[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1003 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1003

  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 SENATE OF THE UNITED STATES

                             July 10, 1997

Mr. Grassley (for himself, Mr. D'Amato, Mrs. Feinstein, Mr. Hutchinson, 
 Mr. Graham, Mr. Hagel, Mr. Stevens, Mr. Thurmond, and Mr. Faircloth) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 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 subchapter, 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.
            ``(4) Strategy.--The term `Strategy' means the National 
        Strategy for Combating Money Laundering and Related Financial 
        Crimes developed in accordance with section 5342.

``SEC. 5342. NATIONAL MONEY LAUNDERING AND RELATED FINANCIAL CRIMES 
              STRATEGY.

    ``(a) Development and Submission to Congress.--
            ``(1) Development.--The President, acting through the 
        Secretary, shall coordinate and develop a National Strategy for 
        Combating Money Laundering and Related Financial Crimes 
        (hereafter in this section referred to as the `Strategy').
            ``(2) Submission to congress.--On February 1 of fiscal 
        years 1999 through 2003, the Secretary shall submit the 
        Strategy to Congress in written form, in accordance with this 
        subchapter.
            ``(3) 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 Congress separately.
            ``(4) Contents.--Each Strategy submitted under paragraph 
        (2) shall include--
                    ``(A) comprehensive, research-based, quantifiable 
                goals for reducing money laundering and related 
                financial crime in the United States;
                    ``(B) 3-year budget projections for program and 
                budget priorities to implement the Strategy;
                    ``(C) a review of State and local strategies to 
                control money laundering and other financial crimes to 
                ensure that the United States pursues well-coordinated 
                and effective money laundering and other financial 
                crime controls at all levels of Government;
                    ``(D) a description of existing operational 
                initiatives to improve detection of money laundering 
                and related financial crimes;
                    ``(E) a description of the actions taken by the 
                Secretary to achieve an enhanced partnership between 
                the private financial sector and law enforcement 
                agencies, as required under subsection (b)(3);
                    ``(F) a description of--
                            ``(i) cooperative efforts between the 
                        Federal Government and State and local 
                        officials, including State and local 
                        prosecutors and other law enforcement 
                        officials; and
                            ``(ii) 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;
                    ``(G) 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;
                    ``(H) the level of compatibility of automated 
                information systems, including the ease of access of 
                the Federal Government and State and local governments 
                to timely, accurate, and complete information;
                    ``(I) a list of persons or officers consulted by 
                the Secretary pursuant to subsection (c); and
                    ``(J) any other information necessary for the 
                purpose of developing and analyzing data in order to 
                ascertain financial crime trends.
    ``(b) Development of Strategy.--The Strategy shall address any area 
that 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) Enhancement of role of private financial sector in 
        prevention.--The Secretary shall pursue an 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.
            ``(4) Designated areas.--A description of geographical 
        areas designated as `high-risk money laundering and related 
        financial crime areas' in accordance with section 5343.
            ``(5) 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.
            ``(6) Improved communications systems.--The compatibility 
        of automated information and facilitating access of the Federal 
        Government and State and local governments to timely, accurate, 
        and complete information, and what steps may be necessary to 
        improve such access.
    ``(c) Consultations.--In developing the Strategy, the Secretary 
shall consult with--
            ``(1) law enforcement organizations of the Department of 
        the Treasury 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, 
        the National Credit Union Administration Board, and other 
        Federal banking agencies;
            ``(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 that--
                    ``(A) money laundering and related financial crimes 
                frequently appear to be concentrated in particular 
                geographic areas, financial systems, industry sectors, 
                or financial institutions; and
                    ``(B) while the Secretary has the responsibility to 
                act with regard to Federal offenses committed in a 
                particular locality or are directed at a single 
                institution, because modern financial systems and 
                institutions are interconnected to a great degree, 
                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.--The purpose of this section 
        is 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) the 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 
Strategy developed pursuant to section 5342.
    ``(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) 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 
        written request for the designation of any area as a high-risk 
        money laundering and related financial crimes area.
            ``(3) Case-by-case determination.--In addition to the 
        factors specified in subsection (d), a designation of any area 
        under this subsection 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.
    ``(d) Factors.--In designating an area as a high-risk money 
laundering and related financial crimes area under this section, the 
Secretary shall, to the extent appropriate, take into account--
            ``(1) the population of the area;
            ``(2) the number of bank and nonbank financial institution 
        transactions that originate in such area or involve 
        institutions located in such area;
            ``(3) the number of stock or commodities transactions that 
        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 that--
                    ``(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; and
            ``(18) such other factors as the Secretary considers 
        relevant.

``SEC. 5344. ASSISTANCE FOR FIGHTING MONEY LAUNDERING AND RELATED 
              FINANCIAL CRIMES.

    ``(a) Grant Program Authorized.--
            ``(1) In general.--After the end of the 1-year period 
        beginning on the date on which the first Strategy is submitted 
        to the Congress in accordance with section 5342, the Secretary 
        may review, select, and award grants in accordance with this 
        subchapter from among applications submitted under paragraph 
        (2) to State or local law enforcement agencies and prosecutors 
        in an area designated as a high-risk money laundering and 
        related financial crimes area under section 5343. Such grants 
        shall be used to provide funding necessary to investigate and 
        prosecute money laundering and related financial crimes in 
        those areas.
            ``(2) Application process.--The Secretary shall award 
        grants under this subchapter upon receipt of written 
        application, in accordance with such terms and procedures as 
        the Secretary may establish.
            ``(3) Special preference.--In awarding grants under this 
        subsection, special preference shall be given to applicants 
        that represent 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) Other Assistance Authorized.--Notwithstanding whether a grant 
is awarded in an area designated as a high-risk money laundering and 
related financial crimes area, the Secretary may, in any such area--
            ``(1) recommend increases in Federal assistance that the 
        Secretary determines are necessary to combat financial crimes 
        in such areas; and
            ``(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. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subchapter, subject to an appropriations Act--
            ``(1) $5,000,000 for fiscal year 1999;
            ``(2) $7,500,000 for fiscal year 2000;
            ``(3) $10,000,000 for fiscal year 2001;
            ``(4) $12,500,000 for fiscal year 2002; and
            ``(5) $15,000,000 for fiscal year 2003.''.
    (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-risk money laundering and related financial 
                            crime areas.
        ``Sec. 5344. Assistance for fighting money laundering and 
                            related financial crimes.
        ``Sec. 5345. Authorization of appropriations.''.

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) Treatment of Funding.--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.''.

SEC. 4. REPORT AND RECOMMENDATIONS.

    Before the end of the 5-year period beginning on the date on which 
the first National Strategy for Combating Money Laundering and Related 
Financial Crimes is submitted to the Congress pursuant to section 5342 
of title 31, United States Code (as added by this Act), 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 this Act), as high-risk money 
laundering and related financial crime areas, together with such 
recommendations for legislation as the Secretary of the Treasury may 
determine to be appropriate to carry out the purposes of that section.
                                 <all>