons of 
        their obligations to report beneficial ownership 
        information under this section, including by causing 
        appropriate informational materials describing such 
        obligations to be included in 1 or more forms or other 
        informational materials regularly distributed by the 
        Internal Revenue Service and FinCEN.
          (2) States and indian tribes.--
                  (A) In general.--As a condition of the funds 
                made available under this section, each State 
                and Indian Tribe shall, not later than 2 years 
                after the effective date of the regulations 
                promulgated under subsection (b)(4), take the 
                following actions:
                          (i) The secretary of a State or a 
                        similar office in each State or Indian 
                        Tribe responsible for the formation or 
                        registration of entities created by the 
                        filing of a public document with the 
                        office under the law of the State or 
                        Indian Tribe shall periodically, 
                        including at the time of any initial 
                        formation or registration of an entity, 
                        assessment of an annual fee, or renewal 
                        of any license to do business in the 
                        United States and in connection with 
                        State or Indian Tribe corporate tax 
                        assessments or renewals--
                                  (I) notify filers of their 
                                requirements as reporting 
                                companies under this section, 
                                including the requirements to 
                                file and update reports under 
                                paragraphs (1) and (2) of 
                                subsection (b); and
                                  (II) provide the filers with 
                                a copy of the reporting company 
                                form created by the Secretary 
                                of the Treasury under this 
                                subsection or an internet link 
                                to that form.
                          (ii) The secretary of a State or a 
                        similar office in each State or Indian 
                        Tribe responsible for the formation or 
                        registration of entities created by the 
                        filing of a public document with the 
                        office under the law of the State or 
                        Indian Tribes shall update the 
                        websites, forms relating to 
                        incorporation, and physical premises of 
                        the office to notify filers of their 
                        requirements as reporting companies 
                        under this section, including providing 
                        an internet link to the reporting 
                        company form created by the Secretary 
                        of the Treasury under this section.
                  (B) Notification from the department of the 
                treasury.--A notification under clause (i) or 
                (ii) of subparagraph (A) shall explicitly state 
                that the notification is on behalf of the 
                Department of the Treasury for the purpose of 
                preventing money laundering, the financing of 
                terrorism, proliferation financing, serious tax 
                fraud, and other financial crime by requiring 
                nonpublic registration of business entities 
                formed or registered to do business in the 
                United States.
  (f) No Bearer Share Corporations or Limited Liability 
Companies.--A corporation, limited liability company, or other 
similar entity formed under the laws of a State or Indian Tribe 
may not issue a certificate in bearer form evidencing either a 
whole or fractional interest in the entity.
  (g) Regulations.--In promulgating regulations carrying out 
this section, the Director shall reach out to members of the 
small business community and other appropriate parties to 
ensure efficiency and effectiveness of the process for the 
entities subject to the requirements of this section.
  (h) Penalties.--
          (1) Reporting violations.--It shall be unlawful for 
        any person to--
                  (A) willfully provide, or attempt to provide, 
                false or fraudulent beneficial ownership 
                information, including a false or fraudulent 
                identifying photograph or document, to FinCEN 
                in accordance with subsection (b); or
                  (B) willfully fail to report complete or 
                updated beneficial ownership information to 
                FinCEN in accordance with subsection (b).
          (2) Unauthorized disclosure or use.--Except as 
        authorized by this section, it shall be unlawful for 
        any person to knowingly disclose or knowingly use the 
        beneficial ownership information obtained by the person 
        through--
                  (A) a report submitted to FinCEN under 
                subsection (b); or
                  (B) a disclosure made by FinCEN under 
                subsection (c).
          (3) Criminal and civil penalties.--
                  (A) Reporting violations.--Any person that 
                violates subparagraph (A) or (B) of paragraph 
                (1)--
                          (i) shall be liable to the United 
                        States for a civil penalty of not more 
                        than $500 for each day that the 
                        violation continues or has not been 
                        remedied; and
                          (ii) may be fined not more than 
                        $10,000, imprisoned for not more than 2 
                        years, or both.
                  (B) Unauthorized disclosure or use 
                violations.--Any person that violates paragraph 
                (2)--
                          (i) shall be liable to the United 
                        States for a civil penalty of not more 
                        than $500 for each day that the 
                        violation continues or has not been 
                        remedied; and
                          (ii)(I) shall be fined not more than 
                        $250,000, or imprisoned for not more 
                        than 5 years, or both; or
                          (II) while violating another law of 
                        the United States or as part of a 
                        pattern of any illegal activity 
                        involving more than $100,000 in a 12-
                        month period, shall be fined not more 
                        than $500,000, imprisoned for not more 
                        than 10 years, or both.
                  (C) Safe harbor.--
                          (i) Safe harbor.--
                                  (I) In general.--Except as 
                                provided in subclause (II), a 
                                person shall not be subject to 
                                civil or criminal penalty under 
                                subparagraph (A) if the 
                                person--
                                          (aa) has reason to 
                                        believe that any report 
                                        submitted by the person 
                                        in accordance with 
                                        subsection (b) contains 
                                        inaccurate information; 
                                        and
                                          (bb) in accordance 
                                        with regulations issued 
                                        by the Secretary, 
                                        voluntarily and 
                                        promptly, and in no 
                                        case later than 90 days 
                                        after the date on which 
                                        the person submitted 
                                        the report, submits a 
                                        report containing 
                                        corrected information.
                                  (II) Exceptions.--A person 
                                shall not be exempt from 
                                penalty under clause (i) if, at 
                                the time the person submits the 
                                report required by subsection 
                                (b), the person--
                                          (aa) acts for the 
                                        purpose of evading the 
                                        reporting requirements 
                                        under subsection (b); 
                                        and
                                          (bb) has actual 
                                        knowledge that any 
                                        information contained 
                                        in the report is 
                                        inaccurate.
                          (ii) Assistance.--FinCEN shall 
                        provide assistance to any person 
                        seeking to submit a corrected report in 
                        accordance with clause (i)(I).
          (4) User complaint process.--
                  (A) In general.--The Inspector General of the 
                Department of the Treasury, in coordination 
                with the Secretary of the Treasury, shall 
                provide public contact information to receive 
                external comments or complaints regarding the 
                beneficial ownership information notification 
                and collection process or regarding the 
                accuracy, completeness, or timeliness of such 
                information.
                  (B) Report.--The Inspector General of the 
                Department of the Treasury shall submit to 
                Congress a periodic report that--
                          (i) summarizes external comments or 
                        complaints and related investigations 
                        conducted by the Inspector General 
                        related to the collection of beneficial 
                        ownership information; and
                          (ii) includes recommendations, in 
                        coordination with FinCEN, to improve 
                        the form and manner of the 
                        notification, collection and updating 
                        processes of the beneficial ownership 
                        information reporting requirements to 
                        ensure the beneficial ownership 
                        information reported to FinCEN is 
                        accurate, complete, and highly useful.
          (5) Treasury office of inspector general 
        investigation in the event of a cybersecurity breach.--
                  (A) In general.--In the event of a 
                cybersecurity breach that results in 
                substantial unauthorized access and disclosure 
                of sensitive beneficial ownership information, 
                the Inspector General of the Department of the 
                Treasury shall conduct an investigation into 
                FinCEN cybersecurity practices that, to the 
                extent possible, determines any vulnerabilities 
                within FinCEN information security and 
                confidentiality protocols and provides 
                recommendations for fixing those deficiencies.
                  (B) Report.--The Inspector General of the 
                Department of the Treasury shall submit to the 
                Secretary of the Treasury a report on each 
                investigation conducted under subparagraph (A).
                  (C) Actions of the secretary.--Upon receiving 
                a report submitted under subparagraph (B), the 
                Secretary of the Treasury shall--
                          (i) determine whether the Director 
                        had any responsibility for the 
                        cybersecurity breach or whether 
                        policies, practices, or procedures 
                        implemented at the direction of the 
                        Director led to the cybersecurity 
                        breach; and
                          (ii) submit to Congress a written 
                        report outlining the findings of the 
                        Secretary, including a determination by 
                        the Secretary on whether to retain or 
                        dismiss the individual serving as the 
                        Director.
          (6) Definition.--In this subsection, the term 
        ``willfully'' means the voluntary, intentional 
        violation of a known legal duty.
  (i) Continuous Review of Exempt Entities.--
          (1) In general.--On and after the effective date of 
        the regulations promulgated under subsection (b)(4), if 
        the Secretary of the Treasury makes a determination, 
        which may be based on information contained in the 
        report required under section 6502(c) of the Anti-Money 
        Laundering Act of 2020 or on any other information 
        available to the Secretary, that an entity or class of 
        entities described in subsection (a)(11)(B) has been 
        involved in significant abuse relating to money 
        laundering, the financing of terrorism, proliferation 
        finance, serious tax fraud, or any other financial 
        crime, not later than 90 days after the date on which 
        the Secretary makes the determination, the Secretary 
        shall submit 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 explains the reasons for the determination 
        and any administrative or legislative recommendations 
        to prevent such abuse.
          (2) Classified annex.--The report required by 
        paragraph (1)--
                  (A) shall be submitted in unclassified form; 
                and
                  (B) may include a classified annex.
  (j) Authorization of Appropriations.--There are authorized to 
be appropriated to FinCEN for each of the 3 fiscal years 
beginning on the effective date of the regulations promulgated 
under subsection (b)(4), such sums as may be necessary to carry 
out this section, including allocating funds to the States to 
pay reasonable costs relating to compliance with the 
requirements of such section.

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