,,ii #aagth ,,congress #b;d ,session ,s4 #djge ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,april #g1 #bjbb,mr4 ,whitehouse 7for himself1 ,mr4 ,cassidy1 ,ms4 ,warren1 and ,mr4 ,wicker7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to prevent money laundering1 the financing of terrorism1 or other forms of illicit finance through ,united ,states real estate and vehicle transactions1 including by ,russian oligarchs1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,kleptocrat ,liability for ,excessive ,property ,transactions and ,ownership ,act or the ,,klepto ,act4 #b4 ,definitions ,in this ,act3 7#a7 ,administrator ,the term ,administrator means the ,administrator of the ,federal ,aviation ,administration4 7#b7 ,bank ,secrecy ,act ,the term ,bank ,secrecy ,act means-- 7,a7 section #ba of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbi;b72 7,b7 chapter #b of title ,i of ,public ,law #ia-ejh 7#ab ,u4,s4,c4 #aiea et seq472 and 7,c7 subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#c7 ,beneficial owner ,the term beneficial owner has the meaning given the term in section #eccf7;a7 of title #ca1 ,united ,states ,code4 7#d7 ,covered entity ,the term covered entity means a non-natural person1 association1 or arrangement1 including any trust1 partnership1 foundation1 corporation1 limited liability company1 or other public or private entity4 7#e7 ,director ,the term ,director means the ,director of ,fin,c,e,n4 7#f7 ,fin,c,e,n ,the term ,fin,c,e,n means the ,financial ,crimes ,enforcement ,network of the ,department of the ,treasury4 7#g7 ,foreign person ,the term foreign person means an individual who is not-- 7,a7 a ,united ,states person2 or 7,b7 an alien lawfully admitted for permanent residence into the ,united ,states4 7#h7 ,real estate professional ,the term real estate professional-- 7,a7 means a person described in section #ecab7;a77#b77,u7 of title #ca1 ,united ,states ,code2 and 7,b7 may include a loan broker1 lender1 title insurance company1 title insurance agent1 escrow agent1 developer1 investment company1 investment adviser1 real estate investment trust1 real estate agent1 attorney1 law firm1 or other financial1 real estate1 or legal professional4 7#i7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury4 7#aj7 ,state ,the term ,state means any ,state of the ,united ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 the ,commonwealth of the ,northern ,mariana ,islands1 ,american ,samoa1 ,guam1 the ,united ,states ,virgin ,islands1 and any other commonwealth1 territory1 or possession of the ,united ,states4 7#aa7 ,united ,states person ,the term ,united ,states person means a natural person who is a citizen of the ,united ,states or who owes permanent allegiance to the ,united ,states4 #c4 ,anti-money laundering safeguards for real estate transactions 7a7 ,rulemaking ,not later than #a year after the date of enactment of this ,act1 in conjunction with the authority under section #ecah7;a77#b7 of title #ca1 ,united ,states ,code1 the ,director shall issue a final rule to guard against money laundering1 the financing of terrorism1 or other forms of illicit finance through commercial and residential real estate transactions under the ,bank ,secrecy ,act1 including by-- 7#a7 requiring real estate professionals to collect and report to the ,director beneficial ownership information for each commercial and residential real estate transaction involving real estate located in a ,state and involving a buyer or seller that is a covered entity1 regardless of the transfer price2 7#b7 in collecting and reporting the information under paragraph 7#a71 defining commercial or residential real estate transactions to include direct and indirect transfers of real estate1 including through the direct or indirect transfer of the ownership or control of a covered entity that directly or indirectly owns or controls the real estate that is the subject of the transaction2 7#c7 establishing a system to determine which real estate professionals must collect and report the information under paragraph 7#a72 7#d7 requiring the ,director to validate the information reported under paragraph 7#a72 7#e7 requiring real estate professionals reporting information under paragraph 7#a7 to take reasonable measures to verify the accuracy of the information reported under this subsection2 and 7#f7 using the definition of beneficial owner in section #eccf7;a7 of title #ca1 ,united ,states ,code4 7b7 ,report ,not later than #cfj days after the date of enactment of this ,act1 the ,secretary shall submit to the appropriate congressional committees a report on how digital ledger technology can be implemented to create a tamper-proof permanent record of direct and indirect transfers of real estate1 including through direct or indirect transfer of ownership or control of a covered entity that directly or indirectly owns or controls the real estate that is subject to the transaction4 7c7 ,anti-,money laundering requirements for real estate professionals ,in the rule required under subsection 7a71 the ,director shall require the #a or more real estate professionals determined under subsection 7a77#c7 to-- 7#a7 report suspicious transactions under section #ecah7;g77#a7 of title #ca1 ,united ,states ,code2 7#b7 establish anti-money laundering programs under section #ecah7;h7 of title #ca1 ,united ,states ,code2 7#c7 establish customer due diligence policies1 procedures1 and controls under section #ecah7;i7 of title #ca1 ,united ,states ,code2 and 7#d7 establish written procedures reasonably designed to identify and verify under section #ecah7l7 of title #ca1 ,united ,states ,code1 the identity of customers1 including the beneficial owners of any covered entity1 involved in commercial and residential real estate transactions4 #d4 ,real estate pilot program 7a7 ,in general ,not later than #b years after the date of enactment of this ,act1 the ,secretary shall pilot a comprehensive e-governance framework for the transparency of commercial and residential real estate sales and purchases in the ,united ,states1 which shall-- 7#a7 designate a pilot locale for the implementation of the pilot program after obtaining the consent of the relevant ,state2 and 7#b7 design a cloud-based distributed ledger for real estate in the pilot locale1 which shall-- 7,a7 consist of a cloud-based network for digital governance that-- 7i7 provides real-time integrated information to users1 which may include individuals1 entities1 and governments2 and 7ii7 allows users to conduct economic and other activity through an internet website or mobile application2 7,b7 be designed to minimize corruption and maximize transparency for persons engaged in real estate transactions1 investment1 assistance1 and any other activities under section #c2 and 7,c7 include the integration with other systems required under subsection 7b7 and the capabilities described in subsection 7c74 7b7 ,integration with other systems ,the ,secretary shall design the framework established under subsection 7a7 to be capable of integration with-- 7#a7 the ,bank ,secretary ,act databases maintained by ,fin,c,e,n1 including-- 7,a7 the beneficial ownership information collected by ,fin,c,e,n under ,geographic ,targeting ,orders2 7,b7 the directory of beneficial ownership information collected under section #eccf of title #ca1 ,united ,states ,code2 and 7,c7 any other ,bank ,secrecy ,act database as determined by the ,director2 7#b7 the sanctions lists maintained by the ,department of the ,treasury's ,office of ,foreign ,assets ,control2 7#c7 the information exchanging systems of the ,egmont ,group of ,financial ,intelligence ,units2 7#d7 the digital business registry databases of other countries2 7#e7 the real estate registries of ,states and political subdivisions of ,states2 7#f7 the beneficial ownership information collected under section #c7;a72 and 7#g7 any other system as determined by the ,secretary4 7c7 ,other requirements 7#a7 ,open source ,the ,secretary shall ensure that the code used for the framework established under subsection 7a7 is open source and capable of being audited4 7#b7 ,multi-lingual functionality ,the ,secretary shall ensure that the framework established under subsection 7a7 is functional in-- 7,a7 ,english1 ,spanish1 ,french1 and ,portuguese2 and 7,b7 any other language as determined by the ,secretary4 7#c7 ,standards ,the ,secretary shall include in the framework established under subsection 7a7 standards for entities seeking to create their own e-governance systems4 #e4 ,certification of aircraft registration 7a7 ,in general ,before approving a certificate of registration issued under section #ddajc of title #di1 ,united ,states ,code1 with a covered entity1 the ,administrator of the ,federal ,aviation ,administration shall require the covered entity to-- 7#a7 identify each beneficial owner of the covered entity by-- 7,a7 name2 7,b7 current residential or business street address2 7,c7 a unique identifying number from a nonexpired passport issued by the ,united ,states or a nonexpired drivers license issued by a ,state or if neither is available1 a legible and credible copy of the pages of a nonexpired passport issued by the government of a foreign country bearing a photograph1 date of birth1 and unique identifying information for the person2 7,d7 nationality2 and 7,e7 the make1 model1 and serial number of the aircraft to be registered2 7#b7 in the case of a covered entity that is owned or controlled by more than #a entity-- 7,a7 identify how each entity relates to every other entity1 including-- 7i7 the extent to which each entity holds an ownership interest in or exercises control over another entity2 and 7ii7 the relationship of each such entity with the beneficial owners who are natural persons2 and 7,b7 identify each trust grantor1 trustee1 trust protector1 and beneficiary of the covered entity that is a foreign person2 7#c7 in the case of a trust or association1 identify the chain of control within the trust or association1 including with respect to the beneficial owners1 any trust grantor1 trustee1 trust protector1 and beneficiary1 and any association director1 officer1 or manager2 and 7#d7 disclose to the ,administrator any beneficial owner of the covered entity that is a foreign person4 7b7 ,timing 7#a7 ,in general ,the ,administrator shall require a covered entity to provide the information described in subsection 7a7 when submitting an application for aircraft certification4 7#b7 ,existing registrants ,for a covered entity that submitted an application for aircraft certification prior to enactment of this ,act1 the ,administrator shall require the covered entity to provide the information described in subsection 7a7 in a new submission to the ,administrator not later than #ahj days after the date of enactment of this ,act4 7#c7 ,updates ,the ,administrator shall require a covered entity to update a submission of the information described in subsection 7a7 not later than #fj days after the date of any change in-- 7,a7 the list of beneficial owners of the covered entity2 or 7,b7 the information required to be provided relating to each such beneficial owner4 #f4 ,anti-money laundering requirements for businesses engaged in vehicle sales ,not later than #a year after the date of enactment of this ,act1 in conjunction with the authority under section #ecah7;a77#b7 of title #ca1 ,united ,states ,code1 the ,secretary shall issue a final rule that requires all businesses described in section #ecab7;a77#b77,t7 of title #ca1 ,united ,states ,code1 to comply with the due diligence and reporting requirements applicable to financial institutions under subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code1 including-- 7#a7 reporting suspicious transactions under section #ecah7;g77#a7 of title #ca1 ,united ,states ,code2 7#b7 establishing anti-money laundering programs under section #ecah7;h7 of title #ca1 ,united ,states ,code2 7#c7 establishing customer due diligence policies1 procedures1 and controls under section #ecah7;i7 of title #ca1 ,united ,states ,code2 and 7#d7 establishing written procedures reasonably designed to identify and verify under section #ecah7l7 of title #ca1 ,united ,states ,code1 the identity of customers1 including the beneficial owners of any covered entity1 involved in a vehicle sale4 #g4 ,beneficial ownership directory ,if an entity formed under the law of a foreign country takes ownership or control of real estate located within the ,united ,states through a real estate transaction carried out by a real estate professional subject to this ,act1 and if that entity would have qualified as a reporting company under section #eccf7;a77#aa77;,a77ii7 of title #ca1 ,united ,states ,code1 except that a ,state exempted the entity from a ,state registration requirement because the only business of the entity within the ,state is to purchase or hold real estate within a ,state1 that entity shall nevertheless be deemed a reporting company under section #eccf7;a77#aa77;,a77ii7 of such title and shall file the reports required under section #eccf7;b7 of such title4 #h4 ,applicability ,this ,act and the rules issued under this ,act shall apply to beneficial owners of covered entities regardless of whether the covered entity is a reporting company1 as defined in section #eccf7;a7 of title #ca1 ,united ,states ,code4 #i4 ,program cost estimation ,not later than #abj days after the date of enactment of this ,act1 the ,secretary and the ,administrator shall each submit to ,congress a cost estimate for implementing this ,act4 #aj4 ,effective date ,the effective date of each rule issued under this ,act shall be #a year after the date on which the final rule is issued4