(a) Short title.—This Act may be cited as the “Coordinating Oversight, Upgrading and Innovating Technology, and Examiner Reform Act of 2019” or the “COUNTER Act of 2019”.

(b) Table of contents.—The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.

Section 5312(a) of title 31, United States Code, is amended by adding at the end the following:

“(6) BANK SECRECY ACT.—The term ‘Bank Secrecy act’ means—

“(A) section 21 of the Federal Deposit Insurance Act;

“(B) chapter 2 of title I of Public Law 91–508; and

“(C) this subchapter.”.

Section 5311 of title 31, United States Code, is amended—

(1) by inserting “to protect our national security, to safeguard the integrity of the international financial system, and” before “to require”; and

(2) by inserting “to law enforcement” before “in criminal”.

Section 310 of title 31, United States Code, is amended—

(1) by redesignating subsection (d) as subsection (f); and

(2) by inserting after subsection (c) the following:

(a) Appointment of Officers.—Not later than the end of the 3-month period beginning on the date of enactment of this Act, a Civil Liberties and Privacy Officer shall be appointed, from among individuals who are attorneys with expertise in data privacy laws—

(1) within each Federal financial regulator, by the head of the Federal financial regulator;

(2) within the Financial Crimes Enforcement Network, by the Secretary of the Treasury; and

(3) within the Internal Revenue Service Criminal Investigation, by the Secretary of the Treasury.

(b) Duties.—Each Civil Liberties and Privacy Officer shall, with respect to the applicable regulator, Network, or Investigation within which the Officer is located—

(1) be consulted each time the regulations are developed or reviewed;

(2) be consulted on information-sharing activities, including activities that provide access to personally identifiable information; and

(3) contribute to the evaluation and regulation of new technologies.

(c) Federal financial regulator defined.—For purposes of this section, the term “Federal financial regulator” means the Board of Governors of the Federal Reserve System, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.

(a) Establishment.—There is established the Privacy and Civil Liberties Council (hereinafter in this section referred to as the “Council”), which shall consist of the Civil Liberties and Privacy Officers appointed pursuant to section 103.

(b) Chair.—The Civil Liberties and Privacy Officer of the Financial Crimes Enforcement Network shall serve as the Chair of the Council.

(c) Duty.—The members of the Council shall coordinate on activities related to their duties as Privacy and Civil Liberties Officers.

(d) Meetings.—The meetings of the Council—

(1) shall be at the call of the Chair, but in no case may the Council meet less than quarterly;

(2) may include open and closed sessions, as determined necessary by the Council; and

(3) may include participation by public and private entities and law enforcement agencies.

(e) Report.—The Council shall issue an annual report to the Congress on the activities of the Council during the previous year and any legislative recommendations that the Council may have.

The Secretary of the Treasury shall work with the Secretary’s foreign counterparts, including through the Financial Action Task Force, the International Monetary Fund, the World Bank, and the United Nations, to promote stronger anti-money laundering frameworks and enforcement of anti-money laundering laws.

(a) In general.—Title 31, United States Code, is amended by inserting after section 315 the following:

(b) Clerical amendment.—The table of contents for chapter 3 of title 31, United States Code, is amended by inserting after the item relating to section 315 the following:

“316. Treasury Attaché Program.”.

There is authorized to be appropriated for fiscal year 2020 to the Secretary of the Treasury for purposes of providing technical assistance for international cooperation an amount equal to twice the amount authorized for such purpose for fiscal year 2019.

Section 310 of title 31, United States Code, as amended by section 102, is further amended by inserting after subsection (d) the following:

“(e) FinCEN Domestic Liaisons.—

“(1) IN GENERAL.—The Director of FinCEN shall appoint at least 6 senior FinCEN employees as FinCEN Domestic Liaisons, who shall—

“(A) each be assigned to focus on a specific region of the United States;

“(B) be located at an office in such region (or co-located at an office of another Federal agency in such region);

“(C) provide education to, and coordination with, both public- and private-sector entities with respect to FinCEN; and

“(D) perform outreach to financial institutions (including non-bank financial institutions) and persons who are not financial institutions, especially with respect to actions taken by FinCEN that require specific actions by, or have specific effects on, such institutions or persons, as determined by the Director.

“(2) FINANCIAL INSTITUTION DEFINED.—In this subsection, the term ‘financial institution’ has the meaning given that term under section 5312.”.

(a) In general.—Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note) is amended by adding at the end the following:

“(6) FINCEN EXCHANGE.—

“(A) ESTABLISHMENT.—The FinCEN Exchange is hereby established within FinCEN, which shall consist of the FinCEN Exchange program of FinCEN in existence on the day before the date of enactment of this paragraph.

“(B) PURPOSE.—The FinCEN Exchange shall further the purpose described under paragraph (1) by facilitating a voluntary public-private information sharing partnership among law enforcement, financial institutions, and FinCEN to—

“(i) effectively and efficiently combat money laundering, terrorism financing, organized crime, and other financial crimes;

“(ii) protect the financial system from illicit use; and

“(iii) promote national security.

“(C) FINCEN DEFINED.—In this paragraph, the term ‘FinCEN’ means the Financial Crimes Enforcement Network of the Department of the Treasury.”.

(b) Authorization of appropriation.—There is authorized to be appropriated such sums as may be necessary to carry out the amendment made by subsection (a).

(a) Study.—The Secretary of the Treasury shall carry out a study, in consultation with other appropriate Federal departments and agencies, on trade-based money laundering.

(b) Report.—Not later than the end of the 9-month period beginning on the date of the enactment of this Act, the Secretary shall issue a report to the Congress containing—

(1) all findings and determinations made in carrying out the study required under subsection (a); and

(2) proposed strategies to combat trade-based money laundering.

(c) Classified annex.—The report required under this section may include a classified annex, if the Secretary determines it appropriate.

(a) Review.—The Secretary of the Treasury, in consultation with the Federal functional regulators (as defined under section 103) and other relevant stakeholders, shall undertake a formal review of—

(1) the adverse consequences of financial institutions de-risking entire categories of relationships, including charities, embassy accounts, money services businesses (as defined under section 1010.100(ff) of title 31, Code of Federal Regulations), countries, regions, and respondent banks;

(2) the reasons why financial institutions are engaging in de-risking;

(3) the association with and effects of de-risking on money laundering and financial crime actors and activities; and

(4) the most appropriate ways to promote financial inclusion while maintaining compliance with the Bank Secrecy Act.

(b) Report.—Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary, in consultation with the Federal functional regulators and other relevant stakeholders, shall issue a report to Congress containing all findings and determinations made in carrying out the study required under subsection (a).

(c) Definitions.—In this section:

(1) DE-RISKING.—The term “de-risking” means the closing of customer accounts or limiting services of a category of customer due to perceived risk as it relates to compliance with the Bank Secrecy Act.

(2) BSA TERMS.—The terms “Bank Secrecy Act” and “financial institution” have the meaning given those terms, respectively, under section 5312 of title 31, United States Code.

(a) In general.—

(1) SHARING WITH FOREIGN BRANCHES AND AFFILIATES.—Section 5318(g) of title 31, United States Code, is amended by adding at the end the following:

“(5) SHARING WITH FOREIGN BRANCHES, SUBSIDIARIES, AND AFFILIATES.—

“(A) IN GENERAL.—Not later than 180 days after the date of the enactment of this paragraph, the Secretary of the Treasury shall issue rules permitting any financial institution with a reporting obligation under this subsection to share information on reports under this subsection with the institution’s foreign branches, subsidiaries, and affiliates for the purposes of combating illicit finance risks, notwithstanding any other provision of law except subparagraph (B).

“(B) EXCEPTION.—In issuing the regulations required under subparagraph (A), the Secretary may not permit a financial institution to share information on reports under this subsection with a foreign branch, subsidiary, or affiliate located in a jurisdiction that—

“(i) is subject to countermeasures imposed by the Federal Government; or

“(ii) the Secretary, in consultation with the Civil Liberties and Privacy Officer of the Financial Crimes Enforcement Network, has determined cannot reasonably protect the privacy and confidentiality of such information.”.

(2) NOTIFICATION PROHIBITIONS.—Section 5318(g)(2)(A) of title 31, United States Code, is amended—

(A) in clause (i), by inserting after “transaction has been reported” the following: “or otherwise reveal any information that would reveal that the transaction has been reported, including materials prepared or used by the financial institution for the purpose of identifying and detecting potentially suspicious activity”; and

(B) in clause (ii), by inserting after “transaction has been reported,” the following: “or otherwise reveal any information that would reveal that the transaction has been reported, including materials prepared or used by the financial institution for the purpose of identifying and detecting potentially suspicious activity,”.

(b) Rulemaking.—Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Secretary of the Treasury shall issue regulations to carry out the amendments made by this section.

The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended—

(1) by moving section 1009A so as to appear after section 1009; and

(2) by inserting after section 1009A, as so moved, the following:

(a) In general.—Section 5318 of title 31, United States Code, is amended by adding at the end the following:

“(o) Sharing of compliance resources.—

“(1) SHARING PERMITTED.—Two or more financial institutions may enter into collaborative arrangements in order to more efficiency comply with the requirements of this subchapter.

“(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 sharing of resources described under paragraph (1).”.

(b) Rule of construction.—The amendment made by subsection (a) may not be construed to require financial institutions to share resources.

(a) Study.—The Comptroller General of the United States shall carry out a study on—

(1) practices within the United States Government for providing feedback (“feedback loop”) to relevant parties (including regulated private entities) on the usage and usefulness of personally identifiable information (“PII”), sensitive-but-unclassified (“SBU”) data, or similar information provided by such parties to Government users of such information and data (including law enforcement or regulators); and

(2) any practices or standards outside the United States for providing feedback loops on sensitive information and public-private partnership information sharing efforts, specifically related to efforts to combat money laundering and other forms of illicit finance.

(b) Report.—Not later than the end of the 18-month period beginning on the date of the enactment of this Act, the Comptroller General shall issue a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives containing—

(1) all findings and determinations made in carrying out the study required under subsection (a); and

(2) with respect to each of paragraphs (1) and (2) of subsection (a), any best practices or significant concerns identified by the Comptroller General, and their applicability to public-private partnerships and feedback loops with respect to U.S. efforts to combat money laundering and other forms of illicit finance.

(a) Study.—The Director of the Financial Crimes Enforcement Network shall carry out a study on Bank Secrecy Act value.

(b) Report.—Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Director shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations made in carrying out the study required under this section.

(c) Classified annex.—The report required under this section may include a classified annex, if the Director determines it appropriate.

(d) Bank Secrecy Act defined.—For purposes of this section, the term “Bank Secrecy Act” has the meaning given that term under section 5312 of title 31, United States Code.

Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as amended by section 109, is further amended by adding at the end the following:

“(7) POINT OF CONTACT LIST.—

“(A) IN GENERAL.—The Secretary shall maintain a list containing contact information for with respect to a law enforcement agency, those individuals who serve as points of contact for a Suspicious Activity Report review committee.

“(B) AVAILABILITY OF LIST.—The Secretary shall make the list of contact information described under subparagraph (A) available to all financial institutions and law enforcement agencies.”.

Section 314(a) of the USA PATRIOT Act (31 U.S.C. 5311 note), as amended by section 206, is further amended by adding at the end the following:

“(8) SHARING OF THREAT PATTERN AND TREND INFORMATION.—

“(A) IN GENERAL.—Not less than monthly, the Secretary shall provide financial institutions with typologies on emerging money laundering and counter terror financing threat patterns and trends.

“(B) INFORMATION CLASSIFICATION.—In providing information pursuant to subparagraph (A), the Secretary may provide public and sensitive information to financial institutions, but may not provide classified information, unless otherwise permitted by law.”.

(a) Rewards.—Section 5323(d) of title 31, United States Code, is amended to read as follows:

“(d) Source of rewards.—For the purposes of paying an award under this section, there are authorized to be appropriated such sums as may be necessary, and the Secretary may also use funds from the Department of the Treasury Forfeiture Fund and the Department of Justice Assets Forfeiture Fund.”.

(b) Whistleblower incentives.—

Chapter 53 of title 31, United States Code, is amended—

(1) by inserting after section 5323 the following:

(2) in the table of contents for such chapter, by inserting after the item relating to section 5323 the following new item:

“5323A. Whistleblower incentives.”.

Section 5321 of title 31, United States Code, is amended by adding at the end the following:

“(f) Certain violators barred from serving on public company boards.—

“(1) IN GENERAL.—An individual found to have committed an egregious violation of a provision of (or rule issued under) this subchapter, section 21 of the Federal Deposit Insurance Act, or section 123 of Public Law 91–508 shall be barred from serving on the board of directors of a public company for a 10-year period beginning on the date of such finding.

“(2) DEFINITIONS.—In this subsection:

“(A) EGREGIOUS VIOLATION.—With respect to an individual, the term ‘egregious violation’ means—

“(i) a felony criminal violation for which the individual was convicted; and

“(ii) a civil violation where the individual knowingly committed such violation and the violation facilitated money laundering or the financing of terrorism.

“(B) PUBLIC COMPANY.—The term ‘public company’ means an issuer the securities of which are traded on a national securities exchange.

“(C) OTHER SECURITIES TERMS.—The terms ‘issuer’ and ‘national securities exchange’ have the meaning given those terms, respectively, under section 3 of the Securities Exchange Act of 1934.”.

Section 5321 of title 31, United States Code, as amended by section 209, is further amended by adding at the end the following:

“(g) Additional damages for repeat violators.—In addition to any other fines permitted by this section and section 5322, with respect to a person who has previously violated a provision of (or rule issued under) this subchapter, section 21 of the Federal Deposit Insurance Act, or section 123 of Public Law 91–508, the Secretary may impose an additional civil penalty against such person for each additional such violation in an amount equal to up to three times the profit gained or loss avoided by such person as a result of the violation.”.

SEC. 211. Justice annual report on deferred and nonprosecution agreements.

Section 5322 of title 31, United States Code, is amended by adding at the end the following:

“(e) Return of profits and bonuses.—A person convicted of violating a provision of (or rule issued under) this subchapter, section 21 of the Federal Deposit Insurance Act, or section 123 of Public Law 91–508 shall—

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

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

Section 162(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

“(6) VIOLATIONS OF THE BANK SECRECY ACT.—In the case of a payment described in paragraph (1) that is in relation to any violation of the Bank Secrecy Act (as defined under section 5312 of title 31, United States Code), no deduction shall be allowed under this chapter for attorney’s fees related to such payment.”.

(a) In general.—Section 5312(a)(2) of title 31, United States Code, is amended—

(1) in subparagraph (Y), by striking “or” at the end;

(2) by redesignating subparagraph (Z) as subparagraph (AA); and

(3) by inserting after subsection (Y) the following:

“(Z) dealers in art or antiquities; or”.

(b) Rulemaking.—Not later than the end of the 180-day period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall issue regulations to carry out the amendments made by subsection (a).

(c) Effective date.—Section 5312(a)(2)(Z) of title 31, United States Code, as added by subsection (a), shall take effect after the end of the 270-day period beginning on the date of the enactment of this Act.

The Secretary of the Treasury shall revise the geographic targeting order issued by the Financial Crimes Enforcement Network on November 15, 2018 (the “Order”), so that the Order—

(1) applies to commercial real estate to the same extent as the Order applies to residential real estate; and

(2) applies to a purchase made, at least in part, using an in-kind transaction to the same extent as the Order applies to a purchase made, at least in part, using currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check, a money order in any form, a funds transfer, or virtual currency.

Section 5318 of title 31, United States Code, as amended by section 203, is further amended by adding at the end the following:

“(p) Encouraging innovation in compliance.—

“(1) IN GENERAL.—The financial agencies shall encourage financial institutions to consider, evaluate, and, where appropriate, responsibly implement innovative approaches to meet the requirements of this subchapter, including through the use of innovation pilot programs.

“(2) EXEMPTIVE RELIEF.—The Secretary, pursuant to subsection (a), may provide exemptions from the requirements of this subchapter if the Secretary determines such exemptions are necessary to facilitate the testing and potential use of new technologies and other innovations.

“(3) FINANCIAL AGENCY DEFINED.—In this subsection, the term ‘financial agency’ means the Department of the Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.”.

(a) In general.—Title 31, United States Code, is amended by inserting after section 5326 the following:

(b) Clerical amendment.—The table of contents for chapter 53 of title 31, United States Code, is amended by inserting after the item relating to section 5326 the following:

“5327. Innovation Labs.”.

(a) Establishment.—There is established the Innovation Council (hereinafter in this section referred to as the “Council”), which shall consist of each Director of an Innovation Lab established under section 302 and the Director of the Financial Crimes Enforcement Network.

(b) Chair.—The Director of the Innovation Lab of the Department of the Treasury shall serve as the Chair of the Council.

(c) Duty.—The members of the Council shall coordinate on activities related to innovation under the Bank Secrecy Act (as defined under section 5312 of title 31, United States Code).

(d) Meetings.—The meetings of the Council—

(1) shall be at the call of the Chair, but in no case may the Council meet less than quarterly;

(2) may include open and closed sessions, as determined necessary by the Council; and

(3) may include participation by public and private entities and law enforcement agencies.

(e) Report.—The Council shall issue an annual report to Congress on the activities of the Council during the previous year and any legislative recommendations that the Council may have.

Section 5318 of title 31, United States Code, as amended by section 301, is further amended by adding at the end the following:

“(q) Parallel runs rulemaking.—The Secretary of the Treasury, in consultation with the Director of the Financial Crimes Enforcement Network and the head of each agency to which the Secretary has delegated duties or powers under subsection (a), shall issue a rule to specify—

“(1) with respect to technology and processes designed to facilitate compliance with the Bank Secrecy Act requirements, under what circumstances it is necessary for a financial institution to test new technology and processes alongside legacy technology and processes (‘parallel runs’);

“(2) if parallel runs are required, what tests must be completed; and

“(3) in what instances or under what circumstances a financial institution may replace or terminate such legacy technology and processes for any examinable technology or process.”.