[House Report 119-22]
[From the U.S. Government Publishing Office]
119th Congress } { REPORT
HOUSE OF REPRESENTATIVES
1st Session } { 119-22
======================================================================
STOP FENTANYL MONEY LAUNDERING ACT OF 2025
_______
March 21, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 1577]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1577) to provide authority to the Secretary of
the Treasury to take special measures against certain entities
outside of the United States of primary money laundering
concern in connection with illicit fentanyl and narcotics
financing, and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 4
Related Hearings................................................. 4
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 7
Performance Goals and Objectives................................. 7
Committee Cost Estimate.......................................... 7
New Budget Authority and CBO Cost Estimate....................... 7
Unfunded Mandates Statement...................................... 7
Earmark Statement................................................ 7
Federal Advisory Committee Act Statement......................... 7
Applicability to the Legislative Branch.......................... 8
Duplication of Federal Programs.................................. 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Fentanyl Money Laundering Act of
2025''.
SEC. 2. DETERMINATION WITH RESPECT TO PRIMARY MONEY LAUNDERING CONCERN
OF ILLICIT FENTANYL AND NARCOTICS FINANCING.
(a) In General.--If the Secretary of the Treasury determines that one
or more financial institutions operating outside of the United States,
or one or more classes of transactions within, or involving, a
jurisdiction outside of the United States, or one or more types of
accounts within, or involving, a jurisdiction outside of the United
States is of primary money laundering concern in connection with
illicit fentanyl and narcotics financing, the Secretary of the Treasury
may, by order, regulation, or otherwise as permitted by law, require
domestic financial institutions and domestic financial agencies to take
one or more of the special measures described in section 5318A(b) of
title 31, United States Code.
(b) Classified Information.--In any judicial review of a finding of
the existence of a primary money laundering concern, or of the
requirement for 1 or more special measures with respect to a primary
money laundering concern made under this section, if the designation or
imposition, or both, were based on classified information (as defined
in section 1(a) of the Classified Information Procedures Act (18 U.S.C.
App.)), such information may be submitted by the Secretary of the
Treasury to the reviewing court ex parte and in camera. This subsection
does not confer or imply any right to judicial review of any finding
made or any requirement imposed under this section.
(c) Availability of Information.--The exemptions from, and
prohibitions on, search and disclosure referred to in section 9714(c)
of the National Defense Authorization Act for Fiscal Year 2021 (Public
Law 116-283; 31 U.S.C. 5318A note) shall apply to any report or record
of report filed pursuant to a requirement imposed under subsection (a).
For purposes of section 552 of title 5, United States Code, this
section shall be considered a statute described in subsection (b)(3)(B)
of that section.
(d) Penalties.--The penalties referred to in section 9714(d) of the
National Defense Authorization Act for Fiscal Year 2021 (Public Law
116-283; 31 U.S.C. 5318A note) shall apply to violations of any order,
regulation, special measure, or other requirement imposed under
subsection (a), in the same manner and to the same extent as described
in such section 9714(d).
(e) Injunctions.--The Secretary of the Treasury may bring a civil
action to enjoin a violation of any order, regulation, special measure,
or other requirement imposed under subsection (a) in the same manner
and to the same extent as described in section 9714(e) of the National
Defense Authorization Act for Fiscal Year 2021 (Public Law 116-283; 31
U.S.C. 5318A note).
(f) Definitions.--In this section, the terms ``domestic financial
agency'', ``domestic financial institution'', ``financial agency'', and
``financial institution'' have the meanings given those terms as used
in section 9714 of the National Defense Authorization Act for Fiscal
Year 2021 (Public Law 116-283; 31 U.S.C. 5318A note).
SEC. 3. TRADE-BASED MONEY LAUNDERING ADVISORY.
Not later than one year following the date of the enactment of this
Act, the Financial Crimes Enforcement Network shall update and issue a
new advisory to financial institutions on identifying Chinese
professional money laundering facilitating the trafficking of fentanyl
and other synthetic opioids. Such advisory shall incorporate the
following advisories:
(1) FIN-2014-A005, entitled ``Update on U.S. Currency
Restrictions in Mexico: Funnel Accounts and TBML''.
(2) FIN-2010-A001, entitled ``Advisory to Financial
Institutions on Filing Suspicious Activity Reports regarding
Trade-Based Money Laundering''.
(3) FIN-2019-A006, entitled ``Advisory to Financial
Institutions on Illicit Financial Schemes and Methods Related
to the Trafficking of Fentanyl and Other Synthetic Opioids''.
SEC. 4. TREATMENT OF TRANSNATIONAL CRIMINAL ORGANIZATIONS IN SUSPICIOUS
TRANSACTIONS.
(a) Filing Instructions.--Not later than 180 days after the date of
the enactment of this Act, the Director of the Financial Crimes
Enforcement Network shall issue guidance or instructions to United
States financial institutions for filing reports on suspicious
transactions required by section 5318(g) of title 31, United States
Code, related to suspected narcotics trafficking by transnational
criminal organizations.
(b) Prioritization of Reports Relating to Narcotics Trafficking or
Transnational Criminal Organizations.--The Director shall prioritize
research into reports described in subsection (a) that indicate a
connection to trafficking of narcotics.
(c) Briefing to Congress.--Not later than one year after the date of
enactment of this Act, the Director shall brief 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 on the usefulness of the guidance or
instructions issued under subsection (a).
SEC. 5. REPORT ON LESSONS LEARNED FROM PREVIOUS DRUG CRISES.
Not later than 360 days after the date of enactment of this Act, the
Comptroller General of the United States, in consultation with the
Department of the Treasury and other relevant agencies, 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 an unclassified report
and briefing on the lessons learned from previous drug crises,
including the crack cocaine crisis of the 1980s, with respect to--
(1) how transnational criminal organizations target
individual and community victims;
(2) the negative impacts on those victims, including
financial and health effects;
(3) mitigation activities that were effective in lessening
the targeting of these victims or the negative impacts on such
victims; and
(4) recommendations to confront such targeting, based on
findings described under paragraphs (1), (2), and (3), that may
be applied to the ongoing opioid crisis.
PURPOSE AND SUMMARY
Introduced on February 25, 2025, by Representative Andy
Ogles, H.R. 1577, the Stop Fentanyl Money Laundering Act of
2025, authorizes the Department of the Treasury to utilize its
existing special measure authorities to target and thwart money
laundering activities that are used to facilitate fentanyl
trafficking in foreign jurisdictions and provides law
enforcement with streamlined and updated Suspicious Activity
Reports that will allow them to follow the money of narcotics
trafficking.
BACKGROUND AND NEED FOR LEGISLATION
There is broad bipartisan agreement that the ongoing opioid
epidemic is one of the most serious threats facing our nation.
The business of fentanyl is not possible without financial
support and accompanying illicit financial activities. While
many of the techniques involved in traditional cartel money
laundering have been prevalent for decades, fentanyl and its
global supply chain have generated a number of novel
techniques. For example, Chinese money laundering organizations
facilitate the movement of cartel cash from America back to
China. Once in China, funds are used to procure and export
precursor chemicals to Mexico.
Special measures are used by the Department of Treasury
(Treasury) to learn more about or disrupt a foreign money
laundering threat to the U.S. financial system. Treasury's
special measure authority can have serious impacts on foreign
financial institutions that are found to be assisting money
laundering, going so far as to close their correspondent
accounts at U.S. banks. Special measures, once sufficient
evidence of money laundering is found, are issued through
regulation and are authorized for a period of 120 days.
Narcotics trafficking is a national money laundering
priority, yet narcotics trafficking does not have a suspicious
activity checkbox on the suspicious activity report (SAR) form.
The absence of such checkbox results in inconsistent reporting
by financial institutions, data capture shortfalls, cumbersome
SAR queries, and government agencies relying on incomplete data
when assessing narcotics traffickers' money laundering
methodologies. Adding a narcotics trafficking checkbox on the
Financial Crimes Enforcement Network's (FinCEN) SARs will
streamline law enforcement investigations in fentanyl
trafficking and the money laundering that facilitates it.
COMMITTEE CONSIDERATION
118TH CONGRESS
On May 11, 2023, Representative Blaine Luetkemeyer (R-MO)
introduced H.R. 3244, the Stop Fentanyl Money Laundering Act of
2023, with Representatives Zachary Nunn (R-IA), Andy Barr (R-
KY), and Young Kim (R-CA) as original cosponsors.
Representatives Brittany Pettersen (D-CO), Michael Lawler (R-
NY), Nick LaLota (R-NY), Daniel Meuser (R-PA), and Monica De La
Cruz (R-TX) were subsequently added as cosponsors. The bill was
referred to the Committee on Financial Services, and in
addition to the Committee on the Judiciary. On December 19,
2024, the Committee on the Judiciary was discharged from
consideration.
On July 18, 2023, the Subcommittee on National Security,
Illicit Finance, and International Financial Institutions held
a hearing entitled ``Potential Consequences of FinCEN's
Beneficial Ownership Rulemaking.'' The introduced version of
the bill was considered in the hearing. The witnesses were: Mr.
Kevin Kuhlman, Vice President at the National Federation of
Independent Business; Mr. Jim Richards, Founder and Principal
of RegTech Consulting LLC; Mr. Pete Selenke, Vice President and
Anti-Money Laundering/Bank Secrecy Act Officer at Central Bank
(Jefferson City, MO), on behalf of the American Bankers
Association; and Mr. Gary Kalman, Executive Director of
Transparency International U.S.
On July 26, 2023, the Committee on Financial Services met
in open session and ordered H.R. 3244 to be reported favorably
to the House by a recorded vote of 40 yeas and 0 nays. Before
the question to report was called, the Committee adopted an
amendment in the nature of a substitute offered by Mr.
Luetkemeyer by a voice vote. H. Rept. 118-783 (Part 1) was
filed on November 29, 2024.
119TH CONGRESS
On February 25, 2025, Representative Andy Ogles (R-TN)
introduced H.R. 1577, the Stop Fentanyl Money Laundering Act of
2025, with Representatives Monica De La Cruz (R-TX), Dan Meuser
(R-PA), Zach Nunn (R-IA), Young Kim (R-CA), Pete Sessions (R-
TX), and Cleo Fields (D-LA) as original cosponsors.
Representatives Tim Moore (R-NC) and Andy Barr (R-KY) were
added subsequently as cosponsors. The bill was referred solely
to the Committee on Financial Services.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 1577:
The Full Committee held a hearing on February 25, 2025,
entitled ``Examining Policies to Counter China.'' A discussion
draft version of the bill was considered in this hearing. The
following witnesses testified: John Miller, Senior Vice
President of Policy, Trust, Data, and Technology, and General
Counsel, Information Technology Industry Council; Nicholas
McMurray, Managing Director of International and Nuclear
Policy, ClearPath; John Cassara, retired United States Treasury
Department Special Agent; Martin Muhleisen, Nonresident Senior
Fellow at the GAO Economic Center at the Atlantic Council; and
Dr. Rush Doshi, C.V. Starr Senior Fellow for Asian Studies, and
Director of the China Strategy Initiative at the Council on
Foreign Relations, and an assistant professor at Georgetown
University.
Witness Cassara described how well-established Chinese
underground banking systems are among the most pernicious
enablers of money laundering for drug cartels and also other
sectors of CCP-supported criminal activity, including
counterfeit goods, intellectual property theft, human
trafficking, illicit tobacco, and trade fraud. These systems
are designed to bypass U.S. financial transparency reporting
requirements, employing tactics like trade-based money
laundering, underground financial systems, value transfers,
mobile phone apps and evade detection by U.S. money laundering
countermeasures. Witness Cassara also mentioned a recent Wall
Street Journal article, which described how illegal proceeds
from fentanyl sales are being laundered through China for
reinvestment in real estate and other vehicles in the United
States.
The Committee on Financial Services met in open session on
March 5, 2025 to consider, among others, H.R. 1577.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On March 5, 2025, the Committee ordered H.R. 1577 to be
reported favorably to the House by a recorded vote of 49 to and
0 nays, a quorum being present. (Record Vote No. FC-024).
Before the question to report was called, the Committee adopted
an amendment in the nature of a substitute that made minor
technical edits offered by Ms. De La Cruz by a voice vote.
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 1577 is to identify,
target, and thwart money laundering activities that are used to
facilitate fentanyl trafficking in foreign jurisdictions.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1577.
The Committee has requested but not received a cost
estimate from the Director of the Congressional Budget Office.
However, pursuant to clause 3(d)(1) of rule XIII of the House
of Representatives, the Committee will adopt as its own the
cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
EARMARK STATEMENT
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This Act may be cited as the ``Stop Fentanyl Money
Laundering Act of 2025.''
Section 2. Determination with respect to primary money laundering
concern of illicit fentanyl and narcotics financing
Section 2 provides the Secretary of the Treasury the
ability to utilize the existing special measure authorities on
financial institutions in foreign jurisdictions if it is found
that the financial institution is a primary money laundering
concern.
Section 3. Trade based money laundering advisory
Section 3 directs FinCEN to update and issue a new advisory
to financial institutions on identifying Chinese professional
money laundering facilitating the trafficking of fentanyl and
other synthetic opioids.
Section 4. Treatment of transnational criminal organizations in
suspicious activity reports
Not later than 180 days after enactment, the Director of
FinCEN shall issue guidance on an updated SAR form. The updated
form shall incorporate a checkbox for suspected narcotics
trafficking by transnational criminal organizations.
Additionally, the Director shall brief Congress on the
usefulness of the updated SAR within one year.
Section 5. Report on lessons learned from previous drug crises
Not later than 360 days after enactment, the Comptroller
General of the United States shall provide a report to the
cognizant committees of Congress an unclassified report and
briefing on the lessons learned from previous drug crises,
including the crack cocaine crisis of the 1980s with respect to
targeting of individuals and communities by transnational
criminal organizations, deleterious impacts on victims, the
relative impacts of mitigation activities, and recommendations
to confront such targeting that may be applied to the current
opioid crisis.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 1577 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
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