CHAPTER 53—MONETARY TRANSACTIONS

SUBCHAPTER I—CREDIT AND MONETARY EXPANSION

SUBCHAPTER II—RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

SUBCHAPTER III—MONEY LAUNDERING AND RELATED FINANCIAL CRIMES

Part 1—National Money Laundering and Related Financial Crimes Strategy

Part 2—Financial Crime-Free Communities Support Program

Amendments

1998—Pub. L. 105–310, §2(b), Oct. 30, 1998, 112 Stat. 2948, added subchapter III heading, parts 1 and 2 headings, and items 5340 to 5355.

1996—Pub. L. 104–208, div. A, title II, §2223(2), Sept. 30, 1996, 110 Stat. 3009–415, struck out item 5327 “Identification of financial institutions”.

1994—Pub. L. 103–325, title III, §311(b), title IV, §408(d), Sept. 23, 1994, 108 Stat. 2221, 2252, added items 5329 and 5330.

1992—Pub. L. 102–550, title XV, §§1511(c), 1563(b), Oct. 28, 1992, 106 Stat. 4057, 4073, added items 5327 and 5328.

1988—Pub. L. 100–690, title VI, §6185(f), Nov. 18, 1988, 102 Stat. 4357, added items 5325 and 5326.

1986—Pub. L. 99–570, title I, §§1354(b), 1356(d), Oct. 27, 1986, 100 Stat. 3207–22, 3207–25, substituted “Compliance, exemptions, and summons authority” for “Compliance and exemptions” in item 5318 and added item 5324.

1984—Pub. L. 98–473, title II, §901(f), Oct. 12, 1984, 98 Stat. 2136, added item 5323.

Chapter Referred to in Other Sections

This chapter is referred to in section 9703 of this title; title 18 section 1510; title 19 sections 1431, 1613b.

SUBCHAPTER I—CREDIT AND MONETARY EXPANSION

§5301. Buying obligations of the United States Government

(a) The President may direct the Secretary of the Treasury to make an agreement with the Federal reserve banks and the Board of Governors of the Federal Reserve System when the President decides that the foreign commerce of the United States is affected adversely because—

(1) the value of coins and currency of a foreign country compared to the present standard value of gold is depreciating;

(2) action is necessary to regulate and maintain the parity of United States coins and currency;

(3) an economic emergency requires an expansion of credit; or

(4) an expansion of credit is necessary so that the United States Government and the governments of other countries can stabilize the value of coins and currencies of a country.

(b) Under an agreement under subsection (a) of this section, the Board shall permit the banks (and the Board is authorized to permit the banks notwithstanding another law) to agree that the banks will—

(1) conduct through each entire specified period open market operations in obligations of the United States Government or corporations in which the Government is the majority stockholder; and

(2) buy directly and hold an additional $3,000,000,000 of obligations of the Government for each agreed period, unless the Secretary consents to the sale of the obligations before the end of the period.

(c) With the approval of the Secretary, the Board may require Federal reserve banks to take action the Secretary and Board consider necessary to prevent unreasonable credit expansion.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 993.)

In subsection (a), before clause (1), the text of 31:821(b)(matter before (1)) is omitted as obsolete because clause (1) is omitted as executed, and clause (2) is omitted as expired. The text of 31:821(b)(matter after (2)) is omitted as obsolete because silver is no longer coined. The words “in his discretion” and “several” are omitted as surplus. The words “Board of Governors of the Federal Reserve System” are substituted for “Federal Reserve Board” because of 12:241. The words “upon investigation” are omitted as surplus. In clause (1), the word “foreign” is substituted for “of any other government or governments” to eliminate unnecessary words. The words “coins and” are added for consistency. In clause (2), the words “United States coins and currency” are substituted for “currency issues of the United States” for consistency. In clause (4), the words “so that the United States Government and the governments of other countries can stabilize” are substituted for “to secure by international agreement a stabilization” for clarity. The words “at proper levels” are omitted as surplus.

In subsection (b), before clause (1), the words “(and the Board is authorized to permit the banks notwithstanding another law)” are substituted for “notwithstanding any provisions of law or rules and regulations to the contrary” for clarity. In clause (1), the words “pursuant to existing law” are omitted as surplus. The words “through each entire” are substituted for “throughout” for clarity. In clause (2), the words “in portfolio”, “or periods of time Treasury bills or other” and “in an aggregate sum of” are omitted as surplus.

Short Title of 1998 Amendment

Pub. L. 105–310, §1, Oct. 30, 1998, 112 Stat. 2941, provided that: “This Act [enacting subchapter III of this chapter and provisions set out as a note under section 5342 of this title] may be cited as the ‘Money Laundering and Financial Crimes Strategy Act of 1998’.”

Short Title of 1994 Amendment

Pub. L. 103–325, title IV, §401, Sept. 23, 1994, 108 Stat. 2243, provided that: “This title [enacting section 5330 of this title, amending sections 5312, 5313, 5318, 5321, 5322, and 5324 of this title, sections 93, 1464, 1772d, 1786, 1818, and 1821 of Title 12, Banks and Banking, and sections 984, 986, 1956, 1957, and 1960 of Title 18, Crimes and Criminal Procedure, and enacting provisions set out as notes under sections 5311, 5313, 5318, and 5330 of this title] may be cited as the ‘Money Laundering Suppression Act of 1994’.”

Section Referred to in Other Sections

This section is referred to in section 5304 of this title.

§5302. Stabilizing exchange rates and arrangements

(a)(1) The Department of the Treasury has a stabilization fund. The fund is available to carry out this section, section 18 of the Bretton Woods Agreement Act (22 U.S.C. 286e–3), and section 3 of the Special Drawing Rights Act (22 U.S.C. 286o), and for investing in obligations of the United States Government those amounts in the fund the Secretary of the Treasury, with the approval of the President, decides are not required at the time to carry out this section. Proceeds of sales and investments, earnings, and interest shall be paid into the fund and are available to carry out this section. However, the fund is not available to pay administrative expenses.

(2) Subject to approval by the President, the fund is under the exclusive control of the Secretary, and may not be used in a way that direct control and custody pass from the President and the Secretary. Decisions of the Secretary are final and may not be reviewed by another officer or employee of the Government.

(b) Consistent with the obligations of the Government in the International Monetary Fund on orderly exchange arrangements and a stable system of exchange rates, the Secretary or an agency designated by the Secretary, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities the Secretary considers necessary. However, a loan or credit to a foreign entity or government of a foreign country may be made for more than 6 months in any 12-month period only if the President gives Congress a written statement that unique or emergency circumstances require the loan or credit be for more than 6 months.

(c)(1) By the 30th day after the end of each month, the Secretary shall give the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a detailed financial statement on the stabilization fund showing all agreements made or renewed, all transactions occurring during the month, and all projected liabilities.

(2) The Secretary shall report each year to the President and Congress on the operation of the fund.

(d) A repayment of any part of the first subscription payment of the Government to the International Monetary Fund, previously paid from the stabilization fund, shall be deposited in the Treasury as a miscellaneous receipt.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 994.)

In subsection (a)(1), the words “The Department of the Treasury has a stabilization fund” are substituted for “there is appropriated, out of the receipts which are directed to be covered into the Treasury under section 408b of this title, the sum of $2,000,000,000, which sum when available shall be deposited in the United States Treasury in a stabilization fund” because the fund has been established. The words “(hereinafter called the ‘fund’)” are omitted as unnecessary because of the restatement. The words “To enable the Secretary of the Treasury” and “The fund shall be available for expenditure, under the direction of the Secretary of the Treasury and in his discretion, for any purpose in connection with carrying out the provisions of this section” are omitted as surplus. The words “section 18 of the Bretton Woods Agreement Act (22 U.S.C. 286e–3), and section 3 of the Special Drawing Rights Act (22 U.S.C. 286o)” are added for clarity. The words “and reinvestment” and “direct” are omitted as surplus. The word “Government” is added for consistency. The words “accruing under the operations of this section” are omitted as surplus. The words “to carry out this section” after “are available” are substituted for “for the purposes of the fund” for consistency.

In subsection (b), the words “directly . . . through” and “for the account of the fund established in this section” are omitted as surplus. The words “government of a foreign country” are substituted for “foreign government” for consistency in the revised title and with other titles of the United States Code. The words “by or through such fund” are omitted as surplus.

In subsection (c)(1), the word “calendar” is omitted as surplus. The words “beginning after the effective date of this paragraph” are omitted as executed. The words “to occur” are omitted as surplus.

In subsection (d), the words “any part of the first subscription payment of the Government to the International Monetary Fund, previously paid from the stabilization fund” are substituted for 31:822a(c)(words before semicolon) and “thereof” for clarity because the payment has been made.

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

Mexican Debt Disclosure

Pub. L. 104–6, title IV, Apr. 10, 1995, 109 Stat. 89, provided that:

“SEC. 401. SHORT TITLE.

“This title may be cited as the ‘Mexican Debt Disclosure Act of 1995’.

“SEC. 402. FINDINGS.

“The Congress finds that—

“(1) Mexico is an important neighbor and trading partner of the United States;

“(2) on January 31, 1995, the President approved a program of assistance to Mexico, in the form of swap facilities and securities guarantees in the amount of $20,000,000,000, using the exchange stabilization fund;

“(3) the program of assistance involves the participation of the Board of Governors of the Federal Reserve System, the International Monetary Fund, the Bank for International Settlements, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Bank of Canada, and several Latin American countries;

“(4) the involvement of the exchange stabilization fund and the Board of Governors of the Federal Reserve System means that United States taxpayer funds will be used in the assistance effort to Mexico;

“(5) assistance provided by the International Monetary Fund, the International Bank for Reconstruction and Development, and the Inter-American Development Bank may require additional United States contributions of taxpayer funds to those entities;

“(6) the immediate use of taxpayer funds and the potential requirement for additional future United States contributions of taxpayer funds necessitates congressional oversight of the disbursement of funds; and

“(7) the efficacy of the assistance to Mexico is contingent on the pursuit of sound economic policy by the Government of Mexico.

“SEC. 403. PRESIDENTIAL REPORTS.

“(a) Reporting Requirement.—Not later than June 30, 1995, and every 6 months thereafter, the President shall transmit to the appropriate congressional committees a report concerning all guarantees issued to, and short-term and long-term currency swaps with, the Government of Mexico by the United States Government, including the Board of Governors of the Federal Reserve System.

“(b) Contents of Reports.—Each report described in subsection (a) shall contain a description of the following actions taken, or economic situations existing, during the preceding 6-month period or, in the case of the initial report, during the period beginning on the date of enactment of this Act [Apr. 10, 1995]:

“(1) Changes in wage, price, and credit controls in the Mexican economy.

“(2) Changes in taxation policy of the Government of Mexico.

“(3) Specific actions taken by the Government of Mexico to further privatize the economy of Mexico.

“(4) Actions taken by the Government of Mexico in the development of regulatory policy that significantly affected the performance of the Mexican economy.

“(5) Consultations concerning the program approved by the President, including advice on economic, monetary, and fiscal policy, held between the Government of Mexico and the Secretary of the Treasury (including any designee of the Secretary) and the conclusions resulting from any periodic reviews undertaken by the International Monetary Fund pursuant to the Fund's loan agreements with Mexico.

“(6) All outstanding loans, credits, and guarantees provided to the Government of Mexico, by the United States Government, including the Board of Governors of the Federal Reserve System, set forth by category of financing.

“(7) The progress the Government of Mexico has made in stabilizing the peso and establishing an independent central bank or currency board.

“(c) Summary of Treasury Department Reports.—In addition to the information required to be included under subsection (b), each report required under this section shall contain a summary of the information contained in all reports submitted under section 404 during the period covered by the report required under this section.

“SEC. 404. REPORTS BY THE SECRETARY OF THE TREASURY.

“(a) Reporting Requirement.—Beginning on the last day of the first month which begins after the date of enactment of this Act [Apr. 10, 1995], and on the last day of every month thereafter, the Secretary of the Treasury shall submit to the appropriate congressional committees a report concerning all guarantees issued to, and short-term and long-term currency swaps with, the Government of Mexico by the United States Government, including the Board of Governors of the Federal Reserve System.

“(b) Contents of Reports.—Each report described in subsection (a) shall include a description of the following actions taken, or economic situations existing, during the month in which the report is required to be submitted:

“(1) The current condition of the Mexican economy.

“(2) The reserve positions of the central bank of Mexico and data relating to the functioning of Mexican monetary policy.

“(3) The amount of any funds disbursed from the exchange stabilization fund pursuant to the program of assistance to the Government of Mexico approved by the President on January 31, 1995.

“(4) The amount of any funds disbursed by the Board of Governors of the Federal Reserve System pursuant to the program of assistance referred to in paragraph (3).

“(5) Financial transactions, both inside and outside of Mexico, made during the reporting period involving funds disbursed to Mexico from the exchange stabilization fund or proceeds of Mexican Government securities guaranteed by the exchange stabilization fund.

“(6) All outstanding guarantees issued to, and short-term and medium-term currency swaps with, the Government of Mexico by the Secretary of the Treasury, set forth by category of financing.

“(7) All outstanding currency swaps with the central bank of Mexico by the Board of Governors of the Federal Reserve System and the rationale for, and any expected costs of, such transactions.

“(8) The amount of payments made by customers of Mexican petroleum companies that have been deposited in the account at the Federal Reserve Bank of New York established to ensure repayment of any payment by the United States Government, including the Board of Governors of the Federal Reserve System, in connection with any guarantee issued to, or any swap with, the Government of Mexico.

“(9) Any setoff by the Federal Reserve Bank of New York against funds in the account described in paragraph (8).

“(10) To the extent such information is available, once there has been a setoff by the Federal Reserve Bank of New York, any interruption in deliveries of petroleum products to existing customers whose payments were setoff.

“(11) The interest rates and fees charged to compensate the Secretary of the Treasury for the risk of providing financing.

“SEC. 405. TERMINATION OF REPORTING REQUIREMENTS.

“The requirements of sections 403 and 404 shall terminate on the date that the Government of Mexico has paid all obligations with respect to swap facilities and guarantees of securities made available under the program approved by the President on January 31, 1995.

“SEC. 406. PRESIDENTIAL CERTIFICATION REGARDING SWAP OF CURRENCIES TO MEXICO THROUGH EXCHANGE STABILIZATION FUND OR FEDERAL RESERVE.

“(a) In General.—Notwithstanding any other provision of law, no loan, credit, guarantee, or arrangement for a swap of currencies to Mexico through the exchange stabilization fund or by the Board of Governors of the Federal Reserve System may be extended or (if already extended) further utilized, unless and until the President submits to the appropriate congressional committees a certification that—

“(1) there is no projected cost (as defined in the Credit Reform Act of 1990 [probably means the Federal Credit Reform Act of 1990, 2 U.S.C. 661 et seq.]) to the United States from the proposed loan, credit, guarantee, or currency swap;

“(2) all loans, credits, guarantees, and currency swaps are adequately backed to ensure that all United States funds are repaid;

“(3) the Government of Mexico is making progress in ensuring an independent central bank or an independent currency control mechanism;

“(4) Mexico has in effect a significant economic reform effort; and

“(5) the President has provided the documents described in paragraphs (1) through (28) of House Resolution 80, adopted March 1, 1995.

“(b) Treatment of Classified or Privileged Material.—For purposes of the certification required by subsection (a)(5), the President shall specify, in the case of any document that is classified or subject to applicable privileges, that, while such document may not have been produced to the House of Representatives, in lieu thereof it has been produced to specified Members of Congress or their designees by mutual agreement among the President, the Speaker of the House, and the chairmen and ranking members of the Committee on Banking and Financial Services [now Committee on Financial Services], the Committee on International Relations, and the Permanent Select Committee on Intelligence of the House.

“SEC. 407. DEFINITIONS.

“For purposes of this title, the following definitions shall apply:

“(1) Appropriate congressional committees.—The term ‘appropriate congressional committees’ means the Committees on International Relations and Banking and Financial Services [now Committee on Financial Services] of the House of Representatives, the Committees on Foreign Relations and Banking, Housing, and Urban Affairs of the Senate, and the Committees on Appropriations of the House of Representatives and the Senate.

“(2) Exchange stabilization fund.—The term ‘exchange stabilization fund’ means the stabilization fund referred to in section 5302(a)(1) of title 31, United States Code.”

Certification Regarding Use of Exchange Stabilization Fund and Federal Reserve in Relation to Economic Crisis in Mexico

Memorandum of President of the United States, June 29, 1995, 60 F.R. 35113, provided:

Memorandum for the Secretary of the Treasury

On January 31, 1995, I approved a program of assistance to Mexico, in the form of swap facilities and securities guarantees in an amount not to exceed $20 billion, using the Exchange Stabilization Fund (the “ESF program”).

By virtue of the authority vested in me by the Constitution and the laws of the United States, including section 301 of title 3, United States Code, and section 406 of the Emergency Supplemental Appropriations and Rescissions for the Department of Defense to Preserve and Enhance Military Readiness Act of 1995 (Public Law 104–6) [set out above], I hereby certify that:

(1) There is no projected cost (as defined in the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.]) to the United States from the proposed swap transaction.

(2) All loans, credits, guarantees, and currency swaps to Mexico from the Exchange Stabilization Fund or the Federal Reserve System are adequately backed to ensure that all United States funds are repaid.

(3) The Government of Mexico is making progress in ensuring an independent central bank.

(4) Mexico has in effect a significant economic reform effort.

(5) The Executive Branch has provided the documents requested by House Resolution 80 adopted March 1, 1995, and described in paragraphs (1) through (28) of that Resolution. All documents identified as responsive to the Resolution have been provided to the entire House of Representatives. Pursuant to the terms of the Resolution, the Executive Branch has not provided those documents as to which the Executive Branch has informed the House that it would be inconsistent with the public interest to provide the documents to the House. Pursuant to arrangements for safekeeping of classified materials in House facilities, classified documents have been provided to the House by making them available either at designated, secure House facilities or at Executive Branch facilities. Each agency, including the Federal Reserve Board, has advised the House of the procedures employed by that agency to provide the documents requested by House Resolution 80.

I have been informed that the Board of Governors of the Federal Reserve System has provided the documents requested by House Resolution 80 and described in paragraphs (1) through (28) of that Resolution.

I hereby delegate to you the reporting requirement contained in section 406 of Public Law 104–6 [set out above]. You are authorized and requested to report this certification immediately to the Speaker of the House and appropriate congressional committees, as defined in section 407 of Public Law 104–6 [set out above].

I also hereby delegate to you the reporting requirement contained in section 403 of Public Law 104–6 [set out above].

You are authorized and directed to publish this memorandum in the Federal Register.

William J. Clinton.      

Prior certifications were contained in the following:

Memorandum of President of the United States, May 17, 1995, 60 F.R. 27395.

Memorandum of President of the United States, Apr. 14, 1995, 60 F.R. 19485.

Section Referred to in Other Sections

This section is referred to in section 5304 of this title; title 22 sections 262r–3, 286e–3, 286e–7, 286o, 5411.

§5303. Reserved coins and currencies of foreign countries

An agency may use coins and currencies of a foreign country the United States Government holds that are or may be reserved for a specific program or activity of an agency. The agency shall reimburse the Treasury from appropriations and shall replace the coins and currencies when they are needed for the program or activity for which they were reserved originally.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 994.)

The word “Federal” is omitted as unnecessary because of the definition of “agency” in section 101 of the revised title. The words “coins and” and “Government” are added for consistency. The words “or set aside” and “of the Government” are omitted as surplus. The words “The agency shall reimburse . . . shall replace” are substituted for “except (1) that reimbursement shall be made . . . (2) . . . shall be replaced” for clarity. The words “applicable . . . of the agency concerned” are omitted as surplus. The words “program or activity” are substituted for “purpose” for clarity and consistency.

§5304. Regulations

With the approval of the President, the Secretary of the Treasury may prescribe regulations—

(1) to carry out section 5301 of this title; and

(2) the Secretary considers necessary to carry out section 5302 of this title.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 994.)

Before clause (1), the words “prescribe regulations” are substituted for “make and promulgate rules and regulations” in 31:822 and “issue . . . such rules and regulations” in 31:822b for consistency. In clause (1), the words “to carry out” are substituted for “covering any action taken or to be taken by the President under” in 31:822 to eliminate unnecessary words. In clause (2), the words “or proper” in 31:822b and “the purposes of” are omitted as surplus. Reference to 31:821 is omitted as obsolete because silver is no longer coined. Reference to 31:824 is omitted as obsolete because 31:824 is executed and is not part of the revised title.

SUBCHAPTER II—RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

Subchapter Referred to in Other Sections

This subchapter is referred to in title 12 sections 1464, 1786, 1817, 1818, 1829b, 3401, 3413; title 15 sections 78q, 6802; title 18 sections 1952, 1956, 1961; title 22 section 2714.

§5311. Declaration of purpose

It is the purpose of this subchapter (except section 5315) to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 995.)

Uniform State Licensing and Regulation of Check Cashing, Currency Exchange, and Money Transmitting Businesses

Pub. L. 103–325, title IV, §407, Sept. 23, 1994, 108 Stat. 2247, provided that:

“(a) Uniform Laws and Enforcement.—For purposes of preventing money laundering and protecting the payment system from fraud and abuse, it is the sense of the Congress that the several States should—

“(1) establish uniform laws for licensing and regulating businesses which—

“(A) provide check cashing, currency exchange, or money transmitting or remittance services, or issue or redeem money orders, travelers’ checks, and other similar instruments; and

“(B) are not depository institutions (as defined in section 5313(g) of title 31, United States Code); and

“(2) provide sufficient resources to the appropriate State agency to enforce such laws and regulations prescribed pursuant to such laws.

“(b) Model Statute.—It is the sense of the Congress that the several States should develop, through the auspices of the National Conference of Commissioners on Uniform State Laws, the American Law Institute, or such other forum as the States may determine to be appropriate, a model statute to carry out the goals described in subsection (a) which would include the following:

“(1) Licensing requirements.—A requirement that any business described in subsection (a)(1) be licensed and regulated by an appropriate State agency in order to engage in any such activity within the State.

“(2) Licensing standards.—A requirement that—

“(A) in order for any business described in subsection (a)(1) to be licensed in the State, the appropriate State agency shall review and approve—

“(i) the business record and the capital adequacy of the business seeking the license; and

“(ii) the competence, experience, integrity, and financial ability of any individual who—

     “(I) is a director, officer, or supervisory employee of such business; or

     “(II) owns or controls such business; and

“(B) any record, on the part of any business seeking the license or any person referred to in subparagraph (A)(ii), of—

“(i) any criminal activity;

“(ii) any fraud or other act of personal dishonesty;

“(iii) any act, omission, or practice which constitutes a breach of a fiduciary duty; or

“(iv) any suspension or removal, by any agency or department of the United States or any State, from participation in the conduct of any federally or State licensed or regulated business,

  may be grounds for the denial of any such license by the appropriate State agency.

“(3) Reporting requirements.—A requirement that any business described in subsection (a)(1)—

“(A) disclose to the appropriate State agency the fees charged to consumers for services described in subsection (a)(1)(A); and

“(B) conspicuously disclose to the public, at each location of such business, the fees charged to consumers for such services.

“(4) Procedures to ensure compliance with federal cash transaction reporting requirements.—A civil or criminal penalty for operating any business referred to in paragraph (1) without establishing and complying with appropriate procedures to ensure compliance with subchapter II of chapter 53 of title 31, United States Code (relating to records and reports on monetary instruments transactions).

“(5) Criminal penalties for operation of business without a license.—A criminal penalty for operating any business referred to in paragraph (1) without a license within the State after the end of an appropriate transition period beginning on the date of enactment of such model statute by the State.

“(c) Study Required.—The Secretary of the Treasury shall conduct a study of—

“(1) the progress made by the several States in developing and enacting a model statute which—

“(A) meets the requirements of subsection (b); and

“(B) furthers the goals of—

“(i) preventing money laundering by businesses which are required to be licensed under any such statute; and

“(ii) protecting the payment system, including the receipt, payment, collection, and clearing of checks, from fraud and abuse by such businesses; and

“(2) the adequacy of—

“(A) the activity of the several States in enforcing the requirements of such statute; and

“(B) the resources made available to the appropriate State agencies for such enforcement activity.

“(d) Report Required.—Not later than the end of the 3-year period beginning on the date of enactment of this Act [Sept. 23, 1994] and not later than the end of each of the first two 1-year periods beginning after the end of such 3-year period, the Secretary of the Treasury shall submit a report to the Congress containing the findings and recommendations of the Secretary in connection with the study under subsection (c), together with such recommendations for legislative and administrative action as the Secretary may determine to be appropriate.

“(e) Recommendations in Cases of Inadequate Regulation and Enforcement by States.—If the Secretary of the Treasury determines that any State has been unable to—

“(1) enact a statute which meets the requirements described in subsection (b);

“(2) undertake adequate activity to enforce such statute; or

“(3) make adequate resources available to the appropriate State agency for such enforcement activity,

the report submitted pursuant to subsection (d) shall contain recommendations of the Secretary which are designed to facilitate the enactment and enforcement by the State of such a statute.

“(f) Federal Funding Study.—

“(1) Study required.—The Secretary of the Treasury shall conduct a study to identify possible available sources of Federal funding to cover costs which will be incurred by the States in carrying out the purposes of this section.

“(2) Report.—The Secretary of the Treasury shall submit a report to the Congress on the study conducted pursuant to paragraph (1) not later than the end of the 18-month period beginning on the date of enactment of this Act [Sept. 23, 1994].”

Anti-Money Laundering Training Team

Pub. L. 102–550, title XV, §1518, Oct. 28, 1992, 106 Stat. 4060, provided that: “The Secretary of the Treasury and the Attorney General shall jointly establish a team of experts to assist and provide training to foreign governments and agencies thereof in developing and expanding their capabilities for investigating and prosecuting violations of money laundering and related laws.”

Advisory Group on Reporting Requirements

Pub. L. 102–550, title XV, §1564, Oct. 28, 1992, 106 Stat. 4073, provided that:

“(a) Establishment.—Not later than 90 days after the date of the enactment of this Act [Oct. 28, 1992], the Secretary of the Treasury shall establish a Bank Secrecy Act Advisory Group consisting of representatives of the Department of the Treasury, the Department of Justice, and the Office of National Drug Control Policy and of other interested persons and financial institutions subject to the reporting requirements of subchapter II of chapter 53 of title 31, United States Code, or section 6050I of the Internal Revenue Code of 1986 [26 U.S.C. 6050I].

“(b) Purposes.—The Advisory Group shall provide a means by which the Secretary—

“(1) informs private sector representatives, on a regular basis, of the ways in which the reports submitted pursuant to the requirements referred to in subsection (a) have been used;

“(2) informs private sector representatives, on a regular basis, of how information regarding suspicious financial transactions provided voluntarily by financial institutions has been used; and

“(3) receives advice on the manner in which the reporting requirements referred to in subsection (a) should be modified to enhance the ability of law enforcement agencies to use the information provided for law enforcement purposes.

“(c) Inapplicability of Federal Advisory Committee Act.—The Federal Advisory Committee Act [5 App. U.S.C.] shall not apply to the Bank Secrecy Act Advisory Group established pursuant to subsection (a).”

GAO Feasibility Study of Financial Crimes Enforcement Network

Pub. L. 102–550, title XV, §1565, Oct. 28, 1992, 106 Stat. 4074, provided that:

“(a) Study Required.—The Comptroller General of the United States shall conduct a feasibility study of the Financial Crimes Enforcement Network (popularly referred to as ‘Fincen’) established by the Secretary of the Treasury in cooperation with other agencies and departments of the United States and appropriate Federal banking agencies.

“(b) Specific Requirements.—In conducting the study required under subsection (a), the Comptroller General shall examine and evaluate—

“(1) the extent to which Federal, State, and local governmental and nongovernmental organizations are voluntarily providing information which is necessary for the system to be useful for law enforcement purposes;

“(2) the extent to which the operational guidelines established for the system provide for the coordinated and efficient entry of information into, and withdrawal of information from, the system;

“(3) the extent to which the operating procedures established for the system provide appropriate standards or guidelines for determining—

“(A) who is to be given access to the information in the system;

“(B) what limits are to be imposed on the use of such information; and

“(C) how information about activities or relationships which involve or are closely associated with the exercise of constitutional rights is to be screened out of the system; and

“(4) the extent to which the operating procedures established for the system provide for the prompt verification of the accuracy and completeness of information entered into the system and the prompt deletion or correction of inaccurate or incomplete information.

“(c) Report to Congress.—Before the end of the 1-year period, beginning on the date of the enactment of this Act [Oct. 28, 1992], the Comptroller General of the United States shall submit a report to the Congress containing the findings and conclusions of the Comptroller General in connection with the study conducted pursuant to subsection (a), together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”

Reports on Uses Made of Currency Transaction Reports

Pub. L. 101–647, title I, §101, Nov. 29, 1990, 104 Stat. 4789, provided that: “Not later than 180 days after the effective date of this section [Nov. 29, 1990], and every 2 years for 4 years, the Secretary of the Treasury shall report to the Congress the following:

“(1) the number of each type of report filed pursuant to subchapter II of chapter 53 of title 31, United States Code (or regulations promulgated thereunder) in the previous fiscal year;

“(2) the number of reports filed pursuant to section 6050I of the Internal Revenue Code of 1986 [26 U.S.C. 6050I] (regarding transactions involving currency) in the previous fiscal year;

“(3) an estimate of the rate of compliance with the reporting requirements by persons required to file the reports referred to in paragraphs (1) and (2);

“(4) the manner in which the Department of the Treasury and other agencies of the United States collect, organize, analyze and use the reports referred to in paragraphs (1) and (2) to support investigations and prosecutions of (A) violations of the criminal laws of the United States, (B) violations of the laws of foreign countries, and (C) civil enforcement of the laws of the United States including the provisions regarding asset forfeiture;

“(5) a summary of sanctions imposed in the previous fiscal year against persons who failed to comply with the reporting requirements referred to in paragraphs (1) and (2), and other steps taken to ensure maximum compliance;

“(6) a summary of criminal indictments filed in the previous fiscal year which resulted, in large part, from investigations initiated by analysis of the reports referred to in paragraphs (1) and (2); and

“(7) a summary of criminal indictments filed in the previous fiscal year which resulted, in large part, from investigations initiated by information regarding suspicious financial transactions provided voluntarily by financial institutions.”

International Currency Transaction Reporting

Pub. L. 100–690, title IV, §4701, Nov. 18, 1988, 102 Stat. 4290, stated Congressional findings concerning success of cash transaction and money laundering control statutes in United States and desirability of United States playing a leadership role in development of similar international system, urged United States Government to seek active cooperation of other countries in enforcement of such statutes, urged Secretary of the Treasury to negotiate with finance ministers of foreign countries to establish an international currency control agency to serve as central source of information and database for international drug enforcement agencies to collect and analyze currency transaction reports filed by member countries, and encouraged adoption, by member countries, of uniform cash transaction and money laundering statutes, prior to repeal by Pub. L. 102–583, §6(e)(1), Nov. 2, 1992, 106 Stat. 4933.

Restrictions on Laundering of United States Currency

Pub. L. 100–690, title IV, §4702, Nov. 18, 1988, 102 Stat. 4291, as amended by Pub. L. 103–447, title I, §103(b), Nov. 2, 1994, 108 Stat. 4693, provided that:

“(a) Findings.—The Congress finds that international currency transactions, especially in United States currency, that involve the proceeds of narcotics trafficking fuel trade in narcotics in the United States and worldwide and consequently are a threat to the national security of the United States.

“(b) Purpose.—The purpose of this section is to provide for international negotiations that would expand access to information on transactions involving large amounts of United States currency wherever those transactions occur worldwide.

“(c) Negotiations.—(1) The Secretary of the Treasury (hereinafter in this section referred to as the ‘Secretary’) shall enter into negotiations with the appropriate financial supervisory agencies and other officials of any foreign country the financial institutions of which do business in United States currency. Highest priority shall be attached to countries whose financial institutions the Secretary determines, in consultation with the Attorney General and the Director of National Drug Control Policy, may be engaging in currency transactions involving the proceeds of international narcotics trafficking, particularly United States currency derived from drug sales in the United States.

“(2) The purposes of negotiations under this subsection are—

“(A) to reach one or more international agreements to ensure that foreign banks and other financial institutions maintain adequate records of large United States currency transactions, and

“(B) to establish a mechanism whereby such records may be made available to United States law enforcement officials.

In carrying out such negotiations, the Secretary should seek to enter into and further cooperative efforts, voluntary information exchanges, the use of letters rogatory, and mutual legal assistance treaties.

“(d) Reports.—Not later than 1 year after the date of enactment of this Act [Nov. 18, 1988], the Secretary shall submit an interim report to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on progress in the negotiations under subsection (c). Not later than 2 years after such enactment, the Secretary shall submit a final report to such Committees and the President on the outcome of those negotiations and shall identify, in consultation with the Attorney General and the Director of National Drug Control Policy, countries—

“(1) with respect to which the Secretary determines there is evidence that the financial institutions in such countries are engaging in currency transactions involving the proceeds of international narcotics trafficking; and

“(2) which have not reached agreement with United States authorities on a mechanism for exchanging adequate records on international currency transactions in connection with narcotics investigations and proceedings.

“(e) Authority.—If after receiving the advice of the Secretary and in any case at the time of receipt of the Secretary's report, the Secretary determines that a foreign country—

“(1) has jurisdiction over financial institutions that are substantially engaging in currency transactions that effect [affect] the United States involving the proceeds of international narcotics trafficking;

“(2) such country has not reached agreement on a mechanism for exchanging adequate records on international currency transactions in connection with narcotics investigations and proceedings; and

“(3) such country is not negotiating in good faith to reach such an agreement,

the President shall impose appropriate penalties and sanctions, including temporarily or permanently—

“(1) prohibiting such persons, institutions or other entities in such countries from participating in any United States dollar clearing or wire transfer system; and

“(2) prohibiting such persons, institutions or entities in such countries from maintaining an account with any bank or other financial institution chartered under the laws of the United States or any State.

Any penalties or sanctions so imposed may be delayed or waived upon certification of the President to the Congress that it is in the national interest to do so. Financial institutions in such countries that maintain adequate records shall be exempt from such penalties and sanctions.

“(f) Definitions.—For the purposes of this section—

“(1) The term ‘United States currency’ means Federal Reserve Notes and United States coins.

“(2) The term ‘adequate records’ means records of United States’ currency transactions in excess of $10,000 including the identification of the person initiating the transaction, the person's business or occupation, and the account or accounts affected by the transaction, or other records of comparable effect.”

International Information Exchange System; Study of Foreign Branches of Domestic Institutions

Pub. L. 99–570, title I, §1363, Oct. 27, 1986, 100 Stat. 3207–33, required the Secretary of the Treasury to initiate discussions with the central banks or other appropriate governmental authorities of other countries and propose that an information exchange system be established to reduce international flow of money derived from illicit drug operations and other criminal activities and to report to Congress before the end of the 9-month period beginning Oct. 27, 1986. The Secretary of the Treasury was also required to conduct a study of (1) the extent to which foreign branches of domestic institutions are used to facilitate illicit transfers of or to evade reporting requirements on transfers of coins, currency, and other monetary instruments into and out of the United States; (2) the extent to which the law of the United States is applicable to the activities of such foreign branches; and (3) methods for obtaining the cooperation of the country in which any such foreign branch is located for purposes of enforcing the law of the United States with respect to transfers, and reports on transfers, of such monetary instruments into and out of the United States and to report to Congress before the end of the 9-month period beginning Oct. 27, 1986.

§5312. Definitions and application

(a) In this subchapter—

(1) “financial agency” means a person acting for a person (except for a country, a monetary or financial authority acting as a monetary or financial authority, or an international financial institution of which the United States Government is a member) as a financial institution, bailee, depository trustee, or agent, or acting in a similar way related to money, credit, securities, gold, or a transaction in money, credit, securities, or gold.

(2) “financial institution” means—

(A) an insured bank (as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)));

(B) a commercial bank or trust company;

(C) a private banker;

(D) an agency or branch of a foreign bank in the United States;

(E) an insured institution (as defined in section 401(a) ¹ of the National Housing Act (12 U.S.C. 1724(a)));

(F) a thrift institution;

(G) a broker or dealer registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);

(H) a broker or dealer in securities or commodities;

(I) an investment banker or investment company;

(J) a currency exchange;

(K) an issuer, redeemer, or cashier of travelers’ checks, checks, money orders, or similar instruments;

(L) an operator of a credit card system;

(M) an insurance company;

(N) a dealer in precious metals, stones, or jewels;

(O) a pawnbroker;

(P) a loan or finance company;

(Q) a travel agency;

(R) a licensed sender of money;

(S) a telegraph company;

(T) a business engaged in vehicle sales, including automobile, airplane, and boat sales;

(U) persons involved in real estate closings and settlements;

(V) the United States Postal Service;

(W) an agency of the United States Government or of a State or local government carrying out a duty or power of a business described in this paragraph;

(X) a casino, gambling casino, or gaming establishment with an annual gaming revenue of more than $1,000,000 which—

(i) is licensed as a casino, gambling casino, or gaming establishment under the laws of any State or any political subdivision of any State; or

(ii) is an Indian gaming operation conducted under or pursuant to the Indian Gaming Regulatory Act other than an operation which is limited to class I gaming (as defined in section 4(6) of such Act);

(Y) any business or agency which engages in any activity which the Secretary of the Treasury determines, by regulation, to be an activity which is similar to, related to, or a substitute for any activity in which any business described in this paragraph is authorized to engage; or

(Z) any other business designated by the Secretary whose cash transactions have a high degree of usefulness in criminal, tax, or regulatory matters.

(3) “monetary instruments” means—

(A) United States coins and currency;

(B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and

(C) as the Secretary of the Treasury shall provide by regulation for purposes of section 5316, checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form.

(4) “person”, in addition to its meaning under section 1 of title 1, includes a trustee, a representative of an estate and, when the Secretary prescribes, a governmental entity.

(5) “United States” means the States of the United States, the District of Columbia, and, when the Secretary prescribes by regulation, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, American Samoa, the Trust Territory of the Pacific Islands, a territory or possession of the United States, or a military or diplomatic establishment.

(b) In this subchapter—

(1) “domestic financial agency” and “domestic financial institution” apply to an action in the United States of a financial agency or institution.

(2) “foreign financial agency” and “foreign financial institution” apply to an action outside the United States of a financial agency or institution.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 995; Pub. L. 99–570, title I, §1362, Oct. 27, 1986, 100 Stat. 3207–33; Pub. L. 100–690, title VI, §6185(a), (g)(1), Nov. 18, 1988, 102 Stat. 4354, 4357; Pub. L. 103–325, title IV, §§405, 409, Sept. 23, 1994, 108 Stat. 2247, 2252.)

In subsection (a)(1), the text of 31:1052(a) is omitted as unnecessary. The text of 31:1052(b) is omitted because of the restatement. The text of 31:1052(i) is omitted as unnecessary because the source provision is restated where necessary in the revised subchapter.

In subsection (a)(2), (3), (4), and (5), the words “the Secretary . . . prescribes” are substituted for “specified by the Secretary by regulation”, “as the Secretary may by regulation specify”, “specified by the Secretary”, and “the Secretary shall by regulation specify” for consistency.

In subsection (a)(2) and (3), the words “for the purposes of the provision of this chapter to which the regulation relates” are omitted as surplus.

In subsection (a)(2), before subclause (A), the words “any person which does business in any one or more of the following capacities” are omitted as surplus. In subclause (F), the words “savings bank, building and loan association, credit union, industrial bank, or other” are omitted as surplus. In subclause (T), the words “agency of the United States Government or of a State or local government” are substituted for “Federal, State, or local government institution” for consistency. In subclause (U), the words “type of” are omitted as surplus. The word “agency” is substituted for “institution” for consistency.

In subsection (a)(3)(B)–(5), the word “prescribe” is substituted for “specify” for consistency in the revised title and with other titles of the United States Code.

In subsection (a)(3)(B), the words “in addition”, and “and such types of” are omitted as surplus. The words “similar material” are substituted for “the equivalent thereof” for clarity.

In subsection (a)(4), the words “in addition to its meaning under section 1 of title 1” are substituted for “natural persons, partnerships, . . . associations, corporations, and all entities cognizable as legal personalities” for consistency because 1:1 is applicable to all laws unless otherwise provided. The words “a trustee, a representative of an estate” are substituted for “trusts, estates”, and the word “entity” is substituted for “department or agency”, for consistency. The words “either for the purpose of this chapter generally or any particular requirement thereunder” are omitted as surplus.

In subsection (a)(5), the words “used in a geographic sense” are omitted because of the restatement. The words “either for the purposes of this chapter generally or any particular requirement thereunder” are omitted as surplus. The words “territory or” are added for consistency.

Subsection (b) is substituted for 31:1052(f) and (h) to eliminate unnecessary words and for consistency.

References in Text

Section 401 of the National Housing Act, referred to in subsec. (a)(2)(E), which was classified to section 1724 of Title 12, Banks and Banking, was repealed by Pub. L. 101–73, title IV, §407, Aug. 9, 1989, 103 Stat. 363.

The Securities Exchange Act of 1934, referred to in subsec. (a)(2)(G), is act June 6, 1934, ch. 404, 48 Stat. 881, as amended, which is classified principally to chapter 2B (§78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 78a of Title 15 and Tables.

The Indian Gaming Regulatory Act, referred to in subsec. (a)(2)(X)(ii), is Pub. L. 100–497, Oct. 17, 1988, 102 Stat. 2467, as amended, which is classified principally to chapter 29 (§2701 et seq.) of Title 25, Indians. Section 4(6) of the Act is classified to section 2703(6) of Title 25. For complete classification of this Act to the Code, see Short Title note set out under section 2701 of this title and Tables.

Amendments

1994—Subsec. (a)(2)(X) to (Z). Pub. L. 103–325, §409, added subpar. (X) and redesignated former subpars. (X) and (Y) as (Y) and (Z), respectively.

Subsec. (a)(3)(C). Pub. L. 103–325, §405, added subpar. (C).

1988—Subsec. (a)(2)(T) to (Y). Pub. L. 100–690, §6185(a), added subpars. (T) to (Y) and struck out former subpars. (T) and (U) which read as follows:

“(T) an agency of the United States Government or of a State or local government carrying out a duty or power of a business described in this clause (2), including the United States Postal Service; or

“(U) another business or agency carrying out a similar, related, or substitute duty or power the Secretary of the Treasury prescribes.”

Subsec. (a)(5). Pub. L. 100–690, §6185(g)(1), inserted a comma after “Puerto Rico” and struck out second comma after “Pacific Islands”.

1986—Subsec. (a)(2)(T). Pub. L. 99–570, §1362(a), which directed that the Postal Service be included within United States agencies by amending subsec. (a)(2)(U) of this section by inserting before the semicolon at the end thereof the following “, including the United States Postal Service”, was executed to subsec. (a)(2)(T) of this section as the probable intent of Congress, because subsec. (a)(2)(U) does not contain a semicolon and subsec. (a)(2)(T) relates to United States agencies.

Subsec. (a)(5). Pub. L. 99–570, §1362(b), inserted “the Virgin Islands, Guam, the Northern Mariana Islands, American Samoa, the Trust Territory of the Pacific Islands,” after “Puerto Rico”.

Termination of Trust Territory of the Pacific Islands

For termination of Trust Territory of the Pacific Islands, see note set out preceding section 1681 of Title 48, Territories and Insular Possessions.

Section Referred to in Other Sections

This section is referred to in section 5340 of this title; title 12 section 1953; title 18 sections 986, 1956, 2339B; title 19 sections 1401, 1607; title 26 section 6050I; title 50 section 438.

¹ See References in Text note below.

§5313. Reports on domestic coins and currency transactions

(a) When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.

(b) The Secretary may designate a domestic financial institution as an agent of the United States Government to receive a report under this section. However, the Secretary may designate a domestic financial institution that is not insured, chartered, examined, or registered as a domestic financial institution only if the institution consents. The Secretary may suspend or revoke a designation for a violation of this subchapter or a regulation under this subchapter (except a violation of section 5315 of this title or a regulation prescribed under section 5315), section 411 ¹ of the National Housing Act (12 U.S.C. 1730d), or section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b).

(c)(1) A person (except a domestic financial institution designated under subsection (b) of this section) required to file a report under this section shall file the report—

(A) with the institution involved in the transaction if the institution was designated;

(B) in the way the Secretary prescribes when the institution was not designated; or

(C) with the Secretary.

(2) The Secretary shall prescribe—

(A) the filing procedure for a domestic financial institution designated under subsection (b) of this section; and

(B) the way the institution shall submit reports filed with it.

(d) Mandatory Exemptions From Reporting Requirements.—

(1) In general.—The Secretary of the Treasury shall exempt, pursuant to section 5318(a)(6), a depository institution from the reporting requirements of subsection (a) with respect to transactions between the depository institution and the following categories of entities:

(A) Another depository institution.

(B) A department or agency of the United States, any State, or any political subdivision of any State.

(C) Any entity established under the laws of the United States, any State, or any political subdivision of any State, or under an interstate compact between 2 or more States, which exercises governmental authority on behalf of the United States or any such State or political subdivision.

(D) Any business or category of business the reports on which have little or no value for law enforcement purposes.

(2) Notice of exemption.—The Secretary of the Treasury shall publish in the Federal Register at such times as the Secretary determines to be appropriate (but not less frequently than once each year) a list of all the entities whose transactions with a depository institution are exempt under this subsection from the reporting requirements of subsection (a).

(e) Discretionary Exemptions From Reporting Requirements.—

(1) In general.—The Secretary of the Treasury may exempt, pursuant to section 5318(a)(6), a depository institution from the reporting requirements of subsection (a) with respect to transactions between the depository institution and a qualified business customer of the institution on the basis of information submitted to the Secretary by the institution in accordance with procedures which the Secretary shall establish.

(2) Qualified business customer defined.—For purposes of this subsection, the term “qualified business customer” means a business which—

(A) maintains a transaction account (as defined in section 19(b)(1)(C) of the Federal Reserve Act) at the depository institution;

(B) frequently engages in transactions with the depository institution which are subject to the reporting requirements of subsection (a); and

(C) meets criteria which the Secretary determines are sufficient to ensure that the purposes of this subchapter are carried out without requiring a report with respect to such transactions.

(3) Criteria for exemption.—The Secretary of the Treasury shall establish, by regulation, the criteria for granting and maintaining an exemption under paragraph (1).

(4) Guidelines.—

(A) In general.—The Secretary of the Treasury shall establish guidelines for depository institutions to follow in selecting customers for an exemption under this subsection.

(B) Contents.—The guidelines may include a description of the types of businesses or an itemization of specific businesses for which no exemption will be granted under this subsection to any depository institution.

(5) Annual review.—The Secretary of the Treasury shall prescribe regulations requiring each depository institution to—

(A) review, at least once each year, the qualified business customers of such institution with respect to whom an exemption has been granted under this subsection; and

(B) upon the completion of such review, resubmit information about such customers, with such modifications as the institution determines to be appropriate, to the Secretary for the Secretary's approval.

(6) 2-year phase-in provision.—During the 2-year period beginning on the date of enactment of the Money Laundering Suppression Act of 1994, this subsection shall be applied by the Secretary on the basis of such criteria as the Secretary determines to be appropriate to achieve an orderly implementation of the requirements of this subsection.

(f) Provisions Applicable to Mandatory and Discretionary Exemptions.—

(1) Limitation on liability of depository institutions.—No depository institution shall be subject to any penalty which may be imposed under this subchapter for the failure of the institution to file a report with respect to a transaction with a customer for whom an exemption has been granted under subsection (d) or (e) unless the institution—

(A) knowingly files false or incomplete information to the Secretary with respect to the transaction or the customer engaging in the transaction; or

(B) has reason to believe at the time the exemption is granted or the transaction is entered into that the customer or the transaction does not meet the criteria established for granting such exemption.

(2) Coordination with other provisions.—Any exemption granted by the Secretary of the Treasury under section 5318(a) in accordance with this section, and any transaction which is subject to such exemption, shall be subject to any other provision of law applicable to such exemption, including—

(A) the authority of the Secretary, under section 5318(a)(6), to revoke such exemption at any time; and

(B) any requirement to report, or any authority to require a report on, any possible violation of any law or regulation or any suspected criminal activity.

(g) Depository Institution Defined.—For purposes of this section, the term “depository institution”—

(1) has the meaning given to such term in section 19(b)(1)(A) of the Federal Reserve Act; and

(2) includes—

(A) any branch, agency, or commercial lending company (as such terms are defined in section 1(b) of the International Banking Act of 1978);

(B) any corporation chartered under section 25A of the Federal Reserve Act; and

(C) any corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve System under section 25 of the Federal Reserve Act.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 996; Pub. L. 103–325, title IV, §402(a), Sept. 23, 1994, 108 Stat. 2243.)

In subsection (a), the words “coins or” are added, and the words “prescribe” and “prescribes” are substituted for “specify” in 31:1081, and “require”, for consistency. The words “other parties thereto or” in 31:1082 are omitted as surplus. The words “to the Secretary” in 31:1081 are omitted as unnecessary and for clarity. The words “in such detail” are omitted as surplus. The words “A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made” are substituted for 31:1082(last sentence) for clarity and to eliminate unnecessary words.

In subsection (b), the words “in his discretion” and “individually or by class” are omitted as surplus. The word “Government” is added for consistency. The words “or a regulation under this subchapter”, are added because of the restatement. The words “(except a violation of section 5315 of this title or a regulation prescribed under section 5315)” are added because 31:1141–1143 was not enacted as a part of the Currency and Foreign Transactions Reporting Act that is restated in this subchapter.

In subsection (c)(1), clause (A) is substituted for “with respect to a domestic financial institution . . . with that institution” for clarity. Clause (C) is substituted for “any such person may, at his election and in lieu of filing the report in the manner hereinabove prescribed, file the report with the Secretary” to eliminate unnecessary words.

References in Text

Section 411 of the National Housing Act, referred to in subsec. (b), which was classified to section 1730d of Title 12, Banks and Banking, was repealed by Pub. L. 101–73, title IV, §407, Aug. 9, 1989, 103 Stat. 363.

Section 19(b)(1)(A) and (C) of the Federal Reserve Act, referred to in subsecs. (e)(2)(A) and (g)(1), is classified to section 461(b)(1)(A) and (C) of Title 12.

The date of enactment of the Money Laundering Suppression Act of 1994, referred to in subsec. (e)(6), is the date of enactment of title IV of Pub. L. 103–325, which was approved Sept. 23, 1994.

Section 1(b) of the International Banking Act of 1978, referred to in subsec. (g)(2)(A), is classified to section 3101 of Title 12.

Sections 25 and 25A of the Federal Reserve Act, referred to in subsec. (g)(2)(B), (C), are classified to subchapters I (§§601 et seq.) and II (§§611 et seq.), respectively, of chapter 6 of Title 12.

Amendments

1994—Subsecs. (d) to (g). Pub. L. 103–325 added subsecs. (d) to (g).

Report Reduction Goal; Streamlined Currency Transaction Reports

Section 402(b), (c) of Pub. L. 103–325 provided that:

“(b) Report Reduction Goal; Reports.—

“(1) In general.—In implementing the amendment made by subsection (a) [amending this section], the Secretary of the Treasury shall seek to reduce, within a reasonable period of time, the number of reports required to be filed in the aggregate by depository institutions pursuant to section 5313(a) of title 31, United States Code, by at least 30 percent of the number filed during the year preceding the date of enactment of this Act [Sept. 23, 1994].

“(2) Interim report.—The Secretary of the Treasury shall submit a report to the Congress not later than the end of the 180-day period beginning on the date of enactment of this Act on the progress made by the Secretary in implementing the amendment made by subsection (a).

“(3) Annual report.—The Secretary of the Treasury shall submit an annual report to the Congress after the end of each of the first 5 calendar years which begin after the date of enactment of this Act on the extent to which the Secretary has reduced the overall number of currency transaction reports filed with the Secretary pursuant to section 5313(a) of title 31, United States Code, consistent with the purposes of such section and effective law enforcement.

“(c) Streamlined Currency Transaction Reports.—The Secretary of the Treasury shall take such action as may be appropriate to—

“(1) redesign the format of reports required to be filed under section 5313(a) of title 31, United States Code, by any financial institution (as defined in section 5312(a)(2) of such title) to eliminate the need to report information which has little or no value for law enforcement purposes; and

“(2) reduce the time and effort required to prepare such report for filing by any such financial institution under such section.”

Section Referred to in Other Sections

This section is referred to in sections 5319, 5324, 5330 of this title; title 12 section 3420; title 18 sections 981, 982; title 26 section 6103; title 28 section 524.

¹ See References in Text note below.

§5314. Records and reports on foreign financial agency transactions

(a) Considering the need to avoid impeding or controlling the export or import of monetary instruments and the need to avoid burdening unreasonably a person making a transaction with a foreign financial agency, the Secretary of the Treasury shall require a resident or citizen of the United States or a person in, and doing business in, the United States, to keep records, file reports, or keep records and file reports, when the resident, citizen, or person makes a transaction or maintains a relation for any person with a foreign financial agency. The records and reports shall contain the following information in the way and to the extent the Secretary prescribes:

(1) the identity and address of participants in a transaction or relationship.

(2) the legal capacity in which a participant is acting.

(3) the identity of real parties in interest.

(4) a description of the transaction.

(b) The Secretary may prescribe—

(1) a reasonable classification of persons subject to or exempt from a requirement under this section or a regulation under this section;

(2) a foreign country to which a requirement or a regulation under this section applies if the Secretary decides applying the requirement or regulation to all foreign countries is unnecessary or undesirable;

(3) the magnitude of transactions subject to a requirement or a regulation under this section;

(4) the kind of transaction subject to or exempt from a requirement or a regulation under this section; and

(5) other matters the Secretary considers necessary to carry out this section or a regulation under this section.

(c) A person shall be required to disclose a record required to be kept under this section or under a regulation under this section only as required by law.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 997.)

In subsection (a), before clause (1), the words “currency or other”, “legitimately”, “by regulation”, and “directly or indirectly” are omitted as surplus. The words “for any person” are substituted for “on behalf of himself or another” to eliminate unnecessary words. The words “and to the extent” are substituted for “and in such detail” for clarity. In clauses (1) and (2), the words “participants” and “participant” are substituted for “parties” for consistency. In clause (2), the words “to the transaction or relationship” are omitted as surplus. In clause (3), the words “if one or more of the parties are not acting solely as principals” are omitted as surplus. In clause (4), the words “including the amounts of money, credit, or other property involved” are omitted as surplus.

In subsection (b), the words “or a regulation under this section” are added because of the restatement. The words “or does not apply” and “uniform” in clause (2) are omitted as surplus. In clause (5), the words “carry out” are substituted for “the application of” for consistency.

In subsection (c), the words “produce or otherwise . . . the contents of” and “in compliance with a subpena or summons duly authorized and issued or . . . may otherwise be” are omitted as surplus. The words “under a regulation” are added because of the restatement.

Section Referred to in Other Sections

This section is referred to in sections 5319, 5321 of this title.

§5315. Reports on foreign currency transactions

(a) Congress finds that—

(1) moving mobile capital can have a significant impact on the proper functioning of the international monetary system;

(2) it is important to have the most feasible current and complete information on the kind and source of capital flows, including transactions by large United States businesses and their foreign affiliates; and

(3) additional authority should be provided to collect information on capital flows under section 5(b) of the Trading With the Enemy Act (50 App. U.S.C. 5(b)) and section 8 of the Bretton Woods Agreement Act (22 U.S.C. 286f).

(b) In this section, “United States person” and “foreign person controlled by a United States person” have the same meanings given those terms in section 7(f)(2)(A) and (C), respectively, of the Securities and Exchange Act of 1934 (15 U.S.C. 78g(f)(2)(A), (C)).

(c) The Secretary of the Treasury shall prescribe regulations consistent with subsection (a) of this section requiring reports on foreign currency transactions conducted by a United States person or a foreign person controlled by a United States person. The regulations shall require that a report contain information and be submitted at the time and in the way, with reasonable exceptions and classifications, necessary to carry out this section.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 997.)

In subsection (a)(3), the words “it is desirable to emphasize this objective . . . existing legal” are omitted as unnecessary.

In subsection (c), the words “(hereafter referred to as the ‘Secretary’)” are omitted because of the restatement. The words “under the authority of this subchapter and any other authority conferred by law” are omitted as surplus. The word “prescribe” is substituted for “supplement” for clarity. The words “the statement of findings under” and “the submission of” are omitted as surplus. The words “Reports required under this subchapter shall cover foreign currency transactions” are omitted because of the restatement. The words “such terms are” and “the policy of” are omitted as surplus.

References in Text

Section 5(b) of the Trading With the Enemy Act, referred to in subsec. (a)(3), is also classified to section 95a of Title 12, Banks and Banking.

Section Referred to in Other Sections

This section is referred to in sections 5311, 5313, 5318, 5321, 5322 of this title.

§5316. Reports on exporting and importing monetary instruments

(a) Except as provided in subsection (c) of this section, a person or an agent or bailee of the person shall file a report under subsection (b) of this section when the person, agent, or bailee knowingly—

(1) transports, is about to transport, or has transported, monetary instruments of more than $10,000 at one time—

(A) from a place in the United States to or through a place outside the United States; or

(B) to a place in the United States from or through a place outside the United States; or

(2) receives monetary instruments of more than $10,000 at one time transported into the United States from or through a place outside the United States.

(b) A report under this section shall be filed at the time and place the Secretary of the Treasury prescribes. The report shall contain the following information to the extent the Secretary prescribes:

(1) the legal capacity in which the person filing the report is acting.

(2) the origin, destination, and route of the monetary instruments.

(3) when the monetary instruments are not legally and beneficially owned by the person transporting the instruments, or if the person transporting the instruments personally is not going to use them, the identity of the person that gave the instruments to the person transporting them, the identity of the person who is to receive them, or both.

(4) the amount and kind of monetary instruments transported.

(5) additional information.

(c) This section or a regulation under this section does not apply to a common carrier of passengers when a passenger possesses a monetary instrument, or to a common carrier of goods if the shipper does not declare the instrument.

(d) Cumulation of Closely Related Events.—The Secretary of the Treasury may prescribe regulations under this section defining the term “at one time” for purposes of subsection (a). Such regulations may permit the cumulation of closely related events in order that such events may collectively be considered to occur at one time for the purposes of subsection (a).

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 998; Pub. L. 98–473, title II, §901(c), Oct. 12, 1984, 98 Stat. 2135; Pub. L. 99–570, title I, §1358, title III, §3153, Oct. 27, 1986, 100 Stat. 3207–26, 3207–94.)

In subsection (a), before clause (1), the words “a person or an agent or bailee of the person shall” are substituted for “whoever, whether as principal, agent, or bailee, or by an agent or bailee” for consistency. The words “or reports” are omitted as unnecessary because of 1:1. In clause (2), the words “transported into the United States” are substituted for “at the termination of their transportation to the United States” for consistency and to eliminate unnecessary words.

In subsection (b), before clause (1), the word “required” is omitted as surplus. The word “prescribes” is substituted for “require” for consistency in the revised title and with other titles of the United States Code. The words “to the extent” are substituted for “in such detail” for clarity. In clause (1), the words “with respect to the monetary instruments transported” are omitted as surplus. In clause (3), the words “or if the person transporting the instruments personally is not going to use them” are substituted for “or are transported for any purpose other than the use in his own behalf of the person transporting the same” for clarity.

In subsection (c), the words “or a regulation under this section” are added because of the restatement.

Amendments

1986—Subsec. (a)(1). Pub. L. 99–570, §1358(b), substituted “transports, is about to transport, or has transported” for “transports or has transported, or attempts to transport or have transported”.

Subsec. (a)(2). Pub. L. 99–570, §§1358(c), 3153, made identical amendments substituting “$10,000” for “$5,000”.

Subsec. (d). Pub. L. 99–570, §1358(a), added subsec. (d).

1984—Subsec. (a)(1). Pub. L. 98–473 inserted “, or attempts to transport or have transported,” after “transports or has transported” and substituted “$10,000” for “$5,000”.

Effective Date of Regulations Prescribed Under 1986 Amendment

Section 1364(d) of Pub. L. 99–570 provided that: “Any regulation prescribed under the amendments made by section 1358 [amending this section] shall apply with respect to transactions completed after the effective date of such regulation.”

Section Referred to in Other Sections

This section is referred to in sections 5312, 5317, 5319, 5321, 5324 of this title; title 12 section 3420; title 18 section 982.

§5317. Search and forfeiture of monetary instruments

(a) The Secretary of the Treasury may apply to a court of competent jurisdiction for a search warrant when the Secretary reasonably believes a monetary instrument is being transported and a report on the instrument under section 5316 of this title has not been filed or contains a material omission or misstatement. The Secretary shall include a statement of information in support of the warrant. On a showing of probable cause, the court may issue a search warrant for a designated person or a designated or described place or physical object. This subsection does not affect the authority of the Secretary under another law.

(b) Searches at Border.—For purposes of ensuring compliance with the requirements of section 5316, a customs officer may stop and search, at the border and without a search warrant, any vehicle, vessel, aircraft, or other conveyance, any envelope or other container, and any person entering or departing from the United States.

(c) If a report required under section 5316 with respect to any monetary instrument is not filed (or if filed, contains a material omission or misstatement of fact), the instrument and any interest in property, including a deposit in a financial institution, traceable to such instrument may be seized and forfeited to the United States Government. Any property, real or personal, involved in a transaction or attempted transaction in violation of section 5324(b), or any property traceable to such property, may be seized and forfeited to the United States Government. A monetary instrument transported by mail or a common carrier, messenger, or bailee is being transported under this subsection from the time the instrument is delivered to the United States Postal Service, common carrier, messenger, or bailee through the time it is delivered to the addressee, intended recipient, or agent of the addressee or intended recipient without being transported further in, or taken out of, the United States.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 998; Pub. L. 98–473, title II, §901(d), Oct. 12, 1984, 98 Stat. 2135; Pub. L. 99–570, title I, §1355, Oct. 27, 1986, 100 Stat. 3207–22; Pub. L. 102–550, title XV, §1525(c)(2), Oct. 28, 1992, 106 Stat. 4065.)

In subsection (a), the words “The Secretary shall include a statement of information in support of the warrant” are substituted for 31:1105(a)(last sentence) to eliminate unnecessary words and for consistency. The word “for” is substituted for “authorizing the search of . . . all of the following” to eliminate unnecessary words. The words “or more” are omitted as unnecessary because the singular includes the plural under 1:1. The words “or premises”, “letters, parcels, packages, or other”, and “vehicles” are omitted as surplus.

In subsection (b), the words “either” and “the possession of” are omitted as surplus. The words “United States Postal Service” are substituted for “postal service” for consistency with title 39. The words “or retained in” are omitted as surplus.

Amendments

1992—Subsec. (c). Pub. L. 102–550 inserted after first sentence “Any property, real or personal, involved in a transaction or attempted transaction in violation of section 5324(b), or any property traceable to such property, may be seized and forfeited to the United States Government.”

1986—Subsec. (b). Pub. L. 99–570, §1355(a), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “A customs officer may stop and search, without a search warrant, a vehicle, vessel, aircraft, or other conveyance, envelope or other container, or person entering or departing from the United States with respect to which or whom the officer has reasonable cause to believe there is a monetary instrument being transported in violation of section 5316 of this title.”

Subsec. (c). Pub. L. 99–570, §1355(b), amended first sentence generally. Prior to amendment, first sentence read as follows: “A monetary instrument being transported may be seized and forfeited to the United States Government when a report on the instrument under section 5316 of this title has not been filed or contains a material omission or misstatement.”

1984—Subsecs. (b), (c). Pub. L. 98–473, §901, added subsec. (b) and redesignated former subsec. (b) as (c).

Effective Date of 1986 Amendment

Section 1364(b) of Pub. L. 99–570 provided that: “The amendments made by sections 1355(b) and 1357(a) [amending this section and section 5321 of this title] shall apply with respect to violations committed after the end of the 3-month period beginning on the date of the enactment of this Act [Oct. 27, 1986].”

Section Referred to in Other Sections

This section is referred to in section 5321 of this title.

§5318. Compliance, exemptions, and summons authority

(a) General Powers of Secretary.—The Secretary of the Treasury may (except under section 5315 of this title and regulations prescribed under section 5315)—

(1) except as provided in subsection (b)(2), delegate duties and powers under this subchapter to an appropriate supervising agency and the United States Postal Service;

(2) require a class of domestic financial institutions to maintain appropriate procedures to ensure compliance with this subchapter and regulations prescribed under this subchapter or to guard against money laundering;

(3) examine any books, papers, records, or other data of domestic financial institutions relevant to the recordkeeping or reporting requirements of this subchapter;

(4) summon a financial institution, an officer or employee of a financial institution (including a former officer or employee), or any person having possession, custody, or care of the reports and records required under this subchapter, to appear before the Secretary of the Treasury or his delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give testimony, under oath, as may be relevant or material to an investigation described in subsection (b);

(5) exempt from the requirements of this subchapter any class of transactions within any State if the Secretary determines that—

(A) under the laws of such State, that class of transactions is subject to requirements substantially similar to those imposed under this subchapter; and

(B) there is adequate provision for the enforcement of such requirements; and

(6) prescribe an appropriate exemption from a requirement under this subchapter and regulations prescribed under this subchapter. The Secretary may revoke an exemption under this paragraph or paragraph (5) by actually or constructively notifying the parties affected. A revocation is effective during judicial review.

(b) Limitations on Summons Power.—

(1) Scope of power.—The Secretary of the Treasury may take any action described in paragraph (3) or (4) of subsection (a) only in connection with investigations for the purpose of civil enforcement of violations of this subchapter, section 21 of the Federal Deposit Insurance Act, section 411 ¹ of the National Housing Act, or chapter 2 of Public Law 91–508 (12 U.S.C. 1951 et seq.) or any regulation under any such provision.

(2) Authority to issue.—A summons may be issued under subsection (a)(4) only by, or with the approval of, the Secretary of the Treasury or a supervisory level delegate of the Secretary of the Treasury.

(c) Administrative Aspects of Summons.—

(1) Production at designated site.—A summons issued pursuant to this section may require that books, papers, records, or other data stored or maintained at any place be produced at any designated location in any State or in any territory or other place subject to the jurisdiction of the United States not more than 500 miles distant from any place where the financial institution operates or conducts business in the United States.

(2) Fees and travel expenses.—Persons summoned under this section shall be paid the same fees and mileage for travel in the United States that are paid witnesses in the courts of the United States.

(3) No liability for expenses.—The United States shall not be liable for any expense, other than an expense described in paragraph (2), incurred in connection with the production of books, papers, records, or other data under this section.

(d) Service of Summons.—Service of a summons issued under this section may be by registered mail or in such other manner calculated to give actual notice as the Secretary may prescribe by regulation.

(e) Contumacy or Refusal.—

(1) Referral to attorney general.—In case of contumacy by a person issued a summons under paragraph (3) or (4) of subsection (a) or a refusal by such person to obey such summons, the Secretary of the Treasury shall refer the matter to the Attorney General.

(2) Jurisdiction of court.—The Attorney General may invoke the aid of any court of the United States within the jurisdiction of which—

(A) the investigation which gave rise to the summons is being or has been carried on;

(B) the person summoned is an inhabitant; or

(C) the person summoned carries on business or may be found,

to compel compliance with the summons.

(3) Court order.—The court may issue an order requiring the person summoned to appear before the Secretary or his delegate to produce books, papers, records, and other data, to give testimony as may be necessary to explain how such material was compiled and maintained, and to pay the costs of the proceeding.

(4) Failure to comply with order.—Any failure to obey the order of the court may be punished by the court as a contempt thereof.

(5) Service of process.—All process in any case under this subsection may be served in any judicial district in which such person may be found.

(f) Written and Signed Statement Required.—No person shall qualify for an exemption under subsection (a)(5) ² unless the relevant financial institution prepares and maintains a statement which—

(1) describes in detail the reasons why such person is qualified for such exemption; and

(2) contains the signature of such person.

(g) Reporting of Suspicious Transactions.—

(1) In general.—The Secretary may require any financial institution, and any director, officer, employee, or agent of any financial institution, to report any suspicious transaction relevant to a possible violation of law or regulation.

(2) Notification prohibited.—A financial institution, and a director, officer, employee, or agent of any financial institution, who voluntarily reports a suspicious transaction, or that reports a suspicious transaction pursuant to this section or any other authority, may not notify any person involved in the transaction that the transaction has been reported.

(3) Liability for disclosures.—Any financial institution that makes a disclosure of any possible violation of law or regulation or a disclosure pursuant to this subsection or any other authority, and any director, officer, employee, or agent of such institution, shall not be liable to any person under any law or regulation of the United States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the person involved in the transaction or any other person of such disclosure.

(4) Single designee for reporting suspicious transactions.—

(A) In general.—In requiring reports under paragraph (1) of suspicious transactions, the Secretary of the Treasury shall designate, to the extent practicable and appropriate, a single officer or agency of the United States to whom such reports shall be made.

(B) Duty of designee.—The officer or agency of the United States designated by the Secretary of the Treasury pursuant to subparagraph (A) shall refer any report of a suspicious transaction to any appropriate law enforcement or supervisory agency.

(C) Coordination with other reporting requirements.—Subparagraph (A) shall not be construed as precluding any supervisory agency for any financial institution from requiring the financial institution to submit any information or report to the agency or another agency pursuant to any other applicable provision of law.

(h) Anti-Money Laundering Programs.—

(1) In general.—In order to guard against money laundering through financial institutions, the Secretary may require financial institutions to carry out anti-money laundering programs, including at a minimum ³

(A) the development of internal policies, procedures, and controls,

(B) the designation of a compliance officer,

(C) an ongoing employee training program, and

(D) an independent audit function to test programs.

(2) Regulations.—The Secretary may prescribe minimum standards for programs established under paragraph (1).

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 999; Pub. L. 99–570, title I, §1356(a), (b), (c)(2), Oct. 27, 1986, 100 Stat. 3207–23, 3207–24; Pub. L. 100–690, title VI, §§6185(e), 6469(c), Nov. 18, 1988, 102 Stat. 4357, 4377; Pub. L. 102–550, title XV, §§1504(d)(1), 1513, 1517(b), Oct. 28, 1992, 106 Stat. 4055, 4058, 4059; Pub. L. 103–322, title XXXIII, §330017(b)(1), Sept. 13, 1994, 108 Stat. 2149; Pub. L. 103–325, title IV, §§403(a), 410, 413(b)(1), Sept. 23, 1994, 108 Stat. 2245, 2252, 2254.)

In the section, before clause (1), the words “have the responsibility to assure compliance with the requirements of this chapter” in 31:1054(a) are omitted as unnecessary because of section 321 of the revised title. The words “(except under section 5315 of this title and regulations prescribed under section 5315)” are added because 31:1141–1143 was not enacted as a part of the Currency and Foreign Transactions Reporting Act that is restated in this subchapter. In clause (1), the words “duties and powers” are substituted for “responsibilities” for consistency in the revised title and with other titles of the United States Code. The words “bank supervisory agency, or other” are omitted as surplus. In clause (2), the words “by regulation” and “as he may deem” are omitted as surplus. The words “and regulations prescribed under this subchapter” are added because of the restatement. In clause (3), the word “prescribe” is substituted for “make” in 31:1055 for consistency in the revised title and with other titles of the Code. The words “otherwise imposed”, 31:1055(1st sentence), and the words “in his discretion” are omitted as surplus.

References in Text

Section 21 of the Federal Deposit Insurance Act, referred to in subsec. (b)(1), is classified to section 1829b of Title 12, Banks and Banking.

Section 411 of the National Housing Act, referred to in subsec. (b)(1), which was classified to section 1730d of Title 12, was repealed by Pub. L. 101–73, title IV, §407, Aug. 9, 1989, 103 Stat. 363.

Chapter 2 of Public Law 91–508 (12 U.S.C. 1951 et seq.), referred to in subsec. (b)(1), probably means chapter 2 (§§121 to 129) of title I of Pub. L. 91–508, Oct. 26, 1970, 84 Stat. 1116, which is classified generally to chapter 21 (§1951 et seq.) of Title 12. For complete classification of chapter 2 to the Code, see Tables.

Subsection (a)(5), referred to in subsec. (f), was redesignated subsection (a)(6) by section 410(a)(2) of Pub. L. 103–325.

Amendments

1994—Subsec. (a)(5). Pub. L. 103–325, §410(a), added par. (5). Former par. (5) redesignated (6).

Subsec. (a)(6). Pub. L. 103–325, §410(b), inserted “under this paragraph or paragraph (5)” after “revoke an exemption” in penultimate sentence.

Pub. L. 103–325, §410(a)(2), redesignated par. (5) as (6).

Subsec. (g). Pub. L. 103–322, §330017(b)(1), and Pub. L. 103–325, §413(b)(1), amended directory language of Pub. L. 102–550, §1517(b), identically. See 1992 Amendment note below.

Subsec. (g)(4). Pub. L. 103–325, §403(a), added par. (4).

Subsec. (h). Pub. L. 103–322, §330017(b)(1), and Pub. L. 103–325, §413(b)(1), amended directory language of Pub. L. 102–550, §1517(b), identically. See 1992 Amendment note below.

1992—Subsec. (a)(1). Pub. L. 102–550, §1504(d)(1), substituted “supervising agency and the United States Postal Service” for “supervising agency or the Postal Inspection Service and the Postal Service”.

Subsec. (a)(2). Pub. L. 102–550, §1513, inserted before semicolon “or to guard against money laundering”.

Subsecs. (g), (h). Pub. L. 102–550, §1517(b), as amended by Pub. L. 103–322, §330017(b)(1), and Pub. L. 103–325, §413(b)(1), added subsecs. (g) and (h).

1988—Subsec. (a)(1). Pub. L. 100–690, §6469(c), inserted “or the Postal Inspection Service” after “appropriate supervising agency”.

Pub. L. 100–690, §6185(e), inserted “and the Postal Service” after “appropriate supervising agency”.

1986—Pub. L. 99–570, §1356(c)(2), substituted “Compliance, exemptions, and summons authority” for “Compliance and exemptions” in section catchline.

Subsec. (a). Pub. L. 99–570, §1356(a)(1)–(5), designated existing provisions as subsec. (a), added subsec. heading, inserted “except as provided in subsection (b)(2),” in par. (1), added pars. (3) and (4), and redesignated former par. (3) as (5).

Subsecs. (b) to (e). Pub. L. 99–570, §1356(a)(6), added subsecs. (b) to (e).

Subsec. (f). Pub. L. 99–570, §1356(b), added subsec. (f).

Effective Date of 1994 Amendment

Section 330017(b)(1) of Pub. L. 103–322 and section 413(b)(1) of Pub. L. 103–325 provided that the identical amendments made by those sections are effective Oct. 28, 1992.

Reports

Section 403(b) of Pub. L. 103–325 provided that:

“(1) Reports required.—The Secretary of the Treasury shall submit an annual report to the Congress at the times required under paragraph (2) on the number of suspicious transactions reported to the officer or agency designated under section 5318(g)(4)(A) of title 31, United States Code, during the period covered by the report and the disposition of such reports.

“(2) Time for submitting reports.—The 1st report required under paragraph (1) shall be filed before the end of the 1-year period beginning on the date of enactment of the Money Laundering Suppression Act of 1994 [Sept. 23, 1994] and each subsequent report shall be filed within 90 days after the end of each of the 5 calendar years which begin after such date of enactment.”

Designation Required To Be Made Expeditiously

Section 403(c) of Pub. L. 103–325 provided that: “The initial designation of an officer or agency of the United States pursuant to the amendment made by subsection (a) [amending this section] shall be made before the end of the 180-day period beginning on the date of enactment of this Act [Sept. 23, 1994].”

Improvement of Identification of Money Laundering Schemes

Section 404 of Pub. L. 103–325 provided that:

“(a) Enhanced Training, Examinations, and Referrals by Banking Agencies.—Before the end of the 6-month period beginning on the date of enactment of this Act [Sept. 23, 1994], each appropriate Federal banking agency shall, in consultation with the Secretary of the Treasury and other appropriate law enforcement agencies—

“(1) review and enhance training and examination procedures to improve the identification of money laundering schemes involving depository institutions; and

“(2) review and enhance procedures for referring cases to any appropriate law enforcement agency.

“(b) Improved Reporting of Criminal Schemes by Law Enforcement Agencies.—The Secretary of the Treasury and each appropriate law enforcement agency shall provide, on a regular basis, information regarding money laundering schemes and activities involving depository institutions to each appropriate Federal banking agency in order to enhance each agency's ability to examine for and identify money laundering activity.

“(c) Report to Congress.—The Financial Institutions Examination Council shall submit a report on the progress made in carrying out subsection (a) and the usefulness of information received pursuant to subsection (b) to the Congress by the end of the 1-year period beginning on the date of enactment of this Act.

“(d) Definition.—For purposes of this section, the term ‘appropriate Federal banking agency’ has the same meaning as in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813].”

Section Referred to in Other Sections

This section is referred to in sections 5313, 5321, 5322 of this title.

¹ See References in Text note below.

² See References in Text note below.

³ So in original. Probably should be followed by a dash.

§5319. Availability of reports

The Secretary of the Treasury shall make information in a report filed under section 5313, 5314, or 5316 of this title available to an agency, including any State financial institutions supervisory agency, on request of the head of the agency. The report shall be available for a purpose consistent with those sections or a regulation prescribed under those sections. The Secretary may only require reports on the use of such information by any State financial institutions supervisory agency for other than supervisory purposes. However, a report and records of reports are exempt from disclosure under section 552 of title 5.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 999; Pub. L. 102–550, title XV, §1506, Oct. 28, 1992, 106 Stat. 4055.)

The words “upon such conditions and pursuant to such procedures as he may by regulation prescribe” and “set forth” in 31:1061, and the word “specifically” in 31:1052(j), are omitted as surplus.

Amendments

1992—Pub. L. 102–550 substituted “to an agency, including any State financial institutions supervisory agency,” for “to an agency” in first sentence and inserted after second sentence “The Secretary may only require reports on the use of such information by any State financial institutions supervisory agency for other than supervisory purposes.”

§5320. Injunctions

When the Secretary of the Treasury believes a person has violated, is violating, or will violate this subchapter or a regulation prescribed or order issued under this subchapter, the Secretary may bring a civil action in the appropriate district court of the United States or appropriate United States court of a territory or possession of the United States to enjoin the violation or to enforce compliance with the subchapter, regulation, or order. An injunction or temporary restraining order shall be issued without bond.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 999.)

The words “has violated, is violating, or will violate this subchapter” are substituted for “has engaged, is engaged, or is about to engage in any acts or practices constituting a violation of the provisions of this chapter” in 31:1057 and “failed to submit a report required under any rule or regulation issued under this subchapter or has violated any rule or regulation issued hereunder” in 31:1143(b)(words before last comma) to eliminate unnecessary words. The words “or a regulation prescribed” are added because of the restatement. The words “in his discretion” are omitted as surplus. The word “civil” is added because of rule 2 of the Federal Rules of Civil Procedure (28 App. U.S.C.). The word “possession” is substituted for “other place subject to the jurisdiction” for consistency in the revised title and with other titles of the United States Code. The words “or to enforce compliance with the subchapter, regulation, or order” are substituted for 31:1057(last sentence) and the words “a mandatory injunction commanding such person to comply with such rule or regulation” in 31:1143(b)(words before last comma) to eliminate unnecessary words. The words “and upon a proper showing . . . permanent or” are omitted as surplus.

Section Referred to in Other Sections

This section is referred to in section 5321 of this title.

§5321. Civil penalties

(a)(1) A domestic financial institution, and a partner, director, officer, or employee of a domestic financial institution, willfully violating this subchapter or a regulation prescribed under this subchapter (except sections 5314 and 5315 of this title or a regulation prescribed under sections 5314 and 5315) is liable to the United States Government for a civil penalty of not more than the greater of the amount (not to exceed $100,000) involved in the transaction (if any) or $25,000. For a violation of section 5318(a)(2) of this title or a regulation prescribed under section 5318(a)(2), a separate violation occurs for each day the violation continues and at each office, branch, or place of business at which a violation occurs or continues.

(2) The Secretary of the Treasury may impose an additional civil penalty on a person not filing a report, or filing a report containing a material omission or misstatement, under section 5316 of this title or a regulation prescribed under section 5316. A civil penalty under this paragraph may not be more than the amount of the monetary instrument for which the report was required. A civil penalty under this paragraph is reduced by an amount forfeited under section 5317(b) of this title.

(3) A person not filing a report under a regulation prescribed under section 5315 of this title or not complying with an injunction under section 5320 of this title enjoining a violation of, or enforcing compliance with, section 5315 or a regulation prescribed under section 5315, is liable to the Government for a civil penalty of not more than $10,000.

(4) Structured Transaction Violation.—

(A) Penalty authorized.—The Secretary of the Treasury may impose a civil money penalty on any person who violates any provision of section 5324.

(B) Maximum amount limitation.—The amount of any civil money penalty imposed under subparagraph (A) shall not exceed the amount of the coins and currency (or such other monetary instruments as the Secretary may prescribe) involved in the transaction with respect to which such penalty is imposed.

(C) Coordination with forfeiture provision.—The amount of any civil money penalty imposed by the Secretary under subparagraph (A) shall be reduced by the amount of any forfeiture to the United States in connection with the transaction with respect to which such penalty is imposed.

(5) Foreign Financial Agency Transaction Violation.—

(A) Penalty authorized.—The Secretary of the Treasury may impose a civil money penalty on any person who willfully violates or any person willfully causing any violation of any provision of section 5314.

(B) Maximum amount limitation.—The amount of any civil money penalty imposed under subparagraph (A) shall not exceed—

(i) in the case of violation of such section involving a transaction, the greater of—

(I) the amount (not to exceed $100,000) of the transaction; or

(II) $25,000; and

(ii) in the case of violation of such section involving a failure to report the existence of an account or any identifying information required to be provided with respect to such account, the greater of—

(I) an amount (not to exceed $100,000) equal to the balance in the account at the time of the violation; or

(II) $25,000.

(6) Negligence.—

(A) In general.—The Secretary of the Treasury may impose a civil money penalty of not more than $500 on any financial institution which negligently violates any provision of this subchapter or any regulation prescribed under this subchapter.

(B) Pattern of negligent activity.—If any financial institution engages in a pattern of negligent violations of any provision of this subchapter or any regulation prescribed under this subchapter, the Secretary of the Treasury may, in addition to any penalty imposed under subparagraph (A) with respect to any such violation, impose a civil money penalty of not more than $50,000 on the financial institution.

(b) Time Limitations for Assessments and Commencement of Civil Actions.—

(1) Assessments.—The Secretary of the Treasury may assess a civil penalty under subsection (a) at any time before the end of the 6-year period beginning on the date of the transaction with respect to which the penalty is assessed.

(2) Civil actions.—The Secretary may commence a civil action to recover a civil penalty assessed under subsection (a) at any time before the end of the 2-year period beginning on the later of—

(A) the date the penalty was assessed; or

(B) the date any judgment becomes final in any criminal action under section 5322 in connection with the same transaction with respect to which the penalty is assessed.

(c) The Secretary may remit any part of a forfeiture under subsection (c) or (d) ¹ of section 5317 of this title or civil penalty under subsection (a)(2) of this section.

(d) Criminal Penalty Not Exclusive of Civil Penalty.—A civil money penalty may be imposed under subsection (a) with respect to any violation of this subchapter notwithstanding the fact that a criminal penalty is imposed with respect to the same violation.

(e) Delegation of Assessment Authority to Banking Agencies.—

(1) In general.—The Secretary of the Treasury shall delegate, in accordance with section 5318(a)(1) and subject to such terms and conditions as the Secretary may impose in accordance with paragraph (3), any authority of the Secretary to assess a civil money penalty under this section on depository institutions (as defined in section 3 of the Federal Deposit Insurance Act) to the appropriate Federal banking agencies (as defined in such section 3).

(2) Authority of agencies.—Subject to any term or condition imposed by the Secretary of the Treasury under paragraph (3), the provisions of this section shall apply to an appropriate Federal banking agency to which is delegated any authority of the Secretary under this section in the same manner such provisions apply to the Secretary.

(3) Terms and conditions.—

(A) In general.—The Secretary of the Treasury shall prescribe by regulation the terms and conditions which shall apply to any delegation under paragraph (1).

(B) Maximum dollar amount.—The terms and conditions authorized under subparagraph (A) may include, in the Secretary's sole discretion, a limitation on the amount of any civil penalty which may be assessed by an appropriate Federal banking agency pursuant to a delegation under paragraph (1).

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 999; Pub. L. 98–473, title II, §901(a), Oct. 12, 1984, 98 Stat. 2135; Pub. L. 99–570, title I, §§1356(c)(1), 1357(a)–(f), (h), Oct. 27, 1986, 100 Stat. 3207–24—3207–26; Pub. L. 100–690, title VI, §6185(g)(2), Nov. 18, 1988, 102 Stat. 4357; Pub. L. 102–550, title XV, §§1511(b), 1525(b), 1535(a)(2), 1561(a), Oct. 28, 1992, 106 Stat. 4057, 4065, 4066, 4071; Pub. L. 103–322, title XXXIII, §330017(a)(1), Sept. 13, 1994, 108 Stat. 2149; Pub. L. 103–325, title IV, §§406, 411(b), 413(a)(1), Sept. 23, 1994, 108 Stat. 2247, 2253, 2254; Pub. L. 104–208, div. A, title II, §2223(3), Sept. 30, 1996, 110 Stat. 3009–415.)

In subsection (a)(1), the words “or a regulation prescribed under this subchapter” are added because of the restatement. The words “(except section 5315 of this title or a regulation prescribed under section 5315)” are added because 31:1141–1143 was not enacted as a part of the Currency and Foreign Transactions Reporting Act that is restated in this subchapter. The words “is liable to the United States Government for” are substituted for “the Secretary may assess upon” in 31:1056(a) for consistency in the revised title and with other titles of the United States Code. The words “the purposes of both civil and criminal penalties for” in 31:1054(b)(last sentence)(related to civil penalties) are omitted, and the words “or a regulation prescribed under section 5318(2)” are added, because of the restatement. The words “the violation continues” are added for consistency in the revised title and with other titles of the Code. The word “separate” before “office” is omitted as surplus.

In subsection (a)(2), the word “impose” is substituted for “assess” for consistency in the revised title and with other titles of the Code. The word “additional” is substituted for 31:1103(last sentence words before last comma) to eliminate unnecessary words. The words “or a regulation prescribed under section 5316” are added because of the restatement. The words “amount of this”, “to be filed”, and “actually” are omitted as surplus.

Subsection (a)(3) is substituted for 31:1143(a) and (b)(words after last comma) for clarity and consistency and because of the restatement.

In subsection (b), the words “in the discretion of”, “in the name of the United States”, and “of any person” are omitted as surplus.

In subsection (c), the words “in his discretion” and “upon such terms and conditions as he deems reasonable and just” are omitted as surplus. The word “civil” is added for clarity.

References in Text

Section 3 of the Federal Deposit Insurance Act, referred to in subsec. (e)(1), is classified to section 1813 of Title 12, Banks and Banking.

Amendments

1996—Subsec. (a)(7). Pub. L. 104–208 struck out par. (7) which read as follows:

“(7) Financial institution identification violations.—

“(A) Penalty authorized.—The Secretary may impose a civil money penalty on any person who willfully violates any provision of section 5327 or any regulation prescribed under such section.

“(B) Maximum amount limitation.—The amount of any civil money penalty imposed under subparagraph (A) shall not exceed $10,000 per day for each day during which a report remains unfiled or a report containing a material omission or misstatement of fact remains uncorrected.”

1994—Subsec. (a)(4)(A). Pub. L. 103–325, §411(b), struck out “willfully” before “violates”.

Subsec. (a)(5)(A). Pub. L. 103–322, §330017(a)(1) and Pub. L. 103–325, §413(a)(1), amended subpar. (A) identically, inserting “any violation of” after “causing”.

Subsec. (e). Pub. L. 103–325, §406, added subsec. (e).

1992—Subsec. (a)(4)(C). Pub. L. 102–550, §1525(b), struck out “under section 5317(d)” after “forfeiture to the United States”.

Subsec. (a)(5)(A). Pub. L. 102–550, §1535(a)(2), inserted “or any person willfully causing” after “willfully violates”.

Subsec. (a)(6). Pub. L. 102–550, §1561(a), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “Negligence.—The Secretary of the Treasury may impose a civil money penalty of not more than $500 on any financial institution which negligently violates any provision of this subchapter or any regulation prescribed under this subchapter.”

Subsec. (a)(7). Pub. L. 102–550, §1511(b), added par. (7).

1988—Subsec. (a)(1). Pub. L. 100–690 inserted “(if any)” after “transaction”.

1986—Subsec. (a)(1). Pub. L. 99–570, §§1356(c)(1), 1357(b), substituted “sections 5314 and 5315” for “section 5315” in two places, substituted “5318(a)(2)” for “5318(2)” in two places, and substituted “the greater of the amount (not to exceed $100,000) involved in the transaction or $25,000” for “$10,000”.

Subsec. (a)(4). Pub. L. 99–570, §1357(a), added par. (4).

Subsec. (a)(5). Pub. L. 99–570, §1357(c), added par. (5).

Subsec. (a)(6). Pub. L. 99–570, §1357(d), added par. (6).

Subsec. (b). Pub. L. 99–570, §1357(e), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “The Secretary may bring a civil action to recover a civil penalty under subsection (a)(1) or (2) of this section that has not been paid.”

Subsec. (c). Pub. L. 99–570, §1357(h), substituted “subsection (c) or (d) of section 5317” for “section 5317(b)”.

Subsec. (d). Pub. L. 99–570, §1357(f), added subsec. (d).

1984—Subsec. (a)(1). Pub. L. 98–473 substituted “$10,000” for “$1,000”.

Effective Date of 1992 Amendment

Section 1561(b) of Pub. L. 102–550 provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to violations committed after the date of the enactment of this Act [Oct. 28, 1992].”

Effective Date of 1986 Amendment

Amendment by section 1357(a) of Pub. L. 99–570, applicable with respect to violations committed after the end of the 3-month period beginning Oct. 27, 1986, see section 1364(b) of Pub. L. 99–570, set out as a note under section 5317 of this title.

Section 1364(c) of Pub. L. 99–570 provided that: “The amendments made by section 1357 (other than subsection (a) of such section) [amending sections 5321 and 5322 of this title] shall apply with respect to violations committed after the date of the enactment of this Act [Oct. 27, 1986].”

Section Referred to in Other Sections

This section is referred to in section 5330 of this title; title 12 section 1829b.

¹ So in original. Section 5317 does not contain a subsec. (d).

§5322. Criminal penalties

(a) A person willfully violating this subchapter or a regulation prescribed under this subchapter (except section 5315 or 5324 of this title or a regulation prescribed under section 5315 or 5324) shall be fined not more than $250,000, or imprisoned for not more than five years, or both.

(b) A person willfully violating this subchapter or a regulation prescribed under this subchapter (except section 5315 or 5324 of this title or a regulation prescribed under section 5315 or 5324), while violating another law of the United States or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period, shall be fined not more than $500,000, imprisoned for not more than 10 years, or both.

(c) For a violation of section 5318(a)(2) of this title or a regulation prescribed under section 5318(a)(2), a separate violation occurs for each day the violation continues and at each office, branch, or place of business at which a violation occurs or continues.

(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 1000; Pub. L. 98–473, title II, §901(b), Oct. 12, 1984, 98 Stat. 2135; Pub. L. 99–570, title I, §§1356(c)(1), 1357(g), Oct. 27, 1986, 100 Stat. 3207–24, 3207–26; Pub. L. 102–550, title XV, §1504(d)(2), Oct. 28, 1992, 106 Stat. 4055; Pub. L. 103–325, title IV, §411(c)(1), Sept. 23, 1994, 108 Stat. 2253.)

In subsections (a) and (b), the words “(except section 5315 of this title or a regulation prescribed under section 5315)” are added because 31:1141–1143 was not enacted as part of the Currency and Foreign Transactions Reporting Act that is restated in the subchapter.

In subsection (a), the word “prescribed” is added for consistency.

In subsection (b), the words “or a regulation prescribed under this subchapter” are added because of the restatement. The words “committed” and “the commission of” are omitted as surplus. The words “United States” are substituted for “Federal” for consistency in the revised title and with other titles of the United States Code.

In subsection (c), the words “the purposes of both civil and criminal penalties for” are omitted because of the restatement. The word “separate” before “office” is omitted as surplus.

Amendments

1994—Subsecs. (a), (b). Pub. L. 103–325 inserted “or 5324” after “section 5315” wherever appearing.

1992—Subsec. (a). Pub. L. 102–550 substituted “imprisoned for” for “imprisonment”.

1986—Subsec. (b). Pub. L. 99–570, §1357(g), substituted “any illegal activity involving” for “illegal activity involving transactions of” and “10 years” for “5 years”.

Subsec. (c). Pub. L. 99–570, §1356(c)(1), substituted “5318(a)(2)” for “5318(2)” in two places.

1984—Subsec. (a). Pub. L. 98–473, which directed the substitution of “$250,000, or imprisonment not more than five years, or both” for “$1,000, or imprisonment not more than one year, or both”, was executed by substituting the quoted wording for “$1,000, imprisoned for not more than one year, or both” to reflect the probable intent of Congress.

Effective Date of 1986 Amendment

Amendment by section 1357(g) of Pub. L. 99–570 applicable with respect to violations committed after Oct. 27, 1986, see section 1364(c) of Pub. L. 99–570, set out as a note under section 5321 of this title.

Section Referred to in Other Sections

This section is referred to in section 5321 of this title; title 12 sections 93, 1464, 1772d, 1786, 1818, 1821, 3105; title 18 sections 986, 1956, 2516.

§5323. Rewards for informants

(a) The Secretary may pay a reward to an individual who provides original information which leads to a recovery of a criminal fine, civil penalty, or forfeiture, which exceeds $50,000, for a violation of this chapter.

(b) The Secretary shall determine the amount of a reward under this section. The Secretary may not award more than 25 per centum of the net amount of the fine, penalty, or forfeiture collected or $150,000, whichever is less.

(c) An officer or employee of the United States, a State, or a local government who provides information described in subsection (a) in the performance of official duties is not eligible for a reward under this section.

(d) There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section.

(Added Pub. L. 98–473, title II, §901(e), Oct. 12, 1984, 98 Stat. 2135.)

§5324. Structuring transactions to evade reporting requirement prohibited

(a) Domestic Coin and Currency Transactions.—No person shall for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section—

(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section;

(2) cause or attempt to cause a domestic financial institution to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section that contains a material omission or misstatement of fact; or

(3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.

(b) International Monetary Instrument Transactions.—No person shall, for the purpose of evading the reporting requirements of section 5316—

(1) fail to file a report required by section 5316, or cause or attempt to cause a person to fail to file such a report;

(2) file or cause or attempt to cause a person to file a report required under section 5316 that contains a material omission or misstatement of fact; or

(3) structure or assist in structuring, or attempt to structure or assist in structuring, any importation or exportation of monetary instruments.

(c) Criminal Penalty.—

(1) In general.—Whoever violates this section shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.

(2) Enhanced penalty for aggravated cases.—Whoever violates this section while violating another law of the United States or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period shall be fined twice the amount provided in subsection (b)(3) or (c)(3) (as the case may be) of section 3571 of title 18, United States Code, imprisoned for not more than 10 years, or both.

(Added Pub. L. 99–570, title I, §1354(a), Oct. 27, 1986, 100 Stat. 3207–22; amended Pub. L. 102–550, title XV, §§1517(a), 1525(a), 1535(a)(1), Oct. 28, 1992, 106 Stat. 4059, 4064, 4066; Pub. L. 103–322, title XXXIII, §330017(a)(2), Sept. 13, 1994, 108 Stat. 2149; Pub. L. 103–325, title IV, §§411(a), 413(a)(2), Sept. 23, 1994, 108 Stat. 2253, 2254.)

Amendments

1994—Subsec. (a). Pub. L. 103–322, §330017(a)(2) and Pub. L. 103–325, §413(a)(2), amended subsec. (a), introductory provisions, identically, substituting “section 5313(a) or 5325 or any regulation prescribed under any such section” for “section 5313(a), section 5325, or the regulations issued thereunder or section 5325 or regulations prescribed under such section 5325” and striking out “with respect to such transaction” before dash.

Subsec. (a)(1), (2). Pub. L. 103–322, §330017(a)(2)(A) and Pub. L. 103–325, §413(a)(2)(A), amended pars. (1) and (2) identically, substituting “section 5313(a) or 5325 or any regulation prescribed under any such section” for “section 5313(a), section 5325, or the regulations issued thereunder or section 5325 or regulations prescribed under such section 5325”.

Subsec. (c). Pub. L. 103–325, §411(a), added subsec. (c).

1992—Pub. L. 102–550, §1525(a)(1), designated existing provisions as subsec. (a), inserted heading, and added subsec. (b).

Pub. L. 102–550, §§1517(a), 1535(a)(1), inserted the following duplicative provisions “or section 5325 or regulations prescribed under such section 5325” and “, section 5325, or the regulations issued thereunder” after “section 5313(a)” wherever appearing.

Effective Date

Section 1364(a) of Pub. L. 99–570 provided that: “The amendment made by section 1354 [enacting this section] shall apply with respect to transactions for the payment, receipt, or transfer of United States coins or currency or other monetary instruments completed after the end of the 3-month period beginning on the date of the enactment of this Act [Oct. 27, 1986].”

Section Referred to in Other Sections

This section is referred to in sections 5317, 5321, 5322 of this title; title 12 sections 93, 1464, 1772d, 1786, 1818, 1821, 3420; title 18 sections 981, 982, 986, 1956; title 28 section 524.

§5325. Identification required to purchase certain monetary instruments

(a) In General.—No financial institution may issue or sell a bank check, cashier's check, traveler's check, or money order to any individual in connection with a transaction or group of such contemporaneous transactions which involves United States coins or currency (or such other monetary instruments as the Secretary may prescribe) in amounts or denominations of $3,000 or more unless—

(1) the individual has a transaction account with such financial institution and the financial institution—

(A) verifies that fact through a signature card or other information maintained by such institution in connection with the account of such individual; and

(B) records the method of verification in accordance with regulations which the Secretary of the Treasury shall prescribe; or

(2) the individual furnishes the financial institution with such forms of identification as the Secretary of the Treasury may require in regulations which the Secretary shall prescribe and the financial institution verifies and records such information in accordance with regulations which such Secretary shall prescribe.

(b) Report to Secretary Upon Request.—Any information required to be recorded by any financial institution under paragraph (1) or (2) of subsection (a) shall be reported by such institution to the Secretary of the Treasury at the request of such Secretary.

(c) Transaction Account Defined.—For purposes of this section, the term “transaction account” has the meaning given to such term in section 19(b)(1)(C) of the Federal Reserve Act.

(Added Pub. L. 100–690, title VI, §6185(b), Nov. 18, 1988, 102 Stat. 4355.)

References in Text

Section 19(b)(1)(C) of the Federal Reserve Act, referred to in subsec. (c), is classified to section 461(b)(1)(C) of Title 12, Banks and Banking.

Section Referred to in Other Sections

This section is referred to in section 5324 of this title.

§5326. Records of certain domestic coin and currency transactions

(a) In General.—If the Secretary of the Treasury finds, upon the Secretary's own initiative or at the request of an appropriate Federal or State law enforcement official, that reasonable grounds exist for concluding that additional recordkeeping and reporting requirements are necessary to carry out the purposes of this subtitle and prevent evasions thereof, the Secretary may issue an order requiring any domestic financial institution or group of domestic financial institutions in a geographic area—

(1) to obtain such information as the Secretary may describe in such order concerning—

(A) any transaction in which such financial institution is involved for the payment, receipt, or transfer of United States coins or currency (or such other monetary instruments as the Secretary may describe in such order) the total amounts or denominations of which are equal to or greater than an amount which the Secretary may prescribe; and

(B) any other person participating in such transaction;

(2) to maintain a record of such information for such period of time as the Secretary may require; and

(3) to file a report with respect to any transaction described in paragraph (1)(A) in the manner and to the extent specified in the order.

(b) Authority To Order Depository Institutions To Obtain Reports From Customers.—

(1) In general.—The Secretary of the Treasury may, by regulation or order, require any depository institution (as defined in section 3(c) of the Federal Deposit Insurance Act)—

(A) to request any financial institution (other than a depository institution) which engages in any reportable transaction with the depository institution to provide the depository institution with a copy of any report filed by the financial institution under this subtitle with respect to any prior transaction (between such financial institution and any other person) which involved any portion of the coins or currency (or monetary instruments) which are involved in the reportable transaction with the depository institution; and

(B) if no copy of any report described in subparagraph (A) is received by the depository institution in connection with any reportable transaction to which such subparagraph applies, to submit (in addition to any report required under this subtitle with respect to the reportable transaction) a written notice to the Secretary that the financial institution failed to provide any copy of such report.

(2) Reportable transaction defined.—For purposes of this subsection, the term “reportable transaction” means any transaction involving coins or currency (or such other monetary instruments as the Secretary may describe in the regulation or order) the total amounts or denominations of which are equal to or greater than an amount which the Secretary may prescribe.

(c) Nondisclosure of Orders.—No financial institution or officer, director, employee or agent of a financial institution subject to an order under this section may disclose the existence of, or terms of, the order to any person except as prescribed by the Secretary.

(d) Maximum Effective Period for Order.—No order issued under subsection (a) shall be effective for more than 60 days unless renewed pursuant to the requirements of subsection (a).

(Added Pub. L. 100–690, title VI, §6185(c), Nov. 18, 1988, 102 Stat. 4355; amended Pub. L. 102–550, title XV, §§1514, 1562, Oct. 28, 1992, 106 Stat. 4058, 4072.)

References in Text

Section 3(c) of the Federal Deposit Insurance Act, referred to in subsec. (b)(1), is classified to section 1813(c) of Title 12, Banks and Banking.

Amendments

1992—Subsecs. (b) to (d). Pub. L. 102–550 added subsecs. (b) and (c) and redesignated former subsec. (b) as (d).

[§5327. Repealed. Pub. L. 104–208, div. A, title II, §2223(1), Sept. 30, 1996, 110 Stat. 3009–415]

Section, added Pub. L. 102–550, title XV, §1511(a), Oct. 28, 1992, 106 Stat. 4056, required Secretary to prescribe regulations requiring depository institutions to identify and report on financial institution customers.

§5328. Whistleblower protections

(a) Prohibition Against Discrimination.—No financial institution may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee (or any person acting pursuant to the request of the employee) provided information to the Secretary of the Treasury, the Attorney General, or any Federal supervisory agency regarding a possible violation of any provision of this subchapter or section 1956, 1957, or 1960 of title 18, or any regulation under any such provision, by the financial institution or any director, officer, or employee of the financial institution.

(b) Enforcement.—Any employee or former employee who believes that such employee has been discharged or discriminated against in violation of subsection (a) may file a civil action in the appropriate United States district court before the end of the 2-year period beginning on the date of such discharge or discrimination.

(c) Remedies.—If the district court determines that a violation has occurred, the court may order the financial institution which committed the violation to—

(1) reinstate the employee to the employee's former position;

(2) pay compensatory damages; or

(3) take other appropriate actions to remedy any past discrimination.

(d) Limitation.—The protections of this section shall not apply to any employee who—

(1) deliberately causes or participates in the alleged violation of law or regulation; or

(2) knowingly or recklessly provides substantially false information to the Secretary, the Attorney General, or any Federal supervisory agency.

(e) Coordination With Other Provisions of Law.—This section shall not apply with respect to any financial institution which is subject to section 33 of the Federal Deposit Insurance Act, section 213 of the Federal Credit Union Act, or section 21A(q) of the Home Owners’ Loan Act ¹ (as added by section 251(c) of the Federal Deposit Insurance Corporation Improvement Act of 1991).

(Added Pub. L. 102–550, title XV, §1563(a), Oct. 28, 1992, 106 Stat. 4072.)

References in Text

Section 33 of the Federal Deposit Insurance Act, referred to in subsec. (e), is classified to section 1831j of Title 12, Banks and Banking.

Section 213 of the Federal Credit Union Act, referred to in subsec. (e), is classified to section 1790b of Title 12.

Section 21A(q) of the Home Owners’ Loan Act, referred to in subsec. (e), probably means section 21A(q) of the Federal Home Loan Bank Act, which is classified to section 1441a(q) of Title 12.

¹ See References in Text note below.

§5329. Staff commentaries

The Secretary shall—

(1) publish all written rulings interpreting this subchapter; and

(2) annually issue a staff commentary on the regulations issued under this subchapter.

(Added Pub. L. 103–325, title III, §311(a), Sept. 23, 1994, 108 Stat. 2221.)

§5330. Registration of money transmitting businesses

(a) Registration With Secretary of the Treasury Required.—

(1) In general.—Any person who owns or controls a money transmitting business shall register the business (whether or not the business is licensed as a money transmitting business in any State) with the Secretary of the Treasury not later than the end of the 180-day period beginning on the later of—

(A) the date of enactment of the Money Laundering Suppression Act of 1994; or

(B) the date on which the business is established.

(2) Form and manner of registration.—Subject to the requirements of subsection (b), the Secretary of the Treasury shall prescribe, by regulation, the form and manner for registering a money transmitting business pursuant to paragraph (1).

(3) Businesses remain subject to state law.—This section shall not be construed as superseding any requirement of State law relating to money transmitting businesses operating in such State.

(4) False and incomplete information.—The filing of false or materially incomplete information in connection with the registration of a money transmitting business shall be considered as a failure to comply with the requirements of this subchapter.

(b) Contents of Registration.—The registration of a money transmitting business under subsection (a) shall include the following information:

(1) The name and location of the business.

(2) The name and address of each person who—

(A) owns or controls the business;

(B) is a director or officer of the business; or

(C) otherwise participates in the conduct of the affairs of the business.

(3) The name and address of any depository institution at which the business maintains a transaction account (as defined in section 19(b)(1)(C) of the Federal Reserve Act).

(4) An estimate of the volume of business in the coming year (which shall be reported annually to the Secretary).

(5) Such other information as the Secretary of the Treasury may require.

(c) Agents of Money Transmitting Businesses.—

(1) Maintenance of lists of agents of money transmitting businesses.—Pursuant to regulations which the Secretary of the Treasury shall prescribe, each money transmitting business shall—

(A) maintain a list containing the names and addresses of all persons authorized to act as an agent for such business in connection with activities described in subsection (d)(1)(A) and such other information about such agents as the Secretary may require; and

(B) make the list and other information available on request to any appropriate law enforcement agency.

(2) Treatment of agent as money transmitting business.—The Secretary of the Treasury shall prescribe regulations establishing, on the basis of such criteria as the Secretary determines to be appropriate, a threshold point for treating an agent of a money transmitting business as a money transmitting business for purposes of this section.

(d) Definitions.—For purposes of this section, the following definitions shall apply:

(1) Money transmitting business.—The term “money transmitting business” means any business other than the United States Postal Service which—

(A) provides check cashing, currency exchange, or money transmitting or remittance services, or issues or redeems money orders, travelers’ checks, and other similar instruments;

(B) is required to file reports under section 5313; and

(C) is not a depository institution (as defined in section 5313(g)).

(2) Money transmitting service.—The term “money transmitting service” includes accepting currency or funds denominated in the currency of any country and transmitting the currency or funds, or the value of the currency or funds, by any means through a financial agency or institution, a Federal reserve bank or other facility of the Board of Governors of the Federal Reserve System, or an electronic funds transfer network.

(e) Civil Penalty for Failure To Comply With Registration Requirements.—

(1) In general.—Any person who fails to comply with any requirement of this section or any regulation prescribed under this section shall be liable to the United States for a civil penalty of $5,000 for each such violation.

(2) Continuing violation.—Each day a violation described in paragraph (1) continues shall constitute a separate violation for purposes of such paragraph.

(3) Assessments.—Any penalty imposed under this subsection shall be assessed and collected by the Secretary of the Treasury in the manner provided in section 5321 and any such assessment shall be subject to the provisions of such section.

(Added Pub. L. 103–325, title IV, §408(b), Sept. 23, 1994, 108 Stat. 2250.)

References in Text

The date of enactment of the Money Laundering Suppression Act of 1994, referred to in subsec. (a)(1)(A), is the date of enactment of title IV of Pub. L. 103–325, which was approved Sept. 23, 1994.

Section 19(b)(1)(C) of the Federal Reserve Act, referred to in subsec. (b)(3), is classified to section 461(b)(1)(C) of Title 12, Banks and Banking.

Findings and Purposes

Section 408(a) of Pub. L. 103–325 provided that:

“(1) Findings.—The Congress hereby finds the following:

“(A) Money transmitting businesses are subject to the recordkeeping and reporting requirements of subchapter II of chapter 53 of title 31, United States Code.

“(B) Money transmitting businesses are largely unregulated businesses and are frequently used in sophisticated schemes to—

“(i) transfer large amounts of money which are the proceeds of unlawful enterprises; and

“(ii) evade the requirements of such subchapter II, the Internal Revenue Code of 1986 [26 U.S.C. 1 et seq.], and other laws of the United States.

“(C) Information on the identity of money transmitting businesses and the names of the persons who own or control, or are officers or employees of, a money transmitting business would have a high degree of usefulness in criminal, tax, or regulatory investigations and proceedings.

“(2) Purpose.—It is the purpose of this section [enacting this section and amending section 1960 of Title 18, Crimes and Criminal Procedure] to establish a registration requirement for businesses engaged in providing check cashing, currency exchange, or money transmitting or remittance services, or issuing or redeeming money orders, travelers’ checks, and other similar instruments to assist the Secretary of the Treasury, the Attorney General, and other supervisory and law enforcement agencies to effectively enforce the criminal, tax, and regulatory laws and prevent such money transmitting businesses from engaging in illegal activities.”

Section Referred to in Other Sections

This section is referred to in title 18 section 1960.

SUBCHAPTER III—MONEY LAUNDERING AND RELATED FINANCIAL CRIMES

§5340. Definitions

For purposes of this subchapter, the following definitions shall apply:

(1) Department of the treasury law enforcement organizations.—The term “Department of the Treasury law enforcement organizations” has the meaning given to such term in section 9703(p)(1).

(2) Money laundering and related financial crime.—The term “money laundering and related financial crime”—

(A) means the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States, or into, out of, or through United States financial institutions, as defined in section 5312 of title 31, United States Code; or

(B) has the meaning given that term (or the term used for an equivalent offense) under State and local criminal statutes pertaining to the movement of illicit cash or cash equivalent proceeds.

(3) Secretary.—The term “Secretary” means the Secretary of the Treasury.

(4) Attorney general.—The term “Attorney General” means the Attorney General of the United States.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2941.)

Part 1—National Money Laundering and Related Financial Crimes Strategy

§5341. National money laundering and related financial crimes strategy

(a) Development and Transmittal to Congress.—

(1) Development.—The President, acting through the Secretary and in consultation with the Attorney General, shall develop a national strategy for combating money laundering and related financial crimes.

(2) Transmittal to congress.—By February 1 of 1999, 2000, 2001, 2002, and 2003, the President shall submit a national strategy developed in accordance with paragraph (1) to the Congress.

(3) Separate presentation of classified material.—Any part of the strategy that involves information which is properly classified under criteria established by Executive Order shall be submitted to the Congress separately in classified form.

(b) Development of Strategy.—The national strategy for combating money laundering and related financial crimes shall address any area the President, acting through the Secretary and in consultation with the Attorney General, considers appropriate, including the following:

(1) Goals, objectives, and priorities.—Comprehensive, research-based goals, objectives, and priorities for reducing money laundering and related financial crime in the United States.

(2) Prevention.—Coordination of regulatory and other efforts to prevent the exploitation of financial systems in the United States for money laundering and related financial crimes, including a requirement that the Secretary shall—

(A) regularly review enforcement efforts under this subchapter and other provisions of law and, when appropriate, modify existing regulations or prescribe new regulations for purposes of preventing such criminal activity; and

(B) coordinate prevention efforts and other enforcement action with the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, the Federal Trade Commission, other Federal banking agencies, the National Credit Union Administration Board, and such other Federal agencies as the Secretary, in consultation with the Attorney General, determines to be appropriate.

(3) Detection and prosecution initiatives.—A description of operational initiatives to improve detection and prosecution of money laundering and related financial crimes and the seizure and forfeiture of proceeds and instrumentalities derived from such crimes.

(4) Enhancement of the role of the private financial sector in prevention.—The enhancement of partnerships between the private financial sector and law enforcement agencies with regard to the prevention and detection of money laundering and related financial crimes, including providing incentives to strengthen internal controls and to adopt on an industrywide basis more effective policies.

(5) Enhancement of intergovernmental cooperation.—The enhancement of—

(A) cooperative efforts between the Federal Government and State and local officials, including State and local prosecutors and other law enforcement officials; and

(B) cooperative efforts among the several States and between State and local officials, including State and local prosecutors and other law enforcement officials,

for financial crimes control which could be utilized or should be encouraged.

(6) Project and budget priorities.—A 3-year projection for program and budget priorities and achievable projects for reductions in financial crimes.

(7) Assessment of funding.—A complete assessment of how the proposed budget is intended to implement the strategy and whether the funding levels contained in the proposed budget are sufficient to implement the strategy.

(8) Designated areas.—A description of geographical areas designated as “high-risk money laundering and related financial crime areas” in accordance with, but not limited to, section 5342.

(9) Persons consulted.—Persons or officers consulted by the Secretary pursuant to subsection (d).

(10) Data regarding trends in money laundering and related financial crimes.—The need for additional information necessary for the purpose of developing and analyzing data in order to ascertain financial crime trends.

(11) Improved communications systems.—A plan for enhancing the compatibility of automated information and facilitating access of the Federal Government and State and local governments to timely, accurate, and complete information.

(c) Effectiveness Report.—At the time each national strategy for combating financial crimes is transmitted by the President to the Congress (other than the first transmission of any such strategy) pursuant to subsection (a), the Secretary shall submit a report containing an evaluation of the effectiveness of policies to combat money laundering and related financial crimes.

(d) Consultations.—In addition to the consultations required under this section with the Attorney General, in developing the national strategy for combating money laundering and related financial crimes, the Secretary shall consult with—

(1) the Board of Governors of the Federal Reserve System and other Federal banking agencies and the National Credit Union Administration Board;

(2) State and local officials, including State and local prosecutors;

(3) the Securities and Exchange Commission;

(4) the Commodities and Futures Trading Commission;

(5) the Director of the Office of National Drug Control Policy, with respect to money laundering and related financial crimes involving the proceeds of drug trafficking;

(6) the Chief of the United States Postal Inspection Service;

(7) to the extent appropriate, State and local officials responsible for financial institution and financial market regulation;

(8) any other State or local government authority, to the extent appropriate;

(9) any other Federal Government authority or instrumentality, to the extent appropriate; and

(10) representatives of the private financial services sector, to the extent appropriate.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2942.)

Section Referred to in Other Sections

This section is referred to in sections 5342, 5354 of this title.

§5342. High-risk money laundering and related financial crime areas

(a) Findings and Purpose.—

(1) Findings.—The Congress finds the following:

(A) Money laundering and related financial crimes frequently appear to be concentrated in particular geographic areas, financial systems, industry sectors, or financial institutions.

(B) While the Secretary has the responsibility to act with regard to Federal offenses which are being committed in a particular locality or are directed at a single institution, because modern financial systems and institutions are interconnected to a degree which was not possible until recently, money laundering and other related financial crimes are likely to have local, State, national, and international effects wherever they are committed.

(2) Purpose and objective.—It is the purpose of this section to provide a mechanism for designating any area where money laundering or a related financial crime appears to be occurring at a higher than average rate such that—

(A) a comprehensive approach to the problem of such crime in such area can be developed, in cooperation with State and local law enforcement agencies, which utilizes the authority of the Secretary to prevent such activity; or

(B) such area can be targeted for law enforcement action.

(b) Element of National Strategy.—The designation of certain areas as areas in which money laundering and related financial crimes are extensive or present a substantial risk shall be an element of the national strategy developed pursuant to section 5341(b).

(c) Designation of Areas.—

(1) Designation by secretary.—The Secretary, after taking into consideration the factors specified in subsection (d), shall designate any geographical area, industry, sector, or institution in the United States in which money laundering and related financial crimes are extensive or present a substantial risk as a “high-risk money laundering and related financial crimes area”.

(2) Case-by-case determination in consultation with the attorney general.—In addition to the factors specified in subsection (d), any designation of any area under paragraph (1) shall be made on the basis of a determination by the Secretary, in consultation with the Attorney General, that the particular area, industry, sector, or institution is being victimized by, or is particularly vulnerable to, money laundering and related financial crimes.

(3) Specific initiatives.—Any head of a department, bureau, or law enforcement agency, including any State or local prosecutor, involved in the detection, prevention, and suppression of money laundering and related financial crimes and any State or local official or prosecutor may submit—

(A) a written request for the designation of any area as a high-risk money laundering and related financial crimes area; or

(B) a written request for funding under section 5351 for a specific prevention or enforcement initiative, or to determine the extent of financial criminal activity, in an area.

(d) Factors.—In considering the designation of any area as a high-risk money laundering and related financial crimes area, the Secretary shall, to the extent appropriate and in consultation with the Attorney General, take into account the following factors:

(1) The population of the area.

(2) The number of bank and nonbank financial institution transactions which originate in such area or involve institutions located in such area.

(3) The number of stock or commodities transactions which originate in such area or involve institutions located in such area.

(4) Whether the area is a key transportation hub with any international ports or airports or an extensive highway system.

(5) Whether the area is an international center for banking or commerce.

(6) The extent to which financial crimes and financial crime-related activities in such area are having a harmful impact in other areas of the country.

(7) The number or nature of requests for information or analytical assistance which—

(A) are made to the analytical component of the Department of the Treasury; and

(B) originate from law enforcement or regulatory authorities located in such area or involve institutions or businesses located in such area or residents of such area.

(8) The volume or nature of suspicious activity reports originating in the area.

(9) The volume or nature of currency transaction reports or reports of cross-border movements of currency or monetary instruments originating in, or transported through, the area.

(10) Whether, and how often, the area has been the subject of a geographical targeting order.

(11) Observed changes in trends and patterns of money laundering activity.

(12) Unusual patterns, anomalies, growth, or other changes in the volume or nature of core economic statistics or indicators.

(13) Statistics or indicators of unusual or unexplained volumes of cash transactions.

(14) Unusual patterns, anomalies, or changes in the volume or nature of transactions conducted through financial institutions operating within or outside the United States.

(15) The extent to which State and local governments and State and local law enforcement agencies have committed resources to respond to the financial crime problem in the area and the degree to which the commitment of such resources reflects a determination by such government and agencies to address the problem aggressively.

(16) The extent to which a significant increase in the allocation of Federal resources to combat financial crimes in such area is necessary to provide an adequate State and local response to financial crimes and financial crime-related activities in such area.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2944.)

Report and Recommendations

Pub. L. 105–310, §2(c), Oct. 30, 1998, 112 Stat. 2949, provided that: “Before the end of the 5-year period beginning on the date the first national strategy for combating money laundering and related financial crimes is submitted to the Congress pursuant to section 5341(a)(1) of title 31, United States Code (as added by section 2(a) of this Act), the Secretary of the Treasury, in consultation with the Attorney General, shall submit a report to the Committee on Banking and Financial Services [now Committee on Financial Services] and the Committee on the Judiciary of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate on the effectiveness of and the need for the designation of areas, under section 5342 of title 31, United States Code (as added by such section 2(a)), as high-risk money laundering and related financial crime areas, together with recommendations for such legislation as the Secretary and the Attorney General may determine to be appropriate to carry out the purposes of such section.”

Section Referred to in Other Sections

This section is referred to in section 5341 of this title.

Part 2—Financial Crime-Free Communities Support Program

§5351. Establishment of financial crime-free communities support program

(a) Establishment.—The Secretary of the Treasury, in consultation with the Attorney General, shall establish a program to support local law enforcement efforts in the development and implementation of a program for the detection, prevention, and suppression of money laundering and related financial crimes.

(b) Program.—In carrying out the program, the Secretary of the Treasury, in consultation with the Attorney General, shall—

(1) make and track grants to grant recipients;

(2) provide for technical assistance and training, data collection, and dissemination of information on state-of-the-art practices that the Secretary determines to be effective in detecting, preventing, and suppressing money laundering and related financial crimes; and

(3) provide for the general administration of the program.

(c) Administration.—The Secretary shall appoint an administrator to carry out the program.

(d) Contracting.—The Secretary may employ any necessary staff and may enter into contracts or agreements with Federal and State law enforcement agencies to delegate authority for the execution of grants and for such other activities necessary to carry out this chapter.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2946.)

Section Referred to in Other Sections

This section is referred to in section 5342 of this title.

§5352. Program authorization

(a) Grant Eligibility.—To be eligible to receive an initial grant or a renewal grant under this part, a State or local law enforcement agency or prosecutor shall meet each of the following criteria:

(1) Application.—The State or local law enforcement agency or prosecutor shall submit an application to the Secretary in accordance with section 5353(a)(2).

(2) Accountability.—The State or local law enforcement agency or prosecutor shall—

(A) establish a system to measure and report outcomes—

(i) consistent with common indicators and evaluation protocols established by the Secretary, in consultation with the Attorney General; and

(ii) approved by the Secretary;

(B) conduct biennial surveys (or incorporate local surveys in existence at the time of the evaluation) to measure the progress and effectiveness of the coalition; and

(C) provide assurances that the entity conducting an evaluation under this paragraph, or from which the applicant receives information, has experience in gathering data related to money laundering and related financial crimes.

(b) Grant Amounts.—

(1) Grants.—

(A) In general.—Subject to subparagraph (D), for a fiscal year, the Secretary of the Treasury, in consultation with the Attorney General, may grant to an eligible applicant under this section for that fiscal year, an amount determined by the Secretary of the Treasury, in consultation with the Attorney General, to be appropriate.

(B) Suspension of grants.—If such grant recipient fails to continue to meet the criteria specified in subsection (a), the Secretary may suspend the grant, after providing written notice to the grant recipient and an opportunity to appeal.

(C) Renewal grants.—Subject to subparagraph (D), the Secretary may award a renewal grant to a grant recipient under this subparagraph for each fiscal year following the fiscal year for which an initial grant is awarded.

(D) Limitation.—The amount of a grant award under this paragraph may not exceed $750,000 for a fiscal year.

(2) Grant awards.—

(A) In general.—Except as provided in subparagraph (B), the Secretary may, with respect to a community, make a grant to one eligible applicant that represents that community.

(B) Exception.—The Secretary may make a grant to more than one eligible applicant that represent ¹ a community if—

(i) the eligible coalitions demonstrate that the coalitions are collaborating with one another; and

(ii) each of the coalitions has independently met the requirements set forth in subsection (a).

(c) Condition Relating to Proceeds of Asset Forfeitures.—

(1) In general.—No grant may be made or renewed under this part to any State or local law enforcement agency or prosecutor unless the agency or prosecutor agrees to donate to the Secretary of the Treasury for the program established under this part any amount received by such agency or prosecutor (after the grant is made) pursuant to any criminal or civil forfeiture under chapter 46 of title 18, United States Code, or any similar provision of State law.

(2) Scope of application.—Paragraph (1) shall not apply to any amount received by a State or local law enforcement agency or prosecutor pursuant to any criminal or civil forfeiture referred to in such paragraph in excess of the aggregate amount of grants received by such agency or prosecutor under this part.

(d) Rolling Grant Application Periods.—In establishing the program under this part, the Secretary shall take such action as may be necessary to ensure, to the extent practicable, that—

(1) applications for grants under this part may be filed at any time during a fiscal year; and

(2) some portion of the funds appropriated under this part for any such fiscal year will remain available for grant applications filed later in the fiscal year.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2946.)

Section Referred to in Other Sections

This section is referred to in section 5353 of this title.

¹ So in original. Probably should be “represents”.

§5353. Information collection and dissemination with respect to grant recipients

(a) Applicant and Grantee Information.—

(1) Application process.—The Secretary shall issue requests for proposal, as necessary, regarding, with respect to the grants awarded under section 5352, the application process, grant renewal, and suspension or withholding of renewal grants. Each application under this paragraph shall be in writing and shall be subject to review by the Secretary.

(2) Reporting.—The Secretary shall, to the maximum extent practicable and in a manner consistent with applicable law, minimize reporting requirements by a grant recipient and expedite any application for a renewal grant made under this part.

(b) Activities of Secretary.—The Secretary may—

(1) evaluate the utility of specific initiatives relating to the purposes of the program;

(2) conduct an evaluation of the program; and

(3) disseminate information described in this subsection to—

(A) eligible State local law enforcement agencies or prosecutors; and

(B) the general public.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2948.)

Section Referred to in Other Sections

This section is referred to in section 5352 of this title.

§5354. Grants for fighting money laundering and related financial crimes

(a) In General.—After the end of the 1-year period beginning on the date the first national strategy for combating money laundering and related financial crimes is submitted to the Congress in accordance with section 5341, and subject to subsection (b), the Secretary may review, select, and award grants for State or local law enforcement agencies and prosecutors to provide funding necessary to investigate and prosecute money laundering and related financial crimes in high-risk money laundering and related financial crime areas.

(b) Special Preference.—Special preference shall be given to applications submitted to the Secretary which demonstrate collaborative efforts of two or more State and local law enforcement agencies or prosecutors who have a history of Federal, State, and local cooperative law enforcement and prosecutorial efforts in responding to such criminal activity.

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2948.)

§5355. Authorization of appropriations

There are authorized to be appropriated the following amounts for the following fiscal years to carry out the purposes of this subchapter:

(Added Pub. L. 105–310, §2(a), Oct. 30, 1998, 112 Stat. 2948.)