[Congressional Record Volume 147, Number 140 (Wednesday, October 17, 2001)]
[House]
[Pages H6924-H6944]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL ANTI-TERRORISM ACT OF 2001
Mr. OXLEY. Mr. Speaker, pursuant to the order of the House of October
16, 2001, I move to suspend the rules and pass the bill (H.R. 3004) to
combat the financing of terrorism and other financial crimes, and for
other purposes, as amended.
The Clerk read as follows:
H.R. 3004
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial
Anti-Terrorism Act of 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--STRENGTHENING LAW ENFORCEMENT
Sec. 101. Bulk cash smuggling into or out of the United States.
Sec. 102. Forfeiture in currency reporting cases.
Sec. 103. Illegal money transmitting businesses.
Sec. 104. Long-arm jurisdiction over foreign money launderers.
Sec. 105. Laundering money through a foreign bank.
Sec. 106. Specified unlawful activity for money laundering.
Sec. 107. Laundering the proceeds of terrorism.
Sec. 108. Proceeds of foreign crimes.
Sec. 109. Penalties for violations of geographic targeting orders and
certain record keeping requirements.
Sec. 110. Exclusion of aliens involved in money laundering.
Sec. 111. Standing to contest forfeiture of funds deposited into
foreign bank that has a correspondent account in the
United States.
Sec. 112. Subpoenas for records regarding funds in correspondent bank
accounts.
Sec. 113. Authority to order convicted criminal to return property
located abroad.
Sec. 114. Corporation represented by a fugitive.
Sec. 115. Enforcement of foreign judgments.
Sec. 116. Reporting provisions and anti-terrorist activities of United
States intelligence agencies.
Sec. 117. Financial Crimes Enforcement Network.
Sec. 118. Prohibition on false statements to financial institutions
concerning the identity of a customer.
Sec. 119. Verification of identification.
Sec. 120. Consideration of anti-money laundering record.
Sec. 121. Reporting of suspicious activities by informal underground
banking systems, such as hawalas.
Sec. 122. Uniform protection authority for Federal reserve facilities.
Sec. 123. Reports relating to coins and currency received in
nonfinancial trade or business.
TITLE II--PUBLIC-PRIVATE COOPERATION
Sec. 201. Establishment of highly secure network.
Sec. 202. Report on improvements in data access and other issues.
Sec. 203. Reports to the financial services industry on suspicious
financial activities.
Sec. 204. Efficient use of currency transaction report system.
Sec. 205. Public-private task force on terrorist financing issues.
Sec. 206. Suspicious activity reporting requirements.
Sec. 207. Amendments relating to reporting of suspicious activities.
Sec. 208. Authorization to include suspicions of illegal activity in
written employment references.
Sec. 209. International cooperation on identification of originators of
wire transfers.
Sec. 210. Check truncation study.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
Sec. 301. Special measures for jurisdictions, financial institutions,
or international transactions of primary money laundering
concern.
Sec. 302. Special due diligence for correspondent accounts and private
banking accounts.
Sec. 303. Prohibition on United States correspondent accounts with
foreign shell banks.
Sec. 304. Anti-money laundering programs.
Sec. 305. Concentration accounts at financial institutions.
Sec. 306. International cooperation in investigations of money
laundering, financial crimes, and the finances of
terrorist groups.
TITLE IV--CURRENCY PROTECTION
Sec. 401. Counterfeiting domestic currency and obligations.
Sec. 402. Counterfeiting foreign currency and obligations.
Sec. 403. Production of documents.
Sec. 404. Reimbursement.
TITLE I--STRENGTHENING LAW ENFORCEMENT
SEC. 101. BULK CASH SMUGGLING INTO OR OUT OF THE UNITED
STATES.
(a) Findings.--The Congress finds the following:
(1) Effective enforcement of the currency reporting
requirements of subchapter II of chapter 53 of title 31,
United States Code, and the regulations prescribed under such
subchapter, has forced drug dealers and other criminals
engaged in cash-based businesses to avoid using traditional
financial institutions.
(2) In their effort to avoid using traditional financial
institutions, drug dealers and other criminals are forced to
move large quantities of currency in bulk form to and through
the airports, border crossings, and other ports of entry
where the currency can be smuggled out of the United States
and placed in a foreign financial institution or sold on the
black market.
(3) The transportation and smuggling of cash in bulk form
may now be the most common form of money laundering, and the
movement of large sums of cash is one of the most reliable
warning signs of drug trafficking, terrorism, money
laundering, racketeering, tax evasion and similar crimes.
(4) The intentional transportation into or out of the
United States of large amounts of currency or monetary
instruments, in a manner designed to circumvent the mandatory
reporting provisions of subchapter II of chapter 53 of title
31, United States Code,, is the equivalent of, and creates
the same harm as, the smuggling of goods.
(5) The arrest and prosecution of bulk cash smugglers are
important parts of law enforcement's effort to stop the
laundering of criminal proceeds, but the couriers who attempt
to smuggle the cash out of the United States are typically
low-level employees of large criminal organizations, and thus
are easily replaced. Accordingly, only the confiscation of
the smuggled bulk cash can effectively break the cycle of
criminal activity of which the laundering of the bulk cash is
a critical part.
(6) The current penalties for violations of the currency
reporting requirements are insufficient to provide a
deterrent to the laundering of criminal proceeds. In
particular, in cases where the only criminal violation under
current law is a reporting offense, the law does not
adequately provide for the confiscation of smuggled currency.
In contrast, if the smuggling of bulk cash were itself an
offense, the cash could be confiscated as the corpus delicti
of the smuggling offense.
(b) Purposes.--The purposes of this section are--
(1) to make the act of smuggling bulk cash itself a
criminal offense;
(2) to authorize forfeiture of any cash or instruments of
the smuggling offense;
(3) to emphasize the seriousness of the act of bulk cash
smuggling; and
(4) to prescribe guidelines for determining the amount of
property subject to such forfeiture in various situations.
(c) Enactment of Bulk Cash Smuggling Offense.--Subchapter
II of chapter 53 of title 31, United States Code, is amended
by adding at the end the following:
``Sec. 5331. Bulk cash smuggling into or out of the United
States
``(a) Criminal Offense.--
``(1) In general.--Whoever, with the intent to evade a
currency reporting requirement under section 5316, knowingly
conceals more than $10,000 in currency or other monetary
instruments on the person of such individual or in any
conveyance, article of luggage, merchandise, or other
container, and transports or transfers or attempts to
transport or transfer such currency or monetary instruments
from a place within the United States to a place outside of
the United States, or from a place outside the United States
to a place within the United States, shall be guilty of a
currency smuggling offense and subject to punishment pursuant
to subsection (b).
``(2) Concealment on person.--For purposes of this section,
the concealment of currency on the person of any individual
includes concealment in any article of clothing worn by the
individual or in any luggage, backpack, or other container
worn or carried by such individual.
``(b) Penalty.--
``(1) Term of imprisonment.--A person convicted of a
currency smuggling offense under subsection (a), or a
conspiracy to commit such offense, shall be imprisoned for
not more than 5 years.
``(2) Forfeiture.--In addition, the court, in imposing
sentence under paragraph (1), shall order that the defendant
forfeit to the United States, any property, real or
personal, involved in the offense, and any property
traceable to such property, subject to subsection (d) of
this section.
``(3) Procedure.--The seizure, restraint, and forfeiture of
property under this section shall be governed by section 413
of the Controlled Substances Act.
[[Page H6925]]
``(4) Personal money judgment.--If the property subject to
forfeiture under paragraph (2) is unavailable, and the
defendant has insufficient substitute property that may be
forfeited pursuant to section 413(p) of the Controlled
Substances Act, the court shall enter a personal money
judgment against the defendant for the amount that would be
subject to forfeiture.
``(c) Civil Forfeiture.--
``(1) In general.--Any property involved in a violation of
subsection (a), or a conspiracy to commit such violation, and
any property traceable to such violation or conspiracy, may
be seized and, subject to subsection (d) of this section,
forfeited to the United States.
``(2) Procedure.--The seizure and forfeiture shall be
governed by the procedures governing civil forfeitures in
money laundering cases pursuant to section 981(a)(1)(A) of
title 18, United States Code.
``(3) Treatment of certain property as involved in the
offense.--For purposes of this subsection and subsection (b),
any currency or other monetary instrument that is concealed
or intended to be concealed in violation of subsection (a) or
a conspiracy to commit such violation, any article,
container, or conveyance used, or intended to be used, to
conceal or transport the currency or other monetary
instrument, and any other property used, or intended to be
used, to facilitate the offense, shall be considered property
involved in the offense.''.
(c) Clerical Amendment.--The table of sections for
subchapter II of chapter 53 of title 31, United States Code,
is amended by inserting after the item relating to section
5330, the following new item:
``5331. Bulk cash smuggling into or out of the United States.''.
SEC. 102. FORFEITURE IN CURRENCY REPORTING CASES.
(a) In General.--Subsection (c) of section 5317 of title
31, United States Code, is amended to read as follows:
``(c) Forfeiture.--
``(1) In general.--The court in imposing sentence for any
violation of section 5313, 5316, or 5324 of this title, or
any conspiracy to commit such violation, shall order the
defendant to forfeit all property, real or personal, involved
in the offense and any property traceable thereto.
``(2) Procedure.--Forfeitures under this subsection shall
be governed by the procedures established in section 413 of
the Controlled Substances Act and the guidelines established
in paragraph (4).
``(3) Civil forfeiture.--Any property involved in a
violation of section 5313, 5316, or 5324 of this title, or
any conspiracy to commit any such violation, and any property
traceable to any such violation or conspiracy, may be seized
and, subject to paragraph (4), forfeited to the United States
in accordance with the procedures governing civil forfeitures
in money laundering cases pursuant to section 981(a)(1)(A) of
title 18, United States Code.''.
(b) Conforming Amendments.--
(1) Section 981(a)(1)(A) of title 18, United States Code,
is amended by striking ``of section 5313(a) or 5324(a) of
title 31, or''.
(2) Section 982(a)(1) of title 18, United States Code, is
amended by striking ``of section 5313(a), 5316, or 5324 of
title 31, or''.
SEC. 103. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) Scienter Requirement for Section 1960 Violation.--
Section 1960 of title 18, United States Code, is amended to
read as follows:
``Sec. 1960. Prohibition of unlicensed money transmitting
businesses
``(a) Whoever knowingly conducts, controls, manages,
supervises, directs, or owns all or part of an unlicensed
money transmitting business, shall be fined in accordance
with this title or imprisoned not more than 5 years, or both.
``(b) As used in this section--
``(1) the term `unlicensed money transmitting business'
means a money transmitting business which affects interstate
or foreign commerce in any manner or degree and--
``(A) is operated without an appropriate money transmitting
license in a State where such operation is punishable as a
misdemeanor or a felony under State law, whether or not the
defendant knew that the operation was required to be licensed
or that the operation was so punishable;
``(B) fails to comply with the money transmitting business
registration requirements under section 5330 of title 31,
United States Code, or regulations prescribed under such
section; or
``(C) otherwise involves the transportation or transmission
of funds that are known to the defendant to have been derived
from a criminal offense or are intended to be used to be used
to promote or support unlawful activity;
``(2) the term `money transmitting' includes transferring
funds on behalf of the public by any and all means including
but not limited to transfers within this country or to
locations abroad by wire, check, draft, facsimile, or
courier; and
``(3) the term `State' means any State of the United
States, the District of Columbia, the Northern Mariana
Islands, and any commonwealth, territory, or possession of
the United States.''.
(b) Seizure of Illegally Transmitted Funds.--Section
981(a)(1)(A) of title 18, United States Code, is amended by
striking ``or 1957'' and inserting ``, 1957 or 1960''.
(c) Clerical Amendment.--The table of sections for chapter
95 of title 18, United States Code, is amended in the item
relating to section 1960 by striking ``illegal'' and
inserting ``unlicensed''.
SEC. 104. LONG-ARM JURISDICTION OVER FOREIGN MONEY
LAUNDERERS.
Section 1956(b) of title 18, United States Code, is
amended--
(1) by striking ``(b) Whoever'' and inserting ``(b)(1)
Whoever'';
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(3) by striking ``subsection (a)(1) or (a)(3),'' and
inserting ``subsection (a)(1) or (a)(2) or section 1957,'';
and
(4) by adding at the end the following new paragraphs:
``(2) For purposes of adjudicating an action filed or
enforcing a penalty ordered under this section, the district
courts shall have jurisdiction over any foreign person,
including any financial institution authorized under the laws
of a foreign country, against whom the action is brought,
if--
``(A) service of process upon such foreign person is made
under the Federal Rules of Civil Procedure or the laws of the
country where the foreign person is found; and
``(B) the foreign person--
``(i) commits an offense under subsection (a) involving a
financial transaction that occurs in whole or in part in the
United States;
``(ii) converts to such person's own use property in which
the United States has an ownership interest by virtue of the
entry of an order of forfeiture by a court of the United
States; or
``(iii) is a financial institution that maintains a
correspondent bank account at a financial institution in the
United States.
``(3) The court may issue a pretrial restraining order or
take any other action necessary to ensure that any bank
account or other property held by the defendant in the United
States is available to satisfy a judgment under this
section.''.
SEC. 105. 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. 106. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING.
(a) In General.--Section 1956(c)(7) of title 18, United
States Code, is amended--
(1) in subparagraph (B)--
(A) by striking clause (ii) and inserting the following new
clause:
``(ii) any act or acts constituting a crime of violence, as
defined in section 16 of this title;''; and
(B) by inserting after clause (iii) the following new
clauses:
``(iv) bribery of a public official, or the
misappropriation, theft, or embezzlement of public funds by
or for the benefit of a public official;
``(v) smuggling or export control violations involving
munitions listed in the United States Munitions List or
technologies with military applications as defined in the
Commerce Control List of the Export Administration
Regulations; or
``(vi) an offense with respect to which the United States
would be obligated by a bilateral treaty either to extradite
the alleged offender or to submit the case for prosecution,
if the offender were found within the territory of the United
States;''; and
(2) in subparagraph (D)--
(A) by inserting ``section 541 (relating to goods falsely
classified),'' before ``section 542'';
(B) by inserting ``section 922(1) (relating to the unlawful
importation of firearms), section 924(n) (relating to
firearms trafficking),'' before ``section 956'';
(C) by inserting ``section 1030 (relating to computer fraud
and abuse),'' before ``1032''; and
(D) by inserting ``any felony violation of the Foreign
Agents Registration Act of 1938, as amended,'' before ``or
any felony violation of the Foreign Corrupt Practices Act''.
(b) Rule of Construction.--None of the changes or
amendments made by the Financial Anti-Terrorism Act of 2001
shall expand the jurisdiction of any Federal or State court
over any civil action or claim for monetary damages for the
nonpayment of taxes or duties under the revenue laws of a
foreign state, or any political subdivision thereof, except
as such actions or claims are authorized by United States
treaty that provides the United States and its political
subdivisions with reciprocal rights to pursue such actions or
claims in the courts of the foreign state and its political
subdivisions.
SEC. 107. LAUNDERING THE PROCEEDS OF TERRORISM.
Section 1956(c)(7)(D) of title 18, United States Code, is
amended by inserting ``or 2339B'' after ``2339A''.
SEC. 108. PROCEEDS OF FOREIGN CRIMES.
Section 981(a)(1)(B) of title 18, United States Code, is
amended to read as follows:
``(B) Any property, real or personal, within the
jurisdiction of the United States, constituting, derived
from, or traceable to, any proceeds obtained directly or
indirectly from an offense against a foreign nation, or any
property used to facilitate such offense, if--
``(i) the offense involves the manufacture, importation,
sale, or distribution of a controlled substance (as such term
is defined for the purposes of the Controlled Substances
[[Page H6926]]
Act), or any other conduct described in section
1956(c)(7)(B),
``(ii) the offense would be punishable within the
jurisdiction of the foreign nation by death or imprisonment
for a term exceeding one year, and
``(iii) the offense would be punishable under the laws of
the United States by imprisonment for a term exceeding one
year if the act or activity constituting the offense had
occurred within the jurisdiction of the United States.''.
SEC. 109. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING
ORDERS AND CERTAIN RECORD KEEPING REQUIREMENTS.
(a) Civil Penalty for Violation of Targeting Order.--
Section 5321(a)(1) of title 31, United States Code, is
amended--
(1) by inserting ``or order issued'' after ``subchapter or
a regulation prescribed''; and
(2) by inserting ``, or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``sections
5314 and 5315)''.
(b) Criminal Penalties for Violation of Targeting Order.--
Section 5322 of title 31, United States Code, is amended--
(1) in subsection (a)--
(A) by inserting ``or order issued'' after ``willfully
violating this subchapter or a regulation prescribed''; and
(B) by inserting ``, or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``under
section 5315 or 5324)'';
(2) in subsection (b)--
(A) by inserting ``or order issued'' after ``willfully
violating this subchapter or a regulation prescribed''; and
(B) by inserting ``or willfully violating a regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508,'' after ``under
section 5315 or 5324),'';
(c) Structuring Transactions To Evade Targeting Order or
Certain Record Keeping Requirements.--Section 5324(a) of
title 31, United States Code, is amended--
(1) by inserting a comma after ``shall'';
(2) by striking ``section--'' and inserting ``section, the
reporting requirements imposed by any order issued under
section 5326, or the record keeping requirements imposed by
any regulation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law 91-508--
''; and
(3) in paragraphs (1) and (2), by inserting ``, to file a
report required by any order issued under section 5326, or to
maintain a record required pursuant to any regulation
prescribed under section 21 of the Federal Deposit Insurance
Act or section 123 of Public Law 91-508'' after ``regulation
prescribed under any such section'' each place that term
appears.
(d) Increase in Civil Penalties for Violation of Certain
Record Keeping Requirements.--
(1) Federal deposit insurance act.--Section 21(j)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1829b(j)(1)) is
amended by striking ``$10,000'' and inserting ``the greater
of--
``(A) the amount (not to exceed $100,000) involved in the
transaction (if any) with respect to which the violation
occurred; or
``(B) $25,000''.
(2) Public law 91-508.--Section 125(a) of Public Law 91-508
(12 U.S.C. 1955(a)) is amended by striking ``$10,000'' and
inserting ``the greater of--
``(1) the amount (not to exceed $100,000) involved in the
transaction (if any) with respect to which the violation
occurred; or
``(2) $25,000''.
(e) Criminal Penalties for Violation of Certain Record
Keeping Requirements.--
(1) Section 126.--Section 126 of Public Law 91-508 (12
U.S.C. 1956) is amended to read as follows:
``SEC. 126. CRIMINAL PENALTY.
``A person that willfully violates this chapter, section 21
of the Federal Deposit Insurance Act, or a regulation
prescribed under this chapter or that section 21, shall be
fined not more than $250,000, or imprisoned for not more than
5 years, or both.''.
(2) Section 127.--Section 127 of Public Law 91-508 (12
U.S.C. 1957) is amended to read as follows:
``SEC. 127. ADDITIONAL CRIMINAL PENALTY IN CERTAIN CASES.
``A person that willfully violates this chapter, section 21
of the Federal Deposit Insurance Act, or a regulation
prescribed under this chapter or that section 21, while
violating another law of the United States or as part of a
pattern of any illegal activity involving more than $100,000
in a 12-month period, shall be fined not more than $500,000,
imprisoned for not more than 10 years, or both.''.
SEC. 110. EXCLUSION OF ALIENS INVOLVED IN MONEY LAUNDERING.
(a) In General.--Section 212 of the Immigration and
Nationality Act, as amended (8 U.S.C. 1182), is amended in
subsection (a)(2)--
(1) by redesignating subparagraphs (D), (E), (F), (G), and
(H) as subparagraphs (E), (F), (G), (H), and (I),
respectively; and
(2) by inserting after subparagraph (C) the following new
subparagraph (D):
``(D) Money laundering activities.--
``(i) In general.--Any alien who the consular officer or
the Attorney General knows or has reason to believe is or has
been engaged in activities which if engaged in within the
United States would constitute a violation of the money
laundering provisions section 1956, 1957, or 1960 of title
18, United States Code, or has knowingly assisted, abetted,
or conspired or colluded with others in any such illicit
activity is inadmissible.
``(ii) Related individuals.--Any alien who the consular
officer or the Attorney General knows or has reason to
believe is the spouse, son, or daughter of an alien
inadmissible under clause (i), has, within the previous 5
years, obtained any financial or other benefit from such
illicit activity of that alien, and knew or reasonably should
have known that the financial or other benefit was the
product of such illicit activity, is inadmissible, except
that the Attorney General may, in the full discretion of the
Attorney General, waive the exclusion of the spouse, son, or
daughter of an alien under this clause if the Attorney
General determines that exceptional circumstances exist that
justify such waiver.''.
(b) Conforming amendment.--Section 212(h)(1)(A)(i) of the
Immigration and Nationality Act, as amended (8 U.S.C. 1182),
is amended by striking ``(D)(i) or (D)(ii)'' and inserting
``(E)(i) or (E)(ii)''.
SEC. 111. STANDING TO CONTEST FORFEITURE OF FUNDS DEPOSITED
INTO FOREIGN BANK THAT HAS A CORRESPONDENT
ACCOUNT IN THE UNITED STATES.
Section 981 of title 18, United States Code, is amended by
adding at the end the following new subsection:
``(k) Correspondent Bank Accounts.--
``(1) Treatment of accounts of correspondent bank in
domestic financial institutions.--
``(A) In general.--For the purpose of a forfeiture under
this section or under the Controlled Substances Act, if funds
are deposited into a dollar-denominated bank account in a
foreign financial institution, and that foreign financial
institution has a correspondent account with a financial
institution in the United States, the funds deposited into
the foreign financial institution (the respondent bank) shall
be deemed to have been deposited into the correspondent
account in the United States, and any restraining order,
seizure warrant, or arrest warrant in rem regarding such
funds may be served on the correspondent bank, and funds in
the correspondent account up to the value of the funds
deposited into the dollar-denominated account in the foreign
financial institution may be seized, arrested or restrained.
``(B) Authority to suspend.--The Attorney General, in
consultation with the Secretary, may suspend or terminate a
forfeiture under this section if the Attorney General
determines that a conflict of law exists between the laws of
the jurisdiction in which the foreign bank is located and the
laws of the United States with respect to liabilities arising
from the restraint, seizure, or arrest of such funds, and
that such suspension or termination would be in the interest
of justice and would not harm the national interests of the
United States.
``(2) No requirement for government to trace funds.--If a
forfeiture action is brought against funds that are
restrained, seized, or arrested under paragraph (1), the
Government shall not be required to establish that such funds
are directly traceable to the funds that were deposited into
the respondent bank, nor shall it be necessary for the
Government to rely on the application of Section 984 of this
title.
``(3) Claims brought by owner of the funds.--If a
forfeiture action is instituted against funds seized,
arrested, or restrained under paragraph (1), the owner of the
funds may contest the forfeiture by filing a claim pursuant
to section 983.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Correspondent account.--The term `correspondent
account' has the meaning given to the term `interbank
account' in section 984(c)(2)(B).
``(B) Owner.--
``(i) In general.--Except as provided in clause (ii), the
term `owner'--
``(I) means the person who was the owner, as that term is
defined in section 983(d)(6), of the funds that were
deposited into the foreign bank at the time such funds were
deposited; and
``(II) does not include either the foreign bank or any
financial institution acting as an intermediary in the
transfer of the funds into the interbank account.
``(ii) Exception.--The foreign bank may be considered the
`owner' of the funds (and no other person shall qualify as
the owner of such funds) only if--
``(I) the basis for the forfeiture action is wrongdoing
committed by the foreign bank; or
``(II) the foreign bank establishes, by a preponderance of
the evidence, that prior to the restraint, seizure, or arrest
of the funds, the foreign bank had discharged all or part of
its obligation to the prior owner of the funds, in which case
the foreign bank shall be deemed the owner of the funds to
the extent of such discharged obligation.''.
SEC. 112. SUBPOENAS FOR RECORDS REGARDING FUNDS IN
CORRESPONDENT BANK ACCOUNTS.
(a) In General.--Subchapter II of chapter 53 of title 31,
United States Code, is amended by inserting after section
5331 (as added by section 101) the following new section:
[[Page H6927]]
``Sec. 5332. Subpoenas for records
``(a) Designation By Foreign Financial Institution of
Agent.--Any foreign financial institution that has a
correspondent bank account at a financial institution in the
United States shall designate a person residing in the United
States as a person authorized to accept a subpoena for bank
records or other legal process served on the foreign
financial institution.
``(b) Maintenance of Records By Domestic Financial
Institution.--
``(1) In general.--Any domestic financial institution that
maintains a correspondent bank account for a foreign
financial institution shall maintain records regarding the
names and addresses of the owners of the foreign financial
institution, and the name and address of the person who may
be served with a subpoena for records regarding any funds
transferred to or from the correspondent account.
``(2) Provision to law enforcement agency.--A domestic
financial institution shall provide names and addresses
maintained under paragraph (1) to a Government authority (as
defined in section 1101(3) of the Right to Financial Privacy
Act of 1978) within 7 days of the receipt of a request, in
writing, for such records.
``(c) Administrative Subpoena.--
``(1) In general.--The Attorney General and the Secretary
of the Treasury may each issue an administrative subpoena for
records relating to the deposit of any funds into a dollar-
denominated account in a foreign financial institution that
maintains a correspondent account at a domestic financial
institution.
``(2) Manner of issuance.--Any subpoena issued by the
Attorney General or the Secretary of the Treasury under
paragraph (1) shall be issued in the manner described in
section 3486 of title 18, and may be served on the
representative designated by the foreign financial
institution pursuant to subsection (a) to accept legal
process in the United States, or in a foreign country
pursuant to any mutual legal assistance treaty, multilateral
agreement, or other request for international law enforcement
assistance.
``(d) Correspondent Account Defined.--For purposes of this
section, the term `correspondent account' has the same
meaning as the term `interbank account' as such term is
defined in section 984(c)(2)(B) of title 18, United States
Code.''.
(b) Clerical amendments.--The table of sections for
subchapter II of chapter 53 of title 31, United States Code,
is amended by inserting after the item relating to section
5331 (as added by section 101) the following new item:
``5332. Subpoenas for records.''.
(c) Effective Date.--Section 5332(a) of title 31, United
States Code, (as added by subsection (a) of this section
shall apply after the end of the 30-day period beginning on
the date of the enactment of this Act.
(d) Requests for Records.--Section 3486(a)(1)(A)(i) of
title 18, United States Code, is amended by striking ``; or
(II) a Federal offense involving the sexual exploitation or
abuse of children,'' and inserting ``, (II) a Federal offense
involving the sexual exploitation or abuse of children, or
(III) a money laundering offense in violation of section
1956, 1957 or 1960 of this title,''.
SEC. 113. AUTHORITY TO ORDER CONVICTED CRIMINAL TO RETURN
PROPERTY LOCATED ABROAD.
(a) Forfeiture of Substitute Property.--Section 413(p) of
the Controlled Substances Act (21 U.S.C. 853) is amended to
read as follows:
``(p) Forfeiture of Substitute Property.--
``(1) In general.--Paragraph (2) of this subsection shall
apply, if any property described in subsection (a), as a
result of any act or omission of the defendant--
``(A) cannot be located upon the exercise of due diligence;
``(B) has been transferred or sold to, or deposited with, a
third party;
``(C) has been placed beyond the jurisdiction of the court;
``(D) has been substantially diminished in value; or
``(E) has been commingled with other property which cannot
be divided without difficulty.
``(2) Substitute property.--In any case described in any of
subparagraphs (A) through (E) of paragraph (1), the court
shall order the forfeiture of any other property of the
defendant, up to the value of any property described in
subparagraphs (A) through (E) of paragraph (1), as
applicable.
``(3) Return of property to jurisdiction.--In the case of
property described in paragraph (1)(C), the court may, in
addition to any other action authorized by this subsection,
order the defendant to return the property to the
jurisdiction of the court so that the property may be seized
and forfeited.''.
(b) Protective Orders.--Section 413(e) of the Controlled
Substances Act (21 U.S.C. 853(e)) is amended by adding at the
end the following:
``(4) Order To Repatriate and Deposit.--
``(A) In general.--Pursuant to its authority to enter a
pretrial restraining order under this section, 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. 114. CORPORATION REPRESENTED BY A FUGITIVE.
Section 2466 of title 28, United States Code, is amended by
designating the present matter as subsection (a), and adding
at the end the following:
``(b) Subsection (a) may be applied to a claim filed by a
corporation if any majority shareholder, or individual filing
the claim on behalf of the corporation is a person to whom
subsection (a) applies.''.
SEC. 115. ENFORCEMENT OF FOREIGN JUDGMENTS.
Section 2467 of title 28, United States Code, is amended--
(1) in subsection (d), by inserting after paragraph (2) the
following new paragraph:
``(3) Preservation of property.--To preserve the
availability of property subject to a foreign forfeiture or
confiscation judgment, the Government may apply for, and the
court may issue, a restraining order pursuant to section
983(j) of title 18, United States Code, at any time before or
after an application is filed pursuant to subsection (c)(1).
The court, in issuing the restraining order--
``(A) may rely on information set forth in an affidavit
describing the nature of the proceeding or investigation
underway in the foreign country, and setting forth a
reasonable basis to believe that the property to be
restrained will be named in a judgment of forfeiture at the
conclusion of such proceeding; or
``(B) may register and enforce a restraining order that has
been issued by a court of competent jurisdiction in the
foreign country and certified by the Attorney General
pursuant to subsection (b)(2).
No person may object to the restraining order on any ground
that is the subject of parallel litigation involving the same
property that is pending in a foreign court.'';
(2) in subsection (b)(1)(C), by striking ``establishing
that the defendant received notice of the proceedings in
sufficient time to enable the defendant'' and inserting
``establishing that the foreign nation took steps, in
accordance with the principles of due process, to give notice
of the proceedings to all persons with an interest in the
property in sufficient time to enable such persons'';
(3) in subsection (d)(1)(D), by striking ``the defendant in
the proceedings in the foreign court did not receive notice''
and inserting ``the foreign nation did not take steps, in
accordance with the principles of due process, to give notice
of the proceedings to a person with an interest in the
property''; and
(4) in subsection (a)(2)(A), by inserting ``, any violation
of foreign law that would constitute a violation of an
offense for which property could be forfeited under Federal
law if the offense were committed in the United States''
after ``United Nations Convention''.
SEC. 116. REPORTING PROVISIONS AND ANTI-TERRORIST ACTIVITIES
OF UNITED STATES INTELLIGENCE AGENCIES.
(a) Amendment Relating to the Purposes of Chapter 53 of
Title 31, United States Code.--Section 5311 of title 31,
United States Code, is amended by inserting before the period
at the end the following: ``, or in the conduct of
intelligence or counterintelligence activities, including
analysis, to protect against international terrorism''.
(b) Amendment Relating to Reporting of Suspicious
Activities.--Section 5318(g)(4)(B) of title 31, United States
Code, is amended by striking ``or supervisory agency'' and
inserting ``, supervisory agency, or United States
intelligence agency for use in the conduct of intelligence or
counterintelligence activities, including analysis, to
protect against international terrorism''.
(c) Amendment Relating to Availability of Reports.--Section
5319 of title 31, United States Code, is amended to read as
follows:
``Sec. 5319. Availability of reports
``The Secretary of the Treasury shall make information in a
report filed under this subchapter available to an agency,
including any State financial institutions supervisory
agency, United States intelligence agency or self-regulatory
organization registered with the Securities and Exchange
Commission or the Commodity Futures Trading Commission, upon
request of the head of the agency or organization. The report
shall be available for a purpose that is consistent with this
subchapter. The Secretary may only require reports on the use
of such information by any State financial institutions
supervisory agency for other than supervisory purposes or by
United States intelligence agencies. However, a report and
records of reports are exempt from disclosure under section
552 of title 5.''.
(d) Amendment Relating to the Retention of Records by
Insured Depository Institutions.--Section 21(a) of the
Federal Deposit Insurance Act (12 U.S.C. 1829b(a)) is
amended--
(1) in paragraph (1), by inserting ``, or in the conduct of
intelligence or counterintelligence activities, including
analysis, to protect against international terrorism'' after
``proceedings''; and
[[Page H6928]]
(2) in paragraph (2), by inserting ``, or in the conduct of
intelligence or counterintelligence activities, including
analysis, to protect against international terrorism'' before
the period at the end.
(e) Amendment Relating to the Retention of Records by
Uninsured Institutions.--Section 123(a) of Public Law 91-508
(12 U.S.C. 1953(a)) is amended by inserting ``, or in the
conduct of intelligence or counterintelligence activities,
including analysis, to protect against international
terrorism'' after ``proceedings''.
(f) Amendments to the Right to Financial Privacy Act.--The
Right to Financial Privacy Act of 1978 is amended--
(1) in section 1112(a) (12 U.S.C. 3412(a)), by inserting
``, or intelligence or counterintelligence activity,
investigation or analysis related to international
terrorism'' after ``legitimate law enforcement inquiry'';
(2) in section 1114(a)(1) (12 U.S.C. 3414(a)(1))--
(A) in subparagraph (A), by striking ``or'' at the end;
(B) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(C) by adding at the end the following:
``(C) a Government authority authorized to conduct
investigations of, or intelligence or counterintelligence
analyses related to, international terrorism for the purpose
of conducting such investigations or analyses.''; and
(3) in section 1120(a)(2) (12 U.S.C. 3420(a)(2)), by
inserting ``, or for a purpose authorized by section
1112(a)'' before the semicolon at the end.
(g) Amendment to the Fair Credit Reporting Act.--
(1) In general.--The Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended--
(A) by redesignating the second of the 2 sections
designated as section 624 (15 U.S.C. 1681u) (relating to
disclosure to FBI for counterintelligence purposes) as
section 625; and
(B) by adding at the end the following new section:
``Sec. 626. Disclosures to governmental agencies for
counterterrorism purposes
``(a) Disclosure.--Notwithstanding section 604 or any other
provision of this title, a consumer reporting agency shall
furnish a consumer report of a consumer and all other
information in a consumer's file to a government agency
authorized to conduct investigations of, or intelligence or
counterintelligence activities or analysis related to,
international terrorism when presented with a written
certification by such government agency that such information
is necessary for the agency's conduct or such investigation,
activity or analysis.
``(b) Form of Certification.--The certification described
in subsection (a) shall be signed by a supervisory official
designated by the head of a Federal agency or an officer of a
Federal agency whose appointment to office is required to be
made by the President, by and with the advice and consent of
the Senate.
``(c) Confidentiality.--No consumer reporting agency, or
officer, employee, or agent of such consumer reporting
agency, shall disclose to any person, or specify in any
consumer report, that a government agency has sought or
obtained access to information under subsection (a).
``(d) Rule of Construction.--Nothing in section 625 shall
be construed to limit the authority of the Director of the
Federal Bureau of Investigation under this section.
``(e) Safe Harbor.--Notwithstanding any other provision of
this subchapter, any consumer reporting agency or agent or
employee thereof making disclosure of consumer reports or
other information pursuant to this section in good-faith
reliance upon a certification of a governmental agency
pursuant to the provisions of this section shall not be
liable to any person for such disclosure under this
subchapter, the constitution of any State, or any law or
regulation of any State or any political subdivision of any
State.''.
(2) Clerical amendments.--The table of sections for the
Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) is
amended--
(A) by redesignating the second of the 2 items designated
as section 624 as section 625; and
(B) by inserting after the item relating to section 625 (as
so redesignated) the following new item:
``626. Disclosures to governmental agencies for counterterrorism
purposes.''.
(h) Application of Amendments.--The amendments made by this
section shall apply with respect to reports filed or records
maintained on, before, or after the date of the enactment of
this Act.
SEC. 117. FINANCIAL CRIMES ENFORCEMENT NETWORK.
(a) In General.--Subchapter I of chapter 3 of title 31,
United States Code, is amended--
(1) by redesignating section 310 as section 311; and
(2) by inserting after section 309 the following new
section:
``Sec. 310. Financial Crimes Enforcement Network
``(a) In General.--The Financial Crimes Enforcement Network
established by order of the Secretary of the Treasury
(Treasury Order Numbered 105-08) on April 25, 1990, shall be
a bureau in the Department of the Treasury.
``(b) Director.--
``(1) Appointment.--The head of the Financial Crimes
Enforcement Network shall be the Director who shall be
appointed by the Secretary of the Treasury.
``(2) Duties and powers.--The duties and powers of the
Director are as follows:
``(A) Advise and make recommendations on matters relating
to financial intelligence, financial criminal activities, and
other financial activities to the Under Secretary for
Enforcement.
``(B) Maintain a government-wide data access service, with
access, in accordance with applicable legal requirements, to
the following:
``(i) Information collected by the Department of the
Treasury, including report information filed under
subchapters II and III of chapter 53 of this title (such as
reports on cash transactions, foreign financial agency
transactions and relationships, foreign currency
transactions, exporting and importing monetary instruments,
and suspicious activities), chapter 2 of title I of Public
Law 91-508, and section 21 of the Federal Deposit Insurance
Act.
``(ii) Information regarding national and international
currency flows.
``(iii) Other records and data maintained by other Federal,
State, local, and foreign agencies, including financial and
other records developed in specific cases.
``(iv) Other privately and publicly available information.
``(C) Analyze and disseminate the available data in
accordance with applicable legal requirements and policies
and guidelines established by the Secretary of the Treasury
and the Under Secretary for Enforcement to--
``(i) identify possible criminal activity to appropriate
Federal, State, local, and foreign law enforcement agencies;
``(ii) support ongoing criminal financial investigations
and prosecutions and related proceedings, including civil and
criminal tax and forfeiture proceedings;
``(iii) identify possible instances of noncompliance with
subchapters II and III of chapter 53 of this title, chapter 2
of title I of Public Law 91-508, and section 21 of the
Federal Deposit Insurance Act to Federal agencies with
statutory responsibility for enforcing compliance with such
provisions and other appropriate Federal regulatory agencies;
``(iv) evaluate and recommend possible uses of special
currency reporting requirements under section 5326;
``(v) determine emerging trends and methods in money
laundering and other financial crimes;
``(vi) support the conduct of intelligence or
counterintelligence activities, including analysis, to
protect against international terrorism; and
``(vii) support government initiatives against money
laundering.
``(D) Establish and maintain a financial crimes
communications center to furnish law enforcement authorities
with intelligence information related to emerging or ongoing
investigations and undercover operations.
``(E) Furnish research, analytical, and informational
services to financial institutions, appropriate Federal
regulatory agencies with regard to financial institutions,
and appropriate Federal, State, local, and foreign law
enforcement authorities, in accordance with policies and
guidelines established by the Secretary of the Treasury or
the Under Secretary of the Treasury for Enforcement, in the
interest of detection, prevention, and prosecution of
terrorism, organized crime, money laundering, and other
financial crimes.
``(F) Establish and maintain a special unit dedicated to
assisting Federal, State, local, and foreign law enforcement
and regulatory authorities in combatting the use of informal,
nonbank networks and payment and barter system mechanisms
that permit the transfer of funds or the equivalent of funds
without records and without compliance with criminal and tax
laws.
``(G) Provide computer and data support and data analysis
to the Secretary of the Treasury for tracking and controlling
foreign assets.
``(H) Coordinate with financial intelligence units in other
countries on anti-terrorism and anti-money laundering
initiatives, and similar efforts.
``(I) Administer the requirements of subchapters II and III
of chapter 53 of this title, chapter 2 of title I of Public
Law 91-508, and section 21 of the Federal Deposit Insurance
Act, to the extent delegated such authority by the Secretary
of the Treasury.
``(J) Such other duties and powers as the Secretary of the
Treasury may delegate or prescribe.
``(c) Requirements Relating to Maintenance and Use of Data
Banks.--The Secretary of the Treasury shall establish and
maintain operating procedures with respect to the government-
wide data access service and the financial crimes
communications center maintained by the Financial Crimes
Enforcement Network which provide--
``(1) for the coordinated and efficient transmittal of
information to, entry of information into, and withdrawal of
information from, the data maintenance system maintained by
the Network, including--
``(A) the submission of reports through the Internet or
other secure network, whenever possible;
``(B) the cataloguing of information in a manner that
facilitates rapid retrieval by law enforcement personnel of
meaningful data; and
[[Page H6929]]
``(C) a procedure that provides for a prompt initial review
of suspicious activity reports and other reports, or such
other means as the Secretary may provide, to identify
information that warrants immediate action; and
``(2) in accordance with section 552a of title 5 and the
Right to Financial Privacy Act of 1978, appropriate standards
and guidelines for determining--
``(A) who is to be given access to the information
maintained by the Network;
``(B) what limits are to be imposed on the use of such
information; and
``(C) how information about activities or relationships
which involve or are closely associated with the exercise of
constitutional rights is to be screened out of the data
maintenance system.
``(d) Authorization of Appropriations.--There are
authorized to be appropriated for the Financial Crimes
Enforcement Network such sums as may be necessary for fiscal
years 2002, 2003, 2004, and 2005.''.
(b) Compliance With Existing Reports Compliance.--The
Secretary of the Treasury shall study methods for improving
compliance with the reporting requirements established in
section 5314 of title 31, United States Code, and shall
submit a report on such study to the Congress by the end of
the 6-month period beginning on the date of the enactment of
this Act and each 1-year period thereafter. The initial
report shall include historical data on compliance with such
reporting requirements.
(c) Clerical Amendment.--The table of sections for
subchapter I of chapter 3 of title 31, United States Code, is
amended--
(1) by redesignating the item relating to section 310 as
section 311; and
(2) by inserting after the item relating to section 309 the
following new item:
``310. Financial Crimes Enforcement Network''.
SEC. 118. PROHIBITION ON FALSE STATEMENTS TO FINANCIAL
INSTITUTIONS CONCERNING THE IDENTITY OF A
CUSTOMER.
(a) In General.--Chapter 47 of title 18, United States
Code, is amended by inserting after section 1007 the
following:
``Sec. 1008. False statements concerning the identity of
customers of financial institutions
``(a) In General.--Whoever, in connection with information
submitted to or requested by a financial institution,
knowingly in any manner--
``(1) falsifies, conceals, or covers up, or attempts to
falsify, conceal, or cover up, the identity of any person in
connection with any transaction with a financial institution;
``(2) makes, or attempts to make, any materially false,
fraudulent, or fictitious statement or representation of the
identity of any person in connection with a transaction with
a financial institution;
``(3) makes or uses, or attempts to make or use, any false
writing or document knowing the same to contain any
materially false, fictitious, or fraudulent statement or
entry concerning the identity of any person in connection
with a transaction with a financial institution; or
``(4) uses or presents, or attempts to use or present, in
connection with a transaction with a financial institution,
an identification document or means of identification the
possession of which is a violation of section 1028;
shall be fined under this title, imprisoned not more than 5
years, or both.
``(b) Definitions.--In this section, the following
definitions shall apply:
``(1) Financial institution.--The term `financial
institution'--
``(A) has the same meaning as in section 20; and
``(B) in addition, has the same meaning as in section
5312(a)(2) of title 31, United States Code.
``(2) Identification document.--The term `identification
document' has the same meaning as in section 1028(d).
``(3) Means of identification.--The term `means of
identification' has the same meaning as in section
1028(d).''.
(b) Technical and Conforming Amendments.--
(1) Title 18, united states code.--Section 1956(c)(7)(D) of
title 18, United States Code, is amended by striking ``1014
(relating to fraudulent loan'' and inserting ``section 1008
(relating to false statements concerning the identity of
customers of financial institutions), section 1014 (relating
to fraudulent loan''.
(2) Table of sections.--The table of sections for chapter
47 of title 18, United States Code, is amended by inserting
after the item relating to section 1007 the following:
``1008. False statements concerning the identity of customers of
financial institutions.''.
SEC. 119. VERIFICATION OF IDENTIFICATION.
(a) In General.--Section 5318 of title 31, United States
Code, is amended by adding at the end the following new
subsection:
``(i) Identification and Verification of Accountholders.--
``(1) In general.--Subject to the requirements of this
subsection, the Secretary of the Treasury shall prescribe
regulations setting forth the minimum standards regarding
customer identification that shall apply in connection with
the opening of an account at a financial institution.
``(2) Minimum requirements.--The regulations shall, at a
minimum, require financial institutions to implement
procedures for--
``(A) verifying the identity of any person seeking to open
an account to the extent reasonable and practicable;
``(B) maintaining records of the information used to verify
a person's identity, including name, address, and other
identifying information;
``(C) consulting lists of known or suspected terrorists or
terrorist organizations provided to the financial institution
by any government agency to determine whether a person
seeking to open an account appears on any such list.
``(3) Factors to be considered.--In prescribing regulations
under this subsection, the Secretary shall take into
consideration the various types of accounts maintained by
various types of financial institutions, the various methods
of opening accounts, and the various types of identifying
information available.
``(4) Certain financial institutions.--In the case of any
financial institution the business of which is engaging in
financial activities described in section 4(k) of the Bank
Holding Company Act of 1956 (including financial activities
subject to the jurisdiction of the Commodity Futures Trading
Commission), the regulations prescribed by the Secretary
under paragraph (1) shall be prescribed jointly with each
Federal functional regulator (as defined in section 509 of
the Gramm-Leach-Bliley Act, including the Commodity Futures
Trading Commission) appropriate for such financial
institution.
``(5) Exemptions.--The Secretary of the Treasury (and, in
the case of any financial institution described in paragraph
(4), any Federal agency described in such paragraph) may, by
regulation or order, exempt any financial institution or type
of account from the requirements of any regulation prescribed
under this subsection in accordance with such standards and
procedures as the Secretary may prescribe.
``(6) Effective date.--Final regulations prescribed under
this subsection shall take effect before the end of the 1-
year period beginning on the date of the enactment of the
Financial Anti-Terrorism Act of 2001.''.
(b) Study and Report Required.--Within 6 months after the
date of the enactment of this Act, the Secretary of the
Treasury, in consultation with the Federal functional
regulators (as defined in section 509 of the Gramm-Leach-
Bliley Act) and other appropriate Government agencies, shall
submit a report to the Congress containing recommendations
for--
(1) determining the most timely and effective way to
require foreign nationals to provide domestic financial
institutions and agencies with appropriate and accurate
information, comparable to that which is required of United
States nationals, concerning their identity, address, and
other related information necessary to enable such
institutions and agencies to comply with the requirements of
this section;
(2) requiring foreign nationals to apply for and obtain,
before opening an account with a domestic financial
institution, an identification number which would function
similarly to a Social Security number or tax identification
number; and
(3) establishing a system for domestic financial
institutions and agencies to review information maintained by
relevant Government agencies for purposes of verifying the
identities of foreign nationals seeking to open accounts at
those institutions and agencies.
SEC. 120. CONSIDERATION OF ANTI-MONEY LAUNDERING RECORD.
(a) Bank Holding Company Act of 1956.--
(1) In general.--Section 3(c) of the Bank Holding Company
Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the
end the following new paragraph:
``(6) Money laundering.--In every case the Board shall take
into consideration the effectiveness of the company or
companies in combatting and preventing money laundering
activities, including in overseas branches.''.
(2) Scope of application.--The amendment made by paragraph
(1) shall apply with respect to any application submitted to
the Board of Governors of the Federal Reserve System under
section 3 of the Bank Holding Company Act of 1956 after
December 31, 2000, which has not been approved by the Board
before the date of the enactment of this Act.
(b) Mergers Subject to Review Under Federal Deposit
Insurance Act.--
(1) In general.--Section 18(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)) is amended--
(A) by redesignating paragraph (11) as paragraph (12); and
(B) by inserting after paragraph (10), the following new
paragraph:
``(11) Money laundering.--In every case, the responsible
agency shall take into consideration the effectiveness of any
insured depository institution involved in the proposed
merger transaction in combatting and preventing money
laundering activities, including in overseas branches.''.
(2) Scope of application.--The amendment made by paragraph
(1) shall apply with respect to any application submitted to
the responsible agency under section 18(c) of the Federal
Deposit Insurance Act after December 31, 2000, which has not
been approved by all appropriate responsible agencies before
the date of the enactment of this Act.
SEC. 121. REPORTING OF SUSPICIOUS ACTIVITIES BY INFORMAL
UNDERGROUND BANKING SYSTEMS, SUCH AS HAWALAS.
(a) Definition for Subchapter.--Subparagraph (R) of section
5312(a)(2) of title 31,
[[Page H6930]]
United States Code, is amended to read as follows:
``(R) a licensed sender of money or any other person who
engages as a business in the transmission of funds, including
through an informal value transfer banking system or network
of people facilitating the transfer of value domestically or
internationally outside of the conventional financial
institutions system;''.
(b) Money Transmitting Business.--Section 5330(d)(1)(A) of
title 31, United States Code, is amended by inserting before
the semicolon the following: ``or any other person who
engages as a business in the transmission of funds, including
through an informal value transfer banking system or network
of people facilitating the transfer of value domestically or
internationally outside of the conventional financial
institutions system''.
(c) Applicability of Rules.--Section 5318 of title 31,
United States Code, as amended by this Act, is amended by
adding at the end the following:
``(l) Applicability of Rules.--Any rules prescribed
pursuant to the authority contained in section 21 of the
Federal Deposit Insurance Act shall apply, in addition to any
other financial institution to which such rules apply, to any
person that engages as a business in the transmission of
funds, including through an informal value transfer banking
system or network of people facilitating the transfer of
value domestically or internationally outside of the
conventional financial institutions system.''.
(d) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Treasury shall
report to Congress on the need for any additional legislation
relating to--
(1) informal value transfer banking systems or networks of
people facilitating the transfer of value domestically or
internationally outside of the conventional financial
institutions system;
(2) anti-money laundering controls; and
(3) regulatory controls relating to underground money
movement and banking systems, such as the system referred to
as ``hawala'', including whether the threshold for the filing
of suspicious activity reports under section 5318(g) of title
31, United States Code should be lowered in the case of such
systems.
SEC. 122. UNIFORM PROTECTION AUTHORITY FOR FEDERAL RESERVE
FACILITIES.
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is
amended by adding at the end the following:
``(q) Uniform Protection Authority for Federal Reserve
Facilities.--
``(1) Notwithstanding any other provision of law, to
authorize personnel to act as law enforcement officers to
protect and safeguard the premises, grounds, property,
personnel, including members of the Board, of the Board, or
any Federal reserve bank, and operations conducted by or on
behalf of the Board or a reserve bank.
``(2) The Board may, subject to the regulations prescribed
under paragraph (5), delegate authority to a Federal reserve
bank to authorize personnel to act as law enforcement
officers to protect and safeguard the bank's premises,
grounds, property, personnel, and operations conducted by or
on behalf of the bank.
``(3) Law enforcement officers designated or authorized by
the Board or a reserve bank under paragraph (1) or (2) are
authorized while on duty to carry firearms and make arrests
without warrants for any offense against the United States
committed in their presence, or for any felony cognizable
under the laws of the United States committed or being
committed within the buildings and grounds of the Board or a
reserve bank if they have reasonable grounds to believe that
the person to be arrested has committed or is committing such
a felony. Such officers shall have access to law enforcement
information that may be necessary for the protection of the
property or personnel of the Board or a reserve bank.
``(4) For purposes of this subsection, the term `law
enforcement officers' means personnel who have successfully
completed law enforcement training and are authorized to
carry firearms and make arrests pursuant to this subsection.
``(5) The law enforcement authorities provided for in this
subsection may be exercised only pursuant to regulations
prescribed by the Board and approved by the Attorney
General.''.
SEC. 123. REPORTS RELATING TO COINS AND CURRENCY RECEIVED IN
NONFINANCIAL TRADE OR BUSINESS.
(a) Reports Required.--Subchapter II of chapter 53 of title
31, United States Code, is amended by inserting after section
5332 (as added by section 112 of this title) the following
new section:
``SEC. 5333. REPORTS RELATING TO COINS AND CURRENCY RECEIVED
IN NONFINANCIAL TRADE OR BUSINESS.
``(a) Coin and Currency Receipts of More Than $10,000.--Any
person--
``(1) who is engaged in a trade or business; and
``(2) who, in the course of such trade or business,
receives more than $10,000 in coins or currency in 1
transaction (or 2 or more related transactions),
shall file a report described in subsection (b) with respect
to such transaction (or related transactions) with the
Financial Crimes Enforcement Network at such time and in such
manner as the Secretary may, by regulation, prescribe.
``(b) Form and Manner of Reports.--A report is described in
this subsection if such report--
``(1) is in such form as the Secretary may prescribe;
``(2) contains--
``(A) the name and address, and such other identification
information as the Secretary may require, of the person from
whom the coins or currency was received;
``(B) the amount of coins or currency received;
``(C) the date and nature of the transaction; and
``(D) such other information, including the identification
of the person filing the report, as the Secretary may
prescribe.
``(c) Exceptions.--
``(1) Amounts received by financial institutions.--
Subsection (a) shall not apply to amounts received in a
transaction reported under section 5313 and regulations
prescribed under such section.
``(2) Transactions occurring outside the united states.--
Except to the extent provided in regulations prescribed by
the Secretary, subsection (a) shall not apply to any
transaction if the entire transaction occurs outside the
United States.
``(d) Currency Includes Foreign Currency and Certain
Monetary Instruments.--
``(1) In general.--For purposes of this section, the term
`currency' includes--
``(A) foreign currency; and
``(B) to the extent provided in regulations prescribed by
the Secretary, any monetary instrument (whether or not in
bearer form) with a face amount of not more than $10,000.
``(2) Scope of application.--Paragraph (1)(B) shall not
apply to any check drawn on the account of the writer in a
financial institution referred to in subparagraph (A), (B),
(C), (D), (E), (F), (G), (J), (K), (R), or (S) of section
5312(a)(2).''.
(b) Prohibition on Structuring Transactions.--
(1) In general.--Section 5324 of title 31, United States
Code, is amended--
(A) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(B) by inserting after subsection (a) the following new
subsection:
``(b) Domestic Coin and Currency Transactions Involving
Nonfinancial Trades or Businesses.--No person shall for the
purpose of evading the report requirements of section 5333 or
any regulation prescribed under such section--
``(1) cause or attempt to cause a nonfinancial trade or
business to fail to file a report required under section 5333
or any regulation prescribed under such section;
``(2) cause or attempt to cause a nonfinancial trade or
business to file a report required under section 5333 or any
regulation prescribed under such section that contains a
material omission or misstatement of fact; or
``(3) structure or assist in structuring, or attempt to
structure or assist in structuring, any transaction with 1 or
more nonfinancial trades or businesses.'.
(2) Technical and conforming amendments.--
(A) The heading for subsection (a) of section 5324 of title
31, United States Code, is amended by inserting ``Involving
Financial Institutions'' after ``Transactions'.
(B) Section 5317(c) of title 31, United States Code, is
amended by striking ``5324(b)'' and inserting ``5324(c)''.
(c) Definition of Nonfinancial Trade or Business.--
(1) In general.--Section 5312(a) of title 31, United States
Code, is amended--
(A) by redesignating paragraphs (4) and (5) as paragraphs
(5) and (6), respectively; and
(B) by inserting after paragraph (3) the following new
paragraph:
``(4) Nonfinancial trade or business.--The term
`nonfinancial trade or business' means any trade or business
other than a financial institution that is subject to the
reporting requirements of section 5313 and regulations
prescribed under such section.''.
(2) Technical and conforming amendments.--
(A) Section 5312(a)(3)(C) of title 31, United States Code,
is amended by striking ``section 5316,'' and inserting
``sections 5333 and 5316,''.
(B) Subsections (a) through (f) of section 5318 of title
31, United States Code, and sections 5321, 5326, and 5328 of
such title are each amended--
(i) by inserting ``or nonfinancial trade or business''
after ``financial institution'' each place such term appears;
and
(ii) by inserting ``or nonfinancial trades or businesses''
after ``financial institutions'' each place such term
appears.
(C) Section 981(a)(1)(A) of title 18, United States Code,
is amended by striking ``5313(a) or 5324(a) of title 31,''
and inserting ``5313(a) or 5333 of title 31, or subsection
(a) or (b) of section 5324 of such title,''.
(D) Section 982(a)(1) of title 18, United States Code, is
amended by inserting ``5333,'' after ``5313(a),''.
(c) Clerical Amendment.--The tables of sections for chapter
53 of title 31, United States Code, is amended by inserting
after the item relating to section 5332 (as added by section
112 of this title) the following new item:
``5333. Reports relating to coins and currency received in nonfinancial
trade or business.''.
(f) Regulations.--Regulations which the Secretary of the
Treasury determines are
[[Page H6931]]
necessary to implement this section shall be published in
final form before the end of the 6-month period beginning on
the date of the enactment of this Act.
TITLE II--PUBLIC-PRIVATE COOPERATION
SEC. 201. ESTABLISHMENT OF HIGHLY SECURE NETWORK.
(a) In General.--The Secretary of the Treasury shall
establish a highly secure network in the Financial Crimes
Enforcement Network that--
(1) allows financial institutions to file reports required
under subchapter II or III of chapter 53 of title 31, United
States Code, chapter 2 of title I of Public Law 91-508, or
section 21 of the Federal Deposit Insurance Act through the
network; and
(2) provides financial institutions with alerts and other
information regarding suspicious activities that warrant
immediate and enhanced scrutiny.
(b) Expedited Development.--The Secretary of the Treasury
shall take such action as may be necessary to ensure that the
website required under subsection (a) is fully operational
before the end of the 9-month period beginning on the date of
the enactment of this Act.
SEC. 202. REPORT ON IMPROVEMENTS IN DATA ACCESS AND OTHER
ISSUES.
Before the end of the 6-month period beginning on the date
of the enactment of this Act, the Secretary of the Treasury,
after consulting with appropriate Federal functional
regulators (as defined in section 509 of the Gramm-Leach-
Bliley Act), shall report to the Congress on the following
issues:
(1) Data collection and analysis.--Progress made since such
date of enactment in meeting the requirements of section
310(c) of title 31, United States Code (as added by this
Act).
(2) Barriers to exchange of financial crime information.--
Technical, legal, and other barriers to the exchange of
financial crime prevention and detection information among
and between Federal law enforcement agencies, including an
identification of all Federal law enforcement data systems
between which or among which data cannot be shared for
whatever reason.
(3) Private banking.--Private banking activities in the
United States, including information on the following:
(A) The nature and extent of private banking activities in
the United States.
(B) Regulatory efforts to monitor private banking
activities and ensure that such activities are conducted in
compliance with subchapter II of chapter 53 of title 31,
United States Code, and section 21 of the Federal Deposit
Insurance Act.
(C) With regard to financial institutions that offer
private banking services, the policies and procedures of such
institutions that are designed to ensure compliance with the
requirements of subchapter II of chapter 53 of title 31,
United States Code, and section 21 of the Federal Deposit
Insurance Act with respect to private banking activity.
SEC. 203. REPORTS TO THE FINANCIAL SERVICES INDUSTRY ON
SUSPICIOUS FINANCIAL ACTIVITIES.
At least once each calendar quarter, the Secretary of the
Treasury shall--
(1) publish a report containing a detailed analysis
identifying patterns of suspicious activity and other
investigative insights derived from suspicious activity
reports and investigations conducted by Federal, State, and
local law enforcement agencies to the extent appropriate; and
(2) distribute such report to financial institutions (as
defined in section 5312 of title 31, United States Code).
SEC. 204. EFFICIENT USE OF CURRENCY TRANSACTION REPORT
SYSTEM.
(a) Findings.--The Congress finds the following:
(1) The Congress established the currency transaction
reporting requirements in 1970 because the Congress found
then that such reports have a high degree of usefulness in
criminal, tax, and regulatory investigations and proceedings
and the usefulness of such reports has only increased in the
years since the requirements were established.
(2) In 1994, in response to reports and testimony that
excess amounts of currency transaction reports were
interfering with effective law enforcement, the Congress
reformed the currency transaction report exemption
requirements to provide--
(A) mandatory exemptions for certain reports that had
little usefulness for law enforcement, such as cash transfers
between depository institutions and cash deposits from
government agencies; and
(B) discretionary authority for the Secretary of the
Treasury to provide exemptions, subject to criteria and
guidelines established by the Secretary, for financial
institutions with regard to regular business customers that
maintain accounts at an institution into which frequent cash
deposits are made.
(3) Today there is evidence that some financial
institutions are not utilizing the exemption system, or are
filing reports even if there is an exemption in effect, with
the result that the volume of currency transaction reports is
once again interfering with effective law enforcement.
(b) Study and Report.--
(1) Study required.--The Secretary of the Treasury shall
conduct a study of--
(A) the possible expansion of the statutory exemption
system in effect under 5313 of title 31, United States Code;
and
(B) methods for improving financial institution utilization
of the statutory exemption provisions as a way of reducing
the submission of currency transaction reports that have
little or no value for law enforcement purposes, including
improvements in the systems in effect at financial
institutions for regular review of the exemption procedures
used at the institution and the training of personnel in its
effective use.
(2) Report required.--The Secretary of the Treasury shall
submit a report to the Congress before the end of the 90-day
period beginning on the date of the enactment of this Act
containing the findings and conclusions of the Secretary with
regard to the study required under subsection (a) and such
recommendations for legislative or administrative action as
the Secretary determines to be appropriate.
SEC. 205. PUBLIC-PRIVATE TASK FORCE ON TERRORIST FINANCING
ISSUES.
Section 1564 of the Annunzio--Wylie Anti-Money Laundering
Act (31 U.S.C. 5311 note) is amended by adding at the end the
following new subsection:
``(d) Terrorist Financing Issues.--
``(1) In general.--The Secretary of the Treasury shall
provide, either within the Bank Secrecy Act Advisory Group,
or as a subcommittee or other adjunct of the Advisory Group,
for a task force of representatives from agencies and
officers represented on the Advisory Group, a representative
of the Director of the Office of Homeland Security, and
representatives of financial institutions, private
organizations that represent the financial services industry,
and other interested parties to focus on--
``(A) issues specifically related to the finances of
terrorist groups, the means terrorist groups use to transfer
funds around the world and within the United States,
including through the use of charitable organizations,
nonprofit organizations, and nongovernmental organizations,
and the extent to which financial institutions in the United
States are unwittingly involved in such finances and the
extent to which such institutions are at risk as a result;
``(B) the relationship, particularly the financial
relationship, between international narcotics traffickers and
foreign terrorist organizations, the extent to which their
memberships overlap and engage in joint activities, and the
extent to which they cooperate with each other in raising and
transferring funds for their respective purposes; and
``(C) means of facilitating the identification of accounts
and transactions involving terrorist groups and facilitating
the exchange of information concerning such accounts and
transactions between financial institutions and law
enforcement organizations.
``(2) Applicability of other provisions.--Sections 552,
552a, and 552b of title 5, United States Code, and the
Federal Advisory Committee Act shall not apply to the task
force established pursuant to paragraph (1).''.
SEC. 206. SUSPICIOUS ACTIVITY REPORTING REQUIREMENTS.
(a) Deadline For Suspicious Activity Reporting Requirements
For Registered Brokers and Dealers.--The Secretary of the
Treasury, in consultation with the Securities and Exchange
Commission, shall publish proposed regulations in the Federal
Register before January 1, 2002, requiring brokers and
dealers registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 to
submit suspicious activity reports under section 5318(g) of
title 31, United States Code. Such regulations shall be
published in final form no later than June 1, 2002.
(b) Suspicious Activity Reporting Requirements For Futures
Commission Merchants, Commodity Trading Advisors, and
Commodity Pool Operators.--The Secretary of the Treasury, in
consultation with the Commodity Futures Trading Commission,
may prescribe regulations requiring futures commission
merchants, commodity trading advisors, and commodity pool
operators registered under the Commodity Exchange Act to
submit suspicious activity reports under section 5318(g) of
title 31, United States Code.
SEC. 207. AMENDMENTS RELATING TO REPORTING OF SUSPICIOUS
ACTIVITIES.
(a) Amendment Relating to Civil Liability Immunity for
Disclosures.--Section 5318(g)(3) of title 31, United States
Code, is amended to read as follows:
``(3) Liability for disclosures.--
``(A) In general.--Any financial institution that makes a
voluntary disclosure of any possible violation of law or
regulation to a government agency or makes a disclosure
pursuant to this subsection or any other authority, and any
director, officer, employee, or agent of such institution who
makes, or requires another to make any such disclosure, shall
not be liable to any person under any law or regulation of
the United States, any constitution, law, or regulation of
any State or political subdivision of any State, or under any
contract or other legally enforceable agreement (including
any arbitration agreement), for such disclosure or for any
failure to provide notice of such disclosure to any person.
``(B) Rule of construction.--Subparagraph (A) shall not be
construed as creating--
``(i) any inference that the term `person', as used in such
subparagraph, may be construed more broadly than its ordinary
usage so to include any government or agency of government;
or
[[Page H6932]]
``(ii) any immunity against, or otherwise affecting, any
civil or criminal action brought by any government or agency
of government to enforce any constitution, law, or regulation
of such government or agency.''.
(b) Prohibition on Notification of Disclosures.--Section
5318(g)(2) of title 31, United States Code, is amended to
read as follows:
``(2) Notification prohibited.--
``(A) In general.--If a financial institution or any
director, officer, employee, or agent of any financial
institution, voluntarily or pursuant to this section or any
other authority, reports a suspicious transaction to a
government agency--
``(i) the financial institution, director, officer,
employee, or agent may not notify any person involved in the
transaction that the transaction has been reported; and
``(ii) no officer or employee of the Federal Government or
of any State, local, tribal, or territorial government within
the United States, who has any knowledge that such report was
made may disclose to any person involved in the transaction
that the transaction has been reported other than as
necessary to fulfill the official duties of such officer or
employee.
``(B) Disclosures in certain employment references.--
Notwithstanding the application of subparagraph (A) in any
other context, subparagraph (A) shall not be construed as
prohibiting any financial institution, or any director,
officer, employee, or agent of such institution, from
including, in a written employment reference that is provided
in accordance with section 18(v) of the Federal Deposit
Insurance Act in response to a request from another financial
institution or a written termination notice or employment
reference that is provided in accordance with the rules of
the self-regulatory organizations registered with the
Securities and Exchange Commission or the Commodity Futures
Trading Commission, information that was included in a report
to which subparagraph (A) applies, but such written
employment reference may not disclose that such information
was also included in any such report or that such report was
made.''.
SEC. 208. AUTHORIZATION TO INCLUDE SUSPICIONS OF ILLEGAL
ACTIVITY IN WRITTEN EMPLOYMENT REFERENCES.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C.
1828) is amended by adding at the end the following new
subsection:
``(w) Written Employment References May Contain Suspicions
of Involvement in Illegal Activity.--
``(1) In general.--Notwithstanding any other provision of
law, any insured depository institution, and any director,
officer, employee, or agent of such institution, may disclose
in any written employment reference relating to a current or
former institution-affiliated party of such institution which
is provided to another insured depository institution in
response to a request from such other institution,
information concerning the possible involvement of such
institution-affiliated party in potentially unlawful
activity, to the extent--
``(A) the disclosure does not contain information which the
institution, director, officer, employee, or agent knows to
be false; and
``(B) the institution, director, officer, employee, or
agent has not acted with malice or with reckless disregard
for the truth in making the disclosure.
``(2) Definition.--For purposes of this subsection, the
term `insured depository institution' includes any uninsured
branch or agency of a foreign bank.''.
SEC. 209. INTERNATIONAL COOPERATION ON IDENTIFICATION OF
ORIGINATORS OF WIRE TRANSFERS.
The Secretary of the Treasury shall--
(1) in consultation with the Attorney General and the
Secretary of State, take all reasonable steps to encourage
foreign governments to require the inclusion of the name of
the originator in wire transfer instructions sent to the
United States and other countries, with the information to
remain with the transfer from its origination until the point
of disbursement; and
(2) report annually to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate on--
(A) progress toward the goal enumerated in paragraph (1),
as well as impediments to implementation and an estimated
compliance rate; and
(B) impediments to instituting a regime in which all
appropriate identification, as defined by the Secretary,
about wire transfer recipients shall be included with wire
transfers from their point of origination until disbursement.
SEC. 210. CHECK TRUNCATION STUDY.
Before the end of the 180-day period beginning on the date
of the enactment of this Act, the Secretary of the Treasury,
in consultation with the Attorney General and the Board of
Governors of the Federal Reserve System, shall conduct a
study of the impact on--
(1) crime prevention (including money laundering and
terrorism);
(2) law enforcement;
(3) the financial services industry (including the
technical, operational, and economic impact on the industry)
and customers of such industry;
(4) the payment system (including the liquidity, stability,
and efficiency of the payment system and the ability to
monitor and access the flow of funds); and
(5) the consumer protection laws,
of any policy of the Board of Governors of the Federal
Reserve System relating to the promotion of check
electronification, through truncation or other means, or
migration away from paper checks. The study shall also
include an analysis of the benefits and burdens of promoting
check electronification on the foregoing entities.
TITLE III--COMBATTING INTERNATIONAL MONEY LAUNDERING
SEC. 301. SPECIAL MEASURES FOR JURISDICTIONS, FINANCIAL
INSTITUTIONS, OR INTERNATIONAL TRANSACTIONS OF
PRIMARY MONEY LAUNDERING CONCERN.
(a) In General.--Subchapter II of chapter 53 of title 31,
United States Code, is amended by inserting after section
5318 the following new section:
``Sec. 5318A. Special measures for jurisdictions, financial
institutions, or international transactions of primary
money laundering concern
``(a) International Counter-Money Laundering
Requirements.--
``(1) In general.--The Secretary may require domestic
financial institutions and domestic financial agencies to
take 1 or more of the special measures described in
subsection (b) if the Secretary finds that reasonable grounds
exist for concluding that a jurisdiction outside of the
United States, 1 or more financial institutions operating
outside of the United States, 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States, or 1 or more types of accounts is of
primary money laundering concern, in accordance with
subsection (c).
``(2) Form of requirement.--The special measures described
in--
``(A) subsection (b) may be imposed in such sequence or
combination as the Secretary shall determine;
``(B) paragraphs (1) through (4) of subsection (b) may be
imposed by regulation, order, or otherwise as permitted by
law; and
``(C) subsection (b)(5) may be imposed only by regulation.
``(3) Duration of orders; rulemaking.--Any order by which a
special measure described in paragraphs (1) through (4) of
subsection (b) is imposed (other than an order described in
section 5326)--
``(A) shall be issued together with a notice of proposed
rulemaking relating to the imposition of such special
measure; and
``(B) may not remain in effect for more than 120 days,
except pursuant to a regulation prescribed on or before the
end of the 120-day period beginning on the date of issuance
of such order.
``(4) Process for selecting special measures.--In selecting
which special measure or measures to take under this
subsection, the Secretary--
``(A) shall consult with the Chairman of the Board of
Governors of the Federal Reserve System, any other
appropriate Federal banking agency (as defined in section 3
of the Federal Deposit Insurance Act), the Secretary of
State, the Securities and Exchange Commission, the Commodity
Futures Trading Commission, the National Credit Union
Administration Board, and in the sole discretion of the
Secretary such other agencies and interested parties as the
Secretary may find to be appropriate; and
``(B) shall consider--
``(i) whether similar action has been or is being taken by
other nations or multilateral groups;
``(ii) whether the imposition of any particular special
measure would create a significant competitive disadvantage,
including any undue cost or burden associated with
compliance, for financial institutions organized or licensed
in the United States;
``(iii) the extent to which the action or the timing of the
action would have a significant adverse systemic impact on
the international payment, clearance, and settlement system,
or on legitimate business activities involving the particular
jurisdiction, institution, or class of transactions; and
``(iv) the effect on national security and foreign policy.
``(5) No limitation on other authority.--This section shall
not be construed as superseding or otherwise restricting any
other authority granted to the Secretary, or to any other
agency, by this subchapter or otherwise.
``(b) Special Measures.--The special measures referred to
in subsection (a), with respect to a jurisdiction outside of
the United States, financial institution operating outside of
the United States, class of transaction within, or involving,
a jurisdiction outside of the United States, or 1 or more
types of accounts are as follows:
``(1) Recordkeeping and reporting of certain financial
transactions.--
``(A) In general.--The Secretary may require any domestic
financial institution or domestic financial agency to
maintain records, file reports, or both, concerning the
aggregate amount of transactions, or concerning each
transaction, with respect to a jurisdiction outside of the
United States, 1 or more financial institutions operating
outside of the United States, 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States, or 1 or more types of accounts if the
Secretary finds any such jurisdiction, institution, or class
of
[[Page H6933]]
transactions to be of primary money laundering concern.
``(B) Form of records and reports.--Such records and
reports shall be made and retained at such time, in such
manner, and for such period of time, as the Secretary shall
determine, and shall include such information as the
Secretary may determine, including--
``(i) the identity and address of the participants in a
transaction or relationship, including the identity of the
originator of any funds transfer;
``(ii) the legal capacity in which a participant in any
transaction is acting;
``(iii) the identity of the beneficial owner of the funds
involved in any transaction, in accordance with such
procedures as the Secretary determines to be reasonable and
practicable to obtain and retain the information; and
``(iv) a description of any transaction.
``(2) Information relating to beneficial ownership.--In
addition to any other requirement under any other provision
of law, the Secretary may require any domestic financial
institution or domestic financial agency to take such steps
as the Secretary may determine to be reasonable and
practicable to obtain and retain information concerning the
beneficial ownership of any account opened or maintained in
the United States by a foreign person (other than a foreign
entity whose shares are subject to public reporting
requirements or are listed and traded on a regulated exchange
or trading market), or a representative of such a foreign
person, that involves a jurisdiction outside of the United
States, 1 or more financial institutions operating outside of
the United States, 1 or more classes of transactions within,
or involving, a jurisdiction outside of the United States, or
1 or more types of accounts if the Secretary finds any such
jurisdiction, institution, transaction, or account to be of
primary money laundering concern.
``(3) Information relating to certain payable-through
accounts.--If the Secretary finds a jurisdiction outside of
the United States, 1 or more financial institutions operating
outside of the United States, or 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution
or domestic financial agency that opens or maintains a
payable-through account in the United States for a foreign
financial institution involving any such jurisdiction or any
such financial institution operating outside of the United
States, or a payable through account through which any such
transaction may be conducted, as a condition of opening or
maintaining such account--
``(A) to identify each customer (and representative of such
customer) of such financial institution who is permitted to
use, or whose transactions are routed through, such payable-
through account; and
``(B) to obtain, with respect to each such customer (and
each such representative), information that is substantially
comparable to that which the depository institution obtains
in the ordinary course of business with respect to its
customers residing in the United States.
``(4) Information relating to certain correspondent
accounts.--If the Secretary finds a jurisdiction outside of
the United States, 1 or more financial institutions operating
outside of the United States, or 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States to be of primary money laundering concern,
the Secretary may require any domestic financial institution
or domestic financial agency that opens or maintains a
correspondent account in the United States for a foreign
financial institution involving any such jurisdiction or any
such financial institution operating outside of the United
States, or a correspondent account through which any such
transaction may be conducted, as a condition of opening or
maintaining such account--
``(A) to identify each customer (and representative of such
customer) of any such financial institution who is permitted
to use, or whose transactions are routed through, such
correspondent account; and
``(B) to obtain, with respect to each such customer (and
each such representative), information that is substantially
comparable to that which the depository institution obtains
in the ordinary course of business with respect to its
customers residing in the United States.
``(5) Prohibitions or conditions on opening or maintaining
certain correspondent or payable-through accounts.--If the
Secretary finds a jurisdiction outside of the United States,
1 or more financial institutions operating outside of the
United States, or 1 or more classes of transactions within,
or involving, a jurisdiction outside of the United States to
be of primary money laundering concern, the Secretary, in
consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the
Federal Reserve System, may prohibit, or impose conditions
upon, the opening or maintaining in the United States of a
correspondent account or payable- through account by any
domestic financial institution or domestic financial agency
for or on behalf of a foreign banking institution, if such
correspondent account or payable-through account involves any
such jurisdiction or institution, or if any such transaction
may be conducted through such correspondent account or
payable-through account.
``(c) Consultations and Information To Be Considered in
Finding Jurisdictions, Institutions, Types of Accounts, or
Transactions To Be of Primary Money Laundering Concern.--
``(1) In general.--In making a finding that reasonable
grounds exist for concluding that a jurisdiction outside of
the United States, 1 or more financial institutions operating
outside of the United States, 1 or more classes of
transactions within, or involving, a jurisdiction outside of
the United States, or 1 or more types of accounts is of
primary money laundering concern so as to authorize the
Secretary to take 1 or more of the special measures described
in subsection (b), the Secretary shall consult with the
Secretary of State, and the Attorney General.
``(2) Additional considerations.--In making a finding
described in paragraph (1), the Secretary shall consider in
addition such information as the Secretary determines to be
relevant, including the following potentially relevant
factors:
``(A) Jurisdictional factors.--In the case of a particular
jurisdiction--
``(i) evidence that organized criminal groups,
international terrorists, or both, have transacted business
in that jurisdiction;
``(ii) the extent to which that jurisdiction or financial
institutions operating in that jurisdiction offer bank
secrecy or special regulatory advantages to nonresidents or
nondomiciliaries of that jurisdiction;
``(iii) the substance and quality of administration of the
bank supervisory and counter-money laundering laws of that
jurisdiction;
``(iv) the relationship between the volume of financial
transactions occurring in that jurisdiction and the size of
the economy of the jurisdiction;
``(v) the extent to which that jurisdiction is
characterized as an offshore banking or secrecy haven by
credible international organizations or multilateral expert
groups;
``(vi) whether the United States has a mutual legal
assistance treaty with that jurisdiction, and the experience
of United States law enforcement officials, and regulatory
officials in obtaining information about transactions
originating in or routed through or to such jurisdiction; and
``(vii) the extent to which that jurisdiction is
characterized by high levels of official or institutional
corruption.
``(B) Institutional factors.--In the case of a decision to
apply 1 or more of the special measures described in
subsection (b) only to a financial institution or
institutions, or to a transaction or class of transactions,
or to a type of account, or to all 3, within or involving a
particular jurisdiction--
``(i) the extent to which such financial institutions,
transactions, or types of accounts are used to facilitate or
promote money laundering in or through the jurisdiction;
``(ii) the extent to which such institutions, transactions,
or types of accounts are used for legitimate business
purposes in the jurisdiction; and
``(iii) the extent to which such action is sufficient to
ensure, with respect to transactions involving the
jurisdiction and institutions operating in the jurisdiction,
that the purposes of this subchapter continue to be
fulfilled, and to guard against international money
laundering and other financial crimes.
``(d) Notification of Special Measures Invoked by the
Secretary.--Not later than 10 days after the date of any
action taken by the Secretary under subsection (a)(1), the
Secretary shall notify, in writing, the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate of any such action.
``(e) Definitions.--Notwithstanding any other provision of
this subchapter, for purposes of this section, the following
definitions shall apply:
``(1) Bank definitions.--The following definitions shall
apply with respect to a bank:
``(A) Account.--The term `account'--
``(i) means a formal banking or business relationship
established to provide regular services, dealings, and other
financial transactions; and
``(ii) includes a demand deposit, savings deposit, or other
transaction or asset account and a credit account or other
extension of credit.
``(B) Correspondent account.--The term `correspondent
account' means an account established to receive deposits
from, make payments on behalf of a foreign financial
institution, or handle other financial transactions related
to such institution.
``(C) Payable-through account.--The term `payable-through
account' means an account, including a transaction account
(as defined in section 19(b)(1)(C) of the Federal Reserve
Act), opened at a depository institution by a foreign
financial institution by means of which the foreign financial
institution permits its customers to engage, either directly
or through a subaccount, in banking activities usual in
connection with the business of banking in the United States.
``(D) Secretary.--The term `Secretary' means the Secretary
of the Treasury.
``(2) Definitions applicable to institutions other than
banks.--With respect to any financial institution other than
a bank, the Secretary shall, after consultation with the
appropriate Federal functional regulators (as defined in
section 509 of the Gramm-Leach-Bliley Act), define by
regulation the term `account', and shall include
[[Page H6934]]
within the meaning of that term, to the extent, if any, that
the Secretary deems appropriate, arrangements similar to
payable-through and correspondent accounts.
``(3) Regulatory definition.--The Secretary shall prescribe
regulations defining beneficial ownership of an account for
purposes of this subchapter. Such regulations shall address
issues related to an individual's authority to fund, direct,
or manage the account (including the power to direct payments
into or out of the account), and an individual's material
interest in the income or corpus of the account, and shall
ensure that the identification of individuals under this
section does not extend to any individual whose beneficial
interest in the income or corpus of the account is
immaterial.
``(4) Other terms.--The Secretary may, by regulation,
further define the terms in paragraphs (1) and (2) and define
other terms for the purposes of this section, as the
Secretary deems appropriate.''.
(b) Financial Institutions Specified in Subchapter II of
Chapter 53 of Title 31, United States Code.--
(1) Credit unions.--Subparagraph (E) of section 5312(2) of
title 31, United States Code, is amended to read as follows:
``(E) any credit union;''.
(2) Futures commission merchant; commodity trading advisor;
commodity pool operator.--Section 5312 of title 31, United
States Code, is amended by adding at the end the following
new subsection:
``(c) Additional Definitions.--For purposes of this
subchapter, the following definitions shall apply:
``(1) Certain institutions included in definition.--The
term `financial institution' (as defined in subsection (a))
includes the following:
``(A) Any futures commission merchant, commodity trading
advisor, or commodity pool operator registered, or required
to register, under the Commodity Exchange Act.''.
(3) CFTC included.--For purposes of this Act and any
amendment made by this Act to any other provision of law, the
term ``Federal functional regulator'' includes the Commodity
Futures Trading Commission.
(c) Clerical Amendment.--The table of sections for
subchapter II of chapter 53 of title 31, United States Code,
is amended by inserting after the item relating to section
5318 the following new item:
``5318A. Special measures for jurisdictions, financial institutions, or
international transactions of primary money laundering
concern.''.
SEC. 302. SPECIAL DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS
AND PRIVATE BANKING ACCOUNTS.
(a) In General.--Section 5318 of title 31, United States
Code, is amended by inserting after subsection (i) (as added
by section 119 of this Act) the following new subsection:
``(j) Due Diligence for United States Private Banking and
Correspondent Bank Accounts Involving Foreign Persons.--
``(1) In general.--Each financial institution that
establishes, maintains, administers, or manages a private
banking account or a correspondent account in the United
States for a non-United States person, including a foreign
individual visiting the United States, or a representative of
a non-United States person, shall establish appropriate,
specific, and, where necessary, enhanced due diligence
policies, procedures, and controls to detect and report
instances of money laundering through those accounts.
``(2) Special standards for certain correspondent
accounts.--
``(A) In general.--Subparagraph (B) shall apply if a
correspondent account is requested or maintained by, or on
behalf of, a foreign bank operating--
``(i) under an offshore banking license; or
``(ii) under a banking license issued by a foreign country
that has been designated--
``(I) as noncooperative with international anti-money
laundering principles or procedures by an intergovernmental
group or organization of which the United States is a member
with which designation the Secretary of the Treasury concurs;
or
``(II) by the Secretary as warranting special measures due
to money laundering concerns.
``(B) Policies, procedures, and controls.--The enhanced due
diligence policies, procedures, and controls required under
paragraph (1) for foreign banks described in subparagraph (A)
shall, at a minimum, ensure that the financial institution in
the United States takes reasonable steps--
``(i) to ascertain for any such foreign bank, the shares of
which are not publicly traded, the identity of each of the
owners of the foreign bank, and the nature and extent of the
ownership interest of each such owner;
``(ii) to conduct enhanced scrutiny of such account to
guard against money laundering and report any suspicious
transactions under section 5318(g); and
``(iii) to ascertain whether such foreign bank provides
correspondent accounts to other foreign banks and, if so, the
identity of those foreign banks and related due diligence
information, as appropriate under paragraph (1).
``(3) Minimum standards for private banking accounts.--If a
private banking account is requested or maintained by, or on
behalf of, a non-United States person, then the due diligence
policies, procedures, and controls required under paragraph
(1) shall, at a minimum, ensure that the financial
institution takes reasonable steps--
``(A) to ascertain the identity of the nominal and
beneficial owners of, and the source of funds deposited into,
such account as needed to guard against money laundering and
report any suspicious transactions under section 5318(g); and
``(B) to conduct enhanced scrutiny of any such account that
is requested or maintained by, or on behalf of, a senior
foreign political figure, or any immediate family member or
close associate of a senior foreign political figure, to
prevent, detect, and report transactions that may involve the
proceeds of foreign corruption.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Offshore banking license.--The term `offshore banking
license' means a license to conduct banking activities which,
as a condition of the license, prohibits the licensed entity
from conducting banking activities with the citizens of, or
with the local currency of, the country which issued the
license.
``(B) Private bank account.--The term `private bank
account' means an account (or any combination of accounts)
that--
``(i) requires a minimum aggregate deposits of funds or
other assets of not less than $1,000,000;
``(ii) is established on behalf of 1 or more individuals
who have a direct or beneficial ownership interest in the
account; and
``(iii) is assigned to, or is administered or managed by,
in whole or in part, an officer, employee, or agent of a
financial institution acting as a liaison between the
financial institution and the direct or beneficial owner of
the account.
``(5) Regulatory authority.--Before the end of the 6-month
period beginning on the date of the enactment of the
Financial Anti-Terrorism Act of 2001, the Secretary, in
consultation with the appropriate Federal functional
regulators (as defined in section 509 of the Gramm-Leach-
Bliley Act) shall further define and clarify, by regulation,
the requirements of this subsection.''.
(b) Effective Date.--The amendments made by this section
shall take effect beginning 180 days after the date of the
enactment of this Act with respect to accounts covered by
subsection (j) of section 5318 of title 31, United States
Code (as added by this section) that are opened before, on,
or after the date of the enactment of this Act.
SEC. 303. PROHIBITION ON UNITED STATES CORRESPONDENT ACCOUNTS
WITH FOREIGN SHELL BANKS.
Section 5318 of title 31, United States Code, is amended by
inserting after subsection (j) (as added by section 302 of
this title) the following new subsection:
``(k) Prohibition on United States Correspondent Accounts
With Foreign Shell Banks.--
``(1) In general.--A depository institution shall not
establish, maintain, administer, or manage a correspondent
account in the United States for, or on behalf of, a foreign
bank that does not have a physical presence in any country.
``(2) Prevention of indirect service to foreign shell
banks.--
``(A) In general.--A depository institution shall take
reasonable steps to ensure that any correspondent account
established, maintained, administered, or managed by that
institution in the United States for a foreign bank is not
being used by that foreign bank to indirectly provide banking
services to another foreign bank that does not have a
physical presence in any country.
``(B) Regulations.--The Secretary shall, in regulations,
delineate reasonable steps necessary for a depository
institution to comply with this subsection.
``(3) Exception.--Paragraphs (1) and (2) shall not be
construed as prohibiting a depository institution from
providing a correspondent account to a foreign bank, if the
foreign bank--
``(A) is an affiliate of a depository institution, credit
union, or other foreign bank that maintains a physical
presence in the United States or a foreign country, as
applicable; and
``(B) is subject to supervision by a banking authority in
the country regulating the affiliated depository institution,
credit union, or foreign bank, described in subparagraph (A),
as applicable.
``(4) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Affiliate.--The term `affiliate' means a foreign bank
that is controlled by or is under common control with a
depository institution, credit union, or foreign bank.
``(B) Depository institution.--The `depository
institution'--
``(i) has the meaning given such term in section 3 of the
Federal Deposit Insurance Act; and
``(ii) includes a credit union.
``(C) Physical presence.--The term `physical presence'
means a place of business that--
``(i) is maintained by a foreign bank;
``(ii) is located at a fixed address (other than solely an
electronic address) in a country in which the foreign bank is
authorized to conduct banking activities, at which location
the foreign bank--
``(I) employs 1 or more individuals on a full-time basis;
and
``(II) maintains operating records related to its banking
activities; and
``(iii) is subject to inspection by the banking authority
which licensed the foreign bank to conduct banking
activities.''.
[[Page H6935]]
SEC. 304. ANTI-MONEY LAUNDERING PROGRAMS.
(a) In General.--Section 5318(h) of title 31, United States
Code, is amended to read as follows:
``(h) Anti-Money Laundering Programs.--
``(1) In general.--In order to guard against money
laundering through financial institutions, each financial
institution shall establish anti-money laundering programs,
including, at a minimum--
``(A) the development of internal policies, procedures, and
controls;
``(B) the designation of an officer of the financial
institution responsible for compliance;
``(C) an ongoing employee training program; and
``(D) an independent audit function to test programs.
``(2) Regulations.--The Secretary may, after consultation
with the appropriate Federal functional regulators (as
defined in section 509 of the Gramm-Leach-Bliley Act),
prescribe minimum standards for programs established under
paragraph (1), and may exempt from the application of those
standards any financial institution that is not subject to
the provisions of the regulations contained in part 103 of
title 31, of the Code of Federal Regulations, as in effect on
the date of the enactment of the Financial Anti-Terrorism Act
of 2001, or any successor to such regulations, for so long as
such financial institution is not subject to the provisions
of such regulations.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect at the end of the 180-day period beginning
on the date of the enactment of this Act.
(c) Date of Application of Regulations; Factors to Be Taken
Into Account.--Before the end of the 180-day period beginning
on the date of the enactment of this Act, the Secretary of
the Treasury shall prescribe regulations to implement the
amendment made by subsection (a). In prescribing such
regulations, the Secretary shall consider the extent to which
the requirements imposed under such regulations are
commensurate with the size, location, and activities of the
financial institutions to which such regulations apply.
SEC. 305. CONCENTRATION ACCOUNTS AT FINANCIAL INSTITUTIONS.
Section 5318(h) of title 31, United States Code (as amended
by section 304) is amended by adding at the end the
following:
``(3) Concentration accounts.--The Secretary may prescribe
regulations under this subsection that govern maintenance of
concentration accounts by financial institutions, in order to
ensure that such accounts are not used to prevent association
of the identity of an individual customer with the movement
of funds of which the customer is the direct or beneficial
owner, which regulations shall, at a minimum--
``(A) prohibit financial institutions from allowing clients
to direct transactions that move their funds into, out of, or
through the concentration accounts of the financial
institution;
``(B) prohibit financial institutions and their employees
from informing customers of the existence of, or the means of
identifying, the concentration accounts of the institution;
and
``(C) require each financial institution to establish
written procedures governing the documentation of all
transactions involving a concentration account, which
procedures shall ensure that, any time a transaction
involving a concentration account commingles funds belonging
to 1 or more customers, the identity of, and specific amount
belonging to, each customer is documented.''.
SEC. 306. INTERNATIONAL COOPERATION IN INVESTIGATIONS OF
MONEY LAUNDERING, FINANCIAL CRIMES, AND THE
FINANCES OF TERRORIST GROUPS.
(a) Negotiations.--
(1) In general.--It is the sense of the Congress that, in
addition to the existing requirements of section 4702 of the
Anti-Drug Abuse Act of 1988, the President should direct the
Secretary of State, the Attorney General, or the Secretary of
the Treasury, as appropriate and in consultation with the
Board of Governors of the Federal Reserve System, to seek to
enter into negotiations with the appropriate financial
supervisory agencies and other officials of any foreign
country the financial institutions of which do business with
United States financial institutions or which may be utilized
by any foreign terrorist organization (as designated under
section 219 of the Immigration and Nationality Act), any
person who is a member or representative of any such
organization, or any person engaged in money laundering or
financial or other crimes.
(2) Purposes of negotiations.--It is the sense of the
Congress that, in carrying out any negotiations described in
paragraph (1), the President should direct the Secretary of
State, the Attorney General, or the Secretary of the
Treasury, as appropriate, to seek to enter into and further
cooperative efforts, voluntary information exchanges, the use
of letters rogatory, mutual legal assistance treaties, and
international agreements to--
(A) ensure that foreign banks and other financial
institutions maintain adequate records of--
(i) large United States currency transactions; and
(ii) transaction and account information relating to any
foreign terrorist organization (as designated under section
219 of the Immigration and Nationality Act), any person who
is a member or representative of any such organization, or
any person engaged in money laundering or financial or other
crimes; and
(B) establish a mechanism whereby such records may be made
available to United States law enforcement officials and
domestic financial institution supervisors, when appropriate.
(b) Reports.--
(1) In general.--Not later than 1 year after the date of
the enactment of this Act and annually thereafter, the
Secretary of State, in conjunction with the Attorney General
and the Secretary of the Treasury, shall submit a report to
the Congress, on the progress in any negotiations described
in subsection (a).
(2) Identification of certain countries.--In any report
submitted under paragraph (1), the Secretary of State shall
identify countries--
(A) with respect to which the Secretary determines there is
evidence that the financial institutions in such countries
are being utilized by any foreign terrorist organization (as
designated under section 219 of the Immigration and
Nationality Act), any person who is a member or
representative of any such organization, or any person
engaged in money laundering or financial or other crimes; and
(B) which have not reached agreement with United States
authorities to meet the objectives of subparagraphs (A) and
(B) of subsection (a)(2).
(3) Report on penalties and sanctions.--If the President
determines that--
(A) a foreign country is described in subparagraphs (A) and
(B) of paragraph (2); and
(B) such country--
(i) is not negotiating in good faith to reach an agreement
described in subsection (a)(2); or
(ii) has not complied with, or a financial institution of
such country has not complied with, a request, made by an
official of the United States Government authorized to make
such request, for information regarding a foreign terrorist
organization (as designated under section 219 of the
Immigration and Nationality Act), a person who is a member or
representative of any such organization, or a person engaged
in money laundering for or with any such organization,
and the President imposes any penalties or sanctions on such
country or financial institutions of such country on the
basis of such determination, the Secretary of State shall
submit a report to the Congress describing the facts and
circumstances of the case before the end of the 60-day period
beginning on the date such sanctions and penalties take
effect.
TITLE IV--CURRENCY PROTECTION
SEC. 401. COUNTERFEITING DOMESTIC CURRENCY AND OBLIGATIONS.
(a) Counterfeit Acts Committed Outside the United States.--
Section 470 of title 18, United States Code, is amended--
(1) in paragraph (2), by inserting ``analog, digital, or
electronic image,'' after ``plate, stone,''; and
(2) by striking ``shall be fined under this title,
imprisoned not more than 20 years, or both'' and inserting
``shall be punished as is provided for the like offense
within the United States''.
(b) Obligations or securities of the United States.--
Section 471 of title 18, United States Code, is amended by
striking ``fifteen years'' and inserting ``20 years''.
(c) Uttering Counterfeit Obligations or Securities.--
Section 472 of title 18, United States Code, is amended by
striking ``fifteen years'' and inserting ``20 years''.
(d) Dealing in Counterfeit Obligations or Securities.--
Section 473 of title 18, United States Code, is amended by
striking ``ten years'' and inserting ``20 years''.
(e) Plates, Stones, or Analog, Digital, or Electronic
Images For Counterfeiting Obligations or Securities.--
(1) In general.--Section 474(a) of title 18, United States
Code, is amended by inserting after the second paragraph the
following new paragraph:
``Whoever, with intent to defraud, makes, executes,
acquires, scans, captures, records, receives, transmits,
reproduces, sells, or has in such person's control, custody,
or possession, an analog, digital, or electronic image of any
obligation or other security of the United States; or''.
(2) Amendment to definition.--Section 474(b) of title 18,
United States Code, is amended by striking the first sentence
and inserting the following new sentence: ``For purposes of
this section, the term `analog, digital, or electronic image'
includes any analog, digital, or electronic method used for
the making, execution, acquisition, scanning, capturing,
recording, retrieval, transmission, or reproduction of any
obligation or security, unless such use is authorized by the
Secretary of the Treasury.''.
(3) Technical and conforming amendment.--The heading for
section 474 of title 18, United States Code, is amended by
striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter
25 of title 18, United States Code, is amended in the item
relating to section 474 by striking ``or stones'' and
inserting ``, stones, or analog, digital, or electronic
images''.
(f) Taking Impressions of Tools Used for Obligations or
Securities.--Section 476 of title 18, United States Code, is
amended--
[[Page H6936]]
(1) by inserting ``analog, digital, or electronic image,''
after ``impression, stamp,''; and
(2) by striking ``ten years'' and inserting ``25 years''.
(g) Possessing or Selling Impressions of Tools Used for
Obligations or Securities.--Section 477 of title 18, United
States Code, is amended--
(1) in the first paragraph, by inserting ``analog, digital,
or electronic image,'' after ``imprint, stamp,'';
(2) in the second paragraph, by inserting ``analog,
digital, or electronic image,'' after ``imprint, stamp,'';
and
(3) in the third paragraph, by striking ``ten years'' and
inserting ``25 years''.
(h) Connecting Parts of Different Notes.--Section 484 of
title 18, United States Code, is amended by striking ``five
years'' and inserting ``10 years''.
(i) Bonds and Obligations of Certain Lending Agencies.--The
first and second paragraphs of section 493 of title 18,
United States Code, are each amended by striking ``five
years'' and inserting ``10 years''.
SEC. 402. COUNTERFEITING FOREIGN CURRENCY AND OBLIGATIONS.
(a) Foreign Obligations or Securities.--Section 478 of
title 18, United States Code, is amended by striking ``five
years'' and inserting ``20 years''.
(b) Uttering Counterfeit Foreign Obligations or
Securities.--Section 479 of title 18, United States Code, is
amended by striking ``three years'' and inserting ``20
years''.
(c) Possessing Counterfeit Foreign Obligations or
Securities.--Section 480 of title 18, United States Code, is
amended by striking ``one year'' and inserting ``20 years''.
(d) Plates, Stones, or Analog, Digital, or Electronic
Images for Counterfeiting Foreign Obligations or
Securities.--
(1) In general.--Section 481 of title 18, United States
Code, is amended by inserting after the second paragraph the
following new paragraph:
``Whoever, with intent to defraud, makes, executes,
acquires, scans, captures, records, receives, transmits,
reproduces, sells, or has in such person's control, custody,
or possession, an analog, digital, or electronic image of any
bond, certificate, obligation, or other security of any
foreign government, or of any treasury note, bill, or promise
to pay, lawfully issued by such foreign government and
intended to circulate as money; or''.
(2) Increased sentence.--The last paragraph of section 481
of title 18, United States Code, is amended by striking
``five years'' and inserting ``25 years''.
(3) Technical and conforming amendment.--The heading for
section 481 of title 18, United States Code, is amended by
striking ``or stones'' and inserting ``, stones, or analog,
digital, or electronic images''.
(4) Clerical amendment.--The table of sections for chapter
25 of title 18, United States Code, is amended in the item
relating to section 481 by striking ``or stones'' and
inserting ``, stones, or analog, digital, or electronic
images''.
(e) Foreign Bank Notes.--Section 482 of title 18, United
States Code, is amended by striking ``two years'' and
inserting ``20 years''.
(f) Uttering Counterfeit Foreign Bank Notes.--Section 483
of title 18, United States Code, is amended by striking ``one
year'' and inserting ``20 years''.
SEC. 403. PRODUCTION OF DOCUMENTS.
Section 5114(a) of title 31, United States Code (relating
to engraving and printing currency and security documents),
is amended--
(1) by striking ``(a) The Secretary of the Treasury'' and
inserting:
``(a) Authority To Engrave and Print.--
``(1) In general.--The Secretary of the Treasury''; and
(2) by adding at the end the following new paragraph:
``(2) Engraving and printing for other governments.--The
Secretary of the Treasury may, if the Secretary determines
that it will not interfere with engraving and printing needs
of the United States, produce currency, postage stamps, and
other security documents for foreign governments, subject to
a determination by the Secretary of State that such
production would be consistent with the foreign policy of the
United States.''.
SEC. 404. REIMBURSEMENT.
Section 5143 of title 31, United States Code (relating to
payment for services of the Bureau of Engraving and
Printing), is amended--
(1) in the first sentence, by inserting ``, any foreign
government, or any territory of the United States'' after
``agency'';
(2) in the second sentence, by inserting ``and other''
after ``administrative''; and
(3) in the last sentence, by inserting ``, foreign
government, or territory of the United States'' after
``agency''.
The SPEAKER pro tempore (Mr. Shimkus). Pursuant to the rule, the
gentleman from Ohio (Mr. Oxley) and the gentleman from New York (Mr.
LaFalce) each will control 20 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Oxley).
General Leave
Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 3004 and to include extraneous material on the bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. OXLEY. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, I rise in support of H.R. 3004, the Financial Anti-
terrorism Act of 2001. The Committee on Financial Services
overwhelmingly approved this bill last week in a near unanimous vote of
62 to 1, signalling a strong consensus among Republicans and Democrats
alike, administration officials, and the financial services industry,
that the time for business as usual is far over.
There is little dissent among us. Strong anti-money laundering
measures are needed and needed now. We recognize that failure to move
swiftly could leave an open door to future attacks against U.S.
citizens and refuse to stand idly by. This bill and the strong
bipartisan support it enjoys represents a resounding pledge of
congressional support for the President in fulfilling his vow to starve
terrorists of their funding.
In the months since the devastating attacks of September 11, we have
learned how easily the terrorists used American dollars and the world-
class services of the American financial system to underwrite their
deadly operations.
At our October 3 committee hearing, we heard testimony from Treasury
undersecretary for enforcement, Jimmy Gurule, on how terrorist
operatives from bin Laden's organization, al-Qaeda, utilized checks,
credit cards, ATM cards, wire transfer systems and brokerage accounts
throughout the world, including the U.S.
He testified that al-Qaeda uses banks, legal businesses, front
companies, and underground financial systems to finance the
organization's activities, and that some elements of the organization
rely on profits from the drug trade.
He also pointed out how some Islamic charities have been penetrated
and their fund-raising activities exploited by terrorists.
Another witness, Deputy Assistant Attorney General for the Justice
Department's Criminal Division, Mary Lee Warren, warned that the United
States is fighting with outdated weapons in the war against money
laundering and flagged serious problems associated with international
smuggling of bulk cash and wire transfers of funds that enable
criminals in one country to conceal their funds in another.
Chief of the Financial Crimes Section of the FBI's Criminal
Investigations Division, Dennis Lormel, echoed that concern when he
testified how terrorists and other criminal organizations rely heavily
upon wire transfers. He flagged correspondent banking as another
potential in the financial services sector that can offer terrorist
organizations a gateway into U.S. banks.
The private sector money laundering experts subsequently described in
detail how underground black market banking operations, like the
ancient South Asian Hawala money transfer system, are used by criminals
to finance their operations.
Mr. Speaker, I applaud the efforts the administration has already
taken to disrupt the financial infrastructure of international
terrorist organizations. Those actions include the creation of a new
foreign terrorist asset tracking center, the issuing of a strong
executive order to block the financial assets of terrorists and their
supporters, the passage by the United Nations of a U.S.-drafted
resolution calling on all governments to freeze terrorist assets, and
the immediate widespread mobilization of the U.S. financial services
industry to assist in ferreting out the money trail of these
terrorists.
To supplement these early initiatives, H.R. 3004 gives the
administration new and improved tools to fight the financial war
against terrorism. Here is how.
First, the bill significantly strengthens the hand of law enforcement
by enhancing bulk cash smuggling laws, making it easier to prosecute
illegal money service businesses, making the provision of material
support to terrorists a predicate offense for money laundering, barring
the entry of aliens suspected of money laundering, and strengthening
procedures for obtaining foreign bank records relevant to terrorism or
money laundering.
[[Page H6937]]
Second, the bill enhances private-public cooperation between Federal
agencies and the financial services industry. The bill requires the
creation of a private-public task force on terrorist financing, as well
as the establishment of a secure website to accept reports from
financial institutions about suspected terrorist activities, and to
alert them to matters requiring immediate attention.
The bill also seeks to reduce the number of bank-filed reports where
they are unnecessary for law enforcement, and requires Treasury to
report regularly to industry on the utility of the reports that are
being filed.
Third, in order to deal with international money laundering risks,
including those associated with terrorism, the bill prohibits U.S.
correspondent banking privileges for off-shore shell banks, and
authorizes the Secretary of the Treasury to take special measures if a
foreign country, institution, or a particular type of transaction or
account is deemed to be a primary money laundering concern.
In closing, let me simply say that this package is balanced and
comprehensive. It reflects input from Members on both sides of the
aisle, as well as from the White House, the Treasury Department, and
the Justice Department.
I want to personally thank my good friend and ranking minority
member, the gentleman from New York (Mr. LaFalce), for his tireless
efforts on this bill. I know he has been a leader on this bill over a
number of years, and it has finally come to fruition, thanks to his
cooperative efforts.
I urge my colleagues to give H.R. 3004 their full support and vote
aye.
Mr. Speaker, I reserve the balance of my time.
{time} 1030
Mr. LaFALCE. Mr. Speaker, I yield myself such time as I might
consume.
Mr. Speaker, the Financial Anti-Terrorism Act of 2001 provides a new
array of weapons in the fight to disrupt the funding of criminals and
international terrorist organizations. Our strong legislation was
adopted by our Committee on Financial Services by a 62 to 1 vote.
The committee's product provides the President and the executive
branch an array of new weapons to combat terrorist funding and money
laundering. It largely reflects legislation that then chairman, the
gentleman from Iowa (Mr. Leach), and I worked on together during the
last Congress, along with Stu Eizenstat, the Deputy Secretary of the
Treasury, and which also passed our committee on a broad bipartisan
basis in 2000, again with only one dissenting vote, the same individual
dissenting in 2000 who dissented in 2001.
That legislation, like today's, was conceived in an effort to track
and impede access to the funds on which criminals and terrorists rely
to conduct their activity. Our medicine today is strong medicine, but
it is fair medicine. It is balanced medicine, and the need for it is
compelling. If we cannot take strong steps to impede the funding of
terrorist activity in light of recent events, I do not know what
incentive it would take.
Our antiterrorism package on which the House acted on Friday was a
good package, and I strongly supported, but it was incomplete. It was
incomplete because it did not contain today's vital provisions. It is
imperative that today's bill be enacted as part of a comprehensive
antiterrorism package to give the President the full range of tools he
needs.
The legislation that the chairman, the gentleman from (Mr. Oxley),
and the vice chairwoman, the gentlewoman from New Jersey (Mrs.
Roukema), and I and so many others worked on is a balanced consensus
product. It was developed through extensive bipartisan consultation
with members of the committee, with members of other committees, with
the administration, with the financial services industry, et cetera.
Reasonable accommodations were made by all sides to garner
overwhelming bipartisan support that was achieved at last Thursday's
committee markup and as recently as late last night. We will not win
the fight against terrorism unless we cut off the funding of al-Qaeda
and each and every other terrorist organization that exists in the
world and we can do it.
The Financial Anti-Terrorism Act of 2001 provides weapons that are
absolutely essential for our long-term war against terrorism. Failure
to enact this legislation is not an option for either the House or the
Senate or for America.
Let me say that I regret that, while the committee also included
provisions last week with respect to illegal Internet gambling, they
were dropped from this bill, but I understand that because that was
problematic. It was filled with contentious issues that had not been
adequately aired. It is not contained in the Senate bill. The
administration opposed the language that the committee reported out on
Internet gambling last week. I regret that but we still reported it
out, and I look forward at the earliest possible moment of bringing
that legislation to the floor of the House of Representatives
separately and advancing it.
In the meantime, this administration has present laws on the books,
and this Justice Department can interpret those laws on the books and
enforce them both criminally and civilly very aggressively, and so I
call on Attorney General John Ashcroft to pursue illegal Internet
gambling much more aggressively in the future, not only to cut it off
because of its troublesome impacts societally, but because according to
the testimony of the FBI, it too is being used to launder clean money
for dirty purposes and dirty money for transparent cosmetic purposes.
So pass today's bill and let us have the administration aggressively
pursue existing law on Internet gambling and let the full House take up
the Internet gambling provisions in the future in as expeditious a
manner as possible.
Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the
gentlewoman from New Jersey (Mrs. Roukema), the vice-chairman of the
committee.
Mrs. ROUKEMA. Mr. Speaker, I thank the Chair, and I want to associate
myself with the statements of our chairman and our ranking member. They
have properly outlined the benefits of this bill, and I also want to
thank the chairman for his leadership in bringing this bill before the
Congress.
As many of my colleagues know, former Congressman McCollum and I had
a bill 2 years ago that very closely tracked this bill, and it was a
proposal put forth by Attorney General Ashcroft more recently. There
are essential elements in this bill that have been outlined here. They
were able to be included. The due diligence for correspondent accounts,
private banking accounts, requirements for financial institutions have
anti-money laundering programs about the authorization of Treasury
regulations governing the so-called concentration accounts.
These are essential provisions that I fully expect will be maintained
in the Congress. Certainly we must do everything we can to assure that.
I would like to also say thanks to the gentleman from Ohio (Mr.
Oxley), and the bill that was passed in Committee on Financial
Services, that there were provisions to make it a crime to smuggle more
than 10,000 in currency in and out of the United States. Unfortunately,
these provisions were among those that were removed from the bill, and
in fact, in my opinion it was unwise and injudicious, if my colleagues
get it, get the reference, because it was not our committee that
removed them.
The point is finally, and I do not have too much time, the point is
that this is important legislation. It would make a mockery of the
anti-terrorist bill if we do not have, as I think the gentleman from
New York (Mr. LaFalce) alluded to, if we do not have strong money
laundering legislation as a component of it. It would make a mockery of
it and cripple law enforcement while protecting the terrorist money
network.
I urge all of our colleagues, it may not be perfect, but it is
essential legislation that we must support; and it is a significant
step down the right track to cripple the terrorist network.
Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentlewoman from
New York (Mrs. Maloney), who has so personally experienced the
terrorist attack and who also has been a multi-year advocate of the
strongest possible money laundering legislation.
Mrs. MALONEY of New York. Mr. Speaker, I rise in strong support of
the
[[Page H6938]]
bipartisan anti-money laundering legislation produced by the Committee
on Financial Services.
As we move to pass comprehensive antiterror legislation, this work
product, which was approved 62 to one, must be included in any
legislation that the President signs. Since September 11, our Nation
has dedicated its resources to fighting terrorism on all front. The
brave men and women of our military are targeting the terrorists
overseas. Our security agencies are working around the clock to seek
out domestic threats, and our law enforcement apparatus is on the trail
of the perpetrators in working to prevent future attacks.
This antimoney laundering legislation provides critically needed
tools to help law enforcement in these efforts. Like any business,
money is as important as oxygen to terrorists. This legislation aims to
cut off their oxygen. And like any business, Terrorism, Inc., is out of
business when they are out of money.
In the past, money laundering has been associated with drug cartels
and criminal organizations that attempt to wash money that is the
product of illegal enterprises. In fighting terrorism, we face a new
challenge. In addition to stopping money that comes from illegal
sources, we must stop money that comes from front charities, overseas
businesses, and underground financial systems such as hawala. This bill
targets all of these.
The sources of terror money are wide spread. The New York Times
recently reported that al-Qaeda has gone so far as to use profits from
Mid-East honey trading to fund terror. While it will never be possible
to plan for every inevitability, this legislation greatly increases our
ability to detect suspicious flows of money, no matter what their
source. The legislation gives Treasury the authority to impose
additional due diligence requirements on U.S. institutions when they
conduct business with individuals or banks in weak money laundering
enforcement countries.
In the past, terrorists such as Osama bin Laden have used accounts in
the Sudan or other countries to set up correspondent accounts with U.S.
banks and wire money to individuals in the United States. This
provision directly targets such relationships.
The bill also criminalizes the concealments of $10,000 or more in
currency to avoid reporting requirements. All the provisions of H.R.
3004 greatly increase cooperation between the private sector, the
financial services regulators, and law enforcement. Communication and
cooperation among these divergent interests is key to coordinating
resources and cutting off terror money.
Global money laundering is an immense problem. The IMF has
conservatively estimated that between $600 billion and $1.5 trillion is
laundered annually worldwide. Working with our allies, the President
has frozen terrorists assets around the world. This legislation gives
our government additional tools to fight old and new laundering
schemes.
Mr. Speaker, I applaud our Chair, our ranking member for their
consistent and outstanding leadership in passing this bill and the
gentleman from Iowa (Mr. Leach), the former chairman.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from Iowa
(Mr. Leach).
Mr. LEACH. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I would first say with regard to the words that have
been brought to us today that this is an important provision in law to
bring a money laundering statute into being. Following the money is the
most effective way of tracking criminal activity of a given nature. It
also serves as a deterrent to crime.
When we first looked at this in the last several years, the main
emphasis has been on narco-trafficking; but clearly with regard to
terrorism, it is an important ingredient. But it is with some
disappointment that I must say that I am amazed and startled to learn
that the provision of the bill that relates to Internet gambling has
been removed by leadership. And I would only as strongly as I can say
that I consider this to be an affront to the committee. I also consider
it to be an assault on basic judgment. I would hope that there would be
a greater courage and greater will in this body on this issue of
Internet gambling.
We are at one of the last moments if there is any hope whatsoever of
trying to put a curb on something that is very destructive to the
economy and very difficult for individual human beings. And a footnote
to the Internet gambling issue is that gambling is one of the great
techniques of laundering money. We have to put a footprint down now to
stop this form of money laundering and stop the kinds of things that
affect so many American individuals. A million Americans a day are now
gambling on the Internet with over 600 casino sites with nobody having
any idea what these casinos do with the credit card numbers that one
gives to these illegal offshore entities.
This Congress has to show a little more backbone when a few interest
groups stand up and say they object, when a few ideologues stand up and
say they have concerns. The judgment is one that I think has got to be
based on compassion and decency, and I hope we can do better.
Mr. LaFALCE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from New York (Mr. Israel).
Mr. ISRAEL. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, we know that this bill is not the silver bullet in our
war against terrorism, but it is a vital tool for our law enforcement
community. I want to thank the chairman and the ranking member for
getting this good strong bill to the floor with such dispatch.
Mr. Speaker, September 11 we have learned a great deal about Osama
bin Laden and the al-Qaeda terrorist network. We know that in addition
to a complex global financial network, there are many, many sources of
funds and a personal fortune of $300 million that Osama bin Laden has.
Alarmingly, evidence suggests that organizations in the United States
and abroad have cloaked themselves as charitable organizations to help
funnel those funds to al-Qaeda.
The President has already frozen the assets of the Wafa Humanitarian
Organization, the Al Rashid Trust, the Makhtab al-Khidamat, and most
recently, the Society of Islamic Cooperation.
These were groups that were supposedly charitable organizations, but
were mere conduits for raising money for the treacherous acts of
September 11.
In committee, Mr. Speaker, I introduced an amendment that the
chairman and the gentleman from New York (Mr. LaFalce) were gracious
enough to accept. It is an important measure. It simply tells the
Treasury Department to scrutinize how terrorists use charitable non-
profits and other groups to fund these activities.
{time} 1045
If we are going to win the war on terrorism, we must fight it on
every front. This is an important bill in that battle.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from New
York (Mrs. Kelly), the chairman of the Subcommittee on Oversight and
Investigations.
Mrs. KELLY. Mr. Speaker, I rise today in strong support of this act.
This legislation takes substantive steps to combat how terrorists and
drug traffickers move their money. One issue that has been given little
attention in our war against terrorism is that the chief export of the
Taliban is illegal drugs. Hence, efforts on both fronts have been
essential in crafting this legislation.
One of my deepest concerns in our effort to dry up the funding
sources for terrorist activities is how we can combat hawalas. This is
an international underground economic system by which financial
operators in different locations honor each other's financial
obligations by making payments in a way which avoids taxes and tariffs.
There is no movement of money between countries; hence no taxes and
tariffs are paid. At best, there are very small traces of the
transactions. This legislation takes the first important step to combat
hawala by enforcing the law against unlicensed money transmitting
businesses.
While there have long been laws on the books to ensure that money-
transmitting businesses be licensed, these laws have been unenforceable
due to court rulings which require knowledge
[[Page H6939]]
of the law and willful intent. In effect, the law is unenforceable.
Section 103 of this legislation removes the standard and tightens up
the law to ensure that law enforcement has the tools to go after the
threat.
This legislation takes important steps to ensure that more financial
institutions have in place antimoney laundering programs. But this is
not a one-size-fits-all mandate; and size, location, and activities of
a business are taken into account. This will ensure everyone, from the
very large financial institutions, with billions in transactions every
day, to small stores that offer wire transfers, has in place internal
policies and procedures and controls to minimize their susceptibility
to inadvertently assisting criminals.
We know the terrorists of September 11 were savvy and familiar with
the law. We know that the terrorists used money orders and had bank
accounts. We know the terrorists were careful not to do anything that
would have attracted attention to themselves before they carried out
their plans of terror, murder, and destruction. We must take steps to
ensure that if future manipulations take place, law enforcement will be
notified in time to prevent acts of cowardice.
The Financial Anti-terrorism Act takes these steps. I urge support of
the bill.
Mr. LaFALCE. Mr. Speaker, how much time do I have remaining?
The SPEAKER pro tempore (Mr. Shimkus). The gentleman from New York
(Mr. LaFalce) has 10\1/2\ minutes remaining, and the gentleman from
Ohio (Mr. Oxley) has 9 minutes remaining.
Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California (Ms. Lee).
Ms. LEE. Mr. Speaker, I want to thank the ranking member for yielding
me this time, and I also want to thank our chairman and ranking member
for bringing this bipartisan bill to the floor in such an expedited
fashion. This important legislation will help crack down on terrorists
using our financial services and having access to funds through money
laundering.
While I am strongly supportive of this bill, I had intended to offer
a very simple amendment that I hope can be included in conference which
would require the Departments of Justice and Treasury to report to
Congress on how the terrorists in the September 11 attacks acquired and
used credit and debt cards.
We still do not know how the terrorists accessed the credit cards
they used to rent cars, purchase airline tickets, and take other
actions that facilitated the terrorist attacks. Did they steal other
people's identity? Did financial institutions have the tools that they
needed to do thorough checks before giving out these cards? We just do
not know.
I would like to mention a quote from today's New York Post with
reference to this issue. According to the New York Post, in an article
today, and I quote, ``The most recent charge on one of the cards came 2
weeks ago, a full 3 weeks after the terrorist strike, a law enforcement
official told the Post.''
We must take every step possible to shut down access to capital to
the terrorists. Finding out how they got credit and debt cards is one
of the important steps in this process. So I would like to thank my
colleagues, our ranking member, the gentleman from New York (Mr.
LaFalce), and our chairman for this bill; and I ask them and suggest to
them to include this provision in the conference committee.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from
Wisconsin (Mr. Green).
Mr. GREEN of Wisconsin. Mr. Speaker, I thank the chairman for
yielding me this time and rise in support of the Financial Anti-
terrorism Act. I appreciate how quickly and how wisely the chairman,
the gentleman from Ohio (Mr. Oxley), and the ranking member, the
gentleman from New York (Mr. LaFalce), moved on this subject.
Mr. Speaker, in this new war we fight new and unpredictable enemies,
and we fight against weapons that are unconventional and at least
initially unexpected. Our enemies seek to turn our own systems,
financial and transportation, against us. But today we fight back.
Today, we approve new weapons for this new war. We authorize new
broader searches of international mail; we make a new Federal crime of
falsifying a customer's ID in a transaction with a financial
institution. This bill directs the Secretary of the Treasury to set up
a new secure Web site dedicated to the filing of suspicious activity
reports by financial institutions and providing those institutions with
alerts.
Last week on the antiterrorism bill and this week on the financial
antiterrorism bill some have questioned why we moved so quickly. But we
have men and women in harm's way overseas; we have them in harm's way
abroad. Let us act boldly, let us act creatively, and let us act today.
Please support this bill.
Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Bentsen).
(Mr. BENTSEN asked and was given permission to revise and extend his
remarks.)
Mr. BENTSEN. Mr. Speaker, I rise today in strong support of H.R.
3004, the Financial Anti-terrorism Act of 2001. As original cosponsor
of this legislation, I want to commend the chairman and the ranking
member, as well as the former chairman, the gentleman from Iowa (Mr.
Leach), for the work that they have done on this bill.
This is not the first time that this legislation has come to light.
In fact, last year the former House Committee on Banking passed this
legislation overwhelmingly. And while we were unable to get it through
the House and through the other body last year, and while our
motivation last year was probably less focused on terrorism as it was
on public corruption and other forms and drug-running corruption and
other forms of money laundering, the body of the legislation is
encompassed in this bill; and I am glad to see it is finally seeing the
light of day.
This bill will give our Federal financial agencies and law
enforcement agencies the tools necessary to combat money laundering.
And while, as one of our colleagues said, this is not a silver bullet,
this will help choke off the resources that terrorist organizations and
other corrupt organizations need in order to operate. We learned in
this country in the last century, in efforts to combat organized crime,
that if we could cut off the flow of money, we could start to cut off
the flow of activity. And the same would be true here.
This legislation gives the Treasury Department very important
authority to ensure that financial institutions abroad, which might be
working with money laundering organizations, including terrorist
organizations, will not have access to the U.S. financial payment
systems if they do not comply with appropriate internationally
recognized banking standards that deal with money laundering. And it is
terribly important that it is in this bill.
Now, we, over the year, have taken great effort with the
administration to include appropriate due process so that everyone gets
a fair shake under this bill, but this is an important bill in the way
it is structured.
I would also like to point out two things. The bill is going to
require bringing new requirements on a number of U.S. financial
institutions, and that is unfortunately a price that we have to pay. I
hope that the regulators look closely at this and do not create too
much burden, but we have to enforce this bill.
I am pleased that the committee included an amendment of mine that
would not sanction U.S. financial institutions for overreporting. On
the one hand, we want them to report; but we should not sanction them
for overreporting. We ought to work with those institutions.
In addition, I appreciate the work of the committee in including a
provision that would allow the U.S. Justice Department to help enforce
foreign judgments against U.S. entities which have had these judgments
brought against them overseas to ensure that such judgments of law do
not conflict with U.S. law and, thus, we protect the rights of U.S.
citizens. So I appreciate the chairman and the ranking member for the
work they did on that.
This is a critical piece of legislation. I am glad to see it has been
brought up. I commend the chairman and the ranking member and the
gentleman from Iowa (Mr. Leach), who brought this up last year; and I
hope the House will pass it unanimously.
[[Page H6940]]
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from New
York (Mr. Grucci).
Mr. GRUCCI. Mr. Speaker, I thank the distinguished chairman for
yielding me this time, and I rise today in support of a critical piece
of legislation which seeks to attack the core foundation of terrorist
organizations.
The Financial Anti-Terrorism Act of 2001 provides law enforcement and
financial oversight officials with critical tools necessary to
dismantle the fund-raising abilities of terrorist networks. It is my
understanding that terrorists used small amounts of cash and remained
well below the checkpoints currently in place to catch financial
criminals.
The Financial Anti-Terrorism Act of 2001 will enhance the ability of
law enforcement agencies to identify and detect terrorist-related
transactions and attack the financial infrastructure of these
organizations.
It will also enhance cooperation between the Government and private
institutions and their abilities to detect and disrupt terrorist
funding as well as prevent terrorists from accessing the U.S. financial
system through foreign countries and institutions.
President Bush stated this will be a war like no other, where we will
fight our enemy both on the field of battle and in the halls of our
financial institutions. This legislation strikes at the ability of
terrorist networks to launder their money and strengthen their ability
of our law enforcement agencies, and I urge my colleagues to support
H.R. 3004, the Financial Anti-terrorism Act of 2001.
Mr. LaFALCE. Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield 1 minute to the gentleman from
Florida (Mr. Weldon).
Mr. WELDON of Florida. Mr. Speaker, I thank the gentleman for
yielding me this time. I will be voting for H.R. 3004 and support most
of its provisions, but I have some reservations about some features of
the bill.
Section 301 is designed to give the Treasury Secretary new powers to
identify and punish governments that fail to control money laundering.
However, some of the provisions in this section are controversial,
particularly the criteria that the Treasury Secretary is supposed to
use when determining whether a jurisdiction is a money laundering
concern.
A jurisdiction should be punished if it refuses to suspend bank
secrecy when presented evidence of a serious crime like terrorism. But
the mere existence of privacy should not be a cause for concern. The
appropriate criteria should be evidence of money laundering,
particularly if conducted with the government's complicity. It would be
wrong to characterize a nation as harboring money laundering activities
simply because they offer lower taxes than European or U.S. and other
nations.
Lower taxes are often designed to foster economic growth of a nation
that is engaging in the lower-tax policy. It should not be interpreted
as evidence of money laundering.
Mr. Speaker, I believe that bill falls short in providing the
assurances needed to ensure that a country is not placed on a blacklist
simply because they have relatively lower taxes.
I believe strongly that a jurisdiction should be punished if it
refuses to suspend bank secrecy when presented with evidence of a
serious crime like terrorism, murder, or drug smuggling, but the mere
existence of financial privacy should not be a cause for concern. Also,
the presence of a vibrant financial services sector is an odd criterion
to be used as evidence of money laundering. Using this criteria, New
York City and London would likely be classified as money laundering
centers.
The appropriate criterion should be evidence of money laundering,
particularly if conducted with a government's complicity. It would be
wrong to characterize a nation has harboring money laundering
activities simply because they offer lower taxes than European nations
or the U.S. Lower taxes are designed to foster economic growth and some
nation's believe that economic growth is an important policy objective.
They should not be punished for making that decision.
We should use our resources effectively. This means targeting and
punishing the jurisdictions that harbor and protect terrorists and
other criminals.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Virginia (Mr. Wolf).
Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the gentleman from
Virginia (Mr. Wolf) because of an anticipatory association on my part
with the remarks of the gentleman from Virginia.
Mr. WOLF. I do not know that I have 4 minutes to speak, but I thank
the gentleman.
I am very disappointed that the language of the gentleman from Iowa
(Mr. Leach) and the gentleman from New York (Mr. LaFalce) with regard
to money laundering and gambling has been taken out.
Gambling is beginning to destroy families and fundamentally corrupt
this country. It is bringing about greater divorce and breakup of
families; and now we see the influence of it coming into this Chamber,
whereby here was an opportunity to deal with money laundering and to do
it in a way that would be a positive thing; yet it was removed.
I want to thank the chairman, the gentleman from Ohio (Mr. Oxley),
because I know he supports this language. And I want to thank the
gentleman from New York (Mr. LaFalce) and the gentleman from Iowa (Mr.
Leach). If this Congress adjourns without dealing with the issue of
money laundering with regard to gambling, it will be an indictment of
this institution.
{time} 1100
Mr. Speaker, this, on my side, is the reason that I signed the
discharge petition with regard to campaign finance reform because we
cannot have the spread of gambling continue in this Nation and not deal
with it every chance we have.
I thank the gentleman from Ohio (Mr. Oxley) and the gentleman from
New York (Mr. LaFalce). We ought not to lose this opportunity. Maybe
for good reasons the gentlemen had to move ahead with this bill and
abandon this opportunity to deal with what is taking place in this
country; but we cannot let anti-gambling legislation languish.
Mr. Speaker, we need to continue to push to pass legislation to help
families.
Mr. LaFALCE. Mr. Speaker, will the gentleman yield?
Mr. WOLF. I yield to the gentleman from New York.
Mr. LaFALCE. Mr. Speaker, the gentleman from Virginia knows that I
have been advocating greater regulation for gambling, even before he
began in 1994; but the administration was not supportive of the
provisions that we passed. I want to come to the floor separately as
soon as possible. I know that is the desire of the gentleman from Ohio
(Mr. Oxley) and the desire of the gentleman from Iowa (Mr. Leach). We
will do it, and we will do it together with the gentleman from
Virginia.
Mr. WOLF. Mr. Speaker, I want to make sure what I say does not
reflect on the gentleman from Ohio (Mr. Oxley), and I appreciate the
efforts of the gentleman.
The reason I feel so strongly is that gambling is running rampant in
the country. The addiction level, particularly among the young is
skyrocketing, and for those of us on both sides of the aisle who care
about the young, this will enable somebody to sit in their bathrobe at
home and gamble, and literally take their family down the road to
bankruptcy. This legislation is important, and I appreciate the
gentleman's efforts. I look forward to an opportunity to pass such
legislation.
Mr. Speaker, I include for the Record two articles regarding Internet
gambling.
[From the New York Times, June 5, 2001]
Nevada Approves Online Gambling
(By Matt Richtel)
The Nevada Legislature voted yesterday to authorize
regulators to license casinos to offer gambling over the
Internet, the first time a state has moved to legalize the
potentially lucrative but highly controversial business of
online gambling.
The Legislature passed the bill on the last day of its
every-two-year session, despite objections by some state
senators who said it would permit only big, politically
powerful casino corporations to participate. A spokesman for
Gov. Kenny Guinn said he supported the idea of Internet
gambling but would not make a decision about signing the bill
until he had read it in its final form.
Even if he does approve, it is far from clear when Las
Vegas's most powerful casinos will be able to offer gambling
over the Internet, or to whom they will be able to offer it.
Federal law enforcement officials say operation of an
Internet casino is illegal under the
[[Page H6941]]
Wire Act, but legal experts say it is not clear whether the
courts concur with that interpretation, and, as a result,
whether casinos will need to seek a change in federal law.
The casinos must satisfy regulators that they have
technology to prevent bets from being placed by minors or by
anyone living in a jurisdiction where gambling is illegal,
which currently includes most states.
If the Nevada Gaming Commission finds those criteria are
met, it would have the power to ``adopt regulations governing
the licensing and operation of interactive gaming.'' Industry
observers said that while the bill authorized regulators to
license casinos, it did not legalize gambling immediately. It
would, however, effectively legalize it in the future--a
major victory for casinos that advocate online gaming.
``This is a very big step,'' said Anthony Cabot, a gambling
law expert and partner in the law firm of Lionel, Sawyer &
Collins, which represents some of Nevada's largest casinos.
``There is no doubt that interactive gambling will be
authorized.''
If and when they are able to participate, Nevada's casinos
will enter an already booming market. According to Bear
Stearns, Internet users worldwide wagered $1.4 billion online
last year on casino games, lotteries, horse races and other
sports events--a figure that the investment banking firm
expects to grow to $5 billion by 2003.
Some Nevada legislators say only the largest casinos will
be able to benefit, however. The bill is written to ensure
that the only casinos eligible to get a license are those
with an established--and resort-size--physical presence in
the state. To get a license, applicants must pay $500,000 for
the first two years, and $250,000 a year thereafter.
``That would have been like saying five years ago, `only
bricks-and-mortar bookstores can sell books over the
Internet,' '' said Senator Terry Care, who was on the losing
side of yesterday's 17-to-4 vote in the Senate. ``What would
that have meant for Amazon?''
Mr. Care had hoped to offer an amendment to open the
prospect of online gambling to any entity in the state with
an unrestricted gambling license. but his was one of several
amendments that was never introduced because of a
parliamentary maneuver.
In recent weeks, a similar bill was tabled after it became
clear that amendments would be offered by several
legislators, including Senator Joe Neal, a longtime
antagonist of the gambling industry who hoped to amend the
bill to increase the gambling tax from 6.25 percent.
To get around the tax question--and the high-profile debate
about taxes that it would have entailed--proponents of
Internet gambling tacked the legislation as a rider onto a
peripheral bill about the work card system for casino
employees, said Senator Dina Titus, a Democrat from Las
Vegas.
Ms. Titus, who voted against the bill, said she objected to
the political maneuvering but she said she supported the idea
of Internet gambling. She said the rationale behind
permitting only large casinos to participate was the belief
that they might be best able to ``operate at this level'' and
would have the ``capability and money to back up'' the
regulations.
Las Vegas's casinos are not united in their desire to move
onto the Internet. Until recently, in fact, many of them
advocated keeping online gambling illegal as a way of trying
to kill competition from overseas. Several of the biggest
casinos have, however, advocated legalizing Internet
gambling, with the companies' executives asserting that since
there is no way to stop people from gambling on the Internet,
American companies should be allowed to compete.
____
Bryan Wary of Internet Gambling
the senator predicts las vegas companies will launch online casinos if
laws are not passed
(By Tony Batt) Donrey Washington Bureau
Washington.--Unless Congress acts this year to prohibit
Internet gambling, Sen. Richard Bryan says mainstream casinos
inevitably will expand into the World Wide Web, a prediction
roundly rebutted by a gaming lobbyist.
``Right now, the industry has been supportive, by and
large, of an Internet gambling ban,'' said Bryan, D-Nev.
``But every indication is that in another year, segments of
the industry will break ranks and jump into this market with
both feet. I think that would be terrible public policy.''
Bryan cited recent comments by Brian Sandoval, the chairman
of the Nevada Gaming Commission, that it may be only a matter
of time before the state Legislature is asked to authorize
Internet gambling.
``One analogy is the number of operators who were staunchly
opposed to Indian gaming, and now many of those same casinos
are in business with the tribes,'' Bryan said.
The industry's top lobbyist in Washington insisted that
casinos are not preparing forays into the Internet market.
``Even if our companies wanted to do business on the
Internet, they couldn't do it without the approval of the
gaming control boards in the states where they are
licensed,'' said Frank Fahrenkopf, president of the American
Gaming Association.
``I haven't seen any sign that the gaming control boards in
Nevada, New Jersey and Mississippi are ready for that,'' he
said.
But if Internet gambling is authorized in those states,
Bryan said, the gaming control boards will not be able to
stop casinos from expanding into the Web.
Bryan was the leading Democratic co-sponsor of an Internet
gambling ban proposed by Sen. Jon Kyl, R-Ariz., that cleared
the Senate in November by voice vote.
But to become law, the ban must be passed by the House, and
prospects there appear uncertain. One reason: a turf battle
between two powerful committee chairmen.
On April 6, the House Judiciary Committee voted 21-8 in
favor of an Internet gambling ban by Rep. Bob Goodlatte, R-
Va.
The vote appeared to pave the way for a vote by the full
House. But the vote has been delayed because the chairman of
the House Commerce Committee, Rep. Tom Bliley Jr., R-Va., has
asked House Speaker Dennis Hastert, R-Ill., to give his panel
jurisdiction over the bill.
Ironically, Bliley is friends with Goodlatte, and the
lawmakers play tennis together.
``We are optimistic that the Judiciary Committee has
complete jurisdiction, and the bill will be going to the
House floor soon,'' said Goodlatte spokeswoman Michelle
Semones. She said she had no idea when Hastert would make a
decision on Bliley's request.
The Commerce Committee is seeking oversight because it
claims the bill would impose a mandate on Internet service
providers to help enforce the gambling ban.
The judiciary panel argues it should have sole jurisdiction
because the bill includes criminal penalties--up to $20,000
in fines and four years in prison for companies offering
gambling on the Internet.
Bliley has clashed with Judiciary Committee Chairman Henry
Hyde, R-Ill., over a number of jurisdictional issues
regarding the Internet.
This is not the first turf fight over the Internet gambling
ban. The bill made it through the judiciary panel only after
it was amended to allow American Indian casinos to operate
reservation-to-reservation Internet gambling networks. The
change was made to accommodate Rep. Don Young, R-Alaska,
chairman of the House Resources Committee.
Even if the Commerce Committee is granted jurisdiction,
gaming lobbyists are confident the Internet gambling ban will
become law this year.
``I think the prospects of the bill getting to the (House)
floor in the next few weeks are very good, and my expectation
is that it will pass by a huge margin,'' said Wayne Mehl, who
lobbies Congress for the Nevada Resort Association.
If the House passes the ban, members of both chambers will
meet in conference to hammer out differences in the House and
Senate versions.
``There is not that much difference between the two bills,
and I don't think the conference will take much time at
all,'' Mehl said.
The version that comes out of the conference then must be
voted on by the House and Senate before being sent to
President Clinton.
The president hasn't said whether he would approve or veto
an Internet gambling ban. The Clinton administration voiced
concern about the House bill in March, when Deputy Assistant
Attorney General Kevin DiGregory said Congress should update
federal statutes to ban Internet gambling instead of creating
a new law.
White House spokeswoman Elizabeth Newman said the president
hopes his concerns about the legislation can be addressed
before he is asked to sign an Internet gambling ban.
``I'll be surprised if this bill does not get to Clinton's
desk before the August recess,'' Mehl said. ``The big battle
has been fought and the outcome has been decided. They're
just nibbling around the edges right now.''
But Bryan remains concerned.
``The holdup in the House does not necessarily mean the
death knell for this legislation,'' he said. ``But in terms
of legislative days, we are down to less than 40 days (for
this year).''
Mrs. CHRISTENSEN. Mr. Speaker, I rise in support of H.R. 3004, the
Financial Anti-Terrorism Act and applaud its sponsors for their work on
this comprehensive bipartisan legislation, which seeks to declare
financial war on terrorists.
I am pleased as well, that the bill does not include language banning
Internet gambling because of the impact that such a ban will have on my
district, which is exploring Internet gaming as a means of stimulating
our stagnant local economy. While I have my own personal reservations
about gambling generally, I must accede to the wishes of my
constituents and local legislature, which earlier this year passed
legislation to make Internet gaming legal in the U.S. Virgin Islands.
My colleagues, one of the disturbing trends in our present economy
has been that when the mainland was experiencing boom times, the
economies of the offshore areas of our country--the Virgin Islands,
Guam, American Samoa and Puerto Rico--did not share in this boom.
Additionally, with the events of September 11 dramatically contributing
to the then downturn in our national economy, the tourism dependent
economy of the Virgin Islands has been decimated. It is because of this
that the Government of the Virgin Islands has looked at Internet
gambling as a means of stimulating our local economy.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his
support for H.R.
[[Page H6942]]
3004, the Financial Anti-Terrorism Act of 2001, which is being
considered under suspension of the House rules. As a result of the
terrorist attacks on September 11, 2001, H.R. 3004, of which this
Member is an original cosponsor, is necessary to detect and eliminate
terrorist funding by giving the Federal authorities the enhanced tools
to address financial crimes.
First, this Member would like to thank the distinguished Chairman of
the House Financial Services Committee from Ohio (Mr. Oxley) and the
distinguished Ranking Member of the House Financial Services Committee
from New York (Mr. LaFalce) for their role in bringing this legislation
to the House Floor today.
The September 11th terrorist attacks on the World Trade Center and
the Pentagon illustrate the extensive financial infrastructure which
can be associated with terrorism. As both the Vice Chairman of the
House Intelligence Committee and as House Intelligence Subcommittee
Chair of Intelligence Policy and National Security, this Member has
been actively studying the details surrounding the tragic events of
September 11th.
Therefore, this member would like to focus on the following three
provisions of the Financial Anti-Terrorism Act of 2001: (1)
codification of the Financial Crimes Enforcement Network (FinCEN)
within the Department of the Treasury; (2) enhancement of law
enforcement's ability to address informal banking systems used by
terrorists such as the South Asian ``hawala'' system; and (3) making
bulk cash smuggling into or out of the United States a Federal crime.
First, this legislation codifies FinCEN's status as a Department of
Treasury bureau with a separate authorization and statutorily assigns
the FinCEN with duties consistent with those assigned currently by
order of the Treasury, such as the administration of the Bank Secrecy
Act. The FinCEN was created in 1990 by an order of the Secretary of the
Treasury to be the government's primary financial intelligence unit. In
addition, the FinCEN has been very successful in collecting and
analyzing data related to large currency transactions and other
suspicious financial activity. Moreover, this legislation also requires
the FinCEN to provide computer support to the Office of Foreign Asset
Control which is also within the Department of Treasury. This FinCEN
support will avoid unnecessary computer data base duplication.
Second, this legislation enhances the ability of law enforcement to
address informal banking systems such as hawalas. Many terrorism
experts believe that a share of terrorist financing is conducted
through an ancient South Asian money exchange system called
``hawalas.'' Hawala is an underground network of financiers who acquire
funds in one country and subsequently have a partner in a different
country pay a certain amount per recipient. In this case, no
transaction records are kept with no funds crossing any borders. This
legislation mandates the creation of a unit within FinCEN specifically
tasked with addressing informal nonbank networks such as hawalas.
Furthermore, this legislation also requires a report to Congress from
the Secretary of the Treasury on these informal banking systems.
Lastly, this legislation, among many other things, makes it a Federal
crime for anyone to knowingly smuggle more than $10,000 in currency or
other monetary instrument across the United States border. The measure
provides a punishment of up to five years in prison and confiscation of
the smuggled money. Under current law, the only requirement is that
such currency be declared to customs inspectors upon entering the
United States. This Members believes that the criminalization of bulk
cash smuggling is necessary to help eliminate terrorist funding within
the borders of the United States.
Therefore, this Member urges his colleagues to support H.R. 3004, the
Financial Anti-Terrorism Act of 2001.
Ms. WATERS. Mr. Speaker, I am pleased that we are passing H.R. 3004,
the Financial Anti-Terrorism Act today. It is crucial that we take
steps to ensure that terrorist funding is cut off at its source. I have
been working on money laundering issues for years, and I believe that
the time for action is long overdue.
I am pleased that this bill addresses may concerns I have been
raising about money laundering for years.
This legislation authorizes Treasury to take special measures against
foreign countries or financial institutions deemed to be primary money
laundering concerns. This provision is similar to one I have advocated
in the past. I am also pleased that other measures I have sponsored
over the years, particularly heightened due diligence for private
banking, and correspondent accounts, are included in this bill.
Additional scrutiny will be required for these accounts, which have
``flown below radar'' for many years.
In an October 28, 1999 letter, Citibank's Private Bank division
defined private banks as banks ``which provide specialized and
sophisticated investment and other services to wealthy individuals and
families.'' The letter went on to say that private banks ``are
inevitably exposed to the risk that an unscrupulous client will attempt
to `launder' proceeds of illegal activities through the bank.'' This is
stating the situation mildly.
A 1998 GAO report on Private Banking detailed how known drug
trafficker and international criminal Raul Salinas was able to transfer
between $90 million to $100 million of proceeds through Citibank's
private banking system. In November of 1999, the Senate's Committee on
Governmental Affairs Permanent Subcommittee on Investigations (PSI)
presented revealing accounts of how Raul Salinas, and several other
private banking customers, were able to launder funds through
Citibank's private banking system. According to the Subcommittee's
minority staff report, a key problem area within the private banking
system is the use of concentration accounts.
Currently, concentration accounts are bank accounts maintained by
financial institutions in which funds from various bank branches and
bank customers are commingled into one single account. Banks have used
concentration accounts as a convenient, internal, banking-transfer
mechanism. However, by combining funds from various sources into one
account, and then wire transferring those funds into separate accounts,
the true ownership and identity of the funds are temporarily lost, and
more importantly, the paper trail is effectively ended.
Law enforcement officials have stated that one of the biggest
problems they encounter in money laundering investigations,
particularly where there is an international flow of funds, is the
inability of investigators to reconstruct an audit trail for
prosecution purposes. This legislation will authorize the Secretary of
the Treasury to issue regulations to ensure that concentration accounts
no longer shield the identity of individual customers. These new
regulations will prohibit banks from telling their customers about
concentration accounts. It will also prohibit banks from allowing their
customers to direct that their money be moved through concentration
accounts. And it will establish procedures to document the identity of
and the amount of funds attributed to each customer whose money is
moved through these accounts. I look forward to working with Treasury
on these issues and seeing strong regulations implemented as soon as
possible.
I am particularly pleased that this legislation also includes and
amendment I offered during markup which will ensure that an
institution's record on money laundering issues is taken into account
when the institution is attempting to merge with or acquire another
institution. I have been told that the regulators can currently
consider this factor, but my amendment makes it clear that they must
consider an institution's record when considering an application from
them.
I would like to thank my colleagues, Chairman Oxley and Ranking
Member LaFalce for working so quickly to bring this legislation to
markup, and for including many strong provisions that I have championed
for years.
Mr. FORD. Mr. Speaker, the September 11 attacks were the evil work of
a well-financed global network of terror. It has been reported that the
19 terrorists, while living in America, received at least $500,000 from
Al Qaeda sources overseas. Their coordinated attack could not have been
planned or perpetrated without access to sources of substantial
funding.
The cowards of September 11 proved that our enemies do not need
armies or tanks or missiles to wage war on the United States. But these
terrorists did need money.
By starving the Al Qaeda terrorist network and all terrorists of
their funding, we can strip them of an essential tool in waging terror.
By following the money, we can more effectively track terrorist
activity and prevent terrorist attacks before they occur.
No anti-terrorism package will be complete without strong financial
anti-terrorism provisions. To fight global terrorism effectively, we
have to crack down on illegal money laundering and on underground
financial activity. To fight terrorism, we have to crack the financial
networks of terrorists.
Last Thursday, thanks in no small part to the hard work and exemplary
cooperation between Chairman Oxley and Ranking Member LaFalce, the
Financial Services Committee reported out bipartisan financial anti-
terrorism legislation by a 62-1 margin.
The Financial Anti-Terrorism Act of 2001 takes critical steps to give
Treasury and other law enforcement agencies the tools they need to
attack the financial infrastructure of terrorists. The bill encourages
cooperation between Federal agencies and the financial services
industry. Such cooperation between government and the private sector
will be critical in our efforts ahead.
The bill also helps prevent international money laundering by
preventing banks from engaging with overseas shell banks. It gives the
Treasury the authority to take special measures against countries,
institutions, or transactions that are of ``primary money laundering
concern.'' We cannot allow terrorists to
[[Page H6943]]
use offshore money laundromats to evade the international network of
transparent commerce.
Financial anti-terrorism legislation is an essential, indispensable
piece of our overall anti-terrorism efforts. In the words of Secretary
O'Neill, we must ensure that the terrorists' moral bankruptcy must be
matched by an empty wallet.
Mr. Speaker, I strongly support the passage of this bill. Financial
anti-terrorism legislation, including strong money laundering
provisions, must be included in any ultimate anti-terrorism package
passed by this Congress.
Mr. PAUL. Mr. Speaker, the so-called Financial Anti-Terrorism Act of
2001 (H.R. 3004) has more to do with the ongoing war against financial
privacy than with the war against international terrorism. Of course,
the Federal government should take all necessary and constitutional
actions to enhance the ability of law enforcement to locate and seize
funds flowing to known terrorists and their front groups. For example,
America should consider signing more mutual legal assistance treaties
with its allies so we can more easily locate the assets of terrorists
and other criminals.
Unfortunately, instead of focusing on reasonable measures aimed at
enhancing the ability to reach assets used to support terrorism, H.R.
3004 is a laundry list of dangerous, unconstitutional power grabs. Many
of these proposals have already been rejected by the American people
when presented as necessary to ``fight the war on drugs'' or
``crackdown on white-collar crime.'' For example, this bill facilitates
efforts to bully low tax jurisdictions into raising taxes to levels
approved by the tax-loving, global bureaucrats of the Organization for
Economic Cooperation and Development!
Among the most obnoxious provisions of this bill: codifying the
unconstitutional authority of the Financial Crimes Enforcement Network
(FinCeN) to snoop into the private financial dealings of American
citizens; and expanding the ``suspicious activity reports'' mandate to
broker-dealers, even though history has shown that these reports fail
to significantly aid apprehending criminals. These measures will
actually distract from the battle against terrorism by encouraging law
enforcement authorities to waste time snooping through the financial
records of innocent Americans who simply happen to demonstrate an
``unusual'' pattern in their financial dealings.
in conclusion, Mr. Speaker, I urge my colleagues to reject this
package of unconstitutional expansions of the financial police state,
most of which will prove ultimately ineffective in the war against
terrorism. Instead, I hope Congress will work to fashion a measure
aimed at giving the government a greater ability to locate and seize
the assets of terrorists while respecting the constitutional rights of
American citizens.
Ms. JACKSON-LEE of Texas. Mr. Speaker, the bill before us today, H.R.
3004, the ``Financial Anti-Terrorism Act of 2001'' will continue the
work that we undertook last week in the Judiciary Committee addressing
the growing threats of terrorism on U.S. soil.
In an historic effort of bi-partisanship, my Judiciary Committee
colleagues and I passed our anti-terrorism bill by a 36-0 vote.
Similarly, the bill before us today passed the House Financial Services
Committee on a bi-partisan vote of 62-1. These numbers demonstrate to
America and to the world the unanimity of our resolve to rid society of
terror, and reiterate the overwhelming timeliness for such legislation.
The problems of money laundering have always been great, but these
problems are exacerbated where international terrorist networks fund
their evil enterprises by masking the origin and purpose of the money.
It has been suggested that the terrorist hijackers behind the September
11 attacks had a deep knowledge of the U.S. Bank Secrecy Act, record
keeping duties of financial institutions, and that at least one of the
leaders conducted transactions that evinced a deep understanding of
obscure and complex U.S. banking regulations. This knowledge is likely
to have helped expedite these horrific acts, which clearly transcend
traditional notions of money laundering.
Make no mistake about it: this is big business. It has been estimated
that money laundering accounts for between $600 billion and $1.5
trillion a year. Given the fact that the recent attacks on the World
Trade Center, the Pentagon, and the crash in Somerset County
Pennsylvania have been estimated to have cost only about $.5 million, a
relatively insignificant amount given the direct and collateral damage
caused by the attacks, it is clear that our current money laundering
laws are insufficient to deal with the current threats raised by our
new war on terrorism.
With that in mind I believe that we should thank Senate Majority
Leader Tom Daschle for insisting that money laundering language be
included in the final anti-terrorism package, and we should also thank
the staffs of the Financial Services and Judiciary Committees who
worked late into the evening last night in search of an agreement that
would bring this important legislation to the floor.
H.R. 3004 moves us in the right direction in fighting this new
battle. It includes specific provisions to detect terrorist funding by
increasing safeguards at banks, borders, and businesses, and gives
authorities the tools that they need to effectively combat financial
terrorism and related crimes. It provides for increased investigatory
abilities to infiltrate terrorist cells and infrastructure,
irrespective of whether such cells utilize normal financial
institutions such as banks, or whether they use more clandestine
underground ``hawala'' financial systems.
The bill establishes a partnership between private industry and
government in order to decimate terrorist funding, and to this end, it
provides additional tracking authority and increased cooperation
between U.S. and foreign national to monitor terrorist funds kept in
offshore accounts.
The bill also limits the potential for mistakes in targeting
terrorists by directing the Treasury Secretary to develop regulations
that require financial institutions to verify the identify of customers
before opening accounts.
The bill also expands jurisdiction of the Customs Service in order to
search, without a warrant, outbound U.S. mail for bulk cash or other
contraband, and criminalizes smuggle currency in excess of $10,000, and
stiffens penalties for knowing falsification of transactional
information in financial institutions.
Finally, additional provisions prohibit the use of credit cards, wire
transfers or checks from U.S. banks to pay for illegal gambling on the
Internet where so much money laundering currently takes place. In all,
this bill gives law enforcement the tools needed to fight this new and
formidable enemy of terrorism.
The need for this legislation is great. Let us pass it today and send
a powerful signal to the world that terrorism, in any form, will not be
tolerated in our free society. I urge my colleagues to support it.
Mr. OXLEY. Mr. Speaker, could I inquire whether the gentleman from
New York has further speakers?
Mr. LaFALCE. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
Mr. OXLEY. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Shimkus). The question is on the motion
offered by the gentleman from Ohio (Mr. Oxley) that the House suspend
the rules and pass the bill, H.R. 3004, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. OXLEY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 412,
nays 1, not voting 17, as follows:
[Roll No. 390]
YEAS--412
Abercrombie
Ackerman
Aderholt
Akin
Allen
Andrews
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett
Bartlett
Barton
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilirakis
Blagojevich
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Brown (SC)
Bryant
Burr
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Castle
Chabot
Chambliss
Clay
Clayton
Clement
Clyburn
Coble
Collins
Combest
Condit
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crenshaw
Crowley
Culberson
Cummings
Cunningham
Davis (CA)
Davis (FL)
Davis (IL)
Davis, Jo Ann
Davis, Tom
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Dingell
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Farr
Ferguson
Filner
Flake
Fletcher
Foley
Forbes
Ford
Fossella
Frank
Frelinghuysen
Frost
Gallegly
Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Goss
Graham
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grucci
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Harman
Hart
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill
Hilleary
Hilliard
Hinchey
[[Page H6944]]
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Honda
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hyde
Inslee
Isakson
Israel
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kanjorski
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kerns
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kirk
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Langevin
Lantos
Largent
Larsen (WA)
Larson (CT)
Latham
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller, Gary
Miller, George
Mink
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Oxley
Pallone
Pascrell
Pastor
Payne
Pelosi
Pence
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Platts
Pombo
Pomeroy
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Rehberg
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Roukema
Royce
Rush
Ryan (WI)
Ryun (KS)
Sanchez
Sanders
Sawyer
Saxton
Schaffer
Schakowsky
Schiff
Schrock
Scott
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Spratt
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tiberi
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins (OK)
Watson (CA)
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NAYS--1
Paul
NOT VOTING--17
Bass
Bishop
Burton
Conyers
Cubin
Fattah
Issa
Kaptur
Kleczka
LaTourette
Miller (FL)
Price (NC)
Roybal-Allard
Sabo
Sandlin
Serrano
Sweeney
{time} 1128
So (two-thirds having voted in favor thereof) the rules were
suspended and the bill, as amended, was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. ISSA. Mr. Speaker, on rollcall No. 390, had I been present, I
would have voted ``yea.''
____________________