[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.
____________________