[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4005 Reported in House (RH)]





                                                 Union Calendar No. 405

105th CONGRESS

  2d Session

                               H. R. 4005

                      [Report No. 105-611, Part I]

_______________________________________________________________________

                                 A BILL

  To amend title 31 of the United States Code to improve methods for 
          preventing financial crimes, and for other purposes.

_______________________________________________________________________

                           September 11, 1998

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed





                                                 Union Calendar No. 405
105th CONGRESS
  2d Session
                                H. R. 4005

                      [Report No. 105-611, Part I]

  To amend title 31 of the United States Code to improve methods for 
          preventing financial crimes, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 5, 1998

  Mr. Leach (for himself, Mr. Bereuter, Mr. Castle, Mr. Bachus, Mrs. 
   Roukema, Mr. Baker, Mr. LaFalce, Mr. Kanjorski, Mr. Hinchey, Ms. 
  Waters, and Ms. Velazquez) introduced the following bill; which was 
  referred to the Committee on Banking and Financial Services, and in 
    addition to the Committee on Ways and Means, 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

                              July 8, 1998

 Reported from the Committee on Banking and Financial Services with an 
                               amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                              July 8, 1998

  Referred to the Committee on the Judiciary for a period ending not 
 later than July 31, 1998, for consideration of such provisions of the 
    bill and amendment recommended by the Committee on Banking and 
 Financial Services as fall within the jurisdiction of that committee 
                    pursuant to clause 1(c), rule X

                              July 8, 1998

   Referral to the Committee on Ways and Means extended for a period 
                  ending not later than July 31, 1998

                             July 31, 1998

                 Committee on the Judiciary discharged

                             July 31, 1998

   Referral to the Committee on Ways and Means extended for a period 
                  ending not later than August 7, 1998

                             August 7, 1998

   Referral to the Committee on Ways and Means extended for a period 
                ending not later than September 11, 1998

                           September 11, 1998

Additional sponsors: Mr. Lazio of New York, Mr. Foley, and Mr. McCollum

                           September 11, 1998

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on June 5, 
                                 1998]

_______________________________________________________________________

                                 A BILL


 
  To amend title 31 of the United States Code to improve methods for 
          preventing 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 Deterrence Act of 
1998''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds as follows:
            (1) The dollar amount involved in international money 
        laundering likely exceeds $500,000,000,000 annually.
            (2) Organized crime groups are continually devising new 
        methods to launder the proceeds of illegal activities in an 
        effort to subvert the transaction reporting requirements of 
        subchapter II of chapter 53 of title 31, United States Code, 
        and chapter 2 of Public Law 91-508.
            (3) A number of methods to launder the proceeds of criminal 
        activity were identified and described in congressional 
        hearings, including the use of financial service providers 
        which are not depository institutions, such as money 
        transmitters and check cashing services, the purchase and 
        resale of durable goods, and the exchange of foreign currency 
        in the so-called ``black market''.
            (4) Recent successes in combating domestic money laundering 
        have involved the application of the heretofore seldom-used 
        authority granted to the Secretary of the Treasury and the 
        cooperative efforts of Federal, State, and local law 
        enforcement agencies.
            (5) Such successes have been exemplified by the 
        implementation of the geographic targeting order in New York 
        City and through the work of the El Dorado task force, a group 
        comprised of agents of Department of the Treasury law 
        enforcement agencies, New York State troopers, and New York 
        City police officers.
            (6) Money laundering by international criminal enterprises 
        challenges the legitimate authority of national governments, 
        corrupts government institutions, endangers the financial and 
        economic stability of nations, and routinely violates legal 
        norms, property rights, and human rights. In some countries, 
        such as Columbia, Mexico, and Russia, the wealth and power of 
        organized criminal enterprises rivals their own government's.
            (7) The structure of international criminal enterprises 
        engaged in money laundering is complex, diverse, and 
        fragmented. Organized criminal enterprises such as the 
        Colombian and Mexican cartels, the Russian ``mafiya'', Sicilian 
        crime families, and Chinese gangs are highly resistant to 
        conventional law enforcement techniques. Their financial 
        management and organizational infrastructure are highly 
        sophisticated and difficult to track because of the 
        globalization of the financial service industry.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To amend subchapter II of chapter 53 of title 31, 
        United States Code, to provide the law enforcement community 
        with the necessary legal authority to combat money laundering.
            (2) To broaden the law enforcement community's access to 
        transactional information already being collected which relate 
        to coins and currency received in a nonfinancial trade or 
        business.
            (3) To expedite the issuance by the Secretary of the 
        Treasury of regulations designed to deter money laundering 
        activities at certain types of financial institutions.

SEC. 3. AMENDMENTS RELATING TO REPORTING OF SUSPICIOUS ACTIVITIES.

    (a) Amendment Relating to Civil Liability Immunity for 
Disclosures.--Section 5318(g)(3) of title 31, United States Code, is 
amended to read as follows:
            ``(3) Liability for disclosures.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law--
                            ``(i) any financial institution that--
                                    ``(I) makes a disclosure of any 
                                possible violation of law or regulation 
                                to an appropriate government agency; or
                                    ``(II) makes a disclosure pursuant 
                                to this subsection or any other 
                                authority;
                            ``(ii) any director, officer, employee, or 
                        agent of such institution who makes, or 
                        requires another to make any such disclosure; 
                        and
                            ``(iii) any independent public accountant 
                        who audits any such financial institution and 
                        makes a disclosure described in clause (i),
                shall not be liable to any person under any law or 
                regulation of the United States, any constitution, law, 
                or regulation of any State or political subdivision 
                thereof, or under any contract or other legally 
                enforceable agreement (including any arbitration 
                agreement), for such disclosure or for any failure to 
                notify the person who is the subject of such disclosure 
                or any other person identified in the disclosure.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to a disclosure or communication required under Federal 
                securities law, other than provisions of law that 
                specifically refer to the Currency and Foreign 
                Transactions Reporting Act of 1970.''.
    (b) Prohibition on Notification of Disclosures.--Section 5318(g)(2) 
of title 31, United States Code, is amended to read as follows:
            ``(2) Notification prohibited.--
                    ``(A) In general.--If a financial institution, any 
                director, officer, employee, or agent of any financial 
                institution, or any independent public accountant who 
                audits any financial institution, voluntarily or 
                pursuant to this section or any other authority, 
                reports a suspicious transaction to an appropriate 
                government agency--
                            ``(i) the financial institution, director, 
                        officer, employee, agent, or accountant may not 
                        notify any person involved in the transaction 
                        that the transaction has been reported and may 
                        not disclose any information included in the 
                        report to any such person; and
                            ``(ii) any other person, including any 
                        officer or employee of any government, who has 
                        any knowledge that such report was made may not 
                        disclose to any person involved in the 
                        transaction that the transaction has been 
                        reported or any information included in the 
                        report.
                    ``(B) Coordination with paragraph (5).--
                Subparagraph (A) shall not be construed as prohibiting 
                any financial institution, or any director, officer, 
                employee, or agent of such institution, from including, 
                in a written employment reference that is provided in 
                accordance with paragraph (5) in response to a request 
                from another financial institution, information that 
                was included in a report to which subparagraph (A) 
                applies, but such written employment reference may not 
                disclose that such information was also included in any 
                such report or that such report was made.''.
    (c) Authorization To Include Suspicions of Illegal Activity in 
Employment References.--Section 5318(g) of title 31, United States 
Code, is amended by adding at the end the following new paragraph:
            ``(5) Employment references may include suspicions of 
        involvement in illegal activity.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law and subject to subparagraph (B) of 
                this paragraph and paragraph (2)(C), any financial 
                institution, and any director, officer, employee, or 
                agent of such institution, may disclose, in any written 
                employment reference relating to a current or former 
                institution-affiliated party of such institution which 
                is provided to another financial institution in 
                response to a request from such other institution, 
                information concerning the possible involvement of such 
                institution-affiliated party in any suspicious 
                transaction relevant to a possible violation of law or 
                regulation.
                    ``(B) Limit on liability for disclosures.--A 
                financial institution, and any director, officer, 
                employee, or agent of such institution, shall not be 
                liable to any person under any law or regulation of the 
                United States, any constitution, law, or regulation of 
                any State or political subdivision thereof, or under 
                any contract or other legally enforceable agreement 
                (including any arbitration agreement), for any 
                disclosure under subparagraph (A), to the extent--
                            ``(i) the disclosure does not contain 
                        information which the institution, director, 
                        officer, employee, agent, or accountant knows 
                        to be false; and
                            ``(ii) the institution, director, officer, 
                        employee, agent, or accountant has not acted 
                        with malice or with reckless disregard for the 
                        truth in making the disclosure.
                    ``(C) Institution-affiliated party defined.--For 
                purposes of this paragraph, the term `institution-
                affiliated party' has the meaning given to such term in 
                section 3(u) of the Federal Deposit Insurance Act, 
                except such section 3(u) shall be applied by 
                substituting `financial institution' for `insured 
                depository institution'.''.
    (d) Amendments Relating to Availability of Suspicious Activity 
Reports for Other Agencies.--Section 5319 of title 31, United States 
Code, is amended--
            (1) in the 1st sentence, by striking ``5314, or 5316'' and 
        inserting ``5313A, 5314, 5316, or 5318(g)'';
            (2) in the last sentence, by inserting ``under section 
        5313, 5313A, 5314, 5316, or 5318(g)'' after ``records of 
        reports''; and
            (3) by adding the following new sentence after the last 
        sentence: ``The Secretary of the Treasury may permit the 
        dissemination of information in any such reports to any self-
        regulatory organization (as defined in section 3(a)(26) of the 
        Securities Exchange Act of 1934), if the Securities and 
        Exchange Commission determines that such dissemination is 
        necessary or appropriate to permit such organization to perform 
        its function under the Securities Exchange Act of 1934 and 
        regulations prescribed under such Act.''.

SEC. 4. EXPANSION OF SCOPE OF SUMMONS POWER.

    Section 5318(b)(1) of title 31, United States Code, is amended by 
inserting ``examinations to determine compliance with the requirements 
of this subchapter, section 21 of the Federal Deposit Insurance Act, 
and chapter 2 of Public Law 91-508 and regulations prescribed pursuant 
to such provisions, investigations relating to reports filed by 
financial institutions or other persons pursuant to any such provision 
or regulation, and'' after ``in connection with''.

SEC. 5. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING ORDERS AND 
              CERTAIN RECORDKEEPING REQUIREMENTS.

    (a) Civil Penalty for Violation of Targeting Order or Certain 
Recordkeeping Requirements.--Section 5321(a)(1) of title 31, United 
States Code, is amended--
            (1) by inserting ``or order issued'' after ``regulation 
        prescribed'' the 1st place it appears; and
            (2) by inserting ``, or willfully violating a regulation 
        prescribed under section 21 of the Federal Deposit Insurance 
        Act or under section 123 of Public Law 91-508,'' before ``is 
        liable''.
    (b) Criminal Penalties for Violation of Targeting Order or Certain 
Recordkeeping Requirements.--Section 5322 of title 31, United States 
Code, is amended--
            (1) in each of subsections (a) and (b), by inserting ``or 
        order issued'' after ``regulation prescribed'' the 1st place it 
        appears;
            (2) in subsection (a), by inserting ``, or willfully 
        violating a regulation prescribed under section 21 of the 
        Federal Deposit Insurance Act or under section 123 of Public 
        Law 91-508,'' before ``shall''; and
            (3) in subsection (b), by inserting ``or willfully 
        violating a regulation prescribed under section 21 of the 
        Federal Deposit Insurance Act or under section 123 of Public 
        Law 91-508,'' before ``while violating''.
    (c) Structuring Transactions To Evade Targeting Order or Certain 
Recordkeeping Requirements.--Section 5324(a) of title 31, United States 
Code, is amended--
            (1) in the portion of such section which precedes paragraph 
        (1), by inserting ``, the reporting requirements imposed by any 
        order issued under section 5326, or the recordkeeping 
        requirements imposed by any regulation prescribed under section 
        21 of the Federal Deposit Insurance Act or section 123 of 
        Public Law 91-508'' after ``regulation prescribed under any 
        such section''; and
            (2) in paragraphs (1) and (2), by inserting ``, to file a 
        report required by any order issued under section 5326, or to 
        maintain a record required pursuant to any regulation 
        prescribed under section 21 of the Federal Deposit Insurance 
        Act or section 123 of Public Law 91-508'' after ``regulation 
        prescribed under any such section'' where such term appears in 
        each such paragraph.
    (d) Increase in Civil Penalties for Violation of Certain 
Recordkeeping Requirements.--
            (1) Federal deposit insurance act.--Section 21(j)(1) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1829b(j)(1)) is 
        amended by striking ``$10,000'' and inserting ``the greater of 
        the amount (not to exceed $100,000) involved in the transaction 
        (if any) with respect to which the violation occurred or 
        $25,000''.
            (2) Public law 91-508.--Section 125(a) of Public Law 91-508 
        (12 U.S.C. 1955(a)) is amended by striking ``$10,000'' and 
        inserting ``the greater of the amount (not to exceed $100,000) 
        involved in the transaction (if any) with respect to which the 
        violation occurred or $25,000''.
    (e) Criminal Penalties for Violation of Certain Recordkeeping 
Requirements.--
            (1) Section 126.--Section 126 of Public Law 91-508 (12 
        U.S.C. 1956) is amended to read as follows:
``Sec. 126. Criminal penalty
    ``A person willfully violating this chapter, section 21 of the 
Federal Deposit Insurance Act, or a regulation prescribed under this 
chapter or such section, shall be fined not more than $250,000, or 
imprisoned for not more than five years, or both.''.
            (2) Section 127.--Section 127 of Public Law 91-508 (12 
        U.S.C. 1957) is amended to read as follows:
``Sec. 127. Additional criminal penalty in certain cases
    ``A person willfully violating this chapter, section 21 of the 
Federal Deposit Insurance Act, or a regulation prescribed under this 
chapter or such section, while violating another law of the United 
States or as part of a pattern of any illegal activity involving more 
than $100,000 in a 12-month period, shall be fined not more than 
$500,000, imprisoned for not more than 10 years, or both.''.

SEC. 6. REPEAL OF CERTAIN REPORTING REQUIREMENTS.

    Section 407(d) of the Money Laundering Suppression Act of 1994 (31 
U.S.C. 5311 note) is amended by striking ``subsection (c)'' and 
inserting ``subsection (c)(2)''.

SEC. 7. LIMITED EXEMPTION FROM PAPERWORK REDUCTION ACT.

    Section 3518(c)(1) of title 44, United States Code, is amended--
            (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively; and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
            ``(C) pursuant to regulations prescribed or orders issued 
        by the Secretary of the Treasury under section 5318(h) or 5326 
        of title 31;''.

SEC. 8. TRANSFER OF REPORTING REQUIREMENTS FROM SECTION 6050I OF THE 
              INTERNAL REVENUE CODE OF 1986 TO TITLE 31, UNITED STATES 
              CODE.

    (a) Reenactment of Section 6050I.--Subchapter II of chapter 53 of 
title 31, United States Code, is amended by inserting after section 
5313 the following new section:
``Sec. 5313A. Reports relating to coins and currency received in 
              nonfinancial trade or business
    ``(a) Coin and Currency Receipts of More Than $10,000.--Any 
person--
            ``(1) who is engaged in a trade or business; and
            ``(2) who, in the course of such trade or business, 
        receives more than $10,000 in coins or currency in 1 
        transaction (or 2 or more related transactions),
shall file a report described in subsection (b) with respect to such 
transaction (or related transactions) at such time as the Secretary may 
by regulations prescribe.
    ``(b) Form and Manner of Reports.--A report is described in this 
subsection if such report--
            ``(1) is in such form as the Secretary may prescribe;
            ``(2) contains--
                    ``(A) the name, address, and taxpayer 
                identification number of the person from whom the coins 
                or currency was received;
                    ``(B) the amount of coins or currency received;
                    ``(C) the date and nature of the transaction; and
                    ``(D) such other information as the Secretary may 
                prescribe.
    ``(c) Exceptions.--
            ``(1) Amounts received by financial institutions.--
        Subsection (a) shall not apply to amounts received in a 
        transaction reported under section 5313 and regulations 
        prescribed under such section.
            ``(2) Transactions occurring outside the united states.--
        Except to the extent provided in regulations prescribed by the 
        Secretary, subsection (a) shall not apply to any transaction if 
        the entire transaction occurs outside the United States.
    ``(d) Currency Includes Foreign Currency and Certain Monetary 
Instruments.--
            ``(1) In general.--For purposes of this section, the term 
        `currency' includes--
                    ``(A) foreign currency; and
                    ``(B) to the extent provided in regulations 
                prescribed by the Secretary, any monetary instrument 
                (whether or not in bearer form) with a face amount of 
                not more than $10,000.
            ``(2) Scope of application.--Paragraph (1)(B) shall not 
        apply to any check drawn on the account of the writer in a 
        financial institution referred to in subparagraph (A), (B), 
        (C), (D), (E), (F), (G), (J), (K), (R), or (S) of section 
        5312(a)(2).
    ``(e) Coins or Currency Received by Criminal Court Clerks.--
            ``(1) In general.--Every clerk of a Federal or State 
        criminal court who receives more than $10,000 in coins or 
        currency as bail for any individual charged with a specified 
        criminal offense shall file a report described in paragraph (2) 
        (at such time as the Secretary may by regulations prescribe) 
        with respect to the receipt of such bail.
            ``(2) Report.--A report is described in this paragraph if 
        such report--
                    ``(A) is in such form as the Secretary may 
                prescribe; and
                    ``(B) contains--
                            ``(i) the name, address, and taxpayer 
                        identification number of--
                                    ``(I) the individual charged with 
                                the specified criminal offense; and
                                    ``(II) each person posting the bail 
                                (other than a person licensed as a bail 
                                bondsman);
                            ``(ii) the amount of coins or currency 
                        received;
                            ``(iii) the date the coins or currency was 
                        received; and
                            ``(iv) such other information as the 
                        Secretary may prescribe.
            ``(3) Specified criminal offense.--For purposes of this 
        subsection, the term `specified criminal offense' means--
                    ``(A) any Federal criminal offense involving a 
                controlled substance;
                    ``(B) racketeering (as defined in section 1951, 
                1952, or 1955 of title 18, United States Code);
                    ``(C) money laundering (as defined in section 1956 
                or 1957 of such title); and
                    ``(D) any State criminal offense substantially 
                similar to an offense described in subparagraph (A), 
                (B), or (C).
            ``(4) Information to federal prosecutors.--Each clerk 
        required to include in a report under paragraph (1) the 
        information described in paragraph (2)(B) with respect to an 
        individual described in paragraph (2)(B)(i)(I) shall furnish 
        (at such time as the Secretary may by regulations prescribe) a 
        written statement showing such information to the United States 
        Attorney for the jurisdiction in which such individual resides 
        and the jurisdiction in which the specified criminal offense 
        occurred.
            ``(5) Information to payors of bail.--Each clerk required 
        to file a report under paragraph (1) shall furnish (at such 
        time as the Secretary may by regulations prescribe) to each 
        person whose name is required to be set forth in such report by 
        reason of paragraph (2)(B)(i)(II) a written statement showing--
                    ``(A) the name and address of the clerk's office 
                required to file the report; and
                    ``(B) the aggregate amount of coins and currency 
                described in paragraph (1) received by such clerk.''.
    (b) Prohibition on Structuring Transactions.--
            (1) In general.--Section 5324 of title 31, United States 
        Code, is amended--
                    (A) by redesignating subsections (b) and (c) as 
                subsections (c) and (d), respectively; and
                    (B) by inserting after subsection (a) the following 
                new subsection:
    ``(b) Domestic Coin and Currency Transactions Involving 
Nonfinancial Trades or Businesses.--No person shall for the purpose of 
evading the report requirements of section 5313A or any regulation 
prescribed under such section--
            ``(1) cause or attempt to cause a nonfinancial trade or 
        business to fail to file a report required under section 5313A 
        or any regulation prescribed under such section;
            ``(2) cause or attempt to cause a nonfinancial trade or 
        business to file a report required under section 5313A or any 
        regulation prescribed under such section that contains a 
        material omission or misstatement of fact; or
            ``(3) structure or assist in structuring, or attempt to 
        structure or assist in structuring, any transaction with 1 or 
        more nonfinancial trades or businesses.''.
            (2) Technical and conforming amendments.--
                    (A) The heading for subsection (a) of section 5324 
                of title 31, United States Code, is amended by 
                inserting ``Involving Financial Institutions'' after 
                ``Transactions''.
                    (B) Section 5317(c) of title 31, United States 
                Code, is amended by striking ``5324(b)'' and inserting 
                ``5324(c)''.
    (c) Definition of Nonfinancial Trade or Business.--
            (1) In general.--Section 5312(a) of title 31, United States 
        Code, is amended--
                    (A) by redesignating paragraphs (4) and (5) as 
                paragraphs (5) and (6), respectively; and
                    (B) by inserting after paragraph (3) the following 
                new paragraph:
            ``(4) Nonfinancial trade or business.--The term 
        `nonfinancial trade or business' means any trade or business 
        other than a financial institution that is subject to the 
        reporting requirements of section 5313 and regulations 
        prescribed under such section.''.
            (2) Technical and conforming amendments.--
                    (A) Section 5312(a)(3)(C) of title 31, United 
                States Code, is amended by striking ``section 5316,'' 
                and inserting ``sections 5313A and 5316,''.
                    (B) Subsections (a) through (f) of section 5318 of 
                title 31, United States Code, and sections 5321, 5326, 
                and 5328 of such title are each amended--
                            (i) by inserting ``or nonfinancial trade or 
                        business'' after ``financial institution'' each 
                        place such term appears; and
                            (ii) by inserting ``or nonfinancial trades 
                        or businesses'' after ``financial 
                        institutions'' each place such term appears.
                    (C) Section 981(a)(1)(A) of title 18, United States 
                Code, is amended by striking ``5313(a) or 5324(a) of 
                title 31,'' and inserting ``5313(a) or 5313A of title 
                31, or subsection (a) or (b) of section 5324 of such 
                title,''.
                    (D) Section 982(a)(1) of title 18, United States 
                Code, is amended by inserting ``5313A,'' after 
                ``5313(a),''.
    (d) Repeal of Duplicate Provision.--Section 6050I of the Internal 
Revenue Code of 1986 is repealed.
    (e) Clerical Amendments.--
            (1) Title 31.--The tables of sections for chapter 53 of 
        title 31, United States Code, is amended by inserting after the 
        item relating to section 5313 the following new item:

``5313A. Reports relating to coins and currency received in 
                            nonfinancial trade or business.''.
            (2) Internal revenue code of 1986.--
                    (A) The table of sections for subpart B of part III 
                of subchapter A of chapter 61 of the Internal Revenue 
                Code of 1986 is amended by striking the item relating 
                to section 6050I.
                    (B)(i) Subsection (l) of section 6103 of such Code 
                is amended by striking paragraph (15).
                    (ii) Subparagraph (A) of section 6103(p)(3) of such 
                Code is amended by striking ``(15),''.
                    (iii) Paragraph (4) of section 6103(p) of such Code 
                is amended by striking in the material preceding 
                subparagraph (A) ``(12)'' and all that follows through 
                ``(16)'' and inserting ``(12), or (16)''.
                    (iv) Clause (ii) of section 6103(p)(4)(F) of such 
                Code is amended by striking ``(14), or (15)'' and 
                inserting ``or (14)''.
                    (C) Paragraph (2) of section 6721(e) of such Code 
                is amended--
                            (i) in subparagraph (A) by striking 
                        ``6050I,'' and by adding ``or'' at the end,
                            (ii) by striking ``or'' at the end of 
                        subparagraph (B) and inserting ``and'', and
                            (iii) by striking subparagraph (C).
                    (D) Subparagraph (B) of section 6724(d)(1) of such 
                Code is amended by striking clause (iv) and by 
                redesignating the succeeding clauses accordingly.
                    (E) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking subparagraph (K) and by 
                redesignating the succeeding subparagraphs accordingly.
                    (F) Section 7203 of such Code is amended by 
                striking the last sentence.
    (f) Regulations; Effective Date.--
            (1) Regulations.--Regulations which the Secretary of the 
        Treasury determines are necessary to implement this section 
        shall be published in final form before the end of the 6-month 
        period beginning on the date of the enactment of this Act.
            (2) Effective date.--The amendments made by this section 
        shall take effect at the end of the 6-month period beginning on 
        the date the regulations referred to in paragraph (1) are 
        published in final form in the Federal Register.

SEC. 9. PROMULGATION OF ``KNOW YOUR CUSTOMER'' REGULATIONS.

    Within 120 days after the date of the enactment of this Act, the 
Secretary of the Treasury shall promulgate ``Know Your Customer'' 
regulations for financial institutions. This section 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 
other applicable provision of law.

SEC. 10. FUNGIBLE PROPERTY IN BANK ACCOUNTS.

    Section 984 of title 18, United States Code, is amended--
            (1) so that subsection (a) reads as follows:
    ``(a) This section applies only if the action for forfeiture was 
commenced by a seizure or an arrest in rem not later than 2 years after 
the offense that is the basis for the forfeiture.'';
            (2) by striking subsection (c);
            (3) by redesignating subsection (d) as subsection (c), and 
        in such subsection--
                    (A) by striking ``(1)'' and all that follows 
                through the end of paragraph (1) and inserting the 
                following:
    ``(1) Subsection (b) does not apply to an action against funds held 
by a financial institution in an interbank account unless the account 
holder knowingly engaged in the offense that is the basis for the 
forfeiture.''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3) As used in this subsection, a `financial institution' 
includes a foreign bank, as defined in paragraph (7) of section 1(b) of 
the International Banking Act of 1978.''; and
            (4) by adding at the end the following new subsection:
    ``(d) Nothing in this section is intended to limit the ability of 
the Government to obtain the forfeiture of property under any statute 
where the property involved in the offense giving rise to the 
forfeiture or property traceable thereto is available for 
forfeiture.''.

SEC. 11. REPORT ON PRIVATE BANKING ACTIVITIES.

    (a) In General.--Within 1 year after the date of the enactment of 
this Act, the Secretary of the Treasury, in consultation with Federal 
banking agencies, shall submit 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 a report on--
            (1) the nature and extent of private banking activities in 
        the United States;
            (2) regulatory efforts to monitor such activities and 
        ensure that such activities are conducted in compliance with 
        the Bank Secrecy Act; and
            (3) policies and procedures of depository institutions that 
        are designed to ensure that such activities are conducted in 
        compliance with the Bank Secrecy Act.
    (b) Private Banking Activities.--In subsection (a), the term 
``private banking activities'', with respect to an institution, 
includes, among other things, personalized services such as money 
management, financial advice, and investment services that are provided 
to clients with high net worth and that are not provided generally to 
all clients of the institution.

SEC. 12. AVAILABILITY OF CERTAIN ACCOUNT INFORMATION.

    Section 5318(h) of title 31, United States Code, is amended by 
adding at the end the following new paragraph:
            ``(3) Availability of certain account information.--The 
        Secretary of the Treasury shall prescribe regulations under 
        this subsection which require financial institutions to 
        maintain all accounts in such a way as to ensure that the name 
        of an account holder and the number of the account are 
        associated with all account activity of the account holder, and 
        to ensure that all such information is available for purposes 
        of account supervision and law enforcement.''.

SEC. 13. SENSE OF THE CONGRESS.

    It is the sense of the Congress that the Secretary of the Treasury 
should make available to all Federal, State, and local law enforcement 
agencies and financial regulatory agencies the full contents of the 
data base of reports that have been filed pursuant to subchapter II of 
chapter 53 of title 31, United States Code.

SEC. 14. DESIGNATION OF FOREIGN HIGH INTENSITY MONEY LAUNDERING AREAS.

    (a) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by inserting after section 5326 the following 
new section:
``Sec. 5327. Designation of foreign high intensity money laundering 
              areas
    ``(a) Criteria.--The Secretary of the Treasury, in consultation 
with appropriate Federal law enforcement agencies, shall develop 
criteria by which to identify areas outside the United States in which 
money laundering activities are concentrated.
    ``(b) Designation.--The Secretary of the Treasury shall designate 
as a foreign high intensity money laundering area any foreign country 
in which there is an area which is identified, using the criteria 
developed under subsection (a), as an area in which money laundering 
activities are concentrated.
    ``(c) Notice.--On the designation under subsection (b) of a country 
as a foreign high intensity money laundering area, the Secretary of the 
Treasury shall provide written notice to each insured depository 
institution (as defined in section 3(c)(2) of the Federal Deposit 
Insurance Act) and each depository institution holding company (as 
defined in section 3(w)(1) of such Act) that has control over an 
insured depository institution of the identity of the foreign country 
and include with the notice a written warning that there is a 
concentration of money laundering activities in the foreign country.''.
    (b) Clerical Amendment.--The table of sections for such chapter is 
amended by inserting after the item relating to section 5326 the 
following new item:

``5327. Designation of foreign high intensity money laundering 
                            areas.''.

SEC. 15. DOUBLING OF CRIMINAL PENALTIES FOR VIOLATIONS OF LAWS AIMED AT 
              PREVENTING MONEY LAUNDERING IN FOREIGN HIGH INTENSITY 
              MONEY LAUNDERING AREAS.

    Section 5322 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d) The court may double the sentence of fine or imprisonment, or 
both, that would otherwise be imposed on a person for a violation 
described in subsection (a) or (b) if person commits the violation with 
respect to a transaction involving a person in, a relationship 
maintained for a person in, or a transport of a monetary instrument 
involving a foreign country, knowing that the foreign country is 
designated under section 5327(b) as a foreign high intensity money 
laundering area.''.