[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1371 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1371
To combat money laundering and protect the United States financial
system by strengthening safeguards in private banking and correspondent
banking, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 3, 2001
Mr. Levin (for himself, Mr. Grassley, Mr. Sarbanes, Mr. Nelson of
Florida, Mr. Kyl, and Mr. DeWine) introduced the following bill; which
was read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
_______________________________________________________________________
A BILL
To combat money laundering and protect the United States financial
system by strengthening safeguards in private banking and correspondent
banking, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Money Laundering Abatement Act''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that--
(1) money laundering, the process by which proceeds from
criminal activity are disguised as legitimate money, is
contrary to the national interest of the United States, because
it finances crime, undermines the integrity of international
financial systems, impedes the international fight against
corruption and drug trafficking, distorts economies, and
weakens emerging democracies and international stability;
(2) United States banks are frequently used to launder
dirty money, and private banking, which provides services to
individuals with large deposits, and correspondent banking,
which occurs when 1 bank provides financial services to another
bank, are specific banking sectors which are particularly
vulnerable to money laundering;
(3) private banking is particularly vulnerable to money
laundering by corrupt foreign government officials because the
services provided (offshore accounts, secrecy, and large
international wire transfers) are also key tools used to
launder money;
(4) correspondent banking is vulnerable to money laundering
because United States banks--
(A) often fail to screen and monitor the
transactions of their high-risk foreign bank clients;
and
(B) enable the owners and clients of the foreign
bank to get indirect access to the United States
banking system when they would be unlikely to get
access directly;
(5) the high-risk foreign bank that currently poses the
greatest money laundering risks in the United States
correspondent banking field is a shell bank, which has no
physical presence in any country, is not affiliated with any
other bank, and is able to evade day-to-day bank regulation;
and
(6) United States anti-money laundering efforts are
currently impeded by outmoded and inadequate statutory
provisions that make United States investigations, prosecutions
and forfeitures more difficult when money laundering involves
foreign persons, foreign banks, or foreign countries.
(b) Purpose.--The purpose of this Act is to modernize and
strengthen existing Federal laws to combat money laundering,
particularly in the private banking and correspondent banking fields
when money laundering offenses involve foreign persons, foreign banks,
or foreign countries.
SEC. 3. INCLUSION OF FOREIGN CORRUPTION OFFENSES AS MONEY LAUNDERING
CRIMES.
Section 1956(c)(7)(B) of title 18, United States Code, is amended--
(1) in clause (ii), by striking ``or destruction of
property by means of explosive or fire'' and inserting
``destruction of property by means of explosive or fire, or a
crime of violence (as defined in section 16)'';
(2) in clause (iii), by striking ``1978'' and inserting
``1978)''; and
(3) by adding at the end the following:
``(iv) fraud, or any scheme or attempt to
defraud, against that foreign nation or an
entity of that foreign nation;
``(v) bribery of a public official, or the
misappropriation, theft, or embezzlement of
public funds by or for the benefit of a public
official;
``(vi) smuggling or export control
violations involving--
``(I) an item controlled on the
United States Munitions List
established under section 38 of the
Arms Export Control Act (22 U.S.C.
2778); or
``(II) technologies with military
applications controlled on any control
list established under the Export
Administration Act of 1979 (50 U.S.C.
App. 2401 et seq.) or any successor
statute;
``(vii) an offense with respect to which
the United States would be obligated by a
multilateral treaty, either to extradite the
alleged offender or to submit the case for
prosecution, if the offender were found within
the territory of the United States; or
``(viii) the misuse of funds of, or
provided by, the International Monetary Fund in
contravention of the Articles of Agreement of
the Fund or the misuse of funds of, or provided
by, any other international financial
institution (as defined in section 1701(c)(2)
of the International Financial Institutions Act
(22 U.S.C. 262r(c)(2)) in contravention of any
treaty or other international agreement to
which the United States is a party, including
any articles of agreement of the members of the
international financial institution;''.
SEC. 4. ANTI-MONEY LAUNDERING MEASURES FOR UNITED STATES BANK ACCOUNTS
INVOLVING FOREIGN PERSONS.
(a) Requirements Relating to United States Bank Accounts Involving
Foreign Persons.--Subchapter II of chapter 53 of title 31, United
States Code, is amended by inserting after section 5318 the following:
``Sec. 5318A. Requirements relating to United States bank accounts
involving foreign persons
``(a) Definitions.--
``(1) In general.--In this section, the following
definitions shall apply:
``(A) Account.--The term `account'--
``(i) means a formal banking or business
relationship established to provide regular
services, dealings, or 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) Branch or agency of a foreign bank.--The term
`branch or agency of a foreign bank' has the meanings
given those terms in section 1 of the International
Banking Act of 1978 (12 U.S.C. 3101).
``(C) Correspondent account.--The term
`correspondent account' means an account established
for a depository institution, credit union, or foreign
bank.
``(D) Correspondent bank.--The term `correspondent
bank' means a depository institution, credit union, or
foreign bank that establishes a correspondent account
for and provides banking services to a depository
institution, credit union, or foreign bank.
``(E) Covered financial institution.--The term
`covered financial institution' means--
``(i) a depository institution;
``(ii) a credit union; and
``(iii) a branch or agency of a foreign
bank.
``(F) Credit union.--The term `credit union' means
any insured credit union, as defined in section 101 of
the Federal Credit Union Act (12 U.S.C. 1752), or any
credit union that is eligible to make application to
become an insured credit union pursuant to section 201
of the Federal Credit Union Act (12 U.S.C. 1781).
``(G) Depository institution.--The term `depository
institution' has the same meaning as in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813).
``(H) Foreign bank.--The term `foreign bank' has
the same meaning as in section 1 of the International
Banking Act of 1978 (12 U.S.C. 3101).
``(I) Foreign country.--The term `foreign country'
has the same meaning as in section 1 of the
International Banking Act of 1978 (12 U.S.C. 3101).
``(J) Foreign person.--The term `foreign person'
means any foreign organization or any individual
resident in a foreign country or any organization or
individual owned or controlled by such an organization
or individual.
``(K) 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 foreign country which issued the
license.
``(L) Private bank account.--The term `private bank
account' means an account (or combination of accounts)
that--
``(i) requires a minimum aggregate deposit
of funds or assets in an amount equal to 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, administered, or
managed in whole or in part by an employee of a
financial institution acting as a liaison
between the institution and the direct or
beneficial owner of the account.
``(2) Other terms.--After consultation with the Board of
Governors of the Federal Reserve System, the Secretary may, by
regulation, order, or otherwise as permitted by law, define any
term that is used in this section and that is not otherwise
defined in this section or section 5312, as the Secretary deems
appropriate.
``(b) United States Bank Accounts With Unidentified Foreign
Owners.--
``(1) Records.--
``(A) In general.--A covered financial institution
shall not establish, maintain, administer, or manage an
account in the United States for a foreign person or a
representative of a foreign person, unless the covered
financial institution maintains in the United States,
for each such account, a record identifying, by a
verifiable name and account number, each individual or
entity having a direct or beneficial ownership interest
in the account.
``(B) Publicly traded corporations.--A record
required under subparagraph (A) that identifies an
entity, the shares of which are publicly traded on a
stock exchange regulated by an organization or agency
that is a member of and endorses the principles of the
International Organization of Securities Commissions
(in this section referred to as `publicly traded'), is
not required to identify individual shareholders of the
entity.
``(C) Foreign banks.--In the case of a
correspondent account that is established for a foreign
bank, the shares of which are not publicly traded, the record required
under subparagraph (A) shall identify each of the owners of the foreign
bank, and the nature and extent of the ownership interest of each such
owner.
``(2) Complex ownership interests.--The Secretary may, by
regulation, order, or otherwise as permitted by law, further
delineate the information to be maintained in the United States
under paragraph (1)(A), including information for accounts with
multiple, complex, or changing ownership interests.
``(c) Prohibition on United States Correspondent Accounts With
Foreign Shell Banks.--
``(1) In general.--A covered financial 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 covered financial institution shall take reasonable
steps to ensure that any correspondent account established,
maintained, administered, or managed by that covered financial
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.
``(3) Exception.--Paragraphs (1) and (2) do not prohibit a
covered financial 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 subsection--
``(A) 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;
and
``(B) 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.
``(d) Due Diligence for United States Private Bank and
Correspondent Bank Accounts Involving Foreign Persons.--
``(1) In general.--Each covered financial institution that
establishes, maintains, administers, or manages a private bank
account or a correspondent account in the United States for a
foreign person or a representative of a foreign person shall
establish enhanced due diligence policies, procedures, and
controls to prevent, detect, and report possible instances of
money laundering through those accounts.
``(2) Minimum standards.--The enhanced due diligence
policies, procedures, and controls required under paragraph (1)
of this subsection, shall, at a minimum, ensure that the
covered financial institution--
``(A) ascertains the identity of each individual or
entity having a direct or beneficial ownership interest
in the account, and obtains sufficient information
about the background of the individual or entity and
the source of funds deposited into the account as is
needed to guard against money laundering;
``(B) monitors such accounts on an ongoing basis to
prevent, detect, and report possible instances of money
laundering;
``(C) conducts enhanced scrutiny of any private
bank account 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;
``(D) conducts enhanced scrutiny of any
correspondent account 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;
or
``(II) by the Secretary as
warranting special measures due to
money laundering concerns; and
``(E) ascertains, as part of the enhanced scrutiny
under subparagraph (D), whether the 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).''.
(b) Regulatory Authority.--After consultation with the Board of
Governors of the Federal Reserve System, the Secretary of the Treasury
may, by regulation, order, or otherwise as permitted by law, take
measures that the Secretary deems appropriate to carry out section
5318A of title 31, United States Code (as added by this section).
(c) Conforming Amendments.--Section 5312(a) of title 31, United
States Code, is amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following:
``(5) `Secretary' means the Secretary of the Treasury,
except as otherwise provided in this subchapter.''.
(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 related to section 5318 the following:
``5318A. Requirements relating to United States bank accounts involving
foreign persons.''.
(e) Effective Date.--Section 5318A of title 31, United States Code,
as added by this section, shall take effect beginning 180 days after
the date of enactment of this Act with respect to accounts covered by
that section that are opened before, on, or after the date of enactment
of this Act.
SEC. 5. LONG-ARM JURISDICTION OVER FOREIGN MONEY LAUNDERERS.
Section 1956(b) of title 18, United States Code, is amended by--
(1) redesignating paragraphs (1) and (2) as subparagraphs
(A) and (B), respectively;
(2) inserting ``(1)'' after ``(b)'';
(3) inserting ``, or section 1957'' after ``or (a)(3)'';
and
(4) adding at the end the following:
``(2) For purposes of adjudicating an action filed or
enforcing a penalty ordered under this section, the district
courts shall have jurisdiction over any foreign person,
including any financial institution authorized under the laws
of a foreign country, against whom the action is brought, if
service of process upon the foreign person is made under the
Federal Rules of Civil Procedure or the laws of the country in
which the foreign person is found, and--
``(A) the foreign person commits an offense under
subsection (a) involving a financial transaction that
occurs in whole or in part in the United States;
``(B) the foreign person converts, to his or her
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
``(C) the foreign person is a financial institution
that maintains a bank account at a financial
institution in the United States.
``(3) A court, described in paragraph (2), 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.
``(4) A court, described in paragraph (2), may appoint a
Federal Receiver, in accordance with paragraph (5), to collect,
marshal, and take custody, control, and possession of all
assets of the defendant, wherever located, to satisfy a
judgment under this section or section 981, 982, or 1957,
including an order of restitution to any victim of a specified
unlawful activity.
``(5) A Federal Receiver, described in paragraph (4)--
``(A) may be appointed upon application of a
Federal prosecutor or a Federal or State regulator, by
the court having jurisdiction over the defendant in the
case;
``(B) shall be an officer of the court, and the
powers of the Federal Receiver shall include the powers
set out in section 754 of title 28, United States Code;
and
``(C) shall have standing equivalent to that of a
Federal prosecutor for the purpose of submitting
requests to obtain information regarding the assets of
the defendant--
``(i) from the Financial Crimes Enforcement
Network of the Department of the Treasury; or
``(ii) from a foreign country pursuant to a
mutual legal assistance treaty, multilateral
agreement, or other arrangement for
international law enforcement assistance,
provided that such requests are in accordance
with the policies and procedures of the
Attorney General.''.
SEC. 6. LAUNDERING MONEY THROUGH A FOREIGN BANK.
Section 1956(c) of title 18, United States Code, is amended by
striking paragraph (6) and inserting the following:
``(6) the term `financial institution' includes--
``(A) any financial institution, as defined in
section 5312(a)(2) of title 31, United States Code, or
the regulations promulgated thereunder; and
``(B) any foreign bank, as defined in section 1 of
the International Banking Act of 1978 (12 U.S.C.
3101).''.
SEC. 7. 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 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. 8. CONCENTRATION ACCOUNTS AT FINANCIAL INSTITUTIONS.
Section 5318(h) of title 31, United States Code, is amended by
adding at the end the following:
``(3) Concentration accounts.--The Secretary shall issue
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. 9. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.
Section 1956(h) of title 18, United States Code, is amended by --
(1) inserting ``(1)'' before ``Any person''; and
(2) adding at the end the following:
``(2) Any person who commits multiple violations of this section or
section 1957 that are part of the same scheme or continuing course of
conduct may be charged, at the election of the Government, in a single
count in an indictment or information.''.
SEC. 10. FUNGIBLE PROPERTY IN BANK ACCOUNTS.
(a) In General.--Section 984 of title 18, United States Code, is
amended by striking subsection (b) and inserting the following:
``(b) The provisions of this section may be invoked only if the
action for forfeiture was commenced by the seizure or restraint of the
property, or by the filing of a complaint, within 2 years of the
offense that is the basis for the forfeiture.''.
(b) Application.--The amendment made by this section shall apply to
any offense committed on or after the date which is 2 years before the
date of enactment of this Act.
SEC. 11. FORFEITURE OF FUNDS IN UNITED STATES INTERBANK ACCOUNTS.
(a) Forfeiture From United States Interbank Account.--Section 981
of title 18, United States Code, is amended by adding at the end the
following:
``(k) Interbank Accounts.--
``(1) In general.--For the purpose of a forfeiture under
this section or under the Controlled Substances Act (21 U.S.C.
801 et seq.), if funds are deposited into an account at a
foreign bank, and that foreign bank has an interbank account in
the United States with a covered financial institution (as
defined in section 5318A of title 31), the funds shall be
deemed to have been deposited into the interbank account in the
United States, and any restraining order, seizure warrant, or
arrest warrant in rem regarding the funds may be served on the
covered financial institution, and funds in the interbank
account, up to the value of the funds deposited into the
account at the foreign bank, may be restrained, seized, or
arrested.
``(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), it shall not be
necessary for the Government to establish that the funds are
directly traceable to the funds that were deposited into the
foreign bank, nor shall it be necessary for the Government to
rely on the application of section 984.
``(3) Claims brought by owner of the funds.--If a
forfeiture action is instituted against funds restrained,
seized, or arrested under paragraph (1), the owner of the funds
deposited into the account at the foreign bank may contest the
forfeiture by filing a claim under section 983.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Interbank account.--The term `interbank
account' has the same meaning as in section
984(c)(2)(B).
``(B) Owner.--
``(i) In general.--Except as provided in
clause (ii), the term `owner'--
``(I) has the same meaning as in
section 983(d)(6); and
``(II) does not include any foreign
bank or other financial institution
acting as an intermediary in the
transfer of funds into the interbank
account and having no ownership
interest in the funds sought to be
forfeited.
``(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.''.
(b) Bank Records.--Section 5318 of title 31, United States Code, is
amended by adding at the end the following:
``(i) Bank Records Related to Anti-Money Laundering Programs.--
``(1) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Appropriate federal banking agency.--The term
`appropriate Federal banking agency' has the same
meaning as in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
``(B) Incorporated terms.--The terms `correspondent
account', `covered financial institution', and `foreign
bank' have the same meanings as in section 5318A.
``(2) 48-hour rule.--Not later than 48 hours after
receiving a request by an appropriate Federal banking agency
for information related to anti-money laundering compliance by
a covered financial institution or a customer of such
institution, a covered financial institution shall provide to
the appropriate Federal banking agency, or make available at a
location specified by the representative of the appropriate
Federal banking agency, information and account documentation
for any account opened, maintained, administered or managed in
the United States by the covered financial institution.
``(3) Foreign bank records.--
``(A) Summons or subpoena of records.--
``(i) In general.--The Secretary or the
Attorney General may issue a summons or
subpoena to any foreign bank that maintains a
correspondent account in the United States and
request records related to such correspondent
account.
``(ii) Service of summons or subpoena.--A
summons or subpoena referred to in clause (i)
may be served on the foreign bank in the United
States if the foreign bank has a representative
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.
``(B) Acceptance of service.--
``(i) Maintaining records in the united
states.--Any covered financial institution
which maintains a correspondent account in the United States for a
foreign bank shall maintain records in the United States identifying
the owners of such foreign bank and the name and address of a person
who resides in the United States and is authorized to accept service of
legal process for records regarding the correspondent account.
``(ii) Law enforcement request.--Upon
receipt of a written request from a Federal law
enforcement officer for information required to
be maintained under this paragraph, the covered
financial institution shall provide the
information to the requesting officer not later
than 7 days after receipt of the request.
``(C) Termination of correspondent relationship.--
``(i) Termination upon receipt of notice.--
A covered financial institution shall terminate
any correspondent relationship with a foreign
bank not later than 10 days after receipt of
written notice from the Secretary or the
Attorney General that the foreign bank has
failed--
``(I) to comply with a summons or
subpoena issued under subparagraph (A);
or
``(II) to initiate proceedings in a
United States court contesting such
summons or subpoena.
``(ii) Limitation on liability.--A covered
financial institution shall not be liable to
any person in any court or arbitration
proceeding for terminating a correspondent
relationship in accordance with this
subsection.
``(iii) Failure to terminate
relationship.--Failure to terminate a
correspondent relationship in accordance with
this subsection shall render the covered
financial institution liable for a civil
penalty of up to $10,000 per day until the
correspondent relationship is so terminated.''.
(c) Authority To Order Convicted Criminal To Return Property
Located Abroad.--
(1) Forfeiture of substitute property.--Section 413 of the
Controlled Substances Act (21 U.S.C. 853) is amended by
striking subsection (p) and inserting the following:
``(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.''.
(2) 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. 12. EFFECTIVE DATE.
Except as otherwise provided in this Act, this Act, and the
amendments made by this Act, shall take effect 90 days after the date
of enactment of this Act.
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