[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1664 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1664

 To amend subchapter II of chapter 53 of title 31, United States Code, 
  to improve enforcement of anti-money laundering laws, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            November 17 (legislative day, November 2), 1993

   Mr. Bryan (for himself, Mr. Bond, and Mr. Riegle) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend subchapter II of chapter 53 of title 31, United States Code, 
  to improve enforcement of anti-money laundering laws, 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 ``Anti-Money Laundering Act of 1993''.

SEC. 2. REFORM OF CTR EXEMPTION REQUIREMENTS TO REDUCE NUMBER AND SIZE 
              OF REPORTS CONSISTENT WITH EFFECTIVE LAW ENFORCEMENT.

    (a) In General.--Section 5313 of title 31, United States Code, is 
amended by adding at the end the following new subsections:
    ``(d) Mandatory Exemptions From Reporting Requirements.--
            ``(1) In general.--The Secretary of the Treasury shall 
        exempt, pursuant to section 5318(a)(5), a depository 
        institution from the reporting requirements of subsection (a) 
        (and regulations prescribed under such subsection) with respect 
        to transactions between the depository institution and the 
        following categories of entities:
                    ``(A) Another depository institution.
                    ``(B) A department or agency of the United States, 
                any State, or any political subdivision of any State, 
                including any entity established under the laws of the 
                United States, any State, or any political subdivision 
                of any State, or under an interstate compact between 2 
                or more States, which exercises governmental authority 
                on behalf of the United States, the State, or the 
                political subdivision.
                    ``(C) Any business or category of business the 
                reports on which have little or no value for law 
                enforcement purposes.
            ``(2) Notice of exemption.--The Secretary of the Treasury 
        shall publish in the Federal Register at such times as the 
        Secretary determines to be appropriate (but not less frequently 
        than once each year) a list of all the entities whose 
        transactions with a depository institution are exempt under 
        this subsection from the reporting requirements of subsection 
        (a) (and regulations prescribed under such subsection).
    ``(e) Discretionary Exemptions From Reporting Requirements.--
            ``(1) In general.--The Secretary of the Treasury may 
        exempt, pursuant to section 5318(a)(5), a depository 
        institution from the reporting requirements of subsection (a) 
        (and regulations prescribed under such subsection) with respect 
        to transactions between the depository institution and a 
        qualified business customer of the institution on the basis of 
        information submitted to the Secretary by the institution in 
        accordance with procedures which the Secretary shall establish.
            ``(2) Qualified business customer defined.--For purposes of 
        this subsection, the term `qualified business customer' means a 
        business which--
                    ``(A) maintains a transaction account (as defined 
                in section 19(b)(1)(C) of the Federal Reserve Act) at 
                the depository institution;
                    ``(B) frequently engages in transactions with the 
                depository institution which are subject to the 
                reporting requirements of subsection (a) (and 
                regulations prescribed under such subsection); and
                    ``(C) meets criteria which the Secretary determines 
                are sufficient to ensure that the purposes of this 
                subchapter are carried out without requiring a report 
                with respect to such transactions.
            ``(3) Criteria for exemption.--The Secretary of the 
        Treasury shall establish, by regulation, the criteria for 
        granting and maintaining an exemption under paragraph (1).
            ``(4) Guidelines.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall establish guidelines for depository institutions 
                to follow in selecting customers for an exemption under 
                this subsection.
                    ``(B) Contents.--The guidelines may include a 
                description of the types of businesses or an 
                itemization of specific businesses for which no 
                exemption will be granted under this subsection to any 
                depository institution.
            ``(5) Annual review.--The Secretary of the Treasury shall 
        prescribe regulations requiring each depository institution 
        to--
                    ``(A) review, at least once each year, the 
                qualified business customers of such institution with 
                respect to whom an exemption has been granted under 
                this subsection; and
                    ``(B) upon the completion of such review, resubmit 
                information about such customers, with such 
                modifications as the institution determines to be 
                appropriate, to the Secretary for the Secretary's 
                approval.
    ``(f) Provisions Applicable to Mandatory and Discretionary 
Exemptions.--
            ``(1) Limitation on liability of depository institutions.--
        No depository institution shall be subject to any penalty which 
        may be imposed under this subchapter for the failure of the 
        institution to file a report with respect to a transaction with 
        a customer for whom an exemption has been granted under 
        subsection (d) or (e) unless the institution--
                    ``(A) knowingly files false or incomplete 
                information to the Secretary with respect to the 
                transaction or the customer engaging in the 
                transaction; or
                    ``(B) has reason to believe at the time the 
                exemption is granted or the transaction is entered into 
                that the customer or the transaction does not meet the 
                criteria established for granting such exemption.
            ``(2) Coordination with other provisions.--Any exemption 
        granted by the Secretary of the Treasury under section 5318(a) 
        in accordance with this section, and any transaction which is 
        subject to such exemption, shall be subject to any other 
        provision of law applicable to such exemption, including--
                    ``(A) the authority of the Secretary, under section 
                5318(a)(5), to revoke such exemption at any time; and
                    ``(B) any requirement to report, or any authority 
                to require a report on, any possible violation of any 
                law or regulation or any suspected criminal activity.
    ``(g) Depository Institution Defined.--For purposes of this 
section, the term `depository institution' has the meaning given to 
such term in section 19(b)(1)(A) of the Federal Reserve Act.''.
    (b) Report Reduction Goal; Reports.--
            (1) In general.--In implementing the amendment made by 
        subsection (a), the Secretary of the Treasury shall seek to 
        reduce, within a reasonable period of time, the number of 
        reports required to be filed in the aggregate by depository 
        institutions pursuant to section 5313(a) of title 31, United 
        States Code, by at least 30 percent of the number filed during 
        the year preceding the date of enactment of this Act.
            (2) Interim report.--The Secretary of the Treasury shall 
        submit a report to the Congress not later than the end of the 
        180-day period beginning on the date of enactment of this Act 
        on the progress made by the Secretary in implementing the 
        amendment made by subsection (a).
            (3) Annual report.--The Secretary of the Treasury shall 
        submit an annual report to the Congress after the end of each 
        of the first 5 calendar years which begin after the date of 
        enactment of this Act on the extent to which the Secretary has 
        reduced the overall number of currency transaction reports 
        filed with the Secretary pursuant to section 5313(a) of title 
        31, United States Code, consistently with the purposes of such 
        section and effective law enforcement.
    (c) Streamlined Currency Transaction Reports.--The Secretary of the 
Treasury shall take such action as may be appropriate to redesign the 
format of reports required to be filed by any depository institution 
under section 5313(a) of title 31, United States Code, to eliminate the 
need to report information which has little or no value for law 
enforcement purposes and reduce the time and effort required to prepare 
such report for filing by any depository institution under such 
section.

SEC. 3. SINGLE DESIGNEE FOR REPORTING OF SUSPICIOUS TRANSACTIONS.

    (a) In General.--Section 5318(g) of title 31, United States Code, 
is amended by adding at the end the following new paragraph:
            ``(4) Single designee for reporting suspicious 
        transactions.--
                    ``(A) In general.--In requiring reports under 
                paragraph (1) of suspicious transactions, the Secretary 
                of the Treasury shall designate, to the extent 
                practicable and appropriate, a single officer or agency 
                of the United States to whom such reports shall be 
                made.
                    ``(B) 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 the appropriate 
                law enforcement or supervisory agency.
                    ``(C) Coordination with other reporting 
                requirements.--Subparagraph (A) shall not be construed 
                as precluding any supervisory agency for any financial 
                institution from requiring the financial institution to 
                submit any information or report to the agency or 
                another agency pursuant to any provision of law other 
                than this subsection.
                    ``(D) Reports.--
                            ``(i) Reports required.--The Secretary of 
                        the Treasury shall submit an annual report to 
                        the Congress at the times required under clause 
                        (ii) on the number of suspicious transactions 
                        reported to the officer or agency designated 
                        under subparagraph (A) during the period 
                        covered by the report and the disposition of 
                        such reports.
                            ``(ii) Time for submitting reports.--The 
                        1st report required under clause (i) shall be 
                        filed before the end of the 1-year period 
                        beginning on the date of enactment of the Anti-
                        Money Laundering Act of 1993 and each 
                        subsequent report shall be filed within 90 days 
                        after the end of each of the 5 calendar years 
                        which begin after such date of enactment.''.
    (b) Designation Required To Be Made Expeditiously.--The initial 
designation of an officer or agency of the United States pursuant to 
the amendment made by subsection (a) shall be made before the end of 
the 180-day period beginning on the date of enactment of this Act.

SEC. 4. BANKING AGENCY PILOT PROGRAMS TO IDENTIFY MONEY LAUNDERING 
              SCHEMES.

    Before the end of the 6-month period beginning on the date of 
enactment of this Act, the Comptroller of the Currency and the Board of 
Governors of the Federal Reserve System shall each establish a pilot 
program designed to test the feasibility of using examiners employed by 
the agency to identify money laundering schemes involving depository 
institutions for which the agency is the appropriate Federal banking 
agency (as defined in section 3(q)) of the Federal Deposit Insurance 
Act.

SEC. 5. NEGOTIABLE INSTRUMENTS DRAWN ON FOREIGN BANKS SUBJECT TO 
              RECORDKEEPING AND REPORTING REQUIREMENTS.

    Section 5312(a)(3) of title 31, United States Code, is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) as the Secretary of the Treasury shall 
                provide by regulation, checks, drafts, notes, money 
                orders, and other similar instruments which are drawn 
                on a foreign financial institution and are not in 
                bearer form.''.

SEC. 6. IMPOSITION OF CIVIL MONEY PENALTIES BY APPROPRIATE FEDERAL 
              BANKING AGENCIES.

    Section 5321 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(e) Delegation of Assessment Authority to Banking Agencies.--
            ``(1) In general.--The Secretary of the Treasury shall 
        delegate, in accordance with section 5318(a)(1) and subject to 
        such terms and conditions as the Secretary may impose in 
        accordance with paragraph (3), any authority of the Secretary 
        to assess a civil money penalty under this section on 
        depository institutions (as defined in section 3 of the Federal 
        Deposit Insurance Act) to the appropriate Federal banking 
        agencies (as defined in such section 3).
            ``(2) Authority of agencies.--Subject to any term or 
        condition imposed by the Secretary of the Treasury under 
        paragraph (3), the provisions of this section shall apply to an 
        appropriate Federal banking agency to which is delegated any 
        authority of the Secretary under this section in the same 
        manner such provisions apply to the Secretary.
            ``(3) Terms and conditions.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall prescribe by regulation the terms and conditions 
                which shall apply to any delegation under paragraph 
                (1).
                    ``(B) Maximum dollar amount.--The terms and 
                conditions authorized under subparagraph (A) may 
                include, in the Secretary's sole discretion, a 
                limitation on the amount of any civil penalty which may 
                be assessed by an appropriate Federal banking agency 
                pursuant to a delegation under paragraph (1).''.

SEC. 7. UNIFORM STATE LICENSING AND REGULATION OF CHECK CASHING, 
              CURRENCY EXCHANGE, AND MONEY TRANSMITTING BUSINESSES.

    (a) Uniform Laws and Enforcement.--For purposes of preventing money 
laundering and protecting the payment system from fraud and abuse, it 
is the sense of the Congress that the several States should--
            (1) establish uniform laws for licensing and regulating 
        businesses which--
                    (A) provide check cashing, currency exchange, or 
                money transmitting or remittance services, or issue or 
                redeem money orders, travelers' checks, and other 
                similar instruments; and
                    (B) are not depository institutions (as defined in 
                section 19(b)(1)(A) of the Federal Reserve Act); and
            (2) provide sufficient resources to the appropriate State 
        agency to enforce such laws and regulations prescribed pursuant 
        to such laws.
    (b) Model Statute.--It is the sense of the Congress that the 
several States should develop, through the auspices of the National 
Conference of Commissioners on Uniform State Laws, the American Law 
Institute, or such other forum as the States may determine to be 
appropriate, a model statute to carry out the goals described in 
subsection (a) which would include the following:
            (1) Licensing requirements.--A requirement that any 
        business described in subsection (a)(1) be licensed and 
        regulated by an appropriate State agency in order to engage in 
        any such activity within the State.
            (2) Licensing standards.--A requirement that--
                    (A) in order for any business described in 
                subsection (a)(1) to be licensed in the State, the 
                appropriate State agency shall review and approve--
                            (i) the business record and the capital 
                        adequacy of the business seeking the license; 
                        and
                            (ii) the competence, experience, integrity, 
                        and financial ability of any individual who--
                                    (I) is a director, officer, or 
                                supervisory employee of such business; 
                                or
                                    (II) owns or controls such 
                                business; and
                    (B) any record, on the part of any business seeking 
                the license or any person referred to in subparagraph 
                (A)(ii), of--
                            (i) any criminal activity;
                            (ii) any fraud or other act of personal 
                        dishonesty;
                            (iii) any act, omission, or practice which 
                        constitutes a breach of a fiduciary duty; or
                            (iv) any suspension or removal, by any 
                        agency or department of the United States or 
                        any State, from participation in the conduct of 
                        any federally or State licensed or regulated 
                        business,
                may be grounds for the denial of any such license by 
                the appropriate State agency.
            (3) Procedures to ensure compliance with federal cash 
        transaction reporting requirements.--A civil or criminal 
        penalty for operating any business referred to in paragraph (1) 
        without establishing and complying with appropriate procedures 
        to ensure compliance with subchapter II of chapter 53 of title 
        31, United States Code (relating to records and reports on 
        monetary instruments transactions).
            (4) Criminal penalties for operation of business without a 
        license.--A criminal penalty for operating any business 
        referred to in paragraph (1) without a license within the State 
        after the end of an appropriate transition period beginning on 
        the date of the enactment of such model statute by the State.
    (c) Study Required.--The Secretary of the Treasury shall conduct a 
study of--
            (1) the progress made by the several States in developing 
        and enacting a model statute which--
                    (A) meets the requirements of subsection (b); and
                    (B) furthers the goals of--
                            (i) preventing money laundering by 
                        businesses which are required to be licensed 
                        under any such statute; and
                            (ii) protecting the payment system, 
                        including the receipt, payment, collection, and 
                        clearing of checks, from fraud and abuse by 
                        such businesses; and
            (2) the adequacy of--
                    (A) the activity of the several States in enforcing 
                the requirements of such statute; and
                    (B) the resources made available to the appropriate 
                State agencies for such enforcement activity.
    (d) Report Required.--Before the end of the 3-year period beginning 
on the date of enactment of this Act and by the end of each of the 
first 2 1-year periods beginning after the end of such 3-year period, 
the Secretary of the Treasury shall submit a report to the Congress 
containing the findings and recommendations of the Secretary in 
connection with the study under subsection (c), together with such 
recommendations for legislative and administrative action as the 
Secretary may determine to be appropriate, including any recommendation 
pursuant to subsection (e).
    (e) Recommendations for Incentives or Sanctions in Cases of 
Inadequate Regulation and Enforcement by States.--If the Secretary of 
the Treasury determines that any State has failed--
            (1) to enact a statute which meets the requirements 
        described in subsection (b);
            (2) to undertake adequate activity to enforce such statute; 
        or
            (3) to make adequate resources available to the appropriate 
        State agency for such enforcement activity,
the report submitted pursuant to subsection (d) shall contain 
recommendations for legislation establishing incentives which may be 
provided or sanctions which may be imposed to remedy such failure.

SEC. 8. REGISTRATION OF MONEY TRANSMITTING BUSINESSES TO PROMOTE 
              EFFECTIVE LAW ENFORCEMENT.

    (a) Findings and Purposes.--
            (1) Findings.--The Congress hereby finds the following:
                    (A) Money transmitting businesses are subject to 
                the recordkeeping and reporting requirements of 
                subchapter II of chapter 53 of title 31, United States 
                Code.
                    (B) Money transmitting businesses are largely 
                unregulated businesses and are frequently used in 
                sophisticated schemes to--
                            (i) transfer large amounts of money which 
                        are the proceeds of unlawful enterprises; and
                            (ii) evade the requirements of such 
                        subchapter II, the Internal Revenue Code of 
                        1986, and other laws of the United States.
                    (C) Information on the identity of money 
                transmitting businesses and the names of the persons 
                who own or control, or are officers or employees of, a 
                money transmitting business would have a high degree of 
                usefulness in criminal, tax, or regulatory 
                investigations and proceedings.
            (2) Purpose.--It is the purpose of this section to 
        establish a registration requirement for businesses engaged in 
        providing check cashing, currency exchange, or money 
        transmitting or remittance services, or issuing or redeeming 
        money orders, travelers' checks, and other similar instruments 
        to assist the Secretary of the Treasury, the Attorney General, 
        and other supervisory and law enforcement agencies to 
        effectively enforce the criminal, tax, and regulatory laws and 
        prevent such money transmitting businesses from engaging in 
        illegal activities.
    (b) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by adding at the end the following new section:
``Sec. 5329. Registration of money transmitting businesses
    ``(a) Registration With Secretary of the Treasury Required.--
            ``(1) In general.--Any person who owns or controls a money 
        transmitting business which is not a depository institution (as 
        defined in section 19(b)(1)(A) of the Federal Reserve Act) 
        shall register the business (whether or not the business is 
        licensed as a money transmitting business in any State) with 
        the Secretary of the Treasury before the end of the 180-day 
        period beginning on the later of--
                    ``(A) the date of enactment of this section; or
                    ``(B) the date the business is established.
            ``(2) Form and manner of registration.--Subject to the 
        requirements of subsection (b), the Secretary of the Treasury 
        shall prescribe, in regulations, the form and manner for 
        registering a money transmitting business pursuant to paragraph 
        (1).
            ``(3) Businesses remain subject to state law.--This section 
        shall not be construed as superseding any requirement of State 
        law relating to money transmitting businesses operating in such 
        State.
            ``(4) False and incomplete information.--The filing of 
        false or materially incomplete information in connection with 
        the registration of a money transmitting business shall be 
        considered as a failure to comply with the requirements of this 
        subsection.
    ``(b) Contents of Registration.--The registration of a money 
transmitting business under subsection (a) shall include the following 
information:
            ``(1) The name and location of the business.
            ``(2) The name and address of each person who--
                    ``(A) owns or controls the business;
                    ``(B) is an director or officer of the business; or
                    ``(C) otherwise participates in the conduct of the 
                affairs of the business.
            ``(3) The name and address of any depository institution at 
        which the business maintains a transaction account (as defined 
        in section 19(b)(1)(C) of the Federal Reserve Act).
            ``(4) Such other information as the Secretary of the 
        Treasury may require.
    ``(c) Definitions.--For purposes of this section--
            ``(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;
                    ``(B) is required to file reports under section 
                5313; and
                    ``(C) is not a depository institution (as defined 
                in section 19(b)(1)(A) of the Federal Reserve Act).
            ``(2) Money transmitting service.--The term `money 
        transmitting service' includes accepting currency or funds 
        denominated in the currency of any country and transmitting the 
        currency or funds, or the value of the currency or funds, by 
        any means through a financial agency or institution, a Federal 
        reserve bank or other facility of the Board of Governors of the 
        Federal Reserve System, or an electronic funds transfer 
        network.
    ``(d) Civil Penalty for Failure To Comply With Registration 
Requirements.--
            ``(1) In general.--Any person who fails to comply with the 
        money transmitting business registration requirements under 
        subsection (a) or regulations prescribed under such subsection 
        shall be liable to the United States for a civil penalty of 
        $5,000 for each such violation.
            ``(2) Continuing violation.--Each day a violation described 
        in paragraph (1) continues shall constitute a separate 
        violation for purposes of such paragraph.
            ``(3) Assessments.--Any penalty imposed under this 
        subsection shall be assessed and collected by the Secretary of 
        the Treasury in the manner provided in section 5321 and any 
        such assessment shall be subject to the provisions of such 
        section.''.
    (c) Criminal Penalty for Failure To Comply With Registration 
Requirements.--Section 1960(b)(1) of title 18, United States Code, is 
amended to read as follows:
            ``(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 5329 
                of title 31, United States Code, or regulations 
                prescribed under such section;''.
    (d) Civil Forfeiture.--Section 981(a)(1)(A) of title 18, United 
States Code, is amended by striking ``or of section 1956 or 1957 of 
this title,'' and inserting ``, of section 1956, 1957, or 1960 of this 
title,''.
    (e) Clerical Amendment.--The table of sections for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 5328 the following new item:

``5329. Registration of money transmitting businesses.''.

SEC. 9. TREASURY STUDY OF CASHIERS' CHECKS.

    (a) Study Required.--The Secretary of the Treasury shall conduct a 
study to determine--
            (1) the extent to which the practice of issuing of 
        cashiers' checks by financial institutions is vulnerable to 
        money laundering schemes;
            (2) the extent to which additional recordkeeping 
        requirements should be imposed on financial institutions which 
        issue cashiers' checks; and
            (3) such other factors relating to the use and regulation 
        of cashiers' checks as the Secretary determines to be 
        appropriate.
    (b) Report Required.--Before the end of the 180-day period 
beginning on the date of enactment of this Act, the Secretary of the 
Treasury shall submit a report to the Congress containing--
            (1) the findings and conclusions of the Secretary in 
        connection with the study conducted pursuant to subsection (a); 
        and
            (2) such recommendations for legislative and administrative 
        action as the Secretary may determine to be appropriate.

                                 <all>

S 1664 IS----2
S 1664 IS----3