[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1756 Introduced in House (IH)]
105th CONGRESS
1st Session
H. R. 1756
To amend chapter 53 of title 31, United States Code, to require the
development and implementation by the Secretary of the Treasury of a
national money laundering and related financial crimes strategy to
combat money laundering and related financial crimes, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 3, 1997
Ms. Velazquez (for herself, Mr. Leach, Mr. Gonzalez, and Mr. Bachus)
introduced the following bill; which was referred to the Committee on
Banking and Financial Services, and in addition to the Committee on the
Judiciary, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend chapter 53 of title 31, United States Code, to require the
development and implementation by the Secretary of the Treasury of a
national money laundering and related financial crimes strategy to
combat money laundering and related financial crimes, 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 ``Money Laundering and Financial
Crimes Strategy Act of 1997''.
SEC. 2. MONEY LAUNDERING AND RELATED FINANCIAL CRIMES.
(a) In General.--Chapter 53 of title 31, United States Code is
amended by adding at the end the following new subchapter:
``Subchapter III--Money Laundering and Related Financial Crimes
``SEC. 5341. DEFINITIONS.
``For purposes of this subtitle, the following definitions shall
apply:
``(1) Department of the treasury law enforcement
organizations.--The term `Department of the Treasury law
enforcement organizations' has the meaning given to such term
in section 9703(p)(1).
``(2) Money laundering and related financial crime.--The
term `money laundering and related financial crime' means an
offense under this subchapter, chapter II of title I of Public
Law 91-508 (12 U.S.C. 1951, et seq.; commonly referred to as
the `Bank Secrecy Act'), or section 1956, 1957, or 1960 of
title 18 or any related Federal, State, or local criminal
offense.
``(3) Secretary.--The term `Secretary' means the Secretary
of the Treasury.
``SEC. 5342. NATIONAL MONEY LAUNDERING AND RELATED FINANCIAL CRIMES
STRATEGY.
``(a) Development and Submission to Congress.--
``(1) Biennial strategy.--Before the end of the 180-day
period beginning on the date of the enactment of this subtitle
and before February 1 of every 2d subsequent year, the
President, acting through the Secretary, shall develop a
national strategy for combating money laundering and related
financial crimes which shall be submitted to the Congress.
``(2) Separate presentation of classified material.--Any
part of the strategy that involves information which is
properly classified under criteria established by Executive
Order shall be submitted to the Congress separately.
``(b) Development of Strategy.--The national strategy for combating
money laundering and related financial crimes shall address any area
the President, acting through the Secretary, considers appropriate,
including the following:
``(1) Goals, objectives, and priorities.--Comprehensive,
research-based goals, objectives, and priorities for reducing
money laundering and related financial crime in the United
States.
``(2) Prevention.--Coordination of regulatory and other
efforts to prevent the exploitation of financial systems in the
United States for money laundering and related financial
crimes, including a requirement that the Secretary shall--
``(A) regularly review enforcement efforts under
this subchapter and other provisions of law and, when
appropriate, modify existing regulations or prescribe
new regulations for purposes of preventing such
criminal activity; and
``(B) coordinate prevention efforts and other
enforcement action with the Board of Governors of the
Federal Reserve System, the Securities and Exchange
Commission, the Federal Trade Commission, other Federal
banking agencies, and the National Credit Union
Administration Board.
``(3) Detection initiatives.--A description of operational
initiatives to improve detection of money laundering and
related financial crimes.
``(4) Enhancement of the role of the private financial
sector in prevention.--A description of the enhanced
partnership between the private financial sector and law
enforcement agencies with regard to the prevention and
detection of money laundering and related financial crimes,
including providing incentives to strengthen internal controls
and to adopt on an industrywide basis more effective policies.
``(5) Intergovernmental cooperation.--A description of--
``(A) cooperative efforts between the Federal
Government and State and local officials, including
State and local prosecutors and other law enforcement
officials; and
``(B) cooperative efforts among the several States
and between State and local officials, including State
and local prosecutors and other law enforcement
officials,
for financial crimes control which could be utilized or should
be encouraged.
``(6) Project and budget priorities.--A 3-year projection
for program and budget priorities and achievable projects for
reductions in financial crimes.
``(7) Assessment of funding.--A complete assessment of how
the proposed budget is intended to implement the strategy and
whether the funding levels contained in the proposed budget are
sufficient to implement the strategy.
``(8) Designated areas.--A description of geographical
areas designated as `high-risk money laundering and related
financial crime areas' in accordance with, but not limited to,
section 5343.
(9) Persons consulted.--Persons or officers consulted by
the Secretary pursuant to subsection (d).
``(10) Data regarding trends in money laundering and
related financial crimes.--The need for additional information
necessary for the purpose of developing and analyzing data in
order to ascertain financial crime trends.
``(11) Improved communications systems.--A plan for
enhancing the compatibility of automated information and
facilitating access of the Federal Government and State and
local governments to timely, accurate, and complete
information.
``(c) Effectiveness Report.--At the time each biennial national
strategy for combating financial crimes is transmitted by the President
to the Congress (other than the 1st transmission of any such strategy)
pursuant to subsection (a), the Secretary shall submit a report
containing an evaluation of the effectiveness of policies to combat
money laundering and related financial crimes.
``(d) Consultations.--In developing the national strategy for
combating money laundering and related financial crimes, the Secretary
shall consult with--
``(1) Department of the Treasury law enforcement
organizations involved in the detection, prevention, and
suppression of money laundering and related financial crimes;
``(2) the Attorney General;
``(3) the Board of Governors of the Federal Reserve System
and other Federal banking agencies and the National Credit
Union Administration Board;
``(4) State and local officials, including State and local
prosecutors;
``(5) the Securities and Exchange Commission;
``(6) the Commodities and Futures Trading Commission;
``(7) to the extent appropriate, State and local officials
responsible for financial institution and financial market
regulation;
``(8) any other State or local government authority, to the
extent appropriate;
``(9) any other Federal Government authority or
instrumentality, to the extent appropriate; and
``(10) representatives of the private financial services
sector, to the extent appropriate.
``SEC. 5343. HIGH-RISK MONEY LAUNDERING AND RELATED FINANCIAL CRIME
AREAS.
``(a) Findings and Purpose.--
``(1) Findings.--The Congress finds the following:
``(A) Money laundering and related financial crimes
frequently appear to be concentrated in particular
geographic areas, financial systems, industry sectors,
or financial institutions.
``(B) While the Secretary has the responsibility to
act with regard to Federal offenses which are being
committed in a particular locality or are directed at a
single institution, because modern financial systems
and institutions are interconnected to a degree which
was not possible until recently, money laundering and
other related financial crimes are likely to have
local, State, national, and international effects
wherever they are committed.
``(2) Purpose and objective.--It is the purpose of this
section to provide a mechanism for designating any area where
money laundering or a related financial crime appears to be
occurring at a higher than average rate such that--
``(A) a comprehensive approach to the problem of
such crime in such area can be developed, in
cooperation with State and local law enforcement
agencies, which utilizes the authority of the Secretary
to prevent such activity; or
``(B) such area can be targeted for law enforcement
action.
``(b) Element of National Strategy.--The designation of certain
areas as areas in which money laundering and related financial crimes
are extensive or present a substantial risk shall be an element of the
national strategy developed pursuant to section 5342(b).
``(c) Designation of Areas.--
``(1) Designation by secretary.--The Secretary, after
taking into consideration the factors specified in subsection
(d), shall designate any geographical area, industry, sector,
or institution in the United States in which money laundering
and related financial crimes are extensive or present a
substantial risk as a `high-risk money laundering and related
financial crimes area'.
``(2) Case-by-case determination.--In addition to the
factors specified in subsection (d), any designation of any
area under paragraph (1) shall be made on the basis of a
determination by the Secretary that the particular area,
industry, sector, or institution is being victimized by, or is
particularly vulnerable to, money laundering and related
financial crimes.
``(3) Specific initiatives.--Any head of a department,
bureau, or law enforcement agency, including any State or local
prosecutor, involved in the detection, prevention, and
suppression of money laundering and related financial crimes
and any State or local official or prosecutor may submit--
``(A) a written request for the designation of any
area as a high-risk money laundering and related
financial crimes area; or
``(B) a written request for funding under section
5345 for a specific prevention or enforcement
initiative, or to determine the extent of financial
criminal activity, in an area.
``(d) Factors.--In considering the designation of any area as a
high-risk money laundering and related financial crimes area, the
Secretary shall, to the extent appropriate, take into account the
following factors:
``(1) The population of the area and the demographics of
the population.
``(2) The number of bank and nonbank financial institution
transactions which originate in such area or involve
institutions located in such area.
``(3) The number of stock or commodities transactions which
originate in such area or involve institutions located in such
area.
``(4) Whether the area is a key transportation hub with any
international ports or airports or an extensive highway system.
``(5) Whether the area is an international center for
banking or commerce.
``(6) The extent to which financial crimes and financial
crime-related activities in such area are having a harmful
impact in other areas of the country.
``(7) The number or nature of requests for information or
analytical assistance which--
``(A) are made to the analytical component of the
Department of the Treasury; and
``(B) originate from law enforcement or regulatory
authorities located in such area or involve
institutions or businesses located in such area or
residents of such area.
``(8) Whether the area is or has been the subject of active
money laundering investigations.
``(9) The volume or nature of suspicious activity reports
originating in the area.
``(10) The volume or nature of currency transaction reports
or reports of cross-border movements of currency or monetary
instruments originating in the area.
``(11) Whether, and how often, the area has been the
subject of a geographical targeting order under section 5326
before being considered for such designation.
``(12) Observed changes in trends and patterns of money
laundering activity.
``(13) Unusual patterns, anomalies, growth, or other
changes in the volume or nature of core economic statistics or
indicators.
``(14) Statistics or indicators of unusual or unexplained
volumes of cash transactions.
``(15) Unusual patterns, anomalies, or changes in the
volume or nature of transactions conducted through financial
institutions operating within or outside the United States.
``(16) The extent to which State and local governments and
State and local law enforcement agencies have committed
resources to respond to the financial crime problem in the area
and the degree to which the commitment of such resources
reflects a determination by such government and agencies to
address the problem aggressively.
``(17) The extent to which a significant increase in the
allocation of Federal resources to combat financial crimes in
such area is necessary to provide an adequate State and local
response to financial crimes and financial crime-related
activities in such area.
``SEC. 5344. DESIGNATION OF LEAD AGENCY.
``(a) In General.--The Secretary shall coordinate and develop a
national strategy for combating money laundering and financial crimes.
``(b) Federal Responses Authorized.--With respect to any area
designated under section 5343 as a high-risk money laundering and
related financial crimes area, the Secretary may take the following
initiatives:
``(1) Recommend increases in Federal assistance which the
Secretary determines is necessary to combat financial crimes in
such areas.
``(2) Establish joint cooperative efforts, and coordinate
enforcement activities, among Federal law enforcement
organizations involved in the detection, prevention, and
suppression of money laundering and related financial crimes
and State and local law enforcement agencies with respect to
financial crimes in such area.
``SEC. 5345. GRANTS FOR FIGHTING MONEY LAUNDERING AND RELATED FINANCIAL
CRIMES.
``(a) Program Authorized.--
``(1) In general.--After the end of the 1-year period
beginning on the date the 1st national strategy for combating
money laundering and related financial crimes is submitted to
the Congress in accordance with section 5342, and subject to
subsection (b), the Secretary may review, select, and award
grants for State or local law enforcement agencies and
prosecutors to provide funding necessary to investigate and
prosecute money laundering and related financial crimes in
high-risk money laundering and related financial crime areas.
``(2) Special preference.--Special preference shall be
given to applications submitted to the Secretary which
demonstrate collaborative efforts of 2 or more State and local
law enforcement agencies or prosecutors who have a history of
Federal, State, and local cooperative law enforcement and
prosecutorial efforts in responding to such criminal activity.
``(b) Authorization.--There are authorized to be appropriated such
sums as may be necessary for fiscal years beginning after fiscal year
1998 to carry out this section.''.
(b) Clerical Amendment.--The table of subchapters for chapter 53 of
title 31, United States Code, is amended by adding at the end the
following items relating to the subchapter added by subsection (a) of
this section:
``subchapter iii--money laundering and related financial crimes
``Sec. 5341. Definitions.
``Sec. 5342. National money laundering and related financial
crimes strategy.
``Sec. 5343. High-intensity and high-risk money laundering and
related financial crime areas.
``Sec. 5344. Designation of lead agency.
``Sec. 5345. Grants for fighting money laundering and related
financial crimes.''.
SEC. 3. BUDGETS FOR LAW ENFORCEMENT ACTIVITIES RELATING TO MONEY
LAUNDERING AND RELATED FINANCIAL CRIMES.
Section 1105 of title 31, United States Code, is amended by adding
at the end the following new subsection:
``(h) The Director of the Office of Management and Budget shall
establish the funding for law enforcement activities with respect to
money laundering and related financial crimes for each applicable
department or agency as a separate object class in each budget annually
submitted to the Congress under this section.''.
(b) Report and Recommendations.--Before the end of the 5-year
period beginning on the date the 1st national strategy for combating
money laundering and related financial crimes is submitted to the
Congress pursuant to section 5342(a)(1) of title 31, United States
Code, the Secretary of the Treasury shall submit a report to the
Committee on Banking and Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate on the effectiveness of and the need for the
designation of areas, under section 5343 of title 31, United States
Code (as added by section 2(a) of this Act), as high-risk money
laundering and related financial crime areas, together with such
recommendations for legislation as the Secretary may determine to be
appropriate to carry out the purposes of such section.
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