[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.
                                 <all>