Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019

IIB 116TH CONGRESS 1ST SESSION H. R. 2514 IN THE SENATE OF THE UNITED STATES OCTOBER 29, 2019 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To make reforms to the Federal Bank Secrecy Act and anti-money laundering laws, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 2514 RFS SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Coordinating Oversight, Upgrading and Innovating 3 Technology, and Examiner Reform Act of 2019’’ or the 4 ‘‘COUNTER Act of 2019’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. Sec. 2. Bank Secrecy Act definition. Sec. 3. Determination of Budgetary Effects. TITLE I—STRENGTHENING TREASURY Sec. 101. Improving the definition and purpose of the Bank Secrecy Act. Sec. 102. Special hiring authority. Sec. 103. Civil Liberties and Privacy Officer. Sec. 104. Civil Liberties and Privacy Council. Sec. 105. International coordination. Sec. 106. Treasury Attache´s Program. Sec. 107. Increasing technical assistance for international cooperation. Sec. 108. FinCEN Domestic Liaisons. Sec. 109. FinCEN Exchange. Sec. 110. Study and strategy on trade-based money laundering. Sec. 111. Study and strategy on de-risking. Sec. 112. AML examination authority delegation study. Sec. 113. Study and strategy on Chinese money laundering. TITLE II—IMPROVING AML/CFT OVERSIGHT Sec. 201. Pilot program on sharing of suspicious activity reports within a finan- cial group. Sec. 202. Sharing of compliance resources. Sec. 203. GAO Study on feedback loops. Sec. 204. FinCEN study on BSA value. Sec. 205. Sharing of threat pattern and trend information. Sec. 206. Modernization and upgrading whistleblower protections. Sec. 207. Certain violators barred from serving on boards of United States fi- nancial institutions. Sec. 208. Additional damages for repeat Bank Secrecy Act violators. Sec. 209. Justice annual report on deferred and non-prosecution agreements. Sec. 210. Return of profits and bonuses. Sec. 211. Application of Bank Secrecy Act to dealers in antiquities. Sec. 212. Geographic targeting order. Sec. 213. Study and revisions to currency transaction reports and suspicious activity reports. Sec. 214. Streamlining requirements for currency transaction reports and sus- picious activity reports. VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 2514 RFS TITLE III—MODERNIZING THE AML SYSTEM Sec. 301. Encouraging innovation in BSA compliance. Sec. 302. Innovation Labs. Sec. 303. Innovation Council. Sec. 304. Testing methods rulemaking. Sec. 305. FinCEN study on use of emerging technologies. Sec. 306. Discretionary surplus funds. SEC. 2. BANK SECRECY ACT DEFINITION. 1 Section 5312(a) of title 31, United States Code, is 2 amended by adding at the end the following: 3 ‘‘(7) BANK SECRECY ACT.—The term ‘Bank Se- 4 crecy act’ means— 5 ‘‘(A) section 21 of the Federal Deposit In- 6 surance Act; 7 ‘‘(B) chapter 2 of title I of Public Law 91– 8 508; and 9 ‘‘(C) this subchapter.’’. 10 SEC. 3. DETERMINATION OF BUDGETARY EFFECTS. 11 The budgetary effects of this Act, for the purpose of 12 complying with the Statutory Pay-As-You-Go Act of 2010, 13 shall be determined by reference to the latest statement 14 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 15 Act, submitted for printing in the Congressional Record 16 by the Chairman of the House Budget Committee, pro- 17 vided that such statement has been submitted prior to the 18 vote on passage. 19 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 2514 RFS TITLE I—STRENGTHENING 1 TREASURY 2 SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF 3 THE BANK SECRECY ACT. 4 Section 5311 of title 31, United States Code, is 5 amended— 6 (1) by inserting ‘‘to protect our national secu- 7 rity, to safeguard the integrity of the international 8 financial system, and’’ before ‘‘to require’’; and 9 (2) by inserting ‘‘to law enforcement and’’ be- 10 fore ‘‘in criminal’’. 11 SEC. 102. SPECIAL HIRING AUTHORITY. 12 (a) IN GENERAL.—Section 310 of title 31, United 13 States Code, is amended— 14 (1) by redesignating subsection (d) as sub- 15 section (g); and 16 (2) by inserting after subsection (c) the fol- 17 lowing: 18 ‘‘(d) SPECIAL HIRING AUTHORITY.— 19 ‘‘(1) IN GENERAL.—The Secretary of the 20 Treasury may appoint, without regard to the provi- 21 sions of sections 3309 through 3318 of title 5, can- 22 didates directly to positions in the competitive serv- 23 ice (as defined in section 2102 of that title) in 24 FinCEN. 25 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 2514 RFS ‘‘(2) PRIMARY RESPONSIBILITIES.—The pri- 1 mary responsibility of candidates appointed pursuant 2 to paragraph (1) shall be to provide substantive sup- 3 port in support of the duties described in subpara- 4 graphs (A), (B), (E), and (F) of subsection (b)(2).’’. 5 (b) REPORT.—Not later than 360 days after the date 6 of enactment of this Act, and every year thereafter for 7 7 years, the Director of the Financial Crimes Enforcement 8 Network shall submit a report to the Committee on Finan- 9 cial Services of the House of Representatives and the 10 Committee on Banking, Housing, and Urban Affairs of 11 the Senate that includes— 12 (1) the number of new employees hired since 13 the preceding report through the authorities de- 14 scribed under section 310(d) of title 31, United 15 States Code, along with position titles and associ- 16 ated pay grades for such hires; and 17 (2) a copy of any Federal Government survey of 18 staff perspectives at the Office of Terrorism and Fi- 19 nancial Intelligence, including findings regarding the 20 Office and the Financial Crimes Enforcement Net- 21 work from the most recently administered Federal 22 Employee Viewpoint Survey. 23 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 2514 RFS SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER. 1 (a) APPOINTMENT OF OFFICERS.—Not later than the 2 end of the 3-month period beginning on the date of enact- 3 ment of this Act, a Civil Liberties and Privacy Officer 4 shall be appointed, from among individuals who are attor- 5 neys with expertise in data privacy laws— 6 (1) within each Federal functional regulator, by 7 the head of the Federal functional regulator; 8 (2) within the Financial Crimes Enforcement 9 Network, by the Secretary of the Treasury; and 10 (3) within the Internal Revenue Service Small 11 Business and Self-Employed Tax Center, by the Sec- 12 retary of the Treasury. 13 (b) DUTIES.—Each Civil Liberties and Privacy Offi- 14 cer shall, with respect to the applicable regulator, Net- 15 work, or Center within which the Officer is located— 16 (1) be consulted each time Bank Secrecy Act or 17 anti-money laundering regulations affecting civil lib- 18 erties or privacy are developed or reviewed; 19 (2) be consulted on information-sharing pro- 20 grams, including those that provide access to person- 21 ally identifiable information; 22 (3) ensure coordination and clarity between 23 anti-money laundering, civil liberties, and privacy 24 regulations; 25 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 2514 RFS (4) contribute to the evaluation and regulation 1 of new technologies that may strengthen data pri- 2 vacy and the protection of personally identifiable in- 3 formation collected by each Federal functional regu- 4 lator; and 5 (5) develop metrics of program success. 6 (c) DEFINITIONS.—For purposes of this section: 7 (1) BANK SECRECY ACT.—The term ‘‘Bank Se- 8 crecy Act’’ has the meaning given that term under 9 section 5312 of title 31, United States Code. 10 (2) FEDERAL FUNCTIONAL REGULATOR.—The 11 term ‘‘Federal functional regulator’’ means the 12 Board of Governors of the Federal Reserve System, 13 the Comptroller of the Currency, the Federal De- 14 posit Insurance Corporation, the National Credit 15 Union Administration, the Securities and Exchange 16 Commission, and the Commodity Futures Trading 17 Commission. 18 SEC. 104. CIVIL LIBERTIES AND PRIVACY COUNCIL. 19 (a) ESTABLISHMENT.—There is established the Civil 20 Liberties and Privacy Council (hereinafter in this section 21 referred to as the ‘‘Council’’), which shall consist of the 22 Civil Liberties and Privacy Officers appointed pursuant to 23 section 103. 24 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 2514 RFS (b) CHAIR.—The Director of the Financial Crimes 1 Enforcement Network shall serve as the Chair of the 2 Council. 3 (c) DUTY.—The members of the Council shall coordi- 4 nate on activities related to their duties as Civil Liberties 5 Privacy Officers, but may not supplant the individual 6 agency determinations on civil liberties and privacy. 7 (d) MEETINGS.—The meetings of the Council— 8 (1) shall be at the call of the Chair, but in no 9 case may the Council meet less than quarterly; 10 (2) may include open and partially closed ses- 11 sions, as determined necessary by the Council; and 12 (3) shall include participation by public and pri- 13 vate entities, law enforcement agencies, and a rep- 14 resentative of State bank supervisors (as defined 15 under section 3 of the Federal Deposit Insurance 16 Act (12 U.S.C. 1813)). 17 (e) REPORT.—The Chair of the Council shall issue 18 an annual report to the Congress on the program and pol- 19 icy activities, including the success of programs as meas- 20 ured by metrics of program success developed pursuant 21 to section 103(b)(5), of the Council during the previous 22 year and any legislative recommendations that the Council 23 may have. 24 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 2514 RFS (f) NONAPPLICABILITY OF FACA.—The Federal Ad- 1 visory Committee Act (5 U.S.C. App.) shall not apply to 2 the Council. 3 SEC. 105. INTERNATIONAL COORDINATION. 4 (a) IN GENERAL.—The Secretary of the Treasury 5 shall work with the Secretary’s foreign counterparts, in- 6 cluding through the Financial Action Task Force, the 7 International Monetary Fund, the World Bank, the 8 Egmont Group of Financial Intelligence Units, the 9 Organisation for Economic Co-operation and Develop- 10 ment, and the United Nations, to promote stronger anti- 11 money laundering frameworks and enforcement of anti- 12 money laundering laws. 13 (b) COOPERATION GOAL.—In carrying out subsection 14 (a), the Secretary of the Treasury may work directly with 15 foreign counterparts and other organizations where the 16 goal of cooperation can best be met. 17 (c) INTERNATIONAL MONETARY FUND.— 18 (1) SUPPORT FOR CAPACITY OF THE INTER- 19 NATIONAL MONETARY FUND TO PREVENT MONEY 20 LAUNDERING AND FINANCING OF TERRORISM.— 21 Title XVI of the International Financial Institutions 22 Act (22 U.S.C. 262p et seq.) is amended by adding 23 at the end the following: 24 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 10 HR 2514 RFS ‘‘SEC. 1629. SUPPORT FOR CAPACITY OF THE INTER- 1 NATIONAL MONETARY FUND TO PREVENT 2 MONEY LAUNDERING AND FINANCING OF 3 TERRORISM. 4 ‘‘The Secretary of the Treasury shall instruct the 5 United States Executive Director at the International 6 Monetary Fund to support the increased use of the admin- 7 istrative budget of the Fund for technical assistance that 8 strengthens the capacity of Fund members to prevent 9 money laundering and the financing of terrorism.’’. 10 (2) NATIONAL ADVISORY COUNCIL REPORT TO 11 CONGRESS.—The Chairman of the National Advisory 12 Council on International Monetary and Financial 13 Policies shall include in the report required by sec- 14 tion 1701 of the International Financial Institutions 15 Act (22 U.S.C. 262r) a description of— 16 (A) the activities of the International Mon- 17 etary Fund in the most recently completed fis- 18 cal year to provide technical assistance that 19 strengthens the capacity of Fund members to 20 prevent money laundering and the financing of 21 terrorism, and the effectiveness of the assist- 22 ance; and 23 (B) the efficacy of efforts by the United 24 States to support such technical assistance 25 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 11 HR 2514 RFS through the use of the Fund’s administrative 1 budget, and the level of such support. 2 (3) SUNSET.—Effective on the date that is the 3 end of the 4-year period beginning on the date of en- 4 actment of this Act, section 1629 of the Inter- 5 national Financial Institutions Act, as added by 6 paragraph (1), is repealed. 7 SEC. 106. TREASURY ATTACHE´ S PROGRAM. 8 (a) IN GENERAL.—Title 31, United States Code, is 9 amended by inserting after section 315 the following: 10 ‘‘§ 316. Treasury Attache´s Program 11 ‘‘(a) IN GENERAL.—There is established the Treas- 12 ury Attache´s Program, under which the Secretary of the 13 Treasury shall appoint employees of the Department of 14 the Treasury, after nomination by the Director of the Fi- 15 nancial Crimes Enforcement Network (‘FinCEN’), as a 16 Treasury attache´, who shall— 17 ‘‘(1) be knowledgeable about the Bank Secrecy 18 Act and anti-money laundering issues; 19 ‘‘(2) be co-located in a United States embassy; 20 ‘‘(3) perform outreach with respect to Bank Se- 21 crecy Act and anti-money laundering issues; 22 ‘‘(4) establish and maintain relationships with 23 foreign counterparts, including employees of min- 24 VerDate Sep 11 2014 00:44 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2514.RFS H2514 pamtmann on DSKBC07HB2PROD with BILLS 12 HR 2514 RFS istries of finance, central banks, and other relevant 1 official entities; 2 ‘‘(5) conduct outreach to local and foreign fi- 3 nancial institutions and other commercial [Text truncated for display. 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