[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3385 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3385

    To protect the integrity of the Nation's financial system from 
  international counterfeiting and economic terrorism, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 27, 1993

   Mr. Leach (for himself and Mr. Bachus of Alabama) introduced the 
    following bill; which was referred jointly to the Committees on 
 Banking, Finance and Urban Affairs, Foreign Affairs, and the Judiciary

_______________________________________________________________________

                                 A BILL


 
    To protect the integrity of the Nation's financial system from 
  international counterfeiting and economic terrorism, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``International Counterfeiting 
Deterrence Act of 1993''.

SEC. 2. INTERNATIONAL COUNTERFEITING DETERRENCE STRIKE FORCE.

    (a) Establishment.--There is hereby established the International 
Counterfeiting Deterrence Strike Force (hereafter in this Act referred 
to as the ``Strike Force'').
    (b) Membership.--
            (1) In general.--The Strike Force shall be composed of 9 
        members as follows:
                    (A) The Secretary of the Treasury or a designee of 
                the Secretary.
                    (B) The Director of the Bureau of Engraving and 
                Printing or a designee of the Director.
                    (C) The Chairman of the Board of Governors of the 
                Federal Reserve System or a designee of the Chairman.
                    (D) The Director of the United States Secret 
                Service or a designee of the Director.
                    (E) The Director of the Federal Bureau of 
                Investigation or a designee of the Director.
                    (F) The Director of the Central Intelligence Agency 
                or a designee of the Director.
                    (G) The Secretary of State or a designee of the 
                Secretary.
                    (H) The Attorney General or a designee of the 
                Attorney General.
                    (I) The Assistant Secretary of the Treasury for 
                Enforcement.
            (2) Chairperson.--The Chairperson of the Strike Force shall 
        be the Secretary of the Treasury.
    (c) Duties.--
            (1) In general.--The Strike Force shall--
                    (A) assess the extent to which United States 
                currency is being counterfeited outside the United 
                States and the manner in which, and the countries in 
                which, such counterfeiting takes place;
                    (B) assess the probable effect of such 
                counterfeiting on the United States and other countries 
                and the extent to which such activities pose a threat 
                to the domestic economy of the United States, the 
                payment system, and United States financial 
                institutions; and
                    (C) assess the extent to which counterfeiting of 
                United States currency which is engaged in within and 
                without the United States is motivated by economic 
                terrorism with the intent to disrupt the economy.
            (2) International cooperation and agreements.--The Strike 
        Force shall--
                    (A) consider various means for achieving greater 
                international coordination and cooperation in combating 
                counterfeiting which occurs outside of the country 
                whose currency is the object of the counterfeit; and
                    (B) propose international agreements which the 
                Strike Force considers appropriate for achieving such 
                coordination and cooperation.
            (3) Annual report.--The Strike Force shall submit an annual 
        report to the Congress on the state of counterfeiting of United 
        States currency in the world and the activities of the Strike 
        Force under this section for the year covered by the report.
    (d) Executive Director.--The Secretary of the Treasury shall 
appoint an executive director of the Strike Force from among employees 
of the Department of the Treasury.
    (e) No Additional Pay or Benefits.--No officer or employee of the 
Federal Government shall be entitled to any additional pay or benefits 
by reason of service with the Strike Force.
    (f) Costs and Expenses.--The costs and expenses incurred by the 
Strike Force after September 30, 1993, shall be shared on a pro rata 
basis by the agencies and department's represented on the Strike Force 
on the basis of each such agency's or department's total budget for the 
preceding fiscal year.
    (g) Assistance From Other Agencies.--The head of any element of the 
intelligence community and the Secretary of Defense may provide the 
Strike Force with such assistance as is appropriate to assist the 
Strike Force in carrying out its functions.

SEC. 3. STUDIES OF COUNTERFEIT DETERRENCE AND ENHANCED DETECTION AND 
              ENFORCEMENT TECHNIQUES.

    (a) In General.--The Strike Force shall conduct a study of all 
available technological devices and methods which may be used to 
enhance detection and enforcement techniques and procedures.
    (b) Factors to Be Studied.--The study conducted under subsection 
(a) shall include a study of--
            (1) various types of fibers, planchettes, optically 
        variable ink, watermarks, and optically variable devices which 
        may be used in producing currency;
            (2) various methods for achieving thread enhancement in 
        currency;
            (3) various means for redesigning images on currency;
            (4) other actions which may be taken to deter the 
        counterfeiting of United States currency;
            (5) how much counterfeit currency has been detected by the 
        United States Government, including the Board of Governors of 
        the Federal Reserve System, and how much cost has been incurred 
        by the United States Government, including such Board, with 
        respect to counterfeit currency which has been detected;
            (6) methods and technologies that may be used in the 
        production of Federal reserve notes--
                    (A) to make such notes traceable through the use of 
                a scanning device; and
                    (B) to reduce the likelihood that the 
                counterfeiting of such notes can be achieved through 
                the use of color copying machines; and
            (7) prudent measures which can be taken to prevent the 
        counterfeiting of United States currency and to more readily 
        identify circulating currency as counterfeit.
    (c) Study of Uses of U.S. Currency Overseas and Correlation of Such 
Uses With Counterfeiting.--The Strike Force shall conduct a study of--
            (1) the extent of the demand for United States currency in 
        other countries;
            (2) the reasons why United States currency is obtained and 
        used in such countries;
            (3) the extent to which such demand or use involves $100 
        Federal reserve notes or any other particular denomination; and
            (4) the merits of abolishing $100 Federal reserve notes or 
        producing such notes in a different form or manner or with a 
        different design as a deterrence to international 
        counterfeiting.
    (d) Report.--
            (1) In general.--Before the end of the 18-month period 
        beginning on the date of the enactment of this Act, the Strike 
        Force shall submit a report to the Committee on Banking, 
        Finance and Urban Affairs of the House of Representatives and 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate on the results of the studies conducted pursuant to 
        subsections (a) and (c).
            (2) Treatment of certain information.--If the Strike force 
        determines that the inclusion of any information in the report 
        required under paragraph (1) could reasonably be expected to 
        interfere with enforcement activities relating to 
        counterfeiting or to disclose technical information which would 
        be useful to persons engaged in counterfeiting, the information 
        shall not be included in the report and shall be made available 
        to the committees described in such paragraph in a form other 
        than as a public document.

SEC. 4. CHANGES IN DESIGN OF CURRENCY.

    Section 5114 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d) Changes in Design of Currency.--
            ``(1) Currency design commission.--There is hereby 
        established the Currency Design Commission consisting of the 
        Secretary of the Treasury, the Chairman of the Board of 
        Governors of the Federal Reserve System, and the Director of 
        the Bureau of Engraving and Printing, the chairperson of which 
        shall be the Secretary of the Treasury.
            ``(2) Design changes.--If any member of the Currency Design 
        Commission proposes that Federal reserve notes of any 
        denomination or any other United States currency be redesigned, 
        reformulated, or otherwise produced in a different form or 
        manner for counterfeit deterrence purposes, and 1 other member 
        of the Commission concurs in such proposal, the Secretary of 
        the Treasury shall redesign, reformulate, or otherwise produce 
        such notes or other currency in accordance with such proposal.
            ``(3) Ancillary actions.--The Secretary of the Treasury 
        shall take such other action under this section and other 
        provisions of law as may be necessary to carry out the 
        requirement of paragraph (2).''.

SEC. 5. FOREIGN OFFICES AUTHORIZED.

    For purposes of carrying out this Act and to assist any agency or 
department which is represented on the Strike Force in any 
investigation or enforcement action with respect to international 
counterfeiting, the Strike Force may maintain offices outside the 
United States.

SEC. 6. ANTICOUNTERFEITING TRAINING TEAM.

    The Director of the United States Secret Service, in consultation 
with the other members of the Strike Force, shall establish a team of 
experts to assist and provide training to foreign governments, and 
agencies and departments of foreign governments, in developing and 
expanding any such government's, agency's, or department's capabilities 
for detecting counterfeited currency, in general, and for investigating 
and prosecuting activities involving counterfeiting.

SEC. 7. NEGOTIATIONS WITH COUNTRIES IN WHICH A SIGNIFICANT AMOUNT OF 
              COUNTERFEITING OF U.S. CURRENCY OCCURS.

    (a) Negotiations.--The Chairperson of the Strike Force (hereafter 
in this section referred to as the ``Chairperson'') shall seek to enter 
into negotiations with appropriate officials of any foreign country 
which the Chairperson, in consultation with the heads of the other 
agencies and departments represented on the Strike Force, has reason to 
believe is a country in which a significant amount of United States 
currency is counterfeited to negotiate 1 or more international 
agreements with such country to--
            (1) share information and technical expertise to facilitate 
        the detection of counterfeit currency of such country or the 
        United States within such country or the United States and the 
        prosecution of the parties responsible for such activity; and
            (2) ensure cooperation between the law enforcement officers 
        of each party to the international agreement in the 
        investigation and prosecution of counterfeiting activities.
    (b) Reports.--
            (1) Interim report.--Before the end of the 1-year period 
        beginning on the date of the enactment of this Act, the 
        Chairperson shall submit an interim report to the Committee on 
        Banking, Finance and Urban Affairs of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate on any negotiations in which the 
        Chairperson is engaged pursuant to subsection (a) and the 
        progress in such negotiations.
            (2) Final report.--Before the end of the 2-year period 
        beginning on the date of the enactment of this Act, the 
        Chairperson shall submit a final report to the President, the 
        Committee on Banking, Finance and Urban Affairs of the House of 
        Representatives, and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate on the outcome of negotiations 
        pursuant to subsection (a).
            (3) Identification of suspect countries.--The final report 
        submitted under paragraph (2) shall identify each foreign 
        country which--
                    (A) the Chairperson, in consultation with the heads 
                of the other agencies and departments represented on 
                the Strike Force, has reason to believe is a country in 
                which a significant amount of United States currency is 
                counterfeited; and
                    (B) has not reached an agreement described in 
                paragraphs (1) and (2) of subsection (a) with the 
                Chairperson.
    (c) Authority of the President.--
            (1) In general.--If, after the end of the 2-year period 
        beginning on the date of the enactment of this Act, the 
        President determines, after consultation with the head of each 
        agency or department represented on the Strike Force, that a 
        foreign country--
                    (A) is a country in which a significant amount of 
                United States currency is counterfeited;
                    (B) has not entered into an agreement described in 
                subsection (b) with the United States; and
                    (C) is not negotiating in good faith to reach any 
                such agreement,
        the President may take any action described in paragraph (2) 
        with respect to such country.
            (2) Actions authorized.--The actions described in this 
        paragraph are as follows:
                    (A) Prohibiting, by Executive order, Federal 
                reserve banks, depository institutions, and all other 
                persons engaged within the United States in the 
                transfer of funds by any means, including clearing 
                checks, from--
                            (i) participating in any transfer of funds, 
                        including wire and electronic funds transfers, 
                        with any person of the foreign country 
                        described in paragraph (1) and any agency, 
                        department, or instrumentality of the 
                        government of such country, including the 
                        central bank of such country; or
                            (ii) accepting any deposit from or on 
                        behalf of any such person, agency, department, 
                        or instrumentality.
                    (B) Prohibiting, by Executive order, any person of 
                the foreign country described in paragraph (1) and any 
                agency, department, or instrumentality of the 
                government of such country, including the central bank 
                of such country, from--
                            (i) participating in any wire or electronic 
                        fund transfer of funds with any Federal reserve 
                        bank, depository institution, or other person 
                        within the United States or otherwise 
                        participating in the payment system in any way; 
                        or
                            (ii) maintaining a deposit account with any 
                        such bank, depository institution, or person.
            (3) Criminal penalty.--Whoever knowingly violates, within 
        or without the United States, any Executive order issued under 
        this subsection shall be fined under title 18, United States 
        Code, imprisoned for not more than 15 years, or both.
            (4) Definitions.--For purposes of this subsection--
                    (A) Depository institution.--The term ``depository 
                institution''--
                            (i) has the meaning given to such term in 
                        section 3(c) of the Federal Deposit Insurance 
                        Act; and
                            (ii) includes any insured or noninsured 
                        credit union (as defined in section 101(7) of 
                        the Federal Credit Union Act.
                    (B) Person of the foreign country.--The term 
                ``person of the foreign country'' has the meaning given 
                to the term ``person of a foreign country'' in section 
                3502(d) of the Primary Dealers Act of 1988.

SEC. 8. AWARDS AUTHORIZED FOR COUNTERFEITING CASES.

    Section 524(c)(1)(B) of title 28, United States Code, is amended by 
striking ``1956 and 1957'' and inserting ``470 through 492, 1956, and 
1957''.

SEC. 9. COUNTERFEITING UNITED STATES CURRENCY ABROAD.

    (a) In General.--Chapter 25 of part I of title 18, United States 
Code, is amended by inserting before section 471 the following new 
section:
``Sec. 470. Counterfeit acts committed outside the United States
    ``Whoever, 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, 
        digital information, 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 of 
this title, if committed within the United States, shall be fined under 
this title, imprisoned for not more than 15 years, or both.''.
    (b) Clerical Amendments.--
            (1) Table of sections.--The table of sections for chapter 
        25 of part I of title 18, United States Code, is amended by 
        inserting before the item relating to section 471 the following 
        new item:

``470. Counterfeit acts committed outside the United States.''.
            (2) Table of chapters.--The table of chapters for part I of 
        title 18, United States Code, is amended by striking the item 
        relating to chapter 25 and inserting the following new item:

``25. Counterfeiting and forgery............................     470''.

SEC. 10. SANCTIONS AGAINST STATE-SUPPORTED COUNTERFEITING.

    (a) Recommendations of Strike Force.--The Strike Force shall 
consider and recommend to the Congress and the President sanctions 
which the Strike Force determines to be appropriate against any foreign 
country the government of which--
            (1) engages in counterfeiting or other activities in 
        violation of section 470 of title 18, United States Code; or
            (2) knowingly or recklessly permits such counterfeiting or 
        activity to occur within such country without conducting 
        reasonably diligent investigations or prosecutions of the 
        persons or governmental units involved in such conduct.
    (b) Prohibition on Ex-Im Bank Support for Countries Which Support 
Counterfeiting of United States Currency.--Section 2(b) of the Export-
Import Bank Act of 1945 (12 U.S.C. 635(b)) is amended by adding at the 
end the following new paragraph:
            ``(12) Prohibition relating to state-supported 
        counterfeiting.--The Bank may not guarantee, insure, extend (or 
        participate in the extension of) credit in connection with the 
        export of any good (other than food or an agricultural 
        commodity) or service to any country if the President 
        determines that the government of such country--
                    ``(A) engages in counterfeiting or other activities 
                in violation of section 470 of title 18, United States 
                Code; or
                    ``(B) knowingly or recklessly permits such 
                counterfeiting or activity to occur within such country 
                without conducting reasonably diligent investigations 
                or prosecutions of the persons or governmental units 
                involved in such conduct.''.
    (c) License Requirement for Countries Involved in State-Supported 
Counterfeiting.--Section 6(j)(1) of the Export Administration Act of 
1979 (50 U.S.C. App. 2405) is amended by adding at the end the 
following subparagraph:
                    ``(C) The government of such country--
                            ``(i) engages in counterfeiting or other 
                        activities in violation of section 470 of title 
                        18, United States Code; or
                            ``(ii) knowingly or recklessly permits such 
                        counterfeiting or other activity to occur 
                        within such country without conducting 
                        reasonably diligent investigations or 
                        prosecutions of the persons or governmental 
                        units involved in such conduct.''.
    (d) Prohibition on Foreign Assistance to Countries Involved in 
State-Supported Counterfeiting.--Chapter 1 of part III of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2351 et seq.) is amended by inserting 
after section 620A the following new section:

``SEC. 620B. PROHIBITION ON FOREIGN ASSISTANCE TO COUNTRIES INVOLVED IN 
              STATE-SUPPORTED COUNTERFEITING.

    ``The United States shall not provide any assistance under this 
Act, the Agricultural Trade Development and Assistance Act of 1954, or 
the Peace Corps Act to any country if the President determines that the 
government of such country--
            ``(1) engages in counterfeiting or other activities in 
        violation of section 470 of title 18, United States Code; or
            ``(2) knowingly or recklessly permits such counterfeiting 
        or activity to occur within such country without conducting 
        reasonably diligent investigations or prosecutions of the 
        persons or governmental units involved in such conduct.''.

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HR 3385 IH----2