[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.
                                 <all>