99 006
107 th Congress
Rept. 107 250
HOUSE OF REPRESENTATIVES
1st Session
Part 1
FINANCIAL ANTI-TERRORISM ACT OF 2001
October 17, 2001.--Ordered to be printed
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 3004]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the bill
(H.R. 3004) to combat the financing of terrorism and other financial
crimes, and for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill as
amended do pass.
CONTENTS
Amendment 2
Purpose and Summary 33
Background and Need for Legislation 34
Hearings 40
Committee Consideration 40
Committee Votes 40
Committee Oversight Findings 44
Performance Goals and Objectives 45
New Budget Authority, Entitlement Authority, and Tax Expenditures45
Committee Cost Estimate 45
Congressional Budget Office Estimate 45
Federal Mandates Statement 49
Advisory Committee Statement 49
Constitutional Authority Statement 50
Applicability to Legislative Branch 50
Exchange of Committee Correspondence 50
Section-by-Section Analysis of the Legislation 52
Changes in Existing Law Made by the Bill, as Reported 76
Dissenting Views 121
AMENDMENT
The amendment is as follows:
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial
Anti-Terrorism Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--STRENGTHENING LAW ENFORCEMENT
Sec. 101. Bulk cash smuggling into or out of the United States.
Sec. 102. Forfeiture in currency reporting cases.
Sec. 103. Interstate currency couriers.
Sec. 104. Illegal money transmitting businesses.
Sec. 105. Long-arm jurisdiction over foreign money launderers.
Sec. 106. Laundering money through a foreign bank.
Sec. 107. Specified unlawful activity for money laundering.
Sec. 108. Laundering the proceeds of terrorism.
Sec. 109. Violations of reporting requirements for nonfinancial
trades and business.
Sec. 110. Proceeds of foreign crimes.
Sec. 111. Availability of reports relating to coins and currency
received in nonfinancial trade or business.
Sec. 112. Penalties for violations of geographic targeting orders
and certain record keeping requirements.
Sec. 113. Exclusion of aliens involved in money laundering.
Sec. 114. Standing to contest forfeiture of funds deposited into
foreign bank that has a correspondent account in the United States.
Sec. 115. Subpoenas for records regarding funds in correspondent
bank accounts.
Sec. 116. Authority to order convicted criminal to return property
located abroad.
Sec. 117. Corporation represented by a fugitive.
Sec. 118. Enforcement of foreign judgments.
Sec. 119. Reporting provisions and anti-terrorist activities of
United States intelligence agencies.
Sec. 120. Financial Crimes Enforcement Network.
Sec. 121. Customs Service border searches.
Sec. 122. Prohibition on false statements to financial
institutions concerning the identity of a customer.
Sec. 123. Verification of identification.
Sec. 124. Consideration of anti-money laundering record.
Sec. 125. Reporting of suspicious activities by informal
underground banking systems, such as hawalas.
TITLE II--PUBLIC-PRIVATE COOPERATION
Sec. 201. Establishment of highly secure network.
Sec. 202. Report on improvements in data access and other issues.
Sec. 203. Reports to the financial services industry on suspicious
financial activities.
Sec. 204. Efficient use of currency transaction report system.
Sec. 205. Public-private task force on terrorist financing issues.
Sec. 206. Suspicious activity reporting requirements.
Sec. 207. Amendments relating to reporting of suspicious activities.
Sec. 208. Authorization to include suspicions of illegal activity
in written employment references.
Sec. 209. International cooperation on identification of
originators of wire transfers.
Sec. 210. Check truncation study.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
Sec. 301. Special measures for jurisdictions, financial
institutions, or international transactions of primary money laundering
concern.
Sec. 302. Special due diligence for correspondent accounts and
private banking accounts.
Sec. 303. Prohibition on United States correspondent accounts with
foreign shell banks.
Sec. 304. Anti-money laundering programs.
Sec. 305. Concentration accounts at financial institutions.
Sec. 306. International cooperation in investigations of money
laundering, financial crimes, and the finances of terrorist groups.
Sec. 307. Prohibition on acceptance of any bank instrument for
unlawful Internet gambling.
Sec. 308. Internet gambling in or through foreign jurisdictions.
TITLE IV--CURRENCY PROTECTION
Sec. 401. Counterfeiting domestic currency and obligations.
Sec. 402. Counterfeiting foreign currency and obligations.
Sec. 403. Production of documents.
Sec. 404. Reimbursement.
TITLE I--STRENGTHENING LAW ENFORCEMENT
SEC. 101. BULK CASH SMUGGLING INTO OR OUT OF THE UNITED STATES.
(a) Findings.--The Congress finds the following:
(1) Effective enforcement of the currency reporting requirements of
subchapter II of chapter 53 of title 31, United States Code, and the
regulations prescribed under such subchapter, has forced drug dealers
and other criminals engaged in cash-based businesses to avoid using
traditional financial institutions.
(2) In their effort to avoid using traditional financial
institutions, drug dealers and other criminals are forced to move large
quantities of currency in bulk form to and through the airports, border
crossings, and other ports of entry where the currency can be smuggled
out of the United States and placed in a foreign financial institution
or sold on the black market.
(3) The transportation and smuggling of cash in bulk form may now be
the most common form of money laundering, and the movement of large sums
of cash is one of the most reliable warning signs of drug trafficking,
terrorism, money laundering, racketeering, tax evasion and similar
crimes.
(4) The intentional transportation into or out of the United States
of large amounts of currency or monetary instruments, in a manner
designed to circumvent the mandatory reporting provisions of subchapter
II of chapter 53 of title 31, United States Code,, is the equivalent of,
and creates the same harm as, the smuggling of goods.
(5) The arrest and prosecution of bulk cash smugglers are important
parts of law enforcement's effort to stop the laundering of criminal
proceeds, but the couriers who attempt to smuggle the cash out of the
United States are typically low-level employees of large criminal
organizations, and thus are easily replaced. Accordingly, only the
confiscation of the smuggled bulk cash can effectively break the cycle
of criminal activity of which the laundering of the bulk cash is a
critical part.
(6) The current penalties for violations of the currency reporting
requirements are insufficient to provide a deterrent to the laundering
of criminal proceeds. In particular, in cases where the only criminal
violation under current law is a reporting offense, the law does not
adequately provide for the confiscation of smuggled currency. In
contrast, if the smuggling of bulk cash were itself an offense, the cash
could be confiscated as the corpus delicti of the smuggling offense.
(b) Purposes.--The purposes of this section are--
(1) to make the act of smuggling bulk cash itself a criminal offense;
(2) to authorize forfeiture of any cash or instruments of the
smuggling offense;
(3) to emphasize the seriousness of the act of bulk cash smuggling; and
(4) to prescribe guidelines for determining the amount of property
subject to such forfeiture in various situations.
(c) Enactment of Bulk Cash Smuggling Offense.--Subchapter II of
chapter 53 of title 31, United States Code, is amended by adding at the
end the following:
``5331. Bulk cash smuggling into or out of the United States
``(a) Criminal Offense.--
``(1) In general.--Whoever, with the intent to evade a currency
reporting requirement under section 5316, knowingly conceals more than
$10,000 in currency or other monetary instruments on the person of such
individual or in any conveyance, article of luggage, merchandise, or
other container, and transports or transfers or attempts to transport or
transfer such currency or monetary instruments from a place within the
United States to a place outside of the United States, or from a place
outside the United States to a place within the United States, shall be
guilty of a currency smuggling offense and subject to punishment
pursuant to subsection (b).
``(2) Concealment on person.--For purposes of this section, the
concealment of currency on the person of any individual includes
concealment in any article of clothing worn by the individual or in any
luggage, backpack, or other container worn or carried by such
individual.
``(b) Penalty.--
``(1) Term of imprisonment.--A person convicted of a currency
smuggling offense under subsection (a), or a conspiracy to commit such
offense, shall be imprisoned for not more than 5 years.
``(2) Forfeiture.--In addition, the court, in imposing sentence
under paragraph (1), shall order that the defendant forfeit to the
United States, any
property, real or personal, involved in the offense, and any
property traceable to such property, subject to subsection (d) of this
section.
``(3) Procedure.--The seizure, restraint, and forfeiture of property
under this section shall be governed by section 413 of the Controlled
Substances Act.
``(4) Personal money judgment.--If the property subject to
forfeiture under paragraph (2) is unavailable, and the defendant has
insufficient substitute property that may be forfeited pursuant to
section 413(p) of the Controlled Substances Act, the court shall enter a
personal money judgment against the defendant for the amount that would
be subject to forfeiture.
``(c) Civil Forfeiture.--
``(1) In general.--Any property involved in a violation of
subsection (a), or a conspiracy to commit such violation, and any
property traceable to such violation or conspiracy, may be seized and,
subject to subsection (d) of this section, forfeited to the United
States.
``(2) Procedure.--The seizure and forfeiture shall be governed by
the procedures governing civil forfeitures in money laundering cases
pursuant to section 981(a)(1)(A) of title 18, United States Code.
``(3) Treatment of certain property as involved in the offense.--For
purposes of this subsection and subsection (b), any currency or other
monetary instrument that is concealed or intended to be concealed in
violation of subsection (a) or a conspiracy to commit such violation,
any article, container, or conveyance used, or intended to be used, to
conceal or transport the currency or other monetary instrument, and any
other property used, or intended to be used, to facilitate the offense,
shall be considered property involved in the offense.
``(d) Proportionality of Forfeiture.--
``(1) In general.--Upon a showing by the property owner by a
preponderance of the evidence that the currency or monetary instruments
involved in the offense giving rise to the forfeiture were derived from
a legitimate source, and were intended for a lawful purpose, the court
shall reduce the forfeiture to the maximum amount that is not grossly
disproportional to the gravity of the offense.
``(2) Factors to be considered.--In determining the amount of the
forfeiture, the court shall consider all aggravating and mitigating
facts and circumstances that have a bearing on the gravity of the
offense, including the following:
``(A) The value of the currency or other monetary instruments
involved in the offense.
``(B) Efforts by the person committing the offense to structure
currency transactions, conceal property, or otherwise obstruct justice.
``(C) Whether the offense is part of a pattern of repeated
violations of Federal law.''.
(c) Clerical Amendment.--The table of sections for subchapter II of
chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5330, the following new item:
``5331. Bulk cash smuggling into or out of the United States.''.
SEC. 102. FORFEITURE IN CURRENCY REPORTING CASES.
(a) In General.--Subsection (c) of section 5317 of title 31, United
States Code, is amended to read as follows:
``(c) Forfeiture.--
``(1) In general.--The court in imposing sentence for any violation
of section 5313, 5316, or 5324 of this title, or section 6050I of the
Internal Revenue Code of 1986, or any conspiracy to commit such
violation, shall order the defendant to forfeit all property, real or
personal, involved in the offense and any property traceable thereto.
``(2) Procedure.--Forfeitures under this subsection shall be
governed by the procedures established in section 413 of the Controlled
Substances Act and the guidelines established in paragraph (4).
``(3) Civil forfeiture.--Any property involved in a violation of
section 5313, 5316, or 5324 of this title, or section 6050I of the
Internal Revenue Code of 1986, or any conspiracy to commit any such
violation, and any property traceable to any such violation or
conspiracy, may be seized and, subject to paragraph (4), forfeited to
the United States in accordance with the procedures governing civil
forfeitures in money laundering cases pursuant to section 981(a)(1)(A)
of title 18, United States Code.
``(4) Proportionality of forfeiture.--
``(A) In general.--Upon a showing by the property owner by a
preponderance of the evidence that any currency or monetary instruments
involved in the offense giving rise to the forfeiture were derived from
a legitimate source, and were intended for a lawful purpose, the court
shall reduce the forfeiture to the maximum amount that is not grossly
disproportional to the gravity of the offense.
``(B) Factors to be considered.--In determining the amount of the
forfeiture, the court shall consider all aggravating and mitigating
facts and circumstances that have a bearing on the gravity of the
offense, including the following:
``(i) The value of the currency or other monetary instruments
involved in the offense.
``(ii) Efforts by the person committing the offense to structure
currency transactions, conceal property, or otherwise obstruct justice.
``(iii) Whether the offense is part of a pattern of repeated
violations of Federal law.''.
(b) Conforming Amendments.--(1) Section 981(a)(1)(A) of title 18,
United States Code, is amended by striking ``of section 5313(a) or
5324(a) of title 31, or''.
(2) Section 982(a)(1) of title 18, United States Code, is amended by
striking ``of section 5313(a), 5316, or 5324 of title 31, or''.
SEC. 103. INTERSTATE CURRENCY COURIERS.
Section 1957 of title 18, United States Code, is amended by adding at
the end the following new subsection:
``(g) Any person who conceals more than $10,000 in currency on his or
her person, in any vehicle, in any compartment or container within any
vehicle, or in any container placed in a common carrier, and transports,
attempts to transport, or conspires to transport such currency in
interstate commerce on any public road or highway or on any bus, train,
airplane, vessel, or other common carrier, knowing that the currency was
derived from some form of unlawful activity, or knowing that the
currency was intended to be used to promote some form of unlawful
activity, shall be punished as provided in subsection (b). The
defendant's knowledge may be established by proof that the defendant was
willfully blind to the source or intended use of the currency. For
purposes of this subsection, the concealment of currency on the person
of any individual includes concealment in any article of clothing worn
by the individual or in any luggage, backpack, or other container worn
or carried by such individual.''.
SEC. 104. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) Scienter Requirement for Section 1960 Violation.--Section 1960 of
title 18, United States Code, is amended to read as follows:
``1960. Prohibition of unlicensed money transmitting businesses
``(a) Whoever knowingly conducts, controls, manages, supervises,
directs, or owns all or part of an unlicensed money transmitting
business, shall be fined in accordance with this title or imprisoned not
more than 5 years, or both.
``(b) As used in this section--
``(1) the term `unlicensed money transmitting business' means a
money transmitting business which affects interstate or foreign commerce
in any manner or degree and--
``(A) is operated without an appropriate money transmitting license
in a State where such operation is punishable as a misdemeanor or a
felony under State law, whether or not the defendant knew that the
operation was required to be licensed or that the operation was so
punishable;
``(B) fails to comply with the money transmitting business
registration requirements under section 5330 of title 31, United States
Code, or regulations prescribed under such section; or
``(C) otherwise involves the transportation or transmission of funds
that are known to the defendant to have been derived from a criminal
offense or are intended to be used to be used to promote or support
unlawful activity;
``(2) the term `money transmitting' includes transferring funds on
behalf of the public by any and all means including but not limited to
transfers within this country or to locations abroad by wire, check,
draft, facsimile, or courier; and
``(3) the term `State' means any State of the United States, the
District of Columbia, the Northern Mariana Islands, and any
commonwealth, territory, or possession of the United States.''.
(b) Seizure of Illegally Transmitted Funds.--Section 981(a)(1)(A) of
title 18, United States Code, is amended by striking ``or 1957'' and
inserting ``, 1957 or 1960''.
(c) Clerical Amendment.--The table of sections for chapter 95 of
title 18, United States Code, is amended in the item relating to section
1960 by striking ``illegal'' and inserting ``unlicensed''.
SEC. 105. LONG-ARM JURISDICTION OVER FOREIGN MONEY LAUNDERERS.
Section 1956(b) of title 18, United States Code, is amended--
(1) by striking ``(b) Whoever'' and inserting ``(b)(1) Whoever'';
(2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and
(B), respectively;
(3) by striking ``subsection (a)(1) or (a)(3),'' and inserting
``subsection (a)(1) or (a)(2) or section 1957,''; and
(4) by adding at the end the following new paragraphs:
``(2) For purposes of adjudicating an action filed or enforcing a
penalty ordered under this section, the district courts shall have
jurisdiction over any foreign person, including any financial
institution authorized under the laws of a foreign country, against whom
the action is brought, if--
``(A) service of process upon such foreign person is made under the
Federal Rules of Civil Procedure or the laws of the country where the
foreign person is found; and
``(B) the foreign person--
``(i) commits an offense under subsection (a) involving a financial
transaction that occurs in whole or in part in the United States;
``(ii) converts to such person's own use property in which the
United States has an ownership interest by virtue of the entry of an
order of forfeiture by a court of the United States; or
``(iii) is a financial institution that maintains a correspondent
bank account at a financial institution in the United States.
``(3) The court may issue a pretrial restraining order or take any
other action necessary to ensure that any bank account or other property
held by the defendant in the United States is available to satisfy a
judgment under this section.''.
SEC. 106. LAUNDERING MONEY THROUGH A FOREIGN BANK.
Section 1956(c)(6) of title 18, United States Code, is amended to
read as follows:
``(6) the term `financial institution' includes any financial
institution described in section 5312(a)(2) of title 31, United States
Code, or the regulations promulgated thereunder, as well as any foreign
bank, as defined in paragraph (7) of section 1(b) of the International
Banking Act of 1978 (12 U.S.C. 3101(7));''.
SEC. 107. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING.
Section 1956(c)(7) of title 18, United States Code, is amended--
(1) in subparagraph (B)--
(A) by striking clause (ii) and inserting the following new clause:
``(ii) any act or acts constituting a crime of violence, as defined
in section 16 of this title;''; and
(B) by inserting after clause (iii) the following new clauses:
``(iv) bribery of a public official, or the misappropriation, theft,
or embezzlement of public funds by or for the benefit of a public
official;
``(v) smuggling or export control violations involving munitions
listed in the United States Munitions List or technologies with military
applications as defined in the Commerce Control List of the Export
Administration Regulations; or
``(vi) an offense with respect to which the United States would be
obligated by a bilateral treaty either to extradite the alleged offender
or to submit the case for prosecution, if the offender were found within
the territory of the United States;''; and
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods falsely
classified),'' before ``section 542'';
(B) by inserting ``section 922(1) (relating to the unlawful
importation of firearms), section 924(n) (relating to firearms
trafficking),'' before ``section 956'';
(C) by inserting ``section 1030 (relating to computer fraud and
abuse),'' before ``1032'';
(D) by inserting ``any felony violation of the Foreign Agents
Registration Act of 1938, as amended,'' before ``or any felony violation
of the Foreign Corrupt Practices Act''; and
(E) by striking ``fraud in the sale of securities'' and inserting
``fraud in the purchase or sale of securities''.
SEC. 108. LAUNDERING THE PROCEEDS OF TERRORISM.
Section 1956(c)(7)(D) of title 18, United States Code, is amended by
inserting ``or 2339B'' after ``2339A''.
SEC. 109. VIOLATIONS OF REPORTING REQUIREMENTS FOR
NONFINANCIAL TRADES AND BUSINESS.
(a) Civil Forfeiture.--Section 981(a)(1)(A) of title 18, United
States Code, is amended by inserting ``section 6050I of the Internal
Revenue Code of 1986, or'' before ``section 1956''.
(b) Criminal Forfeiture.--Section 982(a)(1) of title 18, United
States Code, is amended by inserting ``section 6050I of the Internal
Revenue Code of 1986, or'' before ``section 1956''.
SEC. 110. PROCEEDS OF FOREIGN CRIMES.
Section 981(a)(1)(B) of title 18, United States Code, is amended to
read as follows:
``(B) Any property, real or personal, within the jurisdiction of the
United States, constituting, derived from, or traceable to, any proceeds
obtained directly or indirectly from an offense against a foreign
nation, or any property used to facilitate such offense, if--
``(i) the offense involves the manufacture, importation, sale, or
distribution of a controlled substance (as such term is defined for the
purposes of the Controlled Substances Act), or any other conduct
described in section 1956(c)(7)(B),
``(ii) the offense would be punishable within the jurisdiction of
the foreign nation by death or imprisonment for a term exceeding one
year, and
``(iii) the offense would be punishable under the laws of the United
States by imprisonment for a term exceeding one year if the act or
activity constituting the offense had occurred within the jurisdiction
of the United States.''.
SEC. 111. AVAILABILITY OF REPORTS RELATING TO COINS AND
CURRENCY RECEIVED IN NONFINANCIAL TRADE OR BUSINESS.
(a) Action Required.--Before the end of the 6-month period beginning
on the date of the enactment of this Act, the Secretary of the Treasury
shall take such action and establish such procedures as may be necessary
and appropriate to make the information contained on returns filed under
section 6050I of the Internal Revenue Code of 1986 available through the
Financial Crimes Enforcement Network to government agencies in
accordance with subsections (l)(15) and (p)(4) of section 6103 of such
Code and other applicable laws.
(b) Report.--The Secretary of the Treasury shall submit a report to
the Congress within 15 days after the end of the 6-month period
described in subsection (a) containing a description of the actions of
the Secretary pursuant to such subsection, together with such
recommendations for legislative and administrative action as the
Secretary may determine to be appropriate to achieve the goal described
in such subsection.
SEC. 112. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING
ORDERS AND CERTAIN RECORD KEEPING REQUIREMENTS.
(a) Civil Penalty for Violation of Targeting Order.--Section
5321(a)(1) of title 31, United States Code, is amended--
(1) by inserting ``or order issued'' after ``subchapter or a
regulation prescribed''; and
(2) by inserting ``, or willfully violating a regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of
Public Law 91 508,'' after ``sections 5314 and 5315)''.
(b) Criminal Penalties for Violation of Targeting Order.--
Section 5322 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``or order issued'' after ``willfully violating
this subchapter or a regulation prescribed''; and
(B) by inserting ``, or willfully violating a regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of
Public Law 91 508,'' after ``under section 5315 or 5324)'';
(2) in subsection (b)--
(A) by inserting ``or order issued'' after ``willfully violating
this subchapter or a regulation prescribed''; and
(B) by inserting ``or willfully violating a regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of
Public Law 91 508,'' after ``under section 5315 or 5324),'';
(c) Structuring Transactions To Evade Targeting Order or Certain
Record Keeping Requirements.--Section 5324(a) of title 31, United States
Code, is amended--
(1) by inserting a comma after ``shall'';
(2) by striking ``section--'' and inserting ``section, the reporting
requirements imposed by any order issued under section 5326, or the
record keeping requirements imposed by any regulation prescribed under
section 21 of the Federal Deposit Insurance Act or section 123 of Public
Law 91 508--''; and
(3) in paragraphs (1) and (2), by inserting ``, to file a report
required by any order issued under section 5326, or to maintain a record
required pursuant to any regulation prescribed under section 21 of the
Federal Deposit Insurance Act or section 123 of Public Law 91 508''
after ``regulation prescribed under any such section'' each place that
term appears.
(d) Increase in Civil Penalties for Violation of Certain Record
Keeping Requirements.--
(1) Federal deposit insurance act.--Section 21(j)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1829b(j)(1)) is amended by striking
``$10,000'' and inserting ``the greater of--
``(A) the amount (not to exceed $100,000) involved in the
transaction (if any) with respect to which the violation occurred; or
``(B) $25,000''.
(2) Public law 91 508.--Section 125(a) of Public Law 91 508 (12
U.S.C. 1955(a)) is amended by striking ``$10,000'' and inserting ``the
greater of--
``(1) the amount (not to exceed $100,000) involved in the
transaction (if any) with respect to which the violation occurred; or
``(2) $25,000''.
(e) Criminal Penalties for Violation of Certain Record Keeping
Requirements.--
(1) Section 126.--Section 126 of Public Law 91 508 (12 U.S.C. 1956)
is amended to read as follows:
``SEC. 126. CRIMINAL PENALTY.
``A person that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, shall be fined not more than $250,000, or
imprisoned for not more than 5 years, or both.''.
(2) Section 127.--Section 127 of Public Law 91 508 (12 U.S.C. 1957)
is amended to read as follows:
``SEC. 127. ADDITIONAL CRIMINAL PENALTY IN CERTAIN CASES.
``A person that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, 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.''.
SEC. 113. EXCLUSION OF ALIENS INVOLVED IN MONEY LAUNDERING.
(a) In General.--Section 212 of the Immigration and Nationality Act,
as amended (8 U.S.C. 1182), is amended in subsection (a)(2)--
(1) by redesignating subparagraphs (D), (E), (F), (G), and (H) as
subparagraphs (E), (F), (G), (H), and (I), respectively; and
(2) by inserting after subparagraph (C) the following new
subparagraph (D):
``(D) Money laundering activities.--
``(i) In general.--Any alien who the consular officer or the
Attorney General knows or has reason to believe is or has been engaged
in activities which if engaged in within the United States would
constitute a violation of the money laundering provisions section 1956,
1957, or 1960 of title 18, United States Code, or has knowingly
assisted, abetted, or conspired or colluded with others in any such
illicit activity is inadmissible.
``(ii) Related individuals.--Any alien who the consular officer or
the Attorney General knows or has reason to believe is the spouse, son,
or daughter of an alien inadmissible under clause (i), has, within the
previous 5 years, obtained any financial or other benefit from such
illicit activity of that alien, and knew or reasonably should have known
that the financial or other benefit was the product of such illicit
activity, is inadmissible, except that the Attorney General may, in the
full discretion of the Attorney General, waive the exclusion of the
spouse, son, or daughter of an alien under this clause if the Attorney
General determines that exceptional circumstances exist that justify
such waiver.''.
(b) Conforming amendment.--Section 212(h)(1)(A)(i) of the Immigration
and Nationality Act, as amended (8 U.S.C. 1182), is amended by striking
``(D)(i) or (D)(ii)'' and inserting ``(E)(i) or (E)(ii)''.
SEC. 114. STANDING TO CONTEST FORFEITURE OF FUNDS DEPOSITED
INTO FOREIGN BANK THAT HAS A CORRESPONDENT ACCOUNT IN THE UNITED STATES.
Section 981 of title 18, United States Code, is amended by adding the
following after the last subsection:
``(k) Correspondent Bank Accounts.--
``(1) Treatment of accounts of correspondent bank in domestic
financial institutions.--
``(A) In general.--For the purpose of a forfeiture under this
section or under the Controlled Substances Act, if funds are deposited
into a dollar-denominated bank account in a foreign financial
institution, and that foreign financial institution has a correspondent
account with a financial institution in the United States, the funds
deposited into the foreign financial institution (the respondent bank)
shall be deemed to have been deposited into the correspondent account in
the United States, and any restraining order, seizure warrant, or arrest
warrant in rem regarding such funds may be served on the correspondent
bank, and funds in the correspondent account up to the value of the
funds deposited into the dollar-denominated account in the foreign
financial institution may be seized, arrested or restrained.
``(B) Authority to suspend.--The Attorney General, in consultation
with the Secretary, may suspend or terminate a forfeiture under this
section if the Attorney General determines that a conflict of law exists
between the laws of the jurisdiction in which the foreign bank is
located and the laws of the United States with respect to liabilities
arising from the restraint, seizure, or arrest of such funds, and that
such suspension or termination would be in the interest of justice and
would not harm the national interests of the United States.
``(2) No requirement for government to trace funds.--If a forfeiture
action is brought against funds that are restrained, seized, or arrested
under paragraph (1), the Government shall not be required to establish
that such funds are directly traceable to the funds that were deposited
into the respondent bank, nor shall it be necessary for the Government
to rely on the application of Section 984 of this title.
``(3) Claims brought by owner of the funds.--If a forfeiture action
is instituted against funds seized, arrested, or restrained under
paragraph (1), the owner of the funds may contest the forfeiture by
filing a claim pursuant to section 983.
``(4) Definitions.--For purposes of this subsection, the following
definitions shall apply:
``(A) Correspondent account.--The term `correspondent account' has
the meaning given to the term `interbank account' in section
984(c)(2)(B).
``(B) Owner.--
``(i) In general.--Except as provided in clause (ii), the term
`owner'--
``(I) means the person who was the owner, as that term is defined
in section 983(d)(6), of the funds that were deposited into the foreign
bank at the time such funds were deposited; and
``(II) does not include either the foreign bank or any financial
institution acting as an intermediary in the transfer of the funds into
the interbank account.
``(ii) Exception.--The foreign bank may be considered the `owner' of
the funds (and no other person shall qualify as the owner of such funds)
only if--
``(I) the basis for the forfeiture action is wrongdoing committed
by the foreign bank; or
``(II) the foreign bank establishes, by a preponderance of the
evidence, that prior to the restraint, seizure, or arrest of the funds,
the foreign bank had discharged all or part of its obligation to the
prior owner of the funds, in which case the foreign bank shall be deemed
the owner of the funds to the extent of such discharged obligation.''.
SEC. 115. SUBPOENAS FOR RECORDS REGARDING FUNDS IN
CORRESPONDENT BANK ACCOUNTS.
(a) In General.--Subchapter II of chapter 53 of title 31, United
States Code, is amended by inserting after section 5331 (as added by
section 101) the following new section:
``5332. Subpoenas for records
``(a) Designation by Foreign Financial Institution of Agent.--Any
foreign financial institution that has a correspondent bank account at a
financial institution in the United States shall designate a person
residing in the United States as a person authorized to accept a
subpoena for bank records or other legal process served on the foreign
financial institution.
``(b) Maintenance of Records by Domestic Financial Institution.--
``(1) In general.--Any domestic financial institution that maintains
a correspondent bank account for a foreign financial institution shall
maintain records regarding the names and addresses of the owners of the
foreign financial institution, and the name and address of the person
who may be served with a subpoena for records regarding any funds
transferred to or from the correspondent account.
``(2) Provision to law enforcement agency.--A domestic financial
institution shall provide names and addresses maintained under paragraph
(1) to a Government authority (as defined in section 1101(3) of the
Right to Financial Privacy Act of 1978) within 7 days of the receipt of
a request, in writing, for such records.
``(c) Administrative Subpoena.--
``(1) In general.--The Attorney General and the Secretary of the
Treasury may each issue an administrative subpoena for records relating
to the deposit of any funds into a dollar-denominated account in a
foreign financial institution that maintains a correspondent account at
a domestic financial institution.
``(2) Manner of issuance.--Any subpoena issued by the Attorney
General or the Secretary of the Treasury under paragraph (1) shall be
issued in the manner described in section 3486 of this title, and may be
served on the representative designated by the foreign financial
institution pursuant to subsection (a) to accept legal process in the
United States, or in a foreign country pursuant to any mutual legal
assistance treaty, multilateral agreement, or other request for
international law enforcement assistance.
``(d) Correspondent Account Defined.--For purposes of this section,
the term `correspondent account' has the same meaning as the term
`interbank account' as such term is defined in section 984(c)(2)(B) of
title 18, United States Code.''.
(b) Clerical amendments.--The table of sections for subchapter II of
chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5331 the following new item:
``5332. Subpoenas for records.''.
(c) Effective Date.--Section 5332(a) of title 31, United States Code,
(as added by subsection (a) of this section shall apply after the end of
the 30-day period beginning on the date of the enactment of this Act.
(d) Requests for Records.--Section 3486(a)(1)(A)(i) of title 18,
United States Code, is amended by striking ``; or (II) a Federal offense
involving the sexual exploitation or abuse of children,'' and inserting
``, (II) a Federal offense involving the sexual exploitation or abuse of
children, or (III) a money laundering offense in violation of section
1956, 1957 or 1960 of this title,''.
SEC. 116. AUTHORITY TO ORDER CONVICTED CRIMINAL TO RETURN
PROPERTY LOCATED ABROAD.
(a) Forfeiture of Substitute Property.--Section 413(p) of the
Controlled Substances Act (21 U.S.C. 853) is amended to read as follows:
``(p) Forfeiture of Substitute Property.--
``(1) In general.--Paragraph (2) of this subsection shall apply, if
any property described in subsection (a), as a result of any act or
omission of the defendant--
``(A) cannot be located upon the exercise of due diligence;
``(B) has been transferred or sold to, or deposited with, a third
party;
``(C) has been placed beyond the jurisdiction of the court;
``(D) has been substantially diminished in value; or
``(E) has been commingled with other property which cannot be
divided without difficulty.
``(2) Substitute property.--In any case described in any of
subparagraphs (A) through (E) of paragraph (1), the court shall order
the forfeiture of any other property of the defendant, up to the value
of any property described in subparagraphs (A) through (E) of paragraph
(1), as applicable.
``(3) Return of property to jurisdiction.--In the case of property
described in paragraph (1)(C), the court may, in addition to any other
action authorized by this subsection, order the defendant to return the
property to the jurisdiction of the court so that the property may be
seized and forfeited.''.
(b) Protective Orders.--Section 413(e) of the Controlled Substances
Act (21 U.S.C. 853(e)) is amended by adding at the end the following:
``(4) Order To Repatriate and Deposit.--
``(A) In general.--Pursuant to its authority to enter a pretrial
restraining order under this section, including its authority to
restrain any property forfeitable as substitute assets, the court may
order a defendant to repatriate any property that may be seized and
forfeited, and to deposit that property pending trial in the registry of
the court, or with the United States Marshals Service or the Secretary
of the Treasury, in an interest-bearing account, if appropriate.
``(B) Failure to comply.--Failure to comply with an order under this
subsection, or an order to repatriate property under subsection (p),
shall be punishable as a civil or criminal contempt of court, and may
also result in an enhancement of the sentence of the defendant under the
obstruction of justice provision of the Federal Sentencing
Guidelines.''.
SEC. 117. CORPORATION REPRESENTED BY A FUGITIVE.
Section 2466 of title 28, United States Code, is amended by
designating the present matter as subsection (a), and adding at the end
the following:
``(b) Subsection (a) may be applied to a claim filed by a corporation
if any majority shareholder, or individual filing the claim on behalf of
the corporation is a person to whom subsection (a) applies.''.
SEC. 118. ENFORCEMENT OF FOREIGN JUDGMENTS.
Section 2467 of title 28, United States Code, is amended--
(1) in subsection (d), by inserting after paragraph (2) the
following new paragraph:
``(3) Preservation of property.--To preserve the availability of
property subject to a foreign forfeiture or confiscation judgment, the
Government may apply for, and the court may issue, a restraining order
pursuant to section 983(j) of title 18, United States Code, at any time
before or after an application is filed pursuant to subsection (c)(1).
The court, in issuing the restraining order--
``(A) may rely on information set forth in an affidavit describing
the nature of the proceeding or investigation underway in the foreign
country, and setting forth a reasonable basis to believe that the
property to be restrained will be named in a judgment of forfeiture at
the conclusion of such proceeding; or
``(B) may register and enforce a restraining order that has been
issued by a court of competent jurisdiction in the foreign country and
certified by the Attorney General pursuant to subsection (b)(2).
No person may object to the restraining order on any ground that is
the subject of parallel litigation involving the same property that is
pending in a foreign court.'';
(2) in subsection (b)(1)(C), by striking ``establishing that the
defendant received notice of the proceedings in sufficient time to
enable the defendant'' and inserting ``establishing that the foreign
nation took steps, in accordance with the principles of due process, to
give notice of the proceedings to all persons with an interest in the
property in sufficient time to enable such persons'';
(3) in subsection (d)(1)(D), by striking ``the defendant in the
proceedings in the foreign court did not receive notice'' and inserting
``the foreign nation did not take steps, in accordance with the
principles of due process, to give notice of the proceedings to a person
with an interest in the property''; and
(4) in subsection (a)(2)(A), by inserting ``, any violation of
foreign law that would constitute a violation of an offense for which
property could be forfeited under Federal law if the offense were
committed in the United States'' after ``United Nations Convention''.
SEC. 119. REPORTING PROVISIONS AND ANTI-TERRORIST ACTIVITIES
OF UNITED STATES INTELLIGENCE AGENCIES.
(a) Amendment Relating to the Purposes of Chapter 53 of Title 31 ,
United States Code.--Section 5311 of title 31, United States Code, is
amended by inserting before the period at the end the following: ``, or
in the conduct of intelligence or counterintelligence activities,
including analysis, to protect against international terrorism''.
(b) Amendment Relating to Reporting of Suspicious
Activities.--Section 5318(g)(4)(B) of title 31, United States Code, is
amended by striking ``or supervisory agency'' and inserting ``,
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) Amendment Relating to Availability of Reports.--Section 5319 of
title 31, United States Code, is amended to read as follows:
``5319. Availability of reports
``The Secretary of the Treasury shall make information in a report
filed under this subchapter available to an agency, including any State
financial institutions supervisory agency or United States intelligence
agency, upon request of the head of the agency. The report shall be
available for a purpose that is consistent with this subchapter. The
Secretary may only require reports on the use of such information by any
State financial institutions supervisory agency for other than
supervisory purposes or by United States intelligence agencies. However,
a report and records of reports are exempt from disclosure under section
552 of title 5.''.
(d) Amendments to the Right to Financial Privacy Act.--The Right to
Financial Privacy Act of 1978 is amended--
(1) in section 1112(a) (12 U.S.C. 3412(a)), by inserting ``, or
intelligence or counterintelligence activity, investigation or analysis
related to international terrorism'' after ``legitimate law enforcement
inquiry'';
(2) in section 1114(a)(1) (12 U.S.C. 3414(a)(1))--
(A) in subparagraph (A), by striking ``or'' at the end;
(B) in subparagraph (B), by striking the period at the end and
inserting ``; or''; and
(C) by adding at the end the following:
``(C) a Government authority authorized to conduct investigations
of, or intelligence or counterintelligence analyses related to,
international terrorism for the purpose of conducting such
investigations or analyses.''; and
(3) in section 1120(a)(2) (12 U.S.C. 3420(a)(2)), by inserting ``,
or for a purpose authorized by section 1112(a)'' before the semicolon at
the end.
(e) Amendment to the Fair Credit Reporting Act.--
(1) In general.--The Fair Credit Reporting Act (15 U.S.C. 1681 et
seq.) is amended--
(A) by redesignating the second of the 2 sections designated as
section 624 (15 U.S.C. 1681u) (relating to disclosure to FBI for
counterintelligence purposes) as section 625; and
(B) by adding at the end the following new section:
``626. Disclosures to governmental agencies for
counterterrorism purposes
``(a) Disclosure.--Notwithstanding section 604 or any other provision
of this title, a consumer reporting agency shall furnish a consumer
report of a consumer and all other information in a consumer's file to a
government agency authorized to conduct investigations of, or
intelligence or counterintelligence activities or analysis related to,
international terrorism when presented with a written certification by
such government agency that such information is necessary for the
agency's conduct or such investigation, activity or analysis.
``(b) Form of Certification.--The certification described in
subsection (a) shall be signed by the Secretary of the Treasury, or an
officer designated by the Secretary from among officers of the
Department of the Treasury whose appointments to office are required to
be made by the President, by and with the advice and consent of the
Senate.
``(c) Confidentiality.--No consumer reporting agency, or officer,
employee, or agent of such consumer reporting agency, shall disclose to
any person, or specify in any consumer report, that a government agency
has sought or obtained access to information under subsection (a).
``(d) Rule of Construction.--Nothing in section 625 shall be
construed to limit the authority of the Director of the Federal Bureau
of Investigation under this section.
``(e) Safe Harbor.--Notwithstanding any other provision of this
subchapter, any consumer reporting agency or agent or employee thereof
making disclosure of consumer reports or other information pursuant to
this section in good-faith reliance upon a certification of a
governmental agency pursuant to the provisions of this section shall not
be liable to any person for such disclosure under this subchapter, the
constitution of any State, or any law or regulation of any State or any
political subdivision of any State.''.
(2) Clerical amendments.--The table of sections for the Fair Credit
Reporting Act (15 U.S.C. 1681 et seq.) is amended--
(A) by redesignating the second of the 2 items designated as section
624 as section 625; and
(B) by inserting after the item relating to section 625 (as so
redesignated) the following new item:
``626. Disclosures to governmental agencies for counterterrorism
purposes.''.
SEC. 120. FINANCIAL CRIMES ENFORCEMENT NETWORK.
(a) In General.--Subchapter I of chapter 3 of title 31, United States
Code, is amended--
(1) by redesignating section 310 as section 311; and
(2) by inserting after section 309 the following new section:
``310. Financial Crimes Enforcement Network
``(a) In General.--The Financial Crimes Enforcement Network
established by order of the Secretary of the Treasury (Treasury Order
Numbered 105-08) on April 25, 1990, shall be a bureau in the Department
of the Treasury.
``(b) Director.--
``(1) Appointment.--The head of the Financial Crimes Enforcement
Network shall be the Director who shall be appointed by the President,
by and with the consent of the Senate, to a term of 4 years.
``(2) Duties and powers.--The duties and powers of the Director are
as follows:
``(A) Advise and make recommendations on matters relating to
financial intelligence, financial criminal activities, and other
financial activities to the Under Secretary for Enforcement.
``(B) Maintain a government-wide data access service, with access,
in accordance with applicable legal requirements, to the following:
``(i) Information collected by the Department of the Treasury,
including report information filed under subchapters II and III of
chapter 53 of this title (such as reports on cash transactions, foreign
financial agency transactions and relationships, foreign currency
transactions, exporting and importing monetary instruments, and
suspicious activities), chapter 2 of Public Law 91 508, section 21 of
the Federal Deposit Insurance Act and section 6050I of the Internal
Revenue Code of 1986.
``(ii) Information regarding national and international currency flows.
``(iii) Other records and data maintained by other Federal, State,
local, and foreign agencies, including financial and other records
developed in specific cases.
``(iv) Other privately and publicly available information.
``(C) Analyze and disseminate the available data in accordance with
applicable legal requirements and policies and guidelines established by
the Secretary of the Treasury and the Under Secretary for Enforcement
to--
``(i) identify possible criminal activity to appropriate Federal,
State, local, and foreign law enforcement agencies;
``(ii) support ongoing criminal financial investigations and
prosecutions and related proceedings, including civil and criminal tax
and forfeiture proceedings;
``(iii) identify possible instances of noncompliance with
subchapters II and III of chapter 53 of this title, chapter 2 of Public
Law 91 508, and section 21 of the Federal Deposit Insurance Act to
Federal agencies with statutory responsibility for enforcing compliance
with such provisions and other appropriate Federal regulatory agencies;
``(iv) evaluate and recommend possible uses of special currency
reporting requirements under section 5326; and
``(v) determine emerging trends and methods in money laundering and
other financial crimes.
``(D) Establish and maintain a financial crimes communications
center to furnish law enforcement authorities with intelligence
information related to emerging or ongoing investigations and undercover
operations.
``(E) Furnish research, analytical, and informational services to
financial institutions, appropriate Federal regulatory agencies with
regard to financial institutions, and appropriate Federal, State, local,
and foreign law enforcement authorities, in accordance with policies and
guidelines established by the Secretary of the Treasury or the Under
Secretary of the Treasury for Enforcement, in the interest of detection,
prevention, and prosecution of terrorism, organized crime, money
laundering, and other financial crimes.
``(F) Establish and maintain a special unit dedicated to combatting
the use of informal, nonbank networks and payment and barter system
mechanisms that permit the transfer of funds or the equivalent of funds
without records and without compliance with criminal and tax laws.
``(G) Provide computer and data support and data analysis to the
Secretary of the Treasury for tracking and controlling foreign assets.
``(H) Coordinate with financial intelligence units in other
countries on anti-terrorism and anti-money laundering initiatives, and
similar efforts.
``(I) Administer the requirements of subchapters II and III of
chapter 53 of this title, chapter 2 of Public Law 91 508, and section 21
of the Federal Deposit Insurance Act, to the extent delegated such
authority by the Secretary of the Treasury.
``(J) Such other duties and powers as the Secretary of the Treasury
may delegate or prescribe.
``(c) Requirements Relating to Maintenance and Use of Data
Banks.--The Secretary of the Treasury shall establish and maintain
operating procedures with respect to the government-wide data access
service and the financial crimes communications center maintained by the
Financial Crimes Enforcement Network which provide--
``(1) for the coordinated and efficient transmittal of information
to, entry of information into, and withdrawal of information from, the
data maintenance system maintained by the Network, including--
``(A) the submission of reports through the Internet or other secure
network, whenever possible;
``(B) the cataloguing of information in a manner that facilitates
rapid retrieval by law enforcement personnel of meaningful data; and
``(C) a procedure that provides for a prompt initial review of
suspicious activity reports and other reports, or such other means as
the Secretary may provide, to identify information that warrants
immediate action; and
``(2) in accordance with section 552a of title 5 and the Right to
Financial Privacy Act of 1978, appropriate standards and guidelines for
determining--
``(A) who is to be given access to the information maintained by the
Network;
``(B) what limits are to be imposed on the use of such information; and
``(C) how information about activities or relationships which
involve or are closely associated with the exercise of constitutional
rights is to be screened out of the data maintenance system.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated for the Financial Crimes Enforcement Network such sums as
may be necessary for fiscal years 2002, 2003, 2004, and 2005.''.
(b) Compliance With Existing Reports Compliance.--The Secretary of
the Treasury shall study methods for improving compliance with the
reporting requirements established in section 5314 of title 31, United
States Code, and shall submit a report on such study to the Congress by
the end of the 6-month period beginning on the date of the enactment of
this Act and each 1-year period thereafter. The initial report shall
include historical data on compliance with such reporting requirements.
(c) Clerical Amendment.--The table of sections for subchapter I of
chapter 3 of title 31, United States Code, is amended--
(1) by redesignating the item relating to section 310 as section
311; and
(2) by inserting after the item relating to section 309 the
following new item:
``310. Financial Crimes Enforcement Network''.
SEC. 121. CUSTOMS SERVICE BORDER SEARCHES.
Section 5317(b) of title 31, United States Code, is amended to read
as follows:
``(b) Searches at Border.--
``(1) In general.--For purposes of ensuring compliance with the laws
enforced by the United States Customs Service, a customs officer may
stop and search, at the border and without a search warrant, any
vehicle, vessel, aircraft, or other conveyance, any envelope or other
container, and any person entering, transiting, or departing from the
United States.
``(2) International shipments of mail.--With respect to shipments of
international mail that are exported or imported by the United States
Postal Service, the Customs Service and other appropriate Federal
agencies shall, subject to paragraph (3), apply the customs laws of the
United States and all other laws relating to the importation or
exportation of such shipments in the same manner to both shipments by
the United States Postal Service and similar shipments by private
companies.
``(3) Safeguards.--No provision of this subsection shall be
construed as authorizing any customs officer or any other person to read
any correspondence unless--
``(A) a search warrant has been issued pursuant to Rule 41 of the
Federal Rules of Criminal Procedure which permits such correspondence to
be read; or
``(B) the sender or addressee of the correspondence has given
written consent for any such action.''.
SEC. 122. PROHIBITION ON FALSE STATEMENTS TO FINANCIAL
INSTITUTIONS CONCERNING THE IDENTITY OF A CUSTOMER.
(a) In General.--Chapter 47 of title 18, United States Code, is
amended by inserting after section 1007 the following:
``1008. False statements concerning the identity of customers
of financial institutions
``(a) In General.--Whoever, in connection with information submitted
to or requested by a financial institution, knowingly in any manner--
``(1) falsifies, conceals, or covers up, or attempts to falsify,
conceal, or cover up, the identity of any person in connection with any
transaction with a financial institution;
``(2) makes, or attempts to make, any materially false, fraudulent,
or fictitious statement or representation of the identity of any person
in connection with a transaction with a financial institution;
``(3) makes or uses, or attempts to make or use, any false writing
or document knowing the same to contain any materially false,
fictitious, or fraudulent statement or entry concerning the identity of
any person in connection with a transaction with a financial
institution; or
``(4) uses or presents, or attempts to use or present, in connection
with a transaction with a financial institution, an identification
document or means of identification the possession of which is a
violation of section 1028;
shall be fined under this title, imprisoned not more than 5 years, or
both.
``(b) Definitions.--In this section, the following definitions shall
apply:
``(1) Financial institution.--The term `financial institution'--
``(A) has the same meaning as in section 20; and
``(B) in addition, has the same meaning as in section 5312(a)(2) of
title 31, United States Code.
``(2) Identification document.--The term `identification document'
has the same meaning as in section 1028(d).
``(3) Means of identification.--The term `means of identification'
has the same meaning as in section 1028(d).''.
(b) Technical and Conforming Amendments.--
(1) Title 18, united states code.--Section 1956(c)(7)(D) of title
18, United States Code, is amended by striking ``1014 (relating to
fraudulent loan'' and inserting ``section 1008 (relating to false
statements concerning the identity of customers of financial
institutions), section 1014 (relating to fraudulent loan''.
(2) Table of sections.--The table of sections for chapter 47 of
title 18, United States Code, is amended by inserting after the item
relating to section 1007 the following:
``1008. False statements concerning the identity of customers of
financial institutions.''.
SEC. 123. VERIFICATION OF IDENTIFICATION.
(a) In General.--Section 5318 of title 31, United States Code, is
amended by adding at the end the following new subsection:
``(i) Identification and Verification of Accountholders.--
``(1) In general.--Subject to the requirements of this subsection,
the Secretary of the Treasury shall prescribe regulations setting forth
the minimum standards regarding customer identification that shall apply
in connection with the opening of an account at a financial institution.
``(2) Minimum requirements.--The regulations shall, at a minimum,
require financial institutions to implement 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;
``(C) consulting applicable lists of known or suspected terrorists
or terrorist organizations generated by government agencies to determine
whether a person seeking to open an account appears on any such list.
``(3) Factors to be considered.--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) Certain financial institutions.--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) Exemptions.--The Secretary of the Treasury (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) Effective date.--Final regulations prescribed under this
subsection shall take effect before the end of the 1-year period
beginning on the date of the enactment of the Financial Anti-Terrorism
Act of 2001.''.
(b) Study and Report Required.--Within 6 months after the date of the
enactment of this Act, the Secretary of the Treasury, in consultation
with the Federal functional regulators (as defined in section 509 of the
Gramm-Leach-Bliley Act) and other appropriate Government agencies, shall
submit a report to the Congress containing recommendations for--
(1) determining the most timely and effective way to require foreign
nationals to provide domestic financial institutions and agencies with
appropriate and accurate information, comparable to that which is
required of United States nationals, concerning their identity, address,
and other related information necessary to enable such institutions and
agencies to comply with the requirements of this section;
(2) requiring foreign nationals to apply for and obtain, before
opening an account with a domestic financial institution, an
identification number which would function similarly to a Social
Security number or tax identification number; and
(3) establishing a system for domestic financial institutions and
agencies to review information maintained by relevant Government
agencies for purposes of verifying the identities of foreign nationals
seeking to open accounts at those institutions and agencies.
SEC. 124. CONSIDERATION OF ANTI-MONEY LAUNDERING RECORD.
(a) Bank Holding Company Act of 1956.--
(1) In general.--Section 3(c) of the Bank Holding Company Act of
1956 (12 U.S.C. 1842(c)) is amended by adding at the end the following
new paragraph:
``(6) Money laundering.--In every case the Board shall take into
consideration the effectiveness of the company or companies in combating
and preventing money laundering activities, including in overseas
branches.''.
(2) Scope of application.--The amendment made by paragraph (1) shall
apply with respect to any application submitted to the Board of
Governors of the Federal Reserve System under section 3 of the Bank
Holding Company Act of 1956 after December 31, 2000, which has not been
approved by the Board before the date of the enactment of this Act.
(b) Mergers Subject to Review Under Federal Deposit Insurance Act.--
(1) In general.--Section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(c)) is amended--
(A) by redesignating paragraph (11) as paragraph (12); and
(B) by inserting after paragraph (10), the following new paragraph:
``(11) Money laundering.--In every case, the responsible agency
shall take into consideration the effectiveness of any insured
depository institution involved in the proposed merger transaction in
combating and preventing money laundering activities, including in
overseas branches.''.
(2) Scope of application.--The amendment made by paragraph (1) shall
apply with respect to any application submitted to the responsible
agency under section 18(c) of the Federal Deposit Insurance Act after
December 31, 2000, which has not been approved by all appropriate
responsible agencies before the date of the enactment of this Act.
SEC. 125. REPORTING OF SUSPICIOUS ACTIVITIES BY INFORMAL
UNDERGROUND BANKING SYSTEMS, SUCH AS HAWALAS.
(a) Definition for Subchapter.--Subparagraph (R) of section
5312(a)(2) of title 31, United States Code, is amended to read as
follows:
``(R) a licensed sender of money or any other person who engages as
a business in the transmission of funds, including through an informal
value transfer banking system or network of people facilitating the
transfer of value domestically or internationally outside of the
conventional financial institutions system;''.
(b) Money Transmitting Business.--Section 5330(d)(1)(A) of title 31,
United States Code, is amended by inserting before the semicolon the
following: ``or any other person who engages as a business in the
transmission of funds, including through an informal value transfer
banking system or network of people facilitating the transfer of value
domestically or internationally outside of the conventional financial
institutions system''.
(c) Applicability of Rules.--Section 5318 of title 31, United States
Code, as amended by this title, is amended by adding at the end the
following:
``(l) Applicability of Rules.--Any rules prescribed pursuant to the
authority contained in section 21 of the Federal Deposit Insurance Act
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 through an informal value transfer
banking system or network of people facilitating the transfer of value
domestically or internationally outside of the conventional financial
institutions system.''.
(d) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary of the Treasury shall report to Congress on the
need for any additional legislation relating to--
(1) informal value transfer banking systems or networks of people
facilitating the transfer of value domestically or internationally
outside of the conventional financial institutions system;
(2) anti-money laundering controls; and
(3) regulatory controls relating to underground money movement and
banking systems, such as the system referred to as ``hawala'', including
whether the threshold for the filing of suspicious activity reports
under section 5318(g) of title 31, United States Code should be lowered
in the case of such systems.
TITLE II--PUBLIC-PRIVATE COOPERATION
SEC. 201. ESTABLISHMENT OF HIGHLY SECURE NETWORK.
(a) In General.--The Secretary of the Treasury shall establish a
highly secure network in the Financial Crimes Enforcement Network that--
(1) allows financial institutions to file reports required under
subchapter II or III of chapter 53 of title 31, United States Code,
chapter 2 of Public Law 91 508, or section 21 of the Federal Deposit
Insurance Act through the network; and
(2) provides financial institutions with alerts and other
information regarding suspicious activities that warrant immediate and
enhanced scrutiny.
(b) Expedited Development.--The Secretary of the Treasury shall take
such action as may be necessary to ensure that the website required
under subsection (a) is fully operational before the end of the 9-month
period beginning on the date of the enactment of this Act.
SEC. 202. REPORT ON IMPROVEMENTS IN DATA ACCESS AND OTHER ISSUES.
Before the end of the 6-month period beginning on the date of the
enactment of this Act, the Secretary of the Treasury shall report to the
Congress on the following issues:
(1) Data collection and analysis.--Progress made since such date of
enactment in meeting the requirements of section 310(c) of title 31,
United States Code (as added by this Act).
(2) Barriers to exchange of financial crime information.--Technical,
legal, and other barriers to the exchange of financial crime prevention
and detection information among and between Federal law enforcement
agencies, including an identification of all Federal law enforcement
data systems between which or among which data cannot be shared for
whatever reason.
(3) Private banking.--Private banking activities in the United
States, including information on the following:
(A) The nature and extent of private banking activities in the
United States.
(B) Regulatory efforts to monitor private banking activities and
ensure that such activities are conducted in compliance with subchapter
II of chapter 53 of title 31, United States Code, and section 21 of the
Federal Deposit Insurance Act.
(C) With regard to financial institutions that offer private banking
services, the policies and procedures of such institutions that are
designed to ensure compliance with the requirements of subchapter II of
chapter 53 of title 31, United States Code, and section 21 of the
Federal Deposit Insurance Act with respect to private banking activity.
SEC. 203. REPORTS TO THE FINANCIAL SERVICES INDUSTRY ON
SUSPICIOUS FINANCIAL ACTIVITIES.
At least once each calendar quarter, the Secretary of the Treasury
shall--
(1) publish a report containing a detailed analysis identifying
patterns of suspicious activity and other investigative insights derived
from suspicious activity reports and investigations conducted by
Federal, State, and local law enforcement agencies to the extent
appropriate; and
(2) distribute such report to financial institutions (as defined in
section 5312 of title 31, United States Code).
SEC. 204. EFFICIENT USE OF CURRENCY TRANSACTION REPORT SYSTEM.
(a) Findings.--The Congress finds the following:
(1) The Congress established the currency transaction reporting
requirements in 1970 because the Congress found then that such reports
have a high degree of usefulness in criminal, tax, and regulatory
investigations and proceedings and the usefulness of such reports has
only increased in the years since the requirements were established.
(2) In 1994, in response to reports and testimony that excess
amounts of currency transaction reports were interfering with effective
law enforcement, the Congress reformed the currency transaction report
exemption requirements to provide--
(A) mandatory exemptions for certain reports that had little
usefulness for law enforcement, such as cash transfers between
depository institutions and cash deposits from government agencies; and
(B) discretionary authority for the Secretary of the Treasury to
provide exemptions, subject to criteria and guidelines established by
the Secretary, for financial institutions with regard to regular
business customers that maintain accounts at an institution into which
frequent cash deposits are made.
(3) Today there is evidence that some financial institutions are not
utilizing the exemption system, or are filing reports even if there is
an exemption in effect, with the result that the volume of currency
transaction reports is once again interfering with effective law
enforcement.
(b) Study and Report.--
(1) Study required.--The Secretary of the Treasury shall conduct a
study of--
(A) the possible expansion of the statutory exemption system in
effect under 5313 of title 31, United States Code; and
(B) methods for improving financial institution utilization of the
statutory exemption provisions as a way of reducing the submission of
currency transaction reports that have little or no value for law
enforcement purposes, including improvements in the systems in effect at
financial institutions for regular review of the exemption procedures
used at the institution and the training of personnel in its effective
use.
(2) Report required.--The Secretary of the Treasury shall submit a
report to the Congress before the end of the 90-day period beginning on
the date of the enactment of this Act containing the findings and
conclusions of the Secretary with regard to the study required under
subsection (a) and such recommendations for legislative or
administrative action as the Secretary determines to be appropriate.
SEC. 205. PUBLIC-PRIVATE TASK FORCE ON TERRORIST FINANCING ISSUES.
Section 1564 of the Annunzio--Wylie Anti-Money Laundering Act (31
U.S.C. 5311 note) is amended by adding at the end the following new
subsection:
``(d) Terrorist Financing Issues.--
``(1) In general.--The Secretary of the Treasury shall provide,
either within the Bank Secrecy Act Advisory Group, or as a subcommittee
or other adjunct of the Advisory Group, for a task force of
representatives from agencies and officers represented on the Advisory
Group, a representative of the Director of the Office of Homeland
Security, and representatives of financial institutions, private
organizations that represent the financial services industry, and other
interested parties to focus on--
``(A) issues specifically related to the finances of terrorist
groups, the means terrorist groups use to transfer funds around the
world and within the United States, including through the use of
charitable organizations, nonprofit organizations, and nongovernmental
organizations, and the extent to which financial institutions in the
United States are unwittingly involved in such finances and the extent
to which such institutions are at risk as a result;
``(B) the relationship, particularly the financial relationship,
between international narcotics traffickers and foreign terrorist
organizations, the extent to which their memberships overlap and engage
in joint activities, and the extent to which they cooperate with each
other in raising and transferring funds for their respective purposes;
and
``(C) means of facilitating the identification of accounts and
transactions involving terrorist groups and facilitating the exchange of
information concerning such accounts and transactions between financial
institutions and law enforcement organizations.
``(2) Applicability of other provisions.--Sections 552, 552a, and
552b of title 5, United States Code, and the Federal Advisory Committee
Act shall not apply to the task force established pursuant to paragraph
(1).''.
SEC. 206. SUSPICIOUS ACTIVITY REPORTING REQUIREMENTS.
(a) Deadline For Suspicious Activity Reporting Requirements For
Registered Brokers and Dealers.--The Secretary of the Treasury, in
consultation with the Securities and Exchange Commission, shall publish
proposed regulations in the Federal Register before January 1, 2002,
requiring brokers and dealers registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 to submit
suspicious activity reports under section 5318(g) of title 31, United
States Code. Such regulations shall be published in final form no later
than June 1, 2002.
(b) Suspicious Activity Reporting Requirements For Futures Commission
Merchants, Commodity Trading Advisors, and Commodity Pool
Operators.--The Secretary of the Treasury, in consultation with the
Commodity Futures Trading Commission, may prescribe regulations
requiring futures commission merchants, commodity trading advisors, and
commodity pool operators registered under the Commodity Exchange Act to
submit suspicious activity reports under section 5318(g) of title 31,
United States Code.
SEC. 207. AMENDMENTS RELATING TO REPORTING OF SUSPICIOUS ACTIVITIES.
(a) Amendment Relating to Civil Liability Immunity for
Disclosures.--Section 5318(g)(3) of title 31, United States Code, is
amended to read as follows:
``(3) Liability for disclosures.--
``(A) In general.--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 any person.
``(B) Rule of construction.--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
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.''.
(b) Prohibition on Notification of Disclosures.--Section 5318(g)(2)
of title 31, United States Code, is amended to read as follows:
``(2) Notification prohibited.--
``(A) In general.--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) the financial institution, director, officer, employee, or
agent may not notify any person involved in the transaction that the
transaction has been reported; and
``(ii) no officer or employee of the Federal Government or of 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) Disclosures in certain employment references.--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, in a written employment reference that is provided in
accordance with section 18(v) of the Federal Deposit Insurance Act in
response to a request from another financial institution or a written
termination notice or employment reference that is provided in
accordance with the rules of the self-regulatory organizations
registered with the Securities and Exchange Commission, information that
was included in a report to which subparagraph (A) applies, but such
written employment reference may not disclose that such information was
also included in any such report or that such report was made.''.
SEC. 208. AUTHORIZATION TO INCLUDE SUSPICIONS OF ILLEGAL
ACTIVITY IN WRITTEN EMPLOYMENT REFERENCES.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended by adding at the end the following new subsection:
``(w) Written Employment References May Contain Suspicions of
Involvement in Illegal Activity.--
``(1) In general.--Notwithstanding any other provision of law, any
insured depository institution, and any director, officer, employee, or
agent of such institution, may disclose in any written employment
reference relating to a current or former institution-affiliated party
of such institution which is provided to another insured depository
institution in response to a request from such other institution,
information concerning the possible involvement of such
institution-affiliated party in potentially unlawful activity, to the
extent--
``(A) the disclosure does not contain information which the
institution, director, officer, employee, or agent knows to be false;
and
``(B) the institution, director, officer, employee, or agent has not
acted with malice or with reckless disregard for the truth in making the
disclosure.
``(2) Definition.--For purposes of this subsection, the term
`insured depository institution' includes any uninsured branch or agency
of a foreign bank.''.
SEC. 209. INTERNATIONAL COOPERATION ON IDENTIFICATION OF
ORIGINATORS OF WIRE TRANSFERS.
The Secretary of the Treasury shall--
(1) in consultation with the Attorney General and the Secretary of
State, take all reasonable steps to encourage foreign governments to
require the inclusion of the name of the originator in wire transfer
instructions sent to the United States and other countries, with the
information to remain with the transfer from its origination until the
point of disbursement; and
(2) report annually to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate on--
(A) progress toward the goal enumerated in paragraph (1), as well as
impediments to implementation and an estimated compliance rate; and
(B) impediments to instituting a regime in which all appropriate
identification, as defined by the Secretary, about wire transfer
recipients shall be included with wire transfers from their point of
origination until disbursement.
SEC. 210. CHECK TRUNCATION STUDY.
Before the end of the 90-day period beginning on the date of the
enactment of this Act, the Secretary of the Treasury, in consultation
with the Attorney General and the Board of Governors of the Federal
Reserve System, shall conduct a study of the impact on crime prevention,
law enforcement, and the administration of consumer protection laws of
any policy of the Board of Governors of the Federal Reserve System
relating to the promotion of check electronification, through truncation
or other means, or migration from paper checks.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
SEC. 301. SPECIAL MEASURES FOR JURISDICTIONS, FINANCIAL
INSTITUTIONS, OR INTERNATIONAL TRANSACTIONS OF PRIMARY MONEY LAUNDERING
CONCERN.
(a) In General.--Subchapter II of chapter 53 of title 31, United
States Code, is amended by inserting after section 5318 the following
new section:
``5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary money laundering
concern
``(a) International Counter-Money Laundering Requirements.--
``(1) In general.--The Secretary may require domestic financial
institutions and domestic financial agencies to take 1 or more of the
special measures described in subsection (b) if the Secretary finds that
reasonable grounds exist for concluding that a jurisdiction outside of
the United States, 1 or more financial institutions operating outside of
the United States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States, or 1 or more
types of accounts is of primary money laundering concern, in accordance
with subsection (c).
``(2) Form of requirement.--The special measures described in--
``(A) subsection (b) may be imposed in such sequence or combination
as the Secretary shall determine;
``(B) paragraphs (1) through (4) of subsection (b) may be imposed by
regulation, order, or otherwise as permitted by law; and
``(C) subsection (b)(5) may be imposed only by regulation.
``(3) Duration of orders; rulemaking.--Any order by which a special
measure described in paragraphs (1) through (4) of subsection (b) is
imposed (other than an order described in section 5326)--
``(A) shall be issued together with a notice of proposed rulemaking
relating to the imposition of such special measure; and
``(B) may not remain in effect for more than 120 days, except
pursuant to a regulation prescribed on or before the end of the 120-day
period beginning on the date of issuance of such order.
``(4) Process for selecting special measures.--In selecting which
special measure or measures to take under this subsection, the
Secretary--
``(A) shall consult with the Chairman of the Board of Governors of
the Federal Reserve System, any other appropriate Federal banking agency
(as defined in section 3 of the Federal Deposit Insurance Act), the
Securities and Exchange Commission, the National Credit Union
Administration Board, and in the sole discretion of the Secretary such
other agencies and interested parties as the Secretary may find to be
appropriate; and
``(B) shall consider--
``(i) whether similar action has been or is being taken by other
nations or multilateral groups;
``(ii) whether the imposition of any particular special measure
would create a significant competitive disadvantage, including any undue
cost or burden associated with compliance, for financial institutions
organized or licensed in the United States; and
``(iii) the extent to which the action or the timing of the action
would have a significant adverse systemic impact on the international
payment, clearance, and settlement system, or on legitimate business
activities involving the particular jurisdiction, institution, or class
of transactions.
``(5) No limitation on other authority.--This section shall not be
construed as superseding or otherwise restricting any other authority
granted to the Secretary, or to any other agency, by this subchapter or
otherwise.
``(b) Special Measures.--The special measures referred to in
subsection (a), with respect to a jurisdiction outside of the United
States, financial institution operating outside of the United States,
class of transaction within, or involving, a jurisdiction outside of the
United States, or 1 or more types of accounts are as follows:
``(1) Recordkeeping and reporting of certain financial transactions.--
``(A) In general.--The Secretary may require any domestic financial
institution or domestic financial agency to maintain records, file
reports, or both, concerning the aggregate amount of transactions, or
concerning each transaction, with respect to a jurisdiction outside of
the United States, 1 or more financial institutions operating outside of
the United States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States, or 1 or more
types of accounts if the Secretary finds any such jurisdiction,
institution, or class of transactions to be of primary money laundering
concern.
``(B) Form of records and reports.--Such records and reports shall
be made and retained at such time, in such manner, and for such period
of time, as the Secretary shall determine, and shall include such
information as the Secretary may determine, including--
``(i) the identity and address of the participants in a transaction
or relationship, including the identity of the originator of any funds
transfer;
``(ii) the legal capacity in which a participant in any transaction
is acting;
``(iii) the identity of the beneficial owner of the funds involved
in any transaction, in accordance with such procedures as the Secretary
determines to be reasonable and practicable to obtain and retain the
information; and
``(iv) a description of any transaction.
``(2) Information relating to beneficial ownership.--In addition to
any other requirement under any other provision of law, the Secretary
may require any domestic financial institution or domestic financial
agency to take such steps as the Secretary may determine to be
reasonable and practicable to obtain and retain information concerning
the beneficial ownership of any account opened or maintained in the
United States by a foreign person (other than a foreign entity whose
shares are subject to public reporting requirements or are listed and
traded on a regulated exchange or trading market), or a representative
of such a foreign person, that involves a jurisdiction outside of the
United States, 1 or more financial institutions operating outside of the
United States, 1 or more classes of transactions within, or involving, a
jurisdiction outside of the United States, or 1 or more types of
accounts if the Secretary finds any such jurisdiction, institution,
transaction, or account to be of primary money laundering concern.
``(3) Information relating to certain payable-through accounts.--If
the Secretary finds a jurisdiction outside of the United States, 1 or
more financial institutions operating outside of the United States, or 1
or more classes of transactions within, or involving, a jurisdiction
outside of the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution or domestic
financial agency that opens or maintains a payable-through account in
the United States for a foreign financial institution involving any such
jurisdiction or any such financial institution operating outside of the
United States, or a payable through account through which any such
transaction may be conducted, as a condition of opening or maintaining
such account--
``(A) to identify each customer (and representative of such
customer) of such financial institution who is permitted to use, or
whose transactions are routed through, such payable-through account; and
``(B) to obtain, with respect to each such customer (and each such
representative), information that is substantially comparable to that
which the depository institution obtains in the ordinary course of
business with respect to its customers residing in the United States.
``(4) Information relating to certain correspondent accounts.--If
the Secretary finds a jurisdiction outside of the United States, 1 or
more financial institutions operating outside of the United States, or 1
or more classes of transactions within, or involving, a jurisdiction
outside of the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution or domestic
financial agency that opens or maintains a correspondent account in the
United States for a foreign financial institution involving any such
jurisdiction or any such financial institution operating outside of the
United States, or a correspondent account through which any such
transaction may be conducted, as a condition of opening or maintaining
such account--
``(A) to identify each customer (and representative of such
customer) of any such financial institution who is permitted to use, or
whose transactions are routed through, such correspondent account; and
``(B) to obtain, with respect to each such customer (and each such
representative), information that is substantially comparable to that
which the depository institution obtains in the ordinary course of
business with respect to its customers residing in the United States.
``(5) Prohibitions or conditions on opening or maintaining certain
correspondent or payable-through accounts.--If the Secretary finds a
jurisdiction outside of the United States, 1 or more financial
institutions operating outside of the United States, or 1 or more
classes of transactions within, or involving, a jurisdiction outside of
the United States to be of primary money laundering concern, the
Secretary, in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve System, may prohibit, or impose conditions upon, the opening or
maintaining in the United States of a correspondent account or payable-
through account by any domestic financial institution or domestic
financial agency for or on behalf of a foreign banking institution, if
such correspondent account or payable-through account involves any such
jurisdiction or institution, or if any such transaction may be conducted
through such correspondent account or payable-through account.
``(c) Consultations and Information To Be Considered in Finding
Jurisdictions, Institutions, Types of Accounts, or Transactions To Be of
Primary Money Laundering Concern.--
``(1) In general.--In making a finding that reasonable grounds exist
for concluding that a jurisdiction outside of the United States, 1 or
more financial institutions operating outside of the United States, 1 or
more classes of transactions within, or involving, a jurisdiction
outside of the United States, or 1 or more types of accounts is of
primary money laundering concern so as to authorize the Secretary to
take 1 or more of the special measures described in subsection (b), the
Secretary shall consult with the Secretary of State, and the Attorney
General.
``(2) Additional considerations.--In making a finding described in
paragraph (1), the Secretary shall consider in addition such information
as the Secretary determines to be relevant, including the following
potentially relevant factors:
``(A) Jurisdictional factors.--In the case of a particular
jurisdiction--
``(i) evidence that organized criminal groups, international
terrorists, or both, have transacted business in that jurisdiction;
``(ii) the extent to which that jurisdiction or financial
institutions operating in that jurisdiction offer bank secrecy or
special regulatory advantages to nonresidents or nondomiciliaries of
that jurisdiction;
``(iii) the substance and quality of administration of the bank
supervisory and counter-money laundering laws of that jurisdiction;
``(iv) the relationship between the volume of financial transactions
occurring in that jurisdiction and the size of the economy of the
jurisdiction;
``(v) the extent to which that jurisdiction is characterized as an
offshore banking or secrecy haven by credible international
organizations or multilateral expert groups;
``(vi) whether the United States has a mutual legal assistance
treaty with that jurisdiction, and the experience of United States law
enforcement officials, and regulatory officials in obtaining information
about transactions originating in or routed through or to such
jurisdiction; and
``(vii) the extent to which that jurisdiction is characterized by
high levels of official or institutional corruption.
``(B) Institutional factors.--In the case of a decision to apply 1
or more of the special measures described in subsection (b) only to a
financial institution or institutions, or to a transaction or class of
transactions, or to a type of account, or to all 3, within or involving
a particular jurisdiction--
``(i) the extent to which such financial institutions, transactions,
or types of accounts are used to facilitate or promote money laundering
in or through the jurisdiction;
``(ii) the extent to which such institutions, transactions, or types
of accounts are used for legitimate business purposes in the
jurisdiction; and
``(iii) the extent to which such action is sufficient to ensure,
with respect to transactions involving the jurisdiction and institutions
operating in the jurisdiction, that the purposes of this subchapter
continue to be fulfilled, and to guard against international money
laundering and other financial crimes.
``(d) Notification of Special Measures Invoked by the Secretary.--Not
later than 10 days after the date of any action taken by the Secretary
under subsection (a)(1), the Secretary shall notify, in writing, the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate of any
such action.
``(e) Definitions.--Notwithstanding any other provision of this
subchapter, for purposes of this section, the following definitions
shall apply:
``(1) Bank definitions.--The following definitions shall apply with
respect to a bank:
``(A) Account.--The term `account'--
``(i) means a formal banking or business relationship established to
provide regular services, dealings, and other financial transactions;
and
``(ii) includes a demand deposit, savings deposit, or other
transaction or asset account and a credit account or other extension of
credit.
``(B) Correspondent account.--The term `correspondent account' means
an account established to receive deposits from, make payments on behalf
of a foreign financial institution, or handle other financial
transactions related to such institution.
``(C) Payable-through account.--The term `payable-through account'
means an account, including a transaction account (as defined in section
19(b)(1)(C) of the Federal Reserve Act), opened at a depository
institution by a foreign financial institution by means of which the
foreign financial institution permits its customers to engage, either
directly or through a subaccount, in banking activities usual in
connection with the business of banking in the United States.
``(D) Secretary.--The term `Secretary' means the Secretary of the
Treasury.
``(2) Definitions applicable to institutions other than banks.--With
respect to any financial institution other than a bank, the Secretary
shall, after consultation with the appropriate Federal functional
regulators (as defined in section 509 of the Gramm-Leach-Bliley Act),
define by regulation the term `account', and shall include within the
meaning of that term, to the extent, if any, that the Secretary deems
appropriate, arrangements similar to payable-through and correspondent
accounts.
``(3) Regulatory definition.--The Secretary shall promulgate
regulations defining beneficial ownership of an account for purposes of
this subchapter. Such regulations shall address issues related to an
individual's authority to fund, direct, or manage the account (including
the power to direct payments into or out of the account), and an
individual's material interest in the income or corpus of the account,
and shall ensure that the identification of individuals under this
section does not extend to any individual whose beneficial interest in
the income or corpus of the account is immaterial.
``(4) Other terms.--The Secretary may, by regulation, further define
the terms in paragraphs (1) and (2) and define other terms for the
purposes of this section, as the Secretary deems appropriate.''.
(b) Financial Institutions Specified in Subchapter II of Chapter 53
of Title 31, United States Code.--
(1) Credit unions.--Subparagraph (E) of section 5312(2) of title 31,
United States Code, is amended to read as follows:
``(E) any credit union;''.
(2) Futures commission merchant; commodity trading advisor;
commodity pool operator.--Section 5312 of title 31, United States Code,
is amended by adding at the end the following new subsection:
``(c) Additional Definitions.--For purposes of this subchapter, the
following definitions shall apply:
``(1) Certain institutions included in definition.--The term
`financial institution' (as defined in subsection (a)) includes the
following:
``(A) Any futures commission merchant, commodity trading advisor, or
commodity pool operator registered, or required to register, under the
Commodity Exchange Act.''.
(3) CFTC included.--For purposes of this Act and any amendment made
by this Act to any other provision of law, the term ``Federal functional
regulator'' includes the Commodity Futures Trading Commission.
(c) Clerical Amendment.--The table of sections for subchapter II of
chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5318 the following new item:
``5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary money laundering
concern.''.
SEC. 302. SPECIAL DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS AND
PRIVATE BANKING ACCOUNTS.
(a) In General.--Section 5318 of title 31, United States Code, is
amended by inserting after subsection (i) (as added by section 123 of
this Act) the following new subsection:
``(j) Due Diligence for United States Private Banking and
Correspondent Bank Accounts Involving Foreign Persons.--
``(1) In general.--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 to detect and report instances of
money laundering through those accounts.
``(2) Minimum standards for correspondent accounts.--
``(A) In general.--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
Secretary of the Treasury concurs; or
``(II) by the Secretary as warranting special measures due to money
laundering concerns.
``(B) Policies, procedures, and controls.--The enhanced due
diligence policies, procedures, and controls required under paragraph
(1) for foreign banks described in subparagraph (A) 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 section
5318(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) Minimum standards for private banking accounts.--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 section 5318(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, to prevent, detect, and report transactions
that may involve the proceeds of foreign corruption.
``(4) Definitions.--For purposes of this subsection, the following
definitions shall apply:
``(A) Offshore banking license.--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) Private bank account.--The term `private bank 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.
``(5) Regulatory authority.--Before the end of the 6-month period
beginning on the date of the enactment of the Financial Anti-Terrorism
Act of 2001, the Secretary, in consultation with the appropriate Federal
functional regulators (as defined in section 509 of the
Gramm-Leach-Bliley Act) shall further define and clarify, by regulation,
the requirements of this subsection.''.
(b) Effective Date.--The amendments made by this section shall take
effect beginning 180 days after the date of the enactment of this Act
with respect to accounts covered by subsection (j) of section 5318 of
title 31, United States Code (as added by this section) that are opened
before, on, or after the date of the enactment of this Act.
SEC. 303. PROHIBITION ON UNITED STATES CORRESPONDENT ACCOUNTS
WITH FOREIGN SHELL BANKS.
Section 5318 of title 31, United States Code, is amended by inserting
after subsection (j) (as added by section 302 of this title) the
following new subsection:
``(k) Prohibition on United States Correspondent Accounts With
Foreign Shell Banks.--
``(1) In general.--A depository 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) Prevention of indirect service to foreign shell banks.--
``(A) In general.--A depository institution shall take reasonable
steps to ensure that any correspondent account established, maintained,
administered, or managed by that 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.
``(B) Regulations.--The Secretary shall, in regulations, delineate
reasonable steps necessary for a depository institution to comply with
this subsection.
``(3) Exception.--Paragraphs (1) and (2) shall not be construed as
prohibiting a depository 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
other 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) Definitions.--For purposes of this section, the following
definitions shall apply:
``(A) Affiliate.--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.
``(B) Depository institution.--The `depository institution'--
``(i) has the meaning given such term in section 3 of the Federal
Deposit Insurance Act; and
``(ii) includes a credit union.
``(C) Physical presence.--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.''.
SEC. 304. ANTI-MONEY LAUNDERING PROGRAMS.
(a) In General.--Section 5318(h) of title 31, United States Code, is
amended to read as follows:
``(h) Anti-Money Laundering Programs.--
``(1) In general.--In order to guard against money laundering
through financial institutions, each financial institution shall
establish anti-money laundering programs, including, at a minimum--
``(A) the development of internal policies, procedures, and controls;
``(B) the designation of an officer of the financial institution
responsible for compliance;
``(C) an ongoing employee training program; and
``(D) an independent audit function to test programs.
``(2) Regulations.--The Secretary may, after consultation with the
appropriate Federal functional regulators (as defined in section 509 of
the Gramm-Leach-Bliley Act), 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 regulations contained in part 103 of title 31, of the
Code of Federal Regulations, as in effect on the date of the enactment
of the Financial Anti-Terrorism Act of 2001, or any successor to such
regulations, for so long as such financial institution is not subject to
the provisions of such regulations.''.
(b) Effective Date.--The amendment made by subsection (a) shall take
effect at the end of the 180-day period beginning on the date of the
enactment of this Act.
(c) Date of Application of Regulations; Factors to Be Taken Into
Account.--Before the end of the 180-day period beginning on the date of
the enactment of this Act, the Secretary of the Treasury shall prescribe
regulations to implement the amendment made by subsection (a). In
prescribing such regulations, the Secretary shall consider the extent to
which the requirements imposed under such regulations are commensurate
with the size, location, and activities of the financial institutions to
which such regulations apply.
SEC. 305. CONCENTRATION ACCOUNTS AT FINANCIAL INSTITUTIONS.
Section 5318(h) of title 31, United States Code (as amended by
section 304) is amended by adding at the end the following:
``(3) Concentration accounts.--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.''.
SEC. 306. INTERNATIONAL COOPERATION IN INVESTIGATIONS OF MONEY
LAUNDERING, FINANCIAL CRIMES, AND THE FINANCES OF TERRORIST GROUPS.
(a) Negotiations.--
(1) In general.--In addition to the requirements of section 4702 of
the Anti-Drug Abuse Act of 1988, the Secretary of the Treasury
(hereinafter in this section referred to as the ``Secretary''), in
consultation with the Attorney General, the Secretary of State, and the
Board of Governors of the Federal Reserve System, shall enter into
negotiations with the appropriate financial supervisory agencies and
other officials of any foreign country the financial institutions of
which do business with United States financial institutions or which may
be utilized by any foreign terrorist organization (as designated under
section 219 of the Immigration and Nationality Act), any person who is a
member or representative of any such organization, or any person engaged
in money laundering or financial or other crimes.
(2) Purposes of negotiations.--In carrying out negotiations under
paragraph (1), the Secretary shall seek to enter into and further
cooperative efforts, voluntary information exchanges, the use of letters
rogatory, mutual legal assistance treaties, and international agreements
to--
(A) ensure that foreign banks and other financial institutions
maintain adequate records of--
(i) large United States currency transactions; and
(ii) transaction and account information relating to any foreign
terrorist organization (as designated under section 219 of the
Immigration and Nationality Act), any person who is a member or
representative of any such organization, or any person engaged in money
laundering or financial or other crimes; and
(B) establish a mechanism whereby such records may be made available
to United States law enforcement officials and domestic financial
institution supervisors, when appropriate.
(b) Reports.--
(1) Interim report.--Not later than 1 year after the date of the
enactment of this Act, the Secretary shall submit an interim report to
the Congress on progress in the negotiations under subsection (a).
(2) Final report.--Not later than 2 years after the date of the
enactment of this Act, the Secretary shall submit a final report to the
President and the Congress, on the outcome of negotiations under
subsection (a).
(3) Identification of certain countries.--In the report submitted
under paragraph (2), the Secretary shall identify countries--
(A) with respect to which the Secretary determines there is evidence
that the financial institutions in such countries are being utilized,
knowingly or unwittingly, by any foreign terrorist organization (as
designated under section 219 of the Immigration and Nationality Act),
any person who is a member or representative of any such organization,
or any person engaged in money laundering or financial or other crimes;
and
(B) which have not reached agreement with United States authorities
to meet the objectives of subparagraphs (A) and (B) of subsection
(a)(2).
(c) Authority for Other Action.--
(1) In general.--If the President determines that--
(A) a foreign country is described in subparagraphs (A) and (B) of
subsection (b)(3); and
(B) such country--
(i) is not negotiating in good faith to reach an agreement described
in subsection (a)(2); or
(ii) or a financial institution of such country, has not complied
with a request, made by an official of the United States Government
authorized to make such request, for information regarding a foreign
terrorist organization (as designated under section 219 of the
Immigration and Nationality Act), a person who is a member or
representative of any such organization, or a person engaged in money
laundering for or with any such organization,
the President may impose appropriate penalties and sanctions on such
country and, except as provided in paragraph (3), financial institutions
of such country.
(2) Penalties and sanctions.--The penalties and sanctions which may
be imposed by the President under paragraph (1) include temporarily or
permanently--
(A) prohibiting such persons, institutions, or other entities as the
President may designate in any such country from participating in any
United States dollar clearing or wire transfer system; and
(B) prohibiting such persons, institutions or entities as the
President may designate in such countries from maintaining an account
with any bank or other financial institution chartered under the laws of
the United States or any State.
(3) Exemption for certain financial institutions.--Financial
institutions that maintain adequate records shall be exempt from such
penalties and sanctions.
SEC. 307. PROHIBITION ON ACCEPTANCE OF ANY BANK INSTRUMENT FOR
UNLAWFUL INTERNET GAMBLING.
(a) In General.--No person engaged in the business of betting or
wagering may knowingly accept, in connection with the participation of
another person in unlawful Internet gambling--
(1) credit, or the proceeds of credit, extended to or on behalf of
such other person (including credit extended through the use of a credit
card);
(2) an electronic fund transfer or funds transmitted by or through a
money transmitting business, or the proceeds of an electronic fund
transfer or money transmitting service, from or on behalf of the other
person;
(3) any check, draft, or similar instrument which is drawn by or on
behalf of the other person and is drawn on or payable at or through any
financial institution; or
(4) the proceeds of any other form of financial transaction as the
Secretary may prescribe by regulation which involves a financial
institution as a payor or financial intermediary on behalf of or for the
benefit of the other person.
(b) Definitions.--For purposes of this Act, the following definitions
shall apply:
(1) Bets or wagers.--The term ``bets or wagers''--
(A) means the staking or risking by any person of something of value
upon the outcome of a contest of others, a sporting event, or a game
subject to chance, upon an agreement or understanding that the person or
another person will receive something of greater value than the amount
staked or risked in the event of a certain outcome;
(B) includes the purchase of a chance or opportunity to win a
lottery or other prize (which opportunity to win is predominantly
subject to chance);
(C) includes any scheme of a type described in section 3702 of title
28, United States Code;
(D) includes any instructions or information pertaining to the
establishment or movement of funds in an account by the bettor or
customer with the business of betting or wagering; and
(E) does not include--
(i) any activity governed by the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of 1934) for
the purchase or sale at a future date of securities (as that term is
defined in section 3(a)(10) of such Act);
(ii) any transaction on or subject to the rules of a contract market
designated pursuant to the Commodity Exchange Act;
(iii) any over-the-counter derivative instrument;
(iv) any contract of indemnity or guarantee;
(v) any contract for insurance;
(vi) any deposit or other transaction with a depository institution
(as defined in section 3(c) of the Federal Deposit Insurance Act);
(vii) any participation in a simulation sports game or an
educational game or contest that--
(I) is not dependent solely on the outcome of any single sporting
event or nonparticipant's singular individual performance in any single
sporting event;
(II) has an outcome that reflects the relative knowledge and skill
of the participants with such outcome determined predominantly by
accumulated statistical results of sporting events; and
(III) offers a prize or award to a participant that is established
in advance of the game or contest and is not determined by the number of
participants or the amount of any fees paid by those participants; and
(viii) any transaction with a business licensed by a State.
(2) Business of betting or wagering.--The term ``business of betting
or wagering'' does not include, other than for purposes of subsection
(e), any creditor, credit card issuer, insured depository institution,
financial institution, operator of a terminal at which an electronic
fund transfer may be initiated, money transmitting business, or
international, national, regional, or local network utilized to effect a
credit transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or any participant in such
network.
(3) Internet.--The term ``Internet'' means the international
computer network of interoperable packet switched data networks.
(4) Unlawful internet gambling.--The term ``unlawful Internet
gambling'' means to place, receive, or otherwise transmit a bet or wager
by any means which involves the use, at least in part, of the Internet
where such bet or wager is unlawful under any applicable Federal or
State law in the State in which the bet or wager is initiated, received,
or otherwise made.
(5) Other terms.--
(A) Credit; creditor; and credit card.--The terms ``credit'',
``creditor'', and ``credit card'' have the meanings given such terms in
section 103 of the Truth in Lending Act.
(B) Electronic fund transfer.--The term ``electronic fund transfer''--
(i) has the meaning given such term in section 903 of the Electronic
Fund Transfer Act; and
(ii) includes any fund transfer covered by Article 4A of the Uniform
Commercial Code, as in effect in any State.
(C) Financial institution.--The term ``financial institution'' has
the meaning given such term in section 903 of the Electronic Fund
Transfer Act.
(D) Money transmitting business and money transmitting service.--The
terms ``money transmitting business'' and ``money transmitting service''
have the meanings given such terms in section 5330(d) of title 31,
United States Code.
(E) Secretary.--The term ``Secretary'' means the Secretary of the
Treasury.
(c) Civil Remedies.--
(1) Jurisdiction.--The district courts of the United States shall
have original and exclusive jurisdiction to prevent and restrain
violations of this section by issuing appropriate orders in accordance
with this section, regardless of whether a prosecution has been
initiated under this section.
(2) Proceedings.--
(A) Institution by federal government.--
(i) In general.--The United States, acting through the Attorney
General, may institute proceedings under this subsection to prevent or
restrain a violation of this section.
(ii) Relief.--Upon application of the United States under this
subparagraph, the district court may enter a preliminary injunction or
an injunction against any person to prevent or restrain a violation of
this section, in accordance with Rule 65 of the Federal Rules of Civil
Procedure.
(B) Institution by state attorney general.--
(i) In general.--The attorney general of a State (or other
appropriate State official) in which a violation of this section
allegedly has occurred or will occur may institute proceedings under
this subsection to prevent or restrain the violation.
(ii) Relief.--Upon application of the attorney general (or other
appropriate State official) of an affected State under this
subparagraph, the district court may enter a preliminary injunction or
an injunction against any person to prevent or restrain a violation of
this section, in accordance with Rule 65 of the Federal Rules of Civil
Procedure.
(C) Indian lands.--
(i) In general.--Notwithstanding subparagraphs (A) and (B), for a
violation that is alleged to have occurred, or may occur, on Indian
lands (as that term is defined in section 4 of the Indian Gaming
Regulatory Act)--
(I) the United States shall have the enforcement authority provided
under subparagraph (A);
(II) the enforcement authorities specified in an applicable
Tribal-State compact negotiated under section 11 of the Indian Gaming
Regulatory Act shall be carried out in accordance with that compact; and
(III) class III Internet gaming activities shall be lawful only if
such activities are--
(aa) located in a State that permits Internet gambling;
(bb) conducted in conformance with a tribal-State compact pursuant
to section 11(d)(3) of the Indian Gaming Regulatory Act; and
(cc) the person placing or transmitting the wager or bet is located
in a jurisdiction that permits Internet gambling.
(ii) Rule of construction.--No provision of this section shall be
construed as altering, superseding, or otherwise affecting the
application of the Indian Gaming Regulatory Act.
(D) Banking regulators.--Before initiating any proceeding under this
paragraph with respect to a violation or potential violation of
subsection (e) by an insured depository institution (as defined in
section 3 of the Federal Deposit Insurance Act), the Attorney General of
the United States or an attorney general of a State (or other
appropriate State official) shall--
(i) notify the appropriate Federal banking agency (as defined in
such section) of such violation or potential violation; and
(ii) allow such agency a reasonable time to issue an order to such
insured depository institution under section 8(x) of the Federal Deposit
Insurance Act.
(3) Expedited proceedings.--In addition to any proceeding under
paragraph (2), a district court may, in exigent circumstances, enter a
temporary restraining order against a person alleged to be in violation
of this section upon application of the United States under paragraph
(2)(A), or the attorney general (or other appropriate State official) of
an affected State under paragraph (2)(B), in accordance with Rule 65(b)
of the Federal Rules of Civil Procedure.
(4) Limitation.--No provision of this section shall be construed as
authorizing an injunction against an interactive computer service (as
defined in section 230(f) of the Communications Act of 1934) unless such
interactive computer service is acting in concert or participation with
a person who violates this section and such service receives actual
notice of the order.
(d) Criminal Penalty.--
(1) In general.--Whoever violates this section shall be fined under
title 18, United States Code, or imprisoned for not more than 5 years,
or both.
(2) Permanent injunction.--Upon conviction of a person under this
subsection, the court may enter a permanent injunction enjoining such
person from placing, receiving, or otherwise making bets or wagers or
sending, receiving, or inviting information assisting in the placing of
bets or wagers.
(e) Circumventions Prohibited.--Notwithstanding subsection (b)(2), a
creditor, credit card issuer, financial institution, operator of a
terminal at which an electronic fund transfer may be initiated, money
transmitting business, or international, national, regional, or local
network utilized to effect a credit transaction, electronic fund
transfer, or money transmitting service, or any participant in such
network, may be liable under this section if such creditor, issuer,
institution, operator, business, network, or participant has actual
knowledge and control of bets and wagers--
(1) operates, manages, supervises, or directs an Internet website at
which unlawful bets or wagers may be placed, received, or otherwise made
or at which unlawful bets or wagers are offered to be placed, received,
or otherwise made; or
(2) owns or controls, or is owned or controlled by, any person who
operates, manages, supervises, or directs an Internet website at which
unlawful bets or wagers may be placed, received, or otherwise made or at
which unlawful bets or wagers are offered to be placed, received, or
otherwise made.
(f) Enforcement Actions.--Section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818) is amended by adding at the end the following new
subsection:
``(x) Depository Institution Involvement in Internet Gambling.--If
any appropriate Federal banking agency determines that any insured
depository institution is engaged in any of the following activities,
the agency may issue an order to such institution prohibiting such
institution from continuing to engage in any of the following
activities:
``(1) Extending credit, or facilitating an extension of credit,
electronic fund transfer, or money transmitting service with the actual
knowledge that any person is violating section 3(a) of the Unlawful
Internet Gambling Funding Prohibition Act in connection with such
extension of credit, electronic fund transfer, or money transmitting
service.
``(2) Paying, transferring, or collecting on any check, draft, or
other instrument drawn on any depository institution with the actual
knowledge that any person is violating section 3(a) of the Unlawful
Internet Gambling Funding Prohibition Act in connection with such check,
draft, or other instrument.''.
SEC. 308. INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS.
(a) In General.--In deliberations between the United States
Government and any other country on money laundering, corruption, and
crime issues, the United States Government should--
(1) encourage cooperation by foreign governments and relevant
international fora in identifying whether Internet gambling operations
are being used for money laundering, corruption, or other crimes;
(2) advance policies that promote the cooperation of foreign
governments, through information sharing or other measures, in the
enforcement of this Act; and
(3) encourage the Financial Action Task Force on Money Laundering,
in its annual report on money laundering typologies, to study the extent
to which Internet gambling operations are being used for money
laundering.
(b) Report Required.--The Secretary of the Treasury shall submit an
annual report to the Congress on the deliberations between the United
States and other countries on issues relating to Internet gambling.
TITLE IV--CURRENCY PROTECTION
SEC. 401. COUNTERFEITING DOMESTIC CURRENCY AND OBLIGATIONS.
(a) Counterfeit Acts Committed Outside the United States.--Section
470 of title 18, United States Code, is amended--
(1) in paragraph (2), by inserting ``analog, digital, or electronic
image,'' after ``plate, stone,''; and
(2) by striking ``shall be fined under this title, imprisoned not
more than 20 years, or both'' and inserting ``shall be punished as is
provided for the like offense within the United States''.
(b) Obligations or securities of the United States.--Section 471 of
title 18, United States Code, is amended by striking ``fifteen years''
and inserting ``20 years''.
(c) Uttering Counterfeit Obligations or Securities.--Section 472 of
title 18, United States Code, is amended by striking ``fifteen years''
and inserting ``20 years''.
(d) Dealing in Counterfeit Obligations or Securities.--Section 473 of
title 18, United States Code, is amended by striking ``ten years'' and
inserting ``20 years''.
(e) Plates, Stones, or Analog, Digital, or Electronic Images For
Counterfeiting Obligations or Securities.--
(1) In general.--Section 474(a) of title 18, United States Code, is
amended by inserting after the second paragraph the following new
paragraph:
``Whoever, with intent to defraud, makes, executes, acquires, scans,
captures, records, receives, transmits, reproduces, sells, or has in
such person's control, custody, or possession, an analog, digital, or
electronic image of any obligation or other security of the United
States; or''.
(2) Amendment to definition.--Section 474(b) of title 18, United
States Code, is amended by striking the first sentence and inserting the
following new sentence: ``For purposes of this section, the term
`analog, digital, or electronic image' includes any analog, digital, or
electronic method used for the making, execution, acquisition, scanning,
capturing, recording, retrieval, transmission, or reproduction of any
obligation or security, unless such use is authorized by the Secretary
of the Treasury.''.
(3) Technical and conforming amendment.--The heading for section 474
of title 18, United States Code, is amended by striking `` or stones''
and inserting `` , stones, or analog, digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter 25 of
title 18, United States Code, is amended in the item relating to section
474 by striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(f) Taking Impressions of Tools Used for Obligations or
Securities.--Section 476 of title 18, United States Code, is amended--
(1) by inserting ``analog, digital, or electronic image,'' after
``impression, stamp,''; and
(2) by striking ``ten years'' and inserting ``25 years''.
(g) Possessing or Selling Impressions of Tools Used for Obligations
or Securities.--Section 477 of title 18, United States Code, is
amended--
(1) in the first paragraph, by inserting ``analog, digital, or
electronic image,'' after ``imprint, stamp,'';
(2) in the second paragraph, by inserting ``analog, digital, or
electronic image,'' after ``imprint, stamp,''; and
(3) in the third paragraph, by striking ``ten years'' and inserting
``25 years''.
(h) Connecting Parts of Different Notes.--Section 484 of title 18,
United States Code, is amended by striking ``five years'' and inserting
``10 years''.
(i) Bonds and Obligations of Certain Lending Agencies.--The first and
second paragraphs of section 493 of title 18, United States Code, are
each amended by striking ``five years'' and inserting ``10 years''.
SEC. 402. COUNTERFEITING FOREIGN CURRENCY AND OBLIGATIONS.
(a) Foreign Obligations or Securities.--Section 478 of title 18,
United States Code, is amended by striking ``five years'' and inserting
``20 years''.
(b) Uttering Counterfeit Foreign Obligations or Securities.--Section
479 of title 18, United States Code, is amended by striking ``three
years'' and inserting ``20 years''.
(c) Possessing Counterfeit Foreign Obligations or
Securities.--Section 480 of title 18, United States Code, is amended by
striking ``one year'' and inserting ``20 years''.
(d) Plates, Stones, or Analog, Digital, or Electronic Images for
Counterfeiting Foreign Obligations or Securities.--
(1) In general.--Section 481 of title 18, United States Code, is
amended by inserting after the second paragraph the following new
paragraph:
``Whoever, with intent to defraud, makes, executes, acquires, scans,
captures, records, receives, transmits, reproduces, sells, or has in
such person's control, custody, or possession, an analog, digital, or
electronic image of any bond, certificate, obligation, or other security
of any foreign government, or of any treasury note, bill, or promise to
pay, lawfully issued by such foreign government and intended to
circulate as money; or''.
(2) Increased sentence.--The last paragraph of section 481 of title
18, United States Code, is amended by striking ``five years'' and
inserting ``25 years''.
(3) Technical and conforming amendment.--The heading for section 481
of title 18, United States Code, is amended by striking `` or stones''
and inserting `` , stones, or analog, digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter 25 of
title 18, United States Code, is amended in the item relating to section
481 by striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(e) Foreign Bank Notes.--Section 482 of title 18, United States Code,
is amended by striking ``two years'' and inserting ``20 years''.
(f) Uttering Counterfeit Foreign Bank Notes.--Section 483 of title
18, United States Code, is amended by striking ``one year'' and
inserting ``20 years''.
SEC. 403. PRODUCTION OF DOCUMENTS.
Section 5114(a) of title 31, United States Code (relating to
engraving and printing currency and security documents), is amended--
(1) by striking ``(a) The Secretary of the Treasury'' and inserting:
``(a) Authority To Engrave and Print.--
``(1) In general.--The Secretary of the Treasury''; and
(2) by adding at the end the following new paragraph:
``(2) Engraving and printing for other governments.--The Secretary
of the Treasury may, if the Secretary determines that it will not
interfere with engraving and printing needs of the United States,
produce currency, postage stamps, and other security documents for
foreign governments, subject to a determination by the Secretary of
State that such production would be consistent with the foreign policy
of the United States.''.
SEC. 404. REIMBURSEMENT.
Section 5143 of title 31, United States Code (relating to payment for
services of the Bureau of Engraving and Printing), is amended--
(1) in the first sentence, by inserting ``, any foreign government,
or any territory of the United States'' after ``agency'';
(2) in the second sentence, by inserting ``and other'' after
``administrative''; and
(3) in the last sentence, by inserting ``, foreign government, or
territory of the United States'' after ``agency''.
PURPOSE AND SUMMARY
H.R. 3004, the Financial Anti-Terrorism Act of 2001, provides the
United States government with new tools to combat the financing of
terrorism and other financial crimes. The legislation contains
provisions to strengthen law enforcement authorities, as well as enhance
public-private cooperation between government and industry in disrupting
terrorist funding.
The bill (1) makes it a crime to smuggle over $10,000 into or out of
the United States, and to transport more than $10,000 in criminal
proceeds across State lines; (2) gives the Justice Department new
prosecutorial tools to combat terrorist-related and other money
laundering through U.S. financial institutions; (3) provides statutory
authorization for the Financial Crimes Enforcement Network (FinCEN),
which analyzes reports filed by financial institutions on currency
transactions and suspicious financial activity; (4) sets up a unit in
FinCEN directed at oversight and analysis of hawalas and other
underground black market banking systems; (5) authorizes the Customs
Service to inspect outbound international mail; (6) makes it a crime to
knowingly falsify one's identity in opening an account at a financial
institution and directs the Treasury to develop regulations to guide
financial institutions in identifying account holders; (7) directs the
Treasury Department to establish a secure web site to receive electronic
filings of Suspicious Activity Reports (SARs) and provide financial
institutions with alerts and other information regarding patterns of
terrorist or other suspicious activity that warrant enhanced scrutiny;
(8) requires the Secretary of the Treasury to report quarterly to
industry on how SARs are used to assist law enforcement in combating
terrorism and other crimes; (10) authorizes intelligence agency access
to reports filed by financial institutions and expands government access
to consumer financial records and credit histories; (11) creates a
public-private task force on terrorist financing; (12) sets a December
31, 2001, deadline for proposed regulations on SAR reporting
requirements for broker-dealers and authorizes the Department of the
Treasury to require SARs of certain commodity futures traders; (13)
authorizes the Secretary of the Treasury to impose ``special measures''
if a foreign country, financial institution, transaction, or account is
deemed to be a ``primary money laundering concern''; (14) prohibits U.S.
financial institutions from providing banking services to ``shell''
banks that have no physical presence in any country nor any affiliation
with a financial institution; (15) requires greater due diligence for
certain correspondent and private banking accounts; (16) authorizes
Treasury to regulate concentration accounts; (17) requires financial
institutions to have anti-money laundering programs; (18) authorizes the
President to impose certain sanctions (including limiting access to the
U.S. financial system) against foreign governments that refuse to
cooperate in law enforcement efforts against terrorism and money
laundering; (19) prohibits the use of financial instruments for unlawful
Internet gambling; and (20) updates U.S. anti-counterfeiting laws.
BACKGROUND AND NEED FOR LEGISLATION
In the wake of the September 11, 2001, terrorist attacks on the World
Trade Center and the Pentagon, the financial transactions and
infrastructure associated with the terrorists have received extensive
coverage. Early reports revealed that terrorist operatives used
thousands of dollars in cash for expensive flight school training, paid
their rent with checks drawn on local American banks, bought airline
tickets over the Internet with credit cards, and engaged in numerous
other financial transactions. Although the hijackers are suspected to
have underwritten much of their low-budget operation from funds
generated in the United States, perhaps by petty financial crime,
experts suspect that at least some of the seed money may have originated
overseas from Osama Bin Laden's organization, Al Qaeda.
According to press reports, Mr. Bin Laden's financial net worth may
be as high as $300 million. His fortune derives from an inheritance from
his wealthy Saudi family and from revenue generated by a far-flung
business empire engaged in everything from construction and agriculture
to banking and trade. Witnesses at the trial earlier this year of
terrorists responsible for the U.S. embassy bombings in Africa described
Mr. Bin Laden's banking relationship with Al Shamal Islamic Bank in the
Sudan. Mr. Bin Laden also reportedly enjoys financial support from
Persian Gulf businessmen as well as from front organizations posing as
Islamic charities.
Despite evidence suggesting Mr. Bin Laden and Al Qaeda utilize formal
banking relationships as part of their global financial network, experts
believe that a major share of terrorist financing is conducted through
international cash couriers as well as through informal banking systems,
like the ancient South Asian money exchange system called hawala. The
latter consists of an international network of non-bank financial
agents, often built on trusted family or cultural relationships. In most
cases, the funds themselves are never transferred, just messages
relating to receipt or disbursement of funds. These underground systems
are exploited by terrorists and other financial criminals because of the
lack of record-keeping and opportunity for anonymity.
Immediately after the September 11 terrorist attacks, the
Administration mounted an aggressive strategy to track and disrupt the
financial networks that sustain international terrorism. On September
14, 2001, the Treasury Department announced the creation of a Foreign
Terrorist Asset Tracking Center (FTAT) in Treasury's Office of Foreign
Asset Control (OFAC). On September 24, vowing that ``we will starve
terrorists of funding,'' the President issued Executive Order 13224
under the International Emergency Economic Powers Act (IEEPA), directing
Treasury to freeze any U.S. assets of, and prohibit any financial
transactions with, twenty-seven individuals and organizations including
Mr. Bin Laden, his top subordinates, Al Qaeda, and business and
charitable entities providing support to Al Qaeda. The Executive Order
was broader than previous orders, most notably by authorizing the
blocking of U.S. assets of foreign banks that refuse to freeze terrorist
assets abroad. On October 12, the Administration added 39 more
individuals and entities to the blocking list.
In addition to the OFAC order, Federal regulators advised U.S. banks
and other financial institutions to search their records for any
transactions associated with the FBI's list of 19 hijacking suspects,
and Treasury's Financial Crimes Enforcement Network (FinCEN)
established a 24-hour hotline for banks and other financial institutions
to report suspicious transactions that may be related to terrorist
activity against the United States. To further bolster its efforts to
disrupt terrorist financing, Treasury is accelerating the implementation
of registration and suspicious activity reporting (SAR) requirements for
non-bank financial institutions, including hawala. At the international
level, the Administration has been working with the G 8 countries and
the United Nations to tackle the financial underpinnings of terrorism.
Several allies, including Switzerland and Britain, have already frozen
accounts of suspected terrorists and, on September 28, the U.N. Security
Council unanimously passed a U.S.-drafted resolution directing all
member nations to freeze the assets of terrorists and to prohibit all
financial support to terrorist organizations. All countries were urged
to report to the Security Council within 90 days on steps they have
taken to implement the resolution.
Despite the provisions of the 1970 Bank Secrecy Act and various money
laundering laws enacted since, the current money laundering regime
appears to have been ineffective in detecting or preventing the
terrorist hijackers from operating freely in the United States. For
example, current law requires that U.S. banks file Currency Transaction
Reports (CTRs) for financial transactions in excess of $10,000, and
Suspicious Activity Reports (SARs) for potentially criminal financial
transactions of $5,000 or more. The evidence gathered thus far indicates
that these thresholds exceeded many of the reported financial
transactions of the terrorists. Even the Currency or Monetary Instrument
Reports (CMIRs) which must be filed by any person transporting more than
$10,000 into or out of the United States may have proved futile in
detecting any large cash flows through U.S. ports of entry.
At the Committee's October 3, 2001, hearing on terrorist funding,
Treasury Under Secretary Gurule testified how Al Qaeda operatives ``use
checks, credit cards, ATM cards, and wire-transfer systems and brokerage
accounts throughout the world, including the U.S.'' He explained how
some Islamic charities have been penetrated and their fund-raising
activities exploited by terrorists. He also testified that Al Qaeda uses
banks, legal businesses, front companies, and underground financial
systems to finance the organization's activities, and that some elements
of the organization rely on profits from the drug trade. Under Secretary
Gurule outlined the steps U.S. officials are taking to address financial
networks and transactions that support terrorism including: (1)
investigating terrorist organizations and their supporters; (2)
identifying assets to be blocked; (3) figuring out the methods
terrorists use to move funds for operational support; (4) identifying
the gaps in U.S. law enforcement and regulatory regimes that terrorists
exploit in order to move funds; (5) sharing information with law
enforcement agencies and other organizations around the world; and (6)
utilizing the powers of existing laws and regulations, such as the
International Emergency Economic Powers Act, the Bank Secrecy Act, and
the Anti-Terrorism Act, to deprive terrorists of access to any funds or
other financial assets in the United States.
In testimony presented on behalf of Assistant Attorney General
Michael Chertoff, Deputy Assistant Attorney General Mary Lee Warren
warned that ``we are fighting with outdated weapons in the money
laundering arena today.'' She described money laundering as an
increasingly global problem involving cross-border smuggling of bulk
cash and the international electronic transfer of funds enabling
criminals in one country to conceal their funds in another.
Mr. Dennis Lormel, Chief of the Financial Crimes Section of the
Federal Bureau of Investigation's (FBI's) Criminal Investigations
Division expressed support for the money laundering legislation proposed
by the Administration and described the Bureau's concerns regarding
vulnerabilities in the current financial system which facilitate
movement of terrorist funds. Like Ms. Warren, he warned that terrorist
and other criminal organizations ``rely heavily upon wire transfers''
and called for greater transparency in the originators of such funds.
Mr. Lormel also cited correspondent banking as another ``potential
vulnerability in the financial services sector that can offer terrorist
organizations a gateway into U.S. banks,'' and called for banks to
``more thoroughly screen and monitor foreign banks as clients.'' He also
warned of the problems associated with nonbank financial institutions,
so-called ``Money Services Businesses'' (MSBs), which terrorists are
able to exploit because of heretofore inadequate regulation.
Industry witnesses from the American Bankers Association and the
Securities Industry Association discussed their current efforts to
cooperate with law enforcement to stop terrorist funding and outlined
some of the obstacles they are encountering in that endeavor. Both
called for enhanced efforts to strengthen the ongoing public-private
partnership.
Former Deputy Secretary of Treasury Stuart Eizenstat underscored the
need for new tools to deal in a ``measured, precise, and cost-effective
way with particular money laundering threats,'' and endorsed legislation
passed by the House Banking Committee in the last Congress and
reintroduced in the 107th Congress as H.R. 1114. Finally, money
laundering expert John Moynihan of BERG Associates noted that the
``Achilles heel of any criminal organization is its financial
infrastructure'' and described in detail how underground
``black market banking'' operations--like hawala systems--are used by
criminals to finance their trade.
Bulk Cash Smuggling.-- As recent Congressional hearings have
demonstrated, currency smuggling is an extremely serious law enforcement
problem. Hundreds of millions of dollars in U.S. currency-representing
the proceeds of drug trafficking and other criminal offenses--is
annually transported out of the United States to foreign countries in
shipments of bulk cash. Smugglers use all available means to transport
the currency out of the country, from false bottoms in personal luggage,
to secret compartments in automobiles, to concealment in durable goods
exported for sale abroad.
Even more serious, press reports indicate that persons involved in
planning and perpetrating terrorist acts in the United States may have
smuggled currency into the United States from abroad.
Presently, the only law enforcement weapon against such smuggling is
section 5316 of title 31, United States Code, which makes it an offense
to transport more than $10,000 in currency or monetary instruments into,
or out of, the United States without filing a report with the United
States Customs Service. The effectiveness of section 5316 as a law
enforcement tool has been diminished, however, by a recent Supreme Court
decision. In United States v. Bajakajian, 118 S. Ct. 2028 (1998), the
Supreme Court held that section 5316 constitutes a mere reporting
violation, which is not a serious offense for purposes of the Excessive
Fines Clause of the Eighth Amendment. Accordingly, confiscation of the
full amount of the smuggled currency is unconstitutional, even if the
smuggler took elaborate steps to conceal the currency and otherwise
obstruct justice.
Confiscation of the smuggled currency is, of course, the most
effective weapon that can be employed against currency smugglers.
Accordingly, in response to the Bajakajian decision, the Department of
Justice proposed making the act of bulk cash smuggling itself a criminal
offense, and to authorize the imposition of the full range of civil and
criminal sanctions when the offense is discovered. Because the act of
concealing currency for the purpose of smuggling it out of the United
States is inherently more serious than simply failing to file a Customs
report, strong and meaningful sanctions, such as confiscation of the
smuggled currency, are likely to withstand Eighth Amendment challenges
to the new statute.
The Committee felt that this proposal would be an important weapon in
the arsenal against terrorism, and included these provisions in the
legislation.
Interstate Currency Couriers.-- An essential component of the money
laundering cycle in drug cases is the consolidation of cash proceeds of
drug sales at a collection point. Typically, money-laundering
organizations employ couriers to pick-up cash at various locations and
transport it to another location. A number of recent cases illustrate
this process. See United States v. $141,770.00 in U.S. Currency, 157
F.3d 600 (8th Cir. 1998) (currency packaged in three-layers of zip-lock
bags wrapped in fabric-softener sheets found in hidden vehicle
compartment); United States v. $189,825.00 in U.S. Currency, 8 F.
Supp.2d 1300 (N.D. Okla. 1998) (currency bundled and hidden in gas
tank); United States v. $206,323.56 in U.S. Currency, 998 F. Supp. 693
(S.D. W. Va. 1998) (courier flees during highway stop when drug dog
detects concealed currency); United States v. $94,010 U.S. Currency,
1998 WL 567837 (W.D.N.Y. 1998) (currency concealed in false
compartment).
The common elements in these cases include the transportation of a
large quantity of currency, bundled in street denominations and
concealed in a vehicle, on an interstate or other major highway, by a
person or persons who disclaim any knowledge of where the currency came
from or where it is to be delivered. Yet under current law, the person
transporting the currency may not be guilty of any money laundering
offense. See United States v. Puig-Infante, 19 F.3d 929 (5th Cir. 1994)
(simply transporting drug proceeds from Fla. to Tex. not a money
laundering offense).
Having the tools to stop interstate currency smuggling is
particularly important in terrorism cases because terrorists, as press
reports reveal, engage in a form of reverse money laundering: instead of
conducting transactions to conceal or disguise criminal proceeds,
terrorists transport funds from seemingly legitimate sources, but with
the intent to use those funds for an illegal purpose. Criminalizing such
activity at the Federal level follows the example of the State of
Florida, which has made such transportation an offense under State money
laundering laws. See Florida Statutes, section 896.101(b).
Improving Money Laundering Laws.-- The Committee's review of current
law regarding money laundering revealed a number of shortcomings. For
instance, section 1956 of title 18, United States Code, makes it an
offense to conduct a transaction involving a financial institution if
the transaction involves criminally derived property. Similarly, 18
U.S.C. 1957 creates an offense relating to the deposit, withdrawal,
transfer or exchange of criminally derived funds ``by, to or through a
financial institution.'' For the purposes of both statutes, the term
``financial institution'' is defined in 31 U.S.C. 5312. See 18 U.S.C.
1956(c)(6); 18 U.S.C. 1957(f).
The definition of ``financial institution'' in 5312 does not
explicitly include foreign banks. Such banks may well be covered because
they fall within the meaning of ``commercial bank'' or other terms in
the statute, but as presently drafted, there is some confusion over
whether the government can rely on section 5312 to prosecute an offense
under either 1956 or 1957 involving a transaction through a foreign
bank, even if the offense occurs in part in the United States. For
example, if a person in the United States sends criminal proceeds
abroad--say to a Mexican bank--and launders them through a series of
financial transactions, the government conceivably could not rely on the
definition of a ``financial institution'' in 1956(c)(6) to establish
that the transaction was a ``financial transaction'' within the meaning
of 1956(c)(4)(B) (defining a ``financial transaction'' as a transaction
involving the use of a ``financial institution''), or that it was a
``monetary transaction'' within the meaning of 1957(f) (defining
``monetary transaction'' as, inter alia, a transaction that would be a
``financial transaction'' under 1956(c)(4)(B)).
Similarly, the money laundering laws in effect in most countries
simply make it an offense to launder the proceeds of any crime, foreign
or domestic. In the United States, however, the money laundering statute
is violated only when a person launders the proceeds of one of the
crimes set forth on a list of ``specified unlawful activities.'' 18
U.S.C. 1956(c)(7). Currently only a handful of foreign crimes appear on
that list. See 1956(c)(7)(B).
Most importantly, the Committee found significant shortcomings in the
use of information already in possession of the government. Section
6050I of the Internal Revenue Code requires that any person engaged in a
trade or business (other than financial institutions required to report
under the Bank Secrecy Act) file a report with the Federal government on
cash transactions in excess of $10,000. Reports filed pursuant to this
requirement provide law enforcement authorities with a paper trail that
can, among other things, lead to the detection and prosecution of money
laundering activity.
Under current law, non-financial institutions are required to report
cash transactions exceeding $10,000 to the Internal Revenue Service
(IRS) on IRS Form 8300. Because the requirement that such reports be
filed is contained in the Internal Revenue Code, Form 8300 information
is considered tax return information, and is subject to the procedural
and record-keeping requirements of section 6103 of the Internal Revenue
Code. For example, section 6103(p)(4)(E) requires agencies seeking Form
8300 information to file a report with the Secretary of the Treasury
that describes the procedures established and utilized by the agency for
ensuring the confidentiality of the information. IRS requires that
agencies requesting Form 8300 information file a ``Safeguard Procedures
Report'' which must be approved by the IRS before any such information
can be released. For that reason, Federal, State and local law
enforcement agencies are not given access to the Form 8300s as Congress
anticipated when it last amended this statute. See 26 U.S.C.
6103(l)(15).
While the IRS uses Form 8300 to identify individuals who may be
engaged in tax evasion, Form 8300 information can also be instrumental
in helping law enforcement authorities trace cash payments by drug
traffickers and other criminals for luxury cars, jewelry, and other
expensive merchandise. Because of the restrictions on their
dissemination outlined above, however, Form 8300s are not nearly as
accessible to law enforcement authorities as the various reports
mandated by the Bank Secrecy Act, which can typically be retrieved
electronically from a database maintained by the Treasury Department.
The differential access to the two kinds of reports is made anomalous by
the fact that Form 8300 elicits much the same information that is
required to be disclosed by the Bank Secrecy Act. For example, just as
Form 8300 seeks the name, address, and social security number of a
customer who engages in a cash transaction exceeding $10,000 with a
trade or business, Currency Transaction Reports (CTRs) mandated by the
Bank Secrecy Act require the same information to be reported on a cash
transaction exceeding $10,000 between a financial institution and its
customer.
The Committee believes that these are significant oversights, and has
included provisions intended to address these shortcomings.
Internet Gambling.-- Among the subjects covered at the hearing was
offshore Internet gambling operations. The FBI, the Department of
Justice, and an investigator specializing in money laundering cases
testified that Internet gambling serves as a vehicle for money
laundering activities and can be exploited by terrorists to launder
money. The FBI currently has at least two pending cases involving
Internet gambling as a conduit for money laundering, as well as a number
of pending cases linking Internet gambling to organized crime.
As the Committee learned at earlier Subcommittee hearings, unlike
casino gambling, State lotteries, and horse racing--which are highly
regulated, and legal when licensed by a particular State--Internet
gambling is illegal in most U.S. jurisdictions, and operates largely
from offshore sites that are outside the reach of U.S. regulators and
law enforcement. The National Gambling Impact Study Commission, in a
final report in June 1999, recommended that wire transfers to Internet
gambling sites or their banks be outlawed.
The vast majority of an estimated 1,500 Internet gambling sites
operate offshore--outside the coverage of U.S. law. These ``virtual
casinos'' are free to misuse a bettor's credit card information or
manipulate the odds of a particular wager to the casino's advantage. The
only effective way to curb these abuses is by implementing effective
civil remedies such as those contained in this legislation.
Summary. --In sum, H.R. 3004 is designed to supplement and reinforce
existing U.S. money laundering laws by expanding the strategies the
United States can employ to combat international money laundering.
Numerous provisions in the bill have been drawn from anti-terrorism and
anti-money laundering legislation the Administration submitted to
Congress. In addition, the bill draws on provisions contained in H.R.
3886 from the 106th Congress, reintroduced as H.R. 1114 in this
Congress. Finally, the bill also incorporates bulk cash smuggling
language from H.R. 2920 and H.R. 2922, and H.R. 556 (similar to H.R.
4419 which was approved by the Committee on Banking and Financial
Services in the 106th Congress), which addresses Internet gambling.
HEARINGS
The full Committee held a hearing on October 3, 2001, entitled
``Dismantling the Financial Infrastructure of Global Terrorism'' to
examine the methods by which Osama Bin Laden, his terrorist organization
Al Qaeda, and other terrorist organizations finance their operations.
Treasury Secretary Paul O'Neill and Under Secretary for Enforcement
Jimmy Gurule testified, as well as Mary Lee Warren, Deputy Assistant
Attorney General for the Criminal Division of the Justice Department,
and Special Agent Dennis Lormel, Chief of the Financial Crimes Section
of the FBI's Criminal Investigations Division. Private witnesses
included Ed Yingling of the American Bankers Association (ABA), Marc
Lackritz of the Securities Industry Association (SIA), former Deputy
Secretary of Treasury Stuart Eizenstat, and money laundering expert John
Moynihan of BERG Associates. Written testimony was received jointly from
the Independent Community Bankers of America (ICBA) and America's
Community Bankers (ACB).
COMMITTEE CONSIDERATION
On October 11, 2001, the Committee met in open session and ordered
H.R. 3004 reported, with an amendment, to the House with a favorable
recommendation by a record vote of 62 yeas and 1 nay.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representatives
requires the Committee to list the record votes on the motion to report
legislation and amendments thereto. A motion by Mr. Oxley to report the
bill to the House with a favorable recommendation was agreed to by a
record vote of 62 yeas and 1 nay (Record vote no. 9). The names of
members voting for and against follow:
YEAS NAYS
Mr. Oxley Mr. Paul
Mr. Leach
Mrs. Roukema
Mr. Bereuter
Mr. Baker
Mr. Bachus
Mr. Castle
Mr. Royce
Mr. Lucas of Oklahoma
Mr. Ney
Mr. Barr of Georgia
Mrs. Kelly
Mr. Gillmor
Mr. Cox
Mr. Weldon of Florida
Mr. Ryun of Kansas
Mr. Riley
Mr. LaTourette
Mr. Manzullo
Mr. Jones of North Carolina
Mr. Ose
Mrs. Biggert
Mr. Green of Wisconsin
Mr. Toomey
Mr. Shadegg
Mr. Fossella
Mr. Gary G. Miller of California
Mr. Cantor
Mr. Grucci
Ms. Hart
Mrs. Capito
Mr. Ferguson
Mr. Rogers of Michigan
Mr. Tiberi
Mr. LaFalce
Mr. Frank
Mr. Kanjorski
Ms. Waters
Mr. Sanders
Mrs. Maloney of New York
Mr. Gutierrez
Mr. Watt of North Carolina
Mr. Ackerman
Mr. Bentsen
Mr. Maloney of Connecticut
Ms. Hooley of Oregon
Ms. Carson of Indiana
Mr. Sherman
Mr. Sandlin
Ms. Lee
Mr. Mascara
Mr. Inslee
Ms. Schakowsky
Mr. Moore
Mr. Capuano
Mr. Ford
Mr. Lucas of Kentucky
Mr. Shows
Mr. Crowley
Mr. Clay
Mr. Israel
Mr. Ross
The following amendments were not agreed to by a record vote. The
names of Members voting for and against follow:
An amendment to the amendment in the nature of a substitute by Mr.
Barr, no. 1m, prohibiting the Customs Service from opening outgoing
international mail without a warrant during cross-border searches, was
not agreed to by a record vote of 20 yeas and 43 nays (Record vote no.
8).\1\
\1\An earlier voice vote on which the nays prevailed was vacated by
unanimous consent, and the question put to the Committee de novo.
YEAS NAYS
Mr. Barr of Georgia Mr. Oxley
Mr. Paul Mr. Leach
Mr. Jones of North Carolina Mrs. Roukema
Mr. Ose Mr. Bereuter
Ms. Hart Mr. Baker
Mr. Frank Mr. Bachus
Mr. Kanjorski Mr. Castle
Ms. Waters Mr. Royce
Mr. Sanders Mr. Lucas of Oklahoma
Mrs. Maloney of New York Mr. Ney
Mr. Gutierrez Mrs. Kelly
Mr. Watt of North Carolina Mr. Gillmor
Mr. Ackerman Mr. Cox
Ms. Carson of Indiana Mr. Weldon of Florida
Mr. Sandlin Mr. Ryun of Kansas
Ms. Lee Mr. Riley
Mr. Inslee Mr. LaTourette
Ms. Schakowsky Mr. Manzullo
Mr. Capuano Mrs. Biggert
Mr. Clay Mr. Green of Wisconsin
Mr. Toomey
Mr. Shays
Mr. Shadegg
Mr. Fossella
Mr. Gary G. Miller of California
Mr. Cantor
Mr. Grucci
Mrs. Capito
Mr. Ferguson
Mr. Rogers of Michigan
Mr. Tiberi
Mr. LaFalce
Mr. Bentsen
Mr. Maloney of Connecticut
Ms. Hooley of Oregon
Mr. Sherman
Mr. Mascara
Mr. Moore
Mr. Ford
Mr. Lucas of Kentucky
Mr. Shows
Mr. Crowley
Mr. Israel
An amendment to the amendment in the nature of a substitute by Mr.
Castle, no. 1p, striking provisions relating to Internet gambling, was
not agreed to by a record vote of 25 yeas and 37 nays (Record vote no.
7).
YEAS NAYS
Mr. Baker Mr. Oxley
Mr. Castle Mr. Leach
Mr. Ney Mrs. Roukema
Mr. Barr of Georgia Mr. Bereuter
Mr. Paul Mr. Bachus
Mr. Gillmor Mr. Royce
Mr. Cox Mr. Lucas of Oklahoma
Mr. Jones of North Carolina Mrs. Kelly
Mr. Ose Mr. Weldon of Florida
Mrs. Biggert Mr. Ryun of Kansas
Mr. Toomey Mr. Riley
Mr. Fossella Mr. Green of Wisconsin
Mr. Cantor Mr. Shays
Mr. Tiberi Mr. Shadegg
Mr. Frank Mr. Gary G. Miller of California
Mr. Kanjorski Mr. Grucci
Mr. Watt of North Carolina Ms. Hart
Mr. Ackerman Mrs. Capito
Mr. Bentsen Mr. Ferguson
Mr. Sandlin Mr. Rogers of Michigan
Ms. Schakowsky Mr. LaFalce
Mr. Moore Ms. Waters
Mr. Capuano Mr. Sanders
Mr. Crowley Mrs. Maloney of New York
Mr. Clay Mr. Gutierrez
Mr. Maloney of Connecticut
Ms. Hooley of Oregon
Ms. Carson of Indiana
Mr. Sherman
Ms. Lee
Mr. Mascara
Mr. Inslee
Mr. Ford
Mr. Lucas of Kentucky
Mr. Shows
Mr. Israel
Mr. Ross
The following amendments were agreed to by a voice vote:
An amendment in the nature of a substitute by Mr. Oxley, no. 1,
making various changes to the bill;
An amendment to the amendment in the nature of a substitute by Mr.
LaFalce, no. 1a, making technical changes requested by the
Administration;
An amendment to the amendment in the nature of a substitute by Mr.
Bentsen, no. 1c, striking a study of the feasibility of imposing
sanctions against financial institutions that file currency transaction
reports that qualify for exemptions;
An amendment to the amendment in the nature of a substitute by Ms.
Waters, no. 1e, requiring the consideration of a financial institution's
money laundering record in reviewing of merger applications;
An amendment to the amendment in the nature of a substitute by Mr.
Leach, no. 1f, reinstating coverage for checks and drafts;
An amendment to the amendment in the nature of a substitute by Mr.
Israel, no. 1g, addressing the consideration of charitable organizations
by the public-private anti-terrorism task force;
An amendment to the amendment in the nature of a substitute by Mrs.
Kelly, no. 1h, addressing the date of application of regulations
requiring financial institutions to establish anti-money laundering
programs and the factors to be taken into account for anti-money
laundering programs;
An amendment to the amendment in the nature of a substitute by Mr.
Maloney of Connecticut, no. 1i, making explicit that hawala-type systems
are covered by certain statutory requirements;
An amendment to the amendment in the nature of a substitute by Mr.
Sherman, no. 1k, regarding Presidential sanctions on non-cooperating
countries;
An amendment to the amendment in the nature of a substitute by Mr.
Baker, no. 1l, modifying the Secretary's authority to require financial
institutions to apply enhanced due diligence standards to correspondent
accounts;
A substitute amendment to the amendment offered by Mr. Baker by Mr.
LaFalce, no. 1l(1), clarifying the circumstances under which the
Secretary of the Treasury must require financial institutions to apply
enhanced due diligence standards to correspondent accounts, as modified
by unanimous consent;
An amendment to the amendment in the nature of a substitute by Mr.
Watt, no. 1o, clarifying the term ``compliance officer''; and
An amendment to the amendment in the nature of a substitute by Mr.
Watt, no. 1q, clarifying the exemption for Internet service providers
from certain Internet gambling provisions.
The following amendment was not agreed to by a voice vote:
An amendment to the amendment in the nature of a substitute by Mr.
Sherman, no. 1n, authorizing the President to prohibit certain credit
and contract transactions with non-cooperative countries.
The following amendments were withdrawn:
An amendment to the amendment in the nature of a substitute by Mr.
Weldon of Florida, no. 1b, relating to the sharing of grand jury
information relating to money laundering and bulk cash smuggling;
An amendment to the amendment in the nature of a substitute by Mr.
Leach, no. 1d, eliminating the exemption for ISPs from Internet gambling
restrictions; and,
An amendment to the amendment in the nature of a substitute by Mr.
Weldon of Florida, no. 1j, striking certain factors from those the
Secretary of the Treasury must consider in designating jurisdictions as
``primary money laundering concerns''.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House of
Representatives, the Committee held a hearing and made findings that are
reflected in this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House of
Representatives, the Committee establishes the following performance
related goals and objectives for this legislation:
The President and the Secretary of the Treasury will use the
authority granted by this legislation to track and prevent individuals
from laundering the proceeds of criminal activity and from diverting
funds to terrorist or criminal activities.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives, the Committee finds that this legislation
would result in no new budget authority, entitlement authority, or tax
expenditures or revenues.
COMMITTEE COST ESTIMATE
The Committee adopts as its own the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section 402 of
the Congressional Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATE
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House of
Representatives, the following is the cost estimate provided by the
Congressional Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 16, 2001.
Hon. Michael G. Oxley, Chairman, Committee on Financial Services, House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has prepared the
enclosed cost estimate for H.R. 3004, the Financial Anti-Terrorism Act
of 2001.
If you wish further details on this estimate, we will be pleased to
provide them. The CBO staff contacts are Mark Grabowicz and Mark Hadley
(for federal costs), Susan Sieg Tompkins (for the state and local
impact), and Jean Talarico (for the private-sector impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director.)
Enclosure.
H.R. 3004--Financial Anti-Terrorism Act of 2001
Summary: H.R. 3004 would expand the powers of federal financial
regulators to prevent money laundering, internet gambling, and smuggling
of currency. It also would establish new federal crimes relating to such
acts. H.R. 3004 would authorize the appropriation of such sums as
necessary for each of fiscal years 2002 through 2005 for the Financial
Crimes Enforcement Network (FINCEN), an agency in the Department of the
Treasury that collects data from banks and other financial institutions
and serves as a clearinghouse for financial intelligence. The bill would
authorize the Secretary of the Treasury, through financial regulators,
to impose special requirements on U.S. financial institutions if the
Secretary suspects the transactions of their foreign clients are tied to
money laundering.
Assuming appropriation of the necessary amounts, CBO estimates that
implementing H.R. 3004 would cost about $36 million in fiscal year 2002
and about $210 million over the 2002 2006 period, mostly for FINCEN.
This estimate assumes adjustments for anticipated inflation. Without
such adjustments, we estimate that implementation would cost $202
million over the 2002 2006 period. H.R. 3004 would affect direct
spending and receipts, so pay-as-you-go procedures would apply, but CBO
estimates that any such effects would be less than $500,000 a year.
H.R. 3004 contains intergovernmental mandates as defined in the
Unfunded Mandates Reform Act (UMRA) because it would impose requirements
on certain state and local agencies and because it includes a preemption
of state laws. CBO estimates that the total cost of complying with those
mandates would be small, and would not exceed the threshold established
in UMRA ($56 million in 2001, adjusted annually for inflation).
The bill also contains private-sector mandates as defined in UMRA.
The bill would impose new information collection, reporting, and
recordkeeping requirements on financial institutions and agencies as
defined in the bill. Because those new requirements would depend on
specific regulations that would be established by the Secretary of the
Treasury, CBO cannot determine whether the direct cost to the private
sector would exceed the annual threshold specified in UMRA ($113 million
in 2001, adjusted annually for inflation).
Estimated cost to the Federal Government: For this estimate, CBO
assumes that the bill will be enacted near the start of fiscal year 2002
and that the necessary amount will be appropriated each year. The
estimated budgetary impact of H.R. 3004 is shown in the following table.
The costs of this legislation fall within budget functions 370 (commerce
and housing credit) and 750 (administration of justice).
By fiscal year, in millions of dollars--
2002 2003 2004 2005 2006
CHANGES IN SPENDING SUBJECT TO APPROPRIATION\1\
FINCEN: 48 49 51 52 0
Administrative cost to regulatory agencies: 2 2 2 2 2
Reports by Department of Treasury: 1 (\3\) (\3\) (\3\) (\3\)
Total: 51 51 53 54 2
\1\The bill also would affect direct spending and revenues, but CBO estimates that those changes would each be less than $500,000 a year.
\2\FINCEN received an appropriation of $38 million for fiscal year 2001. For fiscal year 2002, there is no authorization in current law for the agency and a full-year appropriation has not yet been enacted.
\3\Less than $500,000.
Basis of estimate
CBO estimates that implementing H.R. 3004 would cost about $50
million annually for FINCEN, about $2 million annually for increased
administrative costs at agencies that
regulate financial institutions, and about $1 million in 2002
for additional reports by the Secretary of the Treasury. In addition to
these effects on discretionary spending, the bill also would have a
negligible effect on the collection and spending of civil and criminal
penalties. Finally, the legislation would have a small effect on the
operating costs of the Federal Deposit Insurance Corporation (FDIC).
Spending subject to appropriation
FINCEN.-- H.R. 3004 would authorize the appropriation of such sums
as necessary for FINCEN for each of fiscal years 2002 through 2005.
Based on information from the agency, CBO estimates that FINCEN would
need about $46 million in 2002 to carry out its current statutory
responsibilities and an additional $2 million to perform new duties
required by the bill. Thus, CBO estimates that implementing H.R. 3004
would require appropriations of $48 million in fiscal year 2002 and $200
million over the 2002 2005 period, assuming annual adjustments for
inflation.
Administrative costs.-- H.R. 3004 would authorize the Secretary of
the Treasury to impose special measures on U.S. financial institutions
if the Secretary suspects the transactions of their foreign clients are
tied to money laundering. Such measures would be implemented by the
Department of the Treasury, the Securities and Exchange Commission
(SEC), the Commodity Futures Trading Commission, and other financial
regulators, and could include increasing recordkeeping and reporting
requirements and regulating or prohibiting certain types of financial
accounts. Based on information from the affected agencies, CBO estimates
that implementing H.R. 3004 would cost a total of about $2 million a
year over the 2002 2006 period. Most of these funds would pay for
additional SEC staff to examine the records of investment advisors and
investment companies for transactions that may involve money laundering,
and to oversee the efforts of self-regulating securities markets to
detect money laundering.
Reports.-- H.R. 3004 would require the Department of Treasury to
develop regulations and prepare studies for the Congress relating to
financial crimes. CBO estimates these requirements would cost $1 million
in fiscal year 2002 and less than $500,000 in each of the subsequent
years.
Direct spending and revenues
Trustees' Administrative Costs.-- The National Credit Union
Administration (NCUA), Office of the Comptroller of the Currency, and
the Office of Thrift Supervision charge fees to the institutions they
regulate to cover all of their administrative costs; therefore, any
additional spending by these agencies to implement the bill would have
no net budget effect. That is not the case with the FDIC, however, which
uses deposit insurance premiums paid by all banks to cover the expenses
it incurs to supervise state-chartered banks. The bill would cause a
small increase in FDIC spending, but would probably not affect its
premium income. In any case, CBO estimates that imposing special
measures would increase direct spending and offsetting receipts for
those agencies by less than $500,000 a year over the 2002 2006 period.
Bureau of Engraving and Printing.-- H.R. 3004 would allow the Bureau
of Engraving and Printing (BEP) to impose charges for any BEP services
provided to any foreign government or any territory of the United
States. Because foreign governments or territories of the United States
would pay BEP for the full cost of producing any documents, and because
BEP has the authority to retain and spend such collections without
further appropriation this would have no significant net budgetary
impact.
Additional Fines.-- Enacting H.R. 3004 would establish civil and
criminal fines for new crimes that would be established by the bill.
Civil fines are classified as governmental receipts (revenues). Criminal
fines are recorded as receipts and deposited in the Crime Victims Fund,
and spent without further appropriation action. Based on information
from the Department of the Treasury and the Department of Justice, CBO
estimates that any net increase in collections would not be significant
because of the small number of individuals that are likely to be subject
to such fines.
Federal Reserve.-- Budgetary effects on the Federal Reserve are also
recorded as changes in revenues. Based on information from the Federal
Reserve, CBO estimates that enforcing the special requirements on U.S.
Financial Trustees under the bill would reduce such revenues by less
than $500,000 a year over the 2002 2006 period.
Pay-as-you-go considerations: The Balanced Budget and Emergency
Deficit Control Act sets up pay-as-you go procedures for legislation
affecting direct spending or receipts. CBO estimates that enacting H.R.
3004 would affect direct spending and governmental receipts but that
there would be no significant impact in any year.
Estimated impact on state, local, and tribal governments: H.R. 3004
contains intergovernmental mandates as defined in UMRA, but CBO
estimates that the total cost of complying with these mandates would be
small, and would not exceed the threshold established in that act ($56
million in 2001, adjusted annually for inflation). Provisions in several
sections of this bill would place new reporting, monitoring,
recordkeeping, and other procedural requirements on financial
institutions. (Financial institutions include certain state and local
agencies acting in that capacity.) Largely because the number of
affected agencies would be very small, CBO estimates that state and
local governments would incur minimal costs to comply with these
requirements. Another provision would impose a mandate by prohibiting
employees of state, local, tribal, and territorial governments from
disclosing certain information.
This bill also includes a preemption of state and local laws. It
would require consumer reporting agencies to furnish a report and all
other information in a consumer's file, without notifying the consumer,
to a government agency authorized to conduct investigations,
intelligence, and or counterintelligence activities. The legislation
would explicitly preempt state law by exempting these agencies from
liability for violating the constitution of any state, or the law or
regulations of any state or local government. Such a preemption would be
a mandate under UMRA. CBO estimates, however, that it would not affect
the budgets of state, local, or tribal governments, because, while it
would limit the application of state law, it would impose no duty on
states that would result in additional spending.
Estimated impact on the private sector: The bill also contains
private-sector mandates as defined in UMRA. The bill would impose new
information collection, reporting, and recordkeeping requirements on
financial institutions and agencies as defined in the bill. Because
those new requirements would depend on specific regulations that would
be established by the Secretary of the Treasury, CBO cannot determine
whether the direct cost to the private sector would exceed the annual
threshold specified in UMRA ($113 million in 2001, adjusted annually for
inflation).
Although H.R. 3004 would prohibit gambling businesses from accepting
credit card payments and other bank instruments from gamblers who bet
illegally over the Internet, the bill would not create a new
private-sector mandate. Under current federal and state law, gambling
businesses are generally prohibited from accepting bets or wagers over
the Internet. Thus, H.R. 3004 does not contain a new mandate relative to
current law.
H.R. 3004 would authorize federal banking regulators to require
depository institutions that have knowingly participated in transactions
with unlawful Internet gambling businesses to cease doing so. This
provision would not create a new private-sector mandate for depository
institutions because federal banking regulators already have such powers
under current law.
Estimate prepared by: Federal spending: Mark Grabowicz, Mark Hadley,
Ken Johnson, Matthew Pickford, and Lanette Walker; Federal revenues:
Carolyn Lynch and Erin Whitaker; impact on state, local, and tribal
governments: Susan Sieg Tompkins; impact on the private sector: Jean
Talarico.
Estimate approved by: Peter H. Fontaine, Deputy Assistant Director
for Budget Analysis.
FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal mandates
prepared by the Director of the Congressional Budget Office pursuant to
section 423 of the Unfunded Mandates Reform Act.
ADVISORY COMMITTEE STATEMENT
Section 205 of the bill directs the Secretary of the Treasury to
establish, either within the Bank Secrecy Act Advisory Group or a
subcommittee or other adjunct of that advisory group, a task force
comprised of representatives of the agencies and officers represented on
the advisory group, a representative from the Office of Homeland
Security, and representatives of financial institutions, private
organizations that represent the financial services industry, and other
interested parties to focus on the finances of terrorist groups, the
financial relationships between international narcotics traffickers and
foreign terrorist organizations, and the means of facilitating the
identification of accounts and transactions involving foreign terrorist
organizations. Pursuant to the requirements of subsection 5(b) of the
Federal Advisory Committee Act, the Committee finds that the functions
of the proposed advisory committees are not and cannot be performed by
an existing Federal agency or advisory commission requiring the
enlargement of the mandate of the Bank Secrecy Act Advisory Group.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives, the Committee finds that the Constitutional Authority
of Congress to enact this legislation is provided by Article 1, section
8, clause 1 (relating to the general welfare of the United States),
clause 3 (relating to the power to regulate interstate commerce), and
clause 5 (relating to the power to coin money and regulate the value
thereof).
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the terms
and conditions of employment or access to public services or
accommodations within the meaning of section 102(b)(3) of the
Congressional Accountability Act.
EXCHANGE OF COMMITTEE CORRESPONDENCE
House of Representatives,
Committee on Agriculture,
Washington, DC, April 2, 2001.
Hon. Michael G. Oxley, Chairman, House Committee on Financial Services, Rayburn House Office Building, Washington, DC.
Dear Chairman Oxley: I understand that the Committee on Financial
Services recently ordered H.R. 3004, the ``Financial Anti-Terrorism Act
of 2001'', reported to the House. Further, it is my understanding that
your Committee amended this legislation in a manner that effects certain
entities registered with the Commodity Futures Trading Commission
pursuant to the Commodity Exchange Act. As you know, the Committee on
Agriculture has jurisdiction over that Act under rule X of the Rules of
the House of Representatives, which grants the Agriculture Committee
jurisdiction over ``commodity exchanges''.
Because of the importance of this matter, I recognize your desire to
bring this legislation before the House in an expeditious manner and
will waive consideration of the bill by the Agriculture Committee. By
agreeing to waive its consideration of the bill, the Agriculture
Committee does not waive its jurisdiction over H.R. 3004. In addition,
the Committee reserves its authority to seek conferees on any provisions
of the bill that are within the Committee's jurisdiction during any
House-Senate conference that may be convened on this legislation. I ask
your commitment to support any request by the Committee on Agriculture
for conferees on H.R. 3004 or related legislation.
I request that you include this letter and your response as part of
the Congressional Record during consideration of the legislation on the
House floor.
Thank you for your attention to these matters.
Sincerely,
Larry Combest, Chairman.
House of Representatives,
Committee on Financial Services,
Washington, DC, April 2, 2001.
Hon. Larry Combest, Chairman, House Committee on Agriculture, Longworth House Office Building, Washington, DC.
Dear Chairman Combest: Thank you for your letter regarding your
Committee's jurisdictional interest in H.R. 3004, the ``Financial
Anti-Terrorism Act of 2001''.
I acknowledge your committee's jurisdictional interest in this
legislation and appreciate your cooperation in moving the bill to the
House floor expeditiously. I agree that your decision to forego further
action on the bill will not prejudice the Committee on Agriculture with
respect to its jurisdictional prerogatives on this or similar
legislation. I will include a copy of your letter and this response in
the Committee's report on the bill and the Congressional Record when the
legislation is considered by the House.
Thank you again for your cooperation.
Sincerely,
Michael G. Oxley, Chairman.
House of Representatives,
Committee on Agriculture,
Washington, DC, October 15, 2001.
Hon. Michael G. Oxley, Chairman, Committee on Financial Services, Rayburn House Office Building, Washington, DC.
Dear Chairman Oxley: I understand that the Committee on Financial
Services recently ordered H.R. 3004, the ``Financial Anti-Terrorism Act
of 2001'', reported to the House. Further, it is my understanding that
your Committee amended this legislation in a manner that effects certain
entities registered with the Commodity Futures Trading Commission
pursuant to the Commodity Exchange Act. As you know, the Committee on
Agriculture has jurisdiction over that Act under rule X of the Rules of
the House of Representatives, which grants the Agriculture Committee
jurisdiction over ``commodity exchanges''.
Because of the importance of this matter, I recognize your desire to
bring this legislation before the House in an expeditious manner and
will waive consideration of the bill by the Agriculture Committee. By
agreeing to waive its consideration of the bill, the Agriculture
Committee does not waive its jurisdiction over H.R. 3004. In addition,
the Committee reserves its authority to seek conferees on any provisions
of the bill that are within the Committee's jurisdiction during any
House-Senate conference that may be convened on this legislation. I ask
your commitment to support any request by the Committee on Agriculture
for conferees on H.R. 3004 or related legislation.
I request that you include this letter and your response as part of
the Congressional Record during consideration of the legislation on the
House floor.
Thank you for your attention to these matters.
Sincerely,
Larry Combest, Chairman.
House of Representatives,
Committee on Financial Services,
Washington, DC, October 15, 2001.
Hon. Larry Combest, Chairman, Committee on Agriculture, Longworth House Office Building, Washington, DC.
Dear Chairman Combest: Thank you for your letter regarding your
Committee's jurisdictional interest in H.R. 3004, the ``Financial
Anti-Terrorism Act of 2001''.
I acknowledge your committee's jurisdictional interest in this
legislation and appreciate your cooperation in moving the bill to the
House floor expeditiously. I agree that your decision to forego further
action on the bill will not prejudice the Committee on Agriculture with
respect to its jurisdictional prerogatives on this or similar
legislation. I will include a copy of your letter and this response in
the Committee's report on the bill and the Congressional Record when the
legislation is considered by the House.
Thank you again for your cooperation.
Sincerely,
Michael G. Oxley, Chairman.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short Title; Table of Contents
This section provides the short title of the bill, the ``Financial
Anti-Terrorism Act of 2001'' and a table of contents.
TITLE I--STRENGTHENING LAW ENFORCEMENT
Section 101. Bulk Cash Smuggling Into or Out of the United States
Subsections (a) through (c) set forth the new bulk cash smuggling
offense as well as a set of findings explaining why the smuggling of
bulk cash is a serious law enforcement problem. The new offense, which
would be codified at 31 U.S.C. 5331, would make it an offense for anyone
to knowingly conceal more than $10,000 in currency or other monetary
instruments on his person or in any conveyance, article of luggage,
merchandise or other container, and to transport or attempt to transport
that currency across the border with the intent to avoid the reporting
requirements in section 5316. In other words, the offense has three
elements: (1) concealment; (2) transportation (or attempted
transportation); and (3) specific intent to evade filing a complete and
accurate report with the Customs Service.
The penalty section provides for incarceration of up to 5 years. In
addition, and in lieu of any criminal fine, the penalty section
authorizes the confiscation of the smuggled money in accordance with the
usual procedures for criminal and civil forfeiture, including all of the
due process protections enacted as part of the Civil Asset Forfeiture
Reform Act of 2000. Confiscation of smuggled goods has been regarded as
the appropriate penalty for smuggling offenses since the first Customs
laws were enacted in the 18th Century. In the alternative, in accordance
with rule 32.2 of the Federal Rules of Criminal Procedure and existing
case law, the court may enter a personal money judgment against the
defendant. See United States v. Candelaria-Silva, 166 F.3d 19 (1st Cir.
1999) (criminal forfeiture order may take several forms: money judgment,
directly forfeitable property, and substitute assets).
To address concerns that such confiscation is a blunt instrument that
should be mitigated in some circumstances to avoid a hardship, the bill
explicitly authorizes courts to mitigate forfeitures of currency
involved in currency reporting offenses to avoid Eighth Amendment
violations by considering a range of aggravating and mitigating
circumstances. Those circumstances include the value of the currency or
other monetary instruments involved in the offense; efforts by
the person committing the offense to structure currency transactions,
conceal property or otherwise obstruct justice; and whether the offense
is part of a pattern of repeated violations.
The Committee believes, however, that bulk cash smuggling is an
inherently more serious offense than simply failing to file a Customs
report. Because the constitutionality of a forfeiture is dependent on
the ``gravity of the offense'' under Bajakajian, it is anticipated that
the full forfeiture of smuggled money will withstand constitutional
scrutiny in most cases. For the confiscation to be reduced at all, the
smuggler will have to show that the money was derived from a legitimate
source and not intended to be used for any unlawful purpose. Even then,
the court's duty will be to reduce the amount of confiscation to the
maximum that would be permitted in accordance with the Eighth Amendment
and the aggravating and mitigating factors set forth in the statute. The
civil forfeiture provision would apply to conduct occurring before the
effective date of the act.
Section 102. Forfeiture in Currency Reporting Cases
Section 102 makes conforming amendments to the existing criminal and
civil forfeiture provisions for the reporting and structuring violations
in title 31. The section creates parallel forfeiture authority for
violating the currency reporting requirements applicable to businesses
under 26 U.S.C. 6050I and sets forth rules for mitigating the
forfeitures to avoid constitutional violations in accordance with
Bajakajian. This is necessary to address the concern expressed by the
Court in Bajakajian that Congress had not made it clear that trial
courts are authorized to reduce forfeitures down to the maximum level
permissible to avoid violating the Excessive Fines Clause when a
statute, on its face, appears to authorize only the forfeiture of the
full amount of structured or unreported currency.
Section 103. Interstate Currency Couriers
This section amends the money laundering statute to make it an
offense for anyone to transport more than $10,000 in currency concealed
in a vehicle traveling in interstate commerce (e.g. on an interstate
highway) knowing that the currency was derived from some kind of
unlawful activity, or knowing that the currency was intended to be used
to promote such activity. The courier's willful blindness regarding the
source or intended use of the currency would be sufficient to establish
the requisite knowledge.
Section 104. Illegal Money Transmitting Businesses
The operation of an unlicensed money transmitting business is a
violation of Federal law under 18 U.S.C. 1960. First, section 104
clarifies the scienter requirement in 1960 to avoid the problems that
occurred when the Supreme Court interpreted the currency transaction
reporting statutes to require proof that the defendant knew that
structuring a cash transaction to avoid the reporting requirements had
been made a criminal offense. See Ratzlaf v. United States, 114 S. Ct.
655 (1994). The proposal makes clear that an offense under 1960 is a
general intent crime for which a defendant is liable if he knowingly
operates an unlicensed money transmitting business. For purposes of a
criminal prosecution, the Government would not have to show that the
defendant knew that a State license was required or that the Federal
registration requirements promulgated pursuant to 31 U.S.C. 5330 applied
to the business.
Second, section 104 expands the definition of an unlicensed money
transmitting business to include a business engaged in the
transportation or transmission of funds that the defendant knows are
derived from a criminal offense, or are intended to be used for an
unlawful purpose. Thus, a person who agrees to transmit or to transport
drug proceeds for a drug dealer, or funds from any source for a
terrorist, knowing such funds are to be used to commit a terrorist act,
would be engaged in the operation of an unlicensed money transmitting
business. It would not be necessary for the Government to show that the
business was a storefront or other formal business open to walk-in
trade. To the contrary, it would be sufficient to show that the
defendant offered his services as a money transmitter to another.
Finally, when Congress enacted 1960 in 1992, it provided for criminal
but not civil forfeiture. The proposal corrects this oversight, and
allows the government to obtain forfeiture of property involved in the
operation of an illegal money transmitting business even if the
perpetrator is a fugitive.
Section 105. Long-Arm Jurisdiction over Foreign Money Launderers
The first provision in this section creates a long arm statute that
gives the district court jurisdiction over a foreign person, including a
foreign bank, that commits a money laundering offense in the United
States or converts laundered funds that have been forfeited to the
Government to his own use. Thus, if the Government files a civil
enforcement action under section 1956(b), or files a civil lawsuit to
recover forfeited property from a third party, the district court would
have jurisdiction over the defendant if the defendant has been served
with process pursuant to the applicable statutes or rules of procedure,
and the constitutional requirement of minimum contacts is
satisfied in one of three ways: the money laundering offense took place
in the United States; in the case of converted property, the property
was the property of the United States by virtue of a civil or criminal
forfeiture judgment; or in the case of a financial institution, the
defendant maintained a correspondent bank account at another bank in the
United States. Under this provision, for example, the district courts
would have had jurisdiction over the defendant in the circumstances
described in United States v. Swiss American Bank, 191 F.3d 30 (1st Cir.
1999).
The second provision, modeled on 18 U.S.C. 1345(b), gives the
district court the power to restrain property, issue seizure warrants,
or take other action necessary to ensure that a defendant in an action
covered by the statute does not dissipate the assets that would be
needed to satisfy a judgment.
This section also authorizes a court, on the motion of the Government
or a State or Federal regulator, to appoint a receiver to gather and
protect assets needed to satisfy a judgment under sections 1956 and
1957, and the forfeiture provisions in sections 981 and 982. This
authority is intended to apply in three circumstances: (1) when there is
a judgment in a criminal case, including an order of restitution,
following a conviction for a violation of section 1956 or 1957; (2) when
there is a judgment in a civil case under section 1956(b) assessing a
penalty for a violation of either section 1956 or 1957; and (3) when
there is a civil forfeiture judgment under section 981 or a criminal
forfeiture judgment, including a personal money judgment, under section
982.
The amendment also makes section 1956(b) applicable to violations of
section 1957. It applies to conduct occurring before the effective date
of the Act.
Section 106. Laundering Money through a Foreign Bank
This section eliminates the ambiguity in current law regarding money
laundering through foreign banks by including foreign banks within the
definition of ``financial institution'' in 1956(c)(6). The definition is
the same as the one set forth in 12 U.S.C. 3101(7), which is already
employed in 1956(c)(7)(B) for another purpose.
Section 107. Specified Unlawful Activity for Money Laundering
This amendment enlarges the list of foreign crimes that can lead to
money laundering prosecutions in this country when the proceeds of
additional foreign crimes are laundered in the United States. The
additional crimes include all crimes of violence, public corruption, and
offenses covered by existing bilateral extradition treaties. The
Committee intends this provision to send a strong signal that the United
States will not tolerate the use of its financial institutions for the
purpose of laundering the proceeds of such activities.
Section 108. Laundering the Proceeds of Terrorism
The Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA)
made it a criminal offense to provide material support or resources to
an organization designated by the Secretary of State as a ``foreign
terrorist organization.'' 18 U.S.C. 2339B.
Section 2339B, however, was not added to the list of money laundering
predicate offenses in section 1956(c)(7)(D). This provision adds 2339B
to the list of money laundering predicates.
Section 109. Violations of Reporting Requirements for
Nonfinancial Trades and Businesses
18 U.S.C. 981 and 982 are the civil and criminal forfeiture statutes
pertaining to money laundering. Presently, they provide for forfeiture
for money laundering violations under the Bank Secrecy Act (31 U.S.C.
5311 et seq.) and the Money Laundering Control Act (18 U.S.C. 1956 57).
This section would add 26 U.S.C. 6050I of the Internal Revenue Code to
this list in both statutes.
Section 6050I is the statute that requires any trade or business
receiving more than $10,000 in cash to report the transaction to the IRS
on Form 8300. Subsection (f) makes it an offense to structure a
transaction with the intent to avoid the filing of such form. Thus,
section 6050I is the counterpart to 31 U.S.C. 5313 and 5324 which
require the filing of Currency Transaction Reports (CTRs) and Currency
or Monetary Instrument Report (CMIRs) by financial institutions whenever
a $10,000 cash transaction takes place, and by other persons whenever
they send more than $10,000 in currency into or out of the United
States. Including a reference to section 6050I in sections 981 and 982
thus means that violations of the Form 8300 requirement will be treated
the same as CTR and CMIR violations for forfeiture purposes.
Section 110. Proceeds of Foreign Crimes
This section is intended to reinforce the United States' compliance
with the Vienna Convention. It amends 18 U.S.C. 981(a)(1)(B) to allow
the United States to institute its own action against the proceeds of
foreign criminal offenses when such proceeds are found in the United
States. As required by the Vienna Convention, it also authorizes the
confiscation of property used to facilitate such crimes. The list
of foreign crimes to which this section applies is determined
by cross-reference to the foreign crimes that are money laundering
predicates under 1956(c)(7)(B). This section will permit the forfeiture
of property involved in conduct occurring before the effective date of
the Act.
Section 111. Availability of Reports Relating to Coins and
Currency Received in Non-Financial Trade or Business
Section 111 addresses the problem of the accessibility of the Form
8300 information by directing the Secretary of the Treasury to take the
necessary actions and establish the necessary procedures to make the
information contained on Form 8300 available to government agencies
through the network administered by FinCEN. The Secretary is given six
months from date of enactment to achieve this objective, and is required
to report to Congress on the actions taken pursuant to this section,
together with recommendations for any legislative or administrative
action determined to be appropriate by the Secretary.
The Committee believes that safeguards built into the FinCEN
information-sharing protocols currently satisfies appropriate
confidentiality concerns, as specified by section 6103 (p)(4), but
expects the Secretary to address--and resolve--the issue squarely within
the six-month timeline specified. The Committee is aware that some of
the ``outreach'' and data-sharing aspects of FinCEN's duties might be
problematic with regards the sharing of other tax data, specifically
personal or corporate income data. However, the Committee does not view
what is essentially law-enforcement data about specific transactions to
be personal or corporate ``income data,'' regardless of the fact that it
is collected by the Internal Revenue Service.
Section 112. Penalties for Violations of Geographic Targeting
Orders and Certain Record Keeping Requirements
31 U.S.C. 5321 and 5322 impose civil and criminal penalties,
respectively, for violations of the Bank Secrecy Act (BSA) and BSA
regulations; 31 U.S.C. 5324 creates additional criminal offenses for
failing to file a report, filing a false or incomplete report, and
structuring currency transactions in order to evade a reporting
requirement under the BSA. Those statutes, however, do not specifically
refer to reports required by GTOs (geographic targeting orders) issued
under 31 U.S.C. 5326. This provision eliminates any ambiguity concerning
the applicability of these provisions to GTOs by inserting specific
references to 31 U.S.C. 5326 in the respective statutes.
Section 113. Exclusion of Aliens Involved in Money Laundering
This section will provide for inadmissibility of any individual who a
consular officer has reason to believe has or is engaged in certain
money laundering offenses, or any criminal activity in a foreign country
that would constitute such an offense if committed in the United States,
regardless of whether a judgment of conviction has been entered or
avoided due to flight, corruption, etc. This section treats money
launderers with the same standard applicable to drug traffickers and
will make the United States' ability to exclude aliens involved in such
activities less dependent upon the Nation's ability to draw inferences
about a person's intent to do something illicit in the United States.
Money laundering offenses are, in general, related to underlying crimes
involving moral turpitude that are already grounds for exclusion under
the Immigration and Nationality Act.
As an added deterrent, the amendment allows the consular officer to
exclude the money launderer's family members, while also giving the
Attorney General the authority to waive such exclusion if he determines
that exceptional circumstances exist.
Section 114. Standing to Contest Forfeiture of Funds
Deposited Into Foreign Bank that has a Correspondent Account in the
United States
Section 114 creates a new provision in the civil forfeiture statute,
18 U.S.C. 981(k), authorizing the forfeiture of funds found in an
interbank account. The new provision is necessary to reconcile the law
regarding the forfeiture of funds in bank accounts with the realities of
the global movement of electronic funds and the use of off-shore banks
to insulate criminal proceeds from forfeiture.
To prevent drug dealers and other criminals from taking advantage of
certain nuances of forfeiture law to insulate their property from
forfeiture even though it is deposited in a bank account in the United
States, it is necessary to change the law regarding the location of the
debt that a bank owes to its depositor, and the identity of the real
party in interest with standing to contest the forfeiture. The amendment
in this section addresses the location issue by treating a deposit made
into an account in a foreign bank that has a correspondent account at a
U.S. bank as if the deposit had been made into the U.S. bank directly.
Second, the section treats the deposit in the correspondent account as a
debt owed directly to the depositor, and not as a debt owed to the
respondent bank. In other words, the correspondent account is treated as
if it were the foreign bank itself, and the funds in the correspondent
account were debts owed to the foreign bank's customers.
Under this arrangement, if funds traceable to criminal activity are
deposited into a foreign bank, the Government may bring a forfeiture
action against funds in that bank's correspondent account, and only the
initial depositor, and not the intermediary bank, would have standing to
contest it.
The section authorizes the Attorney General to suspend or terminate a
forfeiture in cases where there exists a conflict of laws between the
U.S. and the jurisdiction in which the foreign bank is located, where
such suspension or termination would be in the interest of justice and
not harm U.S. national interests.
Section 115. Subpoenas for Records Regarding Funds in
Correspondent Bank Accounts
Section 115 gives the Attorney General and the Secretary of the
Treasury new authority to subpoena records from a foreign bank that
relate to transactions occurring overseas. Under this provision, a
foreign bank that maintains a correspondent account in the United States
must have a representative in the United States who will accept service
of a subpoena for any records of any transaction with the foreign bank
that occurs overseas. This is necessary to enable law enforcement to
determine the source of money being placed in the United States through
the correspondent banking system. The duty to comply with such a
subpoena is now a requirement for foreign banks that choose to avail
themselves of access to that system in the United States.
Subsection (c) delays the effective date for the requirement to
appoint a person authorized to accept service of a subpoena for 30 days,
but once in effect, the provision allows the Government to subpoena
records relating to transactions occurring before the effective date of
the Act.
Subsection (d) contains a conforming amendment, revising the existing
authority in 18 U.S.C. 3486 to allow the Attorney General to issue
subpoenas in money laundering cases. Currently, section 3486 contains
such authority in health care fraud and child pornography cases. Thus,
the subpoena would be issued in the manner and for the purposes
previously authorized for the issuance of such subpoenas in those cases.
See United States v. Doe , 235 F.3d 256 (6th Cir. 2001) (discussing
standard for enforcement of administrative subpoena issued under section
3486).
Section 116. Authority to Order Convicted Criminal to Return
Property Located Abroad
Section 116 authorizes a court to order a criminal defendant to
repatriate his property to the United States in criminal cases. In
criminal forfeiture cases, the sentencing court is authorized to order
the forfeiture of ``substitute assets'' when the defendant has placed
the property otherwise subject to forfeiture ``beyond the jurisdiction
of the court.'' Frequently, this provision is applied when a defendant
has transferred drug proceeds or other criminally derived property to a
foreign country. In many cases, however, the defendant has no other
assets in the United States of a value commensurate with the forfeitable
property overseas. In such cases, ordering the forfeiture of substitute
assets is a hollow sanction.
This section amends 21 U.S.C. 853 to make clear that a court in a
criminal case may issue a repatriation order--either post-trial as part
of the criminal sentence and judgment, or pre-trial pursuant to the
court's authority under 21 U.S.C. 853(e) to restrain property--so that
they will be available for forfeiture. Failure to comply with such an
order would be punishable as a contempt of court, or it could result in
a sentencing enhancement, such as a longer prison term, under the U.S.
Sentencing Guidelines, or both.
Section 117. Corporation Represented by a Fugitive
Currently, 28 U.S.C. 2466 permits a court to disallow the claim filed
in a forfeiture proceeding by a person who is a fugitive in a related
criminal case. The amendment clarifies that a natural person who is a
fugitive may not circumvent this provision by filing, or having another
person file, a claim on behalf of a corporation that the fugitive
controls.
Section 118. Enforcement of Foreign Judgments
Under current law, 28 U.S.C. 2467(d) gives Federal courts the
authority to enforce civil and criminal forfeiture judgments entered by
foreign courts. This section amends that provision to include a
mechanism for preserving property subject to forfeiture in a foreign
country.
Specifically, a Federal court could issue a restraining order under
18 U.S.C. 983(j) or register and enforce a foreign restraining order, if
the Attorney General certified that such foreign order was obtained in
accordance with the principles of due process. A person seeking to
contest the restraining order could do so on the ground that 28 U.S.C.
2467 was not properly applied to the particular case, but could not
oppose the restraining order on any ground that could also be raised in
the proceedings pending in a foreign court. This provision prevents
a litigant from taking ``two bites at the apple'' by raising
objections to the basis for the forfeiture in the Federal court that he
also raised, or is entitled to raise, in the foreign court where the
forfeiture action is pending. It complements the existing provision in
section 2467(e) providing that the Federal court is bound by the
findings of fact of the foreign court, and may not look behind such
findings in determining whether to enter an order enforcing a foreign
forfeiture judgment.
This section also amends 28 U.S.C. 2467 to make clear that it is not
necessary to prove that the person asserting an interest in the property
received actual notice of the forfeiture proceedings. As is the case
with respect to forfeitures under U.S. law, it is sufficient if the
foreign nation takes steps to provide notice, in accordance with the
principles of due process. See Gonzalez v. United States, 1997 WL 278123
(S.D.N.Y. 1997) (``the [G]overnment is not required to ensure actual
receipt of notice that is properly mailed''); Albajon v. Gugliotta , 72
F. Supp. 2d 1362 (S.D. Fla. 1999) (notice sent to various addresses on
claimant's identifications, and mailed after claimant released from
jail, is sufficient to satisfy due process, even if claimant never
received notice); United States v. Schiavo , 897 F. Supp. 644, 648 49
(D. Mass. 1995) (sending notice to fugitive's last known address is
sufficient; due process satisfied even if he did not receive the
notice).
Finally, 28 U.S.C. 2467 is amended to authorize the enforcement of a
forfeiture judgment based on any foreign offense that would constitute
an offense giving rise to a civil or criminal forfeiture of the same
property if the offense had been committed in the United States. This is
one of two safeguards that the statute contains against the enforcement
of judgments that the United States does not consider appropriate for
enforcement: if the judgment is based on an act that would not
constitute a crime in the United States, such as removing assets from
the reach of a repressive regime, it could not be enforced. In addition,
section 2467 already provides that a foreign judgment may only be
enforced by a Federal court at the request of the United States, and
only after the Attorney General has certified that the judgment was
obtained in accordance with the principles of due process. Thus, neither
a foreign Government nor a foreign private party could enforce a foreign
judgment on its own under this provision.
Section 119. Reporting Provisions and Anti-Terrorist
Activities of United States Intelligence Agencies
This section clarifies the authority of the Secretary of the Treasury
to share Bank Secrecy Act information with the intelligence community
for intelligence or counterintelligence activities related to domestic
or international terrorism. Under current law, the Secretary may share
BSA information with the intelligence community for the purpose of
investigating and prosecuting terrorism. This section would make clear
that the intelligence community may use this information for purposes
unrelated to law enforcement.
The provision would also expand a Right to Financial Privacy Act
(RFPA) exemption, currently applicable to law enforcement inquiries, to
allow an agency or department to share relevant financial records with
another agency or department involved in intelligence or
counterintelligence activities, investigations, or analyses related to
domestic or international terrorism. The section would also exempt from
most provisions of the RFPA a government authority engaged in
investigations of or analyses related to domestic or international
terrorism. This section would also authorize the sharing of financial
records obtained through a Federal grand jury subpoena when relevant to
intelligence or counterintelligence activities, investigations, or
analyses related to domestic or international terrorism. In each case,
the transferring governmental entity must certify that there is reason
to believe that the financial records are relevant to such an activity,
investigation, or analysis.
Finally, this section facilitates government access to information
contained in suspected terrorists' credit reports when the governmental
inquiry relates to an investigation of, or intelligence activity or
analysis relating to, domestic or international terrorism. Even though
private entities such as lenders and insurers can access an individual's
credit history, the government is strictly limited in its ability under
current law to obtain the information. This section would permit those
investigating suspected terrorists prompt access to credit histories
that may reveal key information about the terrorist's plan or source of
funding--without notifying the target. To obtain the information, the
governmental authority must certify to the credit bureau that the
information is necessary to conduct a terrorism investigation or
analysis. The amendment would also create a safe harbor from liability
for credit bureaus acting in good faith that comply with a government
agency's request for information.
Section 120. Financial Crimes Enforcement Network
The Financial Crimes Enforcement Network, or FinCEN, was created by
executive order in 1990, and its duties augmented by several subsequent
orders. Its mission is to create and maintain a computer system that
holds information on financial crimes--allowing law enforcement agencies
to view and query the data with appropriate safeguards--and to analyze
the information to identify leads for further investigation or possible
prosecution.
This section codifies the executive orders, establishing FinCEN as a
permanent bureau of the Treasury, giving it a separate authorization (FY
2002 through FY 2005) and assigning duties consistent with those of the
executive orders. This section also makes the Director of FinCEN a
Presidential appointee, with a four year term. Additionally, the section
establishes a special unit within FinCEN to deal with informal
value-transferring arrangements such as the hawala organizations thought
to be a method by which some terrorists transfer funds outside of normal
banking channels. Also assigned as a new duty is support of the Treasury
Secretary's efforts in tracking and controlling foreign terrorists'
assets by providing computer storage and analysis to the new Foreign
Terrorist Asset Tracking Center recently established at the Office of
Foreign Assets Control.
References in section 120(c)(2) to section 552(a) of title V and the
Right to Financial Privacy Act are not intended by the Committee to
impose additional and/or more stringent standards than what the Privacy
Act outlines.
This section also requires the Treasury Secretary to report to
Congress regularly on compliance with laws requiring the reporting of
foreign bank accounts, along with methods for improving compliance. The
Committee is aware that non-compliance with such regulations is a
possible method of laundering money or financing terrorism, and that
compliance over the last decades has been unacceptably low--probably in
the single-digit percentages.
Section 121. Customs Service Border Searches
This section authorizes the U.S. Customs Service to conduct
warrantless searches of outbound mail transmitted by or for the Postal
Service for bulk cash, dangerous contraband, and other items subject to
the laws enforced by Customs. Because the Customs Service is responsible
for enforcing laws vital to the national interest, including provisions
on the export of weapons of mass destruction, child pornography, and
munitions, there is a critical need for Customs to have this authority.
The Customs Service currently has the authority to conduct such
warrantless searches in virtually every situation in which people or
merchandise cross the U.S. border, including the authority to search
shipments sent by private carrier, such as Federal Express or United
Parcel Service. This section simply extends this authority to outbound
mail sent via the Postal Service, and is intended to ensure that in rule
and practice Postal mail is subject to the same types of border searches
as currently are authorized for private carrier shipments. This section
is not intended to change in any way the existing authority of Customs
to conduct border searches of shipments sent by private carriers.
The provision includes safeguards prohibiting Customs officers from
reading any correspondence in mail sent by the Postal Service without a
search warrant or the written consent of the sender or addressee.
Finally, with regard to sealed letter class mail exported by the Postal
Service, it is intended that Customs officers must have reasonable
suspicion that such mail contains merchandise before opening or
examining it. This parallels the existing rule for Customs border
searches of imported letter class mail. See 19 C.F.R. 145.3.
Section 122. Prohibition on False Statements to Financial
Institutions Concerning the Identity of a Customer
This section makes it a Federal crime, punishable by up to 5 years in
prison, for a person submitting information to a financial institution
to knowingly falsify or conceal their true identity in a transaction
with a financial institution, including a bank, securities firm, or
insurance company.
Section 123. Verification of Identification
Section 123(a) amends 31 U.S.C. 5318 by adding a new subsection
governing the identification of account holders. Paragraph (1) directs
Treasury to prescribe regulations setting forth minimum standards for
customer identification by financial institutions in connection with the
opening of an account. By referencing ``customers'' in this section, the
Committee intends that the regulations prescribed by Treasury take an
approach similar to that of regulations promulgated under title V of the
Gramm-Leach-Bliley Act of 1999, where the functional regulators defined
``customers'' and ``customer relationship'' for purposes of the
financial privacy rules. Under this approach, for example, where a
mutual fund sells its shares to the public through a broker-dealer and
maintains a ``street name'' or omnibus account in the broker-dealer's
name, the individual purchasers of the fund shares are customers of the
broker-dealer, rather than the mutual fund. The mutual fund would not be
required to ``look through'' the broker-dealer to identify and verify
the identities of those customers. Similarly, where a mutual fund sells
its shares to a qualified retirement plan, the plan, and not its
participants, would be the fund's customers. Thus, the fund would not be
required to ``look through'' the plan to identify its participants.
Paragraph (2) requires that the regulations must, at a minimum,
require financial institutions to implement procedures to verify (to the
extent reasonable and practicable) the identity of any person seeking
to open an account, maintain records of the information used
to do so, and consult applicable lists of known or suspected terrorist
or terrorist organizations. The lists of known or suspected terrorists
that the Committee intends financial institutions to consult are those
already supplied to financial institutions by the Office of Foreign
Asset Control (OFAC), and occasionally by law enforcement and regulatory
authorities, as in the days immediately following the September 11,
2001, attacks on the World Trade Center and the Pentagon. It is the
Committee's intent that the verification procedures prescribed by
Treasury make use of information currently obtained by most financial
institutions in the account opening process. It is not the Committee's
intent for the regulations to require verification procedures that are
prohibitively expensive or impractical.
Paragraph (3) requires that Treasury consider the various types of
accounts maintained by various financial institutions, the various
methods of opening accounts, and the various types of identifying
information available in promulgating its regulations. This would
require Treasury to consider, for example, the feasibility of obtaining
particular types of information for accounts opened through the mail,
electronically, or in other situations where the accountholder is not
physically present at the financial institution. Millions of Americans
open accounts at mutual funds, broker-dealers, and other financial
institutions in this manner; it is not the Committee's intent that the
regulations adopted pursuant to this legislation impose burdens that
would make this prohibitively expensive or impractical. This provision
allows Treasury to adopt regulations that are appropriately tailored to
these types of accounts.
Current regulatory guidance instructs depository institutions to make
reasonable efforts to determine the true identity of all customers
requesting an institution's services. (See, e.g., FDIC Division of
Supervision Manual of Exam Policies, section 9.4 VI.) The Committee
intends that the regulations prescribed under this section adopt a
similar approach, and impose requirements appropriate to the size,
location, and type of business of an institution.
Paragraph (4) requires that Treasury consult with the appropriate
functional regulator in developing the regulations. This will help
ensure that the regulations are appropriately tailored to the business
practices of various types of financial institutions, and the risks that
such practices may pose.
Paragraph (5) gives each functional regulator the authority to
exempt, by regulation or order, any financial institution or type of
account from the regulations prescribed under paragraph (1).
Paragraph (6) requires that Treasury's regulations prescribed under
paragraph (1) become effective within one year after enactment of this
bill.
Section 124. Consideration of Anti-Money Laundering Record
This section amends the Bank Holding Company Act and Federal Deposit
Insurance Act to require Federal banking regulators, when considering
merger applications, to take into account the effectiveness of all
parties to the transaction in combating and preventing money laundering
activities, including in overseas branches.
Section 125. Reporting of Suspicious Activities by Informal
Underground Banking Systems, such as Hawalas
Although the Committee believes that informal value transfer banking
systems like hawalas are already adequately covered by references to
money transmitting businesses in certain provisions of existing law,
this section makes that understanding explicit. First, it makes clear
that informal value transfer banking systems are included in the
definition of ``financial institutions'' under the Bank Secrecy Act.
Second, it makes clear such systems are included under statutory
registration requirements for money transmitting businesses. Third, it
makes clear that informal value transfer banking systems are included
under record-keeping rules for international wire transfers.
The section requires the Secretary of the Treasury to report to
Congress within one year from the date of enactment on the need for any
additional legislation relating to informal value transfer banking
systems. The report is to cover such items as anti-money laundering and
other regulatory controls, including a discussion of whether the $5,000
threshold for the filing of suspicious activity reports (SARs) should be
lowered for hawalas and similar systems.
TITLE II--PUBLIC-PRIVATE COOPERATION
Section 201. Establishment of Highly Secure Network
This section directs the Secretary of the Treasury to establish a
highly secure computer network dedicated to (1) receiving electronic
filings of reports of suspicious activity and large currency
transactions filed by financial institutions; and (2) providing
financial institutions with alerts and other information regarding
suspicious activity that warrants immediate and enhanced scrutiny. The
network is to be fully operational within nine months of the date of
enactment of this legislation.
Section 202. Report on Improvements in Data Access and Other Issues
The section requires the Secretary of the Treasury to file three
separate reports to Congress within six months of enactment, covering:
(1) Progress made in the improvements of data entry, data access and
data analysis with respect to the computer systems maintained by the
Financial Crimes Enforcement Network (FinCEN);
(2) Technical, legal and other barriers to the exchange of financial
crime prevention and detection information between Federal
law-enforcement agencies; and,
(3) The nature and extent of private banking activities in the United
States.
The Committee continues to be concerned that FinCEN computer systems
are not used to their maximum efficiency because it is difficult, costly
and time-consuming to enter data into them; analytical tools need
constant improvement; and a number of technical and legal constraints as
well as some inter-agency ``turf'' issues appear to prevent all
financial crime data from being housed in a single system to which all
Federal law enforcement has access. The Committee believes that constant
improvement must be made to the FinCEN system's hardware and software to
improve its effectiveness, and that until such barriers to data-sharing
are eliminated, FinCEN will be impaired in performance of its mission,
and enforcement of anti-money-laundering and anti-terrorism laws will
suffer as a result.
Section 203. Reports to the Financial Services Industry on
Suspicious Financial Activities
This section directs the Secretary of the Treasury to disseminate
quarterly reports to the financial services industry identifying and
analyzing patterns of suspicious financial activity disclosed by the
reports filed by the industry pursuant to the Bank Secrecy Act.
Section 204. Efficient Use of Currency Transaction Report System
This section requires the Secretary of the Treasury to report to
Congress within 90 days of enactment on (1) possible expansion of the
statutory exemptions to the CTR requirement available under current law;
and (2) methods for improving compliance by financial institutions with
the exemptions. The Committee intends that the Secretary's report look
specifically at methods to reduce unnecessary filing of CTRs, and to
improve the quality of data available to law enforcement. The Committee
does not intend that the Secretary's review encompass the issue of
increasing the monetary thresholds for filing CTRs.
Section 205. Public-Private Task Force on Terrorist Financing Issues
This section mandates the creation of a public-private task force,
under the aegis of the Bank Secrecy Act Advisory Group, to focus on
issues related to terrorist financing. Among the issues to be addressed
by the task force are the methods used by terrorist organizations to
transfer funds globally and within the U.S., including through the use
of charitable organizations; the relationship between international
narcotics traffickers and foreign terrorist organizations; and the means
of facilitating the identification of accounts and transactions
involving terrorist groups, and facilitating the exchange of information
concerning terrorist financing between financial institutions and law
enforcement organizations.
Section 206. Suspicious Activity Reporting Requirements
This section directs the Secretary of the Treasury, in consultation
with the Securities Exchange Commission (SEC), to publish by no later
than December 31, 2001, a proposed regulation requiring securities
broker-dealers to file Suspicious Activity Reports. The Secretary is
also authorized, in consultation with the Commodity Futures Trading
Commission (CFTC), to prescribe regulations requiring futures commission
merchants, commodity trading advisors, and commodity pool operators
registered under the Commodity Exchange Act (CEA) to file Suspicious
Activity Reports.
At the time the Secretary of the Treasury proposes any reporting
rules for futures commission merchants, the Secretary should consult
with the Securities and Exchange Commission and the Commodity Futures
Trading Commission and take steps to provide for a reporting process for
entities registered as both securities brokers or dealers and futures
commission merchants that requires only a single report, to the extent
practicable and consistent with the Bank Secrecy Act. The Secretary
should also act to prevent inconsistent regulations being applied to
dually registered entities. Further, the Secretary should consult with
the Commodity Futures Trading Commission to promote the use of a single
reporting form for the Commodity Futures Trading Commission and
Treasury, to the extent practicable and consistent with the Bank Secrecy
Act.
The Committee notes that, under the Bank Secrecy Act, the Secretary
currently has the authority to require Suspicious Activity Reports of
entities similar to futures commission merchants, commodity trading
advisors, and commodity pool operators, namely registered investment
advisors and registered investment companies. Accordingly, registered
investment advisors and registered investment companies are not
specifically identified in section 206(a). The Secretary and the
Commodity Futures Trading Commission should consider the money
laundering regulations and requirements imposed on registered investment
companies and investment advisors when considering what regulations, if
any, should apply to registered commodity pool operators and commodity
trading advisors so as to ensure that these similar entities are treated
in a comparable manner.
Section 207. Amendments Relating to Reporting of Suspicious Activities
Subsection (a) of section 207 makes certain technical and clarifying
amendments to 31 U.S.C. 5318(g)(3), the Bank Secrecy Act's ``safe
harbor'' provision that protects financial institutions that disclose
possible violations of law or regulation from civil liability for
reporting their suspicions and for not alerting those identified in the
reports. The safe harbor is directed at Suspicious Activity Reports and
similar reports to the government and regulatory authorities under the
Bank Secrecy Act.
First, section 207(a) amends section 5318(g)(3) to make clear that
the safe harbor from civil liability applies in arbitration, as well as
judicial, proceedings. Second, it amends section 5318(g)(3) to clarify
the safe harbor's coverage of voluntary disclosures (that is, those not
covered by the SAR regulatory reporting requirement). The language in
section 5318(g)(3)(A) providing that ``any financial institution that *
* * makes a disclosure pursuant to * * * any other authority * * * shall
not be liable to any person'' is not intended to avoid the application
of the reporting and disclosure provisions of the Federal securities
laws to any person, or to insulate any issuers from private rights of
actions for disclosures made under the Federal securities laws.
Subsection 207(b) amends section 5318(g)(2) of title 31--which
currently prohibits notification of any person involved in a transaction
reported in a SAR that a SAR has been filed--to clarify (1) that any
government officer or employee who learns that a SAR has been filed may
not disclose that fact to any person identified in the SAR, except as
necessary to fulfill the officer or employee's official duties, and (2)
that disclosure by a financial institution of potential wrongdoing in a
written employment reference provided in response to a request from
another financial institution pursuant to section 18(v) of the Federal
Deposit Insurance Act, or in a written termination notice or employment
reference provided in accordance with the rules of a securities
self-regulatory organization, is not prohibited simply because the
potential wrongdoing was also reported in a SAR.
Section 208. Authorization to Include Suspicions of Illegal
Activity in Written Employment References
This section deals with the same employment reference issue addressed
in section 207 but with respect to title 12. Occasionally banks develop
suspicions that a bank officer or employee has engaged in potentially
unlawful activity. These suspicions typically result in the bank filing
a SAR. Under present law, however, the ability of banks to share these
suspicions in written employment references with other banks when such
an officer or employee seeks new employment is unclear. Section 208
would amend 12 U.S.C. 1828 to permit a bank, upon request by another
bank, to share information in a written employment reference concerning
the possible involvement of a current or former officer or employee in
potentially unlawful activity without fear of civil liability for
sharing the information, but only to the extent that the disclosure does
not contain information which the bank knows to be false, and the bank
has not acted with malice or with reckless disregard for the truth in
making the disclosure.
Section 209. International Cooperation on Identification of
Originators of Wire Transfers
This section directs the Secretary of the Treasury, in consultation
with the Attorney General and the Secretary of State, to (1) take all
reasonable steps to encourage foreign governments to require the
inclusion of the name of the originator in wire transfer instructions
sent to the U.S. and other countries; and (2) report annually to
Congress on Treasury's progress in achieving this objective, and on
impediments to instituting a regime in which all appropriate
identification about wire transfer recipients is included with wire
transfers from their point of origination until disbursement.
The Committee is concerned that inadequate information on the
originator of wire transfers from a number of foreign jurisdictions
makes it difficult for both law enforcement and financial institutions
to properly understand the source of funds entering the United States in
wire transfers. Such a lack of clarity could aid money launderers or
terrorists in moving their funds into the United States financial
system. Additionally, while arguments have been made that there are
technical impediments to requiring that complete addressee information
appear on all wire transfers terminating in or passing through the
United States, the Committee believes that having such information is
technically feasible and would aid both financial institutions in
performing due diligence and law enforcement in tracking or seizing
money that is the derivative of or would be used in the commission of a
crime.
Section 210. Check Truncation Study
This section directs the Secretary of the Treasury, in consultation
with the Attorney General and the Federal Reserve Board of Governors, to
study the impact on crime prevention, law enforcement, and the
administration of consumer protection laws of check electronification,
through truncation or migration from paper checks.
TITLE III--COMBATING INTERNATIONAL MONEY LAUNDERING
Section 301. Special Measures for Jurisdictions, Financial
Institutions, or International Transactions of Primary Money Laundering
Concern
Section 301 adds a new section 5318A to the Bank Secrecy Act,
authorizing the Secretary of the Treasury to require domestic financial
institutions and agencies to take one or more of five ``special
measures'' if the Secretary finds that reasonable grounds exist to
conclude that a foreign jurisdiction, a financial institution operating
outside the United States, a class of international transactions, or one
or more types of accounts is a ``primary money laundering concern.''
Prior to invoking any of the special measures contained in section
5318A(b), the Secretary is required to consult with the Chairman of the
Board of Governors of the Federal Reserve System, any other appropriate
Federal banking agency, the Securities and Exchange Commission, the
National Credit Union Administration Board, and, in the sole discretion
of the Secretary, such other agencies and interested parties as the
Secretary may find to be appropriate. Among other things, this
consultation is designed to ensure that the Secretary possesses
information on the effect that any particular special measure may have
on the domestic and international banking system. In addition, the
Committee encourages the Secretary to consult with non-governmental
``interested parties,'' including, for example, the Bank Secrecy Act
Advisory Group, to obtain input from those who may be subject to a
regulation or order under this section.
Prior to invoking any of the special measures contained in section
5318A, the Secretary must consider three discrete factors, namely (1)
whether other countries or multilateral groups have taken similar
action; (2) whether the imposition of the measure would create a
significant competitive disadvantage, including any significant cost or
burden associated with compliance, for firms organized or licensed in
the United States; and (3) the extent to which the action would have an
adverse systemic impact on the payment system or legitimate business
transactions.
Finally, subsection (a) makes clear that this new authority is not to
be construed as superseding or restricting any other authority of the
Secretary or any other agency.
Subsection (b) of the new section 5318A outlines the five ``special
measures'' the Secretary may invoke against a foreign jurisdiction,
financial institution operating outside the U.S., class of transaction
within, or involving, a jurisdiction outside the U.S., or one or more
types of accounts, that he finds to be of primary money laundering
concern.
The first such measure would require domestic financial institutions\2\
to maintain records and/or file reports on certain transactions
involving the primary money laundering concern, to include any
information the Secretary requires, such as the identity and address of
participants in a transaction, the legal capacity in which the
participant is acting, the beneficial ownership of the funds (in
accordance with steps that the Secretary determines to be reasonable and
practicable to obtain such information), and a description of the
transaction. The records and/or reports authorized by this section must
involve transactions from a foreign jurisdiction, a financial
institution operating outside the United States, or class of
international transactions within, or involving, a foreign jurisdiction,
and are not to include transactions that both originate and terminate
in, and only involve, domestic financial institutions.
\2\The term ``domestic financial institution'' means a financial
institution, wherever organized, that operates in the United States, but
only to the extent of its U.S. operations. See 31 U.S.C. 5312(b)(2).
The second special measure would require domestic financial
institutions to take such steps as the Secretary determines to be
reasonable and practicable to ascertain beneficial ownership of accounts
opened or maintained in the U.S. by a foreign person (excluding publicly
traded foreign corporations) associated with what has been determined to
be a primary money laundering concern.
The third special measure the Secretary could impose in the case of a
primary money laundering concern would require domestic financial
institutions, as a condition of opening or maintaining a
``payable-through account'' for a foreign financial institution, to
identify each customer (and representative of the customer) who is
permitted to use or whose transactions flow through such an account, and
to obtain for each customer (and representative) information that is
substantially comparable to the information it would obtain with respect
to its own customers. A ``payable-through account'' is defined for
purposes of the
legislation as an account, including a transaction account (as
defined in section 19(b)(1)(C) of the Federal Reserve Act), opened at a
depository institution by a foreign financial institution by means of
which the foreign financial institution permits its customers to engage,
either directly or through a sub-account, in banking activities usual in
connection with the business of banking in the United States.
The fourth special measure the Secretary could impose in the case of
a primary money laundering concern would require domestic financial
institutions, as a condition of opening or maintaining a
``correspondent'' account for a foreign financial institution, to
identify each customer (and representative of the customer) who is
permitted to use or whose transactions flow through such an account, and
to obtain for each customer (and representative) information that is
substantially comparable to the information that it would obtain with
respect to its own customers. With respect to a bank, the term
``correspondent account'' means an account established to receive
deposits from and make payments on behalf of a foreign financial
institution.
The fifth measure the Secretary could impose in the case of a primary
money laundering concern would prohibit or impose conditions (beyond
those already provided for in the third and fourth measures) on domestic
financial institutions' correspondent or payable-through accounts with
foreign banking institutions. In addition to the required consultation
with the Chairman of the Board of Governors of the Federal Reserve,
prior to imposing this measure the Secretary is also directed to consult
with the Secretary of State and the Attorney General.
The five special measures authorized by this section may be imposed
in any sequence or combination as the Secretary determines. The first
four special measures may be imposed by regulation, order, or otherwise
as permitted by law. However, if the Secretary proceeds by issuing an
order, the order must be accompanied by a notice of proposed rulemaking
relating to the imposition of the special measure, and may not remain in
effect for more than 120 days, except pursuant to a regulation
prescribed on or before the end of the 120-day period. The fifth special
measure may be imposed only by regulation.
Section 5318A(c) guides the Secretary's determination whether
reasonable grounds exist to conclude that a jurisdiction, financial
institution class of international transactions or type of account is of
``primary money laundering concern.'' In determining whether reasonable
grounds exist for reaching this conclusion regarding a particular
jurisdiction, the Secretary is to consider relevant information,
including: (1) evidence that organized criminal groups, international
terrorists, or both, have transacted business in that jurisdiction; (2)
the extent to which the jurisdiction or financial institutions operating
in the jurisdiction offer bank secrecy or other regulatory advantages to
nonresidents; (3) the quality of the jurisdiction's bank supervision and
anti-money laundering laws; (4) the volume of financial transactions
occurring in the jurisdiction relative to its economic size; (5) whether
credible international entities characterize the jurisdiction as a bank
secrecy haven; (6) whether the United States has a mutual legal
assistance treaty with the jurisdiction and what the U.S. experience in
obtaining information from the jurisdiction has been; and (7) the extent
to which the jurisdiction is characterized by high levels of official or
institutional corruption.
In deciding whether reasonable grounds exist to conclude that an
institution, a class of transactions, or a type of account represent a
primary money laundering concern, the Secretary is to consider: (1) the
extent to which the institution, transaction, or account facilitates
money laundering; (2) the extent to which the institution, transaction,
or account is used for legitimate business; and (3) the extent to which
the Secretary's finding will be effective in guarding against money
laundering.
To ensure that the Secretary is apprised of the pertinent diplomatic
and law enforcement implications of determinations made pursuant to this
section, subsection (c)(1) requires the Secretary to consult with the
Secretary of State and the Attorney General. The Committee expects that
the Secretary will not routinely determine that reasonable grounds exist
to conclude that a jurisdiction, financial institution, class of
international transactions, or type of account is of primary money
laundering concern, but instead will exercise this authority only to
combat identified and significant money laundering threats.
Subsection (d) requires the Secretary to notify, in writing, the
relevant Committees in the House and Senate within 10 days of taking a
special measure to address a primary money laundering concern.
Subsection (e) defines the terms ``account,'' ``correspondent
account,'' and ``payable-through account'' for banks, and requires the
Secretary, in consultation with the appropriate Federal functional
regulators, to define these terms for application to non-bank financial
institutions.
Subsection (e) also requires the Secretary of the Treasury to
promulgate regulations defining beneficial ownership of an account for
purposes of subchapter II of title 31. The regulations are required to
address issues related to an individual's authority to fund, direct or
manage the account (including the power to direct payments into or out
of the account), and an individual's material interest in the income
or corpus of the account, and must ensure that the
identification of individuals under this section does not extend to any
individual whose beneficial interest in the income or corpus of the
account is immaterial.
Section 301 also amends the definition of ``financial institution''
in 31 U.S.C. 5312 to include credit unions, futures commission
merchants, commodity trading advisors, and commodity pool operators
registered, or required to register, under the Commodity Exchange Act.
The section also clarifies that for purposes of this Act and any
amendment made by this Act to any other provision of law, the term
``Federal functional regulator'' includes the Commodity Futures Trading
Commission.
Section 302. Special Due Diligence for Correspondent Accounts
and Private Banking Accounts
Section 302 amends 31 U.S.C. 5318 to require financial institutions
that establish, maintain, administer, or manage private banking or
correspondent accounts for non-U.S. persons to establish appropriate,
specific, and, where necessary, enhanced due diligence policies,
procedures, and controls to detect and report instances of money
laundering through those accounts.
The section requires financial institutions to apply enhanced due
diligence procedures when opening or maintaining a correspondent account
for a foreign bank operating (1) under 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; or (2)
under a license issued by a foreign country that has been designated (a)
as non-cooperative with international anti-money laundering principles
by an intergovernmental group or organization of which the United States
is a member, with which designation the Secretary of the Treasury
concurs, or (b) by the Secretary as warranting special measures due to
money laundering concerns.
The enhanced due diligence procedures include (1) ascertaining the
identity of each of the owners of the foreign bank (except for banks
that are publicly traded); (2) conducting enhanced scrutiny of the
correspondent account to guard against money laundering and report any
suspicious activity; and (3) ascertaining whether the foreign bank
provides correspondent accounts to other foreign banks and, if so, the
identity of those foreign banks and related due diligence information.
For private banking accounts requested or maintained by a non-United
States person, a financial institution is required to implement
procedures for (1) ascertaining the identity of the nominal and
beneficial owners of, and the source of funds deposited into, the
account as needed to guard against money laundering and report
suspicious activity; and (2) conducting enhanced scrutiny of any such
account requested or maintained by, or on behalf of, a senior foreign
political figure, or his immediate family members or close associates,
to prevent, detect and report transactions that may involve the proceeds
of foreign corruption. A private bank account is defined as an account
(or any combination of accounts) that requires a minimum aggregate
deposit of funds or other assets of not less than $1 million; is
established on behalf of one or more individuals who have a direct or
beneficial ownership in the account; and is assigned to, or administered
or managed by, an officer, employee or agent of a financial institution
acting as a liaison between the institution and the direct or beneficial
owner of the account.
This section directs the Secretary of the Treasury, within 6 months
of enactment of this bill and in consultation with appropriate Federal
functional regulators, to further define and clarify, by regulation, the
requirements imposed by this section.
Section 303. Prohibition on United States Correspondent
Accounts with Foreign Shell Banks
This section bars U.S. depository institutions from providing
correspondent banking services to foreign shell banks that have no
physical presence in any country. It also requires depository
institutions to take reasonable steps to ensure that any correspondent
account established, maintained, administered or managed for a foreign
bank is not being used to indirectly provide banking services to another
foreign bank that does not have a physical presence in any country. This
section does not prevent a U.S. bank from opening a correspondent
account for a foreign bank that is (1) affiliated with a depository
institution, credit union, or other foreign bank that maintains a
physical presence in the U.S. or a foreign country, and (2) is subject
to supervision by a banking authority in the country regulating the
affiliated entity.
The Secretary of the Treasury is directed to prescribe regulations
delineating reasonable steps necessary for a depository institution to
comply with this section.
Section 304. Anti-Money Laundering Programs
This section directs financial institutions to establish anti-money
laundering programs, including the development of internal policies,
procedures, and controls; the designation of an officer of the financial
institution responsible for compliance; an ongoing employee
training program; and an independent audit function to test programs.
The Secretary of the Treasury is required to prescribe regulations
implementing this section within 180 days of enactment of this Act,
taking into consideration the extent to which the requirements imposed
by such regulations are commensurate with the size, location and
activities of the financial institutions to which such regulations
apply. The Committee believes that the regulations to be issued by the
Secretary under this section, and those issued by banking and thrift
regulators as well under other authority, could contribute to the
detection and prevention of money laundering crimes by reconciling rules
that could be interpreted in a way that places conflicting burdens on
financial institutions.
Section 305. Concentration Accounts at Financial Institutions
This section gives the Secretary of the Treasury discretionary
authority to prescribe regulations governing the maintenance of
concentration accounts by financial institutions, to ensure that these
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. If promulgated, the regulations are
required to prohibit financial institutions from allowing clients to
direct transactions into, out of, or through the concentration accounts
of the institution; prohibit financial institutions and their employees
from informing customers of the existence of, or means of identifying,
the concentration accounts of the institution; and to establish written
procedures governing the documentation of all transactions involving a
concentration account.
Section 306. International Cooperation in Investigations of
Money Laundering, Financial Crimes, and the Finances of Terrorist Groups
This section directs the Secretary of the Treasury, in consultation
with the Attorney General, the Secretary of State, and the Board of
Governors of the Federal Reserve, to enter into negotiations with the
appropriate financial supervisory agencies and other officials of any
foreign country whose financial institutions do business with United
States financial institutions or which may be utilized by any foreign
terrorist organization, any person who is a member or representative of
any such organization, or any person engaged in money laundering or
financial or other crimes. The purpose of the negotiations is to further
cooperative efforts to (1) ensure that foreign banks and other financial
institutions maintain adequate records of large United States currency
transactions, and transaction and account information relating to any
foreign terrorist organization or member or representative thereof, or
any person engaged in money laundering or financial or other crimes; and
(2) establish a mechanism for making such records available to United
States law enforcement officials and domestic financial institution
supervisors, where appropriate.
The Secretary of the Treasury is required to submit an interim report
to Congress on progress in the negotiations outlined above within one
year of the date of enactment of this Act, and a final report on the
outcome of the negotiations to the President and the Congress within two
years. In the final report, the Secretary is directed to identify
countries whose financial institutions are being utilized by any foreign
terrorist organization or representative or member thereof, or any
person engaged in money laundering or financial or other crimes, and
which have not reached agreement with the United States on the
maintenance and exchange of information relating to such activities.
If the President determines that a country identified in the report
is not negotiating in good faith with the United States to reach
agreement on matters identified in this section, or that a financial
institution in such country has not complied with a United States
request for information regarding a foreign terrorist organization or a
person engaged in money laundering for any such organization, the
President may impose appropriate penalties on such country. The
penalties imposed by the President may include prohibiting persons,
institutions, or other entities in the relevant foreign country from (1)
participating in any United States dollar clearing or wire transfer
system; and (2) maintaining an account with any bank or other financial
institution chartered under United States law.
Section 307. Prohibition on Acceptance of Any Bank Instrument
for Unlawful Internet Gambling
This section prohibits a gambling business from accepting bank
instruments in connection with unlawful Internet gambling. Covered
instruments include credit cards, electronic fund transfers, and checks.
A financial intermediary would not be held responsible under this
section unless it was involved in the actual operation of an illegal
Internet gambling site. The legislation covers only unlawful Internet
gambling, and would not apply to future lawful Internet gambling should
a State decide to authorize it, as Nevada did this year in passing
legislation to authorize in-State Internet gambling, provided such
operations do not violate Federal law.
Subsection (b) defines the term ``bets or wagers'' as the staking or
risking by any person of something of value upon the outcome of a
contest of others, a sporting event, or a game predominantly
subject to chance with the agreement that the winner will receive
something of greater value than the amount staked or risked. This
subsection clarifies that ``bets or wagers'' does not include a bona
fide business transaction governed by the securities laws; a transaction
subject to the Commodity Exchange Act; an over-the-counter derivative
instrument; a contract of indemnity or guarantee; a contract for life,
health, or accident insurance; a deposit with a depository institution;
or certain participation in a simulation sports game or education game.
The subsection also clarifies that ``business of betting or wagering''
does not generally include any financial intermediary (creditor, credit
card issuer, insured depository institution, transmitter of an electric
fund transfer, money transmitting business, or network used to effect a
credit transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or any participant in such
network). Subsection (b) also defines the terms ``Internet'' and
``unlawful Internet gambling.''
Subsection (c) authorizes civil remedies, including a preliminary
injunction, or injunction against any person other than an Internet
service provider (unless that Internet service provider is acting in
concert or participation with a person violating this section and
receives actual knowledge of the order) to prevent or restrain a
violation of this section, including expedited proceedings in exigent
circumstances. The subsection authorizes such proceedings to be brought
by the U.S. Attorney General, or the attorney general of a State or
other appropriate State official. The subsection clarifies that this
section should not be construed as altering, superseding, or otherwise
affecting the application of the Indian Gaming Regulatory Act. The
subsection requires that, before any proceeding under this subsection is
initiated against an insured depository institution, notification must
be made to the appropriate Federal banking agency and such agency must
be allowed a reasonable time to issue the appropriate regulatory order.
Subsection (d) authorizes criminal penalties for violation of 307(a),
including fines or imprisonment for not more than five years, or both.
The subsection also authorizes a permanent injunction against a person
convicted under this subsection, enjoining such person from placing,
receiving, or otherwise making bets or wagers or sending, receiving, or
inviting information assisting in the placing of bets or wagers.
Subsection (e) provides that the safe harbor provided to a financial
intermediary (creditor, credit card issuer, financial institution,
operator of a terminal at which an electronic fund transfer may be
initiated, money transmitting business, or national, regional, or local
network) under subsection (b)(2) does not apply to a financial
intermediary that operates, manages, supervises, or directs an Internet
website at which unlawful bets or wagers are or may be placed, received,
or otherwise made; or is owned or controlled by any person who operates,
manages, supervises, or directs such an Internet website.
Subsection (f) allows the appropriate Federal banking agency to
prohibit an insured depository institution from extending credit, or
facilitating an extension of credit, electronic fund transfer, or money
transmitting service, or from paying, transferring, or collecting on any
check, draft, or other instrument drawn on any depository institution,
where the institution has actual knowledge that a person is violating
this section in connection with such activities. This subsection, in
conjunction with subsections (b)(2) and (e), is intended to ensure that
a financial intermediary is not held liable for a violation of this
section solely based on the unknowing and unintentional involvement of
the intermediary through the use of the facilities of such intermediary
in an unlawful Internet gambling transaction, unless the intermediary
acted as an agent of a gambling business and had: (1) actual knowledge
that the specific transaction is an unlawful Internet gambling
transaction; and (2) the intent to engage in the business of submitting
into the payment system Internet gambling transactions prohibited by
this section.
Section 308. Internet Gambling In or Through Foreign Jurisdictions
This section provides that, in deliberations between the U.S.
Government and any other country on money laundering, corruption, and
crime issues, the U.S. Government should encourage cooperation by
foreign governments in identifying whether Internet gambling operations
are being used for money laundering, corruption, or other crimes,
advance policies that promote the cooperation by foreign governments in
the enforcement of this Act, and encourage the Financial Action Task
Force on Money Laundering to study the extent to which Internet gambling
operations are being used for money laundering.
TITLE IV--CURRENCY PROTECTION
Section 401. Counterfeiting Domestic Currency and Obligations
This section makes it a criminal offense to possess an electronic
image of an obligation or security document of the United States with
intent to defraud. The provision harmonizes counterfeiting language to
clarify that possessing either analog or digital copies with intent to
defraud constitutes an offense. This section mimics existing language
that makes it a felony to possess the plates from which currency can be
printed, and takes into account the fact that most counterfeit currency
seized today is generated by computers or computer-based equipment. The
section also increases maximum sentences for a series of counterfeiting
offenses.
Section 402. Counterfeiting Foreign Currency and Obligations
This section conforms the legal prohibition on counterfeiting foreign
security documents or obligations within the U.S. to that of
counterfeiting U.S. security documents or obligations, and raises
penalties to parity with those established in section 401.
Section 403. Production of Documents
This section allows the Secretary of the Treasury to authorize
production of currency, stamps or other security documents for foreign
countries if such work does not interfere with the production of such
documents for the U.S. and if the Secretary of State has concurred in
the production.
Section 404. Reimbursement
This section provides that the Treasury be fully reimbursed for the
printing authorized in section 403, including all real, administrative
and other costs, by the foreign nation for which production services are
performed.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of the House
of Representatives, 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 italic, existing
law in which no change is proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
CHAPTER 3--DEPARTMENT OF THE TREASURY
* * * * * * *
SUBCHAPTER I--ORGANIZATION
Sec.
301. Department of the Treasury.
* * * * * * *
310. Financial Crimes Enforcement Network
310. 311. Continuing in office.
* * * * * * *
SUBCHAPTER I--ORGANIZATION
* * * * * * *
310. Financial Crimes Enforcement Network
(a) In General.--The Financial Crimes Enforcement Network established
by order of the Secretary of the Treasury (Treasury Order Numbered
105-08) on April 25, 1990, shall be a bureau in the Department of the
Treasury.
(b) Director.--
(1) Appointment.--The head of the Financial Crimes Enforcement
Network shall be the Director who shall be appointed by the President,
by and with the consent of the Senate, to a term of 4 years.
(2) Duties and powers.--The duties and powers of the Director are as
follows:
(A) Advise and make recommendations on matters relating to financial
intelligence, financial criminal activities, and other financial
activities to the Under Secretary for Enforcement.
(B) Maintain a government-wide data access service, with access, in
accordance with applicable legal requirements, to the following:
(i) Information collected by the Department of the Treasury,
including report information filed under subchapters II and III of
chapter 53 of this title (such as reports on cash transactions, foreign
financial agency transactions and relationships, foreign currency
transactions, exporting and importing monetary instruments, and
suspicious activities), chapter 2 of Public Law 91 508, section 21 of
the Federal Deposit Insurance Act and section 6050I of the Internal
Revenue Code of 1986.
(ii) Information regarding national and international currency flows.
(iii) Other records and data maintained by other Federal, State,
local, and foreign agencies, including financial and other records
developed in specific cases.
(iv) Other privately and publicly available information.
(C) Analyze and disseminate the available data in accordance with
applicable legal requirements and policies and guidelines established by
the Secretary of the Treasury and the Under Secretary for Enforcement
to--
(i) identify possible criminal activity to appropriate Federal,
State, local, and foreign law enforcement agencies;
(ii) support ongoing criminal financial investigations and
prosecutions and related proceedings, including civil and criminal tax
and forfeiture proceedings;
(iii) identify possible instances of noncompliance with subchapters
II and III of chapter 53 of this title, chapter 2 of Public Law 91 508,
and section 21 of the Federal Deposit Insurance Act to Federal agencies
with statutory responsibility for enforcing compliance with such
provisions and other appropriate Federal regulatory agencies;
(iv) evaluate and recommend possible uses of special currency
reporting requirements under section 5326; and
(v) determine emerging trends and methods in money laundering and
other financial crimes.
(D) Establish and maintain a financial crimes communications center
to furnish law enforcement authorities with intelligence information
related to emerging or ongoing investigations and undercover operations.
(E) Furnish research, analytical, and informational services to
financial institutions, appropriate Federal regulatory agencies with
regard to financial institutions, and appropriate Federal, State, local,
and foreign law enforcement authorities, in accordance with policies and
guidelines established by the Secretary of the Treasury or the Under
Secretary of the Treasury for Enforcement, in the interest of detection,
prevention, and prosecution of terrorism, organized crime, money
laundering, and other financial crimes.
(F) Establish and maintain a special unit dedicated to combatting
the use of informal, nonbank networks and payment and barter system
mechanisms that permit the transfer of funds or the equivalent of funds
without records and without compliance with criminal and tax laws.
(G) Provide computer and data support and data analysis to the
Secretary of the Treasury for tracking and controlling foreign assets.
(H) Coordinate with financial intelligence units in other countries
on anti-terrorism and anti-money laundering initiatives, and similar
efforts.
(I) Administer the requirements of subchapters II and III of chapter
53 of this title, chapter 2 of Public Law 91 508, and section 21 of the
Federal Deposit Insurance Act, to the extent delegated such authority by
the Secretary of the Treasury.
(J) Such other duties and powers as the Secretary of the Treasury
may delegate or prescribe.
(c) Requirements Relating to Maintenance and Use of Data Banks.--The
Secretary of the Treasury shall establish and maintain operating
procedures with respect to the government-wide data access service and
the financial crimes communications center maintained by the Financial
Crimes Enforcement Network which provide--
(1) for the coordinated and efficient transmittal of information to,
entry of information into, and withdrawal of information from, the data
maintenance system maintained by the Network, including--
(A) the submission of reports through the Internet or other secure
network, whenever possible;
(B) the cataloguing of information in a manner that facilitates
rapid retrieval by law enforcement personnel of meaningful data; and
(C) a procedure that provides for a prompt initial review of
suspicious activity reports and other reports, or such other means as
the Secretary may provide, to identify information that warrants
immediate action; and
(2) in accordance with section 552a of title 5 and the Right to
Financial Privacy Act of 1978, appropriate standards and guidelines for
determining--
(A) who is to be given access to the information maintained by the
Network;
(B) what limits are to be imposed on the use of such information; and
(C) how information about activities or relationships which involve
or are closely associated with the exercise of constitutional rights is
to be screened out of the data maintenance system.
(d) Authorization of Appropriations.--There are authorized to be
appropriated for the Financial Crimes Enforcement Network such sums as
may be necessary for fiscal years 2002, 2003, 2004, and 2005.
310 311. Continuing in office
When the term of office of an officer of the Department of the
Treasury ends, the officer may continue to serve until a successor is
appointed and qualified.
* * * * * * *
SUBTITLE IV--MONEY
* * * * * * *
CHAPTER 51--COINS AND CURRENCY
* * * * * * *
SUBCHAPTER II--GENERAL AUTHORITY
* * * * * * *
5114. Engraving and printing currency and security documents
(a) The Secretary of the Treasury
(a) Authority To Engrave and Print.--
(1) In general .--The Secretary of the Treasury shall engrave and
print United States currency and bonds of the United States Government
and currency and bonds of United States territories and possessions from
intaglio plates on plate printing presses the Secretary selects.
However, other security documents and checks may be printed by any
process the Secretary selects. Engraving and printing shall be carried
out within the Department of the Treasury if the Secretary decides the
engraving and printing can be carried out as cheaply, perfectly, and
safely as outside the Department.
(2) Engraving and printing for other governments.--The Secretary of
the Treasury may, if the Secretary determines that it will not interfere
with engraving and printing needs of the United States, produce
currency, postage stamps, and other security documents for foreign
governments, subject to a determination by the Secretary of State that
such production would be consistent with the foreign policy of the
United States.
* * * * * * *
SUBCHAPTER IV--BUREAU OF ENGRAVING AND PRINTING
* * * * * * *
5143. Payment for services
The Secretary of the Treasury shall impose charges for Bureau of
Engraving and Printing services the Secretary provides to an agency ,
any foreign government, or any territory of the United States. The
charges shall be in amounts the Secretary considers adequate to cover
the costs of the services (including administrative and other costs
related to providing the services). The agency , foreign government, or
territory of the United States shall pay promptly bills submitted by the
Secretary.
* * * * * * *
CHAPTER 53--MONETARY TRANSACTIONS
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
5311. Declaration of purpose.
* * * * * * *
5318A. Special measures for jurisdictions, financial institutions,
or international transactions of primary money laundering concern.
* * * * * * *
5331. Bulk cash smuggling into or out of the United States.
5332. Subpoenas for records.
* * * * * * *
5311. Declaration of purpose.
It is the purpose of this subchapter (except section 5315) to require
certain reports or records where they have a high degree of usefulness
in criminal, tax, or regulatory investigations or proceedings , or in
the conduct of intelligence or counterintelligence activities, including
analysis, to protect against international terrorism.
5312. Definitions and application
(a) In this subchapter--
(1) * * *
(2) ``financial institution'' means--
(A) * * *
* * * * * * *
(E) an insured institution (as defined in section 401(a) of the
National Housing Act (12 U.S.C. 1724(a)));
(E) any credit union;
* * * * * * *
(R) a licensed sender of money;
(R) a licensed sender of money or any other person who engages as a
business in the transmission of funds, including through an informal
value transfer banking system or network of people facilitating the
transfer of value domestically or internationally outside of the
conventional financial institutions system;
* * * * * * *
(c) Additional Definitions.--For purposes of this subchapter, the
following definitions shall apply:
(1) Certain institutions included in definition.--The term
``financial institution'' (as defined in subsection (a)) includes the
following:
(A) Any futures commission merchant, commodity trading advisor, or
commodity pool operator registered, or required to register, under the
Commodity Exchange Act.
* * * * * * *
5317. Search and forfeiture of monetary instruments
(a) * * *
(b) Searches at Border .--For purposes of ensuring compliance with
the requirements of section 5316, a customs officer may stop and search,
at the border and without a search warrant, any vehicle, vessel,
aircraft, or other conveyance, any envelope or other container, and any
person entering or departing from the United States.
(c) If a report required under section 5316 with respect to any
monetary instrument is not filed (or if filed, contains a material
omission or misstatement of fact), the instrument and any interest in
property, including a deposit in a financial institution, traceable to
such instrument may be seized and forfeited to the United States
Government. Any property, real or personal, involved in a transaction or
attempted transaction in violation of section 5324(b), or any property
traceable to such property, may be seized and forfeited to the United
States Government. A monetary instrument transported by mail or a common
carrier, messenger, or bailee is being transported under this subsection
from the time the instrument is delivered to the United States Postal
Service, common carrier, messenger, or bailee through the time it is
delivered to the addressee, intended recipient, or agent of the
addressee or intended recipient without being transported further in, or
taken out of, the United States.
(b) Searches at Border.--
(1) In general.--For purposes of ensuring compliance with the laws
enforced by the United States Customs Service, a customs officer may
stop and search, at the border and without a search warrant, any
vehicle, vessel, aircraft, or other conveyance, any envelope or other
container, and any person entering, transiting, or departing from the
United States.
(2) International shipments of mail.--With respect to shipments of
international mail that are exported or imported by the United States
Postal Service, the Customs Service and other appropriate Federal
agencies shall, subject to paragraph (3), apply the customs laws of the
United States and all other laws relating to the importation or
exportation of such shipments in the same manner to both shipments by
the United States Postal Service and similar shipments by private
companies.
(3) Safeguards.--No provision of this subsection shall be construed
as authorizing any customs officer or any other person to read any
correspondence unless--
(A) a search warrant has been issued pursuant to Rule 41 of the
Federal Rules of Criminal Procedure which permits such correspondence to
be read; or
(B) the sender or addressee of the correspondence has given written
consent for any such action.
(c) Forfeiture.--
(1) In general.--The court in imposing sentence for any violation of
section 5313, 5316, or 5324 of this title, or section 6050I of the
Internal Revenue Code of 1986, or any conspiracy to commit such
violation, shall order the defendant to forfeit all property, real or
personal, involved in the offense and any property traceable thereto.
(2) Procedure.--Forfeitures under this subsection shall be governed
by the procedures established in section 413 of the Controlled
Substances Act and the guidelines established in paragraph (4).
(3) Civil forfeiture.--Any property involved in a violation of
section 5313, 5316, or 5324 of this title, or section 6050I of the
Internal Revenue Code of 1986, or any conspiracy to commit any such
violation, and any property traceable to any such violation or
conspiracy, may be seized and, subject to paragraph (4), forfeited to
the United States in accordance with the procedures governing civil
forfeitures in money laundering cases pursuant to section 981(a)(1)(A)
of title 18, United States Code.
(4) Proportionality of forfeiture.--
(A) In general.--Upon a showing by the property owner by a
preponderance of the evidence that any currency or monetary instruments
involved in the offense giving rise to the forfeiture were derived from
a legitimate source, and were intended for a lawful purpose, the court
shall reduce the forfeiture to the maximum amount that is not grossly
disproportional to the gravity of the offense.
(B) Factors to be considered.--In determining the amount of the
forfeiture, the court shall consider all aggravating and mitigating
facts and circumstances that have a bearing on the gravity of the
offense, including the following:
(i) The value of the currency or other monetary instruments involved
in the offense.
(ii) Efforts by the person committing the offense to structure
currency transactions, conceal property, or otherwise obstruct justice.
(iii) Whether the offense is part of a pattern of repeated
violations of Federal law.
5318. Compliance, exemptions, and summons authority
(a) * * *
* * * * * * *
(g) Reporting of Suspicious Transactions.--
(1) * * *
(2) Notification prohibited.-- A financial institution, and a
director, officer, employee, or agent of any financial institution, who
voluntarily reports a suspicious transaction, or that reports a
suspicious transaction pursuant to this section or any other authority,
may not notify any person involved in the transaction that the
transaction has been reported.
(3) Liability for disclosures.-- Any financial institution that
makes a disclosure of any possible violation of law or regulation or a
disclosure pursuant to this subsection or any other authority, and any
director, officer, employee, or agent of such institution, shall not be
liable to any person under any law or regulation of the United States or
any constitution, law, or regulation of any State or political
subdivision thereof, for such disclosure or for any failure to notify
the person involved in the transaction or any other person of such
disclosure.
(2) Notification prohibited.--
(A) In general.--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) the financial institution, director, officer, employee, or agent
may not notify any person involved in the transaction that the
transaction has been reported; and
(ii) no officer or employee of the Federal Government or of 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) Disclosures in certain employment references.--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, in a written employment reference that is provided in
accordance with section 18(v) of the Federal Deposit Insurance Act in
response to a request from another financial institution or a written
termination notice or employment reference that is provided in
accordance with the rules of the self-regulatory organizations
registered with the Securities and Exchange Commission, information that
was included in a report to which subparagraph (A) applies, but such
written employment reference may not disclose that such information was
also included in any such report or that such report was made.
(3) Liability for disclosures.--
(A) In general.--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 any person.
(B) Rule of construction.--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
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) Single designee for reporting suspicious transactions.--
(A) * * *
(B) Duty of designee.--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 or supervisory agency , supervisory agency, or United
States intelligence agency for use in the conduct of intelligence or
counterintelligence activities, including analysis, to protect against
international terrorism.
* * * * * * *
(h) Anti-Money Laundering Programs.--
(1) In general.-- In order to guard against money laundering through
financial institutions, the Secretary may require financial institutions
to carry out anti-money laundering 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) Regulations.-- The Secretary may prescribe minimum standards for
programs established under paragraph (1).
(h) Anti-Money Laundering Programs.--
(1) In general.--In order to guard against money laundering through
financial institutions, each financial institution shall establish
anti-money laundering programs, including, at a minimum--
(A) the development of internal policies, procedures, and controls;
(B) the designation of an officer of the financial institution
responsible for compliance;
(C) an ongoing employee training program; and
(D) an independent audit function to test programs.
(2) Regulations.--The Secretary may, after consultation with the
appropriate Federal functional regulators (as defined in section 509 of
the Gramm-Leach-Bliley Act), 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 regulations contained in part 103 of title 31, of the
Code of Federal Regulations, as in effect on the date of the enactment
of the Financial Anti-Terrorism Act of 2001, or any successor to such
regulations, for so long as such financial institution is not subject to
the provisions of such regulations.
(3) Concentration accounts.--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.
(i) Identification and Verification of Accountholders.--
(1) In general.--Subject to the requirements of this subsection, the
Secretary of the Treasury shall prescribe regulations setting forth the
minimum standards regarding customer identification that shall apply in
connection with the opening of an account at a financial institution.
(2) Minimum requirements.--The regulations shall, at a minimum,
require financial institutions to implement 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;
(C) consulting applicable lists of known or suspected terrorists or
terrorist organizations generated by government agencies to determine
whether a person seeking to open an account appears on any such list.
(3) Factors to be considered.--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) Certain financial institutions.--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) Exemptions.--The Secretary of the Treasury (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) Effective date.--Final regulations prescribed under this
subsection shall take effect before the end of the 1-year period
beginning on the date of the enactment of the Financial Anti-Terrorism
Act of 2001.
(j) Due Diligence for United States Private Banking and Correspondent
Bank Accounts Involving Foreign Persons.--
(1) In general.--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 to detect and report instances of
money laundering through those accounts.
(2) Minimum standards for correspondent accounts.--
(A) In general.--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
Secretary of the Treasury concurs; or
(II) by the Secretary as warranting special measures due to money
laundering concerns.
(B) Policies, procedures, and controls.--The enhanced due diligence
policies, procedures, and controls required under paragraph (1) for
foreign banks described in subparagraph (A) 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 section
5318(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) Minimum standards for private banking accounts.--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 section 5318(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, to prevent, detect, and report transactions
that may involve the proceeds of foreign corruption.
(4) Definitions.--For purposes of this subsection, the following
definitions shall apply:
(A) Offshore banking license.--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) Private bank account.--The term ``private bank 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.
(5) Regulatory authority.--Before the end of the 6-month period
beginning on the date of the enactment of the Financial Anti-Terrorism
Act of 2001, the Secretary, in consultation with the appropriate Federal
functional regulators (as defined in section 509 of the
Gramm-Leach-Bliley Act) shall further define and clarify, by regulation,
the requirements of this subsection.
(k) Prohibition on United States Correspondent Accounts With Foreign
Shell Banks.--
(1) In general.--A depository 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) Prevention of indirect service to foreign shell banks.--
(A) In general.--A depository institution shall take reasonable
steps to ensure that any correspondent account established, maintained,
administered, or managed by that 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.
(B) Regulations.--The Secretary shall, in regulations, delineate
reasonable steps necessary for a depository institution to comply with
this subsection.
(3) Exception.--Paragraphs (1) and (2) shall not be construed as
prohibiting a depository 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
other 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) Definitions.--For purposes of this section, the following
definitions shall apply:
(A) Affiliate.--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.
(B) Depository institution.--The ``depository institution''--
(i) has the meaning given such term in section 3 of the Federal
Deposit Insurance Act; and
(ii) includes a credit union.
(C) Physical presence.--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.
(l) Applicability of Rules.--Any rules prescribed pursuant to the
authority contained in section 21 of the Federal Deposit Insurance Act
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 through an informal value transfer
banking system or network of people facilitating the transfer of value
domestically or internationally outside of the conventional financial
institutions system.
5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary money laundering
concern
(a) International Counter-Money Laundering Requirements.--
(1) In general.--The Secretary may require domestic financial
institutions and domestic financial agencies to take 1 or more of the
special measures described in subsection (b) if the Secretary finds that
reasonable grounds exist for concluding that a jurisdiction outside of
the United States, 1 or more financial institutions operating outside of
the United States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States, or 1 or more
types of accounts is of primary money laundering concern, in accordance
with subsection (c).
(2) Form of requirement.--The special measures described in--
(A) subsection (b) may be imposed in such sequence or combination as
the Secretary shall determine;
(B) paragraphs (1) through (4) of subsection (b) may be imposed by
regulation, order, or otherwise as permitted by law; and
(C) subsection (b)(5) may be imposed only by regulation.
(3) Duration of orders; rulemaking.--Any order by which a special
measure described in paragraphs (1) through (4) of subsection (b) is
imposed (other than an order described in section 5326)--
(A) shall be issued together with a notice of proposed rulemaking
relating to the imposition of such special measure; and
(B) may not remain in effect for more than 120 days, except pursuant
to a regulation prescribed on or before the end of the 120-day period
beginning on the date of issuance of such order.
(4) Process for selecting special measures.--In selecting which
special measure or measures to take under this subsection, the
Secretary--
(A) shall consult with the Chairman of the Board of Governors of the
Federal Reserve System, any other appropriate Federal banking agency (as
defined in section 3 of the Federal Deposit Insurance Act), the
Securities and Exchange Commission, the National Credit Union
Administration Board, and in the sole discretion of the Secretary such
other agencies and interested parties as the Secretary may find to be
appropriate; and
(B) shall consider--
(i) whether similar action has been or is being taken by other
nations or multilateral groups;
(ii) whether the imposition of any particular special measure would
create a significant competitive disadvantage, including any undue cost
or burden associated with compliance, for financial institutions
organized or licensed in the United States; and
(iii) the extent to which the action or the timing of the action
would have a significant adverse systemic impact on the international
payment, clearance, and settlement system, or on legitimate business
activities involving the particular jurisdiction, institution, or class
of transactions.
(5) No limitation on other authority.--This section shall not be
construed as superseding or otherwise restricting any other authority
granted to the Secretary, or to any other agency, by this subchapter or
otherwise.
(b) Special Measures.--The special measures referred to in subsection
(a), with respect to a jurisdiction outside of the United States,
financial institution operating outside of the United States, class of
transaction within, or involving, a jurisdiction outside of the United
States, or 1 or more types of accounts are as follows:
(1) Recordkeeping and reporting of certain financial transactions.--
(A) In general.--The Secretary may require any domestic financial
institution or domestic financial agency to maintain records, file
reports, or both, concerning the aggregate amount of transactions, or
concerning each transaction, with respect to a jurisdiction outside of
the United States, 1 or more financial institutions operating outside of
the United States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States, or 1 or more
types of accounts if the Secretary finds any such jurisdiction,
institution, or class of transactions to be of primary money laundering
concern.
(B) Form of records and reports.--Such records and reports shall be
made and retained at such time, in such manner, and for such period of
time, as the Secretary shall determine, and shall include such
information as the Secretary may determine, including--
(i) the identity and address of the participants in a transaction or
relationship, including the identity of the originator of any funds
transfer;
(ii) the legal capacity in which a participant in any transaction is
acting;
(iii) the identity of the beneficial owner of the funds involved in
any transaction, in accordance with such procedures as the Secretary
determines to be reasonable and practicable to obtain and retain the
information; and
(iv) a description of any transaction.
(2) Information relating to beneficial ownership.--In addition to
any other requirement under any other provision of law, the Secretary
may require any domestic financial institution or domestic financial
agency to take such steps as the Secretary may determine to be
reasonable and practicable to obtain and retain information concerning
the beneficial ownership of any account opened or maintained in the
United States by a foreign person (other than a foreign entity whose
shares are subject to public reporting requirements or are listed and
traded on a regulated exchange or trading market), or a representative
of such a foreign person, that involves a jurisdiction outside of the
United States, 1 or more financial institutions operating outside of the
United States, 1 or more classes of transactions within, or involving, a
jurisdiction outside of the United States, or 1 or more types of
accounts if the Secretary finds any such jurisdiction, institution,
transaction, or account to be of primary money laundering concern.
(3) Information relating to certain payable-through accounts.--If
the Secretary finds a jurisdiction outside of the United States, 1 or
more financial institutions operating outside of the United States, or 1
or more classes of transactions within, or involving, a jurisdiction
outside of the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution or domestic
financial agency that opens or maintains a payable-through account in
the United States for a foreign financial institution involving any such
jurisdiction or any such financial institution operating outside of the
United States, or a payable through account through which any such
transaction may be conducted, as a condition of opening or maintaining
such account--
(A) to identify each customer (and representative of such customer)
of such financial institution who is permitted to use, or whose
transactions are routed through, such payable-through account; and
(B) to obtain, with respect to each such customer (and each such
representative), information that is substantially comparable to that
which the depository institution obtains in the ordinary course of
business with respect to its customers residing in the United States.
(4) Information relating to certain correspondent accounts.--If the
Secretary finds a jurisdiction outside of the United States, 1 or more
financial institutions operating outside of the United States, or 1 or
more classes of transactions within, or involving, a jurisdiction
outside of the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution or domestic
financial agency that opens or maintains a correspondent account in the
United States for a foreign financial institution involving any such
jurisdiction or any such financial institution operating outside of the
United States, or a correspondent account through which any such
transaction may be conducted, as a condition of opening or maintaining
such account--
(A) to identify each customer (and representative of such customer)
of any such financial institution who is permitted to use, or whose
transactions are routed through, such correspondent account; and
(B) to obtain, with respect to each such customer (and each such
representative), information that is substantially comparable to that
which the depository institution obtains in the ordinary course of
business with respect to its customers residing in the United States.
(5) Prohibitions or conditions on opening or maintaining certain
correspondent or payable-through accounts.--If the Secretary finds a
jurisdiction outside of the United States, 1 or more financial
institutions operating outside of the United States, or 1 or more
classes of transactions within, or involving, a jurisdiction outside of
the United States to be of primary money laundering concern, the
Secretary, in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve System, may prohibit, or impose conditions upon, the opening or
maintaining in the United States of a correspondent account or payable-
through account by any domestic financial institution or domestic
financial agency for or on behalf of a foreign banking institution, if
such correspondent account or payable-through account involves any such
jurisdiction or institution, or if any such transaction may be conducted
through such correspondent account or payable-through account.
(c) Consultations and Information To Be Considered in Finding
Jurisdictions, Institutions, Types of Accounts, or Transactions To Be of
Primary Money Laundering Concern.--
(1) In general.--In making a finding that reasonable grounds exist
for concluding that a jurisdiction outside of the United States, 1 or
more financial institutions operating outside of the United States, 1 or
more classes of transactions within, or involving, a jurisdiction
outside of the United States, or 1 or more types of accounts is of
primary money laundering concern so as to authorize the Secretary to
take 1 or more of the special measures described in subsection (b), the
Secretary shall consult with the Secretary of State, and the Attorney
General.
(2) Additional considerations.--In making a finding described in
paragraph (1), the Secretary shall consider in addition such information
as the Secretary determines to be relevant, including the following
potentially relevant factors:
(A) Jurisdictional factors.--In the case of a particular
jurisdiction--
(i) evidence that organized criminal groups, international
terrorists, or both, have transacted business in that jurisdiction;
(ii) the extent to which that jurisdiction or financial institutions
operating in that jurisdiction offer bank secrecy or special regulatory
advantages to nonresidents or nondomiciliaries of that jurisdiction;
(iii) the substance and quality of administration of the bank
supervisory and counter-money laundering laws of that jurisdiction;
(iv) the relationship between the volume of financial transactions
occurring in that jurisdiction and the size of the economy of the
jurisdiction;
(v) the extent to which that jurisdiction is characterized as an
offshore banking or secrecy haven by credible international
organizations or multilateral expert groups;
(vi) whether the United States has a mutual legal assistance treaty
with that jurisdiction, and the experience of United States law
enforcement officials, and regulatory officials in obtaining information
about transactions originating in or routed through or to such
jurisdiction; and
(vii) the extent to which that jurisdiction is characterized by high
levels of official or institutional corruption.
(B) Institutional factors.--In the case of a decision to apply 1 or
more of the special measures described in subsection (b) only to a
financial institution or institutions, or to a transaction or class of
transactions, or to a type of account, or to all 3, within or involving
a particular jurisdiction--
(i) the extent to which such financial institutions, transactions,
or types of accounts are used to facilitate or promote money laundering
in or through the jurisdiction;
(ii) the extent to which such institutions, transactions, or types
of accounts are used for legitimate business purposes in the
jurisdiction; and
(iii) the extent to which such action is sufficient to ensure, with
respect to transactions involving the jurisdiction and institutions
operating in the jurisdiction, that the purposes of this subchapter
continue to be fulfilled, and to guard against international money
laundering and other financial crimes.
(d) Notification of Special Measures Invoked by the Secretary.--Not
later than 10 days after the date of any action taken by the Secretary
under subsection (a)(1), the Secretary shall notify, in writing, the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate of any
such action.
(e) Definitions.--Notwithstanding any other provision of this
subchapter, for purposes of this section, the following definitions
shall apply:
(1) Bank definitions.--The following definitions shall apply with
respect to a bank:
(A) Account.--The term ``account''--
(i) means a formal banking or business relationship established to
provide regular services, dealings, and other financial transactions;
and
(ii) includes a demand deposit, savings deposit, or other
transaction or asset account and a credit account or other extension of
credit.
(B) Correspondent account.--The term ``correspondent account'' means
an account established to receive deposits from, make payments on behalf
of a foreign financial institution, or handle other financial
transactions related to such institution.
(C) Payable-through account.--The term ``payable-through account''
means an account, including a transaction account (as defined in section
19(b)(1)(C) of the Federal Reserve Act), opened at a depository
institution by a foreign financial institution by means of which the
foreign financial institution permits its customers to engage, either
directly or through a subaccount, in banking activities usual in
connection with the business of banking in the United States.
(D) Secretary.--The term ``Secretary'' means the Secretary of the
Treasury.
(2) Definitions applicable to institutions other than banks.--With
respect to any financial institution other than a bank, the Secretary
shall, after consultation with the appropriate Federal functional
regulators (as defined in section 509 of the Gramm-Leach-Bliley Act),
define by regulation the term ``account'', and shall include within the
meaning of that term, to the extent, if any, that the Secretary deems
appropriate, arrangements similar to payable-through and correspondent
accounts.
(3) Regulatory definition.--The Secretary shall promulgate
regulations defining beneficial ownership of an account for purposes of
this subchapter. Such regulations shall address issues related to an
individual's authority to fund, direct, or manage the account (including
the power to direct payments into or out of the account), and an
individual's material interest in the income or corpus of the account,
and shall ensure that the identification of individuals under this
section does not extend to any individual whose beneficial interest in
the income or corpus of the account is immaterial.
(4) Other terms.--The Secretary may, by regulation, further define
the terms in paragraphs (1) and (2) and define other terms for the
purposes of this section, as the Secretary deems appropriate.
5319. Availability of reports
The Secretary of the Treasury shall make information in a report
filed under section 5313, 5314, or 5316 of this title available to an
agency, including any State financial institutions supervisory agency,
on request of the head of the agency. The report shall be available for
a purpose consistent with those sections or a regulation prescribed
under those sections. The Secretary may only require reports on the use
of such information by any State financial institutions supervisory
agency for other than supervisory purposes. However, a report and
records of reports are exempt from disclosure under section 552 of title
5.
5319. Availability of reports
The Secretary of the Treasury shall make information in a report
filed under this subchapter available to an agency, including any State
financial institutions supervisory agency or United States intelligence
agency, upon request of the head of the agency. The report shall be
available for a purpose that is consistent with this subchapter. The
Secretary may only require reports on the use of such information by any
State financial institutions supervisory agency for other than
supervisory purposes or by United States intelligence agencies. However,
a report and records of reports are exempt from disclosure under section
552 of title 5.
* * * * * * *
5321. Civil penalties
(a)(1) A domestic financial institution, and a partner, director,
officer, or employee of a domestic financial institution, willfully
violating this subchapter or a regulation prescribed or order issued
under this subchapter (except sections 5314 and 5315 of this title or a
regulation prescribed under sections 5314 and 5315) , or willfully
violating a regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91 508, is liable to
the United States Government for a civil penalty of not more than the
greater of the amount (not to exceed $100,000) involved in the
transaction (if any) or $25,000. For a violation of section 5318(a)(2)
of this title or a regulation prescribed under section 5318(a)(2), a
separate violation occurs for each day the violation continues and at
each office, branch, or place of business at which a violation occurs or
continues.
* * * * * * *
5322. Criminal penalties
(a) A person willfully violating this subchapter or a regulation
prescribed or order issued under this subchapter (except section 5315 or
5324 of this title or a regulation prescribed under section 5315 or
5324) , or willfully violating a regulation prescribed under section 21
of the Federal Deposit Insurance Act or section 123 of Public Law 91
508, shall be fined not more than $250,000, or imprisoned for not more
than five years, or both.
(b) a person willfully violating this subchapter or a regulation
prescribed or order issued under this subchapter (except section 5315 or
5324 of this title or a regulation prescribed under section 5315 or
5324), or willfully violating a regulation prescribed under section 21
of the Federal Deposit Insurance Act or section 123 of Public Law 91
508, 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.
* * * * * * *
5324. Structuring transactions to evade reporting requirement prohibited
(a) Domestic Coin and Currency Transactions .--No person shall , for
the purpose of evading the reporting requirements of section 5313(a) or
5325 or any regulation prescribed under any such section-- section, the
reporting requirements imposed by any order issued under section 5326,
or the record keeping requirements imposed by any regulation prescribed
under section 21 of the Federal Deposit Insurance Act or section 123 of
Public Law 91 508--
(1) cause or attempt to cause a domestic financial institution to
fail to file a report required under section 5313(a) or 5325 or any
regulation prescribed under any such section , to file a report required
by any order issued under section 5326, or to maintain a record required
pursuant to any regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91 508;
(2) cause or attempt to cause a domestic financial institution to
file a report required under section 5313(a) or 5325 or any regulation
prescribed under any such section , to file a report required by any
order issued under section 5326, or to maintain a record required
pursuant to any regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91 508 that contains
a material omission or misstatement of fact; or
* * * * * * *
5330. Registration of money transmitting businesses
(a) * * *
* * * * * * *
(d) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Money transmitting business.--The term ``money transmitting
business'' means any business other than the United States Postal
Service which--
(A) provides check cashing, currency exchange, or money transmitting
or remittance services, or issues or redeems money orders, travelers'
checks, and other similar instruments or any other person who engages as
a business in the transmission of funds, including through an informal
value transfer banking system or network of people facilitating the
transfer of value domestically or internationally outside of the
conventional financial institutions system;
* * * * * * *
5331. Bulk cash smuggling into or out of the United States
(a) Criminal Offense.--
(1) In general.--Whoever, with the intent to evade a currency
reporting requirement under section 5316, knowingly conceals more than
$10,000 in currency or other monetary instruments on the person of such
individual or in any conveyance, article of luggage, merchandise, or
other container, and transports or transfers or attempts to transport or
transfer such currency or monetary instruments from a place within the
United States to a place outside of the United States, or from a place
outside the United States to a place within the United States, shall be
guilty of a currency smuggling offense and subject to punishment
pursuant to subsection (b).
(2) Concealment on person.--For purposes of this section, the
concealment of currency on the person of any individual includes
concealment in any article of clothing worn by the individual or in any
luggage, backpack, or other container worn or carried by such
individual.
(b) Penalty.--
(1) Term of imprisonment.--A person convicted of a currency
smuggling offense under subsection (a), or a conspiracy to commit such
offense, shall be imprisoned for not more than 5 years.
(2) Forfeiture.--In addition, the court, in imposing sentence under
paragraph (1), shall order that the defendant forfeit to the United
States, any property, real or personal, involved in the offense, and any
property traceable to such property, subject to subsection (d) of this
section.
(3) Procedure.--The seizure, restraint, and forfeiture of property
under this section shall be governed by section 413 of the Controlled
Substances Act.
(4) Personal money judgment.--If the property subject to forfeiture
under paragraph (2) is unavailable, and the defendant has insufficient
substitute property that may be forfeited pursuant to section 413(p) of
the Controlled Substances Act, the court shall enter a personal money
judgment against the defendant for the amount that would be subject to
forfeiture.
(c) Civil Forfeiture.--
(1) In general.--Any property involved in a violation of subsection
(a), or a conspiracy to commit such violation, and any property
traceable to such violation or conspiracy, may be seized and, subject to
subsection (d) of this section, forfeited to the United States.
(2) Procedure.--The seizure and forfeiture shall be governed by the
procedures governing civil forfeitures in money laundering cases
pursuant to section 981(a)(1)(A) of title 18, United States Code.
(3) Treatment of certain property as involved in the offense.--For
purposes of this subsection and subsection (b), any currency or other
monetary instrument that is concealed or intended to be concealed in
violation of subsection (a) or a conspiracy to commit such violation,
any article, container, or conveyance used, or intended to be used, to
conceal or transport the currency or other monetary instrument, and any
other property used, or intended to be used, to facilitate the offense,
shall be considered property involved in the offense.
(d) Proportionality of Forfeiture.--
(1) In general.--Upon a showing by the property owner by a
preponderance of the evidence that the currency or monetary instruments
involved in the offense giving rise to the forfeiture were derived from
a legitimate source, and were intended for a lawful purpose, the court
shall reduce the forfeiture to the maximum amount that is not grossly
disproportional to the gravity of the offense.
(2) Factors to be considered.--In determining the amount of the
forfeiture, the court shall consider all aggravating and mitigating
facts and circumstances that have a bearing on the gravity of the
offense, including the following:
(A) The value of the currency or other monetary instruments involved
in the offense.
(B) Efforts by the person committing the offense to structure
currency transactions, conceal property, or otherwise obstruct justice.
(C) Whether the offense is part of a pattern of repeated violations
of Federal law.
5332. Subpoenas for records
(a) Designation By Foreign Financial Institution of Agent.--Any
foreign financial institution that has a correspondent bank account at a
financial institution in the United States shall designate a person
residing in the United States as a person authorized to accept a
subpoena for bank records or other legal process served on the foreign
financial institution.
(b) Maintenance of Records By Domestic Financial Institution.--
(1) In general.--Any domestic financial institution that maintains a
correspondent bank account for a foreign financial institution shall
maintain records regarding the names and addresses of the owners of the
foreign financial institution, and the name and address of the person
who may be served with a subpoena for records regarding any funds
transferred to or from the correspondent account.
(2) Provision to law enforcement agency.--A domestic financial
institution shall provide names and addresses maintained under paragraph
(1) to a Government authority (as defined in section 1101(3) of the
Right to Financial Privacy Act of 1978) within 7 days of the receipt of
a request, in writing, for such records.
(c) Administrative Subpoena.--
(1) In general.--The Attorney General and the Secretary of the
Treasury may each issue an administrative subpoena for records relating
to the deposit of any funds into a dollar-denominated account in a
foreign financial institution that maintains a correspondent account at
a domestic financial institution.
(2) Manner of issuance.--Any subpoena issued by the Attorney General
or the Secretary of the Treasury under paragraph (1) shall be issued in
the manner described in section 3486 of this title, and may be served on
the representative designated by the foreign financial institution
pursuant to subsection (a) to accept legal process in the United States,
or in a foreign country pursuant to any mutual legal assistance treaty,
multilateral agreement, or other request for international law
enforcement assistance.
(d) Correspondent Account Defined.--For purposes of this section, the
term ``correspondent account'' has the same meaning as the term
``interbank account'' as such term is defined in section 984(c)(2)(B) of
title 18, United States Code.
* * * * * * *
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 25--COUNTERFEITING AND FORGERY
Sec.
470. Counterfeit acts committed outside the United States.
* * * * * * *
474. Plates or stones , stones, or analog, digital, or electronic
images for counterfeiting obligations or securities.
* * * * * * *
481. Plates or stones , stones, or analog, digital, or electronic
images for counterfeiting foreign obligations or securities.
* * * * * * *
470. Counterfeit acts committed outside the United States
A person who, outside the United States, engages in the act of--
(1) making, dealing, or possessing any counterfeit obligation or
other security of the United States; or
(2) making, dealing, or possessing any plate, stone, analog,
digital, or electronic image, or other thing, or any part thereof, used
to counterfeit such obligation or security,
if such act would constitute a violation of section 471, 473, or 474
if committed within the United States, shall be fined under this title,
imprisoned not more than 20 years, or both shall be punished as is
provided for the like offense within the United States.
471. Obligations or securities of United States
Whoever, with intent to defraud, falsely makes, forges, counterfeits,
or alters any obligation or other security of the United States, shall
be fined under this title or imprisoned not more than fifteen 20 years,
or both.
472. Uttering counterfeit obligations or securities
Whoever, with intent to defraud, passes, utters, publishes, or sells,
or attempts to pass, utter, publish, or sell, or with like intent brings
into the United States or keeps in possession or conceals any falsely
made, forged, counterfeited, or altered obligation or other security of
the United States, shall be fined under this title or imprisoned not
more than fifteen 20 years, or both.
473. Dealing in counterfeit obligations or securities
Whoever buys, sells, exchanges, transfers, receives, or delivers any
false, forged, counterfeited, or altered obligation or other security of
the United States, with the intent that the same be passed, published,
or used as true and genuine, shall be fined under this title or
imprisoned not more than ten 20 years, or both.
474. Plates or stones , stones, or analog, digital, or
electronic images for counterfeiting obligations or securities
(a) Whoever, having control, custody, or possession of any plate,
stone, or other thing, or any part thereof, from which has been printed,
or which may be prepared by direction of the Secretary of the Treasury
for the purpose of printing, any obligation or other security of the
United States, uses such plate, stone, or other thing, or any part
thereof, or knowingly suffers the same to be used for the purpose of
printing any such or similar obligation or other security, or any part
thereof, except as may be printed for the use of the United States by
order of the proper officer thereof; or
Whoever makes or executes any plate, stone, or other thing in the
likeness of any plate designated for the printing of such obligation or
other security; or
Whoever, with intent to defraud, makes, executes, acquires, scans,
captures, records, receives, transmits, reproduces, sells, or has in
such person's control, custody, or possession, an analog, digital, or
electronic image of any obligation or other security of the United
States; or
* * * * * * *
(b) For purposes of this section, the terms ``plate'', ``stone'',
``thing'', or ``other thing'' includes any electronic method used for
the acquisition, recording, retrieval, transmission, or reproduction of
any obligation or other security, unless such use is authorized by the
Secretary of the Treasury. For purposes of this section, the term
``analog, digital, or electronic image'' includes any analog, digital,
or electronic method used for the making, execution, acquisition,
scanning, capturing, recording, retrieval, transmission, or reproduction
of any obligation or security, unless such use is authorized by the
Secretary of the Treasury. The Secretary shall establish a system
(pursuant to section 504) to ensure that the legitimate use of such
electronic methods and retention of such reproductions by businesses,
hobbyists, press and others shall not be unduly restricted.
* * * * * * *
476. Taking impressions of tools used for obligations or securities
Whoever, without authority from the United States, takes, procures,
or makes an impression, stamp, analog, digital, or electronic image, or
imprint of, from or by the use of any tool, implement, instrument, or
thing used or fitted or intended to be used in printing, stamping, or
impressing, or in making other tools, implements, instruments, or things
to be used or fitted or intended to be used in printing, stamping, or
impressing any obligation or other security of the United States, shall
be fined under this title or imprisoned not more than ten 25 years, or
both.
477. Possessing or selling impressions of tools used for
obligations or securities
Whoever, with intent to defraud, possesses, keeps, safeguards, or
controls, without authority from the United States, any imprint, stamp,
analog, digital, or electronic image, or impression, taken or made upon
any substance or material whatsoever, of any tool, implement, instrument
or thing, used, fitted or intended to be used, for any of the purposes
mentioned in section 476 of this title; or
Whoever, with intent to defraud, sells, gives, or delivers any such
imprint, stamp, analog, digital, or electronic image, or impression to
any other person--
Shall be fined under this title or imprisoned not more than ten 25
years, or both.
478. Foreign obligations or securities
Whoever, within the United States, with intent to defraud, falsely
makes, alters, forges, or counterfeits any bond, certificate,
obligation, or other security of any foreign government, purporting to
be or in imitation of any such security issued under the authority of
such foreign government, or any treasury note, bill, or promise to pay,
lawfully issued by such foreign government and intended to circulate as
money, shall be fined under this title or imprisoned not more than five
20 years, or both.
479. Uttering counterfeit foreign obligations or securities
Whoever, within the United States, knowingly and with intent to
defraud, utters, passes, or puts off, in payment or negotiation, any
false, forged, or counterfeited bond, certificate, obligation, security,
treasury note, bill, or promise to pay, mentioned in section 478 of this
title, whether or not the same was made, altered, forged, or
counterfeited within the United States, shall be fined under this title
or imprisoned not more than three 20 years, or both.
480. Possessing counterfeit foreign obligations or securities
Whoever, within the United States, knowingly and with intent to
defraud, possesses or delivers any false, forged, or counterfeit bond,
certificate, obligation, security, treasury note, bill, promise to pay,
bank note, or bill issued by a bank or corporation of any foreign
country, shall be fined under this title or imprisoned not more than one
year 20 years, or both.
481. Plates or stones , stones, or analog, digital, or
electronic images for counterfeiting foreign obligations or securities
Whoever, within the United States except by lawful authority,
controls, holds, or possesses any plate, stone, or other thing, or any
part thereof, from which has been printed or may be printed any
counterfeit note, bond, obligation, or other security, in whole or in
part, of any foreign government, bank, or corporation, or uses such
plate, stone, or other thing, or knowingly permits or suffers the same
to be used in counterfeiting such foreign obligations, or any part
thereof; or
Whoever, except by lawful authority, makes or engraves any plate,
stone, or other thing in the likeness or similitude of any plate, stone,
or other thing designated for the printing of the genuine issues of the
obligations of any foreign government, bank, or corporation; or
Whoever, with intent to defraud, makes, executes, acquires, scans,
captures, records, receives, transmits, reproduces, sells, or has in
such person's control, custody, or possession, an analog, digital, or
electronic image of any bond, certificate, obligation, or other security
of any foreign government, or of any treasury note, bill, or promise to
pay, lawfully issued by such foreign government and intended to
circulate as money; or
* * * * * * *
Shall be fined under this title or imprisoned not more than five 25
years, or both.
482. Foreign bank notes
Whoever, within the United States, with intent to defraud, falsely
makes, alters, forges, or counterfeits any bank note or bill issued by a
bank or corporation of any foreign country, and intended by the law or
usage of such foreign country to circulate as money, such bank or
corporation being authorized by the laws of such country, shall be fined
under this title or imprisoned not more than two 20 years, or both.
483. Uttering counterfeit foreign bank notes
Whoever, within the United States, utters, passes, puts off, or
tenders in payment, with intent to defraud, any such false, forged,
altered, or counterfeited bank note or bill, mentioned in section 482 of
this title, knowing the same to be so false, forged, altered, and
counterfeited, whether or not the same was made, forged, altered, or
counterfeited within the United States, shall be fined under this title
or imprisoned not more than one year 20 years, or both.
484. Connecting parts of different notes
Whoever so places or connects together different parts of two or more
notes, bills, or other genuine instruments issued under the authority of
the United States, or by any foreign government, or corporation, as to
produce one instrument, with intent to defraud, shall be guilty of
forgery in the same manner as if the parts so put together were falsely
made or forged, and shall be fined under this title or imprisoned not
more than five 10 years, or both.
* * * * * * *
493. Bonds and obligations of certain lending agencies
Whoever falsely makes, forges, counterfeits or alters any note, bond,
debenture, coupon, obligation, instrument, or writing in imitation or
purporting to be in imitation of, a note, bond, debenture, coupon,
obligation, instrument or writing, issued by the Reconstruction Finance
Corporation, Federal Deposit Insurance Corporation, National Credit
Union Administration, Home Owners' Loan Corporation, Farm Credit
Administration, Department of Housing and Urban Development, or any land
bank, intermediate credit bank, insured credit union, bank for
cooperatives or any lending, mortgage, insurance, credit or savings and
loan corporation or association authorized or acting under the laws of
the United States, shall be fined under this title or imprisoned not
more than five 10 years, or both.
Whoever passes, utters, or publishes, or attempts to pass, utter or
publish any note, bond, debenture, coupon, obligation, instrument or
document knowing the same to have been falsely made, forged,
counterfeited or altered, contrary to the provisions of this section,
shall be fined under this title or imprisoned not more than five 10
years, or both.
* * * * * * *
CHAPTER 46--FORFEITURE
* * * * * * *
981. Civil forfeiture
(a)(1) The following property is subject to forfeiture to the United
States:
(A) Any property, real or personal, involved in a transaction or
attempted transaction in violation of section 5313(a) or 5324(a) of
title 31, or of section 6050I of the Internal Revenue Code of 1986, or
section 1956 or 1957 , 1957 or 1960 of this title, or any property
traceable to such property. However, no property shall be seized or
forfeited in the case of a violation of section 5313(a) of title 31 by a
domestic financial institution examined by a Federal bank supervisory
agency or a financial institution regulated by the Securities and
Exchange Commission or a partner, director, or employee thereof.
(B) Any property, real or personal, within the jurisdiction of the
United States, constituting, derived from, or traceable to, any proceeds
obtained directly or indirectly from an offense against a foreign nation
involving the manufacture, importation, sale, or distribution of a
controlled substance (as such term is defined for the purposes of the
Controlled Substances Act), within whose jurisdiction such offense would
be punishable by death or imprisonment for a term exceeding one year and
which would be punishable under the laws of the United States by
imprisonment for a term exceeding one year if such act or activity
constituting the offense against the foreign nation had occurred within
the jurisdiction of the United States.
(B) Any property, real or personal, within the jurisdiction of the
United States, constituting, derived from, or traceable to, any proceeds
obtained directly or indirectly from an offense against a foreign
nation, or any property used to facilitate such offense, if--
(i) the offense involves the manufacture, importation, sale, or
distribution of a controlled substance (as such term is defined for the
purposes of the Controlled Substances Act), or any other conduct
described in section 1956(c)(7)(B),
(ii) the offense would be punishable within the jurisdiction of the
foreign nation by death or imprisonment for a term exceeding one year,
and
(iii) the offense would be punishable under the laws of the United
States by imprisonment for a term exceeding one year if the act or
activity constituting the offense had occurred within the jurisdiction
of the United States.
* * * * * * *
(k) Correspondent Bank Accounts.--
(1) Treatment of accounts of correspondent bank in domestic
financial institutions.--
(A) In general.--For the purpose of a forfeiture under this section
or under the Controlled Substances Act, if funds are deposited into a
dollar-denominated bank account in a foreign financial institution, and
that foreign financial institution has a correspondent account with a
financial institution in the United States, the funds deposited into the
foreign financial institution (the respondent bank) shall be deemed to
have been deposited into the correspondent account in the United States,
and any restraining order, seizure warrant, or arrest warrant in rem
regarding such funds may be served on the correspondent bank, and funds
in the correspondent account up to the value of the funds deposited into
the dollar-denominated account in the foreign financial institution may
be seized, arrested or restrained.
(B) Authority to suspend.--The Attorney General, in consultation
with the Secretary, may suspend or terminate a forfeiture under this
section if the Attorney General determines that a conflict of law exists
between the laws of the jurisdiction in which the foreign bank is
located and the laws of the United States with respect to liabilities
arising from the restraint, seizure, or arrest of such funds, and that
such suspension or termination would be in the interest of justice and
would not harm the national interests of the United States.
(2) No requirement for government to trace funds.--If a forfeiture
action is brought against funds that are restrained, seized, or arrested
under paragraph (1), the Government shall not be required to establish
that such funds are directly traceable to the funds that were deposited
into the respondent bank, nor shall it be necessary for the Government
to rely on the application of Section 984 of this title.
(3) Claims brought by owner of the funds.--If a forfeiture action is
instituted against funds seized, arrested, or restrained under paragraph
(1), the owner of the funds may contest the forfeiture by filing a claim
pursuant to section 983.
(4) Definitions.--For purposes of this subsection, the following
definitions shall apply:
(A) Correspondent account.--The term ``correspondent account'' has
the meaning given to the term ``interbank account'' in section
984(c)(2)(B).
(B) Owner.--
(i) In general.--Except as provided in clause (ii), the term
``owner''--
(I) means the person who was the owner, as that term is defined in
section 983(d)(6), of the funds that were deposited into the foreign
bank at the time such funds were deposited; and
(II) does not include either the foreign bank or any financial
institution acting as an intermediary in the transfer of the funds into
the interbank account.
(ii) Exception.--The foreign bank may be considered the ``owner'' of
the funds (and no other person shall qualify as the owner of such funds)
only if--
(I) the basis for the forfeiture action is wrongdoing committed by
the foreign bank; or
(II) the foreign bank establishes, by a preponderance of the
evidence, that prior to the restraint, seizure, or arrest of the funds,
the foreign bank had discharged all or part of its obligation to the
prior owner of the funds, in which case the foreign bank shall be deemed
the owner of the funds to the extent of such discharged obligation.
982. Criminal forfeiture
(a)(1) The court, in imposing sentence on a person convicted of an
offense in violation of section 5313(a), 5316, or 5324 of title 31, or
of section 6050I of the Internal Revenue Code of 1986, or section 1956,
1957, or 1960 of this title, shall order that the person forfeit to the
United States any property, real or personal, involved in such offense,
or any property traceable to such property. However, no property shall
be seized or forfeited in the case of a violation of section 5313(a) of
title 31 by a domestic financial institution examined by a Federal bank
supervisory agency or a financial institution regulated by the
Securities and Exchange Commission or a partner, director, or employee
thereof.
* * * * * * *
CHAPTER 47--FRAUD AND FALSE STATEMENTS
Sec.
1001. Statements or entries generally.
* * * * * * *
1008. False statements concerning the identity of customers of
financial institutions.
* * * * * * *
1008. False statements concerning the identity of customers of
financial institutions
(a) In General.--Whoever, in connection with information submitted to
or requested by a financial institution, knowingly in any manner--
(1) falsifies, conceals, or covers up, or attempts to falsify,
conceal, or cover up, the identity of any person in connection with any
transaction with a financial institution;
(2) makes, or attempts to make, any materially false, fraudulent, or
fictitious statement or representation of the identity of any person in
connection with a transaction with a financial institution;
(3) makes or uses, or attempts to make or use, any false writing or
document knowing the same to contain any materially false, fictitious,
or fraudulent statement or entry concerning the identity of any person
in connection with a transaction with a financial institution; or
(4) uses or presents, or attempts to use or present, in connection
with a transaction with a financial institution, an identification
document or means of identification the possession of which is a
violation of section 1028;
shall be fined under this title, imprisoned not more than 5 years, or
both.
(b) Definitions.--In this section, the following definitions shall
apply:
(1) Financial institution.--The term ``financial institution''--
(A) has the same meaning as in section 20; and
(B) in addition, has the same meaning as in section 5312(a)(2) of
title 31, United States Code.
(2) Identification document.--The term ``identification document''
has the same meaning as in section 1028(d).
(3) Means of identification.--The term ``means of identification''
has the same meaning as in section 1028(d).
* * * * * * *
CHAPTER 95--RACKETEERING
Sec.
1951. Interference with commerce by threats or violence.
* * * * * * *
1960. Prohibition of illegal unlicensed money transmitting
businesses.
* * * * * * *
1956. Laundering of monetary instruments
(a) * * *
(b) (1) Whoever conducts or attempts to conduct a transaction
described in subsection (a)(1) or (a)(3), subsection (a)(1) or (a)(2) or
section 1957, or a transportation, transmission, or transfer described
in subsection (a)(2), is liable to the United States for a civil penalty
of not more than the greater of--
(1) (A) the value of the property, funds, or monetary instruments
involved in the transaction; or
(2) (B) $10,000.
(2) For purposes of adjudicating an action filed or enforcing a
penalty ordered under this section, the district courts shall have
jurisdiction over any foreign person, including any financial
institution authorized under the laws of a foreign country, against whom
the action is brought, if--
(A) service of process upon such foreign person is made under the
Federal Rules of Civil Procedure or the laws of the country where the
foreign person is found; and
(B) the foreign person--
(i) commits an offense under subsection (a) involving a financial
transaction that occurs in whole or in part in the United States;
(ii) converts to such person's own use property in which the United
States has an ownership interest by virtue of the entry of an order of
forfeiture by a court of the United States; or
(iii) is a financial institution that maintains a correspondent bank
account at a financial institution in the United States.
(3) The court may issue a pretrial restraining order or take any
other action necessary to ensure that any bank account or other property
held by the defendant in the United States is available to satisfy a
judgment under this section.
(c) As used in this section--
(1) * * *
* * * * * * *
(6) the term ``financial institution'' has the definition given that
term in section 5312(a)(2) of title 31, United States Code, or the
regulations promulgated thereunder;
(6) the term ``financial institution'' includes any financial
institution described in section 5312(a)(2) of title 31, United States
Code, or the regulations promulgated thereunder, as well as any foreign
bank, as defined in paragraph (7) of section 1(b) of the International
Banking Act of 1978 (12 U.S.C. 3101(7));
(7) the term ``specified unlawful activity'' means--
(A) * * *
(B) with respect to a financial transaction occurring in whole or in
part in the United States, an offense against a foreign nation
involving--
(i) * * *
(ii) murder, kidnapping, robbery, extortion, or destruction of
property by means of explosive or fire;
(ii) any act or acts constituting a crime of violence, as defined in
section 16 of this title;
* * * * * * *
(iv) bribery of a public official, or the misappropriation, theft,
or embezzlement of public funds by or for the benefit of a public
official;
(v) smuggling or export control violations involving munitions
listed in the United States Munitions List or technologies with military
applications as defined in the Commerce Control List of the Export
Administration Regulations; or
(vi) an offense with respect to which the United States would be
obligated by a bilateral treaty either to extradite the alleged offender
or to submit the case for prosecution, if the offender were found within
the territory of the United States;
* * * * * * *
(D) an offense under section 32 (relating to the destruction of
aircraft), section 37 (relating to violence at international airports),
section 115 (relating to influencing, impeding, or retaliating against a
Federal official by threatening or injuring a family member), section
152 (relating to concealment of assets; false oaths and claims;
bribery), section 215 (relating to commissions or gifts for procuring
loans), section 351 (relating to congressional or Cabinet officer
assassination), any of sections 500 through 503 (relating to certain
counterfeiting offenses), section 513 (relating to securities of States
and private entities), section 541 (relating to goods falsely
classified), section 542 (relating to entry of goods by means of false
statements), section 545 (relating to smuggling goods into the United
States), section 549 (relating to removing goods from Customs custody),
section 641 (relating to public money, property, or records), section
656 (relating to theft, embezzlement, or misapplication by bank officer
or employee), section 657 (relating to lending, credit, and insurance
institutions), section 658 (relating to property mortgaged or pledged to
farm credit agencies), section 666 (relating to theft or bribery
concerning programs receiving Federal funds), section 793, 794, or 798
(relating to espionage), section 831 (relating to prohibited
transactions involving nuclear materials), section 844 (f) or (i)
(relating to destruction by explosives or fire of Government property or
property affecting interstate or foreign commerce), section 875
(relating to interstate communications), section 922(1) (relating to the
unlawful importation of firearms), section 924(n) (relating to firearms
trafficking), section 956 (relating to conspiracy to kill, kidnap, maim,
or injure certain property in a foreign country), section 1005 (relating
to fraudulent bank entries), 1006 (relating to fraudulent Federal credit
institution entries), 1007 (relating to Federal Deposit Insurance
transactions), 1014 (relating to fraudulent loan section 1008 (relating
to false statements concerning the identity of customers of financial
institutions), section 1014 (relating to fraudulent loan or credit
applications), section 1030 (relating to computer fraud and abuse), 1032
(relating to concealment of assets from conservator, receiver, or
liquidating agent of financial institution), section 1111 (relating to
murder), section 1114 (relating to murder of United States law
enforcement officials), section 1116 (relating to murder of foreign
officials, official guests, or internationally protected persons),
section 1201 (relating to kidnapping), section 1203 (relating to hostage
taking), section 1361 (relating to willful injury of Government
property), section 1363 (relating to destruction of property within the
special maritime and territorial jurisdiction), section 1708 (theft from
the mail), section 1751 (relating to Presidential assassination),
section 2113 or 2114 (relating to bank and postal robbery and theft),
section 2280 (relating to violence against maritime navigation), section
2281 (relating to violence against maritime fixed platforms), or section
2319 (relating to copyright infringement), section 2320 (relating to
trafficking in counterfeit goods and services),, section 2332 (relating
to terrorist acts abroad against United States nationals), section 2332a
(relating to use of weapons of mass destruction), section 2332b
(relating to international terrorist acts transcending national
boundaries), or section 2339A or 2339B (relating to providing material
support to terrorists) of this title, section 46502 of title 49, United
States Code,, a felony violation of the Chemical Diversion and
Trafficking Act of 1988 (relating to precursor and essential chemicals),
section 590 of the Tariff Act of 1930 (19 U.S.C. 1590) (relating to
aviation smuggling), section 422 of the Controlled Substances Act
(relating to transportation of drug paraphernalia), section 38(c)
(relating to criminal violations) of the Arms Export Control Act,
section 11 (relating to violations) of the Export Administration Act of
1979, section 206 (relating to penalties) of the International Emergency
Economic Powers Act, section 16 (relating to offenses and punishment) of
the Trading with the Enemy Act, any felony violation of section 15 of
the Food Stamp Act of 1977 (relating to food stamp fraud) involving a
quantity of coupons having a value of not less than $5,000, any
violation of section 543(a)(1) of the Housing Act of 1949 (relating to
equity skimming), any felony violation of the Foreign Agents
Registration Act of 1938, as amended, or any felony violation of the
Foreign Corrupt Practices Act; or
* * * * * * *
1957. Engaging in monetary transactions in property derived
from specified unlawful activity
(a) * * *
* * * * * * *
(g) Any person who conceals more than $10,000 in currency on his or
her person, in any vehicle, in any compartment or container within any
vehicle, or in any container placed in a common carrier, and transports,
attempts to transport, or conspires to transport such currency in
interstate commerce on any public road or highway or on any bus, train,
airplane, vessel, or other common carrier, knowing that the currency was
derived from some form of unlawful activity, or knowing that the
currency was intended to be used to promote some form of unlawful
activity, shall be punished as provided in subsection (b). The
defendant's knowledge may be established by proof that the defendant was
willfully blind to the source or intended use of the currency. For
purposes of this subsection, the concealment of currency on the person
of any individual includes concealment in any article of clothing worn
by the individual or in any luggage, backpack, or other container worn
or carried by such individual.
* * * * * * *
1960. Prohibition of illegal money transmitting businesses
(a) Whoever conducts, controls, manages, supervises, directs, or owns
all or part of a business, knowing the business is an illegal money
transmitting business, shall be fined in accordance with this title or
imprisoned not more than 5 years, or both.
(b) As used in this section--
(1) the term ``illegal money transmitting business'' means a money
transmitting business which affects interstate or foreign commerce in
any manner or degree and--
(A) is intentionally operated without an appropriate money
transmitting license in a State where such operation is punishable as a
misdemeanor or a felony under State law; or
(B) fails to comply with the money transmitting business
registration requirements under section 5330 of title 31, United States
Code, or regulations prescribed under such section;
(2) the term ``money transmitting'' includes but is not limited to
transferring funds on behalf of the public by any and all means
including but not limited to transfers within this country or to
locations abroad by wire, check, draft, facsimile, or courier; and
(3) the term ``State'' means any State of the United States, the
District of Columbia, the Northern Mariana Islands, and any
commonwealth, territory, or possession of the United States.
1960. Prohibition of unlicensed money transmitting businesses
(a) Whoever knowingly conducts, controls, manages, supervises,
directs, or owns all or part of an unlicensed money transmitting
business, shall be fined in accordance with this title or imprisoned not
more than 5 years, or both.
(b) As used in this section--
(1) the term ``unlicensed money transmitting business'' means a
money transmitting business which affects interstate or foreign commerce
in any manner or degree and--
(A) is operated without an appropriate money transmitting license in
a State where such operation is punishable as a misdemeanor or a felony
under State law, whether or not the defendant knew that the operation
was required to be licensed or that the operation was so punishable;
(B) fails to comply with the money transmitting business
registration requirements under section 5330 of title 31, United States
Code, or regulations prescribed under such section; or
(C) otherwise involves the transportation or transmission of funds
that are known to the defendant to have been derived from a criminal
offense or are intended to be used to be used to promote or support
unlawful activity;
(2) the term ``money transmitting'' includes transferring funds on
behalf of the public by any and all means including but not limited to
transfers within this country or to locations abroad by wire, check,
draft, facsimile, or courier; and
(3) the term ``State'' means any State of the United States, the
District of Columbia, the Northern Mariana Islands, and any
commonwealth, territory, or possession of the United States.
* * * * * * *
PART II--CRIMINAL PROCEDURE
* * * * * * *
CHAPTER 223--WITNESSES AND EVIDENCE
* * * * * * *
3486. Administrative subpoenas
(a) Authorization.--(1)(A) In any investigation of--
(i)(I) a Federal health care offense; or (II) a Federal offense
involving the sexual exploitation or abuse of children, , (II) a Federal
offense involving the sexual exploitation or abuse of children, or (III)
a money laundering offense in violation of section 1956, 1957 or 1960 of
this title, the Attorney General; or
* * * * * * *
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 8. (a) * * *
* * * * * * *
(x) Depository Institution Involvement in Internet Gambling.--If any
appropriate Federal banking agency determines that any insured
depository institution is engaged in any of the following activities,
the agency may issue an order to such institution prohibiting such
institution from continuing to engage in any of the following
activities:
(1) Extending credit, or facilitating an extension of credit,
electronic fund transfer, or money transmitting service with the actual
knowledge that any person is violating section 3(a) of the Unlawful
Internet Gambling Funding Prohibition Act in connection with such
extension of credit, electronic fund transfer, or money transmitting
service.
(2) Paying, transferring, or collecting on any check, draft, or
other instrument drawn on any depository institution with the actual
knowledge that any person is violating section 3(a) of the Unlawful
Internet Gambling Funding Prohibition Act in connection with such check,
draft, or other instrument.
* * * * * * *
Sec. 18. (a) * * *
* * * * * * *
(c)(1) * * *
* * * * * * *
(11) Money laundering.--In every case, the responsible agency shall
take into consideration the effectiveness of any insured depository
institution involved in the proposed merger transaction in combating and
preventing money laundering activities, including in overseas branches.
(11) (12) The provisions of this subsection do not apply to any
merger transaction involving a foreign bank if no party to the
transaction is principally engaged in business in the United States.
* * * * * * *
(w) Written Employment References May Contain Suspicions of
Involvement in Illegal Activity.--
(1) In general.--Notwithstanding any other provision of law, any
insured depository institution, and any director, officer, employee, or
agent of such institution, may disclose in any written employment
reference relating to a current or former institution-affiliated party
of such institution which is provided to another insured depository
institution in response to a request from such other institution,
information concerning the possible involvement of such
institution-affiliated party in potentially unlawful activity, to the
extent--
(A) the disclosure does not contain information which the
institution, director, officer, employee, or agent knows to be false;
and
(B) the institution, director, officer, employee, or agent has not
acted with malice or with reckless disregard for the truth in making the
disclosure.
(2) Definition.--For purposes of this subsection, the term ``insured
depository institution'' includes any uninsured branch or agency of a
foreign bank.
* * * * * * *
Sec. 21. (a) * * *
* * * * * * *
(j) Civil Penalties.--
(1) Penalty imposed.--Any insured depository institution and any
director, officer, or employee of an insured depository institution who
willfully or through gross negligence violates, or any person who
willfully causes such a violation, any regulation prescribed under
subsection (b) shall be liable to the United States for a civil penalty
of not more than $10,000 the greater of--
(A) the amount (not to exceed $100,000) involved in the transaction
(if any) with respect to which the violation occurred; or
(B) $25,000.
* * * * * * *
ACT OF OCTOBER 26, 1970
(Public Law 91 508)
AN ACT To amend the Federal Deposit Insurance Act to
require insured banks to maintain certain records, to require that
certain transactions in the United States currency be reported to the
Department of the Treasury, and for other purposes.
* * * * * * *
125. Civil penalties
(a) For each willful or grossly negligent violation of any regulation
under this chapter, the Secretary may assess upon any person to which
the regulation applies, or any person willfully causing a violation of
the regulation, and, if such person is a partnership, corporation, or
other entity, upon any partner, director, officer, or employee thereof
who willfully or through gross negligence participates in the violation,
a civil penalty not exceeding $10,000 the greater of--
(1) the amount (not to exceed $100,000) involved in the transaction
(if any) with respect to which the violation occurred; or
(2) $25,000.
* * * * * * *
126. Criminal penalty
Whoever willfully violates any regulation under this chapter shall be
fined not more than $1,000 or imprisoned not more than one year, or
both.
127. Additional criminal penalty in certain cases
Whoever willfully violates, or willfully causes a violation of any
regulation under this chapter, section 21 of the Federal Deposit
Insurance Act, or section 411 of the National Housing Act, where the
violation is committed in furtherance of the commission of any violation
of Federal law punishable by imprisonment for more than one year, shall
be fined not more than $10,000 or imprisoned not more than five years,
or both.
SEC. 126. CRIMINAL PENALTY.
A person that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, shall be fined not more than $250,000, or
imprisoned for not more than 5 years, or both.
SEC. 127. ADDITIONAL CRIMINAL PENALTY IN CERTAIN CASES.
A person that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, 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.
* * * * * * *
SECTION 212 OF THE IMMIGRATION AND NATIONALITY ACT
GENERAL CLASSES OF ALIENS INELIGIBLE TO RECEIVE VISAS AND INELIGIBLE FOR
ADMISSION; WAIVERS OF INADMISSIBILITY
Sec. 212. (a) Classes of Aliens Ineligible for Visas or
Admission.--Except as otherwise provided in this Act, aliens who are
inadmissible under the following paragraphs are ineligible to receive
visas and ineligible to be admitted to the United States:
(1) * * *
(2) Criminal and related grounds.--
(A) * * *
* * * * * * *
(D) Money laundering activities.--
(i) In general.--Any alien who the consular officer or the Attorney
General knows or has reason to believe is or has been engaged in
activities which if engaged in within the United States would constitute
a violation of the money laundering provisions section 1956, 1957, or
1960 of title 18, United States Code, or has knowingly assisted,
abetted, or conspired or colluded with others in any such illicit
activity is inadmissible.
(ii) Related individuals.--Any alien who the consular officer or the
Attorney General knows or has reason to believe is the spouse, son, or
daughter of an alien inadmissible under clause (i), has, within the
previous 5 years, obtained any financial or other benefit from such
illicit activity of that alien, and knew or reasonably should have known
that the financial or other benefit was the product of such illicit
activity, is inadmissible, except that the Attorney General may, in the
full discretion of the Attorney General, waive the exclusion of the
spouse, son, or daughter of an alien under this clause if the Attorney
General determines that exceptional circumstances exist that justify
such waiver.
(D) (E) Prostitution and commercialized vice.--Any alien who--
(i) * * *
* * * * * * *
(E) (F) Certain aliens involved in serious criminal activity who
have asserted immunity from prosecution.--Any alien--
(i) * * *
* * * * * * *
(F) (G) Waiver authorized.--For provision authorizing waiver of
certain subparagraphs of this paragraph, see subsection (h).
(G) (H) Foreign government officials who have engaged in
particularly severe violations of religious freedom.--Any alien who,
while serving as a foreign government official, was responsible for or
directly carried out, at any time during the preceding 24-month period,
particularly severe violations of religious freedom, as defined in
section 3 of the International Religious Freedom Act of 1998, and the
spouse and children, if any, are inadmissible.
(H) (I) Significant traffickers in persons.--
(i) * * *
* * * * * * *
(h) The Attorney General may, in his discretion, waive the
application of subparagraphs (A)(i)(I), (B), (D), and (E) of subsection
(a)(2) and subparagraph (A)(i)(II) of such subsection insofar as it
relates to a single offense of simple possession of 30 grams or less of
marijuana if--
(1)(A) in the case of any immigrant it is established to the
satisfaction of the Attorney General that--
(i) the alien is inadmissible only under subparagraph (D)(i) or
(D)(ii) (E)(i) or (E)(ii) of such subsection or the activities for which
the alien is inadmissible occurred more than 15 years before the date of
the alien's application for a visa, admission, or adjustment of status,
* * * * * * *
SECTION 413 OF THE CONTROLLED SUBSTANCES ACT
CRIMINAL FORFEITURES
PROPERTY SUBJECT TO CRIMINAL FORFEITURE
Sec. 413. (a) * * *
* * * * * * *
PROTECTIVE ORDERS
(e)(1) * * *
* * * * * * *
(4) Order To Repatriate and Deposit.--
(A) In general.--Pursuant to its authority to enter a pretrial
restraining order under this section, including its authority to
restrain any property forfeitable as substitute assets, the court may
order a defendant to repatriate any property that may be seized and
forfeited, and to deposit that property pending trial in the registry of
the court, or with the United States Marshals Service or the Secretary
of the Treasury, in an interest-bearing account, if appropriate.
(B) Failure to comply.--Failure to comply with an order under this
subsection, or an order to repatriate property under subsection (p),
shall be punishable as a civil or criminal contempt of court, and may
also result in an enhancement of the sentence of the defendant under the
obstruction of justice provision of the Federal Sentencing Guidelines.
* * * * * * *
(p) If any of the property described in subsection (a), as a result
of any act or omission of the defendant--
(1) cannot be located upon the exercise of due diligence;
(2) has been transferred or sold to, or deposited with, a third party;
(3) has been placed beyond the jurisdiction of the court;
(4) has been substantially diminished in value; or
(5) has been commingled with other property which cannot be divided
without difficulty;
the court shall order the forfeiture of any other property of the
defendant up to the value of any property described in paragraphs (1)
through (5).
(p) Forfeiture of Substitute Property.--
(1) In general.--Paragraph (2) of this subsection shall apply, if
any property described in subsection (a), as a result of any act or
omission of the defendant--
(A) cannot be located upon the exercise of due diligence;
(B) has been transferred or sold to, or deposited with, a third party;
(C) has been placed beyond the jurisdiction of the court;
(D) has been substantially diminished in value; or
(E) has been commingled with other property which cannot be divided
without difficulty.
(2) Substitute property.--In any case described in any of
subparagraphs (A) through (E) of paragraph (1), the court shall order
the forfeiture of any other property of the defendant, up to the value
of any property described in subparagraphs (A) through (E) of paragraph
(1), as applicable.
(3) Return of property to jurisdiction.--In the case of property
described in paragraph (1)(C), the court may, in addition to any other
action authorized by this subsection, order the defendant to return the
property to the jurisdiction of the court so that the property may be
seized and forfeited.
* * * * * * *
TITLE 28, UNITED STATES CODE
* * * * * * *
PART VI--PARTICULAR PROCEEDING
* * * * * * *
CHAPTER 163--FINES, PENALTIES AND FORFEITURES
* * * * * * *
2466. Fugitive disentitlement
(a) A judicial officer may disallow a person from using the resources
of the courts of the United States in furtherance of a claim in any
related civil forfeiture action or a claim in third party proceedings in
any related criminal forfeiture action upon a finding that such person--
(1) * * *
* * * * * * *
(b) Subsection (a) may be applied to a claim filed by a corporation
if any majority shareholder, or individual filing the claim on behalf of
the corporation is a person to whom subsection (a) applies.
2467. Enforcement of foreign judgment
(a) Definitions.--In this section--
(1) * * *
(2) the term ``forfeiture or confiscation judgment'' means a final
order of a foreign nation compelling a person or entity--
(A) to pay a sum of money representing the proceeds of an offense
described in Article 3, Paragraph 1, of the United Nations Convention ,
any violation of foreign law that would constitute a violation of an
offense for which property could be forfeited under Federal law if the
offense were committed in the United States , or any foreign offense
described in section 1956(c)(7)(B) of title 18, or property the value of
which corresponds to such proceeds; or
* * * * * * *
(b) Review by Attorney General.--
(1) In general.--A foreign nation seeking to have a forfeiture or
confiscation judgment registered and enforced by a district court of the
United States under this section shall first submit a request to the
Attorney General or the designee of the Attorney General, which request
shall include--
(A) * * *
* * * * * * *
(C) an affidavit or sworn declaration establishing that the
defendant received notice of the proceedings in sufficient time to
enable the defendant establishing that the foreign nation took steps, in
accordance with the principles of due process, to give notice of the
proceedings to all persons with an interest in the property in
sufficient time to enable such persons to defend against the charges and
that the judgment rendered is in force and is not subject to appeal; and
* * * * * * *
(d) Entry and Enforcement of Judgment.--
(1) In general.--The district court shall enter such orders as may
be necessary to enforce the judgment on behalf of the foreign nation
unless the court finds that--
(A) * * *
* * * * * * *
(D) the defendant in the proceedings in the foreign court did not
receive notice the foreign nation did not take steps, in accordance with
the principles of due process, to give notice of the proceedings to a
person with an interest in the property of the proceedings in sufficient
time to enable him or her to defend; or
* * * * * * *
(3) Preservation of property.--To preserve the availability of
property subject to a foreign forfeiture or confiscation judgment, the
Government may apply for, and the court may issue, a restraining order
pursuant to section 983(j) of title 18, United States Code, at any time
before or after an application is filed pursuant to subsection (c)(1).
The court, in issuing the restraining order--
(A) may rely on information set forth in an affidavit describing the
nature of the proceeding or investigation underway in the foreign
country, and setting forth a reasonable basis to believe that the
property to be restrained will be named in a judgment of forfeiture at
the conclusion of such proceeding; or
(B) may register and enforce a restraining order that has been
issued by a court of competent jurisdiction in the foreign country and
certified by the Attorney General pursuant to subsection (b)(2).
No person may object to the restraining order on any ground that is
the subject of parallel litigation involving the same property that is
pending in a foreign court.
* * * * * * *
RIGHT TO FINANCIAL PRIVACY ACT OF 1978
TITLE XI--RIGHT TO FINANCIAL PRIVACY
Sec. 1100. This title may be cited as the ``Right to Financial
Privacy Act of 1978''.
* * * * * * *
USE OF INFORMATION
Sec. 1112. (a) Financial records originally obtained pursuant to
this title shall not be transferred to another agency or department
unless the transferring agency or department certifies in writing that
there is reason to believe that the records are relevant to a legitimate
law enforcement inquiry , or intelligence or counterintelligence
activity, investigation or analysis related to international terrorism
within the jurisdiction of the receiving agency or department.
* * * * * * *
SPECIAL PROCEDURES
Sec. 1114. (a)(1) Nothing in this title (except sections 1115, 1117,
1118, and 1121) shall apply to the production and disclosure of
financial records pursuant to requests from--
(A) a Government authority authorized to conduct foreign counter- or
foreign positive-intelligence activities for purposes of conducting such
activities; or
(B) the Secret Service for the purpose of conducting its protective
functions (18 U.S.C. 3056; 3 U.S.C. 202, Public Law 90 331, as amended).
; or
(C) a Government authority authorized to conduct investigations of,
or intelligence or counterintelligence analyses related to,
international terrorism for the purpose of conducting such
investigations or analyses.
* * * * * * *
GRAND JURY INFORMATION
Sec. 1120. (a) Financial records about a customer obtained from a
financial institution pursuant to a subpena issued under the authority
of a Federal grand jury--
(1) * * *
(2) shall be used only for the purpose of considering whether to
issue an indictment or presentment by that grand jury, or of prosecuting
a crime for which that indictment or presentment is issued, or for a
purpose authorized by rule 6(e) of the Federal Rules of Criminal
Procedure , or for a purpose authorized by section 1112(a) ;
* * * * * * *
FAIR CREDIT REPORTING ACT
TITLE VI--CONSUMER CREDIT REPORTING
Sec.
601. Short title.
* * * * * * *
624. 625. Disclosures to FBI for counterintelligence purposes.
626. Disclosures to governmental agencies for counterterrorism
purposes.
601. Short title
This title may be cited as the Fair Credit Reporting Act.
* * * * * * *
624. 625. Disclosures to FBI for counterintelligence purposes
(a) * * *
* * * * * * *
626. Disclosures to governmental agencies for counterterrorism purposes
(a) Disclosure.--Notwithstanding section 604 or any other provision
of this title, a consumer reporting agency shall furnish a consumer
report of a consumer and all other information in a consumer's file to a
government agency authorized to conduct investigations of, or
intelligence or counterintelligence activities or analysis related to,
international terrorism when presented with a written certification by
such government agency that such information is necessary for the
agency's conduct or such investigation, activity or analysis.
(b) Form of Certification.--The certification described in subsection
(a) shall be signed by the Secretary of the Treasury, or an officer
designated by the Secretary from among officers of the Department of the
Treasury whose appointments to office are required to be made by the
President, by and with the advice and consent of the Senate.
(c) Confidentiality.--No consumer reporting agency, or officer,
employee, or agent of such consumer reporting agency, shall disclose to
any person, or specify in any consumer report, that a government agency
has sought or obtained access to information under subsection (a).
(d) Rule of Construction.--Nothing in section 625 shall be construed
to limit the authority of the Director of the Federal Bureau of
Investigation under this section.
(e) Safe Harbor.--Notwithstanding any other provision of this
subchapter, any consumer reporting agency or agent or employee thereof
making disclosure of consumer reports or other information pursuant to
this section in good-faith reliance upon a certification of a
governmental agency pursuant to the provisions of this section shall not
be liable to any person for such disclosure under this subchapter, the
constitution of any State, or any law or regulation of any State or any
political subdivision of any State.
SECTION 3 OF THE BANK HOLDING COMPANY ACT OF 1956
ACQUISITION OF BANK SHARES OR ASSETS
Sec. 3. (a) * * *
* * * * * * *
(c) Factors for Consideration by Board.--
(1) * * *
* * * * * * *
(6) Money laundering.--In every case the Board shall take into
consideration the effectiveness of the company or companies in combating
and preventing money laundering activities, including in overseas
branches.
* * * * * * *
ANNUNZIO-WYLIE ANTI-MONEY LAUNDERING ACT
TITLE XV--ANNUNZIO-WYLIE ANTI-MONEY LAUNDERING ACT
SEC. 1500. SHORT TITLE.
This title may be cited as the ``Annunzio-Wylie Anti-Money Laundering
Act''.
* * * * * * *
Subtitle F--Miscellaneous Provisions
* * * * * * *
SEC. 1564. ADVISORY GROUP ON REPORTING REQUIREMENTS.
(a) * * *
* * * * * * *
(d) Terrorist Financing Issues.--
(1) In general.--The Secretary of the Treasury shall provide, either
within the Bank Secrecy Act Advisory Group, or as a subcommittee or
other adjunct of the Advisory Group, for a task force of representatives
from agencies and officers represented on the Advisory Group, a
representative of the Director of the Office of Homeland Security, and
representatives of financial institutions, private organizations that
represent the financial services industry, and other interested parties
to focus on--
(A) issues specifically related to the finances of terrorist groups,
the means terrorist groups use to transfer funds around the world and
within the United States, including through the use of charitable
organizations, nonprofit organizations, and nongovernmental
organizations, and the extent to which financial institutions in the
United States are unwittingly involved in such finances and the extent
to which such institutions are at risk as a result;
(B) the relationship, particularly the financial relationship,
between international narcotics traffickers and foreign terrorist
organizations, the extent to which their memberships overlap and engage
in joint activities, and the extent to which they cooperate with each
other in raising and transferring funds for their respective purposes;
and
(C) means of facilitating the identification of accounts and
transactions involving terrorist groups and facilitating the exchange of
information concerning such accounts and transactions between financial
institutions and law enforcement organizations.
(2) Applicability of other provisions.--Sections 552, 552a, and 552b
of title 5, United States Code, and the Federal Advisory Committee Act
shall not apply to the task force established pursuant to paragraph (1).
* * * * * * *
DISSENTING VIEWS
The so-called Financial Anti-Terrorism Act of 2001 (HR 3004) has more
to do with the ongoing war against financial privacy than with the war
against international terrorism. Of course, the federal government
should take all necessary and constitutional actions to enhance the
ability of law enforcement to locate and seize funds flowing to known
terrorists and their front groups. For example, America should consider
signing more mutual legal assistance treaties with its allies so we can
more easily locate the assets of terrorists and other criminals.
Unfortunately, instead of focusing on reasonable measures aimed at
enhancing the ability to reach assets used to support terrorism, HR 3004
is a laundry list of dangerous, unconstitutional power grabs. Many of
these proposals have already been rejected by the American people when
presented as necessary to ``fight the war on drugs'' or ``crackdown on
white-collar crime.'' Even a ban on Internet gambling has somehow made
it into this ``anti-terrorism'' bill!
Among the most obnoxious provisions of this bill are: expanding the
war on cash by creating a new federal crime of taking over $10,000 cash
into or out of the United States; codifying the unconstitutional
authority of the Financial Crimes Enforcement Network (FinCEN) to snoop
into the private financial dealings of American citizens; and expanding
the ``suspicious activity reports'' mandate to broker-dealers, even
though history has shown that these reports fail to significantly aid in
apprehending criminals. These measures will actually distract from the
battle against terrorism by encouraging law enforcement authorities to
waste time snooping through the financial records of innocent Americans
who simply happen to demonstrate an ``unusual'' pattern in their
financial dealings.
HR 3004 also attacks the Fourth Amendment by allowing Customs
officials to open incoming or outgoing mail without a search warrant.
Allowing government officials to read mail going out of or coming into
the country at whim is characteristic of totalitarian regimes, not free
societies.
The Financial Anti-Terrorism Act of 2001 (HR 3004) is a package of
unconstitutional expansions of the financial police state, most of which
will prove ultimately ineffective in the war against terrorism. I
therefore urge my colleagues to reject this bill and work to fashion a
measure aimed at giving the government a greater ability to locate and
seize the assets of terrorists while respecting the constitutional
rights of American citizens.
Ron Paul.
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Source: U.S. Government Website |