[Congressional Record Volume 146, Number 77 (Monday, June 19, 2000)]
[House]
[Pages H4610-H4613]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SENSE OF HOUSE REGARDING MONEY LAUNDERING

  Mrs. ROUKEMA. Madam Speaker, I move to suspend the rules and agree to 
the resolution (H. Res. 495) expressing the sense of the House 
regarding support for the Financial Action Task Force on Money 
Laundering, and the timely and public identification of non-cooperative 
jurisdictions in the fight against international money laundering.
  The Clerk read as follows:

                              H. Res. 495

       Whereas the International Monetary Fund has estimated the 
     amount of international money laundering to be at least 
     $600,000,000,000 annually representing 2 to 5 percent of the 
     world's gross domestic product;
       Whereas money laundering is a crucial adjunct to the 
     underlying crimes that generate money, including drug 
     trafficking, kidnapping, murder, international terrorism, and 
     other forms of violent crime;
       Whereas money laundering and foreign corruption facilitate 
     each other, undermining the efforts of the United States to 
     promote democratic institutions and economic development 
     around the world;
       Whereas, in today's open and global financial markets, 
     which are characterized by a high mobility of funds and the 
     rapid development of new payment technologies, the tools for 
     laundering the proceeds of serious crimes have become more 
     sophisticated and readily available;
       Whereas recent years have witnessed a sharp increase in the 
     number of jurisdictions offering financial services without 
     appropriate controls or regulation and which are protected by 
     strict banking secrecy legislation which facilitates the 
     anonymous protection for illegal assets in certain countries 
     or territories making them even more attractive for money 
     laundering;

[[Page H4611]]

       Whereas the proliferation of such noncooperative countries 
     or territories which do not, or only marginally, participate 
     in international cooperation against financial crime, also 
     exacerbates competition between these centers and so 
     contributes to worsen existing practices and makes more 
     difficult the maintenance of anti-money laundering standards 
     in other countries;
       Whereas, in order to ensure the stability of the 
     international financial system and effective prevention of 
     money laundering, all financial centers in the world should 
     have comprehensive control, regulation, and supervision 
     systems, and that all financial intermediaries and agents be 
     subject to strict obligations, notably as regards the 
     prevention, detection, and punishment of money laundering;
       Whereas the Financial Action Task Force on Money Laundering 
     (FATF), of which the United States is a founding member, was 
     established for the purpose of developing and promoting 
     policies to combat international money laundering;
       Whereas the FATF, consisting of 26 jurisdictions including 
     the United States and 2 international organizations, 
     originally issued in 1990 and revised in 1996 40 
     recommendations designed for universal application that set 
     out the basic framework for antimoney laundering efforts 
     covering the criminal justice system and law enforcement, the 
     financial system and its regulation, and international 
     cooperation;
       Whereas the FATF has determined the criteria for defining 
     noncooperative countries or territories consistent with the 
     40 recommendations, and FATF members have agreed on a process 
     for identifying noncooperative jurisdictions to include all 
     countries and territories, both inside and outside FATF 
     membership, whose detrimental practices seriously and 
     unjustifiably hamper the fight against international money 
     laundering;
       Whereas the FATF has reported that the list of 
     noncooperative countries or territories should include 
     several subcategories of noncooperative countries or 
     territories which could be as follows: clearly noncooperative 
     with severe deficiencies in many areas, partly noncooperative 
     with impediments in various areas, and de facto 
     noncooperative with no significant impediments in laws and 
     regulations but ineffective regime in practice; and
       Whereas the FATF is gathering and analyzing all relevant 
     information necessary for the publication of lists of 
     noncooperative jurisdictions: Now, therefore, be it
       Resolved, That it is the sense of the House that--
       (1) the United States should continue to actively and 
     publicly support the objectives of the FATF with regard to 
     combating international money laundering;
       (2) the FATF should identify noncooperative jurisdictions 
     in as expeditious a manner as possible and publicly release a 
     list directly naming those jurisdictions identified;
       (3) the United States should support the public release of 
     the list naming noncooperative jurisdictions identified by 
     the FATF;
       (4) the United States should encourage the adoption of the 
     necessary international action to encourage compliance by the 
     identified noncooperative jurisdictions; and
       (5) the United States should take the necessary 
     countermeasures to protect the United States economy against 
     money of unlawful origin and encourage other nations to do 
     the same.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New Jersey (Mrs. Roukema) and the gentleman from New York (Mr. LaFalce) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from New Jersey (Mrs. Roukema).
  (Mrs. ROUKEMA asked and was given permission to revise and extend her 
remarks.)
  Mrs. ROUKEMA. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, today we want to address the very serious issue of 
international money laundering and put the House on clear record in 
support of efforts by the Financial Action Task Force on Money 
Laundering.
  Madam Speaker, money laundering is the process by which organized 
crime and the drug cartels take their ill-gotten gains, namely cash, 
and move it back into the economy under their own names. The IMF has 
estimated that internationally over $600 billion is laundered annually. 
That is a huge problem, it is an illegal problem, and one can only 
imagine the effect it has on the economy in various parts of the world.
  The good news here is that an international organization, namely the 
Financial Action Task Force on Money Laundering, of which the United 
States is a member, has been working on this serious and growing 
problem for some time. In 1990, the FATF issued a list of 40 anti-money 
laundering standards. The 40 standards are recognized today as being 
the international standard which should be followed by all countries.
  More recently, FATF undertook a systematic review of the compliance 
by jurisdiction with the FATF 40. This process is commonly named and 
referred to as ``name and shame,'' a process, and it is nearly 
complete. Later this month, FATF will identify those jurisdictions 
which they have determined do not comply with the FATF 40.
  I believe it is extremely important that FATF proceed as planned and 
publicly identify those jurisdictions which are not in compliance. As 
many have said before, ``sunlight is the best disinfectant.'' That is 
exactly the procedure that we should be supporting and following here 
with this resolution. The prompt and public identification of non-
compliant jurisdictions will put pressure on the jurisdictions to meet 
the international standards on anti-money laundering and to initiate 
retaliatory actions from other countries that are also in compliance.
  I would note that the FATF ``name and shame'' process has already 
produced results. Austria, which is a member of FATF, just announced 
that it will eliminate, and by ``just renounced,'' the report was last 
Friday in the Wall Street Journal, that it will eliminate anonymous 
savings accounts. As the Journal reported, there are over 20 million 
anonymous accounts, more than three for each man, woman and child in 
Austria. These accounts hold an estimated $100 billion. The FATF and 
money laundering experts had identified the anonymous Austrian savings 
accounts as posing significant money laundering problems. Austria's 
action, which came only after it became clear, and I went to stress 
that, that action and compliance only came after it became clear that 
the FATF would name Austria, shows that the ``name and shame'' project 
can be effective. Austria will then be in compliance with the 
international standards.
  Another benefit from the FATF announcements is that our U.S. banks 
and securities firms will be on notice regarding what jurisdictions 
should be avoided and our regulators will be focused on those 
jurisdictions.
  Madame Chairman, this resolution represents a significant step in 
direction of serious action to fight money laundering crimes.
  This Congress needs to do more on the subject of money laundering. 
This week Mr. McCollum and I will be introducing a comprehensive money 
laundering proposal similar to the Administration's bill from last 
November. This bill will address major problems such as (1) bulk cash 
smuggling, (2) currency couriers, and (3) sanctions against money 
launderers.
  These, and other, money laundering issues should be addressed this 
Congress.
  Madam Chairman, as wonderful as this particular proposal is, and I 
would like to reserve time at the end here to add something more, I 
would say that as strongly as I support this effort, and it is an 
essential action that this Congress must take today, there is much more 
to be done that must be done, and I would hope that this is the first 
step in a concerted, focused effort for this Congress to continue down 
the anti-money laundering path.
  Madam Speaker, I reserve the balance of my time.
  Mr. LaFALCE. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in strong support of this resolution. Of the 
many public policy challenges facing lawmakers, facing the law 
enforcement community and facing regulators, I do not know that any 
represents as significant a threat to our financial system as money 
laundering does.
  The wholesale cleansing of illegitimate profits derived from criminal 
activities reaches staggering proportions, by some estimates between 
$100 and $300 billion in the United States alone, and nearly $600 
billion, that is over one-half trillion, worldwide per year.
  According to the IMF, this figure represents from 2 to 5 percent of 
the entire world's gross domestic product. So in this context, the 
resolution of the gentlewoman from New Jersey (Mrs. Roukema) expresses 
the support of the House of Representatives for the actions about to be 
taken by what is known as the Financial Action Task Force on Money 
Laundering.

[[Page H4612]]

  That task force is composed of 26 member nations, including the 
United States, the European Commission, the Gulf Cooperation Council, 
et cetera. It was formed by the G-7 economic summit of 1989, and the 
task force was set up to address the global problem of money 
laundering. This week, on June 22, the task force will ``name and 
shame,'' if you will, non-compliant jurisdictions, both inside and 
outside the task force's membership.

                              {time}  1530

  The purpose of naming these jurisdictions is to highlight their lack 
of cooperation in the fight against money laundering.
  The resolution follows the recent approval by the Committee on 
Banking of the Clinton administration antimoney laundering proposal 
which passed our committee on June 8 with very broad bipartisan 
support; in fact, almost unanimously. I am hopeful that the bill will 
soon come before our full House so that we can pass it and can provide 
the Treasury Secretary with well-targeted discretionary tools to 
address discrete problems in recognized money laundering offshore 
havens.
  I should note that the identical language from today's resolution was 
included in the administration's legislation for which we can credit 
the efforts of our distinguished colleague, the gentlewoman from New 
Jersey (Mrs. Roukema). I supported the resolution in the Committee on 
Banking, and I support it today on the House floor.
  Madam Speaker, we must not lose sight of the continuing challenges we 
face in the fight against money launderers who represent a very fast-
moving and remarkably adaptable class of criminals. The global gross of 
electronic commerce and banking and the unprecedented expansion of 
global commerce in general, renders our financial system more 
vulnerable to misuse and abuse.
  I therefore urge my colleagues to join us in sending a very clear 
message to noncooperative offshore jurisdictions that the House is 
paying close attention to the task force's work and supports every 
effort to bring more accountability to bear on those who would 
facilitate money laundering.
  Madam Speaker, I reserve the balance of my time.
  Mrs. ROUKEMA. Madam Speaker, I yield 5 minutes to the gentleman from 
Nebraska (Mr. Bereuter), a leading advocate of this legislation and a 
leader on all Committee on Banking and Financial Services issues.
  (Mr. BEREUTER asked and was given permission to revise and extend his 
remarks, and include extraneous material.)
  Mr. BEREUTER. Madam Speaker, I rise in strong support of H. Res. 495, 
which is a sense of the House regarding support for the Financial 
Action Task Force, FATF, on money laundering, and in support of the 
timely and public identification of noncooperative jurisdictions in the 
fight against international money laundering. I thank the gentlewoman 
for yielding me this time, and I thank her for her initiative in 
introducing this resolution and for her efforts in moving the 
legislation.
  Additional appreciation is also expressed to the distinguished 
gentleman from Iowa (Mr. Leach), the chairman of the Committee on 
Banking and Financial Services, and the distinguished gentleman from 
New York (Mr. LaFalce) for expediting consideration of the legislation.
  As a member of both the House Committee on International Relations 
and the Committee on Banking, this Member is committed to reducing the 
global pervasiveness of money laundering. According to an International 
Monetary Fund, IMF, estimate, as already mentioned by the gentlewoman 
from New Jersey (Mrs. Roukema), international money laundering is at 
least a $600 billion industry, and that represents at least 2 to 5 
percent of the world's annual gross domestic product.
  This Member intends to focus his remarks on H. Res. 495 in four 
different sections today. They are as follows: The history and impetus 
for H. Res. 495; second, the main provisions of H. Res. 495; third, the 
support for H. Res. 495; and, fourth, the exigent circumstances 
explaining why immediate passage of H. Res. 495 is needed.
  First, to illustrate the history behind the resolution, in February 
of this year, three of the five committees of the NATO Parliamentary 
Assembly, including this Member and other Members of the House, met, as 
usual, at the headquarters of the Organization for Economic Cooperation 
and Development, OECD, and, of course, the House delegation to the NATO 
PA attended that meeting. A major topic of that discussion was FATF, 
which predominantly includes the representatives of the member States 
of the OECD.
  As mentioned, FATF is an intergovernmental effort whose function is 
the development and promotion of policies to combat money laundering. 
The FATF currently consists of 26 countries, including the major 
financial center countries of Europe, North America and Asia. During 
the aforementioned NATO PA meeting, after the presentation of the 
subject of international money laundering conducted by the FATF and 
given by the OECD staff, and other private conversations with OECD 
staff and the parliamentary delegations from the other NATO countries, 
the U.S. House delegation became concerned whether the FATF actually 
would publicly name those countries which were identified in their 
draft report as noncooperative jurisdictions in the fight against 
international money laundering. There were indications that the FATF 
would not name names unless pressure was brought to bear in favor of 
the naming of noncompliant jurisdictions.
  Second: provisions. As a result of that NATO PA meeting, the 
distinguished chairwoman, the gentlewoman from New Jersey (Mrs. 
Roukema), a long-term and active member of the Economic Committee of 
the NATO PA, along with this Member and other Members of the House 
delegation, as original cosponsors, introduced this resolution which 
expresses the U.S. House's firm support for the public release of the 
names of noncooperative jurisdictions identified by the FATF. Because 
of the possible public release of these names, according to media 
reports, as mentioned by the chairman, Austria had already recently 
abolished its controversial anonymous bank accounts, and I am going to 
include that article from the June 16 edition of the Wall Street 
Journal.
  Furthermore, the expression of the sense of the House in this 
resolution also states that the U.S. should encourage the adoption of 
the necessary international actions to encourage compliance by these 
identified jurisdictions. Plus, it specifies that the U.S. should put 
in place necessary countermeasures against money laundering and 
encourage other nations to do the same.
  Three: the support for it. In addition to the distinguished 
chairwoman from New Jersey and this Member, there are seven additional 
cosponsors. Moreover, very similar language, as mentioned by the 
gentleman from New York, was successfully added by the gentlewoman, the 
chairman of the subcommittee, during the Committee on Banking and 
Financial Services' markup of H.R. 3886. That is a more comprehensive 
bill, which was advanced by the Committee on Banking and Financial 
Services on June 8 of this year.
  Lastly, exigent circumstances. Due to the planned release by FATF of 
some type of report on this subject later this week, it is timely and 
essential that H. Res. 495, this sense of the House Resolution, be 
approved today and the results of our action conveyed to the FATF and 
to the OECD.
  Madam Speaker, I include this article from the Wall Street Journal 
for the Record:

             [From the Wall Street Journal, June 16, 2000]

           Austria Escapes Censure by Ending Secret Accounts

                           (By Michael Allen)

       A week before a multilateral task force is scheduled to 
     ``name and shame'' world money-laundering havens, Austria has 
     escaped censure by agreeing to abolish its controversial 
     anonymous bank accounts.
       The 26-nation Financial Action Task Force, or FATF, the 
     world's leading anti-money-laundering group, had warned it 
     would expel Austria from its ranks if it didn't abolish the 
     anonymous passbook accounts, which date to the Austro-
     Hungarian Empire. The accounts had become a major concern for 
     law-enforcement authorities--and a major irritant in U.S.-
     Austrian relations--because they offer an impenetrable way to 
     disguise the source and ownership of criminal proceeds.
       Passbook accounts could be used by anyone who knew the 
     coded number and possessed the book, meaning they could be 
     opened by one person, then traded on the

[[Page H4613]]

     Internet to someone else, who could then use them for any 
     number of illegal purposes in complete secrecy--and even 
     access the funds from ATMs around the world.
       ``Anonymous passbook savings accounts have been a major 
     problem and a critical loophole in the international 
     consensus to combat money-laundering,'' said Stuart 
     Eizenstat, deputy U.S. Treasury secretary. ``This victory 
     represents a clear demonstration of FATF resolve and 
     credibility.''
       Forcing Austria to either clean its own house or leave the 
     FATF was viewed as an essential step before the organization 
     releases a list next week of money-laundering havens, or 
     offshore centers deemed to have inadequate laws and financial 
     supervision. The composition of the list has been kept 
     secret, but observers believe it will be heavily weighted 
     with Caribbean and South Pacific island states.
       Another possible candidate is Liechtenstein, which a French 
     parliamentary report described as Europe's ``most dangerous 
     money-laundering center.'' The Liechtenstein government, 
     which has already sent some leading citizens to jail, says it 
     is trying to clean up its banking industry.
       According to U.S. Treasury officials, Austria has 24 
     million anonymous passbook accounts, or three for every man, 
     woman and child in the country, signifying that many of them 
     are in the hands of foreigners. The accounts are believed to 
     hold about $100 billion.
       The U.S. and other nations have been trying to get Austria 
     to eliminate the accounts for a decade, but it was only in 
     February that the threat of FATF expulsion prompted Vienna to 
     agree to changes. Initial legislative proposals didn't 
     appease the U.S., and the Austrian government--already under 
     heavy diplomatic pressure because of its inclusion of the 
     right-wing Freedom Party in the ruling coalition--quickly 
     relented. On May 25, the financial committee of the lower 
     house of the Austrian Parliament passed the revised bill, to 
     go into effect this fall.
       The law calls for anonymous accounts to be eliminated by 
     June 30, 2002. In the interim, many transactions will be 
     prohibited unless the account holder is first identified. 
     ``Austrian books will have to make a fundamental change in 
     the way they do business,'' said Mr. Eizenstat.
       In a move parallel to the FATF initiative, the Paris-based 
     Organization for Economic Cooperation and Development is 
     drawing up a list of tax havens that the group believes 
     unfairly divert tax proceeds from developed countries, 
     through the twin lure of low taxes and strict bank secrecy. 
     That list is expected to be released by the end of this 
     month.

  Madam Speaker, for the above stated reasons and others, this Member 
urges his colleagues to support H.Res. 495.
  Mr. LaFALCE. Madam Speaker, I have no further requests for time, and 
I yield back the balance of my time.
  Mrs. ROUKEMA. Madam Speaker, I yield myself such time as I may 
consume.
  I would like to conclude by making the following observations. It 
should be recognized that as the ranking member, as well as the 
gentleman from Nebraska (Mr. Bereuter), has already noted, the 
Committee on Banking and Financial Services on June 8 did report H.R. 
3886, the International Counter-Money Laundering Act; and I would hope 
that we would be able to take action on that and perhaps even expand on 
it, as a matter of fact.
  I also want to point out that while this resolution is a significant 
step in the right direction, in addition to H.R. 3886, there is other 
serious action that we must take to fight money laundering crimes; and 
in that respect, I am fully anticipating that the gentleman from 
Florida (Mr. McCollum) and I will be introducing a comprehensive money 
laundering proposal similar to the administration's bill from last 
November. We have been working on this for some time, and it will 
supplement what H.R. 3886 does in the international arena, with a very 
focused effort comprehensively on domestic money laundering. Cash 
smuggling, currency couriers, and sanctions against the money 
launderers will be the major problems that we are addressing in the 
that bill; and it is a joint operation between the Committee on the 
Judiciary and members of the Committee on Banking and Financial 
Services. These and other money laundering issues, I hope and pray, 
will be addressed in this Congress; and if not completed in this 
Congress, and I think there is time enough to complete it in this 
Congress, then we will make it a top priority in the next.
  However, that is for the future. For today, we are very happy to have 
this resolution before us, and I thank my colleagues for their 
cooperation and the work that we have been able to accomplish together 
here.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mrs. Biggert). The question is on the motion 
offered by the gentlewoman from New Jersey (Mrs. Roukema) that the 
House suspend the rules and agree to the resolution, House Resolution 
495.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the resolution was agreed to.
  A motion to reconsider was laid on the table.

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