[Congressional Record Volume 170, Number 5 (Wednesday, January 10, 2024)]
[House]
[Pages H37-H39]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  OFAC LICENSURE FOR INVESTIGATORS ACT

  Mr. McHENRY. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 6370) to require the Office of Foreign Assets Control to 
develop a program under which private sector firms may receive a 
license to conduct nominal financial transactions in furtherance of the 
firms' investigations, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6370

       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 ``OFAC Licensure for 
     Investigators Act''.

     SEC. 2. SENDING AND RECEIVING OF NOMINAL AMOUNTS.

       (a) In General.--The Director of the Office of Foreign 
     Assets Control shall, not later than 1 year after the date of 
     the enactment of this section, establish a pilot program 
     under which a private sector firm may receive a license to 
     conduct nominal financial transactions in furtherance of the 
     firm's investigations.
       (b) Coordination.--When establishing and carrying out the 
     pilot program required under subsection (a), the Director of 
     the Office of Foreign Assets Control shall coordinate with 
     the Director of the Financial Crimes Enforcement Network for 
     the purposes of supporting activities of the Financial Crimes 
     Enforcement Network Exchange, as described in section 310(d) 
     of title 31 of the United States Code.
       (c) Reporting on Activities.--Each private sector firm that 
     receives a license described under subsection (a) shall 
     submit a detailed monthly report to the Director of the 
     Office of Foreign Assets Control on the activities of the 
     firm conducted under such license.
       (d) Report to Congress.--
       (1) In general.--On the date that is 1 year after the date 
     on which the pilot program is established under this section, 
     and annually thereafter until the end of the 1-year period 
     beginning on the date the pilot program is terminated, the 
     Director of the Office of Foreign Assets Control shall submit 
     a report to the Committees on Financial Services and Foreign 
     Affairs of the House of Representatives and the Committees on 
     Banking, Housing, and Urban Affairs and Foreign Relations of 
     the Senate containing--
       (A) the number of licenses requested under the pilot 
     program;
       (B) the number of licenses granted under the pilot program; 
     and
       (C) a broad discussion of the utility of the pilot program.
       (2) Classified briefing.--After submission of each report 
     required under paragraph (1), the Director of the Office of 
     Foreign Assets Control shall provide the Committees on 
     Financial Services and Foreign Affairs of the House of 
     Representatives and the Committees on Banking, Housing, and 
     Urban Affairs and Foreign Relations of the Senate with a 
     classified briefing containing--
       (A) additional detail on the applicants for a license under 
     the pilot program;
       (B) identification of the firms granted a license;
       (C) information on the operation of the pilot program, 
     including how long each license lasted and the personnel 
     needed to manage the pilot program;
       (D) information gleaned by the Office of Foreign Assets 
     Control from running the pilot program;
       (E) the utility of that information;
       (F) any obstacles to the operation or utility of the pilot 
     program; and
       (G) any recommendations for improving or extending the 
     pilot program.
       (e) Termination.--The pilot program established by the 
     Director of the Office of Foreign Assets Control under 
     subsection (a) shall terminate on the date that is 5 years 
     after the date on which the Director of the Office of Foreign 
     Assets Control establishes such program.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. McHenry) and the gentlewoman from Ohio (Mrs. 
Beatty) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina.


                             General Leave

  Mr. McHENRY. Madam Speaker, I ask unanimous consent that all Members 
have 5 legislative days in 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 North Carolina?
  There was no objection.
  Mr. McHENRY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in support of H.R. 6370, the OFAC Licensure for 
Investigators Act, introduced by my friend, the ranking member of the 
National Security, Illicit Finance, and International Financial 
Institutions Subcommittee, Mrs. Beatty.
  The gentlewoman from Ohio has been an adept legislator in committee 
and great as an ally and fearsome as a foe. It has been good to work 
with her on solid policy.
  I think this is an important matter for us. Illicit finance 
internationally and domestically is something we want to tackle, and we 
want to tackle this through solid policy that can be passed in a 
bipartisan way.
  Since Hamas' October 7 terrorist attack on Israel, we have witnessed 
the ramifications of bad actors using the financial system to further 
their acts of terrorism.
  This bill would enhance the tools in Treasury's arsenal to go after 
sanctioned individuals and entities while also holding them accountable 
in their financial activities.
  There is already a well-established practice in traditional financial 
investigations where a law enforcement agency can request that 
financial institutions keep open criminal accounts in order to help 
track the illicit flows of money.
  This bill mirrors that practice.
  The bill requires the Secretary of the Treasury to develop a pilot 
program administered by the Office of Foreign Assets Control to allow 
private sector firms under a temporary and specific license to conduct 
nominal financial transactions to and through sanctioned entities to 
further their investigations.
  OFAC, the Office of Foreign Assets Control, is a very important tool, 
one of our most powerful tools of protecting free people around the 
world and the flow of funds and tracking those flow of funds.
  OFAC's licenses are authorized to OFAC to engage in transactions that 
would otherwise be prohibited. Mrs. Beatty's bill would allow, for 
example, blockchain analytics firms to work with OFAC to trace wallets 
controlled by bad actors. The power of blockchain lies within its 
immutable ledger that cannot be altered and allows analysis firms to 
see the movement of value every step along the way.
  Mrs. Beatty's bill is a crucial step in the right direction. The 
Treasury Department will be required to keep Congress informed of 
OFAC's activities and findings under the license. With strict oversight 
and Treasury's ability to continue to follow the money and follow the 
value, the United States will be better positioned to go after 
terrorists and other bad actors and entities.
  I thank Mrs. Beatty for her legislation and for her important work on 
this topic, and I urge my colleagues to support it.
  Madam Speaker, I reserve the balance of my time.
                                         House of Representatives,


                                 Committee on Foreign Affairs,

                                  Washington, DC, January 5, 2024.
     Hon. Patrick McHenry,
     Chairman, Committee on Financial Services,
     Washington, DC.
       Dear Chairman McHenry: Thank you for consulting with the 
     Committee on Foreign Affairs on H.R. 6370, the OFAC Licensure 
     for Investigators Act. Based on your commitment to 
     incorporate agreed edits into the suspension text, I agree 
     that Foreign Affairs may be discharged from further 
     consideration of the bill, so that it may proceed 
     expeditiously to the House Floor.
       This agreement is made with the understanding that it does 
     not in any way diminish or alter the jurisdiction of the 
     Committee on Foreign Affairs, or prejudice our jurisdictional 
     prerogatives on this measure or similar legislation in the 
     future.
       Thank you for agreeing to place our exchange of letters 
     into the Record during Floor consideration. I look forward to 
     continuing to work together as this bill moves through the 
     legislative process.
           Sincerely,
                                                   Michael McCaul,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                  Washington, DC, January 4, 2024.
     Hon. Michael McCaul,
     Chairman, Committee on Foreign Affairs,
     Washington, DC.
       Dear Chairman McCaul: Thank you for agreeing to be 
     discharged from further consideration of H.R. 6370, the OFAC 
     Licensure

[[Page H38]]

     for Investigators Act, so that it may proceed expeditiously 
     to the House Floor. I agree that by foregoing consideration 
     of H.R. 6370 at this time, you do not waive any jurisdiction 
     over the subject matter contained in this or similar 
     legislation, and that you will be appropriately consulted and 
     involved on this or similar legislation as it moves forward.
       As discussed, I will seek to place a copy of our exchange 
     of letters on this bill in the Congressional Record during 
     floor consideration thereof.
           Sincerely,
                                                  Patrick McHenry,
                        Chairman, Committee on Financial Services.

  Mrs. BEATTY. Madam Speaker, I yield myself such time as I may 
consume.
  I rise in support of my bill, H.R. 6370, the OFAC Licensure for 
Investigators Act, which is cosponsored by Mr. Nunn of Iowa. I also 
thank the chairman and my friend for his support.
  The global regime to counter money laundering and terrorist financing 
is becoming increasingly effective at detecting and deterring the abuse 
of our financial markets. However, we must stay ahead of the bad 
actors, who in many cases are moving into darker corners of the 
financial system and using technologies and methods that are harder to 
trace.
  Private investigative firms, some with unique technologies and 
analytic methods, should be enlisted to help banks and governments, 
among others, identify the criminals and the terrorists, their bank 
accounts, and their typologies.
  Today, these private firms are limited in how far they can see into a 
bad actor's operations. One of those limitations is due to sanctions, 
which appropriately prevent parties from engaging with sanctioned 
targets. However, as a result, whether in analytic firms or large bank 
intelligence units, the good guys have to stop their investigations 
upon finding evidence that suggest that a wallet or account or address 
may be associated with a sanctioned individual or entity.
  There is a workaround today, but it is far too limited. Treasury's 
Office of Foreign Assets Control, or OFAC, provides licenses to 
individual parties and transactions which allow for narrow exceptions 
to its sanctions program. My bill requires OFAC to design a pilot 
licensing program that would allow investigators to apply to OFAC for 
permission to get a step further and engage with sanctioned persons 
under certain conditions to gain more visibility into opaque networks 
and practices.
  The investigators could only use nominal amounts but would be able to 
trace where the money goes. Ensuring that there is robust oversight in 
this process, the bill mandates that recipients of these specific 
licenses must report to OFAC monthly on their findings.
  This program would be similar to when government officials ask 
financial institutions to keep open suspicious accounts so the 
government could then go and watch the transactions, and while they are 
doing that, they are able to follow the money.
  Madam Speaker, I urge my colleagues to support this innovative and 
bipartisan bill, and I reserve the balance of my time.
  Mr. McHENRY. Madam Speaker, I yield myself such time as I may consume 
to engage in a colloquy with the gentlewoman from Ohio.
  Madam Speaker, I have heard concerns from Members about the 
definition of ``nominal transactions'' in the bill. As we saw in OFAC's 
August 22 designation of Tornado Cash, U.S. persons may have received 
unsolicited nominal amounts of virtual currency from Tornado Cash. 
These nominal amounts could be as small as a fraction of a penny. The 
term ``nominal amounts'' is a term of art within OFAC, but, 
understandably, Members are worried that this license could allow for 
the financing of terror activities.
  Prior to today's floor proceedings, OFAC and my staff discussed 
capping licenses at $10. A fraction of a penny spread across $10 could 
provide an immense amount of data on illicit actors and their funding 
mechanisms.
  I think it is important to reiterate on the record for Members that 
this bill is not intended to allow a license for greater than $10. Is 
that something that the gentlewoman would agree with?
  Mrs. BEATTY. Will the gentleman yield?
  Mr. McHENRY. I yield to the gentlewoman from Ohio (Mrs. Beatty).
  Mrs. BEATTY. Madam Speaker, I say to the gentleman that I would. I 
think that is a very fair question to ask. Let me just assure you that 
it is also my intent, as the sponsor of this bill, that the term 
``nominal'' in this context should not be interpreted to be more than 
the $10 as you referenced, and I certainly understand why that concern 
came up. As you know, this bill is intended to enhance our efforts to 
stop terrorist financing. The kind of investigation that this bill is 
trying to allow for doesn't need more than a few dollars--or nominal, 
not to exceed $10--to be effective. We have seen this before, so I am 
very comfortable assuring you that we would define it as $10 or less.
  I thank the gentleman for clarifying this. I, too, want to put on the 
record that it would be defined as the $10 mark, and I certainly thank 
the gentleman for his support on this legislation.
  Mr. McHENRY. Madam Speaker, I thank the bill's sponsor for this and 
for her addressing an important matter, which is money laundering 
internationally and at home is a severe problem. It is a severe problem 
with regulated financial institutions, and we have longstanding laws 
and rules and folks that are engaged in Justice and at Treasury that 
are highly adept at this.
  We have new technologies that emerge each day and new approaches to 
launder value or money. The movement of digital money is complex. With 
blockchain technology it makes it much easier because then you 
basically can follow what is on the blockchain, and it is there for the 
public to see and for our experts in government to follow very well.
  We want to make sure that they are given the full tools to track that 
illicit finance wherever it may be using the best techniques and 
technology available to anyone in the world. We want to make sure that 
we stay on top of this and curb illicit finance the best that we 
possibly can.
  We have the best laws, the best rules, and the best people working to 
protect our people here and abroad.
  Madam Speaker, I thank Mrs. Beatty for her leadership here on this 
important issue.
  Madam Speaker, I have no further speakers, I am prepared to close, 
and I reserve the balance of my time.
  Mrs. BEATTY. Madam Speaker, I have no further speakers, and I yield 
myself the balance of my time for the purpose of closing.
  My colleague, Mr. Nunn, and I have devised a smart pilot program that 
would allow for private-sector investigators to engage in small-dollar 
transactions with sanctioned persons in order to gain valuable 
information about how networks and activities of those bad actors work.
  I am pleased to say that we have agreed on the nominal amount of $10, 
and by creating a licensing program for such a person, both business 
and government will benefit from the information gained, improving 
visibility into criminal and terrorist financing networks. That is what 
this bill is all about.
  Madam Speaker, for those reasons, I again urge my colleagues to 
support this bipartisan bill, and I yield back the balance of my time.
  Mr. McHENRY. Madam Speaker, I yield myself the balance of my time.
  Madam Speaker, I would just reiterate that Mrs. Beatty's bill is a 
crucial step in the right direction, and the Treasury Department will 
be required to keep Congress informed of OFAC's activities and findings 
under the license.
  Madam Speaker, I urge my colleagues to support this bill, and I yield 
back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. McHenry) that the House suspend the 
rules and pass the bill, H.R. 6370, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. McHENRY. Madam Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.

[[Page H39]]

  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  The point of no quorum is considered withdrawn.

                          ____________________