[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[House]
[Pages H9474-H9480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                MONEY LAUNDERING DETERRENCE ACT OF 1998

  Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 4005) to amend title 31 of the United States Code to improve 
methods for preventing financial crimes, and for other purposes, as 
amended.
  The Clerk read as follows:

                               H.R. 4005

       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 ``Money 
     Laundering Deterrence Act of 1998''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Amendments relating to reporting of suspicious activities.
Sec. 4. Expansion of scope of summons power.
Sec. 5. Penalties for violations of geographic targeting orders and 
              certain recordkeeping requirements.
Sec. 6. Repeal of certain reporting requirements.
Sec. 7. Limited exemption from Paperwork Reduction Act.
Sec. 8. Promulgation of ``know your customer'' regulations.
Sec. 9. Report on private banking activities.
Sec. 10. Availability of certain account information.
Sec. 11. Sense of the Congress.
Sec. 12. Designation of foreign high intensity money laundering areas.
Sec. 13. Doubling of criminal penalties for violations of laws aimed at 
              preventing money laundering in foreign high intensity 
              money laundering areas.
Sec. 14. Laundering money through a foreign bank.
Sec. 15. Criminal forfeiture for money laundering conspiracies.
Sec. 16. Charging money laundering as a course of conduct.
Sec. 17. Venue in money laundering cases.
Sec. 18. Technical amendment to restore wiretap authority for certain 
              money laundering offenses.
Sec. 19. Knowledge that the property is the proceeds of a felony.
Sec. 20. Coverage of foreign bank branches in the territories.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds as follows:
       (1) The dollar amount involved in international money 
     laundering likely exceeds $500,000,000,000 annually.
       (2) Organized crime groups are continually devising new 
     methods to launder the proceeds of illegal activities in an 
     effort to subvert the transaction reporting requirements of 
     subchapter II of chapter 53 of title 31, United States Code, 
     and chapter 2 of Public Law 91-508.
       (3) A number of methods to launder the proceeds of criminal 
     activity were identified and described in congressional 
     hearings, including the use of financial service providers 
     which are not depository institutions, such as money 
     transmitters and check cashing services, the purchase and 
     resale of durable goods, and the exchange of foreign currency 
     in the so-called ``black market''.
       (4) Recent successes in combating domestic money laundering 
     have involved the application of the heretofore seldom-used 
     authority granted to the Secretary of the Treasury and the 
     cooperative efforts of Federal, State, and local law 
     enforcement agencies.
       (5) Such successes have been exemplified by the 
     implementation of the geographic targeting order in New York 
     City and through the work of the El Dorado task force, a 
     group comprised of agents of Department of the Treasury law 
     enforcement agencies, New York State troopers, and New York 
     City police officers.
       (6) Money laundering by international criminal enterprises 
     challenges the legitimate authority of national governments, 
     corrupts government institutions, endangers the financial and 
     economic stability of nations, and routinely violates legal 
     norms,

[[Page H9475]]

     property rights, and human rights. In some countries, such as 
     Columbia, Mexico, and Russia, the wealth and power of 
     organized criminal enterprises rivals their own government's.
       (7) The structure of international criminal enterprises 
     engaged in money laundering is complex, diverse, and 
     fragmented. Organized criminal enterprises such as the 
     Colombian and Mexican cartels, the Russian ``mafiya'', 
     Sicilian crime families, and Chinese gangs are highly 
     resistant to conventional law enforcement techniques. Their 
     financial management and organizational infrastructure are 
     highly sophisticated and difficult to track because of the 
     globalization of the financial service industry.
       (b) Purposes.--The purposes of this Act are as follows:
       (1) To amend subchapter II of chapter 53 of title 31, 
     United States Code, to provide the law enforcement community 
     with the necessary legal authority to combat money 
     laundering.
       (2) To expedite the issuance by the Secretary of the 
     Treasury of regulations designed to deter money laundering 
     activities at certain types of financial institutions.

     SEC. 3. 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.--Notwithstanding any other provision of 
     law--
       ``(i) any financial institution that--

       ``(I) makes a disclosure of any possible violation of law 
     or regulation to an appropriate government agency; or
       ``(II) makes a disclosure pursuant to this subsection or 
     any other authority;

       ``(ii) any director, officer, employee, or agent of such 
     institution who makes, or requires another to make any such 
     disclosure; and
       ``(iii) any independent public accountant who audits any 
     such financial institution and makes a disclosure described 
     in clause (i),

     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 thereof, or under any 
     contract or other legally enforceable agreement (including 
     any arbitration agreement), for such disclosure or for any 
     failure to notify the person who is the subject of such 
     disclosure or any other person identified in the disclosure.
       ``(B) Exception.--Subparagraph (A) shall not apply to a 
     disclosure or communication required under Federal securities 
     law, other than provisions of law that specifically refer to 
     the Currency and Foreign Transactions Reporting Act of 1970.
       ``(C) 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, any 
     director, officer, employee, or agent of any financial 
     institution, or any independent public accountant who audits 
     any financial institution, voluntarily or pursuant to this 
     section or any other authority, reports a suspicious 
     transaction to an appropriate government agency--
       ``(i) the financial institution, director, officer, 
     employee, agent, or accountant may not notify any person 
     involved in the transaction that the transaction has been 
     reported and may not disclose any information included in the 
     report to any such person; and
       ``(ii) any other person, including any officer or employee 
     of any government, who has any knowledge that such report was 
     made may not disclose to any person involved in the 
     transaction that the transaction has been reported or any 
     information included in the report.
       ``(B) Coordination with paragraph (5).--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 paragraph (5) 
     in response to a request from another financial institution, 
     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.''.
       (c) Authorization To Include Suspicions of Illegal Activity 
     in Employment References.--Section 5318(g) of title 31, 
     United States Code, is amended by adding at the end the 
     following new paragraph:
       ``(5) Employment references may include suspicions of 
     involvement in illegal activity.--
       ``(A) In general.--Notwithstanding any other provision of 
     law and subject to subparagraph (B) of this paragraph and 
     paragraph (2)(C), any financial 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 financial 
     institution in response to a request from such other 
     institution, information concerning the possible involvement 
     of such institution-affiliated party in any suspicious 
     transaction relevant to a possible violation of law or 
     regulation.
       ``(B) Limit on liability for disclosures.--A financial 
     institution, and any director, officer, employee, or agent of 
     such institution, 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 
     thereof, or under any contract or other legally enforceable 
     agreement (including any arbitration agreement), for any 
     disclosure under subparagraph (A), to the extent--
       ``(i) the disclosure does not contain information which the 
     institution, director, officer, employee, agent, or 
     accountant knows to be false; and
       ``(ii) the institution, director, officer, employee, agent, 
     or accountant has not acted with malice or with reckless 
     disregard for the truth in making the disclosure.
       ``(C) Institution-affiliated party defined.--For purposes 
     of this paragraph, the term `institution-affiliated party' 
     has the meaning given to such term in section 3(u) of the 
     Federal Deposit Insurance Act, except such section 3(u) shall 
     be applied by substituting `financial institution' for 
     `insured depository institution'.''.
       (d) Amendments Relating to Availability of Suspicious 
     Activity Reports for Other Agencies.--Section 5319 of title 
     31, United States Code, is amended--
       (1) in the 1st sentence, by striking ``5314, or 5316'' and 
     inserting ``5313A, 5314, 5316, or 5318(g)'';
       (2) in the last sentence, by inserting ``under section 
     5313, 5313A, 5314, 5316, or 5318(g)'' after ``records of 
     reports''; and
       (3) by adding the following new sentence after the last 
     sentence: ``The Secretary of the Treasury may permit the 
     dissemination of information in any such reports to any self-
     regulatory organization (as defined in section 3(a)(26) of 
     the Securities Exchange Act of 1934), if the Securities and 
     Exchange Commission determines that such dissemination is 
     necessary or appropriate to permit such organization to 
     perform its function under the Securities Exchange Act of 
     1934 and regulations prescribed under such Act.''.

     SEC. 4. EXPANSION OF SCOPE OF SUMMONS POWER.

       Section 5318(b)(1) of title 31, United States Code, is 
     amended by inserting ``examinations to determine compliance 
     with the requirements of this subchapter, section 21 of the 
     Federal Deposit Insurance Act, and chapter 2 of Public Law 
     91-508 and regulations prescribed pursuant to such 
     provisions, investigations relating to reports filed by 
     financial institutions or other persons pursuant to any such 
     provision or regulation, and'' after ``in connection with''.

     SEC. 5. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING 
                   ORDERS AND CERTAIN RECORDKEEPING REQUIREMENTS.

       (a) Civil Penalty for Violation of Targeting Order or 
     Certain Recordkeeping Requirements.--Section 5321(a)(1) of 
     title 31, United States Code, is amended--
       (1) by inserting ``or order issued'' after ``regulation 
     prescribed'' the 1st place it appears; and
       (2) by inserting ``, or willfully violating a regulation 
     prescribed under section 21 of the Federal Deposit Insurance 
     Act or under section 123 of Public Law 91-508,'' before ``is 
     liable''.
       (b) Criminal Penalties for Violation of Targeting Order or 
     Certain Recordkeeping Requirements.--Section 5322 of title 
     31, United States Code, is amended--
       (1) in each of subsections (a) and (b), by inserting ``or 
     order issued'' after ``regulation prescribed'' the 1st place 
     it appears;
       (2) in subsection (a), by inserting ``, or willfully 
     violating a regulation prescribed under section 21 of the 
     Federal Deposit Insurance Act or under section 123 of Public 
     Law 91-508,'' before ``shall''; and
       (3) in subsection (b), by inserting ``or willfully 
     violating a regulation prescribed under section 21 of the 
     Federal Deposit Insurance Act or under section 123 of Public 
     Law 91-508,'' before ``while violating''.
       (c) Structuring Transactions To Evade Targeting Order or 
     Certain Recordkeeping Requirements.--Section 5324(a) of title 
     31, United States Code, is amended--
       (1) in the portion of such section which precedes paragraph 
     (1), by inserting ``, the reporting requirements imposed by 
     any order issued under section 5326, or the recordkeeping 
     requirements imposed by 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''; and
       (2) 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'' where such term appears 
     in each such paragraph.
       (d) Increase in Civil Penalties for Violation of Certain 
     Recordkeeping Requirements.--

[[Page H9476]]

       (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 the amount (not to exceed $100,000) involved in the 
     transaction (if any) with respect to which the violation 
     occurred or $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 the amount (not to exceed 
     $100,000) involved in the transaction (if any) with respect 
     to which the violation occurred or $25,000''.
       (e) Criminal Penalties for Violation of Certain 
     Recordkeeping 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 willfully violating this chapter, section 21 of 
     the Federal Deposit Insurance Act, or a regulation prescribed 
     under this chapter or such section, shall be fined not more 
     than $250,000, or imprisoned for not more than five 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 willfully violating this chapter, section 21 of 
     the Federal Deposit Insurance Act, or a regulation prescribed 
     under this chapter or such section, 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. 6. REPEAL OF CERTAIN REPORTING REQUIREMENTS.

       Section 407(d) of the Money Laundering Suppression Act of 
     1994 (31 U.S.C. 5311 note) is amended by striking 
     ``subsection (c)'' and inserting ``subsection (c)(2)''.

     SEC. 7. LIMITED EXEMPTION FROM PAPERWORK REDUCTION ACT.

       Section 3518(c)(1) of title 44, United States Code, is 
     amended--
       (1) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively; and
       (2) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) pursuant to regulations prescribed or orders issued 
     by the Secretary of the Treasury under section 5318(h) or 
     5326 of title 31;''.

     SEC. 8. PROMULGATION OF ``KNOW YOUR CUSTOMER'' REGULATIONS.

       (a) In General.--Within 120 days after the date of the 
     enactment of this Act, the Secretary of the Treasury shall 
     promulgate ``Know Your Customer'' regulations for financial 
     institutions.
       (b) Rule of Construction.--This section shall not be 
     construed as precluding any supervisory agency for any 
     financial institution from requiring the financial 
     institution to submit any information or report to the agency 
     or another agency pursuant to any other applicable provision 
     of law.
       (c) Definition of Financial Institution.--For purposes of 
     subsection (a), the term ``financial institution'' shall not 
     include any broker, dealer, investment company, or investment 
     adviser as such terms are defined in the Securities Exchange 
     Act of 1934.

     SEC. 9. REPORT ON PRIVATE BANKING ACTIVITIES.

       (a) In General.--Within 1 year after the date of the 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with Federal banking agencies, shall submit to 
     the Committee on Banking and Financial Services of the House 
     of Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report on--
       (1) the nature and extent of private banking activities in 
     the United States;
       (2) regulatory efforts to monitor such activities and 
     ensure that such activities are conducted in compliance with 
     the Bank Secrecy Act; and
       (3) policies and procedures of depository institutions that 
     are designed to ensure that such activities are conducted in 
     compliance with the Bank Secrecy Act.
       (b) Private Banking Activities.--In subsection (a), the 
     term ``private banking activities'', with respect to an 
     institution, includes, among other things, personalized 
     services such as money management, financial advice, and 
     investment services that are provided to clients with high 
     net worth and that are not provided generally to all clients 
     of the institution.

     SEC. 10. AVAILABILITY OF CERTAIN ACCOUNT INFORMATION.

       Section 5318(h) of title 31, United States Code, is amended 
     by adding at the end the following new paragraph:
       ``(3) Availability of certain account information.--The 
     Secretary of the Treasury shall prescribe regulations under 
     this subsection which require financial institutions to 
     maintain all accounts in such a way as to ensure that the 
     name of an account holder and the number of the account are 
     associated with all account activity of the account holder, 
     and to ensure that all such information is available for 
     purposes of account supervision and law enforcement.''.

     SEC. 11. SENSE OF THE CONGRESS.

       It is the sense of the Congress that the Secretary of the 
     Treasury should make available to all Federal, State, and 
     local law enforcement agencies and financial regulatory 
     agencies the full contents of the data base of reports that 
     have been filed pursuant to subchapter II of chapter 53 of 
     title 31, United States Code.

     SEC. 12. DESIGNATION OF FOREIGN HIGH INTENSITY MONEY 
                   LAUNDERING AREAS.

       (a) In General.--Subchapter II of chapter 53 of title 31, 
     United States Code, is amended by inserting after section 
     5326 the following new section:

     ``Sec. 5327. Designation of foreign high intensity money 
       laundering areas

       ``(a) Criteria.--The Secretary of the Treasury, in 
     consultation with appropriate Federal law enforcement 
     agencies, shall develop criteria by which to identify areas 
     outside the United States in which money laundering 
     activities are concentrated.
       ``(b) Designation.--The Secretary of the Treasury shall 
     designate as a foreign high intensity money laundering area 
     any foreign country in which there is an area which is 
     identified, using the criteria developed under subsection 
     (a), as an area in which money laundering activities are 
     concentrated.
       ``(c) Notice.--On the designation under subsection (b) of a 
     country as a foreign high intensity money laundering area, 
     the Secretary of the Treasury shall provide written notice to 
     each insured depository institution (as defined in section 
     3(c)(2) of the Federal Deposit Insurance Act) and each 
     depository institution holding company (as defined in section 
     3(w)(1) of such Act) that has control over an insured 
     depository institution of the identity of the foreign country 
     and include with the notice a written warning that there is a 
     concentration of money laundering activities in the foreign 
     country.''.
       (b) Clerical Amendment.--The table of sections for such 
     chapter is amended by inserting after the item relating to 
     section 5326 the following new item:

``5327. Designation of foreign high intensity money laundering 
              areas.''.

     SEC. 13. DOUBLING OF CRIMINAL PENALTIES FOR VIOLATIONS OF 
                   LAWS AIMED AT PREVENTING MONEY LAUNDERING IN 
                   FOREIGN HIGH INTENSITY MONEY LAUNDERING AREAS.

       Section 5322 of title 31, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d) The court may double the sentence of fine or 
     imprisonment, or both, that would otherwise be imposed on a 
     person for a violation described in subsection (a) or (b) if 
     person commits the violation with respect to a transaction 
     involving a person in, a relationship maintained for a person 
     in, or a transport of a monetary instrument involving a 
     foreign country, knowing that the foreign country is 
     designated under section 5327(b) as a foreign high intensity 
     money laundering area.''.

     SEC. 14. 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. 15. CRIMINAL FORFEITURE FOR MONEY LAUNDERING 
                   CONSPIRACIES.

       Section 982(a)(1) of title 18, United States Code, is 
     amended by inserting ``, or a conspiracy to commit any such 
     offense'' after ``of this title''.

     SEC. 16. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.

       Section 1956(h) of title 18, United States Code, is 
     amended--
       (1) by inserting ``(1)'' before ``Any person''; and
       (2) by 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. 17. VENUE IN MONEY LAUNDERING CASES.

       Section 1956 of title 18, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(i) Venue.--(1) Except as provided in paragraph (2), a 
     prosecution for an offense under this section or section 1957 
     may be brought in--
       ``(A) any district in which the financial or monetary 
     transaction is conducted, or
       ``(B) any district where a prosecution for the underlying 
     specified unlawful activity could be brought, if the 
     defendant participated in the transfer of the proceeds of the 
     specified unlawful activity from that district to the 
     district where the financial or monetary transaction is 
     conducted.
       ``(2) A prosecution for an attempt or conspiracy offense 
     under this section or section 1957 may be brought in the 
     district where venue would lie for the completed offense 
     under paragraph (1), or in any other district where an act in 
     furtherance of the attempt or conspiracy took place.''.

     SEC. 18. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY FOR 
                   CERTAIN MONEY LAUNDERING OFFENSES.

       Section 2516(1)(g) of title 18, United States Code, is 
     amended by striking ``a violation of section 5322 of title 
     31, United States Code (dealing with the reporting of 
     currency transactions)'' and inserting ``a violation of 
     section 5322 or 5324 of title 31, United States Code (dealing 
     with the reporting and illegal structuring of currency 
     transactions)''.

[[Page H9477]]

     SEC. 19. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A 
                   FELONY.

       Section 1956(c)(1) of title 18, United States Code, is 
     amended by inserting ``, and regardless of whether or not the 
     person knew that the activity constituted a felony'' before 
     the semicolon at the end.

     SEC. 20. COVERAGE OF FOREIGN BANK BRANCHES IN THE 
                   TERRITORIES.

       Section 20(9) of title 18, United States Code, is amended 
     by inserting ``, except that, for purposes of the application 
     of that definition, the term `State' as used in such Act 
     includes a commonwealth, territory, or possession of the 
     United States'' after ``Banking Act of 1978''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Iowa (Mr. Leach) and the gentleman from Minnesota (Mr. Vento) each will 
control 20 minutes.
  The Chair recognizes the gentleman from Iowa (Mr. Leach).


                             General Leave

  Mr. LEACH. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and insert extraneous material on H.R. 4005, the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Iowa?
  There was no objection.
  Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
  The Money Laundering Deterrence Act of 1998 is intended to strengthen 
the hand of Federal law enforcement in detecting and prosecuting 
financial crimes, and to encourage greater reporting of suspicious 
monetary transactions by financial institutions and their agents.
  It is estimated that upwards of $500 billion in laundered funds, a 
large portion of it derived from narcotics trafficking, is cycled 
through the United States financial system on an annual basis. Any 
meaningful strategy for combating the international drug trade and 
other global criminal enterprises must include strong legal mechanisms 
for detecting the flows of their illicit proceeds. Left unchecked, 
money laundering has a devastating effect on the integrity of financial 
institutions and, because it is the lifeblood of drug traffickers, on 
the social fabric as well.
  Beginning with the passage of the Bank Secrecy Act of 1970, the 
Committee on Banking and Financial Services has been at the forefront 
of legislative efforts to erect a system of financial reporting and 
recordkeeping designed to give law enforcement authorities sufficient 
tools to detect and prosecute money laundering offenses. The various 
reporting requirements imposed by the Bank Secrecy Act and subsequent 
legislation promote the disclosure of information relating to 
suspicious financial transactions by financial institutions and other 
commercial enterprises, and the subsequent dissemination of that 
information among Federal, State and local law enforcement authorities.
  In crafting these bills, Congress has sought to advance a number of 
policy objectives, including facilitating the law enforcement 
community's access to accurate and complete information regarding 
possible money laundering, and encouraging safe and sound practices at 
Federal insured depository institutions, while, at the same time, 
protecting the free flow of legitimate commerce and the privacy 
interests of legitimate bank customers.
  H.R. 4005, as amended by the committee in its June 11 markup to the 
legislation, contains a series of amendments to the Bank Secrecy Act 
and other provisions of the United States Code related to money 
laundering offenses.
  First, it extends safe harbor protections to independent public 
accountants who submit reports of suspicious financial activity to the 
Federal Government.
  Second, it provides financial institutions with immunity from civil 
liability when making employment references that may include suspicions 
of an employee's involvement in illegal activity, unless such 
suspicions are known to be false or the institution has acted with 
malice or reckless disregard for the truth.
  Third, it makes reports of suspicious financial activity filed with 
the Federal Government available to self-regulatory organizations as 
defined by the Securities and Exchange Act of 1934, such as the 
National Association of Securities Dealers.
  Fourth, it requires the Secretary of the Treasury to promulgate 
``Know Your Customer'' regulations within 120 days of enactment of the 
legislation; submit a comprehensive report to Congress on so-called 
private banking activities, those personalized services that financial 
institutions provide to clients with high net worth, often involving 
complex transactions conducted offshore; prescribe regulations 
requiring financial institutions to maintain all accounts in such a way 
as to ensure that the name of an account holder, and the number of his 
or her account are associated with all activity in the account; and 
develop criteria to identify areas outside the United States where 
money laundering is concentrated.
  H.R. 4005 is a product of broad bipartisan consensus within the 
committee, which approved it by voice vote, and reflects serious 
thoughtful input from both the Republican and Democratic members of the 
committee. I would like to accord special recognition in this regard to 
the gentlewoman from New Jersey (Mrs. Roukema) and the gentleman from 
Alabama (Mr. Bachus), who chairs the Subcommittee on General Oversight 
and Investigations of the Committee on Banking and Financial Services. 
Under his leadership, and her leadership, the subcommittees have held a 
series of hearings highlighting aspects of the money laundering problem 
and the Federal Government's efforts to address it. Several of the 
provisions in this bill are there simply because of the oversight that 
was conducted.
  Before concluding my remarks, Mr. Speaker, let me also recognize the 
constructive role played by the ranking member, the gentleman from New 
York (Mr. LaFalce), and the gentleman from Minnesota (Mr. Vento), in 
shepherding this legislation through committee and on to the floor. I 
look forward to a successful completion of this task at this time.
  Mr. Speaker, I submit for the Record correspondence, and attachments 
thereto, regarding H.R. 4005.
                                         House of Representatives,


                                   Committee on the Judiciary,

                               Washington, DC, September 28, 1998.
     Hon. Jim Leach,
     Chairman, House Committee on Banking and Financial Services, 
         Washington, DC.
       Dear Jim: I respectfully request that section 9 of H.R. 
     4005 be removed before the bill is brought to the floor on 
     the suspension calendar. The section, entitled ``Fungible 
     Property in Bank Accounts'' modifies section 984 of title 18 
     of the United States Code and makes a substantive change to 
     federal civil asset forfeiture law as it relates to the 
     forfeiture of fungible property in the form of cash or funds 
     deposited in a financial institution. As the House Leadership 
     wants to delay consideration of reforms to our federal civil 
     asset forfeiture laws until the 106th Congress, it would be 
     more appropriate for this provision to be considered at that 
     time.
           Sincerely,
                                                    Henry J. Hyde,
     Chairman.
                                  ____

         House of Representatives, Committee on Banking and 
           Financial Services,
                                  Washington, DC, October 1, 1998.
     Hon. Henry J. Hyde,
     Chairman, Committee on the Judiciary, Rayburn House Office 
         Building, Washington, DC.
       Dear Chairman Hyde: Thank you for your letter of September 
     28, 1998, notifying me of your objection to H.R. 4005's 
     provision relating to civil asset forfeiture. In deference to 
     your concerns--and to the House leadership's view that 
     further consideration of civil asset forfeiture reforms 
     should await the next Congress--this provision will be 
     removed from the bill reported by the Banking Committee on 
     July 8, 1998. In making the accommodation, it is my hope that 
     the legislation can be brought to the House floor 
     expeditiously for consideration under suspension of the 
     rules.
       On a related issue, I am writing to apprise you of a 
     legislative proposal that the Banking Committee has received 
     from the Department of Justice that touches on matters of 
     shared jurisdiction between our respective committees. As you 
     know, on June 22, 1998, the United States Supreme Court held 
     that the government's seizure of some $357,000 in cash from 
     an individual attempting to carry the funds out of the 
     country without filing the currency reporting form required 
     by the Bank Secrecy Act violated the Eighth Amendment ban on 
     ``excessive fines.'' See United States v. Bajakajian, 118 S. 
     Ct. 2028 (1998). In an effort to mitigate what it sees as the 
     Bajakajian decision's detrimental consequences for narcotics 
     and money laundering enforcement, the Department of Justice 
     has proposed amending Title 31 to make the act of bulk cash 
     smuggling a criminal offense, and to authorize seizure of the 
     smuggled currency in accordance with the civil and criminal 
     forfeiture provisions found in

[[Page H9478]]

     Title 18. A summary of the proposal submitted by the Justice 
     Department is enclosed for your review.
       I have informed Justice Department officials that I am 
     willing to entertain any credible proposal for aiding law 
     enforcement in detecting and prosecuting drug-related money 
     laundering, and therefore intend to keep an open mind on the 
     merits of their suggested legislation responding to 
     Bajakaijian. I also made clear to the Department, however, 
     that the specific measure it has advanced is one that would 
     require favorable consideration not only by our Committee, 
     but also by the Committee on the Judiciary, since the 
     substantive Title 31 offense created by the proposed 
     legislation is one that falls squarely within Banking 
     Committee jurisdiction and the sanctions involving civil 
     and criminal forfeiture are obviously within the purview 
     of the Judiciary Committee. (Indeed, while it is typically 
     the case that the definition of a criminal offense is more 
     fundamental to a statute than the penalties imposed for 
     committing that offense, here, it seems to me, the reverse 
     may be true.)
       I am aware that you have been a leading critic of the way 
     that the civil forfeiture laws are currently being applied. 
     Accordingly, I have informed the Department that while I am 
     open to their suggestions, I am unprepared to go forward with 
     consideration of their proposal in this Congress unless you 
     are supportive. In this regard, please let me know if there 
     are any elements of the administration's approach that you 
     think would be advisable at this time.
       Thank you for your consideration of these matters.
           Sincerely,
                                                   James A. Leach,
     Chairman.
                                  ____



     analysis of bulk cash smuggling statute and related amendments

       As recent Congressional hearings and investigative reports 
     in the press have revealed, currency smuggling is an 
     extremely serious law enforcement problem. Hundreds of 
     millions of dollars in U.S. currency--representing the 
     proceeds of drug trafficking and other criminal offenses, as 
     well as income not reported for income tax purposes--is 
     annually transported out of the United States to foreign 
     countries in shipments of bulk cash. Smugglers use all 
     available means to transport the currency out of the country, 
     from false bottoms in personal luggage, to secret 
     compartments in automobiles, to concealment in durable goods 
     exported for sale abroad.
       Presently, the only law enforcement weapon against such 
     smuggling is Section 5316 of Title 31, United States Code, 
     which makes it an offense to transport more than $10,000 in 
     currency or monetary instruments into, or out of, the United 
     States without filing a report with the United States Customs 
     Service. The effectiveness of Sec. 5316 as a law enforcement 
     tool has been diminished, however, by a recent Supreme Court 
     decision. In United States v. Bajakajian, 118 S. Ct. 2028 
     (1988), the Supreme Court held that Sec. 5316 constitutes a 
     mere reporting violation, which is not a serious offense to 
     purposes of the Excessive Fines Clause of the Eighth 
     Amendment. Accordingly, confiscation of the full amount of 
     the smuggled currency is unconstitutional, even if the 
     smuggler took elaborate steps to conceal the currency and 
     otherwise obstruct justice.
       Confiscation of the smuggled currency is, of course, the 
     most effective weapon that can be employed against these 
     smugglers. Accordingly, in response to the Bajakajian 
     decision, the Department of Justice proposed making the act 
     of bulk cash smuggling itself a criminal offense, and to 
     authorize the imposition of the full range of civil and 
     criminal sanctions when the offense is discovered. Because 
     the act of concealing currency for the purpose of smuggling 
     it out of the United States is inherently more serious than 
     simply failing to file a Customs report, strong and 
     meaningful sanctions, such as confiscation of the smuggled 
     currency, are likely to withstand Eighth Amendment challenges 
     to the new statute.
       Sections 1 and 2 of the bill set forth the new bulk cash 
     smuggling offense as well as a set of findings explaining why 
     the smuggling of bulk cash is a serious law enforcement 
     problem. The new offense, which would be codified at 31 
     U.S.C. Sec. 5331, would make it an offense for anyone to 
     knowingly conceal more than $10,000 in currency or other 
     monetary instruments on his person or in any conveyance, 
     article of luggage, merchandise or other container, and to 
     transport or attempt to transport that currency across the 
     border with the intent to avoid the reporting requirements in 
     Section 5316. In other words, the offense has three elements: 
     (1) concealment; (2) transportation (or attempted 
     transportation); and 3) specific intent to evade filing a 
     complete and accurate report with the Customs Service.
       The statute is intended to apply to persons who commit any 
     of a wide variety of smuggling offenses involving bulk cash--
     from the money brokers for the drug cartels who stuff $20 
     bills into trucks bound for Mexico or appliances being 
     exported to Colombia, to couriers who attempt to cross the 
     border with currency concealed in their luggage. It would 
     also apply to efforts to move money into or out of the United 
     States at places other than ports of entry where CMIR reports 
     are customarily filed. In other words, unlike the CMIR 
     statute, which only applies once the duty to file the Customs 
     report has been triggered, Section 5331 would apply to a 
     person who had not yet reached the border, or was traveling 
     at a place other than a port of entry, but was traveling (or 
     intending to travel) toward the border with the intent to 
     cross it, and had already concealed the money with the intent 
     to evade the reporting requirement.
       The penalty section provides for incarceration of up to 5 
     years. In addition, and in lieu of any criminal fine, the 
     penalty section authorizes the confiscation of the smuggled 
     money in accordance with the usual procedures for criminal 
     and civil forfeiture. (The civil forfeiture provisions are 
     essential to permit confiscation of discovered currency in 
     cases where the smuggler is not found, is a fugitive, or is 
     not the legal owner of the money; the innocent owner 
     provisions of 18 U.S.C. Sec. 981(a)(2) would, however, 
     protect innocent owners of smuggled money.) Confiscation of 
     smuggled goods has been regarded as the appropriate penalty 
     for smuggling offenses since the first Customs laws were 
     enacted in the 18th Century. To address concerns that such 
     confiscation is a blunt instrument that should be mitigated 
     in some circumstances to avoid a hardship, the bill 
     explicitly authorizes courts to mitigate forfeitures of 
     currency involved in currency reporting offenses to avoid 
     Eighth Amendment violations by considering a range of 
     aggravating and mitigating circumstances. Those circumstances 
     include the value of the currency or other monetary 
     instruments involved in the offense; efforts by the person 
     committing the offense to structure currency transactions, 
     conceal property or otherwise obstruct justice; and whether 
     the offense is part of a pattern of repeated violations.
       It must be stressed, however, that bulk cash smuggling is 
     an inherently more serious offense than simply failing to 
     file a Customs report. Because the constitutionality of a 
     forfeiture is dependent on the ``gravity of the offense'' 
     under Bajakajian, it is anticipated that the full forfeiture 
     of smuggled money will withstand constitutional scrutiny in 
     most cases. For the confiscation to be reduced at all, the 
     smuggler will have to show that the money was derived from a 
     legitimate source and not intended to be used for any 
     unlawful purpose. Even then, the court's duty will be to 
     reduce the amount of confiscation to the maximum that would 
     be permitted in accordance with the Eighth Amendment and the 
     aggravating and mitigating factors set forth in the statute.
       Section 3 of the bill makes conforming amendments to the 
     existing criminal and civil forfeiture provisions for the 
     reporting and structuring violations in Title 31. Its purpose 
     is simply to put all of these provisions in one place (e.g., 
     by moving some of the existing forfeiture provisions for 
     currency reporting violations from title 18 to title 31 and 
     combining them with the provisions that are already codified 
     at 31 U.S.C. Sec. 5317(c)), and to set forth rules for 
     mitigating the forfeitures to avoid constitutional violations 
     in accordance with Bajakajian. This is necessary to address 
     the concern expressed by the Court in Bajakajian that 
     Congress had not made it clear that trial courts are 
     authorized to reduce forfeitures down to the maximum level 
     permissible to avoid violating the Excessive Fines Clause 
     when a statute, on its face, appears to authorize only the 
     full amount of structured of unreported currency.
       Again, this does not imply that such forfeitures must be 
     reduced in all cases. In structuring cases, for example, a 
     pattern of repeated conduct over a period of time would 
     likely support the confiscation of the full amount of 
     structured currency irrespective of whether the defendant met 
     his burden of showing that the property was derived from a 
     legitimate source and was not intended to be used for any 
     unlawful purpose.

  Mr. Speaker, I reserve the balance of my time.

                              {time}  1745

  Mr. VENTO. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. VENTO asked and was given permission to revise and extend his 
remarks and to include extraneous material.)
  Mr. VENTO. Mr. Speaker, I rise in support of this measure, H.R. 4005, 
the Money Laundering Deterrence Act of 1998, authored by the gentleman 
from Iowa (Mr. Leach), the distinguished chairman of the Committee on 
Banking and Financial Services.
  This legislation significantly improves the ability of our Nation's 
law enforcement authorities to curtail money laundering and prosecute 
criminals involved in these illegal activities.
  The Committee on Banking and Financial Services has had a successful 
and long bipartisan history of bringing anti-money laundering 
legislation to the floor of this House of Representatives and, 
following its completion, enactment into law.
  We have traditionally reported bills making it more difficult for 
drug pushers and other criminals to deposit their profits in the 
legitimate banking system and have cleared the path and policies so 
that prosecutors can effectively

[[Page H9479]]

charge and put these criminals in jail. This measure continues that 
effort because it clarifies and perfects existing law and regulations 
that have already been proven effective in the effort to curtail money 
laundering.
  I believe it is important to focus the attention of the House on the 
series of amendments adopted in committee. These are amendments offered 
by our colleague the gentlewoman from California (Ms. Waters), who is 
without peer in her efforts to get to the heart of serious drug 
problems in her Los Angeles congressional district.
  The Waters amendments target the sensitive and secret world of the 
private banking community. The Waters amendments were designed to make 
certain that the comfort and courtesies afforded the wealthy in the 
banking board rooms are subject to the same reporting requirements 
enforced in the lobbies of our financial institutions.
  With the passage of the Waters amendments, the committee will have 
some of the information it will need to ensure that laws of our Nation 
are fully enforced, even in the rarified world of private banking.
  An important part of this bill reported by the Committee on Banking 
and Financial Services has been deleted in deference to the 
jurisdiction of the Committee on Ways and Means.
  To complement the reporting requirements imposed on the financial 
industry, the Ways and Means Committee amended the tax code to require 
that all businesses and professional corporations file a report with 
the IRS whenever they accept $10,000 or more in cash as payment for 
goods and services provided. In hearings before our Committee, we 
received testimony which indicated that the protections appropriately 
provided to information gathered under the tax code were otherwise 
impeding the ability of the law enforcement community to access and use 
this information. The provisions of H.R. 4005, as reported by the 
Committee, transferred the reporting requirement from the tax code to 
the Bank Secrecy Act, the statute under which the financial 
institutions reports are presently collected and made available to 
legitimate law enforcement authorities. That provision has now been 
dropped. Although I accept and understand the need for the Ways and 
Means Committee to be able to review amendments to the tax code, the 
American public should not be asked to accept inefficiencies in our 
crime fighting policies because of the Congress' rules of jurisdiction.
  Mr. Speaker, I sincerely hope that the Committee on Ways and Means 
will soon conduct a full review of the referenced 8300 reporting 
requirements so that appropriate changes can be made as soon as 
possible to maximize the use of these valued reports.
  Finally, Mr. Speaker, I want to again compliment the gentleman from 
Iowa (Mr. Leach) for his leadership in bringing this bill not only 
through the committee, but to the full House in a timely manner and 
basis. This bill is an important step in providing the law enforcement 
community the tools they need to keep money laundering under control.
  I again urge adoption of this bill and support for it.
  Mr. Speaker, I submit for the Record the thoughtful statements 
supporting the bill from the gentleman from New York (Mr. LaFalce), the 
ranking Democrat Member.
  Mr. LaFALCE: Mr. Speaker, I rise to support H.R. 4005, The Money 
Laundering Deterrence Act of 1998.
  I wish to join the Ranking Member of the Financial Institutions 
Subcommittee, Congressman Bruce Vento, in complimenting the 
distinguished Chairman of the Banking Committee, Congressman Jim Leach, 
for bringing this bill to the floor in a timely manner. As was noted by 
previous speakers, this legislation significantly improves the ability 
of our nation's law enforcement authorities to bring money launderers 
to justice.
  H.R. 4005 continues the Banking Committee's long and bipartisan 
tradition of reporting important anti-money laundering legislation to 
the House of Representatives. Today's bill continues this effort in 
that it further improves existing law and encourages greater reporting 
of suspicious financial activity by financial institutions and their 
agents.
  I am pleased to report that some of the most important provisions of 
this bill were introduced as amendments authored by the distinguished 
Congresswoman from California, Maxine Waters. Congresswoman Waters' 
tremendous energy and dedication to the concerns of Congressional 
District have led her to be one of the Congress' most vigilant 
crusaders against those who would use the traditional banking system to 
launder illegal proceeds, particularly those profits realized from the 
sale of illegal drugs in her South Central Los Angeles District. The 
Waters' amendments were designed to make certain that wealthy 
individuals cannot use their influence to cause banks to ``look the 
other way'' when it comes to those laws the banks normally implement 
vigorously. With the passage of the Waters amendments, the Committee 
will have begun the effort of investigating private banking practices, 
particularly as they relate to serving wealthy individuals who insist 
on secrecy in their financial dealings.
  Finally, Mr. Speaker, I again compliment Chairman Leach for his 
leadership in bringing this bill not only to the Committee but to the 
full House on a timely basis. The bill is another important step in 
providing the law enforcement community the tools they need to keep 
money laundering under control.
  I urge the adoption of this bill.
  Mr. VENTO. Mr. Speaker, I reserve the balance of my time.
  Mr. LEACH. Mr. Speaker, I yield 3 minutes to the gentlewoman from New 
Jersey (Mrs. Roukema), who has been so instrumental in bringing this 
bill forward.
  (Mrs. ROUKEMA asked and was given permission to revise and extend her 
remarks.)
  Mrs. ROUKEMA. Mr. Speaker, I especially rise to thank the chairman 
for his leadership here, and certainly for those on the other side of 
the aisle who have been working so hard on this legislation, both 
pieces of legislation I should say. And I do want to say that the good 
news has been that the U.S. is making significant strides in limiting 
money laundering through our financial institutions. That we know.
  But the bad news, as we learned, is that organized crime is turning 
to other U.S. businesses for their money laundering as well as 
financial institutions in other countries. And I believe these two 
pieces of legislation are making a significant step in the direction of 
helping the law enforcement community with stronger statutes on money 
laundering so that we can coordinate with the help law enforcement 
needs.
  I certainly want to thank the chairman again for his leadership here. 
I also want to say that I believe that we can go farther, and of course 
I am assuming and doing everything I can do to hope that the other body 
will act promptly on this legislation and not let it falter here in the 
waning days of this Congress.
  But I would also say that there is more to be done in the next 
Congress. And I have introduced just on Friday of this past week the 
Bulk Cash Smuggling Act of 1998. We will go into more on that at 
another time. But it will be complementary to what we are doing here. 
It deals with currency or monetary instruments in excess of $10,000 
that is transported either in or out of the United States and civil 
forfeiture questions with regard to those monies. We will talk about 
that at another time. It should complement what we are doing.
  But we are taking a giant stride in the right direction here to get 
at the criminal elements that are making a sham out of our financial 
institutions.
  Mr. VENTO. Mr. Speaker, I yield myself such time as I may consume.
  Just in closing from my side, I would say that this half trillion 
dollars of illegal money that is washing through our society through 
our banks needs to be regulated, needs to be addressed. We need to 
provide the law enforcement and Treasury and other specific officials 
with the authority so that they can, in fact, trace this and, in fact, 
effectively fight the type of creative crime that is going on in our 
society, especially with electronic banking and other regulations.
  At the same time we are very concerned about privacy, very concerned 
about due process. I think this bill does strike the proper balance in 
terms of those issues and puts in the hands of law enforcement 
officials at the national and State level a consistent policy with 
regards to this that can and will continue to need our diligence and 
attention to prove if it is going to ultimately be effective in dealing 
with the growing problem of money laundering for these diverse 
problems, whether it is for crime, whether it is for drugs, whether it 
is for other types of gambling and other types of illegal activities.
  As most I think can see, the tools need to be there in the hands of 
the prosecutors and in the hands of the law

[[Page H9480]]

enforcement officials to, in fact, enforce our laws at the State and at 
the national level.
  Ms. WATERS. Mr. Speaker, I rise in strong support of H.R. 4005, the 
Money Laundering Deterrence Act of 1998. I would like to thank Chairman 
Leach, Ranking Member LaFalce and Representatives Roukema and Vento for 
their efforts to bring this bill to the floor.
  This tough bi-partisan bill reflects a new willingness by Congress to 
get tough on drug money laundering. The illegal drug trade is one of 
the world's largest industries, with annual revenues of more than $500 
billion a year worldwide, eclipsing even the revenues generated from 
the production of oil and gas. But the illegal drug trade would come to 
a screeching halt tomorrow without the ability to launder drug profits 
through financial insitutions globally. By making our money laundering 
laws tougher and closing up the loopholes this legislation is an 
important step in putting an end to the ability of the cartels use to 
profit from their terrible trade.
  Now the need for tougher money laundering is clearer than ever. We 
only need to look at the massive money laundering, murder and drug 
trafficking case involving Raul Salinas de Gotari, former Mexican 
cabinet minister and brother of Mexican President Carlos Salinas de 
Gotari. This case highlights allegations of the use of Citibank/
Citicorp's private bank system by Salinas and other drug traffickers in 
laundering at least $130 million dollars in drug proceeds.
  Citibank's private banker, Amy Elliot was central to the allegations. 
Ms. Elliot set up an elaborate and secretive system for Salinas to get 
his money that was banked in Mexico out of the country, and into 
offshore and Swiss bank accounts. Ms. Elliott used Citibank's 
concentration accounts to transfer hundreds of millions of Salinas' 
proceeds. The concentration accounts acted to effectively cut off the 
paper trail of Salinas' money, making it next to impossible for law 
enforcement agencies to track the drug money. With Ms. Elliot's 
skillful assistance, the former President's borther is suspected of 
laundering hundreds of millionas of dollars in drug proceeds.
  Two weeks ago, the New York Times and the Wall Street Journal 
reported that the Swiss Attorney General's office has completed a 369 
page report on this case that asserts among other damaging allegations 
that ``[w]hen Carlos Salinas de Gotari became President of Mexico in 
1988, Raul Salinas de Gortari assumed control over practically all drug 
shipments through Mexico. Through his influence and bribes paid with 
drug money, officials of the army and the police supported and 
protected the flourishing drug business.''
  This is simply one of many cases that point to the need for 
comprehensive money laundering legislation. The Money Laundering 
Deterrence Act of 1998 is a very good first step.
  I offered a number of amendments to the bill in Committee to focus 
attention on the ``private banking'' system and the dangers of its 
abuse by major money launderers, drug cartels and organized crime 
syndicates.
  I also amended the bill by calling for tougher enforcement of our 
nation's money laundering laws and closer scrutiny of our domestic 
financial institutions. These amendments added important weapons in the 
battle against major money laundering operations.
  My amendments strengthen H.R. 4005 by:
  Requiring the Secretary of the Treasury to submit to the House and 
Senate Banking Committees a report on the ``private banking'' system;
  Prohibiting banks from maintaining accounts that prevent the name and 
account number of a customer from being associated with the account 
activity of an account holder. This would outlaw certain concentration 
accounts in use by banks, if they can be used to effectively hide the 
identity of the account holder;
  Requiring the Secretary of the Treasury to issue ``Know Your 
Customer'' regulations within 120 days from the date of enactment of 
the Act; and
  Identifying areas outside the United States where money laundering is 
concentrated and increasing penalties for violations of United States 
money laundering laws associated with activities in these identified 
countries.
  I am pleased we are moving forward in the pursuit of the money 
laundering kingpins who are at the center of the half a trillion dollar 
annual drug trade and I ask my colleagues to support this important 
legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. LEACH. Mr. Speaker, I have no further requests for times, and I 
yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Miller of Florida). The question is on 
the motion offered by the gentleman from Iowa (Mr. Leach) that the 
House suspend the rules and pass the bill, H.R. 4005, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  The title was amended so as to read:

       ``A bill to amend titles 18 and 31, United States Code, to 
     improve methods for preventing money laundering and other 
     financial crimes, and for other purposes.''.

  A motion to reconsider was laid on the table.

                          ____________________