[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3004 Reported in House (RH)]
Union Calendar No. 151
107th CONGRESS
1st Session
H. R. 3004
[Report No. 107-250, Part I]
To combat the financing of terrorism and other financial crimes, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 3, 2001
Mr. Oxley (for himself, Mr. LaFalce, Mr. Leach, Mrs. Maloney of New
York, Mrs. Roukema, Mr. Bentsen, Ms. Hooley of Oregon, Mr. Bereuter,
Mr. Baker, Mr. Bachus, Mr. King, Mrs. Kelly, Mr. Gillmor, Mr. Cantor,
Mr. Riley, Mr. LaTourette, Mr. Green of Wisconsin, and Mr. Grucci)
introduced the following bill; which was referred to the Committee on
Financial Services, and in addition to the Committees on the Judiciary,
and 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
October 17, 2001
Additional sponsors: Mr. Israel, Mr. Shows, Mr. Maloney of Connecticut,
Mr. Moran of Virginia, Mr. Ross, Mr. Shays, and Mr. Sherman
October 17, 2001
Reported from the Committee on Financial Services with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
October 17, 2001
Referral to the Committees on the Judiciary and Ways and Means extended
for a period ending not later than October 17, 2001
October 17, 2001
Committees on the Judiciary and 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 October
3, 2001]
_______________________________________________________________________
A BILL
To combat the financing of terrorism and other 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial Anti-
Terrorism Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--STRENGTHENING LAW ENFORCEMENT
Sec. 101. Bulk cash smuggling into or out of the United States.
Sec. 102. Forfeiture in currency reporting cases.
Sec. 103. Interstate currency couriers.
Sec. 104. Illegal money transmitting businesses.
Sec. 105. Long-arm jurisdiction over foreign money launderers.
Sec. 106. Laundering money through a foreign bank.
Sec. 107. Specified unlawful activity for money laundering.
Sec. 108. Laundering the proceeds of terrorism.
Sec. 109. Violations of reporting requirements for nonfinancial trades
and business.
Sec. 110. Proceeds of foreign crimes.
Sec. 111. Availability of reports relating to coins and currency
received in nonfinancial trade or business.
Sec. 112. Penalties for violations of geographic targeting orders and
certain record keeping requirements.
Sec. 113. Exclusion of aliens involved in money laundering.
Sec. 114. Standing to contest forfeiture of funds deposited into
foreign bank that has a correspondent
account in the United States.
Sec. 115. Subpoenas for records regarding funds in correspondent bank
accounts.
Sec. 116. Authority to order convicted criminal to return property
located abroad.
Sec. 117. Corporation represented by a fugitive.
Sec. 118. Enforcement of foreign judgments.
Sec. 119. Reporting provisions and anti-terrorist activities of United
States intelligence agencies.
Sec. 120. Financial Crimes Enforcement Network.
Sec. 121. Customs Service border searches.
Sec. 122. Prohibition on false statements to financial institutions
concerning the identity of a customer.
Sec. 123. Verification of identification.
Sec. 124. Consideration of anti-money laundering record.
Sec. 125. Reporting of suspicious activities by informal underground
banking systems, such as hawalas.
TITLE II--PUBLIC-PRIVATE COOPERATION
Sec. 201. Establishment of highly secure network.
Sec. 202. Report on improvements in data access and other issues.
Sec. 203. Reports to the financial services industry on suspicious
financial activities.
Sec. 204. Efficient use of currency transaction report system.
Sec. 205. Public-private task force on terrorist financing issues.
Sec. 206. Suspicious activity reporting requirements.
Sec. 207. Amendments relating to reporting of suspicious activities.
Sec. 208. Authorization to include suspicions of illegal activity in
written employment references.
Sec. 209. International cooperation on identification of originators of
wire transfers.
Sec. 210. Check truncation study.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
Sec. 301. Special measures for jurisdictions, financial institutions,
or international transactions of primary
money laundering concern.
Sec. 302. Special due diligence for correspondent accounts and private
banking accounts.
Sec. 303. Prohibition on United States correspondent accounts with
foreign shell banks.
Sec. 304. Anti-money laundering programs.
Sec. 305. Concentration accounts at financial institutions.
Sec. 306. International cooperation in investigations of money
laundering, financial crimes, and the
finances of terrorist groups.
Sec. 307. Prohibition on acceptance of any bank instrument for unlawful
Internet gambling.
Sec. 308. Internet gambling in or through foreign jurisdictions.
TITLE IV--CURRENCY PROTECTION
Sec. 401. Counterfeiting domestic currency and obligations.
Sec. 402. Counterfeiting foreign currency and obligations.
Sec. 403. Production of documents.
Sec. 404. Reimbursement.
TITLE I--STRENGTHENING LAW ENFORCEMENT
SEC. 101. BULK CASH SMUGGLING INTO OR OUT OF THE UNITED STATES.
(a) Findings.--The Congress finds the following:
(1) Effective enforcement of the currency reporting
requirements of subchapter II of chapter 53 of title 31, United
States Code, and the regulations prescribed under such
subchapter, has forced drug dealers and other criminals engaged
in cash-based businesses to avoid using traditional financial
institutions.
(2) In their effort to avoid using traditional financial
institutions, drug dealers and other criminals are forced to
move large quantities of currency in bulk form to and through
the airports, border crossings, and other ports of entry where
the currency can be smuggled out of the United States and
placed in a foreign financial institution or sold on the black
market.
(3) The transportation and smuggling of cash in bulk form
may now be the most common form of money laundering, and the
movement of large sums of cash is one of the most reliable
warning signs of drug trafficking, terrorism, money laundering,
racketeering, tax evasion and similar crimes.
(4) The intentional transportation into or out of the
United States of large amounts of currency or monetary
instruments, in a manner designed to circumvent the mandatory
reporting provisions of subchapter II of chapter 53 of title
31, United States Code, is the equivalent of, and creates the
same harm as, the smuggling of goods.
(5) The arrest and prosecution of bulk cash smugglers are
important parts of law enforcement's effort to stop the
laundering of criminal proceeds, but the couriers who attempt
to smuggle the cash out of the United States are typically low-
level employees of large criminal organizations, and thus are easily
replaced. Accordingly, only the confiscation of the smuggled bulk cash
can effectively break the cycle of criminal activity of which the
laundering of the bulk cash is a critical part.
(6) The current penalties for violations of the currency
reporting requirements are insufficient to provide a deterrent
to the laundering of criminal proceeds. In particular, in cases
where the only criminal violation under current law is a
reporting offense, the law does not adequately provide for the
confiscation of smuggled currency. In contrast, if the
smuggling of bulk cash were itself an offense, the cash could
be confiscated as the corpus delicti of the smuggling offense.
(b) Purposes.--The purposes of this section are--
(1) to make the act of smuggling bulk cash itself a
criminal offense;
(2) to authorize forfeiture of any cash or instruments of
the smuggling offense;
(3) to emphasize the seriousness of the act of bulk cash
smuggling; and
(4) to prescribe guidelines for determining the amount of
property subject to such forfeiture in various situations.
(c) Enactment of Bulk Cash Smuggling Offense.--Subchapter II of
chapter 53 of title 31, United States Code, is amended by adding at the
end the following:
``Sec. 5331. Bulk cash smuggling into or out of the United States
``(a) Criminal Offense.--
``(1) In general.--Whoever, with the intent to evade a
currency reporting requirement under section 5316, knowingly
conceals more than $10,000 in currency or other monetary
instruments on the person of such individual or in any
conveyance, article of luggage, merchandise, or other
container, and transports or transfers or attempts to transport
or transfer such currency or monetary instruments from a place
within the United States to a place outside of the United
States, or from a place outside the United States to a place
within the United States, shall be guilty of a currency
smuggling offense and subject to punishment pursuant to
subsection (b).
``(2) Concealment on person.--For purposes of this section,
the concealment of currency on the person of any individual
includes concealment in any article of clothing worn by the
individual or in any luggage, backpack, or other container worn
or carried by such individual.
``(b) Penalty.--
``(1) Term of imprisonment.--A person convicted of a
currency smuggling offense under subsection (a), or a
conspiracy to commit such offense, shall be imprisoned for not
more than 5 years.
``(2) Forfeiture.--In addition, the court, in imposing
sentence under paragraph (1), shall order that the defendant
forfeit to the United States, any property, real or personal,
involved in the offense, and any property traceable to such property,
subject to subsection (d) of this section.
``(3) Procedure.--The seizure, restraint, and forfeiture of
property under this section shall be governed by section 413 of
the Controlled Substances Act.
``(4) Personal money judgment.--If the property subject to
forfeiture under paragraph (2) is unavailable, and the
defendant has insufficient substitute property that may be
forfeited pursuant to section 413(p) of the Controlled
Substances Act, the court shall enter a personal money judgment
against the defendant for the amount that would be subject to
forfeiture.
``(c) Civil Forfeiture.--
``(1) In general.--Any property involved in a violation of
subsection (a), or a conspiracy to commit such violation, and
any property traceable to such violation or conspiracy, may be
seized and, subject to subsection (d) of this section,
forfeited to the United States.
``(2) Procedure.--The seizure and forfeiture shall be
governed by the procedures governing civil forfeitures in money
laundering cases pursuant to section 981(a)(1)(A) of title 18,
United States Code.
``(3) Treatment of certain property as involved in the
offense.--For purposes of this subsection and subsection (b),
any currency or other monetary instrument that is concealed or
intended to be concealed in violation of subsection (a) or a
conspiracy to commit such violation, any article, container, or
conveyance used, or intended to be used, to conceal or
transport the currency or other monetary instrument, and any
other property used, or intended to be used, to facilitate the
offense, shall be considered property involved in the offense.
``(d) Proportionality of Forfeiture.--
``(1) In general.--Upon a showing by the property owner by
a preponderance of the evidence that the currency or monetary
instruments involved in the offense giving rise to the
forfeiture were derived from a legitimate source, and were
intended for a lawful purpose, the court shall reduce the
forfeiture to the maximum amount that is not grossly disproportional to
the gravity of the offense.
``(2) Factors to be considered.--In determining the amount
of the forfeiture, the court shall consider all aggravating and
mitigating facts and circumstances that have a bearing on the
gravity of the offense, including the following:
``(A) The value of the currency or other monetary
instruments involved in the offense.
``(B) Efforts by the person committing the offense
to structure currency transactions, conceal property,
or otherwise obstruct justice.
``(C) Whether the offense is part of a pattern of
repeated violations of Federal law.''.
(d) Clerical Amendment.--The table of sections for subchapter II of
chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5330, the following new item:
``5331. Bulk cash smuggling into or out of the United States.''.
SEC. 102. FORFEITURE IN CURRENCY REPORTING CASES.
(a) In General.--Subsection (c) of section 5317 of title 31, United
States Code, is amended to read as follows:
``(c) Forfeiture.--
``(1) In general.--The court in imposing sentence for any
violation of section 5313, 5316, or 5324 of this title, or
section 6050I of the Internal Revenue Code of 1986, or any
conspiracy to commit such violation, shall order the defendant
to forfeit all property, real or personal, involved in the
offense and any property traceable thereto.
``(2) Procedure.--Forfeitures under this subsection shall
be governed by the procedures established in section 413 of the
Controlled Substances Act and the guidelines established in
paragraph (4).
``(3) Civil forfeiture.--Any property involved in a
violation of section 5313, 5316, or 5324 of this title, or
section 6050I of the Internal Revenue Code of 1986, or any
conspiracy to commit any such violation, and any property
traceable to any such violation or conspiracy, may be seized
and, subject to paragraph (4), forfeited to the United States
in accordance with the procedures governing civil forfeitures
in money laundering cases pursuant to section 981(a)(1)(A) of
title 18, United States Code.
``(4) Proportionality of forfeiture.--
``(A) In general.--Upon a showing by the property
owner by a preponderance of the evidence that any
currency or monetary instruments involved in the
offense giving rise to the forfeiture were derived from
a legitimate source, and were intended for a lawful
purpose, the court shall reduce the forfeiture to the
maximum amount that is not grossly disproportional to
the gravity of the offense.
``(B) Factors to be considered.--In determining the
amount of the forfeiture, the court shall consider all
aggravating and mitigating facts and circumstances that
have a bearing on the gravity of the offense, including
the following:
``(i) The value of the currency or other
monetary instruments involved in the offense.
``(ii) Efforts by the person committing the
offense to structure currency transactions,
conceal property, or otherwise obstruct
justice.
``(iii) Whether the offense is part of a
pattern of repeated violations of Federal
law.''.
(b) Conforming Amendments.--(1) Section 981(a)(1)(A) of title 18,
United States Code, is amended by striking ``of section 5313(a) or
5324(a) of title 31, or''.
(2) Section 982(a)(1) of title 18, United States Code, is amended
by striking ``of section 5313(a), 5316, or 5324 of title 31, or''.
SEC. 103. INTERSTATE CURRENCY COURIERS.
Section 1957 of title 18, United States Code, is amended by adding
at the end the following new subsection:
``(g) Any person who conceals more than $10,000 in currency on his
or her person, in any vehicle, in any compartment or container within
any vehicle, or in any container placed in a common carrier, and
transports, attempts to transport, or conspires to transport such
currency in interstate commerce on any public road or highway or on any
bus, train, airplane, vessel, or other common carrier, knowing that the
currency was derived from some form of unlawful activity, or knowing
that the currency was intended to be used to promote some form of
unlawful activity, shall be punished as provided in subsection (b). The
defendant's knowledge may be established by proof that the defendant
was willfully blind to the source or intended use of the currency. For
purposes of this subsection, the concealment of currency on the person
of any individual includes concealment in any article of clothing worn
by the individual or in any luggage, backpack, or other container worn
or carried by such individual.''.
SEC. 104. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) Scienter Requirement for Section 1960 Violation.--Section 1960
of title 18, United States Code, is amended to read as follows:
``Sec. 1960. Prohibition of unlicensed money transmitting businesses
``(a) Whoever knowingly conducts, controls, manages, supervises,
directs, or owns all or part of an unlicensed money transmitting
business, shall be fined in accordance with this title or imprisoned
not more than 5 years, or both.
``(b) As used in this section--
``(1) the term `unlicensed money transmitting business'
means a money transmitting business which affects interstate or
foreign commerce in any manner or degree and--
``(A) is operated without an appropriate money
transmitting license in a State where such operation is
punishable as a misdemeanor or a felony under State
law, whether or not the defendant knew that the
operation was required to be licensed or that the
operation was so punishable;
``(B) fails to comply with the money transmitting
business registration requirements under section 5330
of title 31, United States Code, or regulations
prescribed under such section; or
``(C) otherwise involves the transportation or
transmission of funds that are known to the defendant
to have been derived from a criminal offense or are
intended to be used to be used to promote or support
unlawful activity;
``(2) the term `money transmitting' includes transferring
funds on behalf of the public by any and all means including
but not limited to transfers within this country or to
locations abroad by wire, check, draft, facsimile, or courier;
and
``(3) the term `State' means any State of the United
States, the District of Columbia, the Northern Mariana Islands,
and any commonwealth, territory, or possession of the United
States.''.
(b) Seizure of Illegally Transmitted Funds.--Section 981(a)(1)(A)
of title 18, United States Code, is amended by striking ``or 1957'' and
inserting ``, 1957 or 1960''.
(c) Clerical Amendment.--The table of sections for chapter 95 of
title 18, United States Code, is amended in the item relating to
section 1960 by striking ``illegal'' and inserting ``unlicensed''.
SEC. 105. LONG-ARM JURISDICTION OVER FOREIGN MONEY LAUNDERERS.
Section 1956(b) of title 18, United States Code, is amended--
(1) by striking ``(b) Whoever'' and inserting ``(b)(1)
Whoever'';
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(3) by striking ``subsection (a)(1) or (a)(3),'' and
inserting ``subsection (a)(1) or (a)(2) or section 1957,''; and
(4) by adding at the end the following new paragraphs:
``(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, against
whom the action is brought, if--
``(A) 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; and
``(B) the foreign person--
``(i) commits an offense under subsection (a)
involving a financial transaction that occurs in whole
or in part in the United States;
``(ii) converts to such person's own use property
in which the United States has an ownership interest by
virtue of the entry of an order of forfeiture by a
court of the United States; or
``(iii) is a financial institution that maintains a
correspondent bank account at a financial institution
in the United States.
``(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. 106. 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. 107. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING.
Section 1956(c)(7) of title 18, United States Code, is amended--
(1) in subparagraph (B)--
(A) by striking clause (ii) and inserting the
following new clause:
``(ii) any act or acts constituting a crime
of violence, as defined in section 16 of this
title;''; and
(B) by inserting after clause (iii) the following
new clauses:
``(iv) bribery of a public official, or the
misappropriation, theft, or embezzlement of
public funds by or for the benefit of a public
official;
``(v) 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
``(vi) an offense with respect to which the
United States would be obligated by a bilateral
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;''; and
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods
falsely classified),'' before ``section 542'';
(B) by inserting ``section 922(1) (relating to the
unlawful importation of firearms), section 924(n)
(relating to firearms trafficking),'' before ``section
956'';
(C) by inserting ``section 1030 (relating to
computer fraud and abuse),'' before ``1032'';
(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
(E) by striking ``fraud in the sale of securities''
and inserting ``fraud in the purchase or sale of
securities''.
SEC. 108. LAUNDERING THE PROCEEDS OF TERRORISM.
Section 1956(c)(7)(D) of title 18, United States Code, is amended
by inserting ``or 2339B'' after ``2339A''.
SEC. 109. VIOLATIONS OF REPORTING REQUIREMENTS FOR NONFINANCIAL TRADES
AND BUSINESS.
(a) Civil Forfeiture.--Section 981(a)(1)(A) of title 18, United
States Code, is amended by inserting ``section 6050I of the Internal
Revenue Code of 1986, or'' before ``section 1956''.
(b) Criminal Forfeiture.--Section 982(a)(1) of title 18, United
States Code, is amended by inserting ``section 6050I of the Internal
Revenue Code of 1986, or'' before ``section 1956''.
SEC. 110. PROCEEDS OF FOREIGN CRIMES.
Section 981(a)(1)(B) of title 18, United States Code, is amended to
read as follows:
``(B) Any property, real or personal, within the
jurisdiction of the United States, constituting, derived from,
or traceable to, any proceeds obtained directly or indirectly
from an offense against a foreign nation, or any property used
to facilitate such offense, if--
``(i) the offense involves the manufacture,
importation, sale, or distribution of a controlled
substance (as such term is defined for the purposes of
the Controlled Substances Act), or any other conduct
described in section 1956(c)(7)(B),
``(ii) the offense would be punishable within the
jurisdiction of the foreign nation by death or
imprisonment for a term exceeding one year, and
``(iii) the offense would be punishable under the
laws of the United States by imprisonment for a term
exceeding one year if the act or activity constituting
the offense had occurred within the jurisdiction of the
United States.''.
SEC. 111. AVAILABILITY OF REPORTS RELATING TO COINS AND CURRENCY
RECEIVED IN NONFINANCIAL TRADE OR BUSINESS.
(a) Action Required.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the Secretary of
the Treasury shall take such action and establish such procedures as
may be necessary and appropriate to make the information contained on
returns filed under section 6050I of the Internal Revenue Code of 1986
available through the Financial Crimes Enforcement Network to
government agencies in accordance with subsections (l)(15) and (p)(4)
of section 6103 of such Code and other applicable laws.
(b) Report.--The Secretary of the Treasury shall submit a report to
the Congress within 15 days after the end of the 6-month period
described in subsection (a) containing a description of the actions of
the Secretary pursuant to such subsection, together with such
recommendations for legislative and administrative action as the
Secretary may determine to be appropriate to achieve the goal described
in such subsection.
SEC. 112. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING ORDERS AND
CERTAIN RECORD KEEPING REQUIREMENTS.
(a) Civil Penalty for Violation of Targeting Order.--Section
5321(a)(1) of title 31, United States Code, is amended--
(1) by inserting ``or order issued'' after ``subchapter or
a regulation prescribed''; and
(2) by inserting ``, or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``sections
5314 and 5315)''.
(b) Criminal Penalties for Violation of Targeting Order.--Section
5322 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``or order issued'' after
``willfully violating this subchapter or a regulation
prescribed''; and
(B) by inserting ``, or willfully violating a
regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91-
508,'' after ``under section 5315 or 5324)'';
(2) in subsection (b)--
(A) by inserting ``or order issued'' after
``willfully violating this subchapter or a regulation
prescribed''; and
(B) by inserting ``or willfully violating a
regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91-
508,'' after ``under section 5315 or 5324),'';
(c) Structuring Transactions To Evade Targeting Order or Certain
Record Keeping Requirements.--Section 5324(a) of title 31, United
States Code, is amended--
(1) by inserting a comma after ``shall'';
(2) by striking ``section--'' and inserting ``section, the
reporting requirements imposed by any order issued under
section 5326, or the record keeping requirements imposed by any
regulation prescribed under section 21 of the Federal Deposit
Insurance Act or section 123 of Public Law 91-508--''; and
(3) 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'' each place that term
appears.
(d) Increase in Civil Penalties for Violation of Certain Record
Keeping 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--
``(A) the amount (not to exceed $100,000) involved
in the transaction (if any) with respect to which the
violation occurred; or
``(B) $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--
``(1) the amount (not to exceed $100,000) involved in the
transaction (if any) with respect to which the violation
occurred; or
``(2) $25,000''.
(e) Criminal Penalties for Violation of Certain Record Keeping
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 that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, shall be fined not more than $250,000, or
imprisoned for not more than 5 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 that willfully violates this chapter, section 21 of the
Federal Deposit Insurance Act, or a regulation prescribed under this
chapter or that section 21, 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. 113. EXCLUSION OF ALIENS INVOLVED IN MONEY LAUNDERING.
(a) In General.--Section 212 of the Immigration and Nationality
Act, as amended (8 U.S.C. 1182), is amended in subsection (a)(2)--
(1) by redesignating subparagraphs (D), (E), (F), (G), and
(H) as subparagraphs (E), (F), (G), (H), and (I), respectively;
and
(2) by inserting after subparagraph (C) the following new
subparagraph (D):
``(D) Money laundering activities.--
``(i) In general.--Any alien who the
consular officer or the Attorney General knows
or has reason to believe is or has been engaged
in activities which if engaged in within the
United States would constitute a violation of
the money laundering provisions section 1956,
1957, or 1960 of title 18, United States Code,
or has knowingly assisted, abetted, or
conspired or colluded with others in any such
illicit activity is inadmissible.
``(ii) Related individuals.--Any alien who
the consular officer or the Attorney General
knows or has reason to believe is the spouse,
son, or daughter of an alien inadmissible under
clause (i), has, within the previous 5 years,
obtained any financial or other benefit from
such illicit activity of that alien, and knew
or reasonably should have known that the
financial or other benefit was the product of
such illicit activity, is inadmissible, except
that the Attorney General may, in the full
discretion of the Attorney General, waive the
exclusion of the spouse, son, or daughter of an
alien under this clause if the Attorney General
determines that exceptional circumstances exist
that justify such waiver.''.
(b) Conforming amendment.--Section 212(h)(1)(A)(i) of the
Immigration and Nationality Act, as amended (8 U.S.C. 1182), is amended
by striking ``(D)(i) or (D)(ii)'' and inserting ``(E)(i) or (E)(ii)''.
SEC. 114. STANDING TO CONTEST FORFEITURE OF FUNDS DEPOSITED INTO
FOREIGN BANK THAT HAS A CORRESPONDENT ACCOUNT IN THE
UNITED STATES.
Section 981 of title 18, United States Code, is amended by adding
the following after the last subsection:
``(k) Correspondent Bank Accounts.--
``(1) Treatment of accounts of correspondent bank in
domestic financial institutions.--
``(A) In general.--For the purpose of a forfeiture
under this section or under the Controlled Substances
Act, if funds are deposited into a dollar-denominated
bank account in a foreign financial institution, and
that foreign financial institution has a correspondent
account with a financial institution in the United
States, the funds deposited into the foreign financial
institution (the respondent bank) shall be deemed to
have been deposited into the correspondent account in
the United States, and any restraining order, seizure
warrant, or arrest warrant in rem regarding such funds
may be served on the correspondent bank, and funds in
the correspondent account up to the value of the funds
deposited into the dollar-denominated account in the
foreign financial institution may be seized, arrested
or restrained.
``(B) Authority to suspend.--The Attorney General,
in consultation with the Secretary, may suspend or
terminate a forfeiture under this section if the
Attorney General determines that a conflict of law
exists between the laws of the jurisdiction in which
the foreign bank is located and the laws of the United
States with respect to liabilities arising from the
restraint, seizure, or arrest of such funds, and that
such suspension or termination would be in the interest
of justice and would not harm the national interests of
the United States.
``(2) No requirement for government to trace funds.--If a
forfeiture action is brought against funds that are restrained,
seized, or arrested under paragraph (1), the Government shall
not be required to establish that such funds are directly
traceable to the funds that were deposited into the respondent
bank, nor shall it be necessary for the Government to rely on
the application of Section 984 of this title.
``(3) Claims brought by owner of the funds.--If a
forfeiture action is instituted against funds seized, arrested,
or restrained under paragraph (1), the owner of the funds may
contest the forfeiture by filing a claim pursuant to section
983.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Correspondent account.--The term
`correspondent account' has the meaning given to the
term `interbank account' in section 984(c)(2)(B).
``(B) Owner.--
``(i) In general.--Except as provided in
clause (ii), the term `owner'--
``(I) means the person who was the
owner, as that term is defined in
section 983(d)(6), of the funds
that were deposited into the foreign bank at the time such funds were
deposited; and
``(II) does not include either the
foreign bank or any financial
institution acting as an intermediary
in the transfer of the funds into the
interbank account.
``(ii) Exception.--The foreign bank may be
considered the `owner' of the funds (and no
other person shall qualify as the owner of such
funds) only if--
``(I) the basis for the forfeiture
action is wrongdoing committed by the
foreign bank; or
``(II) the foreign bank
establishes, by a preponderance of the
evidence, that prior to the restraint,
seizure, or arrest of the funds, the
foreign bank had discharged all or part
of its obligation to the prior owner of
the funds, in which case the foreign
bank shall be deemed the owner of the
funds to the extent of such discharged
obligation.''.
SEC. 115. SUBPOENAS FOR RECORDS REGARDING FUNDS IN CORRESPONDENT BANK
ACCOUNTS.
(a) In General.--Subchapter II of chapter 53 of title 31, United
States Code, is amended by inserting after section 5331 (as added by
section 101) the following new section:
``Sec. 5332. Subpoenas for records
``(a) Designation by Foreign Financial Institution of Agent.--Any
foreign financial institution that has a correspondent bank account at
a financial institution in the United States shall designate a person
residing in the United States as a person authorized to accept a
subpoena for bank records or other legal process served on the foreign
financial institution.
``(b) Maintenance of Records by Domestic Financial Institution.--
``(1) In general.--Any domestic financial institution that
maintains a correspondent bank account for a foreign financial
institution shall maintain records regarding the names and
addresses of the owners of the foreign financial institution,
and the name and address of the person who may be served with a
subpoena for records regarding any funds transferred to or from
the correspondent account.
``(2) Provision to law enforcement agency.--A domestic
financial institution shall provide names and addresses
maintained under paragraph (1) to a Government authority (as
defined in section 1101(3) of the Right to Financial Privacy
Act of 1978) within 7 days of the receipt of a request, in
writing, for such records.
``(c) Administrative Subpoena.--
``(1) In general.--The Attorney General and the Secretary
of the Treasury may each issue an administrative subpoena for
records relating to the deposit of any funds into a dollar-
denominated account in a foreign financial institution that
maintains a correspondent account at a domestic financial
institution.
``(2) Manner of issuance.--Any subpoena issued by the
Attorney General or the Secretary of the Treasury under
paragraph (1) shall be issued in the manner described in
section 3486 of this title, and may be served on the
representative designated by the foreign financial institution
pursuant to subsection (a) to accept legal process in the
United States, or in a foreign country pursuant to any mutual
legal assistance treaty, multilateral agreement, or other
request for international law enforcement assistance.
``(d) Correspondent Account Defined.--For purposes of this section,
the term `correspondent account' has the same meaning as the term
`interbank account' as such term is defined in section 984(c)(2)(B) of
title 18, United States Code.''.
(b) Clerical Amendments.--The table of sections for subchapter II
of chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5331 the following new item:
``5332. Subpoenas for records.''.
(c) Effective Date.--Section 5332(a) of title 31, United States
Code, (as added by subsection (a) of this section shall apply after the
end of the 30-day period beginning on the date of the enactment of this
Act.
(d) Requests for Records.--Section 3486(a)(1)(A)(i) of title 18,
United States Code, is amended by striking ``; or (II) a Federal
offense involving the sexual exploitation or abuse of children,'' and
inserting ``, (II) a Federal offense involving the sexual exploitation
or abuse of children, or (III) a money laundering offense in violation
of section 1956, 1957 or 1960 of this title,''.
SEC. 116. AUTHORITY TO ORDER CONVICTED CRIMINAL TO RETURN PROPERTY
LOCATED ABROAD.
(a) Forfeiture of Substitute Property.--Section 413(p) of the
Controlled Substances Act (21 U.S.C. 853) is amended to read as
follows:
``(p) Forfeiture of Substitute Property.--
``(1) In general.--Paragraph (2) of this subsection shall
apply, if any property described in subsection (a), as a result
of any act or omission of the defendant--
``(A) cannot be located upon the exercise of due
diligence;
``(B) has been transferred or sold to, or deposited
with, a third party;
``(C) has been placed beyond the jurisdiction of
the court;
``(D) has been substantially diminished in value;
or
``(E) has been commingled with other property which
cannot be divided without difficulty.
``(2) Substitute property.--In any case described in any of
subparagraphs (A) through (E) of paragraph (1), the court shall
order the forfeiture of any other property of the defendant, up
to the value of any property described in subparagraphs (A)
through (E) of paragraph (1), as applicable.
``(3) Return of property to jurisdiction.--In the case of
property described in paragraph (1)(C), the court may, in
addition to any other action authorized by this subsection,
order the defendant to return the property to the jurisdiction
of the court so that the property may be seized and
forfeited.''.
(b) Protective Orders.--Section 413(e) of the Controlled Substances
Act (21 U.S.C. 853(e)) is amended by adding at the end the following:
``(4) Order To Repatriate and Deposit.--
``(A) In general.--Pursuant to its authority to enter a
pretrial restraining order under this section, including its
authority to restrain any property forfeitable as substitute
assets, the court may order a defendant to repatriate any
property that may be seized and forfeited, and to deposit that
property pending trial in the registry of the court, or with
the United States Marshals Service or the Secretary of the
Treasury, in an interest-bearing account, if appropriate.
``(B) Failure to comply.--Failure to comply with an order
under this subsection, or an order to repatriate property under
subsection (p), shall be punishable as a civil or criminal
contempt of court, and may also result in an enhancement of the
sentence of the defendant under the obstruction of justice
provision of the Federal Sentencing Guidelines.''.
SEC. 117. CORPORATION REPRESENTED BY A FUGITIVE.
Section 2466 of title 28, United States Code, is amended by
designating the present matter as subsection (a), and adding at the end
the following:
``(b) Subsection (a) may be applied to a claim filed by a
corporation if any majority shareholder, or individual filing the claim
on behalf of the corporation is a person to whom subsection (a)
applies.''.
SEC. 118. ENFORCEMENT OF FOREIGN JUDGMENTS.
Section 2467 of title 28, United States Code, is amended--
(1) in subsection (d), by inserting after paragraph (2) the
following new paragraph:
``(3) Preservation of property.--To preserve the
availability of property subject to a foreign forfeiture or
confiscation judgment, the Government may apply for, and the
court may issue, a restraining order pursuant to section 983(j)
of title 18, United States Code, at any time before or after an
application is filed pursuant to subsection (c)(1). The court,
in issuing the restraining order--
``(A) may rely on information set forth in an
affidavit describing the nature of the proceeding or
investigation underway in the foreign country, and
setting forth a reasonable basis to believe that the
property to be restrained will be named in a judgment
of forfeiture at the conclusion of such proceeding; or
``(B) may register and enforce a restraining order
that has been issued by a court of competent
jurisdiction in the foreign country and certified by
the Attorney General pursuant to subsection (b)(2).
No person may object to the restraining order on any ground
that is the subject of parallel litigation involving the same
property that is pending in a foreign court.'';
(2) in subsection (b)(1)(C), by striking ``establishing
that the defendant received notice of the proceedings in
sufficient time to enable the defendant'' and inserting
``establishing that the foreign nation took steps, in
accordance with the principles of due process, to give notice
of the proceedings to all persons with an interest in the
property in sufficient time to enable such persons'';
(3) in subsection (d)(1)(D), by striking ``the defendant in
the proceedings in the foreign court did not receive notice''
and inserting ``the foreign nation did not take steps, in
accordance with the principles of due process, to give notice
of the proceedings to a person with an interest in the
property''; and
(4) in subsection (a)(2)(A), by inserting ``, any violation
of foreign law that would constitute a violation of an offense
for which property could be forfeited under Federal law if the
offense were committed in the United States'' after ``United
Nations Convention''.
SEC. 119. REPORTING PROVISIONS AND ANTI-TERRORIST ACTIVITIES OF UNITED
STATES INTELLIGENCE AGENCIES.
(a) Amendment Relating to the Purposes of Chapter 53 of Title 31,
United States Code.--Section 5311 of title 31, United States Code, is
amended by inserting before the period at the end the following: ``, or
in the conduct of intelligence or counterintelligence activities,
including analysis, to protect against international terrorism''.
(b) Amendment Relating to Reporting of Suspicious Activities.--
Section 5318(g)(4)(B) of title 31, United States Code, is amended by
striking ``or supervisory agency'' and inserting ``, supervisory
agency, or United States intelligence agency for use in the conduct of
intelligence or counterintelligence activities, including analysis, to
protect against international terrorism''.
(c) Amendment Relating to Availability of Reports.--Section 5319 of
title 31, United States Code, is amended to read as follows:
``Sec. 5319. Availability of reports
``The Secretary of the Treasury shall make information in a report
filed under this subchapter available to an agency, including any State
financial institutions supervisory agency or United States intelligence
agency, upon request of the head of the agency. The report shall be
available for a purpose that is consistent with this subchapter. The
Secretary may only require reports on the use of such information by
any State financial institutions supervisory agency for other than
supervisory purposes or by United States intelligence agencies.
However, a report and records of reports are exempt from disclosure
under section 552 of title 5.''.
(d) Amendments to the Right to Financial Privacy Act.--The Right to
Financial Privacy Act of 1978 is amended--
(1) in section 1112(a) (12 U.S.C. 3412(a)), by inserting
``, or intelligence or counterintelligence activity,
investigation or analysis related to international terrorism''
after ``legitimate law enforcement inquiry'';
(2) in section 1114(a)(1) (12 U.S.C. 3414(a)(1))--
(A) in subparagraph (A), by striking ``or'' at the
end;
(B) in subparagraph (B), by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following:
``(C) a Government authority authorized to conduct
investigations of, or intelligence or
counterintelligence analyses related to, international
terrorism for the purpose of conducting such
investigations or analyses.''; and
(3) in section 1120(a)(2) (12 U.S.C. 3420(a)(2)), by
inserting ``, or for a purpose authorized by section 1112(a)''
before the semicolon at the end.
(e) Amendment to the Fair Credit Reporting Act.--
(1) In general.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended--
(A) by redesignating the second of the 2 sections
designated as section 624 (15 U.S.C. 1681u) (relating
to disclosure to FBI for counterintelligence purposes)
as section 625; and
(B) by adding at the end the following new section:
``Sec. 626. Disclosures to governmental agencies for counterterrorism
purposes
``(a) Disclosure.--Notwithstanding section 604 or any other
provision of this title, a consumer reporting agency shall furnish a
consumer report of a consumer and all other information in a consumer's
file to a government agency authorized to conduct investigations of, or
intelligence or counterintelligence activities or analysis related to,
international terrorism when presented with a written certification by
such government agency that such information is necessary for the
agency's conduct or such investigation, activity or analysis.
``(b) Form of Certification.--The certification described in
subsection (a) shall be signed by the Secretary of the Treasury, or an
officer designated by the Secretary from among officers of the
Department of the Treasury whose appointments to office are required to
be made by the President, by and with the advice and consent of the
Senate.
``(c) Confidentiality.--No consumer reporting agency, or officer,
employee, or agent of such consumer reporting agency, shall disclose to
any person, or specify in any consumer report, that a government agency
has sought or obtained access to information under subsection (a).
``(d) Rule of Construction.--Nothing in section 625 shall be
construed to limit the authority of the Director of the Federal Bureau
of Investigation under this section.
``(e) Safe Harbor.--Notwithstanding any other provision of this
subchapter, any consumer reporting agency or agent or employee thereof
making disclosure of consumer reports or other information pursuant to
this section in good-faith reliance upon a certification of a
governmental agency pursuant to the provisions of this section shall
not be liable to any person for such disclosure under this subchapter,
the constitution of any State, or any law or regulation of any State or
any political subdivision of any State.''.
(2) Clerical amendments.--The table of sections for the
Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is amended--
(A) by redesignating the second of the 2 items
designated as section 624 as section 625; and
(B) by inserting after the item relating to section
625 (as so redesignated) the following new item:
``626. Disclosures to governmental agencies for counterterrorism
purposes.''.
SEC. 120. FINANCIAL CRIMES ENFORCEMENT NETWORK.
(a) In General.--Subchapter I of chapter 3 of title 31, United
States Code, is amended--
(1) by redesignating section 310 as section 311; and
(2) by inserting after section 309 the following new
section:
``Sec. 310. Financial Crimes Enforcement Network
``(a) In General.--The Financial Crimes Enforcement Network
established by order of the Secretary of the Treasury (Treasury Order
Numbered 105-08) on April 25, 1990, shall be a bureau in the Department
of the Treasury.
``(b) Director.--
``(1) Appointment.--The head of the Financial Crimes
Enforcement Network shall be the Director who shall be
appointed by the President, by and with the consent of the
Senate, to a term of 4 years.
``(2) Duties and powers.--The duties and powers of the
Director are as follows:
``(A) Advise and make recommendations on matters
relating to financial intelligence, financial criminal
activities, and other financial activities to the Under
Secretary for Enforcement.
``(B) Maintain a government-wide data access
service, with access, in accordance with applicable
legal requirements, to the following:
``(i) Information collected by the
Department of the Treasury, including report
information filed under subchapters II and III
of chapter 53 of this title (such as reports on
cash transactions, foreign financial agency
transactions and relationships, foreign
currency transactions, exporting and importing
monetary instruments, and suspicious
activities), chapter 2 of Public Law 91-508,
section 21 of the Federal Deposit Insurance Act
and section 6050I of the Internal Revenue Code
of 1986.
``(ii) Information regarding national and
international currency flows.
``(iii) Other records and data maintained
by other Federal, State, local, and foreign
agencies, including financial and other records
developed in specific cases.
``(iv) Other privately and publicly
available information.
``(C) Analyze and disseminate the available data in
accordance with applicable legal requirements and
policies and guidelines established by the Secretary of
the Treasury and the Under Secretary for Enforcement
to--
``(i) identify possible criminal activity
to appropriate Federal, State, local, and
foreign law enforcement agencies;
``(ii) support ongoing criminal financial
investigations and prosecutions and related
proceedings, including civil and criminal tax
and forfeiture proceedings;
``(iii) identify possible instances of
noncompliance with subchapters II and III of
chapter 53 of this title, chapter 2 of Public
Law 91-508, and section 21 of the Federal
Deposit Insurance Act to Federal agencies with
statutory responsibility for enforcing
compliance with such provisions and other
appropriate Federal regulatory agencies;
``(iv) evaluate and recommend possible uses
of special currency reporting requirements
under section 5326; and
``(v) determine emerging trends and methods
in money laundering and other financial crimes.
``(D) Establish and maintain a financial crimes
communications center to furnish law enforcement
authorities with intelligence information related to
emerging or ongoing investigations and undercover
operations.
``(E) Furnish research, analytical, and
informational services to financial institutions,
appropriate Federal regulatory agencies with regard to
financial institutions, and appropriate Federal, State,
local, and foreign law enforcement authorities, in
accordance with policies and guidelines established by
the Secretary of the Treasury or the Under Secretary of
the Treasury for Enforcement, in the interest of
detection, prevention, and prosecution of terrorism,
organized crime, money laundering, and other financial
crimes.
``(F) Establish and maintain a special unit
dedicated to combatting the use of informal, nonbank
networks and payment and barter system mechanisms that
permit the transfer of funds or the equivalent of funds
without records and without compliance with criminal
and tax laws.
``(G) Provide computer and data support and data
analysis to the Secretary of the Treasury for tracking
and controlling foreign assets.
``(H) Coordinate with financial intelligence units
in other countries on anti-terrorism and anti-money
laundering initiatives, and similar efforts.
``(I) Administer the requirements of subchapters II
and III of chapter 53 of this title, chapter 2 of
Public Law 91-508, and section 21 of the Federal
Deposit Insurance Act, to the extent delegated such
authority by the Secretary of the Treasury.
``(J) Such other duties and powers as the Secretary
of the Treasury may delegate or prescribe.
``(c) Requirements Relating to Maintenance and Use of Data Banks.--
The Secretary of the Treasury shall establish and maintain operating
procedures with respect to the government-wide data access service and
the financial crimes communications center maintained by the Financial
Crimes Enforcement Network which provide--
``(1) for the coordinated and efficient transmittal of
information to, entry of information into, and withdrawal of
information from, the data maintenance system maintained by the
Network, including--
``(A) the submission of reports through the
Internet or other secure network, whenever possible;
``(B) the cataloguing of information in a manner
that facilitates rapid retrieval by law enforcement
personnel of meaningful data; and
``(C) a procedure that provides for a prompt
initial review of suspicious activity reports and other
reports, or such other means as the Secretary may
provide, to identify information that warrants
immediate action; and
``(2) in accordance with section 552a of title 5 and the
Right to Financial Privacy Act of 1978, appropriate standards
and guidelines for determining--
``(A) who is to be given access to the information
maintained by the Network;
``(B) what limits are to be imposed on the use of
such information; and
``(C) how information about activities or
relationships which involve or are closely associated
with the exercise of constitutional rights is to be
screened out of the data maintenance system.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated for the Financial Crimes Enforcement Network such sums as
may be necessary for fiscal years 2002, 2003, 2004, and 2005.''.
(b) Compliance With Existing Reports Compliance.--The Secretary of
the Treasury shall study methods for improving compliance with the
reporting requirements established in section 5314 of title 31, United
States Code, and shall submit a report on such study to the Congress by
the end of the 6-month period beginning on the date of the enactment of
this Act and each 1-year period thereafter. The initial report shall
include historical data on compliance with such reporting requirements.
(c) Clerical Amendment.--The table of sections for subchapter I of
chapter 3 of title 31, United States Code, is amended--
(1) by redesignating the item relating to section 310 as
section 311; and
(2) by inserting after the item relating to section 309 the
following new item:
``310. Financial Crimes Enforcement Network''.
SEC. 121. CUSTOMS SERVICE BORDER SEARCHES.
Section 5317(b) of title 31, United States Code, is amended to read
as follows:
``(b) Searches at Border.--
``(1) In general.--For purposes of ensuring compliance with
the laws enforced by the United States Customs Service, a
customs officer may stop and search, at the border and without
a search warrant, any vehicle, vessel, aircraft, or other
conveyance, any envelope or other container, and any person
entering, transiting, or departing from the United States.
``(2) International shipments of mail.--With respect to
shipments of international mail that are exported or imported
by the United States Postal Service, the Customs Service and
other appropriate Federal agencies shall, subject to paragraph
(3), apply the customs laws of the United States and all other
laws relating to the importation or exportation of such
shipments in the same manner to both shipments by the United
States Postal Service and similar shipments by private
companies.
``(3) Safeguards.--No provision of this subsection shall be
construed as authorizing any customs officer or any other
person to read any correspondence unless--
``(A) a search warrant has been issued pursuant to
Rule 41 of the Federal Rules of Criminal Procedure
which permits such correspondence to be read; or
``(B) the sender or addressee of the correspondence
has given written consent for any such action.''.
SEC. 122. PROHIBITION ON FALSE STATEMENTS TO FINANCIAL INSTITUTIONS
CONCERNING THE IDENTITY OF A CUSTOMER.
(a) In General.--Chapter 47 of title 18, United States Code, is
amended by inserting after section 1007 the following:
``Sec. 1008. False statements concerning the identity of customers of
financial institutions
``(a) In General.--Whoever, in connection with information
submitted to or requested by a financial institution, knowingly in any
manner--
``(1) falsifies, conceals, or covers up, or attempts to
falsify, conceal, or cover up, the identity of any person in
connection with any transaction with a financial institution;
``(2) makes, or attempts to make, any materially false,
fraudulent, or fictitious statement or representation of the
identity of any person in connection with a transaction with a
financial institution;
``(3) makes or uses, or attempts to make or use, any false
writing or document knowing the same to contain any materially
false, fictitious, or fraudulent statement or entry concerning
the identity of any person in connection with a transaction with a
financial institution; or
``(4) uses or presents, or attempts to use or present, in
connection with a transaction with a financial institution, an
identification document or means of identification the
possession of which is a violation of section 1028;
shall be fined under this title, imprisoned not more than 5 years, or
both.
``(b) Definitions.--In this section, the following definitions
shall apply:
``(1) Financial institution.--The term `financial
institution'--
``(A) has the same meaning as in section 20; and
``(B) in addition, has the same meaning as in
section 5312(a)(2) of title 31, United States Code.
``(2) Identification document.--The term `identification
document' has the same meaning as in section 1028(d).
``(3) Means of identification.--The term `means of
identification' has the same meaning as in section 1028(d).''.
(b) Technical and Conforming Amendments.--
(1) Title 18, united states code.--Section 1956(c)(7)(D) of
title 18, United States Code, is amended by striking ``1014
(relating to fraudulent loan'' and inserting ``section 1008
(relating to false statements concerning the identity of
customers of financial institutions), section 1014 (relating to
fraudulent loan''.
(2) Table of sections.--The table of sections for chapter
47 of title 18, United States Code, is amended by inserting
after the item relating to section 1007 the following:
``1008. False statements concerning the identity of customers of
financial institutions.''.
SEC. 123. VERIFICATION OF IDENTIFICATION.
(a) In General.--Section 5318 of title 31, United States Code, is
amended by adding at the end the following new subsection:
``(i) Identification and Verification of Accountholders.--
``(1) In general.--Subject to the requirements of this
subsection, the Secretary of the Treasury shall prescribe
regulations setting forth the minimum standards regarding
customer identification that shall apply in connection with the
opening of an account at a financial institution.
``(2) Minimum requirements.--The regulations shall, at a
minimum, require financial institutions to implement procedures
for--
``(A) verifying the identity of any person seeking
to open an account to the extent reasonable and
practicable;
``(B) maintaining records of the information used
to verify a person's identity, including name, address,
and other identifying information;
``(C) consulting applicable lists of known or
suspected terrorists or terrorist organizations
generated by government agencies to determine whether a
person seeking to open an account appears on any such
list.
``(3) Factors to be considered.--In prescribing regulations
under this subsection, the Secretary shall take into
consideration the various types of accounts maintained by
various types of financial institutions, the various methods of
opening accounts, and the various types of identifying
information available.
``(4) Certain financial institutions.--In the case of any
financial institution the business of which is engaging in
financial activities described in section 4(k) of the Bank
Holding Company Act of 1956 (including financial activities
subject to the jurisdiction of the Commodity Futures Trading
Commission), the regulations prescribed by the Secretary under
paragraph (1) shall be prescribed jointly with each Federal
functional regulator (as defined in section 509 of the Gramm-
Leach-Bliley Act, including the Commodity Futures Trading
Commission) appropriate for such financial institution.
``(5) Exemptions.--The Secretary of the Treasury (and, in
the case of any financial institution described in paragraph
(4), any Federal agency described in such paragraph) may, by
regulation or order, exempt any financial institution or type
of account from the requirements of any regulation prescribed
under this subsection in accordance with such standards and
procedures as the Secretary may prescribe.
``(6) Effective date.--Final regulations prescribed under
this subsection shall take effect before the end of the 1-year
period beginning on the date of the enactment of the Financial
Anti-Terrorism Act of 2001.''.
(b) Study and Report Required.--Within 6 months after the date of
the enactment of this Act, the Secretary of the Treasury, in
consultation with the Federal functional regulators (as defined in
section 509 of the Gramm-Leach-Bliley Act) and other appropriate
Government agencies, shall submit a report to the Congress containing
recommendations for--
(1) determining the most timely and effective way to
require foreign nationals to provide domestic financial
institutions and agencies with appropriate and accurate
information, comparable to that which is required of United
States nationals, concerning their identity, address, and other
related information necessary to enable such institutions and
agencies to comply with the requirements of this section;
(2) requiring foreign nationals to apply for and obtain,
before opening an account with a domestic financial
institution, an identification number which would function
similarly to a Social Security number or tax identification
number; and
(3) establishing a system for domestic financial
institutions and agencies to review information maintained by
relevant Government agencies for purposes of verifying the
identities of foreign nationals seeking to open accounts at
those institutions and agencies.
SEC. 124. CONSIDERATION OF ANTI-MONEY LAUNDERING RECORD.
(a) Bank Holding Company Act of 1956.--
(1) 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 the Board shall take
into consideration the effectiveness of the company or
companies in combating and preventing money laundering
activities, including in overseas branches.''.
(2) Scope of application.--The amendment made by paragraph
(1) 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, 2000, which has not been approved by the Board
before the date of the enactment of this Act.
(b) Mergers Subject to Review Under Federal Deposit Insurance
Act.--
(1) In general.--Section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)) is amended--
(A) by redesignating paragraph (11) as paragraph
(12); and
(B) by inserting after paragraph (10), the
following new paragraph:
``(11) Money laundering.--In every case, the responsible
agency shall take into consideration the effectiveness of any
insured depository institution involved in the proposed merger
transaction in combating and preventing money laundering
activities, including in overseas branches.''.
(2) Scope of application.--The amendment made by paragraph
(1) shall apply with respect to any application submitted to
the responsible agency under section 18(c) of the Federal
Deposit Insurance Act after December 31, 2000, which has not
been approved by all appropriate responsible agencies before
the date of the enactment of this Act.
SEC. 125. REPORTING OF SUSPICIOUS ACTIVITIES BY INFORMAL UNDERGROUND
BANKING SYSTEMS, SUCH AS HAWALAS.
(a) Definition for Subchapter.--Subparagraph (R) of section
5312(a)(2) of title 31, United States Code, is amended to read as
follows:
``(R) a licensed sender of money or any other
person who engages as a business in the transmission of
funds, including through an informal value transfer
banking system or network of people facilitating the
transfer of value domestically or internationally
outside of the conventional financial institutions
system;''.
(b) Money Transmitting Business.--Section 5330(d)(1)(A) of title
31, United States Code, is amended by inserting before the semicolon
the following: ``or any other person who engages as a business in the
transmission of funds, including through an informal value transfer
banking system or network of people facilitating the transfer of value
domestically or internationally outside of the conventional financial
institutions system''.
(c) Applicability of Rules.--Section 5318 of title 31, United
States Code, as amended by this title, is amended by adding at the end
the following:
``(l) Applicability of Rules.--Any rules prescribed pursuant to the
authority contained in section 21 of the Federal Deposit Insurance Act
shall apply, in addition to any other financial institution to which
such rules apply, to any person that engages as a business in the
transmission of funds, including through an informal value transfer
banking system or network of people facilitating the transfer of value
domestically or internationally outside of the conventional financial
institutions system.''.
(d) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary of the Treasury shall report to Congress on the
need for any additional legislation relating to--
(1) informal value transfer banking systems or networks of
people facilitating the transfer of value domestically or
internationally outside of the conventional financial
institutions system;
(2) anti-money laundering controls; and
(3) regulatory controls relating to underground money
movement and banking systems, such as the system referred to as
``hawala'', including whether the threshold for the filing of
suspicious activity reports under section 5318(g) of title 31,
United States Code should be lowered in the case of such
systems.
TITLE II--PUBLIC-PRIVATE COOPERATION
SEC. 201. ESTABLISHMENT OF HIGHLY SECURE NETWORK.
(a) In General.--The Secretary of the Treasury shall establish a
highly secure network in the Financial Crimes Enforcement Network
that--
(1) allows financial institutions to file reports required
under subchapter II or III of chapter 53 of title 31, United
States Code, chapter 2 of Public Law 91-508, or section 21 of
the Federal Deposit Insurance Act through the network; and
(2) provides financial institutions with alerts and other
information regarding suspicious activities that warrant
immediate and enhanced scrutiny.
(b) Expedited Development.--The Secretary of the Treasury shall
take such action as may be necessary to ensure that the website
required under subsection (a) is fully operational before the end of
the 9-month period beginning on the date of the enactment of this Act.
SEC. 202. REPORT ON IMPROVEMENTS IN DATA ACCESS AND OTHER ISSUES.
Before the end of the 6-month period beginning on the date of the
enactment of this Act, the Secretary of the Treasury shall report to
the Congress on the following issues:
(1) Data collection and analysis.--Progress made since such
date of enactment in meeting the requirements of section 310(c)
of title 31, United States Code (as added by this Act).
(2) Barriers to exchange of financial crime information.--
Technical, legal, and other barriers to the exchange of
financial crime prevention and detection information among and
between Federal law enforcement agencies, including an
identification of all Federal law enforcement data systems
between which or among which data cannot be shared for whatever
reason.
(3) Private banking.--Private banking activities in the
United States, including information on the following:
(A) The nature and extent of private banking
activities in the United States.
(B) 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.
(C) With regard to financial institutions that
offer private banking services, the policies and
procedures of such institutions that are designed to
ensure compliance with the requirements of subchapter
II of chapter 53 of title 31, United States Code, and
section 21 of the Federal Deposit Insurance Act with
respect to private banking activity.
SEC. 203. REPORTS TO THE FINANCIAL SERVICES INDUSTRY ON SUSPICIOUS
FINANCIAL ACTIVITIES.
At least once each calendar quarter, the Secretary of the Treasury
shall--
(1) publish a report containing a detailed analysis
identifying patterns of suspicious activity and other
investigative insights derived from suspicious activity reports
and investigations conducted by Federal, State, and local law
enforcement agencies to the extent appropriate; and
(2) distribute such report to financial institutions (as
defined in section 5312 of title 31, United States Code).
SEC. 204. EFFICIENT USE OF CURRENCY TRANSACTION REPORT SYSTEM.
(a) Findings.--The Congress finds the following:
(1) The Congress established the currency transaction
reporting requirements in 1970 because the Congress found then
that such reports have a high degree of usefulness in criminal,
tax, and regulatory investigations and proceedings and the
usefulness of such reports has only increased in the years
since the requirements were established.
(2) In 1994, in response to reports and testimony that
excess amounts of currency transaction reports were interfering
with effective law enforcement, the Congress reformed the
currency transaction report exemption requirements to provide--
(A) mandatory exemptions for certain reports that
had little usefulness for law enforcement, such as cash
transfers between depository institutions and cash
deposits from government agencies; and
(B) discretionary authority for the Secretary of
the Treasury to provide exemptions, subject to criteria
and guidelines established by the Secretary, for
financial institutions with regard to regular business
customers that maintain accounts at an institution into
which frequent cash deposits are made.
(3) Today there is evidence that some financial
institutions are not utilizing the exemption system, or are
filing reports even if there is an exemption in effect, with
the result that the volume of currency transaction reports is
once again interfering with effective law enforcement.
(b) Study and Report.--
(1) Study required.--The Secretary of the Treasury shall
conduct a study of--
(A) the possible expansion of the statutory
exemption system in effect under 5313 of title 31,
United States Code; and
(B) methods for improving financial institution
utilization of the statutory exemption provisions as a
way of reducing the submission of currency transaction
reports that have little or no value for law
enforcement purposes, including improvements in the
systems in effect at financial institutions for regular
review of the exemption procedures used at the
institution and the training of personnel in its
effective use.
(2) Report required.--The Secretary of the Treasury shall
submit a report to the Congress before the end of the 90-day
period beginning on the date of the enactment of this Act
containing the findings and conclusions of the Secretary with
regard to the study required under subsection (a) and such
recommendations for legislative or administrative action as the
Secretary determines to be appropriate.
SEC. 205. PUBLIC-PRIVATE TASK FORCE ON TERRORIST FINANCING ISSUES.
Section 1564 of the Annunzio-Wylie Anti-Money Laundering Act (31
U.S.C. 5311 note) is amended by adding at the end the following new
subsection:
``(d) Terrorist Financing Issues.--
``(1) In general.--The Secretary of the Treasury shall
provide, either within the Bank Secrecy Act Advisory Group, or
as a subcommittee or other adjunct of the Advisory Group, for a
task force of representatives from agencies and officers
represented on the Advisory Group, a representative of the
Director of the Office of Homeland Security, and
representatives of financial institutions, private organizations that
represent the financial services industry, and other interested parties
to focus on--
``(A) issues specifically related to the finances
of terrorist groups, the means terrorist groups use to
transfer funds around the world and within the United
States, including through the use of charitable
organizations, nonprofit organizations, and
nongovernmental organizations, and the extent to which
financial institutions in the United States are
unwittingly involved in such finances and the extent to
which such institutions are at risk as a result;
``(B) the relationship, particularly the financial
relationship, between international narcotics
traffickers and foreign terrorist organizations, the
extent to which their memberships overlap and engage in
joint activities, and the extent to which they
cooperate with each other in raising and transferring
funds for their respective purposes; and
``(C) means of facilitating the identification of
accounts and transactions involving terrorist groups
and facilitating the exchange of information concerning
such accounts and transactions between financial
institutions and law enforcement organizations.
``(2) Applicability of other provisions.--Sections 552,
552a, and 552b of title 5, United States Code, and the Federal
Advisory Committee Act shall not apply to the task force
established pursuant to paragraph (1).''.
SEC. 206. SUSPICIOUS ACTIVITY REPORTING REQUIREMENTS.
(a) Deadline for Suspicious Activity Reporting Requirements for
Registered Brokers and Dealers.--The Secretary of the Treasury, in
consultation with the Securities and Exchange Commission, shall publish
proposed regulations in the Federal Register before January 1, 2002,
requiring brokers and dealers registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 to submit
suspicious activity reports under section 5318(g) of title 31, United
States Code. Such regulations shall be published in final form no later
than June 1, 2002.
(b) Suspicious Activity Reporting Requirements for Futures
Commission Merchants, Commodity Trading Advisors, and Commodity Pool
Operators.--The Secretary of the Treasury, in consultation with the
Commodity Futures Trading Commission, may prescribe regulations
requiring futures commission merchants, commodity trading advisors, and
commodity pool operators registered under the Commodity Exchange Act to
submit suspicious activity reports under section 5318(g) of title 31,
United States Code.
SEC. 207. 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.--Any financial institution that
makes a voluntary disclosure of any possible violation
of law or regulation to a government agency or makes a
disclosure pursuant to this subsection or any other
authority, and any director, officer, employee, or
agent of such institution who makes, or requires
another to make any such disclosure, 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 of any State, or
under any contract or other legally enforceable
agreement (including any arbitration agreement), for
such disclosure or for any failure to provide notice of
such disclosure to any person.
``(B) Rule of construction.--Subparagraph (A) shall
not be construed as creating--
``(i) any inference that the term `person',
as used in such subparagraph, may be construed
more broadly than its ordinary usage so to
include any government or agency of government;
or
``(ii) any immunity against, or otherwise
affecting, any civil or criminal action brought
by any government or agency of government to
enforce any constitution, law, or regulation of
such government or agency.''.
(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 or
any director, officer, employee, or agent of any
financial institution, voluntarily or pursuant to this
section or any other authority, reports a suspicious
transaction to a government agency--
``(i) the financial institution, director,
officer, employee, or agent may not notify any
person involved in the transaction that the
transaction has been reported; and
``(ii) no officer or employee of the
Federal Government or of any State, local,
tribal, or territorial government within the
United States, who has any knowledge that such
report was made may disclose to any person
involved in the transaction that the
transaction has been reported other than as
necessary to fulfill the official duties of
such officer or employee.
``(B) Disclosures in certain employment
references.--Notwithstanding the application of
subparagraph (A) in any other context, 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 section 18(v) of the Federal Deposit Insurance Act
in response to a request from another financial
institution or a written termination notice or
employment reference that is provided in accordance
with the rules of the self-regulatory organizations
registered with the Securities and Exchange Commission,
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.''.
SEC. 208. AUTHORIZATION TO INCLUDE SUSPICIONS OF ILLEGAL ACTIVITY IN
WRITTEN EMPLOYMENT REFERENCES.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
amended by adding at the end the following new subsection:
``(w) Written Employment References May Contain Suspicions of
Involvement in Illegal Activity.--
``(1) In general.--Notwithstanding any other provision of
law, any insured depository 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 insured depository institution in
response to a request from such other institution, information
concerning the possible involvement of such institution-affiliated
party in potentially unlawful activity, to the extent--
``(A) the disclosure does not contain information
which the institution, director, officer, employee, or
agent knows to be false; and
``(B) the institution, director, officer, employee,
or agent has not acted with malice or with reckless
disregard for the truth in making the disclosure.
``(2) Definition.--For purposes of this subsection, the
term `insured depository institution' includes any uninsured
branch or agency of a foreign bank.''.
SEC. 209. INTERNATIONAL COOPERATION ON IDENTIFICATION OF ORIGINATORS OF
WIRE TRANSFERS.
The Secretary of the Treasury shall--
(1) in consultation with the Attorney General and the
Secretary of State, take all reasonable steps to encourage
foreign governments to require the inclusion of the name of the
originator in wire transfer instructions sent to the United
States and other countries, with the information to remain with
the transfer from its origination until the point of
disbursement; and
(2) report annually to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate on--
(A) progress toward the goal enumerated in
paragraph (1), as well as impediments to implementation
and an estimated compliance rate; and
(B) impediments to instituting a regime in which
all appropriate identification, as defined by the
Secretary, about wire transfer recipients shall be
included with wire transfers from their point of
origination until disbursement.
SEC. 210. CHECK TRUNCATION STUDY.
Before the end of the 90-day period beginning on the date of the
enactment of this Act, the Secretary of the Treasury, in consultation
with the Attorney General and the Board of Governors of the Federal
Reserve System, shall conduct a study of the impact on crime
prevention, law enforcement, and the administration of consumer
protection laws of any policy of the Board of Governors of the Federal
Reserve System relating to the promotion of check electronification,
through truncation or other means, or migration from paper checks.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
SEC. 301. SPECIAL MEASURES FOR JURISDICTIONS, FINANCIAL INSTITUTIONS,
OR INTERNATIONAL TRANSACTIONS OF PRIMARY MONEY LAUNDERING
CONCERN.
(a) In General.--Subchapter II of chapter 53 of title 31, United
States Code, is amended by inserting after section 5318 the following
new section:
``Sec. 5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary
money laundering concern
``(a) International Counter-Money Laundering Requirements.--
``(1) In general.--The Secretary may require domestic
financial institutions and domestic financial agencies to take
1 or more of the special measures described in subsection (b)
if the Secretary finds that reasonable grounds exist for
concluding that a jurisdiction outside of the United States, 1
or more financial institutions operating outside of the United
States, 1 or more classes of transactions within, or involving,
a jurisdiction outside of the United States, or 1 or more types
of accounts is of primary money laundering concern, in
accordance with subsection (c).
``(2) Form of requirement.--The special measures described
in--
``(A) subsection (b) may be imposed in such
sequence or combination as the Secretary shall
determine;
``(B) paragraphs (1) through (4) of subsection (b)
may be imposed by regulation, order, or otherwise as
permitted by law; and
``(C) subsection (b)(5) may be imposed only by
regulation.
``(3) Duration of orders; rulemaking.--Any order by which a
special measure described in paragraphs (1) through (4) of
subsection (b) is imposed (other than an order described in
section 5326)--
``(A) shall be issued together with a notice of
proposed rulemaking relating to the imposition of such
special measure; and
``(B) may not remain in effect for more than 120
days, except pursuant to a regulation prescribed on or
before the end of the 120-day period beginning on the
date of issuance of such order.
``(4) Process for selecting special measures.--In selecting
which special measure or measures to take under this
subsection, the Secretary--
``(A) shall consult with the Chairman of the Board
of Governors of the Federal Reserve System, any other
appropriate Federal banking agency (as defined in
section 3 of the Federal Deposit Insurance Act), the
Securities and Exchange Commission, the National Credit
Union Administration Board, and in the sole discretion
of the Secretary such other agencies and interested
parties as the Secretary may find to be appropriate;
and
``(B) shall consider--
``(i) whether similar action has been or is
being taken by other nations or multilateral
groups;
``(ii) whether the imposition of any
particular special measure would create a
significant competitive disadvantage, including
any undue cost or burden associated with
compliance, for financial institutions
organized or licensed in the United States; and
``(iii) the extent to which the action or
the timing of the action would have a
significant adverse systemic impact on the
international payment, clearance, and
settlement system, or on legitimate business
activities involving the particular
jurisdiction, institution, or class of
transactions.
``(5) No limitation on other authority.--This section shall
not be construed as superseding or otherwise restricting any
other authority granted to the Secretary, or to any other
agency, by this subchapter or otherwise.
``(b) Special Measures.--The special measures referred to in
subsection (a), with respect to a jurisdiction outside of the United
States, financial institution operating outside of the United States,
class of transaction within, or involving, a jurisdiction outside of
the United States, or 1 or more types of accounts are as follows:
``(1) Recordkeeping and reporting of certain financial
transactions.--
``(A) In general.--The Secretary may require any
domestic financial institution or domestic financial
agency to maintain records, file reports, or both,
concerning the aggregate amount of transactions, or
concerning each transaction, with respect to a
jurisdiction outside of the United States, 1 or more
financial institutions operating outside of the United
States, 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States,
or 1 or more types of accounts if the Secretary finds
any such jurisdiction, institution, or class of
transactions to be of primary money laundering concern.
``(B) Form of records and reports.--Such records
and reports shall be made and retained at such time, in
such manner, and for such period of time, as the
Secretary shall determine, and shall include such
information as the Secretary may determine, including--
``(i) the identity and address of the
participants in a transaction or relationship,
including the identity of the originator of any
funds transfer;
``(ii) the legal capacity in which a
participant in any transaction is acting;
``(iii) the identity of the beneficial
owner of the funds involved in any transaction,
in accordance with such procedures as the
Secretary determines to be reasonable and
practicable to obtain and retain the
information; and
``(iv) a description of any transaction.
``(2) Information relating to beneficial ownership.--In
addition to any other requirement under any other provision of
law, the Secretary may require any domestic financial
institution or domestic financial agency to take such steps as
the Secretary may determine to be reasonable and practicable to
obtain and retain information concerning the beneficial
ownership of any account opened or maintained in the United
States by a foreign person (other than a foreign entity whose
shares are subject to public reporting requirements or are
listed and traded on a regulated exchange or trading market),
or a representative of such a foreign person, that involves a
jurisdiction outside of the United States, 1 or more financial
institutions operating outside of the United States, 1 or more
classes of transactions within, or involving, a jurisdiction
outside of the United States, or 1 or more types of accounts if
the Secretary finds any such jurisdiction, institution,
transaction, or account to be of primary money laundering
concern.
``(3) Information relating to certain payable-through
accounts.--If the Secretary finds a jurisdiction outside of the
United States, 1 or more financial institutions operating outside of
the United States, or 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States to be of primary
money laundering concern, the Secretary may require any domestic
financial institution or domestic financial agency that opens or
maintains a payable-through account in the United States for a foreign
financial institution involving any such jurisdiction or any such
financial institution operating outside of the United States, or a
payable through account through which any such transaction may be
conducted, as a condition of opening or maintaining such account--
``(A) to identify each customer (and representative
of such customer) of such financial institution who is
permitted to use, or whose transactions are routed
through, such payable-through account; and
``(B) to obtain, with respect to each such customer
(and each such representative), information that is
substantially comparable to that which the depository
institution obtains in the ordinary course of business
with respect to its customers residing in the United
States.
``(4) Information relating to certain correspondent
accounts.--If the Secretary finds a jurisdiction outside of the
United States, 1 or more financial institutions operating
outside of the United States, or 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution or
domestic financial agency that opens or maintains a
correspondent account in the United States for a foreign
financial institution involving any such jurisdiction or any
such financial institution operating outside of the United
States, or a correspondent account through which any such
transaction may be conducted, as a condition of opening or
maintaining such account--
``(A) to identify each customer (and representative
of such customer) of any such financial institution who
is permitted to use, or whose transactions are routed
through, such correspondent account; and
``(B) to obtain, with respect to each such customer
(and each such representative), information that is
substantially comparable to that which the depository
institution obtains in the ordinary course of business
with respect to its customers residing in the United
States.
``(5) Prohibitions or conditions on opening or maintaining
certain correspondent or payable-through accounts.--If the
Secretary finds a jurisdiction outside of the United States, 1
or more financial institutions operating outside of the United
States, or 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States to be of
primary money laundering concern, the Secretary, in
consultation with the Secretary of State, the Attorney General,
and the Chairman of the Board of Governors of the Federal
Reserve System, may prohibit, or impose conditions upon, the
opening or maintaining in the United States of a correspondent
account or payable-through account by any domestic financial
institution or domestic financial agency for or on behalf of a
foreign banking institution, if such correspondent account or
payable-through account involves any such jurisdiction or
institution, or if any such transaction may be conducted
through such correspondent account or payable-through account.
``(c) Consultations and Information To Be Considered in Finding
Jurisdictions, Institutions, Types of Accounts, or Transactions To Be
of Primary Money Laundering Concern.--
``(1) In general.--In making a finding that reasonable
grounds exist for concluding that a jurisdiction outside of the
United States, 1 or more financial institutions operating
outside of the United States, 1 or more classes of transactions
within, or involving, a jurisdiction outside of the United
States, or 1 or more types of accounts is of primary money
laundering concern so as to authorize the Secretary to take 1
or more of the special measures described in subsection (b),
the Secretary shall consult with the Secretary of State, and
the Attorney General.
``(2) Additional considerations.--In making a finding
described in paragraph (1), the Secretary shall consider in
addition such information as the Secretary determines to be
relevant, including the following potentially relevant factors:
``(A) Jurisdictional factors.--In the case of a
particular jurisdiction--
``(i) evidence that organized criminal
groups, international terrorists, or both, have
transacted business in that jurisdiction;
``(ii) the extent to which that
jurisdiction or financial institutions
operating in that jurisdiction offer bank
secrecy or special regulatory advantages to
nonresidents or nondomiciliaries of that
jurisdiction;
``(iii) the substance and quality of
administration of the bank supervisory and
counter-money laundering laws of that
jurisdiction;
``(iv) the relationship between the volume
of financial transactions occurring in that
jurisdiction and the size of the economy of the
jurisdiction;
``(v) the extent to which that jurisdiction
is characterized as an offshore banking or
secrecy haven by credible international
organizations or multilateral expert groups;
``(vi) whether the United States has a
mutual legal assistance treaty with that
jurisdiction, and the experience of United
States law enforcement officials, and
regulatory officials in obtaining information
about transactions originating in or routed
through or to such jurisdiction; and
``(vii) the extent to which that
jurisdiction is characterized by high levels of
official or institutional corruption.
``(B) Institutional factors.--In the case of a
decision to apply 1 or more of the special measures
described in subsection (b) only to a financial
institution or institutions, or to a transaction or
class of transactions, or to a type of account, or to
all 3, within or involving a particular jurisdiction--
``(i) the extent to which such financial
institutions, transactions, or types of
accounts are used to facilitate or promote
money laundering in or through the
jurisdiction;
``(ii) the extent to which such
institutions, transactions, or types of
accounts are used for legitimate business
purposes in the jurisdiction; and
``(iii) the extent to which such action is
sufficient to ensure, with respect to
transactions involving the jurisdiction and
institutions operating in the jurisdiction,
that the purposes of this subchapter continue
to be fulfilled, and to guard against
international money laundering and other
financial crimes.
``(d) Notification of Special Measures Invoked by the Secretary.--
Not later than 10 days after the date of any action taken by the
Secretary under subsection (a)(1), the Secretary shall notify, in
writing, the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate of any such action.
``(e) Definitions.--Notwithstanding any other provision of this
subchapter, for purposes of this section, the following definitions
shall apply:
``(1) Bank definitions.--The following definitions shall
apply with respect to a bank:
``(A) Account.--The term `account'--
``(i) means a formal banking or business
relationship established to provide regular
services, dealings, and other financial
transactions; and
``(ii) includes a demand deposit, savings
deposit, or other transaction or asset account
and a credit account or other extension of
credit.
``(B) Correspondent account.--The term
`correspondent account' means an account established to
receive deposits from, make payments on behalf of a
foreign financial institution, or handle other
financial transactions related to such institution.
``(C) Payable-through account.--The term `payable-
through account' means an account, including a
transaction account (as defined in section 19(b)(1)(C)
of the Federal Reserve Act), opened at a depository
institution by a foreign financial institution by means
of which the foreign financial institution permits its
customers to engage, either directly or through a
subaccount, in banking activities usual in connection
with the business of banking in the United States.
``(D) Secretary.--The term `Secretary' means the
Secretary of the Treasury.
``(2) Definitions applicable to institutions other than
banks.--With respect to any financial institution other than a
bank, the Secretary shall, after consultation with the
appropriate Federal functional regulators (as defined in
section 509 of the Gramm-Leach-Bliley Act), define by
regulation the term `account', and shall include within the
meaning of that term, to the extent, if any, that the
Secretary deems appropriate, arrangements similar to payable-through
and correspondent accounts.
``(3) Regulatory definition.--The Secretary shall
promulgate regulations defining beneficial ownership of an
account for purposes of this subchapter. Such regulations shall
address issues related to an individual's authority to fund,
direct, or manage the account (including the power to direct
payments into or out of the account), and an individual's
material interest in the income or corpus of the account, and
shall ensure that the identification of individuals under this
section does not extend to any individual whose beneficial
interest in the income or corpus of the account is immaterial.
``(4) Other terms.--The Secretary may, by regulation,
further define the terms in paragraphs (1) and (2) and define
other terms for the purposes of this section, as the Secretary
deems appropriate.''.
(b) Financial Institutions Specified in Subchapter II of Chapter 53
of Title 31, United States Code.--
(1) Credit unions.--Subparagraph (E) of section 5312(2) of
title 31, United States Code, is amended to read as follows:
``(E) any credit union;''.
(2) Futures commission merchant; commodity trading advisor;
commodity pool operator.--Section 5312 of title 31, United
States Code, is amended by adding at the end the following new
subsection:
``(c) Additional Definitions.--For purposes of this subchapter, the
following definitions shall apply:
``(1) Certain institutions included in definition.--The
term `financial institution' (as defined in subsection (a))
includes the following:
``(A) Any futures commission merchant, commodity
trading advisor, or commodity pool operator registered,
or required to register, under the Commodity Exchange
Act.''.
(3) CFTC included.--For purposes of this Act and any
amendment made by this Act to any other provision of law, the
term ``Federal functional regulator'' includes the Commodity
Futures Trading Commission.
(c) Clerical Amendment.--The table of sections for subchapter II of
chapter 53 of title 31, United States Code, is amended by inserting
after the item relating to section 5318 the following new item:
``5318A. Special measures for jurisdictions, financial institutions, or
international transactions of primary money
laundering concern.''.
SEC. 302. SPECIAL DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS AND PRIVATE
BANKING ACCOUNTS.
(a) In General.--Section 5318 of title 31, United States Code, is
amended by inserting after subsection (i) (as added by section 123 of
this Act) the following new subsection:
``(j) Due Diligence for United States Private Banking and
Correspondent Bank Accounts Involving Foreign Persons.--
``(1) In general.--Each financial institution that
establishes, maintains, administers, or manages a private
banking account or a correspondent account in the United States
for a non-United States person, including a foreign individual
visiting the United States, or a representative of a non-United
States person, shall establish appropriate, specific, and,
where necessary, enhanced due diligence policies, procedures,
and controls to detect and report instances of money laundering
through those accounts.
``(2) Minimum standards for correspondent accounts.--
``(A) In general.--Subparagraph (B) shall apply if
a correspondent account is requested or maintained by,
or on behalf of, a foreign bank operating--
``(i) under an offshore banking license; or
``(ii) under a banking license issued by a
foreign country that has been designated--
``(I) as noncooperative with
international anti-money laundering
principles or procedures by an
intergovernmental group or organization
of which the United States is a member
with which designation the Secretary of
the Treasury concurs; or
``(II) by the Secretary as
warranting special measures due to
money laundering concerns.
``(B) Policies, procedures, and controls.--The
enhanced due diligence policies, procedures, and
controls required under paragraph (1) for foreign banks
described in subparagraph (A) shall, at a minimum,
ensure that the financial institution in the United
States takes reasonable steps--
``(i) to ascertain for any such foreign
bank, the shares of which are not publicly
traded, the identity of each of the owners
of the foreign bank, and the nature and extent of the ownership
interest of each such owner;
``(ii) to conduct enhanced scrutiny of such
account to guard against money laundering and
report any suspicious transactions under
section 5318(g); and
``(iii) to ascertain whether such foreign
bank provides correspondent accounts to other
foreign banks and, if so, the identity of those
foreign banks and related due diligence
information, as appropriate under paragraph
(1).
``(3) Minimum standards for private banking accounts.--If a
private banking account is requested or maintained by, or on
behalf of, a non-United States person, then the due diligence
policies, procedures, and controls required under paragraph (1)
shall, at a minimum, ensure that the financial institution
takes reasonable steps--
``(A) to ascertain the identity of the nominal and
beneficial owners of, and the source of funds deposited
into, such account as needed to guard against money
laundering and report any suspicious transactions under
section 5318(g); and
``(B) to conduct enhanced scrutiny of any such
account that is requested or maintained by, or on
behalf of, a senior foreign political figure, or any
immediate family member or close associate of a senior
foreign political figure, to prevent, detect, and
report transactions that may involve the proceeds of
foreign corruption.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Offshore banking license.--The term `offshore
banking license' means a license to conduct banking
activities which, as a condition of the license,
prohibits the licensed entity from conducting banking
activities with the citizens of, or with the local
currency of, the country which issued the license.
``(B) Private bank account.--The term `private bank
account' means an account (or any combination of
accounts) that--
``(i) requires a minimum aggregate deposits
of funds or other assets of not less than
$1,000,000;
``(ii) is established on behalf of 1 or
more individuals who have a direct or
beneficial ownership interest in the account;
and
``(iii) is assigned to, or is administered
or managed by, in whole or in part, an officer,
employee, or agent of a financial institution
acting as a liaison between the financial
institution and the direct or beneficial owner
of the account.
``(5) Regulatory authority.--Before the end of the 6-month
period beginning on the date of the enactment of the Financial
Anti-Terrorism Act of 2001, the Secretary, in consultation with
the appropriate Federal functional regulators (as defined in
section 509 of the Gramm-Leach-Bliley Act) shall further define
and clarify, by regulation, the requirements of this
subsection.''.
(b) Effective Date.--The amendments made by this section shall take
effect beginning 180 days after the date of the enactment of this Act
with respect to accounts covered by subsection (j) of section 5318 of
title 31, United States Code (as added by this section) that are opened
before, on, or after the date of the enactment of this Act.
SEC. 303. PROHIBITION ON UNITED STATES CORRESPONDENT ACCOUNTS WITH
FOREIGN SHELL BANKS.
Section 5318 of title 31, United States Code, is amended by
inserting after subsection (j) (as added by section 302 of this title)
the following new subsection:
``(k) Prohibition on United States Correspondent Accounts With
Foreign Shell Banks.--
``(1) In general.--A depository institution shall not
establish, maintain, administer, or manage a correspondent
account in the United States for, or on behalf of, a foreign
bank that does not have a physical presence in any country.
``(2) Prevention of indirect service to foreign shell
banks.--
``(A) In general.--A depository institution shall
take reasonable steps to ensure that any correspondent
account established, maintained, administered, or
managed by that institution in the United States for a
foreign bank is not being used by that foreign bank to
indirectly provide banking services to another foreign
bank that does not have a physical presence in any
country.
``(B) Regulations.--The Secretary shall, in
regulations, delineate reasonable steps necessary for a
depository institution to comply with this subsection.
``(3) Exception.--Paragraphs (1) and (2) shall not be
construed as prohibiting a depository institution from
providing a correspondent account to a foreign bank, if the
foreign bank--
``(A) is an affiliate of a depository institution,
credit union, or other foreign bank that maintains a
physical presence in the United States or a foreign
country, as applicable; and
``(B) is subject to supervision by a banking
authority in the country regulating the affiliated
depository institution, credit union, or foreign bank,
described in subparagraph (A), as applicable.
``(4) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Affiliate.--The term `affiliate' means a
foreign bank that is controlled by or is under common
control with a depository institution, credit union, or
foreign bank.
``(B) Depository institution.--The `depository
institution'--
``(i) has the meaning given such term in
section 3 of the Federal Deposit Insurance Act;
and
``(ii) includes a credit union.
``(C) Physical presence.--The term `physical
presence' means a place of business that--
``(i) is maintained by a foreign bank;
``(ii) is located at a fixed address (other
than solely an electronic address) in a country
in which the foreign bank is authorized to
conduct banking activities, at which location
the foreign bank--
``(I) employs 1 or more individuals
on a full-time basis; and
``(II) maintains operating records
related to its banking activities; and
``(iii) is subject to inspection by the
banking authority which licensed the foreign
bank to conduct banking activities.''.
SEC. 304. ANTI-MONEY LAUNDERING PROGRAMS.
(a) In General.--Section 5318(h) of title 31, United States Code,
is amended to read as follows:
``(h) Anti-Money Laundering Programs.--
``(1) In general.--In order to guard against money
laundering through financial institutions, each financial
institution shall establish anti-money laundering programs,
including, at a minimum--
``(A) the development of internal policies,
procedures, and controls;
``(B) the designation of an officer of the
financial institution responsible for compliance;
``(C) an ongoing employee training program; and
``(D) an independent audit function to test
programs.
``(2) Regulations.--The Secretary may, after consultation
with the appropriate Federal functional regulators (as defined
in section 509 of the Gramm-Leach-Bliley Act), prescribe
minimum standards for programs established under paragraph (1),
and may exempt from the application of those standards any
financial institution that is not subject to the provisions of
the regulations contained in part 103 of title 31, of the Code
of Federal Regulations, as in effect on the date of the
enactment of the Financial Anti-Terrorism Act of 2001, or any
successor to such regulations, for so long as such financial
institution is not subject to the provisions of such
regulations.''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect at the end of the 180-day period beginning on the date of
the enactment of this Act.
(c) Date of Application of Regulations; Factors To Be Taken Into
Account.--Before the end of the 180-day period beginning on the date of
the enactment of this Act, the Secretary of the Treasury shall
prescribe regulations to implement the amendment made by subsection
(a). In prescribing such regulations, the Secretary shall consider the
extent to which the requirements imposed under such regulations are
commensurate with the size, location, and activities of the financial
institutions to which such regulations apply.
SEC. 305. CONCENTRATION ACCOUNTS AT FINANCIAL INSTITUTIONS.
Section 5318(h) of title 31, United States Code (as amended by
section 304) is amended by adding at the end the following:
``(3) Concentration accounts.--The Secretary may prescribe
regulations under this subsection that govern maintenance of
concentration accounts by financial institutions, in order to
ensure that such accounts are not used to prevent association
of the identity of an individual customer with the movement of
funds of which the customer is the direct or beneficial owner,
which regulations shall, at a minimum--
``(A) prohibit financial institutions from allowing
clients to direct transactions that move their funds
into, out of, or through the concentration accounts of
the financial institution;
``(B) prohibit financial institutions and their
employees from informing customers of the existence of,
or the means of identifying, the concentration accounts
of the institution; and
``(C) require each financial institution to
establish written procedures governing the
documentation of all transactions involving a
concentration account, which procedures shall ensure
that, any time a transaction involving a concentration
account commingles funds belonging to 1 or more
customers, the identity of, and specific amount
belonging to, each customer is documented.''.
SEC. 306. INTERNATIONAL COOPERATION IN INVESTIGATIONS OF MONEY
LAUNDERING, FINANCIAL CRIMES, AND THE FINANCES OF
TERRORIST GROUPS.
(a) Negotiations.--
(1) In general.--In addition to the requirements of section
4702 of the Anti-Drug Abuse Act of 1988, the Secretary of the
Treasury (hereinafter in this section referred to as the
``Secretary''), in consultation with the Attorney General, the
Secretary of State, and the Board of Governors of the Federal
Reserve System, shall enter into negotiations with the
appropriate financial supervisory agencies and other officials
of any foreign country the financial institutions of which do
business with United States financial institutions or which may
be utilized by any foreign terrorist organization (as
designated under section 219 of the Immigration and Nationality
Act), any person who is a member or representative of any such
organization, or any person engaged in money laundering or
financial or other crimes.
(2) Purposes of negotiations.--In carrying out negotiations
under paragraph (1), the Secretary shall seek to enter into and
further cooperative efforts, voluntary information exchanges,
the use of letters rogatory, mutual legal assistance treaties,
and international agreements to--
(A) ensure that foreign banks and other financial
institutions maintain adequate records of--
(i) large United States currency
transactions; and
(ii) transaction and account information
relating to any foreign terrorist organization
(as designated under section 219 of the
Immigration and Nationality Act), any person
who is a member or representative of any such
organization, or any person engaged in money
laundering or financial or other crimes; and
(B) establish a mechanism whereby such records may
be made available to United States law enforcement
officials and domestic financial institution
supervisors, when appropriate.
(b) Reports.--
(1) Interim report.--Not later than 1 year after the date
of the enactment of this Act, the Secretary shall submit an
interim report to the Congress on progress in the negotiations
under subsection (a).
(2) Final report.--Not later than 2 years after the date of
the enactment of this Act, the Secretary shall submit a final
report to the President and the Congress, on the outcome of
negotiations under subsection (a).
(3) Identification of certain countries.--In the report
submitted under paragraph (2), the Secretary shall identify
countries--
(A) with respect to which the Secretary determines
there is evidence that the financial institutions in
such countries are being utilized, knowingly or
unwittingly, by any foreign terrorist organization (as
designated under section 219 of the Immigration and
Nationality Act), any person who is a member or
representative of any such organization, or any person
engaged in money laundering or financial or other
crimes; and
(B) which have not reached agreement with United
States authorities to meet the objectives of
subparagraphs (A) and (B) of subsection (a)(2).
(c) Authority for Other Action.--
(1) In general.--If the President determines that--
(A) a foreign country is described in subparagraphs
(A) and (B) of subsection (b)(3); and
(B) such country--
(i) is not negotiating in good faith to
reach an agreement described in subsection
(a)(2); or
(ii) or a financial institution of such
country, has not complied with a request, made
by an official of the United States Government
authorized to make such request, for
information regarding a foreign terrorist
organization (as designated under section 219
of the Immigration and Nationality Act), a
person who is a member or representative of any
such organization, or a person engaged in money
laundering for or with any such organization,
the President may impose appropriate penalties and sanctions on
such country and, except as provided in paragraph (3),
financial institutions of such country.
(2) Penalties and sanctions.--The penalties and sanctions
which may be imposed by the President under paragraph (1)
include temporarily or permanently--
(A) prohibiting such persons, institutions, or
other entities as the President may designate in any
such country from participating in any United States
dollar clearing or wire transfer system; and
(B) prohibiting such persons, institutions or
entities as the President may designate in such
countries from maintaining an account with any bank or
other financial institution chartered under the laws of
the United States or any State.
(3) Exemption for certain financial institutions.--
Financial institutions that maintain adequate records shall be
exempt from such penalties and sanctions.
SEC. 307. PROHIBITION ON ACCEPTANCE OF ANY BANK INSTRUMENT FOR UNLAWFUL
INTERNET GAMBLING.
(a) In General.--No person engaged in the business of betting or
wagering may knowingly accept, in connection with the participation of
another person in unlawful Internet gambling--
(1) credit, or the proceeds of credit, extended to or on
behalf of such other person (including credit extended through
the use of a credit card);
(2) an electronic fund transfer or funds transmitted by or
through a money transmitting business, or the proceeds of an
electronic fund transfer or money transmitting service, from or
on behalf of the other person;
(3) any check, draft, or similar instrument which is drawn
by or on behalf of the other person and is drawn on or payable
at or through any financial institution; or
(4) the proceeds of any other form of financial transaction
as the Secretary may prescribe by regulation which involves a
financial institution as a payor or financial intermediary on
behalf of or for the benefit of the other person.
(b) Definitions.--For purposes of this Act, the following
definitions shall apply:
(1) Bets or wagers.--The term ``bets or wagers''--
(A) means the staking or risking by any person of
something of value upon the outcome of a contest of
others, a sporting event, or a game subject to chance,
upon an agreement or understanding that the person or
another person will receive something of greater value
than the amount staked or risked in the event of a
certain outcome;
(B) includes the purchase of a chance or
opportunity to win a lottery or other prize (which
opportunity to win is predominantly subject to chance);
(C) includes any scheme of a type described in
section 3702 of title 28, United States Code;
(D) includes any instructions or information
pertaining to the establishment or movement of funds in
an account by the bettor or customer with the business
of betting or wagering; and
(E) does not include--
(i) any activity governed by the securities
laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of
1934) for the purchase or sale at a future date
of securities (as that term is defined in
section 3(a)(10) of such Act);
(ii) any transaction on or subject to the
rules of a contract market designated pursuant
to the Commodity Exchange Act;
(iii) any over-the-counter derivative
instrument;
(iv) any contract of indemnity or
guarantee;
(v) any contract for insurance;
(vi) any deposit or other transaction with
a depository institution (as defined in section
3(c) of the Federal Deposit Insurance Act);
(vii) any participation in a simulation
sports game or an educational game or contest
that--
(I) is not dependent solely on the
outcome of any single sporting event or
nonparticipant's singular individual
performance in any single sporting
event;
(II) has an outcome that reflects
the relative knowledge and skill of the
participants with such outcome
determined predominantly by accumulated
statistical results of sporting events;
and
(III) offers a prize or award to a
participant that is established in
advance of the game or contest and is
not determined by the number of
participants or the amount of any fees
paid by those participants; and
(viii) any transaction with a business
licensed by a State.
(2) Business of betting or wagering.--The term ``business
of betting or wagering'' does not include, other than for
purposes of subsection (e), any creditor, credit card issuer,
insured depository institution, financial institution, operator
of a terminal at which an electronic fund transfer may be
initiated, money transmitting business, or international,
national, regional, or local network utilized to effect a
credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or any
participant in such network.
(3) Internet.--The term ``Internet'' means the
international computer network of interoperable packet switched
data networks.
(4) Unlawful internet gambling.--The term ``unlawful
Internet gambling'' means to place, receive, or otherwise
transmit a bet or wager by any means which involves the use, at
least in part, of the Internet where such bet or wager is
unlawful under any applicable Federal or State law in the State
in which the bet or wager is initiated, received, or otherwise
made.
(5) Other terms.--
(A) Credit; creditor; and credit card.--The terms
``credit'', ``creditor'', and ``credit card'' have the
meanings given such terms in section 103 of the Truth
in Lending Act.
(B) Electronic fund transfer.--The term
``electronic fund transfer''--
(i) has the meaning given such term in
section 903 of the Electronic Fund Transfer
Act; and
(ii) includes any fund transfer covered by
Article 4A of the Uniform Commercial Code, as
in effect in any State.
(C) Financial institution.--The term ``financial
institution'' has the meaning given such term in
section 903 of the Electronic Fund Transfer Act.
(D) Money transmitting business and money
transmitting service.--The terms ``money transmitting
business'' and ``money transmitting service'' have the
meanings given such terms in section 5330(d) of title
31, United States Code.
(E) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(c) Civil Remedies.--
(1) Jurisdiction.--The district courts of the United States
shall have original and exclusive jurisdiction to prevent and
restrain violations of this section by issuing appropriate
orders in accordance with this section, regardless of whether a
prosecution has been initiated under this section.
(2) Proceedings.--
(A) Institution by federal government.--
(i) In general.--The United States, acting
through the Attorney General, may institute
proceedings under this subsection to prevent or
restrain a violation of this section.
(ii) Relief.--Upon application of the
United States under this subparagraph, the
district court may enter a preliminary
injunction or an injunction against any person
to prevent or restrain a violation of this
section, in accordance with Rule 65 of the
Federal Rules of Civil Procedure.
(B) Institution by state attorney general.--
(i) In general.--The attorney general of a
State (or other appropriate State official) in
which a violation of this section allegedly has
occurred or will occur may institute
proceedings under this subsection to prevent or
restrain the violation.
(ii) Relief.--Upon application of the
attorney general (or other appropriate State
official) of an affected State under this
subparagraph, the district court may enter a
preliminary injunction or an injunction against
any person to prevent or restrain a violation
of this section, in accordance with Rule 65 of
the Federal Rules of Civil Procedure.
(C) Indian lands.--
(i) In general.--Notwithstanding
subparagraphs (A) and (B), for a violation that
is alleged to have occurred, or may occur, on
Indian lands (as that term is defined in
section 4 of the Indian Gaming Regulatory
Act)--
(I) the United States shall have
the enforcement authority provided
under subparagraph (A);
(II) the enforcement authorities
specified in an applicable Tribal-State
compact negotiated under section 11 of
the Indian Gaming Regulatory Act shall
be carried out in accordance with that
compact; and
(III) class III Internet gaming
activities shall be lawful only if such
activities are--
(aa) located in a State
that permits Internet gambling;
(bb) conducted in
conformance with a tribal-State
compact pursuant to section
11(d)(3) of the Indian Gaming
Regulatory Act; and
(cc) the person placing or
transmitting the wager or bet
is located in a jurisdiction
that permits Internet gambling.
(ii) Rule of construction.--No provision of
this section shall be construed as altering,
superseding, or otherwise affecting the
application of the Indian Gaming Regulatory
Act.
(D) Banking regulators.--Before initiating any
proceeding under this paragraph with respect to a
violation or potential violation of subsection (e) by
an insured depository institution (as defined in
section 3 of the Federal Deposit Insurance Act), the
Attorney General of the United States or an attorney
general of a State (or other appropriate State official) shall--
(i) notify the appropriate Federal banking
agency (as defined in such section) of such
violation or potential violation; and
(ii) allow such agency a reasonable time to
issue an order to such insured depository
institution under section 8(x) of the Federal
Deposit Insurance Act.
(3) Expedited proceedings.--In addition to any proceeding
under paragraph (2), a district court may, in exigent
circumstances, enter a temporary restraining order against a
person alleged to be in violation of this section upon
application of the United States under paragraph (2)(A), or the
attorney general (or other appropriate State official) of an
affected State under paragraph (2)(B), in accordance with Rule
65(b) of the Federal Rules of Civil Procedure.
(4) Limitation.--No provision of this section shall be
construed as authorizing an injunction against an interactive
computer service (as defined in section 230(f) of the
Communications Act of 1934) unless such interactive computer
service is acting in concert or participation with a person who
violates this section and such service receives actual notice
of the order.
(d) Criminal Penalty.--
(1) In general.--Whoever violates this section shall be
fined under title 18, United States Code, or imprisoned for not
more than 5 years, or both.
(2) Permanent injunction.--Upon conviction of a person
under this subsection, the court may enter a permanent
injunction enjoining such person from placing, receiving, or
otherwise making bets or wagers or sending, receiving, or
inviting information assisting in the placing of bets or
wagers.
(e) Circumventions Prohibited.--Notwithstanding subsection (b)(2),
a creditor, credit card issuer, financial institution, operator of a
terminal at which an electronic fund transfer may be initiated, money
transmitting business, or international, national, regional, or local
network utilized to effect a credit transaction, electronic fund
transfer, or money transmitting service, or any participant in such
network, may be liable under this section if such creditor, issuer,
institution, operator, business, network, or participant has actual
knowledge and control of bets and wagers--
(1) operates, manages, supervises, or directs an Internet
website at which unlawful bets or wagers may be placed,
received, or otherwise made or at which unlawful bets or wagers
are offered to be placed, received, or otherwise made; or
(2) owns or controls, or is owned or controlled by, any
person who operates, manages, supervises, or directs an
Internet website at which unlawful bets or wagers may be
placed, received, or otherwise made or at which unlawful bets
or wagers are offered to be placed, received, or otherwise
made.
(f) Enforcement Actions.--Section 8 of the Federal Deposit
Insurance Act (12 U.S.C. 1818) is amended by adding at the end the
following new subsection:
``(x) Depository Institution Involvement in Internet Gambling.--If
any appropriate Federal banking agency determines that any insured
depository institution is engaged in any of the following activities,
the agency may issue an order to such institution prohibiting such
institution from continuing to engage in any of the following
activities:
``(1) Extending credit, or facilitating an extension of
credit, electronic fund transfer, or money transmitting service
with the actual knowledge that any person is violating section
3(a) of the Unlawful Internet Gambling Funding Prohibition Act
in connection with such extension of credit, electronic fund
transfer, or money transmitting service.
``(2) Paying, transferring, or collecting on any check,
draft, or other instrument drawn on any depository institution
with the actual knowledge that any person is violating section
3(a) of the Unlawful Internet Gambling Funding Prohibition Act
in connection with such check, draft, or other instrument.''.
SEC. 308. INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS.
(a) In General.--In deliberations between the United States
Government and any other country on money laundering, corruption, and
crime issues, the United States Government should--
(1) encourage cooperation by foreign governments and
relevant international fora in identifying whether Internet
gambling operations are being used for money laundering,
corruption, or other crimes;
(2) advance policies that promote the cooperation of
foreign governments, through information sharing or other
measures, in the enforcement of this Act; and
(3) encourage the Financial Action Task Force on Money
Laundering, in its annual report on money laundering
typologies, to study the extent to which Internet gambling
operations are being used for money laundering.
(b) Report Required.--The Secretary of the Treasury shall submit an
annual report to the Congress on the deliberations between the United
States and other countries on issues relating to Internet gambling.
TITLE IV--CURRENCY PROTECTION
SEC. 401. COUNTERFEITING DOMESTIC CURRENCY AND OBLIGATIONS.
(a) Counterfeit Acts Committed Outside the United States.--Section
470 of title 18, United States Code, is amended--
(1) in paragraph (2), by inserting ``analog, digital, or
electronic image,'' after ``plate, stone,''; and
(2) by striking ``shall be fined under this title,
imprisoned not more than 20 years, or both'' and inserting
``shall be punished as is provided for the like offense within
the United States''.
(b) Obligations or Securities of the United States.--Section 471 of
title 18, United States Code, is amended by striking ``fifteen years''
and inserting ``20 years''.
(c) Uttering Counterfeit Obligations or Securities.--Section 472 of
title 18, United States Code, is amended by striking ``fifteen years''
and inserting ``20 years''.
(d) Dealing in Counterfeit Obligations or Securities.--Section 473
of title 18, United States Code, is amended by striking ``ten years''
and inserting ``20 years''.
(e) Plates, Stones, or Analog, Digital, or Electronic Images For
Counterfeiting Obligations or Securities.--
(1) In general.--Section 474(a) of title 18, United States
Code, is amended by inserting after the second paragraph the
following new paragraph:
``Whoever, with intent to defraud, makes, executes, acquires,
scans, captures, records, receives, transmits, reproduces, sells, or
has in such person's control, custody, or possession, an analog,
digital, or electronic image of any obligation or other security of the
United States; or''.
(2) Amendment to definition.--Section 474(b) of title 18,
United States Code, is amended by striking the first sentence
and inserting the following new sentence: ``For purposes of
this section, the term `analog, digital, or electronic image'
includes any analog, digital, or electronic method used for the
making, execution, acquisition, scanning, capturing, recording,
retrieval, transmission, or reproduction of any obligation or
security, unless such use is authorized by the Secretary of the
Treasury.''.
(3) Technical and conforming amendment.--The heading for
section 474 of title 18, United States Code, is amended by
striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter
25 of title 18, United States Code, is amended in the item
relating to section 474 by striking ``or stones'' and inserting
``, stones, or analog, digital, or electronic images''.
(f) Taking Impressions of Tools Used for Obligations or
Securities.--Section 476 of title 18, United States Code, is amended--
(1) by inserting ``analog, digital, or electronic image,''
after ``impression, stamp,''; and
(2) by striking ``ten years'' and inserting ``25 years''.
(g) Possessing or Selling Impressions of Tools Used for Obligations
or Securities.--Section 477 of title 18, United States Code, is
amended--
(1) in the first paragraph, by inserting ``analog, digital,
or electronic image,'' after ``imprint, stamp,'';
(2) in the second paragraph, by inserting ``analog,
digital, or electronic image,'' after ``imprint, stamp,''; and
(3) in the third paragraph, by striking ``ten years'' and
inserting ``25 years''.
(h) Connecting Parts of Different Notes.--Section 484 of title 18,
United States Code, is amended by striking ``five years'' and inserting
``10 years''.
(i) Bonds and Obligations of Certain Lending Agencies.--The first
and second paragraphs of section 493 of title 18, United States Code,
are each amended by striking ``five years'' and inserting ``10 years''.
SEC. 402. COUNTERFEITING FOREIGN CURRENCY AND OBLIGATIONS.
(a) Foreign Obligations or Securities.--Section 478 of title 18,
United States Code, is amended by striking ``five years'' and inserting
``20 years''.
(b) Uttering Counterfeit Foreign Obligations or Securities.--
Section 479 of title 18, United States Code, is amended by striking
``three years'' and inserting ``20 years''.
(c) Possessing Counterfeit Foreign Obligations or Securities.--
Section 480 of title 18, United States Code, is amended by striking
``one year'' and inserting ``20 years''.
(d) Plates, Stones, or Analog, Digital, or Electronic Images for
Counterfeiting Foreign Obligations or Securities.--
(1) In general.--Section 481 of title 18, United States
Code, is amended by inserting after the second paragraph the
following new paragraph:
``Whoever, with intent to defraud, makes, executes, acquires,
scans, captures, records, receives, transmits, reproduces, sells, or
has in such person's control, custody, or possession, an analog,
digital, or electronic image of any bond, certificate, obligation, or
other security of any foreign government, or of any treasury note,
bill, or promise to pay, lawfully issued by such foreign government and
intended to circulate as money; or''.
(2) Increased sentence.--The last paragraph of section 481
of title 18, United States Code, is amended by striking ``five
years'' and inserting ``25 years''.
(3) Technical and conforming amendment.--The heading for
section 481 of title 18, United States Code, is amended by
striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter
25 of title 18, United States Code, is amended in the item
relating to section 481 by striking ``or stones'' and inserting
``, stones, or analog, digital, or electronic images''.
(e) Foreign Bank Notes.--Section 482 of title 18, United States
Code, is amended by striking ``two years'' and inserting ``20 years''.
(f) Uttering Counterfeit Foreign Bank Notes.--Section 483 of title
18, United States Code, is amended by striking ``one year'' and
inserting ``20 years''.
SEC. 403. PRODUCTION OF DOCUMENTS.
Section 5114(a) of title 31, United States Code (relating to
engraving and printing currency and security documents), is amended--
(1) by striking ``(a) The Secretary of the Treasury'' and
inserting:
``(a) Authority To Engrave and Print.--
``(1) In general.--The Secretary of the Treasury''; and
(2) by adding at the end the following new paragraph:
``(2) Engraving and printing for other governments.--The
Secretary of the Treasury may, if the Secretary determines that
it will not interfere with engraving and printing needs of the
United States, produce currency, postage stamps, and other
security documents for foreign governments, subject to a
determination by the Secretary of State that such production
would be consistent with the foreign policy of the United
States.''.
SEC. 404. REIMBURSEMENT.
Section 5143 of title 31, United States Code (relating to payment
for services of the Bureau of Engraving and Printing), is amended--
(1) in the first sentence, by inserting ``, any foreign
government, or any territory of the United States'' after
``agency'';
(2) in the second sentence, by inserting ``and other''
after ``administrative''; and
(3) in the last sentence, by inserting ``, foreign
government, or territory of the United States'' after
``agency''.
Union Calendar No. 151
107th CONGRESS
1st Session
H. R. 3004
[Report No. 107-250, Part I]
_______________________________________________________________________
A BILL
To combat the financing of terrorism and other financial crimes, and
for other purposes.
_______________________________________________________________________
October 17, 2001
Reported from the Committee on Financial Services with an amendment
October 17, 2001
Referral to the Committees on the Judiciary and Ways and Means extended
for a period ending not later than October 17, 2001
October 17, 2001
Committees on the Judiciary and Ways and Means discharged; committed to
the Committee of the Whole House on the State of the Union, and ordered
to be printed