[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3745 Introduced in House (IH)]
105th CONGRESS
2d Session
H. R. 3745
To prevent money laundering.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 29, 1998
Mr. McCollum (for himself, Mr. Schumer, Mr. Hastert, Mr. Portman, Mr.
Goss, and Mr. Solomon) introduced the following bill; which was
referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To prevent money laundering.
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 Act of 1998''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Illegal money transmitting businesses.
Sec. 4. Restraint of assets of persons arrested abroad.
Sec. 5. Access to records in bank secrecy jurisdictions.
Sec. 6. Civil money laundering jurisdiction.
Sec. 7. Laundering money through a foreign bank.
Sec. 8. Specified unlawful activity for money laundering.
Sec. 9. Criminal forfeiture for money laundering conspiracies.
Sec. 10. Subpoenas for bank records.
Sec. 11. Admissibility of foreign business records.
Sec. 12. Charging money laundering as a course of conduct.
Sec. 13. Venue in money laundering cases.
Sec. 14. Technical amendment to restore wiretap authority for certain
money laundering offenses.
Sec. 15. Knowledge that the property is the proceeds of a felony.
Sec. 16. Money purchased on the black market.
Sec. 17. Asset forfeiture transfers.
Sec. 18. Receipt and deposit amendment.
Sec. 19. Coverage of foreign bank branches in the territories.
SEC. 3. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) Civil Forfeiture for Money Transmitting Violation.--Section
981(a)(1)(A) of title 18, United States Code, is amended by striking
``or 1957'' and inserting ``, 1957 or 1960''.
(b) Scienter Requirement for Section 1960 Violation.--Section 1960
of title 18, United States Code, is amended by adding at the end the
following:
``(c) For the purposes of proving a violation of this section
involving an illegal money transmitting business as defined in
subsection (b)(1)(A), it shall be sufficient for the Government to
prove that the defendant knew that the money transmitting business
lacked a license required by State law. It shall not be necessary to
show that the defendant knew that the operation of such a business
without the required license was an offense punishable under State
law.''.
SEC. 4. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD.
Section 981(b) of title 18, United States Code, is amended by
adding at the end the following:
``(3) If any person is arrested or charged in a foreign country in
connection with an offense that would give rise to the forfeiture of
property in the United States under this section or under the
Controlled Substances Act, the Attorney General may apply to any
Federal judge or magistrate judge in the district where the property is
located for an ex parte order restraining the property subject to
forfeiture for not more than 30 days, except that the time may be
extended for good cause shown at a hearing conducted in the manner
provided in rule 43(e) of the Federal Rules of Civil Procedure. The
application for the restraining order shall set forth the nature and
circumstances of the foreign charges and the basis for belief that the
person arrested or charged has property in the United States that would
be subject to forfeiture, and shall contain a statement that the
restraining order is needed to preserve the availability of property
for such time as is necessary to receive evidence from the foreign
country or elsewhere in support of probable cause for the seizure of
the property under this subsection.''.
SEC. 5. ACCESS TO RECORDS IN BANK SECRECY JURISDICTIONS.
Section 986 of title 18, United States Code, is amended by adding
at the end the following:
``(d) In any civil forfeiture case, or in any ancillary proceeding
in any criminal forfeiture case governed by section 413(n) of the
Controlled Substances Act (21 U.S.C. 853(n)), where--
``(1) financial records located in a foreign country may be
material--
``(A) to any claim or to the ability of the
Government to respond to such claim; or
``(B) in a civil forfeiture case, to the
Government's ability to establish the forfeitability of
the property; and
``(2) it is within the capacity of the claimant to waive
the claimant's rights under such secrecy laws, or to obtain the
records directly so that the records can be made available,
the refusal of the claimant to provide the records in response to a
discovery request or take the action necessary otherwise to make the
records available shall result in the dismissal of the claim with
prejudice. This subsection does not affect the claimant's rights to
refuse production on the basis of any privilege guaranteed by the
Constitution or laws of the United States.''.
SEC. 6. CIVIL MONEY LAUNDERING JURISDICTION.
Section 1956(b) of title 18, United States Code, is amended--
(1) by inserting ``(1)'' after ``(b)'';
(2) by redesignating present paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(3) by inserting ``, or section 1957'' after ``or (a)(3)'';
and
(4) by adding at the end the following:
``(2) For purposes of adjudicating an action filed or enforcing a
penalty ordered under this section, the district courts shall have
jurisdiction over any foreign person, including any financial
institution authorized under the laws of a foreign country, that
commits an offense under subsection (a) involving a financial
transaction that occurs in whole or in part in the United States, if
that service of process upon such foreign person is made under the
Federal Rules of Civil Procedure or the laws of the country where the
foreign person is found.
``(3) The court may issue a pretrial restraining order or take any
other action necessary to ensure that any bank account or other
property held by the defendant in the United States is available to
satisfy a judgment under this section.''.
SEC. 7. LAUNDERING MONEY THROUGH A FOREIGN BANK.
Section 1956(c)(6) of title 18, United States Code, is amended to
read as follows:
``(6) the term `financial institution' includes any
financial institution described in section 5312(a)(2) of title
31, United States Code, or the regulations promulgated
thereunder, as well as any foreign bank, as defined in
paragraph (7) of section 1(b) of the International Banking Act
of 1978 (12 U.S.C. 3101(7)).''.
SEC. 8. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING.
(a) In General.--Section 1956(c)(7) of title 18, United States
Code, is amended--
(1) in subparagraph (B)--
(A) so that clause (ii) reads as follows:
``(ii) any conduct constituting a crime of
violence;''; and
(B) by inserting after clause (iii) the following:
``(iv) fraud, or any scheme to defraud,
committed against a foreign government or
foreign governmental entity;
``(v) bribery of a public official, or the
misappropriation, theft, or embezzlement of
public funds by or for the benefit of a public
official;
``(vi) smuggling or export control
violations involving munitions listed in the
United States Munitions List or technologies
with military applications as defined in the
Commerce Control List of the Export
Administration Regulations; or
``(vii) an offense with respect to which
the United States would be obligated by a
multilateral treaty either to extradite the
alleged offender or to submit the case for
prosecution, if the offender were found within
the territory of the United States.'';
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods
falsely classified),'' before ``section 542'';
(B) by inserting ``section 924(m) (relating to
firearms trafficking),'' before ``section 956'';
(C) by inserting ``section 1030 (relating to
computer fraud and abuse),'' before ``1032''; and
(D) by inserting ``any felony violation of the
Foreign Agents Registration Act of 1938, as amended,''
before ``or any felony violation of the Foreign Corrupt
Practices Act''; and
(3) in subparagraph (E)--
(A) by inserting ``section 42 or 43 of this title
(commonly called the Lacey Act),'' after ``a felony
violation of'';
(B) by inserting ``the Clean Air Act (42 U.S.C.
7401 et seq.),'' after ``the Safe Drinking Water Act
(42 U.S.C. 300f et seq.),''.
(b) National Security.--Section 1956(d) of title 18, United States
Code, is amended by adding at the end the following: ``This section
does not apply to any official conduct by a representative of, or to an
action which is authorized by and conducted on behalf of, the United
States Government.''.
SEC. 9. CRIMINAL FORFEITURE FOR MONEY LAUNDERING CONSPIRACIES.
Section 982(a)(1) of title 18, United States Code, is amended by
inserting ``, or a conspiracy to commit any such offense'' after ``of
this title''.
SEC. 10. SUBPOENAS FOR BANK RECORDS.
Section 986 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) by striking ``section 1956, 1957, or 1960 of
this title, section 5322 or 5324 of title 31, United
States Code'' and inserting ``section 981 or 982 of
this title'';
(B) by inserting ``before or'' before ``after'';
(C) by striking ``in rem''; and
(D) by striking the last sentence; and
(2) in subsection (c), by inserting ``or the Federal Rules
of Criminal Procedure'' after ``Procedure''.
SEC. 11. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.
(a) In General.--Chapter 163 of title 28, United States Code, is
amended by adding at the end the following:
``Sec. 2466. Foreign records
``(a) In a civil proceeding in a court of the United States,
including civil forfeiture proceedings and proceedings in the United
States Claims Court and the United States Tax Court, a foreign record
of regularly conducted activity, or copy of such record, obtained
pursuant to an official request, shall not be excluded as evidence by
the hearsay rule if a foreign certification, also obtained pursuant to
the same official request or subsequent official request that
adequately identifies such foreign record, attests that--
``(1) such record was made, at or near the time of the
occurrence of the matters set forth, by (or from information
transmitted by) a person with knowledge of those matters;
``(2) such record was kept in the course of a regularly
conducted business activity;
``(3) the business activity made such a record as a regular
practice; and
``(4) if such record is not the original, such record is a
duplicate of the original; unless the source of information or
the method or circumstances of preparation indicate lack of
trustworthiness.
``(b) A foreign certification under this section shall authenticate
such record or duplicate.
``(c) As soon as practicable after a responsive pleading has been
filed, a party intending to offer in evidence under this section a
foreign record of regularly conducted activity shall provide written
notice of that intention to each other party. A motion opposing
admission in evidence of such record shall be made by the opposing
party and determined by the court before trial. Failure by a party to
file such motion before trial shall constitute a waiver of objection to
such record or duplicate, but the court for cause shown may grant
relief from the waiver.
``(d) As used in this section--
``(1) the term `foreign record of regularly conducted
activity' means a memorandum, report, record, or data
compilation, in any form, of acts, events, conditions,
opinions, or diagnoses, maintained in a foreign country;
``(2) the term `foreign certification' means a written
declaration made and signed in a foreign country by the
custodian of a record of regularly conducted activity or
another qualified person, that if falsely made, would subject
the maker to criminal penalty under the law of that country;
``(3) the term `business' includes business, institution,
association, profession, occupation, and calling of every kind
whether or not conducted for profit; and
``(4) the term `official request' means a letter rogatory,
a request under an agreement, treaty or convention, or any
other request for information or evidence made by a court of
the United States or an authority of the United States having
law enforcement responsibility to a court or other authority of
a foreign country.''.
(b) Clerical Amendment.--The table of sections at the beginning of
chapter 163 of title 28, United States Code, is amended by inserting at
the end the following new item:
``2466. Foreign records.''.
SEC. 12. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.
Section 1956(h) of title 18, United States Code, is amended--
(1) by inserting ``(1)'' before ``Any person''; and
(2) by adding at the end the following:
``(2) Any person who commits multiple violations of this section or
section 1957 that are part of the same scheme or continuing course of
conduct may be charged, at the election of the Government, in a single
count in an indictment or information.''.
SEC. 13. VENUE IN MONEY LAUNDERING CASES.
Section 1956 of title 18, United States Code, is amended, by adding
at the end the following subsection:
``(i) Venue.--(1) Except as provided in paragraph (2), a
prosecution for an offense under this section or section 1957 may be
brought in any district in which the financial or monetary transaction
is conducted, or where a prosecution for the underlying specified
unlawful activity could be brought.
``(2) A prosecution for an attempt or conspiracy offense under this
section or section 1957 may be brought in the district where venue
would lie for the completed offense under paragraph (1), or in any
other district where an act in furtherance of the attempt or conspiracy
took place.''.
SEC. 14. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY FOR CERTAIN
MONEY LAUNDERING OFFENSES.
Section 2516(1)(g) of title 18, United States Code, is amended by
striking ``a violation of section 5322 of title 31, United States Code
(dealing with the reporting of currency transactions)'' and inserting
``a violation of section 5322 or 5324 of title 31, United States Code
(dealing with the reporting and illegal structuring of currency
transactions)''.
SEC. 15. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A FELONY.
Section 1956(c)(1) of title 18, United States Code, is amended by
inserting ``, and regardless of whether or not the person knew that the
activity constituted a felony'' before the semicolon at the end.
SEC. 16. MONEY PURCHASED ON THE BLACK MARKET.
(a) In General.--Section 981(a) of title 18, United States Code, is
amended by adding at the end the following:
``(3) A person asserting an innocent owner defense under paragraph
(2), or any other provision of law, in currency, monetary instruments
or funds purchased from a money broker must be a bona fide purchaser
for value without reason to know that the currency, monetary
instruments or funds were subject to forfeiture, and must establish
that such person took all reasonable affirmative steps to determine the
source of the currency, monetary instruments or funds, or to verify
that the currency, monetary instruments or funds were not derived from
illegal activity.
``(4) For purposes of paragraph (3)--
``(A) the term `money broker' means any person who sells or
exchanges currency, monetary instruments or funds, either in
the United States or in a foreign country, either
independently, or through any parallel market, black market,
casa de cambio, or other currency exchange business; and
``(B) what constitutes `all reasonable affirmative steps'
depends on the facts and circumstances surrounding the
transaction, but if the money broker is a financial
institution, as defined in section 20 of this title, the
purchaser takes `all reasonable affirmative steps' if the
purchaser conducts the transaction at the financial institution
during normal business hours in an arms-length transaction and
has no reason to know that the currency, monetary instruments,
or funds were derived from or used to commit any unlawful
activity.''.
(b) Application.--The amendments made by this section shall apply
to any case pending on the effective date of this Act.
SEC. 17. ASSET FORFEITURE TRANSFERS.
Section 511(e)(1)(E)(iii) of the Controlled Substances Act (21
U.S.C. 881(e)(1)(E)(iii)) is amended by inserting ``, or to a country
that has not been so certified, if the Secretary of State finds that
transfer to be in the national interest'' before the period.
SEC. 18. RECEIPT AND DEPOSIT AMENDMENT.
The United States Sentencing Commission shall amend or promulgate
sentencing guidelines to provide that the sentence for an offense under
section 1957 of title 18, United States Code, if the transaction in
criminally derived property consists of a deposit of that property in a
financial institution without any intent to disguise or conceal the
nature, location, source, ownership, or control of such proceeds, shall
not exceed the sentence for the offense giving rise to such property by
more than one offense level.
SEC. 19. COVERAGE OF FOREIGN BANK BRANCHES IN THE TERRITORIES.
Section 20(9) of title 18, United States Code, is amended by
inserting ``, except that, for purposes of the application of that
definition, the term `State' as used in such Act includes a
commonwealth, territory, or possession of the United States'' after
``Banking Act of 1978''.
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