(a) General powers of Secretary. The Secretary of the Treasury may
(except under section 5315 of this title and regulations prescribed
under section 5315)—
(1) except as provided in subsections (b)(2)
and (h)(4), delegate duties and powers under this subchapter to an
appropriate supervising agency and the United States Postal Service;
(2) require a class of
domestic financial institutions or nonfinancial trades or businesses
to maintain appropriate procedures, including the collection and reporting
of certain information as the Secretary of the Treasury may prescribe
by regulation, to ensure compliance with this subchapter and regulations
prescribed under this subchapter or to guard against money laundering,
the financing of terrorism, or other forms of illicit finance;
(3) examine any books,
papers, records, or other data of domestic financial institutions
or nonfinancial trades or businesses relevant to the recordkeeping
or reporting requirements of this subchapter;
(4) summon a financial institution or nonfinancial
trade or business, an officer or employee of a financial institution
or nonfinancial trade or business (including a former officer or employee),
or any person having possession, custody, or care of the reports and
records required under this subchapter, to appear before the Secretary
of the Treasury or his delegate at a time and place named in the summons
and to produce such books, papers, records, or other data, and to
give testimony, under oath, as may be relevant or material to an investigation
described in subsection (b);
(5) exempt from the requirements of this
subchapter any class of transactions within any State if the Secretary
determines that—
(A) under the laws of such State, that
class of transactions is subject to requirements substantially similar
to those imposed under this subchapter; and
(B) there is adequate provision for
the enforcement of such requirements;
(6) rely on examinations conducted by a
State supervisory agency of a category of financial institution, if
the Secretary determines that—
(A) the category of financial
institution is required to comply with this subchapter and regulations
prescribed under this subchapter; or
(B) the State supervisory agency examines
the category of financial institution for compliance with this subchapter
and regulations prescribed under this subchapter; and
(7) prescribe an appropriate
exemption from a requirement under this subchapter and regulations
prescribed under this subchapter. The Secretary may revoke an exemption
under this paragraph or paragraph (5) by actually or constructively
notifying the parties affected. A revocation is effective during judicial
review.
3-1776.1
(b) Limitations
on summons power.
(1) The Secretary of the Treasury may take
any action described in paragraph (3) or (4) of subsection (a) only
in connection with investigations for the purpose of civil enforcement
of violations of this subchapter, section 21 of the Federal Deposit
Insurance Act, section 411 of the National Housing Act, or chapter
2 of Public Law 91-508 (12 U.S.C. 1951 et seq.) or any regulation
under any such provision.
(2) A summons may be issued under subsection (a)(4) only by, or with
the approval of, the Secretary of the Treasury or a supervisory level
delegate of the Secretary of the Treasury.
3-1776.2
(c) Administrative aspects of summons.
(1) A summons issued pursuant
to this section may require that books, papers, records, or other
data stored or maintained at any place be produced at any designated
location in any State or in any territory or other place subject to
the jurisdiction of the United States not more than 500 miles distant
from any place where the financial institution operates or conducts
business in the United States.
(2) Persons summoned under this section
shall be paid the same fees and mileage for travel in the United States
that are paid witnesses in the courts of the United States.
(3) The United States shall
not be liable for any expense, other than an expense described in
paragraph (2), incurred in connection with the production of
books, papers, records, or other data under this section.
3-1776.3
(d) Service of summons. Service of a summons issued under this section may be by registered
mail or in such other manner calculated to give actual notice as the
Secretary may prescribe by regulation.
3-1776.4
(e) Contumacy or refusal.
(1) In case of contumacy by a person issued
a summons under paragraph (3) or (4) of subsection (a) or a refusal
by such person to obey such summons, the Secretary of the Treasury
shall refer the matter to the Attorney General.
(2) The Attorney General may invoke the
aid of any court of the United States within the jurisdiction of which—
(A) the investigation which gave rise to the summons is being or
has been carried on;
(B) the person summoned is an inhabitant; or
(C) the person summoned carries on business
or may be found,
to compel compliance with the summons.
(3) The court may issue an order requiring
the person summoned to appear before the Secretary or his delegate
to produce books, papers, records, and other data, to give testimony
as may be necessary to explain how such material was compiled and
maintained, and to pay the costs of the proceeding.
(4) Any failure to obey the order of the
court may be punished by the court as a contempt thereof.
(5) All process in any case
under this subsection may be served in any judicial district in which
such person may be found.
3-1776.5
(f) Written and signed statement required. No
person shall qualify for an exemption under subsection (a)(5) unless
the relevant financial institution or nonfinancial trade or business
prepares and maintains a statement which—
(1) describes in detail the reasons why
such person is qualified for such exemption; and
(2) contains the signature of such person.
3-1776.6
(g) Reporting of suspicious
transactions.
(1) The Secretary may require any financial
institution, and any director, officer, employee, or agent of any
financial institution, to report any suspicious transaction relevant
to a possible violation of law or regulation.
(2)
(A) If a financial institution or any director, officer, employee,
or agent of any financial institution, voluntarily or pursuant to
this section or any other authority, reports a suspicious transaction
to a government agency—
(i) neither the financial institution, director,
officer, employee, or agent of such institution (whether or not any
such person is still employed by the institution), nor any other current
or former director, officer, or employee of, or contractor for, the
financial institution or other reporting person, may notify any person
involved in the transaction that the transaction has been reported;
and
(ii) no current or
former officer or employee of or contractor for the Federal Government
or of or for any State, local, tribal, or territorial government within
the United States, who has any knowledge that such report was made
may disclose to any person involved in the transaction that the transaction
has been reported, other than as necessary to fulfill the official
duties of such officer or employee.
(B) (i)
Notwithstanding the application of subparagraph (A) in any other context,
subparagraph (A) shall not be construed as prohibiting any financial
institution, or any director, officer, employee, or agent of such
institution, from including information that was included in a report
to which subparagraph (A) applies—
(I) in a written employment reference that is provided in accordance
with section 18(w) of the Federal Deposit Insurance Act in response
to a request from another financial institution; or
(II) in a written termination notice or employment
reference that is provided in accordance with the rules of a self-regulatory
organization registered with the Securities and Exchange Commission
or the Commodity Futures Trading Commission, except that such written
reference or notice may not disclose that such information was also
included in any such report, or that such report was made.
(ii) Clause (i) shall not
be construed, by itself, to create any affirmative duty to include
any information described in clause (i) in any employment reference
or termination notice referred to in clause (i).
3-1776.7
(3) (A) Any financial institution
that makes a voluntary disclosure of any possible violation of law
or regulation to a government agency or makes a disclosure pursuant
to this subsection or any other authority, and any director, officer,
employee, or agent of such institution who makes, or requires another
to make any such disclosure, shall not be liable to any person under
any law or regulation of the United States, any constitution, law,
or regulation of any State or political subdivision of any State,
or under any contract or other legally enforceable agreement (including
any arbitration agreement), for such disclosure or for any failure
to provide notice of such disclosure to the person who is the subject
of such disclosure or any other person identified in the disclosure.
(B) Subparagraph (A)
shall not be construed as creating—
(i) any inference that the
term “person,” as used in such subparagraph, may be construed
more broadly than its ordinary usage so as to include any government
or agency of government; or
(ii) any immunity against, or otherwise affecting, any civil or criminal
action brought by any government or agency of government to enforce
any constitution, law, or regulation of such government or agency.
(4) (A) In requiring reports under
paragraph (1) of suspicious transactions, the Secretary of the Treasury
shall designate, to the extent practicable and appropriate, a single
officer or agency of the United States to whom such reports shall
be made.
(B) The
officer or agency of the United States designated by the Secretary
of the Treasury pursuant to subparagraph (A) shall refer any report of a suspicious
transaction to any appropriate law enforcement, supervisory agency,
or United States intelligence agency for use in the conduct of intelligence
or counterintelligence activities, including analysis, to protect
against international terrorism.
(C) Subparagraph (A) shall not be construed
as precluding any supervisory agency for any financial institution
from requiring the financial institution to submit any information
or report to the agency or another agency pursuant to any other applicable
provision of law.
(5) (A) In this paragraph,
the terms “Bank Secrecy Act,” “Federal functional
regulator,” “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.
(B) In imposing any requirement
to report any suspicious transaction under this subsection, the Secretary
of the Treasury, in consultation with the Attorney General, appropriate
representatives of State bank supervisors, State credit union supervisors,
and the Federal functional regulators, shall consider items that include—
(i) the national priorities established by the Secretary;
(ii) the purposes described in
section 5311; and
(iii)
the means by or form in which the Secretary shall receive such reporting,
including the burdens imposed by such means or form of reporting on
persons required to provide such reporting, the efficiency of the
means or form, and the benefits derived by the means or form of reporting
by Federal law enforcement agencies and the intelligence community
in countering financial crime, including money laundering and the
financing of terrorism.
(C) Reports filed under this subsection
shall be guided by the compliance program of a covered financial institution
with respect to the Bank Secrecy Act, including the risk assessment
processes of the covered institution that should include a consideration
of priorities established by the Secretary of the Treasury under section
5318.
(D) (i) In considering the means by or
form in which the Secretary of the Treasury shall receive reporting
pursuant to subparagraph (B)(iii), the Secretary of the Treasury,
acting through the Director of the Financial Crimes Enforcement Network,
and in consultation with appropriate representatives of the State
bank supervisors, State credit union supervisors, and Federal functional
regulators, shall—
(I) establish streamlined, including automated, processes to, as
appropriate, permit the filing of noncomplex categories of reports
that—
(aa) reduce burdens imposed
on persons required to report; and
(bb) do not diminish the usefulness of the
reporting to Federal law enforcement agencies, national security officials,
and the intelligence community in combating financial crime, including
the financing of terrorism;
(II) subject to clause (ii)—
(aa) permit streamlined, including automated,
reporting for the categories described in subclause (I); and
(bb) establish the conditions
under which the reporting described in item (aa) is permitted; and
(III) establish
additional systems and processes as necessary to allow for the reporting
described in subclause (II)(aa).
(ii) The Secretary of the Treasury—
(I) in carrying out clause (i), shall establish
standards to ensure that streamlined reports relate to suspicious
transactions relevant to potential violations of law (including regulations);
and
(II) in establishing
the standards under subclause (I), shall consider transactions, including
structured transactions, designed to evade any regulation promulgated
under this subchapter, certain fund and asset transfers with little or no apparent
economic or business purpose, transactions without lawful purposes,
and any other transaction that the Secretary determines to be appropriate.
(iii) Nothing
in this subparagraph may be construed to preclude the Secretary of
the Treasury from—
(I) requiring reporting as provided for in subparagraphs (B) and
(C); or
(II) notifying
Federal law enforcement with respect to any transaction that the Secretary
has determined implicates a national priority established by the Secretary.
(6) (A) In this
paragraph—
(i) the terms “Bank Secrecy Act”
and “Federal functional regulator” have the meanings given
the terms in section 6003 of the Anti-Money Laundering Act of 2020;
and
(ii) the term “typology”
means a technique to launder money or finance terrorism.
(B) Not less frequently
than semiannually, the Director of the Financial Crimes Enforcement
Network shall publish threat pattern and trend information to provide
meaningful information about the preparation, use, and value of reports
filed under this subsection by financial institutions, as well as
other reports filed by financial institutions under the Bank Secrecy
Act.
(C) In each
publication published under subparagraph (B), the Director shall provide
financial institutions and the Federal functional regulators with
typologies, including data that can be adapted in algorithms if appropriate,
relating to emerging money laundering and terrorist financing threat
patterns and trends.
(7) Nothing in this subsection may be construed
as precluding the Secretary of the Treasury from—
(A) requiring
reporting as provided under subparagraphs (A) and (B) of paragraph
(6); or
(B) notifying
a Federal law enforcement agency with respect to any transaction that
the Secretary has determined directly implicates a national priority
established by the Secretary.
(8) (A)(i) 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) 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) 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) (i) 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) 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) 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) 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 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) In this subsection:
(A) The term “affiliate” means an entity that controls,
is controlled by, or is under common control with another entity.
(B) 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.
3-1776.8
(h) Anti-money laundering
programs.
(1) In order to guard against money laundering
and the financing of terrorism through financial institutions, each
financial institution shall establish anti-money laundering and countering
the financing of terrorism programs, including, at a minimum—
(A) the development of internal policies, procedures, and controls;
(B) the designation
of a compliance officer;
(C) an ongoing employee training program;
and
(D) an independent
audit function to test programs.
(2)
(A) The Secretary of the Treasury, after consultation with the appropriate
Federal functional regulator (as defined in section 509 of the Gramm-Leach-Bliley
Act), may prescribe minimum standards for programs established under
paragraph (1), and may exempt from the application of those standards
any financial institution that is not subject to the provisions of
the rules contained in part 103 of title 31, of the Code of Federal
Regulations, or any successor rule thereto, for so long as such financial
institution is not subject to the provisions of such rules.
(B) In prescribing the
minimum standards under subparagraph (A), and in supervising and examining
compliance with those standards, the Secretary of the Treasury, and
the appropriate Federal functional regulator (as defined in section
509 of the Gramm-Leach-Bliley Act (12 U.S.C. 6809)) shall take into
account the following:
(i) Financial institutions are spending private
compliance funds for a public and private benefit, including protecting
the United States financial system from illicit finance risks.
(ii) The extension of financial
services to the underbanked and the facilitation of financial transactions,
including remittances, coming from the United States and abroad in
ways that simultaneously prevent criminal persons from abusing formal
or informal financial services networks are key policy goals of the
United States.
(iii) Effective
anti-money laundering and countering the financing of terrorism programs
safeguard national security and generate significant public benefits
by preventing the flow of illicit funds in the financial system and
by assisting law enforcement and national security agencies with the
identification and prosecution of persons attempting to launder money
and undertake other illicit activity through the financial system.
(iv) Anti-money laundering
and countering the financing of terrorism programs described in paragraph
(1) should be—
(I) reasonably designed to assure and monitor compliance with the
requirements of this subchapter and regulations promulgated under
this subchapter; and
(II) risk-based, including ensuring that more attention and resources
of financial institutions should be directed toward higher-risk customers
and activities, consistent with the risk profile of a financial institution,
rather than toward lower-risk customers and activities.
(3) The Secretary may prescribe regulations under this subsection
that govern maintenance of concentration accounts by financial institutions,
in order to ensure that such accounts are not used to prevent association
of the identity of an individual customer with the movement of funds
of which the customer is the direct or beneficial owner, which regulations
shall, at a minimum—
(A) prohibit financial institutions
from allowing clients to direct transactions that move their funds
into, out of, or through the concentration accounts of the financial
institution;
(B) prohibit
financial institutions and their employees from informing customers
of the existence of, or the means of identifying, the concentration
accounts of the institution; and
(C) require each financial institution
to establish written procedures governing the documentation of all
transactions involving a concentration account, which procedures shall
ensure that, any time a transaction involving a concentration account
commingles funds belonging to 1 or more customers, the identity of,
and specific amount belonging to, each customer is documented.
(4) (A) Not later than 180 days
after the date of enactment of this paragraph, the Secretary of the
Treasury, in consultation with the Attorney General, Federal functional
regulators (as defined in section 509 of the Gramm-Leach-Bliley Act
(15 U.S.C. 6809)), relevant State financial regulators, and relevant
national security agencies, shall establish and make public priorities
for anti-money laundering and countering the financing of terrorism
policy.
(B) Not
less frequently than once every 4 years, the Secretary of the Treasury,
in consultation with the Attorney General, Federal functional regulators
(as defined in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C.
6809)), relevant State financial regulators, and relevant national
security agencies, shall update the priorities established under subparagraph
(A).
(C) The Secretary
of the Treasury shall ensure that the priorities established under
subparagraph (A) are consistent with the national strategy for countering
the financing of terrorism and related forms of illicit finance developed
under section 261 of the Countering Russian Influence in Europe and
Eurasia Act of 2017 (Public Law 115-44; 131 Stat. 934).
(D) Not later than 180
days after the date on which the Secretary of the Treasury establishes
the priorities under subparagraph (A), the Secretary of the Treasury,
acting through the Director of the Financial Crimes Enforcement Network
and in consultation with the Federal functional regulators (as defined
in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)) and
relevant State financial regulators, shall, as appropriate, promulgate
regulations to carry out this paragraph.
(E) The review by a financial institution
of the priorities established under subparagraph (A) and the incorporation
of those priorities, as appropriate, into the risk-based programs
established by the financial institution to meet obligations under
this subchapter, the USA PATRIOT Act (Public Law 107-56; 115 Stat.
272), and other anti-money laundering and countering the financing
of terrorism laws and regulations shall be included as a measure on
which a financial institution is supervised and examined for compliance
with those obligations.
(5) The duty to establish, maintain and
enforce an anti-money laundering and countering the financing of terrorism
program as required by this subsection shall remain the responsibility
of, and be performed by, persons in the United States who are accessible
to, and subject to oversight and supervision by, the Secretary of
the Treasury and the appropriate Federal functional regulator (as
defined in section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)).
3-1776.81
(i) Due diligence for United
States private banking and correspondent bank accounts involving foreign
persons.
(1) Each financial institution that establishes,
maintains, administers, or manages a private banking account or a
correspondent account in the United States for a non-United States
person, including a foreign individual visiting the United States,
or a representative of a non-United States person shall establish
appropriate, specific, and, where necessary, enhanced, due diligence
policies, procedures, and controls that are reasonably designed to
detect and report instances of money laundering through those accounts.
(2) (A) Subparagraph (B) shall
apply if a correspondent account is requested or maintained by, or
on behalf of, a foreign bank operating—
(i) under an
offshore banking license; or
(ii) under a banking license issued by a foreign
country that has been designated—
(I) as noncooperative with international anti-money laundering principles
or procedures by an intergovernmental group or organization of which
the United States is a member, with which designation the United States
representative to the group or organization concurs; or
(II) by the Secretary of the
Treasury as warranting special measures due to money laundering concerns.
(B) The enhanced due diligence policies,
procedures, and controls required under paragraph (1) shall, at a
minimum, ensure that the financial institution in the United States
takes reasonable steps—
(i) to ascertain for any such
foreign bank, the shares of which are not publicly traded, the identity
of each of the owners of the foreign bank, and the nature and extent
of the ownership interest of each such owner;
(ii) to conduct enhanced scrutiny of such
account to guard against money laundering and report any suspicious
transactions under subsection (g); and
(iii) to ascertain whether such foreign bank
provides correspondent accounts to other foreign banks and, if so,
the identity of those foreign banks and related due diligence information,
as appropriate under paragraph (1).
(3) If a private banking
account is requested or maintained by, or on behalf of, a non-United
States person, then the due diligence policies, procedures, and controls
required under paragraph (1) shall, at a minimum, ensure that the
financial institution takes reasonable steps—
(A) to
ascertain the identity of the nominal and beneficial owners of, and
the source of funds deposited into, such account as needed to guard
against money laundering and report any suspicious transactions under
subsection (g); and
(B) to conduct enhanced scrutiny of any such account that is requested
or maintained by, or on behalf of, a senior foreign political figure,
or any immediate family member or close associate of a senior foreign
political figure, that is reasonably designed to detect and report
transactions that may involve the proceeds of foreign corruption.
(4) For
purposes of this subsection, the following definitions shall apply:
(A) The term “offshore banking license” means a license
to conduct banking activities which, as a condition of the license,
prohibits the licensed entity from conducting banking activities with
the citizens of, or with the local currency of, the country which
issued the license.
(B) The term “private banking account” means an account
(or any combination of accounts) that—
(i) requires a
minimum aggregate deposits of funds or other assets of not less than
$1,000,000;
(ii) is established
on behalf of 1 or more individuals who have a direct or beneficial
ownership interest in the account; and
(iii) is assigned to, or is administered or
managed by, in whole or in part, an officer, employee, or agent of
a financial institution acting as a liaison between the financial
institution and the direct or beneficial owner of the account.
3-1776.82
(j) Prohibition on United States correspondent accounts
with foreign shell banks.
(1) A financial institution described in
subparagraphs (A) through (G) of section 5312(a)(2) (in this subsection
referred to as a “covered financial institution”) shall
not establish, maintain, administer, or manage a correspondent account
in the United States for, or on behalf of, a foreign bank that does
not have a physical presence in any country.
(2) A covered financial institution shall
take reasonable steps to ensure that any correspondent account established,
maintained, administered, or managed by that covered financial institution
in the United States for a foreign bank is not being used by that
foreign bank to indirectly provide banking services to another foreign
bank that does not have a physical presence in any country. The Secretary
of the Treasury shall, by regulation, delineate the reasonable steps necessary
to comply with this paragraph.
(3) Paragraphs (1) and (2) do not prohibit
a covered financial institution from providing a correspondent account
to a foreign bank, if the foreign bank—
(A) is
an affiliate of a depository institution, credit union, or foreign
bank that maintains a physical presence in the United States or a
foreign country, as applicable; and
(B) is subject to supervision by a banking
authority in the country regulating the affiliated depository institution,
credit union, or foreign bank described in subparagraph (A), as applicable.
(4) For purposes
of this subsection—
(A) the term “affiliate”
means a foreign bank that is controlled by or is under common control
with a depository institution, credit union, or foreign bank; and
(B) the term “physical
presence” means a place of business that—
(i) is maintained
by a foreign bank;
(ii)
is located at a fixed address (other than solely an electronic address)
in a country in which the foreign bank is authorized to conduct banking
activities, at which location the foreign bank—
(I) employs 1 or more individuals on a full-time
basis; and
(II) maintains
operating records related to its banking activities; and
(iii) is subject to inspection
by the banking authority which licensed the foreign bank to conduct
banking activities.
3-1776.83
(k) Bank records related to
anti-money laundering programs.
(1) For purposes of this subsection, the
following definitions shall apply:
(A) The term “appropriate
Federal banking agency” has the same meaning as in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(B) The term “covered
financial institution” means an institution referred to in subsection
(j)(1).
(C) The term
“correspondent account” has the same meaning as in section
5318A(e)(1)(B).
(2) Not later than 120 hours after receiving
a request by an appropriate Federal banking agency for information
related to anti-money laundering compliance by a covered financial
institution or a customer of such institution, a covered financial
institution shall provide to the appropriate Federal banking agency,
or make available at a location specified by the representative of
the appropriate Federal banking agency, information and account documentation
for any account opened, maintained, administered or managed in the
United States by the covered financial institution.
(3) (A) (i) Notwithstanding subsection
(b), the Secretary of the Treasury or the Attorney General may issue
a subpoena to any foreign bank that maintains a correspondent account
in the United States and request any records relating to the correspondent
account or any account at the foreign bank, including records maintained
outside of the United States, that are the subject of—
(I) any investigation of a violation of a
criminal law of the United States;
(II) any investigation of a violation of
this subchapter;
(III)
a civil forfeiture action; or
(IV) an investigation pursuant to section
5318A.
(ii) The foreign bank on which a subpoena described in clause (i)
is served shall produce all requested records and authenticate all
requested records with testimony in the manner described in—
(I) rule 902(12) of the Federal Rules of
Evidence; or
(II) section
3505 of title 18.
(iii) A subpoena described in clause (i)—
(I) shall designate—
(aa) a return date; and
(bb) the judicial district in which the related
investigation is proceeding; and
(II) may be served—
(aa) in person;
(bb) by mail or fax in the United States
if the foreign bank has a representative in the United States; or
(cc) if applicable, in
a foreign country under any mutual legal assistance treaty, multilateral
agreement, or other request for international legal or law enforcement
assistance.
(iv) (I) At any time before the
return date of a subpoena described in clause (i), the foreign bank
on which the subpoena is served may petition the district court of
the United States for the judicial district in which the related investigation
is proceeding, as designated in the subpoena, to modify or quash—
(aa) the subpoena; or
(bb) the prohibition against disclosure described
in subparagraph (C).
(II) An assertion that compliance with a
subpoena described in clause (i) would conflict with a provision of
foreign secrecy or confidentiality law shall not be a sole basis for
quashing or modifying the subpoena.
(B) (i) Any covered financial institution that maintains a correspondent
account in the United States for a foreign bank shall maintain records
in the United States identifying—
(I) the owners of record and the beneficial owners of the foreign
bank; and
(II) the name
and address of a person who—
(aa) resides in the United States; and
(bb) is authorized to accept service of legal
process for records covered under this subsection.
(ii) Upon
receipt of a written request from a Federal law enforcement officer
for information required to be maintained under this paragraph, a
covered financial institution shall provide the information to the
requesting officer not later than 7 days after receipt of the request.
(C) (i) No officer, director, partner,
employee, or shareholder of, or agent or attorney for, a foreign bank
on which a subpoena is served under this paragraph shall, directly
or indirectly, notify any account holder involved or any person named
in the subpoena issued under subparagraph (A)(i) and served on the
foreign bank about the existence or contents of the subpoena.
(ii) Upon application by the
Attorney General for a violation of this subparagraph, a foreign bank
on which a subpoena is served under this paragraph shall be liable
to the United States Government for a civil penalty in an amount equal
to—
(I) double the amount of
the suspected criminal proceeds sent through the correspondent account
of the foreign bank in the related investigation; or
(II) if no such proceeds can be identified,
not more than $250,000.
(D) (i) If
a foreign bank fails to obey a subpoena issued under subparagraph
(A)(i), the Attorney General may invoke the aid of the district court
of the United States for the judicial district in which the investigation
or related proceeding is occurring to compel compliance with the subpoena.
(ii) A court described in
clause (i) may—
(I) issue an order requiring the foreign bank to appear before the
Secretary of the Treasury or the Attorney General to produce—
(aa) certified records, in accordance with—
(AA) rule 902(12)
of the Federal Rules of Evidence; or
(BB) section 3505 of title 18; or
(bb) testimony regarding
the production of the certified records; and
(II) punish any failure to obey
an order
issued under subclause (I) as contempt of court.
(iii) All process in a case
under this subparagraph shall be served on the foreign bank in the
same manner as described in subparagraph (A)(iii).
(E) (i) A covered financial institution shall terminate any correspondent
relationship with a foreign bank not later than 10 business days after
the date on which the covered financial institution receives written
notice from the Secretary of the Treasury or the Attorney General
if, after consultation with the other, the Secretary of the Treasury
or the Attorney General, as applicable, determines that the foreign
bank has failed—
(I) to comply with a subpoena issued under subparagraph (A)(i); or
(II) to prevail in proceedings
before—
(aa) the appropriate district
court of the United States after challenging a subpoena described
in subclause (I) under subparagraph (A)(iv)(I); or
(bb) a court of appeals of the United States
after appealing a decision of a district court of the United States
under item (aa).
(ii) A covered financial institution shall
not be liable to any person in any court or arbitration proceeding
for—
(I) terminating a correspondent
relationship under this subparagraph; or
(II) complying with a nondisclosure order
under subparagraph (C).
(iii)(I) A covered financial institution
that fails to terminate a correspondent relationship under clause
(i) shall be liable for a civil penalty in an amount that is not more
than $25,000 for each day that the covered financial institution fails
to terminate the relationship.
(II)(aa) Upon failure to comply
with a subpoena under subparagraph (A)(i), a foreign bank may be liable
for a civil penalty assessed by the issuing agency in an amount that
is not more than $50,000 for each day that the foreign bank fails
to comply with the terms of a subpoena.
(bb) Beginning after the date that is 60
days after a foreign bank fails to comply with a subpoena under subparagraph
(A)(i), the Secretary of the Treasury or the Attorney General may
seek additional penalties and compel compliance with the subpoena
in the appropriate district court of the United States.
(cc) A foreign bank may seek
review in the appropriate district court of the United States of any
penalty assessed under this clause and the issuance of a subpoena
under subparagraph (A)(i).
(F) Upon application
by the United States, any funds held in the correspondent account
of a foreign bank that is maintained in the United States with a covered
financial institution may be seized by the United States to satisfy
any civil penalties that are imposed—
(i) under subparagraph
(C)(ii);
(ii) by a court
for contempt under subparagraph (D); or
(iii) under subparagraph (E)(iii)(II).
3-1776.84
(l) Identification and verification of accountholders.
(1) Subject to the requirements
of this subsection, the Secretary of the Treasury shall prescribe
regulations setting forth the minimum standards for financial institutions
and their customers regarding the identity of the customer that shall
apply in connection with the opening of an account at a financial
institution.
(2) The
regulations shall, at a minimum, require financial institutions to
implement, and customers (after being given adequate notice) to comply
with, reasonable procedures for—
(A) verifying the identity
of any person seeking to open an account to the extent reasonable
and practicable;
(B) maintaining
records of the information used to verify a person’s identity,
including name, address, and other identifying information; and
(C) consulting lists
of known or suspected terrorists or terrorist organizations provided
to the financial institution by any government agency to determine
whether a person seeking to open an account appears on any such list.
(3) In prescribing
regulations under this subsection, the Secretary shall take into consideration
the various types of accounts maintained by various types of financial
institutions, the various methods of opening accounts, and the various
types of identifying information available.
(4) In the case of any financial institution
the business of which is engaging in financial activities described
in section 4(k) of the Bank Holding Company Act of 1956 (including
financial activities subject to the jurisdiction of the Commodity
Futures Trading Commission), the regulations prescribed by the Secretary
under paragraph (1) shall be prescribed jointly with each Federal
functional regulator (as defined in section 509 of the Gramm-Leach-Bliley
Act, including the Commodity Futures Trading Commission) appropriate
for such financial institution.
(5) The Secretary (and, in the case of
any financial institution described in paragraph (4), any Federal
agency described in such paragraph) may, by regulation or order, exempt
any financial institution or type of account from the requirements
of any regulation prescribed under this subsection in accordance with
such standards and procedures as the Secretary may prescribe.
(6) Final regulations prescribed
under this subsection shall take effect before the end of the 1-year
period beginning on the date of enactment of the International Money
Laundering Abatement and Financial Anti-Terrorism Act of 2001.
3-1776.841
(m) Applicability of rules. Any rules promulgated pursuant to the authority contained in section
21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b) shall apply,
in addition to any other financial institution to which such rules
apply, to any person that engages as a business in the transmission
of funds, including any person who engages as a business in an informal
money transfer system or any network of people who engage as a business
in facilitating the transfer of money domestically or internationally
outside of the conventional financial institutions system.
3-1776.842
(n) Reporting of certain cross-border
transmittals of funds.
(1) Subject to paragraphs (3) and (4),
the Secretary shall prescribe regulations requiring such financial
institutions as the Secretary determines to be appropriate to report
to the Financial Crimes Enforcement Network certain cross-border electronic
transmittals of funds, if the Secretary determines that reporting
of such transmittals is reasonably necessary to conduct the efforts
of the Secretary against money laundering and terrorist financing.
(2) Information required
to be reported by the regulations prescribed under paragraph (1) shall
not exceed the information required to be retained by the reporting
financial institution pursuant to section 21 of the Federal Deposit
Insurance Act and the regulations promulgated thereunder, unless—
(A) the Board of Governors of the Federal Reserve System and the
Secretary jointly determine that a particular item or items of information
are not currently required to be retained under such section or such
regulations; and
(B) the Secretary determines, after consultation with the Board of
Governors of the Federal Reserve System, that the reporting of such
information is reasonably necessary to conduct the efforts of the
Secretary to identify cross-border money laundering and terrorist
financing.
(3) In prescribing the regulations required under paragraph (1),
the Secretary shall, subject to paragraph (2), determine the appropriate
form, manner, content, and frequency of filing of the required reports.
(4)(A) Before prescribing the regulations
required under paragraph (1), and as soon as is practicable after the date
of enactment of the Intelligence Reform and Terrorism Prevention Act
of 2004, the Secretary shall submit 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 that—
(i) identifies
the information in cross-border electronic transmittals of funds that
may be found in particular cases to be reasonably necessary to conduct
the efforts of the Secretary to identify money laundering and terrorist
financing, and outlines the criteria to be used by the Secretary to
select the situations in which reporting under this subsection may
be required;
(ii) outlines
the appropriate form, manner, content, and frequency of filing of
the reports that may be required under such regulations;
(iii) identifies the technology
necessary for the Financial Crimes Enforcement Network to receive,
keep, exploit, protect the security of, and disseminate information
from reports of cross-border electronic transmittals of funds to law
enforcement and other entities engaged in efforts against money laundering
and terrorist financing; and
(iv) discusses the information security protections required by the
exercise of the Secretary’s authority under this subsection.
(B)
In reporting the feasibility report under subparagraph (A), the Secretary
may consult with the Bank Secrecy Act Advisory Group established by
the Secretary, and any other group considered by the Secretary to
be relevant.
(5) (A) Subject to subparagraph
(B), the regulations required by paragraph (1) shall be prescribed
in final form by the Secretary, in consultation with the Board of
Governors of the Federal Reserve System, before the end of the 3-year
period beginning on the date of enactment of the National Intelligence
Reform Act of 2004.
(B) No regulations shall be prescribed under this subsection before
the Secretary certifies to the Congress that the Financial Crimes
Enforcement Network has the technological systems in place to effectively
and efficiently receive, keep, exploit, protect the security of, and
disseminate information from reports of cross-border electronic transmittals
of funds to law enforcement and other entities engaged in efforts
against money laundering and terrorist financing.
(o) Testing.
(1) 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) 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)
(A) 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) 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) 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.
(p) Sharing of compliance resources.
(1) 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) 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).
(q) Interagency coordination and consultation.
(1) The Secretary of the Treasury
shall, as appropriate, invite an appropriate State bank supervisor
and an appropriate State credit union supervisor to participate in
the interagency consultation and coordination with the Federal depository
institution regulators regarding the development or modification of
any rule or regulation carrying out this subchapter.
(2) Nothing in this subsection may be construed
to—
(A) affect, modify, or limit the discretion
of the Secretary of the Treasury with respect to the methods or forms
of interagency consultation and coordination; or
(B) require the Secretary of the Treasury
or a Federal depository institution regulator to coordinate or consult
with an appropriate State bank supervisor or to invite such supervisor
to participate in interagency consultation and coordination with respect
to a matter, including a rule or regulation, specifically affecting
only Federal depository institutions or Federal credit unions.
(3) In this
subsection:
(A) The term “appropriate State
bank supervisor” means the Chairman or members of the State
Liaison Committee of the Financial Institutions Examination Council.
(B) The term “appropriate
State credit union supervisor” means the Chairman or members
of the State Liaison Committee of the Financial Institutions Examination
Council.
(C) The
term “Federal credit union” has the meaning given the
term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
(D) The term “Federal
depository institution” has the meaning given the term in section
3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(E) The term “Federal
depository institution regulator” means a member of the Financial
Institutions Examination Council to which is delegated any authority
of the Secretary under subsection (a)(1).
[31 USC 5318.
Previously 31 USC 1054 and 1055 (Bank Secrecy Act sections 205 and
206 (84 Stat. 1120)). Restated and recodified by act of Sept. 13,
1982 (96 Stat. 999). As amended by acts of Oct. 27, 1986 (100 Stat.
3207-23, 3207-24); Nov. 18, 1988 (102 Stat. 4357); Oct. 28, 1992 (106
Stat. 4055, 4058); Oct. 26, 2001 (115 Stat. 304, 306, 312, 317, 320,
321, 322, 326, 328, 335); Dec. 4, 2003 (117 Stat. 2012); Dec. 17,
2004 (118 Stat. 3746, 3747, 3748); Mar. 9, 2006 (120 Stat. 245); Dec.
23, 2011 (125 Stat. 891); Aug. 8, 2014 (128 Stat. 1829); and Jan.
1, 2021 (134 Stat. 4550, 4553, 4571, 4573, 4576, 4579, 4584, 4590).
Act of October 18, 1992, called for subsections (g) and (h) to be
added at the end of section 5314, but they were added at the end of
section 5318 as the probable intent of Congress (House Report No.
102-1017, 102 Cong., 2 Sess., p. 404).]
