[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1471 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1471

To eliminate money laundering in the private banking system, to require 
 the Secretary of the Treasury to warn insured depository institutions 
    of foreign countries in which there is a concentration of money 
laundering activities, to amend the Bank Holding Company Act of 1956 to 
require the Board of Governors of the Federal Reserve System to include 
money laundering activities in the consideration of applications under 
             section 3 of such Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 15, 1999

  Ms. Waters introduced the following bill; which was referred to the 
              Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
To eliminate money laundering in the private banking system, to require 
 the Secretary of the Treasury to warn insured depository institutions 
    of foreign countries in which there is a concentration of money 
laundering activities, to amend the Bank Holding Company Act of 1956 to 
require the Board of Governors of the Federal Reserve System to include 
money laundering activities in the consideration of applications under 
             section 3 of such Act, 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 Prevention Act of 
1999''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress makes the following findings:
            (1) Money laundering is a serious problem: between 
        $100,000,000,000 and $300,000,000,000 in United States currency 
        is ``laundered'' each year and the total dollar amount involved 
        in international money laundering likely exceeds 
        $500,000,000,000.
            (2) Money laundering is critical to the survival of the 
        illicit drug trade, which has annual worldwide revenues of more 
        than $400,000,000,000, more than 8 percent of the total value 
        of international trade.
            (3) United States financial institutions are a critical 
        link in our efforts to combat money laundering.
            (4) Highly secretive and loosely regulated private banking 
        services that cater to wealthy clients are particularly 
        vulnerable to use by drug traffickers for money laundering 
        purposes, and it is estimated that private banking services 
        have banking assets ranging from $200,000,000,000 to 
        $300,000,000,000.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To ensure that United States financial institutions 
        make combating money laundering the highest of priorities.
            (2) To close the existing gaps in law that allow money 
        laundering to flourish in the private banking system.
            (3) To designate foreign high-intensity money laundering 
        areas for the purpose of targeting areas of concentrated money 
        laundering activities.
            (4) To require the Board of Governors of the Federal 
        Reserve System to take into account money laundering activities 
        in the consideration of applications under section 3 of the 
        Bank Holding Company Act of 1956.

SEC. 3. REPORT ON PRIVATE BANKING ACTIVITIES.

    (a) In General.--Before the end of the 1-year period beginning on 
the date of the enactment of this Act, the Secretary of the Treasury, 
in consultation with the Federal banking agencies (as defined in 
section 3(z) of the Federal Deposit Insurance Act) shall submit a 
report on private banking activities in the United States 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.
    (b) Contents of Report.--The report required under subsection (a) 
shall include information on the following:
            (1) The nature and extent of private banking activities in 
        the United States.
            (2) Regulatory efforts to monitor private banking 
        activities and ensure that such activities are conducted in 
        compliance with subchapter II of chapter 53 of title 31, United 
        States Code, and section 21 of the Federal Deposit Insurance 
        Act.
            (3) The policies and procedures of depository institutions 
        that are designed to ensure compliance by such institutions 
        with the requirements of subchapter II of chapter 53 of title 
        31, United States Code, and section 21 of the Federal Deposit 
        Insurance Act.
    (c) Private Banking Activities Defined.--For purposes of this 
section, the term ``private banking activities'' includes, with respect 
to a financial institution, personalized services, such as money 
management, financial advice, and investment services, that are 
provided to individuals with a high net worth and are not provided 
generally to all clients of the financial institution.

SEC. 4. REQUIRE THAT ANTI-MONEY LAUNDERING PROGRAMS PROHIBIT MONEY 
              LAUNDERING THROUGH CONCENTRATION ACCOUNTS AT FINANCIAL 
              INSTITUTIONS BY REQUIRING THE 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--
                    ``(A) the name of the account holder and the number 
                of the account are associated with all account activity 
                of the account holder; and
                    ``(B) all such information is available for 
                purposes of account supervision and law enforcement.''

SEC. 5. DESIGNATION OF FOREIGN HIGH-INTENSITY MONEY LAUNDERING AREAS.

    (a) In General.--Subchapter III of chapter 53 of title 31, United 
States Code (as added by the Money Laundering and Financial Crimes 
Strategy Act of 1998) is amended by adding at the end the following new 
part:

 ``Part 3--International Money Laundering and Related Financial Crimes

``Sec. 5361. Designation of foreign high-intensity money laundering 
              areas
    ``(a) In General.--The Secretary, in consultation with the Federal 
banking agencies, shall develop criteria for identifying areas outside 
the United States in which money laundering activities are 
concentrated.
    ``(b) Designation.--The Secretary shall designate as a high-
intensity money laundering area any foreign country in which there is 
an area identified, in accordance with the criteria developed pursuant 
to subsection (a), as an area in which money laundering activities are 
concentrated.
    ``(c) Notice and warning.--Upon the designation, under subsection 
(b), of a country as a high-intensity money laundering area, the 
Secretary shall provide--
            ``(1) a written notice to each insured depository 
        institution (as defined in section 3 of the Federal Deposit 
        Insurance Act), and each depository institution holding company 
        (as defined in such section 3) that controls an insured 
        depository institution, of the identity of the country 
        designated; and
            ``(2) a written warning that there is a concentration of 
        money laundering activity in such country.
    (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 item:

 ``Part 3--International Money Laundering and Related Financial Crimes

``5361. Designation of foreign high-intensity money laundering 
                            areas.''.

SEC. 6. DOUBLE THE CRIMINAL PENALTIES FOR VIOLATIONS INVOLVING HIGH-
              INTENSITY MONEY LAUNDERING AREAS.

    (a) In General.--Section 5322 of title 31, United States Code, is 
amended by adding at the end the following new subsection:
    ``(d) Doubled Penalty.--The court may double the sentence of fine 
or imprisonment, or both, that could otherwise be imposed on any person 
for a violation described in subsection (a) or (b) if the 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 a 
designation of the foreign country as a high-intensity money laundering 
area under section 5361 was in effect at the time of the violation.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to any violation committed on or after the date of 
the enactment of this Act.

SEC. 7. AMENDMENT TO SECTION 3 OF THE BANK HOLDING COMPANY ACT OF 1956.

    (a) In General.--Section 3(c) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1842(c)) is amended by adding at the end the following 
new paragraph:
            ``(6) Money laundering.--In every case--
                    ``(A) the Board shall take into consideration the 
                effectiveness of the company or companies in combating 
                and preventing money laundering activities, including 
                in overseas branches;
                    ``(B) the Board shall not consider any application 
                under this section involving any company which is the 
                subject of any--
                            ``(i) pending Federal investigation of 
                        possible money laundering or other related 
                        financial crimes; or
                            ``(ii) pending Federal prosecution for 
                        money laundering or other related financial 
                        crimes,
                until such investigation or prosecution is completed 
                and a finding is made, except that this subparagraph 
                shall not apply if the period for such completion and 
                the making of findings exceeds 3 years; and
                    ``(C) the Board shall disapprove any application 
                under this section involving any company which has been 
                found criminally or civilly liable for money laundering 
                or any related financial crime during the 5-year period 
                preceding the consideration of such application by the 
                Board.''.
    (b) Scope of Application.--The amendment made by subsection (a) 
shall apply with respect to any application submitted to the Board of 
Governors of the Federal Reserve System under section 3 of the Bank 
Holding Company Act of 1956 after December 31, 1997, which has not been 
approved by the Board before the date of the enactment of this Act.
                                 <all>