Below are a few of the bills that NACDL has worked to defeat, improve, or, in those rare instances, support.
Related Legislation
Beneficial Ownership Bills
S. 1465 and H.R. 3331, the “Incorporation Transparency and Law Enforcement Assistance Act of 2013”
These bills seek to amend the Homeland Security Act of 2002 in order to force states to amend their incorporation laws in a few key areas. Specifically, the bills seek to require corporations and limited liability companies (LLCs) to provide a list of the “beneficial owners” of the business and to establish an ongoing duty to report changes to the beneficial owner filing within 60 days of any change to the beneficial ownership information.
Small Business Deposit Relief Act
H.R. 1184, the "Small Business Deposit Relief Act of 2013"
This bill seeks to offer small businesses relief from the criminal offense and forfeiture provisions of the anti-structuring law at 31 U.S.C. § 5324. Specifically, the bill would limit any criminal and civil penalties for structuring when there is no other crime being committed. The bill would reduce the penalty for violating the federal anti-structuring laws from a five year sentence to a one year maximum sentence. First time offenders would not be subject to a sentence of imprisonment. Finally, the bill would limit the amount of property subject to forfeiture and fines that could be imposed when a monetary transaction violates federal law so long as the transaction is not made while violating a separate federal law.
Accountability in Deferred Prosecution Act
H.R. 1947, the "Accountability in Deferred Prosecution Act of 2009"
H.R. 1947 requires the regulation and disclosure of deferred prosecution agreements (“DPAs”) and non-prosecution agreements (“NPAs”) made between the Department of Justice and potential corporate defendants.
Why These Bills Matter
Beneficial Ownership Bill
In its various iterations, the proposed Beneficial Ownership bill would create four new federal criminal offenses. Specifically, the legislation criminalizes: (1) knowingly providing false beneficial ownership information; (2) willfully failing to provide complete or updated beneficial ownership information; (3) knowingly disclosing the existence of a subpoena, summons or other request for beneficial ownership; and (4) applicable to formation agents, knowingly failing to obtain or maintain credible, legible and updated beneficial ownership information. Penalties include civil fines up to $10,000, criminal fines, and imprisonment up to three years.
In addition, the bill’s definition of “beneficial owner” is unclear and overly broad. The criminal offenses lack a meaningful criminal intent requirement, which could result in criminal prosecution and punishment for individuals who made honest mistakes or engaged in seemingly legal conduct. Further, the punishment imposed by the bill is too extreme for "paperwork" violations. The punishment simply would not fit the ill-defined crime—this is especially true when the business is otherwise in compliance with the law.
Small Business Deposit Relief Act
This bill will provide relief to small business owners who deal primarily in cash. Upon introducing this bill, Rep. Andy Harris (R-MD) explained that farmers in his district have become targets for seizure of their business earnings under the federal anti-structuring laws. The Maryland Farm Bureau supports this bill for the protections it could offer the farm community. If enacted, the bill’s protections will extend beyond the farm community to small businesses nationwide.
By limiting the criminal penalties for violations of reporting requirements where the transaction is a first offense of its kind and is not made while also violating another federal law, the bill would rightly protect those who unwittingly break the law. Further, by limiting the amount of property forfeiture and monetary penalties imposed with respect to a transaction in violation of the reporting requirement, legitimate business owners will not be subject to disproportionate financial penalties for a paperwork violations.
Accountability in Deferred Prosecution Act
This Act calls for the Attorney General to issue public written guidelines outlining: (1) the terms and conditions that are appropriate in such agreements; (2) the process to be followed by the Department of Justice in evaluating whether terms of the agreement have been satisfied; (3) the circumstances in which the appointment of an independent monitor is warranted and the duties and authority of such a monitor; and (4) the situations where NPAs should be opted for over DPAs.
The Act also requires that all DPAs be filed with, and approved by, an appropriate U.S. district court. Furthermore, the terms and conditions of all DPAs shall be posted on the Department of Justice’s website, along with a national list of persons qualified to be independent monitors.
NACDL’s Position on Business and Corporate Focused Legislation
NACDL Opposes the Beneficial Ownership Bill
NACDL opposes enactment of the beneficial ownership bill for many reasons. First, the bill’s definition of “beneficial owner” is unclear and overly broad. Second, the bill’s criminal offenses lack meaningful criminal intent requirements, which can lead to unjust punishment for individuals who made honest mistakes or engaged in seemingly legal conduct. Lastly, the punishment imposed by the proposed bill is too extreme for a “paperwork” violation. In other words, the punishment does not fit the crime.
NACDL Supports the Small Business Deposit Relief Act
NACDL supports H.R. 1184 because it seeks to protect law-abiding individuals and those acting absent criminal intent by limiting criminal penalties for reporting requirement violations that are not in connection with another violation of federal law and when it is a first time violation. Further, the bill would limit seizures of property and money to a much more reasonable and proportionate amount.
NACDL Neither Opposes or Supports the Accountability in Deferred Prosecution Act
NACDL does not generally oppose H.R. 1947. However, to conserve judicial resources and prevent judicial intrusion into inherently executive decisions, NACDL supports revising the Act to require judicial review of DPAs and NPAs only in the event of a breach. Further, to prevent unnecessary harm to a business organization’s reputation, we believe that only general statistics, not DPAs and NPAs in their entirety, should be mandated for publication. NACDL sent a letter summarizing these views to the Subcommittee on Commercial and Administrative Law on June 25, 2009.
Status of These Bills
Beneficial Ownership Bill
The Beneficial Ownership bill has been introduced in multiple sessions of Congress but has always stalled. The most recent iterations, S. 1465 and H.R. 3331, were introduced in the Senate by Sen. Carl Levin (D-MI) in August 2013 and in the House by Rep. Carolyn Maloney in October 2013. The Senate bill was referred to the Judiciary Committee and the House bill was referred to the Financial Services Committee. No further action has been taken.
In the 112th Congress, the Beneficial Ownership bill was S. 1483 and H.R. 3416. The Senate Committee on Foreign Relations held a hearing on the bill, but no further action was taken. In the 111th Congress, the Beneficial Ownership bill was S. 569 and it was the subject of a hearing before the Senate Committee on Homeland Security and Governmental Affairs.
Small Business Deposit Relief Act
Rep. Andy Harris (R-MD) introduced H.R. 1184 on March 14, 2013, and it was immediately referred to the House Financial Services Committee. No further action has been taken.
Accountability in Deferred Prosecution Act
No action was taken on the bill following its introduction.
How to Get Involved
Please use NACDL’s Contact Congress function to call or e-mail your U.S. Representative or Senator to encourage them to re-introduce, co-sponsor, or generally support similar legislation in the 113th Congress.
Find and contact your elected officials in Washington.
Resources
Beneficial Ownership Bill
Incorporation Transparency and Law Enforcement Assistance Act of 2013 (S. 1465) (H.R. 3331)
Incorporation Transparency and Law Enforcement Assistance Act of 2011 (S. 1483) (H.R. 3416)
Incorporation Transparency and Law Enforcement Assistance Act of 2009 (S. 569)
NACDL Letter Opposing S. 1483, Sept. 13, 2011
NACDL Letter Opposing S. 569, Oct. 30, 2009
Small Business Deposit Relief Act
Small Business Deposit Relief Act of 2013, H.R. 1184
Congressman Andy Harris Introduces Bill to Protect Small Businesses From Arcane Banking Law
Accountability in Deferred Prosecution Act
June 25, 2009, NACDL Letter to House Judiciary Subcommittee on Commercial and Administrative Law on DPAs and NPAs
Shana-Tara Regon, Proposal Seeks More Oversight Of Justice Department's Pre-Trial Diversion Agreements, Washington Legal Foundation (September 2009)
November 19, 2009, NACDL Letter on H.R. 1947 and the Hearing on Transparency and Integrity in Corporate Monitoring