Division F — Anti-Money Laundering

Ҥ 5311. Declaration of purpose

“It is the purpose of this subchapter (except section 5315) to—

“(1) require certain reports or records that are highly useful in—

“(A) criminal, tax, or regulatory investigations, risk assessments, or proceedings; or

“(B) intelligence or counterintelligence activities, including analysis, to protect against terrorism;

“(2) prevent the laundering of money and the financing of terrorism through the establishment by financial institutions of reasonably designed risk-based programs to combat money laundering and the financing of terrorism;

“(3) facilitate the tracking of money that has been sourced through criminal activity or is intended to promote criminal or terrorist activity;

“(4) assess the money laundering, terrorism finance, tax evasion, and fraud risks to financial institutions, products, or services to—

“(A) protect the financial system of the United States from criminal abuse; and

“(B) safeguard the national security of the United States; and

“(5) establish appropriate frameworks for information sharing among financial institutions, their agents and service providers, their regulatory authorities, associations of financial institutions, the Department of the Treasury, and law enforcement authorities to identify, stop, and apprehend money launderers and those who finance terrorists.”

“(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, 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, 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 to which the particular procedures apply.

“(B) Use of information.—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.

“(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).”

“(g) 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 the OTFI.

“(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 (G) of subsection (a)(4).

“(h) Deployment of Staff.—The Secretary of the Treasury may detail, without regard to the provisions of section 300.301 of title 5, Code of Federal Regulations, any employee in the OTFI to any position in the OTFI for which the Secretary has determined there is a need.”

“§ 316. Treasury Attaché Program

“(a) In General.—There is established the Treasury Financial Attaché Program, under which the Secretary of the Treasury shall appoint employees of the Department of the Treasury as a Treasury Financial Attaché, who shall—

“(1) further the work of the Department of the Treasury in developing and executing the financial and economic policy of the United States Government and the international fight against terrorism, money laundering, and other illicit finance;

“(2) be co-located in a United States Embassy, a similar United States Government facility, or a foreign government facility, as the Secretary determines is appropriate;

“(3) establish and maintain relationships with foreign counterparts, including employees of ministries of finance, central banks, international financial institutions, and other relevant official entities;

“(4) conduct outreach to local and foreign financial institutions and other commercial actors;

“(5) coordinate with representatives of the Department of Justice at United States Embassies who perform similar functions on behalf of the United States Government; and

“(6) perform such other actions as the Secretary determines are appropriate.

“(b) Number of Attachés.—

“(1) In general.—The number of Treasury Financial Attachés appointed under this section at any one time shall be not fewer than 6 more employees than the number of employees of the Department of the Treasury serving as Treasury attachés on the date of enactment of this section.

“(2) Additional posts.—The Secretary of the Treasury may establish additional posts subject to the availability of appropriations.

“(c) Compensation.—

“(1) In general.—Each Treasury Financial Attaché appointed under this section and located at a United States Embassy shall receive compensation, including allowances, at the higher of—

“(A) the rate of compensation, including allowances, provided to a Foreign Service officer serving at the same embassy; and

“(B) the rate of compensation, including allowances, the Treasury Financial Attaché would otherwise have received, absent the application of this subsection.

“(2) Phase in.—The compensation described in paragraph (1) shall be phased in over 2 years.”

“316. Treasury Attaché Program.”.

“(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.”

“(o) Testing.—

“(1) In general.—The Secretary of the Treasury, in consultation with the head of each agency to which the Secretary has delegated duties or powers under subsection (a), shall issue a rule to specify with respect to technology and related technology internal processes designed to facilitate compliance with the requirements under this subchapter, the standards by which financial institutions are to test the technology and related technology internal processes.

“(2) Standards.—The standards described in paragraph (1) may include—

“(A) an emphasis on using innovative approaches such as machine learning or other enhanced data analytics processes;

“(B) risk-based testing, oversight, and other risk management approaches of the regime, prior to and after implementation, to facilitate calibration of relevant systems and prudently evaluate and monitor the effectiveness of their implementation;

“(C) specific criteria for when and how risk-based testing against existing processes should be considered to test and validate the effectiveness of relevant systems and situations and standards for when other risk management processes, including those developed by or through third party risk and compliance management systems, and oversight may be more appropriate;

“(D) specific standards for a risk governance framework for financial institutions to provide oversight and to prudently evaluate and monitor systems and testing processes both pre- and post-implementation;

“(E) requirements for appropriate data privacy and information security; and

“(F) a requirement that the system configurations, including any applicable algorithms and any validation of those configurations used by the regime be disclosed to the Financial Crimes Enforcement Network and the appropriate Federal functional regulator upon request.

“(3) Confidentiality of algorithms.—

“(A) In general.—If a financial institution or any director, officer, employee, or agent of any financial institution, voluntarily or pursuant to this subsection or any other authority, discloses the algorithms of the financial institution to a government agency, the algorithms and any materials associated with the creation or adaption of such algorithms shall be considered confidential and not subject to public disclosure.

“(B) Freedom of information act.—Section 552(a)(3) of title 5 (commonly known as the ‘Freedom of Information Act’) shall not apply to any request for algorithms described in subparagraph (A) and any materials associated with the creation or adaptation of the algorithms.

“(4) Definition.—In this subsection, the term ‘Federal functional regulator’ means—

“(A) the Board of Governors of the Federal Reserve System;

“(B) the Office of the Comptroller of the Currency;

“(C) the Federal Deposit Insurance Corporation;

“(D) the National Credit Union Administration;

“(E) the Securities and Exchange Commission; and

“(F) the Commodity Futures Trading Commission.”

“(8) Pilot program on sharing with foreign branches, subsidiaries, and affiliates.—

“(A) In general.—

“(i) Issuance of rules.—Not later than 1 year after the date of enactment of this paragraph, the Secretary of the Treasury shall issue rules, in coordination with the Director of the Financial Crimes Enforcement Network, establishing the pilot program described in subparagraph (B).

“(ii) Considerations.—In issuing the rules required under clause (i), the Secretary shall ensure that the sharing of information described in subparagraph (B)—

“(I) is limited by the requirements of Federal and State law enforcement operations;

“(II) takes into account potential concerns of the intelligence community; and

“(III) is subject to appropriate standards and requirements regarding data security and the confidentiality of personally identifiable information.

“(B) Pilot program described.—The pilot program described in this paragraph shall—

“(i) permit a financial institution with a reporting obligation under this subsection to share information related to reports under this subsection, including that such a report has been filed, with the institution’s foreign branches, subsidiaries, and affiliates for the purpose of combating illicit finance risks, notwithstanding any other provision of law except subparagraph (A) or (C);

“(ii) permit the Secretary to consider, implement, and enforce provisions that would hold a foreign affiliate of a United States financial institution liable for the disclosure of information related to reports under this section;

“(iii) terminate on the date that is 3 years after the date of enactment of this paragraph, except that the Secretary of the Treasury may extend the pilot program for not more than 2 years upon submitting to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that includes—

“(I) a certification that the extension is in the national interest of the United States, with a detailed explanation of the reasons that the extension is in the national interest of the United States;

“(II) after appropriate consultation by the Secretary with participants in the pilot program, an evaluation of the usefulness of the pilot program, including a detailed analysis of any illicit activity identified or prevented as a result of the program; and

“(III) a detailed legislative proposal providing for a long-term extension of activities under the pilot program, measures to ensure data security, and confidentiality of personally identifiable information, including expected budgetary resources for those activities, if the Secretary of the Treasury determines that a long-term extension is appropriate.

“(C) Prohibition involving certain jurisdictions.—

“(i) In general.—In issuing the rules required under subparagraph (A), the Secretary of the Treasury may not permit a financial institution to share information on reports under this subsection with a foreign branch, subsidiary, or affiliate located in—

“(I) the People’s Republic of China;

“(II) the Russian Federation; or

“(III) a jurisdiction that—

“(aa) is a state sponsor of terrorism;

“(bb) is subject to sanctions imposed by the Federal Government; or

“(cc) the Secretary has determined cannot reasonably protect the security and confidentiality of such information.

“(ii) Exceptions.—The Secretary is authorized to make exceptions, on a case-by-case basis, for a financial institution located in a jurisdiction listed in subclause (I) or (II) of clause (i), if the Secretary notifies the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that such an exception is in the national security interest of the United States.

“(D) Implementation updates.—Not later than 360 days after the date on which rules are issued under subparagraph (A), and annually thereafter for 3 years, the Secretary of the Treasury, or the designee of the Secretary, shall brief the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on—

“(i) the degree of any information sharing permitted under the pilot program and a description of criteria used by the Secretary to evaluate the appropriateness of the information sharing;

“(ii) the effectiveness of the pilot program in identifying or preventing the violation of a United States law or regulation and mechanisms that may improve that effectiveness; and

“(iii) any recommendations to amend the design of the pilot program.

“(9) Treatment of foreign jurisdiction-originated reports.—Information related to a report received by a financial institution from a foreign affiliate with respect to a suspicious transaction relevant to a possible violation of law or regulation shall be subject to the same confidentiality requirements provided under this subsection for a report of a suspicious transaction described in paragraph (1).

“(10) No offshoring compliance.—No financial institution may establish or maintain any operation located outside of the United States the primary purpose of which is to ensure compliance with the Bank Secrecy Act as a result of the sharing granted under this subsection.

“(11) Definitions.—In this subsection:

“(A) Affiliate.—The term ‘affiliate’ means an entity that controls, is controlled by, or is under common control with another entity.

“(B) Bank secrecy act; state bank supervisor; state credit union supervisor.—The terms ‘Bank Secrecy Act’, ‘State bank supervisor’, and ‘State credit union supervisor’ have the meanings given the terms in section 6003 of the Anti-Money Laundering Act of 2020.”

“(p) Sharing of Compliance Resources.—

“(1) Sharing permitted.—In order to more efficiently comply with the requirements of this subchapter, 2 or more financial institutions may enter into collaborative arrangements, as described in the statement entitled ‘Interagency Statement on Sharing Bank Secrecy Act Resources’, published on October 3, 2018, by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, and the Office of the Comptroller of the Currency.

“(2) Outreach.—The Secretary of the Treasury and the appropriate supervising agencies shall carry out an outreach program to provide financial institutions with information, including best practices, with respect to the collaborative arrangements described in paragraph (1).”

Ҥ 5334. Training regarding anti-money laundering and countering the financing of terrorism

“(a) Training Requirement.—Each Federal examiner reviewing compliance with the Bank Secrecy Act, as defined in section 6003 of the Anti-Money Laundering Act of 2020, shall attend appropriate annual training, as determined by the Secretary of the Treasury, relating to anti-money laundering activities and countering the financing of terrorism, including with respect to—

“(1) potential risk profiles and warning signs that an examiner may encounter during examinations;

“(2) financial crime patterns and trends;

“(3) the high-level context for why anti-money laundering and countering the financing of terrorism programs are necessary for law enforcement agencies and other national security agencies and what risks those programs seek to mitigate; and

“(4) de-risking and the effect of de-risking on the provision of financial services.

“(b) Training Materials and Standards.—The Secretary of the Treasury shall, in consultation with the Financial Institutions Examination Council, the Financial Crimes Enforcement Network, and Federal, State, Tribal, and local law enforcement agencies, establish appropriate training materials and standards for use in the training required under subsection (a).”

“5334. Training regarding anti-money laundering and countering the financing of terrorism.”.

“(g) Certain Violators Barred From Serving on Boards of United States Financial Institutions.—

“(1) Definition.—In this subsection, the term ‘egregious violation’ means, with respect to an individual—

“(A) a criminal violation—

“(i) for which the individual is convicted; and

“(ii) for which the maximum term of imprisonment is more than 1 year; and

“(B) a civil violation in which—

“(i) the individual willfully committed the violation; and

“(ii) the violation facilitated money laundering or the financing of terrorism.

“(2) Bar.—An individual found to have committed an egregious violation of the Bank Secrecy Act, as defined in section 6003 of the Anti-Money Laundering Act of 2020, or any rules issued under the Bank Secrecy Act, shall be barred from serving on the board of directors of a United States financial institution during the 10-year period that begins on the date on which the conviction or judgment, as applicable, with respect to the egregious violation is entered.”

“(e) A person convicted of violating a provision of (or rule issued under) the Bank Secrecy Act, as defined in section 6003 of the Anti-Money Laundering Act of 2020, shall—

“(1) in addition to any other fine under this section, be fined in an amount that is equal to the profit gained by such person by reason of such violation, as determined by the court; and

“(2) if the person is an individual who was a partner, director, officer, or employee of a financial institution at the time the violation occurred, repay to such financial institution any bonus paid to the individual during the calendar year in which the violation occurred or the calendar year after which the violation occurred.”

Ҥ 5335. Prohibition on concealment of the source of assets in monetary transactions

“(a) Definition of Monetary Transaction.—In this section, the term the term ‘monetary transaction’—

“(1) means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of title 18) by, through, or to a financial institution (as defined in section 1956(c)(6) of title 18);

“(2) includes any transaction that would be a financial transaction under section 1956(c)(4)(B) of title 18; and

“(3) does not include any transaction necessary to preserve the right to representation of a person as guaranteed by the Sixth Amendment to the Constitution of the United States.

“(b) Prohibition.—No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the ownership or control of assets involved in a monetary transaction if—

“(1) the person or entity who owns or controls the assets is a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure, as set forth in this title or the regulations promulgated under this title; and

“(2) the aggregate value of the assets involved in 1 or more monetary transactions is not less than $1,000,000.

“(c) Source of Funds.—No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the source of funds in a monetary transaction that—

“(1) involves an entity found to be a primary money laundering concern under section 5318A or the regulations promulgated under this title; and

“(2) violates the prohibitions or conditions prescribed under section 5318A(b)(5) or the regulations promulgated under this title.

“(d) Penalties.—A person convicted of an offense under subsection (b) or (c), or a conspiracy to commit an offense under subsection (b) or (c), shall be imprisoned for not more than 10 years, fined not more than $1,000,000, or both.

“(e) Forfeiture.—

“(1) Criminal forfeiture.—

“(A) In general.—The court, in imposing a sentence under subsection (d), shall order that the defendant forfeit to the United States any property involved in the offense and any property traceable thereto.

“(B) Procedure.—The seizure, restraint, and forfeiture of property under this paragraph shall be governed by section 413 of the Controlled Substances Act (21 U.S.C. 853).

“(2) Civil forfeiture.—

“(A) In general.—Any property involved in a violation of subsection (b) or (c), or a conspiracy to commit a violation of subsection (b) or (c), and any property traceable thereto may be seized and forfeited to the United States.

“(B) Procedure.—Seizures and forfeitures under this paragraph shall be governed by the provisions of chapter 46 of title 18 relating to civil forfeitures, except that such duties, under the customs laws described in section 981(d) of title 18, given to the Secretary of the Treasury shall be performed by such officers, agents, and other persons as may be designated for that purpose by the Secretary of Homeland Security or the Attorney General.”

“5335. Prohibition on concealment of the source of assets in monetary transactions.”.

Ҥ 5323. Whistleblower incentives and protections

“(a) Definitions.—In this section:

“(1) Covered judicial or administrative action.—The term ‘covered judicial or administrative action’ means any judicial or administrative action brought by the Secretary of the Treasury (referred to in this section as the ‘Secretary’) or the Attorney General under this subchapter or subchapter III that results in monetary sanctions exceeding $1,000,000.

“(2) Monetary sanctions.—The term ‘monetary sanctions’, when used with respect to any judicial or administrative action—

“(A) means any monies, including penalties, disgorgement, and interest, ordered to be paid; and

“(B) does not include—

“(i) forfeiture;

“(ii) restitution; or

“(iii) any victim compensation payment.

“(3) Original information.—The term ‘original information’ means information that—

“(A) is derived from the independent knowledge or analysis of a whistleblower;

“(B) is not known to the Secretary or the Attorney General from any other source, unless the whistleblower is the original source of the information; and

“(C) is not exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media, unless the whistleblower is a source of the information.

“(4) Related action.—The term ‘related action’, when used with respect to any judicial or administrative action brought by the Secretary or the Attorney General under this subchapter or subchapter III, means any judicial or administrative action brought by an entity described in any of subclauses (I) through (III) of subsection (g)(4)(D)(i) that is based upon the original information provided by a whistleblower pursuant to subsection (b) that led to the successful enforcement of the action by the Secretary or the Attorney General.

“(5) Whistleblower.—

“(A) In general.—The term ‘whistleblower’ means any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of this subchapter or subchapter III to the employer of the individual or individuals, including as part of the job duties of the individual or individuals, or to the Secretary or the Attorney General.

“(B) Special rule.—Solely for the purposes of subsection (g)(1), the term ‘whistleblower’ includes any individual who takes, or 2 or more individuals acting jointly who take, an action described in subsection (g)(1)(A).

“(b) Awards.—

“(1) In general.—In any covered judicial or administrative action, or related action, the Secretary, under regulations prescribed by the Secretary, in consultation with the Attorney General and subject to subsection (c) and to amounts made available in advance by appropriation Acts, shall pay an award or awards to 1 or more whistleblowers who voluntarily provided original information to the employer of the individual, the Secretary, or the Attorney General, as applicable, that led to the successful enforcement of the covered judicial or administrative action, or related action, in an aggregate amount equal to not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions.

“(2) Source of awards.—For the purposes of paying any award under this section, the Secretary may, subject to amounts made available in advance by appropriation Acts, use monetary sanction amounts recovered based on the original information with respect to which the award is being paid.

“(c) Determination of Amount of Award; Denial of Award.—

“(1) Determination of amount of award.—

“(A) Discretion.—The determination of the amount of an award made under subsection (b) shall be in the discretion of the Secretary.

“(B) Criteria.—In determining the amount of an award made under subsection (b), the Secretary shall take into consideration—

“(i) the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;

“(ii) the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;

“(iii) the programmatic interest of the Department of the Treasury in deterring violations of this subchapter and subchapter III by making awards to whistleblowers who provide information that lead to the successful enforcement of either such subchapter; and

“(iv) such additional relevant factors as the Secretary, in consultation with the Attorney General, may establish by rule or regulation.

“(2) Denial of award.—No award under subsection (b) may be made—

“(A) to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to the Secretary or the Attorney General, as applicable, a member, officer, or employee—

“(i) of—

“(I) an appropriate regulatory or banking agency;

“(II) the Department of the Treasury or the Department of Justice; or

“(III) a law enforcement agency; and

“(ii) acting in the normal course of the job duties of the whistleblower;

“(B) to any whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award under this section; or

“(C) to any whistleblower who fails to submit information to the Secretary or the Attorney General, as applicable, in such form as the Secretary, in consultation with the Attorney General, may, by rule, require.

“(d) Representation.—

“(1) Permitted representation.—Any whistleblower who makes a claim for an award under subsection (b) may be represented by counsel.

“(2) Required representation.—

“(A) In general.—Any whistleblower who anonymously makes a claim for an award under subsection (b) shall be represented by counsel if the whistleblower anonymously submits the information upon which the claim is based.

“(B) Disclosure of identity.—Before the payment of an award, a whistleblower shall disclose the identity of the whistleblower and provide such other information as the Secretary may require, directly or through counsel for the whistleblower.

“(e) No Contract Necessary.—No contract with the Department of the Treasury is necessary for any whistleblower to receive an award under subsection (b), unless otherwise required by the Secretary by rule or regulation.

“(f) Appeals.—

“(1) In general.—Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discretion of the Secretary.

“(2) Requirements.—

“(A) In general.—Any determination described in paragraph (1), except the determination of the amount of an award if the award was made in accordance with subsection (b), may be appealed to the appropriate court of appeals of the United States not more than 30 days after the determination is issued by the Secretary.

“(B) Scope of review.—The court to which a determination by the Secretary is appealed under subparagraph (A) shall review the determination in accordance with section 706 of title 5.

“(g) Protection of Whistleblowers.—

“(1) Prohibition against retaliation.—No employer may, directly or indirectly, discharge, demote, suspend, threaten, blacklist, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment or post-employment because of any lawful act done by the whistleblower—

“(A) in providing information in accordance with this section to—

“(i) the Secretary or the Attorney General;

“(ii) a Federal regulatory or law enforcement agency;

“(iii) any Member of Congress or any committee of Congress; or

“(iv) a person with supervisory authority over the whistleblower, or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct; or

“(B) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Department of the Treasury or the Department of Justice based upon or related to the information described in subparagraph (A); or

“(C) in providing information regarding any conduct that the whistleblower reasonably believes constitutes a violation of any law, rule, or regulation subject to the jurisdiction of the Department of the Treasury, or a violation of section 1956, 1957, or 1960 of title 18 (or any rule or regulation under any such provision), to—

“(i) a person with supervisory authority over the whistleblower at the employer of the whistleblower; or

“(ii) another individual working for the employer described in clause (i) who the whistleblower reasonably believes has the authority to—

“(I) investigate, discover, or terminate the misconduct; or

“(II) take any other action to address the misconduct.

“(2) Enforcement.—Any individual who alleges discharge or other discrimination, or is otherwise aggrieved by an employer, in violation of paragraph (1), may seek relief by—

“(A) filing a complaint with the Secretary of Labor in accordance with the requirements of this subsection; or

“(B) if the Secretary of Labor has not issued a final decision within 180 days of the filing of a complaint under subparagraph (A), and there is no showing that such a delay is due to the bad faith of the claimant, bringing an action against the employer at law or in equity in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy.

“(3) Procedure.—

“(A) Department of labor complaint.—

“(i) In general.—Except as provided in clause (ii) and subparagraph (C), the requirements under section 42121(b) of title 49, including the legal burdens of proof described in such section 42121(b), shall apply with respect to a complaint filed under paragraph (2)(A) by an individual against an employer.

“(ii) Exception.—With respect to a complaint filed under paragraph (2)(A), notification required to be made under section 42121(b)(1) of title 49 shall be made to each person named in the complaint, including the employer.

“(B) District court complaint.—

“(i) Jury trial.—A party to an action brought under paragraph (2)(B) shall be entitled to trial by jury.

“(ii) Statute of limitations.—

“(I) In general.—An action may not be brought under paragraph (2)(B)—

“(aa) more than 6 years after the date on which the violation of paragraph (1) occurs; or

“(bb) more than 3 years after the date on which when facts material to the right of action are known, or reasonably should have been known, by the employee alleging a violation of paragraph (1).

“(II) Required action within 10 years.—Notwithstanding subclause (I), an action under paragraph (2)(B) may not in any circumstance be brought more than 10 years after the date on which the violation occurs.

“(C) Relief.—Relief for an individual prevailing with respect to a complaint filed under subparagraph (A) of paragraph (2) or an action brought under subparagraph (B) of that paragraph shall include—

“(i) reinstatement with the same seniority status that the individual would have had, but for the conduct that is the subject of the complaint or action, as applicable;

“(ii) 2 times the amount of back pay otherwise owed to the individual, with interest;

“(iii) the payment of compensatory damages, which shall include compensation for litigation costs, expert witness fees, and reasonable attorneys’ fees; and

“(iv) any other appropriate remedy with respect to the conduct that is the subject of the complaint or action, as applicable.

“(4) Confidentiality.—

“(A) In general.—Except as provided in subparagraphs (C) and (D), the Secretary or the Attorney General, as applicable, and any officer or employee of the Department of the Treasury or the Department of Justice, shall not disclose any information, including information provided by a whistleblower to either such official, which could reasonably be expected to reveal the identity of a whistleblower, except in accordance with the provisions of section 552a of title 5, unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the appropriate such official or any entity described in subparagraph (D).

“(B) Exempted statute.—For purposes of section 552 of title 5, this paragraph shall be considered a statute described in subsection (b)(3)(B) of such section 552.

“(C) Rule of construction.—Nothing in this section is intended to limit, or shall be construed to limit, the ability of the Attorney General to present such evidence to a grand jury or to share such evidence with potential witnesses or defendants in the course of an ongoing criminal investigation.

“(D) Availability to government agencies.—

“(i) In general.—Without the loss of its status as confidential in the hands of the Secretary or the Attorney General, as applicable, all information referred to in subparagraph (A) may, in the discretion of the appropriate such official, when determined by that official to be necessary to accomplish the purposes of this subchapter, be made available to—

“(I) any appropriate Federal authority;

“(II) a State attorney general in connection with any criminal investigation;

“(III) any appropriate State regulatory authority; and

“(IV) a foreign law enforcement authority.

“(ii) Confidentiality.—

“(I) In general.—Each of the entities described in subclauses (I) through (III) of clause (i) shall maintain such information as confidential in accordance with the requirements established under subparagraph (A).

“(II) Foreign authorities.—Each entity described in clause (i)(IV) shall maintain such information in accordance with such assurances of confidentiality as determined by the Secretary or Attorney General, as applicable.

“(5) Rights retained.—Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any whistleblower under any Federal or State law or under any collective bargaining agreement.

“(6) Coordination with other provisions of law.—This subsection shall not apply with respect to any employer that is subject to section 33 of the Federal Deposit Insurance Act (12 U.S.C. 1831j) or section 213 or 214 of the Federal Credit Union Act (12 U.S.C. 1790b, 1790c).

“(h) Provision of False Information.—A whistleblower shall not be entitled to an award under this section if the whistleblower—

“(1) knowingly and willfully makes any false, fictitious, or fraudulent statement or representation; or

“(2) uses any false writing or document knowing the writing or document contains any false, fictitious, or fraudulent statement or entry.

“(i) Rulemaking Authority.—The Secretary, in consultation with the Attorney General, shall have the authority to issue such rules and regulations as may be necessary or appropriate to implement the provisions of this section consistent with the purposes of this section.

“(j) Nonenforceability of Certain Provisions Waiving Rights and Remedies or Requiring Arbitration of Disputes.—

“(1) Waiver of rights and remedies.—The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement.

“(2) Predispute arbitration agreements.—No predispute arbitration agreement shall be valid or enforceable, to the extent the agreement requires arbitration of a dispute arising under this section.”

Ҥ 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 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 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.”

“(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.”

“(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.”