[Congressional Record Volume 162, Number 111 (Monday, July 11, 2016)]
[House]
[Pages H4583-H4586]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   NATIONAL STRATEGY FOR COMBATING TERRORIST, UNDERGROUND, AND OTHER 
                         ILLICIT FINANCING ACT

  Mr. FITZPATRICK. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 5594) to require the establishment of a national 
strategy for combating the financing of terrorism and related financial 
crimes, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5594

       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 ``National Strategy for 
     Combating Terrorist, Underground, and Other Illicit Financing 
     Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) The financing of terrorism and related forms of illicit 
     finance present a direct threat to national security and a 
     threat to global stability.
       (2) New terrorist groups or threats can form quickly, and 
     other groups change tactics to adapt, creating a constantly 
     changing terrorist environment, presenting ever-changing 
     risks and challenges to programs to disrupt the financing of 
     terrorism and related forms of illicit finance.
       (3) As demonstrated in hearings before the Task Force to 
     Investigate Terrorism Financing, terrorists in some instances 
     have formed symbiotic relationships with, or are taking over, 
     transnational crime syndicates, so that funding for both 
     terrorism and profits from crime flow in the same fashion and 
     often are indistinguishable.
       (4) Methods of concealing the movement of illicit funding 
     change quickly in a globalized economy, and rapid 
     technological changes and financial innovation pose new risks 
     that may be increasingly difficult for governments to stay 
     abreast of without an agile, constantly adjusted strategy to 
     spot, disrupt, and prevent the financing of terrorism and 
     related forms of illicit finance.
       (5) A bipartisan requirement to create a national anti-
     money laundering strategy enacted in 1998 expired in 2007. 
     Given the rapid globalization and rapid technology changes of 
     the financial sector, an updated strategy focused on the 
     financing of terrorism is necessary.
       (6) It is important for the Government to have a unified 
     strategy to fight financial crime and to update it annually, 
     both to accommodate new and developing threats and to help 
     Congress develop legislative and funding priorities.
       (7) An effective strategy to counter terrorism financing is 
     a critical component of the broader counter terrorism 
     strategy of the United States.

     SEC. 3. DEVELOPMENT OF NATIONAL STRATEGY.

       (a) In General.--The President, acting through the 
     Secretary of the Treasury (the ``Secretary'') shall, in 
     consultation with the Attorney General, the Secretaries of 
     State, Defense, and Homeland Security, the Director of 
     National Intelligence and the appropriate Federal banking 
     agencies, develop a national strategy for combating the 
     financing of terrorism and related forms of illicit finance.
       (b) Transmittal to Congress.--By June 1 each year following 
     the date of the enactment of this Act, the President shall 
     submit to the appropriate congressional committees a national 
     strategy developed in accordance with subsection (a)
       (c) Evaluation of Existing Efforts and Broader Strategy.--
     The President shall accompany each strategy submitted under 
     subsection (b) with a report that--
       (1) describes the effectiveness of efforts to enforce 
     existing prohibitions against illicit finance;
       (2) describes how the United States is addressing the 
     highest levels of risk identified in the National Money 
     Laundering Risk Assessment and the National Terrorist 
     Financing Risk Assessment published by the Department of the 
     Treasury;
       (3) evaluates the effectiveness of United States efforts to 
     fight illicit finance at actually preventing, discovering, 
     and countering terrorist financing and other forms of illicit 
     finance (and the effectiveness of those efforts that the 
     United States coordinates with foreign nations); and
       (4) describes how the strategy submitted under subsection 
     (b) is integrated into, and supports, the broader counter 
     terrorism strategy of the United States.
       (d) Separate Presentation of Classified Material.--Any part 
     of the national strategy that involves information which is 
     properly classified under criteria established by the 
     President shall be submitted to the Congress separately in a 
     classified annex and, if requested by the chairman or ranking 
     Member of one of the appropriate congressional committees, as 
     a briefing at an appropriate level of security.

     SEC. 4. CONTENTS.

       (a) In General.--The strategy described under section 3 
     shall contain, at a minimum, the following:
       (1) Threats, goals, objectives, and priorities.--A 
     comprehensive, research-based, long-range, quantifiable 
     discussion of threats, goals, objectives, and priorities for 
     disrupting, preventing and reducing the number, dollar value, 
     and effects of illicit finance in the United States and 
     foreign countries that impact the security of the United 
     States.

[[Page H4584]]

       (2) Coordination.--A discussion of methods to best 
     coordinate such efforts with international, State, and local 
     officials, law enforcement, regulators, and financial 
     institutions.
       (3) Reviews and proposed changes.--Reviews of enforcement 
     efforts, relevant regulations and relevant provisions of law 
     and, when appropriate, discussions of proposed changes 
     determined to be appropriate to ensure that the United States 
     pursues coordinated and effective efforts at all levels of 
     government in the fight against illicit finance and with 
     international partners.
       (4) Detection and prosecution initiatives.--A description 
     of efforts to improve detection and prosecution of illicit 
     finance, including efforts to ensure that--
       (A) subject to legal restrictions, all appropriate data 
     collected by the Government that is relevant to the efforts 
     described in this Act be available in a timely fashion to all 
     appropriate Federal departments and agencies and, as 
     appropriate and consistent with section 314 of the USA 
     PATRIOT Act, to financial institutions to assist them in 
     efforts to comply with laws aimed at curbing illicit finance; 
     and
       (B) appropriate efforts are undertaken to ensure that 
     Federal departments and agencies charged with reducing and 
     preventing illicit finance make thorough use of publicly 
     available data in furtherance of this effort.
       (5) The role of the private financial sector in prevention 
     of illicit finance.--A discussion of ways to enhance 
     partnerships between the private financial sector and Federal 
     departments and agencies with regard to the prevention and 
     detection of illicit money laundering finance, including--
       (A) efforts to facilitate compliance with laws aimed at 
     stopping such illicit finance while maintaining the 
     effectiveness of such efforts; and
       (B) providing incentives to strengthen internal controls 
     and to adopt on an industry-wide basis more effective 
     policies.
       (6) Enhancement of intergovernmental cooperation.--A 
     discussion of ways to combat illicit finance by enhancing--
       (A) cooperative efforts between Federal, State, and local 
     officials, including State and local prosecutors and other 
     law enforcement officials;
       (B) to the extent possible, cooperative efforts among 
     States and between State and local officials, including State 
     and local regulators, prosecutors, and law enforcement 
     officials; and
       (C) cooperative efforts with and between governments of 
     countries and with and between multinational institutions 
     with expertise in fighting illicit finance.
       (7) Project and budget priorities.--A 3-year projection for 
     program and budget priorities and achievable projects for 
     reductions in illicit finance.
       (8) Assessment of funding.--A complete assessment of how 
     the proposed budget described under paragraph (7) is intended 
     to implement the strategy described in this Act and whether 
     the funding levels contained in the proposed budget are 
     sufficient to implement the strategy, including a discussion 
     of the extent to which funding for such efforts is or should 
     be funded from fines, settlements, seizures or forfeitures 
     related to illicit finance.
       (9) Trend analysis.--Data regarding trends in illicit 
     finance, with a special focus on the funding of terrorism.
       (10) Enforcement report.--A report containing an evaluation 
     of the enforcement of policies to combat illicit finance.
       (11) Enforcement.--A discussion of the current policies of 
     the United States to enforce the provisions of the Bank 
     Secrecy Act and related laws regarding the financing of 
     terrorism and other forms of illicit finance, together with 
     recommendations for improving enforcement.
       (12) Treasury attaches.--A discussion of the Department of 
     the Treasury attaches, including--
       (A) a list of embassies where Department of the Treasury 
     attaches are posted and a discussion of their effectiveness 
     in the fight against illicit finance;
       (B) a list of the United States embassies at which a 
     Department of the Treasury attache is assigned for temporary 
     duty, the length of such assignments, and the reason why such 
     assignments are not considered to be permanent assignments;
       (C) how the Department of the Treasury's interests relating 
     to economic and anti-terror finance issues are handled at 
     other embassies, including a discussion of the reporting 
     structure by which such issues are brought to the direct 
     attention of the ambassador; and
       (D) the effect of not having more attaches in embassies 
     that are most vulnerable to illicit finance threats and a 
     discussion of whether the Department of the Treasury's 
     economic or anti-illicit finance issues are thought to be 
     under-represented in some embassies or regions.
       (13) Illicit finance and cyber crime.--A discussion of 
     terrorist financing and other forms of illicit finance that 
     involve cyber attacks, evolving forms of value transfer, 
     including so-called ``crypto currencies'', and other methods 
     that are computer, telecommunications, or internet-based.
       (14) Technology.--An analysis of current and developing 
     ways to leverage technology to improve the effectiveness of 
     the fight against the financing of terror and other forms of 
     illicit finance, including the use of ``big data'' analytics, 
     the merging of publicly sourced data with Bank Secrecy Act 
     data and with other forms of secure Government data to 
     increase such effectiveness, and ways to enhance the role of 
     the private sector in combating illicit finance.

     SEC. 5. DEFINITIONS.

       For purposes of this Act:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means the Committee 
     on Financial Services, Committee on Foreign Affairs, 
     Committee on Armed Services, Committee on Homeland Security, 
     and the Permanent Select Committee on Intelligence of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs, Committee on Foreign Relations, 
     Committee on Armed Services, Committee on Homeland Security 
     and Governmental Affairs, and the Select Committee on 
     Intelligence of the Senate.
       (2) Appropriate federal banking agencies.--The term 
     ``appropriate Federal banking agencies'' has the meaning 
     given that term under section 3 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813).
       (3) Bank secrecy act.--The term ``Bank Secrecy Act'' 
     means--
       (A) section 21 of the Federal Deposit Insurance Act;
       (B) chapter 2 of title I of Public Law 91-508; and
       (C) subchapter II of chapter 53 of title 31, United States 
     Code.
       (4) Illicit finance.--The term ``illicit finance'' means 
     the financing of terrorism, money laundering, and other forms 
     of illicit or underground financing or other illicit finance 
     domestically and internationally, as defined by the 
     President.
       (5) State.--The term ``State'' means each of the several 
     States, the District of Columbia, and each territory or 
     possession of the United States.

  The SPEAKER pro tempore (Mr. Collins of New York). Pursuant to the 
rule, the gentleman from Pennsylvania (Mr. Fitzpatrick) and the 
gentleman from Massachusetts (Mr. Lynch) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania.


                             General Leave

  Mr. FITZPATRICK. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.

                              {time}  1430

  Mr. FITZPATRICK. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, during my 2-year appointment on the House Financial 
Services Committee's Task Force to Investigate Terrorism Financing, I 
joined with Ranking Member Stephen Lynch, Vice Chair Robert Pittenger, 
and a dedicated, bipartisan body to investigate and evaluate the 
efforts made by the United States to counter and dismantle the 
financial networks funding terrorist organizations. During this time, 
our task force heard repeated testimony that information sharing is not 
as efficient as it ought to be and that, in some instances, agencies or 
departments are not coordinating their efforts well enough.
  During a hearing held by our task force, Juan Zarate, senior adviser 
at the Center for Strategic and International Studies, stated that, and 
this is a quote: ``The U.S. Government's approach to its economic 
vulnerabilities is scattered--with strategies to protect supply chain 
security, combat transnational organized crime, secure the cyber 
domain, protect critical infrastructure, and promote U.S. private 
sector interests abroad to compete with state-owned enterprises . . . 
the U.S. should craft a deliberate strategy that aligns economic 
strength with national security interests more explicitly and more 
completely.''
  This, Mr. Speaker, is exactly what this bill aims to address. H.R. 
5594 requires the President, acting through the Treasury, to develop 
and publish an annual whole-of-government strategy to combat money 
laundering and terrorist financing.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LYNCH. Mr. Speaker, I yield myself such time as I may consume.
  I am very pleased to rise, along with my colleagues Chairman Michael 
Fitzpatrick from Pennsylvania; our vice chair, the gentleman from North 
Carolina (Mr. Pittenger); the gentlewoman from New York (Ms. 
Velazquez); and also the gentlewoman from Arizona (Ms. Sinema), in 
support of H.R. 5594, a bill that will build on the administration's 
commendable efforts to counter the financing of terrorism.

[[Page H4585]]

  I would note that the proposal before us today, of which I am a 
cosponsor, also builds off of previous bipartisan legislation, led by 
the gentlewoman from New York (Ms. Velazquez), and former Financial 
Services Committee Chairman, Spencer Bachus. Together, their 
legislation, enacted in 1998, called for the creation of a national 
anti-money laundering strategy and laid the groundwork for the 
legislation that we present here today.
  Thanks to the continued leadership of Representative Velazquez and 
the work of members of the Financial Services Committee's Task Force to 
Investigate Terrorism Financing, which was created by the full 
committee chairman, Mr. Hensarling of Texas, and joined by the 
gentlewoman from California (Ms. Maxine Waters), our government will be 
required to continue its efforts to stay ahead of the evolving methods 
that terrorists and other bad actors use to conceal the movement of 
illicit funds.
  Specifically, the national strategy that will be developed as part of 
this legislation will require a comprehensive assessment of the 
threats, goals, objectives, and priorities for preventing and 
disrupting illicit finance, and it will promote efforts to detect and 
prosecute the financing of terrorism.
  Moreover, this legislation includes a requirement to assess the ways 
in which we can strengthen the role of the private sector, enhance 
public-private partnerships to disrupt illicit finance, and most 
effectively enhance intergovernmental coordination.
  Our legislation also calls on the administration to assess the 
adequacy of funding dedicated to meeting anti-money laundering/
counterterrorist financing challenges, and assess how best to leverage 
technology and other data to fight against the financing of terror.
  As the Islamic State and other terrorist groups continue to 
demonstrate their capacity and willingness to export heinous acts of 
violence to every corner of the globe and inspire attacks here in the 
United States, the need to have an effective strategy to counter the 
financing of these activities is now more important than ever.
  In closing, I would like to thank House Financial Services Committee 
Chair Jeb Hensarling and Ranking Member Maxine Waters for the creation 
of the Financial Services Committee's Task Force to Investigate 
Terrorism Financing.
  I would also like to again thank the gentleman from Pennsylvania, 
Chairman Mike Fitzpatrick; the gentleman from North Carolina, Vice 
Chair Robert Pittenger; and the rest of my colleagues on the Financial 
Services Committee for the enthusiasm and energy with which they have 
carried out the mandate of the task force. Our work has been a truly 
bipartisan effort, and I look forward to the opportunity to build on 
these efforts in the future.
  I urge my colleagues to support this legislation.
  I reserve the balance of my time.
  Mr. FITZPATRICK. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arkansas (Mr. Hill), an important and valued member of the task force.
  Mr. HILL. I thank the chairman for yielding. I thank Mr. Lynch for 
his important legislation, H.R. 5594, which I stand in support of and 
as a cosponsor of today.
  I want to thank Chairman Fitzpatrick and Chairman Hensarling for the 
opportunity to serve on this critical task force on terror financing. 
It is an important but less-discussed part of the war on terror.
  This war on terror requires a more nuanced approach to achieve 
victory than previous U.S. conflicts. It requires the full coordination 
and collaboration of allied financial, cyber, diplomatic, and military 
capabilities. And one of the most underreported aspects of winning this 
war has been infiltrating and cutting off sources of funding for 
terrorist groups.
  Like its occasional intermittent engagement, accompanied by long 
periods of lack of resolve, lack of clear rules of engagement that 
would produce victory, occasionally, this administration has not been 
consistent in pressing for victory in the war on terror finance. But 
since San Bernardino and Paris, we see the administration aggressively 
targeting ISIS' funding sources.
  Instead of intermittent, we need a coordinated strategy to combat 
terror finance between all of our government agencies and with our 
allies to make sure it is the most effective in countering this menace.
  The Financial Crimes Enforcement Network, or FinCEN, is our Nation's 
front line at the Treasury for government-to-government and enhanced 
government-to-private sector coordination that this national strategy 
puts in full force.
  I was pleased to cosponsor Mr. Lynch's amendment that was passed in 
last week's Financial Services appropriations legislation that includes 
an increase for FinCEN's budget.
  I am proud to join my colleague, Mr. Fitzpatrick, and our committee 
on this important bill to require a national strategy to combat 
terrorism, underground, and other forms of illicit finance. I urge my 
colleagues to support this important bill.
  Mr. LYNCH. Mr. Speaker, I thank the gentleman from Arkansas, and I 
yield 3 minutes to the gentlewoman from Arizona (Ms. Sinema), one of 
our lead cosponsors on this legislation.

  Ms. SINEMA. Mr. Speaker, I thank Chairman Fitzpatrick and Ranking 
Member Lynch.
  Over the course of the past year, the Task Force to Investigate 
Terrorism Financing has found that U.S. Government efforts to counter 
the financing of terrorism lack sufficient coordination and that the 
United States has no unified national strategy to guide our 
counterfinancing efforts.
  The Federal Government must change its approach and mindset to 
counter the financing of terrorism, and this is why Chairman 
Fitzpatrick and I introduced this bipartisan legislation to direct the 
Secretary of the Treasury, in coordination with relevant Federal 
agencies, to establish a whole-of-government strategy to combat the 
financing of terrorism and related forms of illicit finance.
  This strategy must include: a critical assessment of the 
effectiveness of U.S. efforts to fight terrorist financing; ways to 
improve coordination with international, State, and local law 
enforcement and the private sector; and a comprehensive discussion of 
threats, goals, objectives, and priorities for disrupting and 
preventing terrorist financing. The strategy should enhance detection, 
deterrence, prosecution, and ultimately strengthen our broader national 
security goals.
  Our legislation forces the Federal Government to create a whole-of-
government strategy to counter terrorism financing that improves the 
effectiveness of our efforts and better aligns these efforts with our 
broader national interests.
  Terrorism is an undeniable threat to our country's security and 
global stability. Terrorist networks constantly develop new ways to 
finance their deadly operations and threaten America.
  The Islamic State is one of the world's most violent, dangerous, and 
well-financed terrorist groups. To keep our country safe, we must be 
one step ahead of ISIS, cutting off its funding and stopping its 
efforts.
  I thank Chairman Fitzpatrick and Congresswoman Velazquez for allowing 
me to join and work with them on this important legislation.
  I thank Chairman Hensarling and Ranking Member Waters for 
establishing this important task force, and I thank Chairman 
Fitzpatrick and Ranking Member Lynch for their leadership on the Task 
Force to Investigate Terrorism Financing.
  I look forward to working with my colleagues on both sides of the 
aisle to keep money out of terrorists' hands and build on our progress 
to strengthen America's security.
  Mr. FITZPATRICK. Mr. Speaker, I yield 2 minutes to the gentlewoman 
from Missouri (Mrs. Wagner), a trusted member of the Task Force to 
Investigate Terrorism Financing.
  Mrs. WAGNER. Mr. Speaker, I thank my colleague, Representative 
Fitzpatrick, the chair of our terrorism task force here, along with 
Representative Lynch, Representative Sinema, and others, for moving 
forward on this issue and legislation.
  I stand today in support, and I am proud to have been a cosponsor of 
this important legislation that would require the President to develop 
an all-encompassing government strategy to

[[Page H4586]]

combat money laundering and terrorist financing.
  The National Strategy for Combating Terrorist, Underground, and Other 
Illicit Financing Act addresses this important problem by developing a 
comprehensive strategy that includes many different components and 
capabilities of our Federal Government and allies.
  From my time working on the terrorism finance task force, we have 
heard testimony from members of various government agencies and from 
the private sector who play a role in fighting this issue abroad. As a 
former United States Ambassador who has worked to stop international 
terrorist financing, it is clear that coordination and communication 
between these agencies can be improved to block terrorist financing.
  ISIS, along with other terrorist groups, continues to find creative 
and new ways to obtain financing, oftentimes using our regulated 
financial system as a means to launder that money. This legislation, 
H.R. 5594, ensures our government is taking all actions necessary to 
stop this growing terrorist threat, and I urge its passage.
  Mr. LYNCH. Mr. Speaker, I have no further speakers, and I yield back 
the balance of my time.
  Mr. FITZPATRICK. Mr. Speaker, I yield myself the balance of my time.
  In closing, I just want to again thank Chairman Hensarling and 
Ranking Member Waters for entrusting to myself and my colleague, Mr. 
Lynch, the important work of investigating terrorism finance, how these 
terrorist organizations are achieving their resources, what we can do 
to sort of choke off their financing, which, to terrorism, is sort of 
like oxygen. Without oxygen, you can't live. Without financing, 
terrorists can't achieve their goals.
  So I want to thank Mr. Lynch because, during the course of the 2 
years we worked together, he worked very closely with me to make sure, 
in each of the hearings that we had and all the work in putting the 
bills together, that no politics seeped into this important work, and 
so we continue to work together.
  I also want to thank the staff of the Financial Services Committee, 
Mr. Joe Pinder, Mr. Chris Matarangas of my staff, and Jackie Cahan of 
Representative Lynch's staff, who helped us craft the legislation that 
is on the floor today. I ask all of my colleagues to support this bill 
to adopt H.R. 5594.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Pennsylvania (Mr. Fitzpatrick) that the House suspend 
the rules and pass the bill, H.R. 5594.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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