HR 425 — Repealing Big Brother Overreach Act

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 TITLE 31, UNITED STATES CODE

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SUBTITLE IV--MONEY

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 CHAPTER 53--MONETARY TRANSACTIONS

 SUBCHAPTER I--CREDIT AND MONETARY EXPANSION

Sec.
5301. Buying obligations of the United States Government.

 SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

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5336. Beneficial foreign ownership information reporting requirements.

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SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

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Sec. 5336. Beneficial foreign 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 foreign owner.--The term ``beneficial 
 foreign owner''--
 (A) means, with respect to an entity, an 
 individual who is a foreign person and, 
 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] that is 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 foreign 
 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 Foreign 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 foreign 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 foreign 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 foreign 
 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 foreign owners within a 
 shorter period of time after a change 
 in the list of beneficial foreign 
 owners would impose on corporations, 
 limited liability companies, or other 
 similar entities; and
 (iii) not later than 2 years after 
 the date of enactment of this section, 
 incorporate 2 into the 
 regulations, as appropriate, any 
 changes necessary to implement the 
 findings and determinations based on 
 the review required under this 
 subparagraph.
 (F) Regulation requirements.--In promulgating 
 the regulations required under subparagraphs 
 (A) through (D), the Secretary of the Treasury 
 shall, to the greatest extent practicable--
 (i) establish partnerships with 
 State, local, and Tribal governmental 
 agencies;
 (ii) collect information described in 
 paragraph (2) through existing Federal, 
 State, and local processes and 
 procedures;
 (iii) minimize burdens on reporting 
 companies associated with the 
 collection of the information described 
 in paragraph (2), in light of the 
 private compliance costs placed on 
 legitimate businesses, including by 
 identifying any steps taken to mitigate 
 the costs relating to compliance with 
 the collection of information; and
 (iv) collect information described in 
 paragraph (2) in a form and manner that 
 ensures the information is highly 
 useful in--
 (I) facilitating important 
 national security, 
 intelligence, and law 
 enforcement activities; and
 (II) confirming beneficial 
 foreign 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 foreign 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 foreign 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 
 foreign 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 foreign 
 ownership information, including by 
 eliminating duplicative requirements; 
 and
 (ii) ensure the beneficial foreign 
 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 Foreign Ownership 
Information by FinCEN.--
 (1) Retention of information.--Beneficial foreign 
 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 foreign 
 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 foreign 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 foreign 
 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 foreign 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 foreign 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 
 foreign 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 foreign 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 foreign 
 ownership information;
 (G) restrict, to the satisfaction of the 
 Secretary, access to beneficial foreign 
 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 
 foreign 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 foreign 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 foreign ownership 
 information from the Secretary conduct an 
 annual audit to verify that the beneficial 
 foreign 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 foreign 
 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 foreign 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 foreign 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 foreign 
 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 foreign 
 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 2 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 2 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 foreign 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 
 foreign 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 foreign 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 foreign 
 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 foreign 
 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 foreign 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 foreign 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 foreign 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 
 foreign 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 foreign 
 ownership information reporting 
 requirements to ensure the beneficial 
 foreign 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 foreign ownership 
 information, the Inspector General of the 
 Department of the Treasury shall conduct an 
 investigation into FinCEN cybersecurity 
 practices that, to the extent possible, 
 determines any vulnerabilities within FinCEN 
 information security and confidentiality 
 protocols and provides recommendations for 
 fixing those deficiencies.
 (B) Report.--The Inspector General of the 
 Department of the Treasury shall submit to the 
 Secretary of the Treasury a report on each 
 investigation conducted under subparagraph (A).
 (C) Actions of the secretary.--Upon receiving 
 a report submitted under subparagraph (B), the 
 Secretary of the Treasury shall--
 (i) determine whether the Director 
 had any responsibility for the 
 cybersecurity breach or whether 
 policies, practices, or procedures 
 implemented at the direction of the 
 Director led to the cybersecurity 
 breach; and
 (ii) submit to Congress a written 
 report outlining the findings of the 
 Secretary, including a determination by 
 the Secretary on whether to retain or 
 dismiss the individual serving as the 
 Director.
 (6) Definition.--In this subsection, the term 
 ``willfully'' means the voluntary, intentional 
 violation of a known legal duty.
 (i) Continuous Review of Exempt Entities.--
 (1) In general.--On and after the effective date of 
 the regulations promulgated under subsection (b)(4), if 
 the Secretary of the Treasury makes a determination, 
 which may be based on information contained in the 
 report required under section 6502(c) of the Anti-Money 
 Laundering Act of 2020 or on any other information 
 available to the Secretary, that an entity or class of 
 entities described in subsection (a)(11)(B) has been 
 involved in significant abuse relating to money 
 laundering, the financing of terrorism, proliferation 
 finance, serious tax fraud, or any other financial 
 crime, not later than 90 days after the date on which 
 the Secretary makes the determination, the Secretary 
 shall submit to the Committee on Banking, Housing, and 
 Urban Affairs of the Senate and the Committee on 
 Financial Services of the House of Representatives a 
 report that explains the reasons for the determination 
 and any administrative or legislative recommendations 
 to prevent such abuse.
 (2) Classified annex.--The report required by 
 paragraph (1)--
 (A) shall be submitted in unclassified form; 
 and
 (B) may include a classified annex.
 (j) Authorization of Appropriations.--There are authorized to 
be appropriated to FinCEN for each of the 3 fiscal years 
beginning on the effective date of the regulations promulgated 
under subsection (b)(4), such sums as may be necessary to carry 
out this section, including allocating funds to the States to 
pay reasonable costs relating to compliance with the 
requirements of such section.

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