[Congressional Record Volume 152, Number 31 (Monday, March 13, 2006)]
[Senate]
[Pages S2032-S2034]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Baucus):
  S. 2401. A bill to amend the Internal Revenue Code of 1986 to extend 
certain energy tax incentives, and for other purposes; to the Committee 
on Finance.
  Mr. GRASSLEY. Mr. President, I rise to speak in support of a bill 
that I am introducing today, the Combating Money Laundering and 
Terrorist Financing Act of 2006.
  I first introduced the Combating Money Laundering and Terrorist 
Financing Act in 2003 to address what I saw as a significant threat to 
the security of our Nation. Money laundering is an issue of profound 
importance to our national security because it undermines financial 
stability by infiltrating and using legitimate financial institutions 
to hide the illegitimate source of these funds. Money laundering also 
affects our national security simply because money is the motivating 
factor for so much of the criminal activities that affect our daily 
lives, from shoplifting and petty theft to drug trafficking and multi-
million dollar stock frauds.
  We also know that money laundering is a key tool for terrorist groups 
because it fuels their ability to spread murder, fear and destruction 
throughout the world. One of the 9/11 Commission Report recommendations 
stated that, ``Vigorous efforts to track terrorist financing must 
remain front and center in the U.S. counter-terrorism efforts.'' The 
Commission expressed its concerns about terrorist financing and ``the 
need to crack down on terrorist organizations and curtail their 
funding.'' I strongly share the Commission's concerns and support their 
recommendations that they provided in their final report.
  However, I am very concerned about the 9/11 Commission's Final Report 
Card, released on December 5, 2005, which gave the U.S. Government an 
A- for our ``vigorous efforts against terror financing.'' After the 
release of the 9/11 Commission Report and nearly 4 years after the 
terrorist attacks on the World Trade Center and the Pentagon, our 
Government is still too ill-equipped and fraught with in-fighting to 
rate an A- for its efforts. While we have made significant strides in 
identifying the methods used to earn, store and move this money, we are 
still far behind the curve on shutting down the flow of illicit 
financing permanently.
  Billions of dollars continue to be funneled to terrorist and criminal 
organizations after being laundered for these organizations around the 
world. Therefore, we must continue to increase the pressure we put on 
these organizations until we reach the point where their ever-changing 
money laundering methods are no longer convenient, profitable or 
effective.
  The legislation I am introducing today includes several provisions 
that will strengthen our current money laundering laws by streamlining 
a number of statutes, clarifying language in the current law and 
closing loopholes that are often exploited by criminal organizations. 
As our new anti-money laundering laws have proven to be effective and 
make money laundering through traditional financial institutions more 
difficult, criminals are

[[Page S2033]]

forced to shift methods to launder their illegally gained funds. As 
these criminals change their tactics, so must we. Allow me to tell you 
about some of the key changes that this bill includes to meet these 
challenges.
  To begin with, under current law there are over 200 ``specified 
unlawful activities'' or ``SUA's'' that serve as predicate offenses for 
money laundering charges. As criminals continue to alter their methods 
of laundering illegal funds, this list of required ``SUA's'' is sure to 
grow. My legislation will eliminate the need to continually update the 
statutes by consolidating the growing list of ``specified unlawful 
activities'' to include all offenses punishable by imprisonment for 
more than 1 year. This legislation also recognizes the global aspect of 
money laundering by including foreign offenses that would be illegal 
money laundering offenses had they occurred within U.S. jurisdiction.

  This bill also simplifies current law by allowing the government to 
charge money laundering acts as a ``course of conduct.'' Currently, in 
most circuits, courts are required to charge each money laundering 
transaction as a separate count. This legislation allows, but does not 
require, courts to charge a series of money laundering offenses as a 
``course of conduct.'' This change would reduce the time and expense 
currently incurred by courts that are required to charge and prosecute 
each separate violation of the money laundering laws.
  As new laws have made money laundering through traditional financial 
institutions more difficult, criminals are turning to riskier methods 
of moving their money. One growing area is bulk cash smuggling, and as 
such, this bill increases the penalty for bulk cash smuggling to 10 
years.
  In addition, many ``money service businesses,'' or ``MSB's'' have 
also come under increased scrutiny because of their suspected role in 
moving funds from the United States to terrorist organizations 
throughout the world. Another provision of my legislation amends 
Section 373 of the USA PATRIOT Act regarding money service businesses 
to read ``illegal'' instead of ``unlicensed'' to ensure that the law 
covers any money service business that promotes unlawful activity as a 
course of business.
  Another money laundering technique is for couriers to carry checks 
that are complete except for the dollar amount. Under this approach the 
couriers attempt to avoid U.S. Customs reporting requirements through 
the movement of monetary instruments that are in bearer form and are 
worth over $10,000. Even though the blank checks are in bearer form, 
they argue that the value being left blank is not over $10,000 and does 
not need to be reported. Once they and the blank check reach their 
destination, all they need to do is to fill in the amount, whatever 
that may be, and have it negotiated. This legislation removes any 
confusion as to whether this act is a violation of the reporting 
requirement. This bill would resolve this issue by clarifying that a 
check in bearer form, with an amount left blank shall be deemed to have 
a value equal to the highest amount in the bank account that it is 
drawn upon while the check was being transported, or when the blank 
check is cashed or intended to be cashed.
  My legislation eliminates confusion or ambiguity about the definition 
of ``commingled funds,'' and structured transactions. ``Commingling of 
funds'' is a method often used by criminals to disguise illegal money 
from legal money by mixing the funds together in one account. 
``Structured transactions'' is a method used to circumvent our monetary 
transaction reporting requirements by breaking monetary transactions 
into several smaller dollar amounts so as to avoid a Government 
reporting requirement if the transaction had been only one transaction 
with a value over $10,000. Plus, this legislation clarifies 
extraterritorial jurisdiction to include money laundering acts that 
have an effect in the United States.
  Often, money couriers are intercepted before they reach the 
collection point but are released because they claim that they didn't 
know that the money was derived illegally. My bill ensures that the 
courier can no longer be released from responsibility in the money 
laundering chain by claiming ignorance about how the money was derived, 
which means the law enforcement agency can get both the courier and the 
money off the street.
  Finally, this bill updates counterfeiting statutes to keep them 
current with new technology and devices, such as holograms, that are 
used to produce counterfeits of U.S. obligations and securities.
  The battle against terrorism and organized criminal groups must be 
fought on many fronts--including the financial front. We know that we 
have made strides in this area as evidenced by the money launderers' 
use of different techniques. As important as it is to learn what 
techniques these criminals use, it is just as important to act upon 
this knowledge. If we can shut down the flow of illegal money, whether 
generated by drug sales or in support of terrorist activities, I 
believe we will make a significant impact on the demise of these 
criminal and terrorist groups. This bill is important to identifying 
particular criminal and terrorist financing operations and putting them 
out of business. I urge my colleagues to support my legislation and 
strengthen our national efforts against the continued threat of 
terrorist financing and financial crimes.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2402

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Combating Money Laundering 
     and Terrorist Financing Act of 2006''.

                       TITLE I--MONEY LAUNDERING

     SEC. 101. SPECIFIED UNLAWFUL ACTIVITY.

       Section 1956(c)(7) of title 18, United States Code, is 
     amended to read as follows:
       ``(7) the term `specified unlawful activity' means--
       ``(A) any act or activity constituting an offense in 
     violation of the laws of the United States or any State 
     punishable by imprisonment for a term exceeding 1 year; and
       ``(B) any act or activity occurring outside of the United 
     States that would constitute an offense covered under 
     subparagraph (A) if the act or activity had occurred within 
     the jurisdiction of the United States or any State;''.

     SEC. 102. MAKING THE DOMESTIC MONEY LAUNDERING STATUTE APPLY 
                   TO ``REVERSE MONEY LAUNDERING'' AND INTERSTATE 
                   TRANSPORTATION.

       (a) In General.--Section 1957 of title 18, United States 
     Code, is amended--
       (1) in the heading, by inserting ``or in support of 
     criminal activity'' after ``specified unlawful activity'';
       (2) in subsection (a), by striking ``Whoever'' and 
     inserting the following:
       ``(1) Whoever''; and
       (3) by adding at the end the following:
       ``(2) Whoever--
       ``(A) in any of the circumstances set forth in subsection 
     (d)--
       ``(i) conducts or attempts to conduct a monetary 
     transaction involving property of a value that is greater 
     than $10,000; or
       ``(ii) transports, attempts to transport, or conspires to 
     transport property of a value that is greater than $10,000;
       ``(B) in or affecting interstate commerce; and
       ``(C) either--
       ``(i) knowing that the property was derived from some form 
     of unlawful activity; or
       ``(ii) with the intent to promote the carrying on of 
     specified unlawful activity;

     shall be fined under this title, imprisoned for a term of 
     years not to exceed the statutory maximum for the unlawful 
     activity from which the property was derived or the unlawful 
     activity being promoted, or both.''.
       (b) Chapter Analysis.--The item relating to section 1957 in 
     the table of sections for chapter 95 of title 18, United 
     States Code, is amended to read as follows:

``1957. Engaging in monetary transactions in property derived from 
              specified unlawful activity or in support of criminal 
              activity.''.

     SEC. 103. PROCEDURE FOR ISSUING SUBPOENAS IN MONEY LAUNDERING 
                   CASES.

       (a) In General.--Section 986 of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(e) Procedure for Issuing Subpoenas.--The Attorney 
     General, the Secretary of the Treasury, or the Secretary of 
     Homeland Security may issue a subpoena in any investigation 
     of a violation of sections 1956, 1957 or 1960, or sections 
     5316, 5324, 5331 or 5332 of title 31, United States Code, in 
     the manner set forth under section 3486.''.
       (b) Grand Jury and Trial Subpoenas.--Section 
     5318(k)(3)(A)(i) of title 31, United States Code, is 
     amended--
       (1) by striking ``related to such correspondent account'';
       (2) by striking ``or the Attorney General'' and inserting 
     ``, the Attorney General, or the Secretary of Homeland 
     Security''; and

[[Page S2034]]

       (3) by adding at the end the following:
       ``(iii) Grand jury or trial subpoena.--In addition to a 
     subpoena issued by the Attorney General, Secretary of the 
     Treasury, or the Secretary of Homeland Security under clause 
     (i), a subpoena under clause (i) includes a grand jury or 
     trial subpoena requested by the Government.''.
       (c) Fair Credit Reporting Act Amendment.--Section 604(a)(1) 
     of the Fair Credit Reporting Act (15 U.S.C. 1681b(a)(1)) is 
     amended--
       (1) by striking ``or''; and
       (2) by inserting before the period the following: ``, or an 
     investigative subpoena issued under section 5318 of title 31, 
     United States Code''.
       (d) Obstruction of Justice.--Section 1510(b) of title 18, 
     United States Code, is amended--
       (1) in paragraph (2)(A), by inserting ``or an investigative 
     subpoena issued under section 5318 of title 31, United States 
     Code'' after ``grand jury subpoena''; and
       (2) in paragraph (3)(B), by inserting ``, an investigative 
     subpoena issued under section 5318 of title 31, United States 
     Code,'' after ``grand jury subpoena''.
       (e) Right to Financial Privacy Act.--Section 1120 of the 
     Right to Financial Privacy Act of 1978 (12 U.S.C. 3420) is 
     amended--
       (1) in subsection (a)(1), by inserting ``or to the 
     Government'' after ``to the grand jury''; and
       (2) in subsection (b)(1), by inserting ``, or an 
     investigative subpoena issued pursuant to section 5318 of 
     title 31, United States Code,'' after ``grand jury 
     subpoena''.

     SEC. 104. TRANSPORTATION OR TRANSHIPMENT OF BLANK CHECKS IN 
                   BEARER FORM.

       Section 5316 of title 31, United States Code, is amended by 
     adding at the end the following:
       ``(e) Monetary Instruments With Amount Left Blank.--For 
     purposes of this section, a monetary instrument in bearer 
     form that has the amount left blank, such that the amount 
     could be filled in by the bearer, shall be considered to have 
     a value equal to the highest value of the funds in the 
     account on which the monetary instrument is drawn during the 
     time period the monetary instrument was being transported or 
     the time period it was negotiated or was intended to be 
     negotiated.''.

     SEC. 105. BULK CASH SMUGGLING.

       Section 5332(a) of title 31, United States Code, is 
     amended--
       (1) in subsection (b)(1), by striking ``5 years'' and 
     inserting ``10 years''; and
       (2) by adding the end the following:
       ``(d) Investigative Authority.--Violations of this section 
     may be investigated by the Attorney General, the Secretary of 
     the Treasury, the Secretary of Homeland Security, and the 
     Postal Service.''.

     SEC. 106. VIOLATIONS INVOLVING COMMINGLED FUNDS AND 
                   STRUCTURED TRANSACTIONS.

       Section 1957(f) of title 18, United States Code, is 
     amended--
       (1) in paragraph (2) by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period and inserting 
     a semicolon; and
       (3) by adding at the end the following:
       ``(4) the term `monetary transaction in criminally derived 
     property that is of a value greater than $10,000' includes--
       ``(A) a monetary transaction involving the transfer, 
     withdrawal, encumbrance or other disposition of more than 
     $10,000 from a bank account in which more than $10,000 in 
     proceeds of specified unlawful activity have been commingled 
     with other funds;
       ``(B) a series of monetary transactions in amounts under 
     $10,000 that exceed $10,000 in the aggregate and that are 
     closely related to each other in terms of such factors as 
     time, the identity of the parties involved, the nature and 
     purpose of the transactions, and the manner in which they are 
     conducted; and
       ``(C) any financial transaction covered under section 
     1956(j) that involves more than $10,000 in proceeds of 
     specified unlawful activity; and
       ``(5) the term `monetary transaction involving property of 
     a value that is greater than $10,000' includes a series of 
     monetary transactions in amounts under $10,000 that exceed 
     $10,000 in the aggregate and that are closely related to each 
     other in terms of such factors as time, the identity of the 
     parties involved, the nature and purpose of the transactions, 
     and the manner in which they are conducted.''.

     SEC. 107. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.

       (a) In General.--Section 1956 of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(j) Multiple Violations.--Multiple violations of this 
     section that are part of the same scheme or continuing course 
     of conduct may be charged, at the election of the Government, 
     in a single count in an indictment or information.''.
       (b) Conspiracies.--Section 1956(h) of title 18, United 
     States Code, is amended by striking ``or section 1957'' and 
     inserting ``, section 1957, or section 1960''.

     SEC. 108. ILLEGAL MONEY TRANSMITTING BUSINESSES.

       (a) Technical Amendments.--
       (1) In general.--Section 1960 of title 18, United States 
     Code, is amended--
       (A) in the heading by striking ``unlicensed'' and inserting 
     ``illegal'';
       (B) in subsection (a), by striking ``unlicensed'' and 
     inserting ``illegal'';
       (C) in subsection (b)(1), by striking ``unlicensed'' and 
     inserting ``illegal''; and
       (D) in subsection (b)(1)(C), by striking ``to be used to be 
     used'' and inserting ``to be used''.
       (2) Chapter analysis.--The item relating to section 1960 in 
     the table of sections for chapter 95 of title 18, United 
     States Code, is amended to read as follows:

``1960. Prohibition of illegal money transmitting businesses.''.

       (b) Definition of Business To Include Informal Value 
     Transfer Systems and Money Brokers for Drug Cartels.--Section 
     1960(b) of title 18, United States Code, is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(4) the term `business' includes any person or 
     association of persons, formal or informal, licensed or 
     unlicenced, that provides money transmitting services on 
     behalf of any third party in return for remuneration or other 
     consideration.''.
       (c) Prohibition of Unlicensed Money Transmitting 
     Businesses.--Section 1960(b)(1)(B) of title 18, United States 
     Code, is amended by inserting the following before the 
     semicolon: ``, whether or not the defendant knew that the 
     operation was required to comply with such registration 
     requirements''.
       (d) Authority To Investigate.--Section 1960 of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(c) Authority To Investigate.--Violations of this section 
     may be investigated by the Attorney General, the Secretary of 
     the Treasury, and the Secretary of Homeland Security.''.

     SEC. 109. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A 
                   SPECIFIC FELONY.

       (a) Proceeds of a Felony.--Section 1956(c)(1) of title 18, 
     United States Code, is amended by inserting ``, and 
     regardless of whether or not the person knew that the 
     activity constituted a felony'' before the semicolon at the 
     end.
       (b) Intent To Conceal or Disguise.--Section 1956(a) of 
     title 18, United States Code, is amended--
       (1) in paragraph (1)(B)(i), by striking ``specified 
     unlawful activity'' and inserting ``some form of unlawful 
     activity''; and
       (2) in paragraph (2)(B)(i), by striking ``specified 
     unlawful activity'' and inserting ``some form of unlawful 
     activity''.

     SEC. 110. EXTRATERRITORIAL JURISDICTION.

       Section 1956(f)(1) of title 18, United States Code, is 
     amended by inserting ``or has an effect in the United 
     States'' after ``conduct occurs in part in the United 
     States''.

     SEC. 111. CONDUCT IN AID OF COUNTERFEITING.

       (a) In General.--Section 474(a) of title 18, United States 
     Code, is amended by inserting after the paragraph beginning 
     ``Whoever has in his control, custody, or possession any 
     plate'' the following:
       ``Whoever, with intent to defraud, has custody, control, or 
     possession of any material that can be used to make, alter, 
     forge, or counterfeit any obligation or other security of the 
     United States or any part of such obligation or security, 
     except under the authority of the Secretary of the Treasury; 
     or''.
       (b) Foreign Obligations and Securities.--Section 481 of 
     title 18, United States Code, is amended by inserting after 
     the paragraph beginning ``Whoever, with intent to defraud'' 
     the following:
       ``Whoever, with intent to defraud, has custody, control, or 
     possession of any material that can be used to make, alter, 
     forge, or counterfeit any obligation or other security of any 
     foreign government, bank, or corporation; or''.
       (c) Counterfeit Acts.--Section 470 of title 18, United 
     States Code, is amended by striking ``or 474'' and inserting 
     ``474, or 474A''.
       (d) Materials Used in Counterfeiting.--Section 474A(b) of 
     title 18, United States Code, is amended by striking ``any 
     essentially identical'' and inserting ``any thing or material 
     made after or in the similitude of any''.

                     TITLE II--TECHNICAL AMENDMENTS

     SEC. 201. TECHNICAL AMENDMENTS TO SECTIONS 1956 AND 1957.

       (a) Unlawful Activity.--Section 1956(c) of title 18, United 
     States Code, is amended--
       (1) in paragraph (2), by striking ```conducts''' and 
     inserting ```conduct'''; and
       (2) in paragraph (7)(F), by inserting ``, as defined in 
     section 24(a)'' before the semicolon.
       (b) Property From Unlawful Activity.--Section 1957 of title 
     18, United States Code, is amended--
       (1) in subsection (a), by striking ``engages or attempts to 
     engage in'' and inserting ``conducts or attempts to 
     conduct''; and
       (2) in subsection (f)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(4) the term `conduct' has the meaning given such term 
     under section 1956(c)(2).''.
                                 ______