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<PRE>[DOCID: f:s1511pcs.txt]





                                                       Calendar No. 185
107th CONGRESS
  1st Session
                                S. 1511

   To combat international money laundering, thwart the financing of 
  terrorism, and protect the United States financial system, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 9, 2001

  Mr. Sarbanes, from the Committee on Banking, reported the following 
     original bill; which was read twice and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
   To combat international money laundering, thwart the financing of 
  terrorism, and protect the United States financial system, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``International 
Money Laundering Abatement and Anti-Terrorist Financing Act of 2001''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. 4-Year congressional review-expedited consideration.
  TITLE I--INTERNATIONAL COUNTER MONEY LAUNDERING AND RELATED MEASURES

Sec. 101. Special measures for jurisdictions, financial institutions, 
                            or international transactions of primary 
                            money laundering concern.
Sec. 102. Special due diligence for correspondent accounts and private 
                            banking accounts.
Sec. 103. Prohibition on United States correspondent accounts with 
                            foreign shell banks.
Sec. 104. Cooperative efforts to deter money laundering.
Sec. 105. Inclusion of foreign corruption offenses as money laundering 
                            crimes.
Sec. 106. Anti-terrorist forfeiture protection.
Sec. 107. Long-arm jurisdiction over foreign money launderers.
Sec. 108. Laundering money through a foreign bank.
Sec. 109. Forfeiture of funds in United States interbank accounts.
Sec. 110. Proceeds of foreign crimes.
Sec. 111. Exclusion of aliens involved in money laundering.
Sec. 112. Corporation represented by a fugitive.
Sec. 113. Enforcement of foreign judgments.
Sec. 114. Increase in civil and criminal penalties for money 
                            laundering.
Sec. 115. Report and recommendation.
Sec. 116. Report on effectiveness.
Sec. 117. Concentration accounts at financial institutions.
    TITLE II--CURRENCY TRANSACTION REPORTING AMENDMENTS AND RELATED 
                              IMPROVEMENTS

Sec. 201. Amendments relating to reporting of suspicious activities.
Sec. 202. Anti-money laundering programs.
Sec. 203. Penalties for violations of geographic targeting orders and 
                            certain recordkeeping requirements, and 
                            lengthening effective period of geographic 
                            targeting orders.
Sec. 204. Anti-money laundering strategy.
Sec. 205. Authorization to include suspicions of illegal activity in 
                            written employment references.
Sec. 206. Bank Secrecy Act advisory group.
Sec. 207. Agency reports on reconciling penalty amounts.
Sec. 208. Reporting of suspicious activities by securities brokers and 
                            dealers.
Sec. 209. Special report on administration of Bank Secrecy provisions.
Sec. 210. Bank Secrecy provisions and anti-terrorist activities of 
                            United States intelligence agencies.
Sec. 211. Reporting of suspicious activities by hawala and other 
                            underground banking systems.
Sec. 212. Use of Authority of the United States Executive Directors.
                       TITLE III--CURRENCY CRIMES

Sec. 301. Bulk cash smuggling.
                   TITLE IV--ANTICORRUPTION MEASURES

Sec. 401. Corruption of foreign governments and ruling elites.
Sec. 402. Support for the financial action task force on money 
                            laundering.
Sec. 403. Terrorist funding through money laundering.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) money laundering, estimated by the International 
        Monetary Fund to amount to between 2 and 5 percent of global 
        gross domestic product, which is at least $600,000,000,000 
        annually, provides the financial fuel that permits 
        transnational criminal enterprises to conduct and expand their 
        operations to the detriment of the safety and security of 
        American citizens;
            (2) money laundering, and the defects in financial 
        transparency on which money launderers rely, are critical to 
        the financing of global terrorism and the provision of funds 
        for terrorist attacks;
            (3) money launderers subvert legitimate financial 
        mechanisms and banking relationships by using them as 
        protective covering for the movement of criminal proceeds and 
        the financing of crime and terrorism, and, by so doing, can 
        threaten the safety of United States citizens and undermine the 
        integrity of United States financial institutions and of the 
        global financial and trading systems upon which prosperity and 
        growth depend;
            (4) certain jurisdictions outside of the United States that 
        offer ``offshore'' banking and related facilities designed to 
        provide anonymity, coupled with special tax advantages and weak 
        financial supervisory and enforcement regimes, provide 
        essential tools to disguise ownership and movement of criminal 
        funds, derived from, or used to commit, offenses ranging from 
        narcotics trafficking, terrorism, arms smuggling, and 
        trafficking in human beings, to financial frauds that prey on 
        law-abiding citizens;
            (5) transactions involving such offshore jurisdictions make 
        it difficult for law enforcement officials and regulators to 
        follow the trail of money earned by criminals, organized 
        international criminal enterprises, and global terrorist 
        organizations;
            (6) correspondent banking facilities are one of the banking 
        mechanisms susceptible in some circumstances to manipulation by 
        foreign banks to permit the laundering of funds by hiding the 
        identity of real parties in interest to financial transactions;
            (7) private banking services can be susceptible to 
        manipulation by money launderers, for example corrupt foreign 
        government officials, particularly if those services include 
        the creation of offshore accounts and facilities for large 
        personal funds transfers to channel funds into accounts around 
        the globe;
            (8) United States anti-money laundering efforts are impeded 
        by outmoded and inadequate statutory provisions that make 
        investigations, prosecutions, and forfeitures more difficult, 
        particularly in cases in which money laundering involves 
        foreign persons, foreign banks, or foreign countries;
            (9) the ability to mount effective counter-measures to 
        international money launderers requires national, as well as 
        bilateral and multilateral action, using tools specially 
        designed for that effort; and
            (10) the Basle Committee on Banking Regulation and 
        Supervisory Practices and the Financial Action Task Force on 
        Money Laundering, of both of which the United States is a 
        member, have each adopted international anti-money laundering 
        principles and recommendations.
    (b) Purposes.--The purposes of this Act are--
            (1) to increase the stre
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ngth of United States measures to 
        prevent, detect, and prosecute international money laundering 
        and the financing of terrorism;
            (2) to ensure that--
                    (A) banking transactions and financial 
                relationships and the conduct of such transactions and 
                relationships, do not contravene the purposes of 
                subchapter II of chapter 53 of title 31, United States 
                Code, section 21 of the Federal Deposit Insurance Act, 
                or chapter 2 of title I of Public Law 91-508 (84 Stat. 
                1116), or facilitate the evasion of any such provision; 
                and
                    (B) the purposes of such provisions of law continue 
                to be fulfilled, and that such provisions of law are 
                effectively and efficiently administered;
            (3) to strengthen the provisions put into place by the 
        Money Laundering Control Act of 1986 (18 U.S.C. 981 note), 
        especially with respect to crimes by non-United States 
        nationals and foreign financial institutions;
            (4) to provide a clear national mandate for subjecting to 
        special scrutiny those foreign jurisdictions, financial 
        institutions operating outside of the United States, and 
        classes of international transactions that pose particular, 
        identifiable opportunities for criminal abuse;
            (5) to provide the Secretary of the Treasury (in this Act 
        referred to as the ``Secretary'') with broad discretion, 
        subject to the safeguards provided by the Administrative 
        Procedures Act under title 5, United States Code, to take 
        measures tailored to the particular money laundering problems 
        presented by specific foreign jurisdictions, financial 
        institutions operating outside of the United States, and 
        classes of international transactions;
            (6) to ensure that the employment of such measures by the 
        Secretary permits appropriate opportunity for comment by 
        affected financial institutions;
            (7) to provide guidance to domestic financial institutions 
        on particular foreign jurisdictions, financial institutions 
        operating outside of the United States, and classes of 
        international transactions that are of primary money laundering 
        concern to the United States Government;
            (8) to ensure that the forfeiture of any assets in 
        connection with the anti-terrorist efforts of the United States 
        permits for adequate challenge consistent with providing due 
        process rights;
            (9) to clarify the terms of the safe harbor from civil 
        liability for filing suspicious activity reports;
            (10) to strengthen the authority of the Secretary to issue 
        and administer geographic targeting orders, and to clarify that 
        violations of such orders or any other requirement imposed 
        under the authority contained in chapter 2 of title I of Public 
        Law 91-508 and subchapters II and III of chapter 53 of title 
        31, United States Code, may result in criminal and civil 
        penalties;
            (11) to ensure that all appropriate elements of the 
        financial services industry are subject to appropriate 
        requirements to report potential money laundering transactions 
        to proper authorities, and that jurisdictional disputes do not 
        hinder examination of compliance by financial institutions with 
        relevant reporting requirements;
            (12) to fix responsibility for high level coordination of 
        the anti-money laundering efforts of the Department of the 
        Treasury;
            (13) to strengthen the ability of financial institutions to 
        maintain the integrity of their employee population; and
            (14) to strengthen measures to prevent the use of the 
        United States financial system for personal gain by corrupt 
        foreign officials and to facilitate the repatriation of any 
        stolen assets to the citizens of countries to whom such assets 
        belong.

SEC. 3. 4-YEAR CONGRESSIONAL REVIEW-EXPEDITED CONSIDERATION.

    (a) In General.--Effective on and after the first day of fiscal 
year 2005, the provisions of this Act and the amendments made by this 
Act shall terminate if the Congress enacts a joint resolution, the text 
after the resolving clause of which is as follows: ``That provisions of 
the International Money Laundering Abatement and Anti-Terrorist 
Financing Act of 2001, and the amendments made thereby, shall no longer 
have the force of law.''.
    (b) Expedited Consideration.--Any joint resolution submitted 
pursuant to this section shall be considered in the Senate in 
accordance with the provisions of section 601(b) of the International 
Security Assistance and Arms Control Act of 1976. For the purpose of 
expediting the consideration and enactment of a joint resolution under 
this section, a motion to proceed to the consideration of any such 
joint resolution after it has been reported by the appropriate 
committee, shall be treated as highly privileged in the House of 
Representatives.

  TITLE I--INTERNATIONAL COUNTER MONEY LAUNDERING AND RELATED MEASURES

SEC. 101. SPECIAL MEASURES FOR JURISDICTIONS, FINANCIAL INSTITUTIONS, 
              OR INTERNATIONAL TRANSACTIONS OF PRIMARY MONEY LAUNDERING 
              CONCERN.

    (a) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by inserting after section 5318 the following 
new section:

``SEC. 5318A. SPECIAL MEASURES FOR JURISDICTIONS, FINANCIAL 
              INSTITUTIONS, OR INTERNATIONAL TRANSACTIONS OF PRIMARY 
              MONEY LAUNDERING CONCERN.

    ``(a) International Counter-Money Laundering Requirements.--
            ``(1) In general.--The Secretary may require domestic 
        financial institutions and domestic financial agencies to take 
        1 or more of the special measures described in subsection (b) 
        if the Secretary finds that reasonable grounds exist for 
        concluding that a jurisdiction outside of the United States, 1 
        or more financial institutions operating outside of the United 
        States, 1 or more classes of transactions within, or involving, 
a jurisdiction outside of the United States, or 1 or more types of 
accounts is of primary money laundering concern, in accordance with 
subsection (c).
            ``(2) Form of requirement.--The special measures described 
        in--
                    ``(A) subsection (b) may be imposed in such 
                sequence or combination as the Secretary shall 
                determine;
                    ``(B) paragraphs (1) through (4) of subsection (b) 
                may be imposed by regulation, order, or otherwise as 
                permitted by law; and
                    ``(C) subsection (b)(5) may be imposed only by 
                regulation.
            ``(3) Duration of orders; rulemaking.--Any order by which a 
        special measure described in paragraphs (1) through (4) of 
        subsection (b) is imposed (other than an order described in 
        section 5326)--
                    ``(A) shall be issued together with a notice of 
                proposed rulemaking relating to the imposition of such 
                special measure; and
                    ``(B) may not remain in effect for more than 120 
                days, except pursuant to a rule promulgated on or 
                before the end of the 120-day period beginning on the 
                date of issuance of such order.
            ``(4) Process for selecting special measures.--In selecting 
        which special measure or measures to take under this 
        subsection, the Secretary--
                    ``(A) shall consult with the Chairman of the Board 
                of Governors of the Federal Reserve System, any other 
                appropriate Federal banking agency, as defined in 
              
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  section 3 of the Federal Deposit Insurance Act, the 
                Securities and Exchange Commission, the National Credit 
                Union Administration Board, and in the sole discretion 
                of the Secretary such other agencies and interested 
                parties as the Secretary may find to be appropriate; 
                and
                    ``(B) shall consider--
                            ``(i) whether similar action has been or is 
                        being taken by other nations or multilateral 
                        groups;
                            ``(ii) whether the imposition of any 
                        particular special measure would create a 
                        significant competitive disadvantage, including 
                        any undue cost or burden associated with 
                        compliance, for financial institutions 
                        organized or licensed in the United States; and
                            ``(iii) the extent to which the action or 
                        the timing of the action would have a 
                        significant adverse systemic impact on the 
                        international payment, clearance, and 
                        settlement system, or on legitimate business 
                        activities involving the particular 
                        jurisdiction, institution, or class of 
                        transactions.
            ``(5) No limitation on other authority.--This section shall 
        not be construed as superseding or otherwise restricting any 
        other authority granted to the Secretary, or to any other 
        agency, by this subchapter or otherwise.
    ``(b) Special Measures.--The special measures referred to in 
subsection (a), with respect to a jurisdiction outside of the United 
States, financial institution operating outside of the United States, 
class of transaction within, or involving, a jurisdiction outside of 
the United States, or 1 or more types of accounts are as follows:
            ``(1) Recordkeeping and reporting of certain financial 
        transactions.--
                    ``(A) In general.--The Secretary may require any 
                domestic financial institution or domestic financial 
                agency to maintain records, file reports, or both, 
                concerning the aggregate amount of transactions, or 
                concerning each transaction, with respect to a 
                jurisdiction outside of the United States, 1 or more 
                financial institutions operating outside of the United 
                States, 1 or more classes of transactions within, or 
                involving, a jurisdiction outside of the United States, 
                or 1 or more types of accounts if the Secretary finds 
                any such jurisdiction, institution, or class of 
                transactions to be of primary money laundering concern.
                    ``(B) Form of records and reports.--Such records 
                and reports shall be made and retained at such time, in 
                such manner, and for such period of time, as the 
                Secretary shall determine, and shall include such 
                information as the Secretary may determine, including--
                            ``(i) the identity and address of the 
                        participants in a transaction or relationship, 
                        including the identity of the originator of any 
                        funds transfer;
                            ``(ii) the legal capacity in which a 
                        participant in any transaction is acting;
                            ``(iii) the identity of the beneficial 
                        owner of the funds involved in any transaction, 
                        in accordance with such procedures as the 
                        Secretary determines to be reasonable and 
                        practicable to obtain and retain the 
                        information; and
                            ``(iv) a description of any transaction.
            ``(2) Information relating to beneficial ownership.--In 
        addition to any other requirement under any other provision of 
        law, the Secretary may require any domestic financial 
        institution or domestic financial agency to take such steps as 
        the Secretary may determine to be reasonable and practicable to 
        obtain and retain information concerning the beneficial 
        ownership of any account opened or maintained in the United 
        States by a foreign person (other than a foreign entity whose 
        shares are subject to public reporting requirements or are 
        listed and traded on a regulated exchange or trading market), 
        or a representative of such a foreign person, that involves a 
        jurisdiction outside of the United States, 1 or more financial 
        institutions operating outside of the United States, 1 or more 
        classes of transactions within, or involving, a jurisdiction 
        outside of the United States, or 1 or more types of accounts if 
        the Secretary finds any such jurisdiction, institution, 
or transaction to be of primary money laundering concern.
            ``(3) Information relating to certain payable-through 
        accounts.--If the Secretary finds a jurisdiction outside of the 
        United States, 1 or more financial institutions operating 
        outside of the United States, or 1 or more classes of 
        transactions within, or involving, a jurisdiction outside of 
        the United States to be of primary money laundering concern, 
        the Secretary may require any domestic financial institution or 
        domestic financial agency that opens or maintains a payable-
        through account in the United States for a foreign financial 
        institution involving any such jurisdiction or any such 
        financial institution operating outside of the United States, 
        or a payable through account through which any such transaction 
        may be conducted, as a condition of opening or maintaining such 
        account--
                    ``(A) to identify each customer (and representative 
                of such customer) of such financial institution who is 
                permitted to use, or whose transactions are routed 
                through, such payable-through account; and
                    ``(B) to obtain, with respect to each such customer 
                (and each such representative), information that is 
                substantially comparable to that which the depository 
                institution obtains in the ordinary course of business 
                with respect to its customers residing in the United 
                States.
            ``(4) Information relating to certain correspondent 
        accounts.--If the Secretary finds a jurisdiction outside of the 
        United States, 1 or more financial institutions operating 
        outside of the United States, or 1 or more classes of 
        transactions within, or involving, a jurisdiction outside of 
        the United States to be of primary money laundering concern, 
        the Secretary may require any domestic financial institution or 
        domestic financial agency that opens or maintains a 
        correspondent account in the United States for a foreign 
        financial institution involving any such jurisdiction or any 
        such financial institution operating outside of the United 
        States, or a correspondent account through which any such 
        transaction may be conducted, as a condition of opening or 
        maintaining such account--
                    ``(A) to identify each customer (and representative 
                of such customer) of any such financial institution who 
                is permitted to use, or whose transactions are routed 
                through, such correspondent account; and
                    ``(B) to obtain, with respect to each such cu
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                (and each such representative), information that is 
                substantially comparable to that which the depository 
                institution obtains in the ordinary course of business 
                with respect to its customers residing in the United 
                States.
            ``(5) Prohibitions or conditions on opening or maintaining 
        certain correspondent or payable-through accounts.--If the 
        Secretary finds a jurisdiction outside of the United States, 1 
        or more financial institutions operating outside of the United 
        States, or 1 or more classes of transactions within, or 
        involving, a jurisdiction outside of the United States to be of 
        primary money laundering concern, the Secretary, in 
        consultation with the Secretary of State, the Attorney General, 
        and the Chairman of the Board of Governors of the Federal 
        Reserve System, may prohibit, or impose conditions upon, the 
        opening or maintaining in the United States of a correspondent 
        account or payable- through account by any domestic financial 
        institution or domestic financial agency for or on behalf of a 
        foreign banking institution, if such correspondent account or 
        payable-through account involves any such jurisdiction or 
        institution, or if any such transaction may be conducted 
        through such correspondent account or payable-through account.
    ``(c) Consultations and Information To Be Considered in Finding 
Jurisdictions, Institutions, Types of Accounts, or Transactions To Be 
of Primary Money Laundering Concern.--
            ``(1) In general.--In making a finding that reasonable 
        grounds exist for concluding that a jurisdiction outside of the 
        United States, 1 or more financial institutions operating 
        outside of the United States, 1 or more classes of transactions 
        within, or involving, a jurisdiction outside of the United 
        States, or 1 or more types of accounts is of primary money 
        laundering concern so as to authorize the Secretary to take 1 
        or more of the special measures described in subsection (b), 
        the Secretary shall consult with the Secretary of State, and 
        the Attorney General.
            ``(2) Additional considerations.--In making a finding 
        described in paragraph (1), the Secretary shall consider in 
        addition such information as the Secretary determines to be 
        relevant, including the following potentially relevant factors:
                    ``(A) Jurisdictional factors.--In the case of a 
                particular jurisdiction--
                            ``(i) evidence that organized criminal 
                        groups, international terrorists, or both, have 
                        transacted business in that jurisdiction;
                            (ii) the extent to which that jurisdiction 
                        or financial institutions operating in that 
                        jurisdiction offer bank secrecy or special tax 
                        or regulatory advantages to nonresidents or 
                        nondomiciliaries of that jurisdiction;
                            ``(iii) the substance and quality of 
                        administration of the bank supervisory and 
                        counter-money laundering laws of that 
                        jurisdiction;
                            ``(iv) the relationship between the volume 
                        of financial transactions occurring in that 
                        jurisdiction and the size of the economy of the 
                        jurisdiction;
                            ``(v) the extent to which that jurisdiction 
                        is characterized as a tax haven or offshore 
                        banking or secrecy haven by credible 
                        international organizations or multilateral 
                        expert groups;
                            ``(vi) whether the United States has a 
                        mutual legal assistance treaty with that 
                        jurisdiction, and the experience of United 
                        States law enforcement officials, regulatory 
                        officials, and tax administrators in obtaining 
                        information about transactions originating in 
                        or routed through or to such jurisdiction; and
                            ``(vii) the extent to which that 
                        jurisdiction is characterized by high levels of 
                        official or institutional corruption.
                    ``(B) Institutional factors.--In the case of a 
                decision to apply 1 or more of the special measures 
                described in subsection (b) only to a financial 
                institution or institutions, or to a transaction or 
                class of transactions, or to a type of account, or to 
                all 3, within or involving a particular jurisdiction--
                            ``(i) the extent to which such financial 
                        institutions, transactions, or types of 
                        accounts are used to facilitate or promote 
                        money laundering in or through the 
                        jurisdiction;
                            ``(ii) the extent to which such 
                        institutions, transactions, or types of 
                        accounts are used for legitimate business 
                        purposes in the jurisdiction; and
                            ``(iii) the extent to which such action is 
                        sufficient to ensure, with respect to 
                        transactions involving the jurisdiction and 
                        institutions operating in the jurisdiction, 
                        that the purposes of this subchapter continue 
                        to be fulfilled, and to guard against 
                        international money laundering and other 
                        financial crimes.
    ``(d) Notification of Special Measures Invoked by the Secretary.--
Not later than 10 days after the date of any action taken by the 
Secretary under subsection (a)(1), the Secretary shall notify, in 
writing, the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate of any such action.
    ``(e) Study and Report on Foreign Nationals.--
            ``(1) Study.--The Secretary, in consultation with the 
        appropriate Federal agencies, including the Federal banking 
        agencies (as defined in section 3 of the Federal Deposit 
        Insurance Act), shall conduct a study to--
                    ``(A) determine the most timely and effective way 
                to require foreign nationals to provide domestic 
                financial institutions and agencies with appropriate 
                and accurate information, comparable to that which is 
                required of United States nationals, concerning their 
                identity, address, and other related information 
                necessary to enable such institutions and agencies to 
                comply with the reporting, information gathering, and 
                other requirements of this section; and
                    ``(B) consider the need for requiring foreign 
                nationals to apply for and obtain an identification 
                number, similar to what is required for United States 
                citizens through a social security number or tax 
                identification number, prior to opening an account with 
                a domestic financial institution.
            ``(2) Report.--The Secretary shall report to Congress not 
        later than 180 days after the date of enactment of this section 
        with recommendations for implementing such action referred to 
        in paragraph (1) in a timely and effective man
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ner.
    ``(f) Definitions.--Notwithstanding any other provision of this 
subchapter, for purposes of this section, the following definitions 
shall apply:
            ``(1) Bank definitions.--The following definitions shall 
        apply with respect to a bank:
                    ``(A) Account.--The term `account'--
                            ``(i) means a formal banking or business 
                        relationship established to provide regular 
                        services, dealings, and other financial 
                        transactions; and
                            ``(ii) includes a demand deposit, savings 
                        deposit, or other transaction or asset account 
                        and a credit account or other extension of 
                        credit.
                    ``(B) Correspondent account.--The term 
                `correspondent account' means an account established to 
                receive deposits from, make payments on behalf of a 
                foreign financial institution, or handle other 
                financial transactions related to such institution.
                    ``(C) Payable-through account.--The term `payable-
                through account' means an account, including a 
                transaction account (as defined in section 19(b)(1)(C) 
                of the Federal Reserve Act), opened at a depository 
                institution by a foreign financial institution by means 
                of which the foreign financial institution permits its 
                customers to engage, either directly or through a 
                subaccount, in banking activities usual in connection 
                with the business of banking in the United States.
            ``(2) Definitions applicable to institutions other than 
        banks.--With respect to any financial institution other than a 
        bank, the Secretary shall, after consultation with the 
        Securities and Exchange Commission, define by regulation the 
        term `account', and shall include within the meaning of that 
        term, to the extent, if any, that the Secretary deems 
        appropriate, arrangements similar to payable-through and 
        correspondent accounts.
            ``(3) Regulatory definition.--The Secretary shall 
        promulgate regulations defining beneficial ownership of an 
        account for purposes of this section. Such regulations shall 
        address issues related to an individual's authority to fund, 
        direct, or manage the account (including, without limitation, 
        the power to direct payments into or out of the account), and 
        an individual's material interest in the income or corpus of 
        the account, and shall ensure that the identification of 
        individuals under this section does not extend to any 
        individual whose beneficial interest in the income or corpus of 
        the account is immaterial.''.
            ``(4) Other terms.--The Secretary may, by regulation, 
        further define the terms in paragraphs (1) and (2) and define 
        other terms for the purposes of this section, as the Secretary 
        deems appropriate.''.
    (b) Clerical Amendment.--The table of sections for subchapter II of 
chapter 53 of title 31, United States Code, is amended by inserting 
after the item relating to section 5318 the following new item:

``5318A. Special measures for jurisdictions, financial institutions, or 
                            international transactions of primary money 
                            laundering concern.''.

SEC. 102. SPECIAL DUE DILIGENCE FOR CORRESPONDENT ACCOUNTS AND PRIVATE 
              BANKING ACCOUNTS.

    (a) In General.--Section 5318 of title 31, United States Code, is 
amended by adding at the end the following:
    ``(i) Due Diligence for United States Private Banking and 
Correspondent Bank Accounts Involving Foreign Persons.--
            ``(1) In general.--Each financial institution that 
        establishes, maintains, administers, or manages a private 
        banking account or a correspondent account in the United States 
        for a non-United States person, including a foreign individual 
        visiting the United States, or a representative of a non-United 
        States person shall establish appropriate, specific, and, where 
        necessary, enhanced, due diligence policies, procedures, and 
        controls to detect and report instances of money laundering 
        through those accounts.
            ``(2) Minimum standards for correspondent accounts.--
                    ``(A) In general.--Subparagraph (B) shall apply if 
                a correspondent account is requested or maintained by, 
                or on behalf of, a foreign bank operating--
                            ``(i) under an offshore banking license; or
                            ``(ii) under a banking license issued by a 
                        foreign country that has been designated--
                                    ``(I) as noncooperative with 
                                international anti-money laundering 
                                principles or procedures by an 
                                intergovernmental group or organization 
                                of which the United States is a member; 
                                or
                                    ``(II) by the Secretary as 
                                warranting special measures due to 
                                money laundering concerns.
                    ``(B) Policies, procedures, and controls.--The 
                enhanced due diligence policies, procedures, and 
                controls required under paragraph (1) shall, at a 
                minimum, ensure that the financial institution in the 
                United States takes reasonable steps--
                            ``(i) to ascertain for any such foreign 
                        bank, the shares of which are not publicly 
                        traded, the identity of each of the owners of 
                        the foreign bank, and the nature and extent of 
                        the ownership interest of each such owner;
                            ``(ii) to conduct enhanced scrutiny of such 
                        account to guard against money laundering and 
                        report any suspicious transactions under 
                        section 5318(g); and
                            ``(iii) to ascertain whether such foreign 
                        bank provides correspondent accounts to other 
                        foreign banks and, if so, the identity of those 
                        foreign banks and related due diligence 
                        information, as appropriate under paragraph 
                        (1).
            ``(3) Minimum standards for private banking accounts.--If a 
        private banking account is requested or maintained by, or on 
        behalf of, a non-United States person, then the due diligence 
        policies, procedures, and controls required under paragraph (1) 
        shall, at a minimum, ensure that the financial institution 
        takes reasonable steps--
                    ``(A) to ascertain the identity of the nominal and 
                beneficial owners of, and the source of funds deposited 
                into, such account as needed to guard against money 
                laundering and report any suspicious transactions under 
                section 5318(g); and
                    ``(B) to conduct enhanced scrutiny of any such 
                account that is requested or maintained by, or on 
                behalf of, a senior foreign political figure, or any 
                immediate family member or close associate of a senior 
                foreign political figure, to prevent, detect, and 
                report transactions that may involve the proceeds of 
                foreign corruption.
            ``(4) Definitions and regulatory authority.--
                    ``(A) Offshore b
2000
anking license.--For purposes of 
                this subsection, the term `offshore banking license' 
                means a license to conduct banking activities which, as 
                a condition of the license, prohibits the licensed 
                entity from conducting banking activities with the 
                citizens of, or with the local currency of, the country 
                which issued the license.
                    ``(B) Regulatory authority.--The Secretary, in 
                consultation with the appropriate functional regulators 
                of the affected financial institutions, may further 
                delineate, by regulation the due diligence policies, 
                procedures, and controls required under paragraph 
                (1).''.
    (b) Effective Date.--The amendments made by this section shall take 
effect beginning 180 days after the date of enactment of this Act with 
respect to accounts covered by section 5318(i) of title 31, United 
States Code, as added by this section, that are opened before, on, or 
after the date of enactment of this Act.

SEC. 103. PROHIBITION ON UNITED STATES CORRESPONDENT ACCOUNTS WITH 
              FOREIGN SHELL BANKS.

    (a) In General.--Section 5318 of title 31, United States Code, is 
amended by inserting after section 5318(i), as added by section 102 of 
this Act, the following:
    ``(j) Prohibition on United States Correspondent Accounts With 
Foreign Shell Banks.--
            ``(1) In general.--A financial institution described in 
        subparagraphs (A) through (F) of section 5312(a)(2) (in this 
        subsection referred to as a `covered financial institution') 
        shall not establish, maintain, administer, or manage a 
        correspondent account in the United States for, or on behalf 
        of, a foreign bank that does not have a physical presence in 
        any country.
            ``(2) Prevention of indirect service to foreign shell 
        banks.--A covered financial institution shall take reasonable 
        steps to ensure that any correspondent account established, 
        maintained, administered, or managed by that covered financial 
        institution in the United States for a foreign bank is not 
        being used by that foreign bank to indirectly provide banking 
        services to another foreign bank that does not have a physical 
        presence in any country. The Secretary shall, by regulation, 
        delineate the reasonable steps necessary to comply with this 
        paragraph.
            ``(3) Exception.--Paragraphs (1) and (2) do not prohibit a 
        covered financial institution from providing a correspondent 
        account to a foreign bank, if the foreign bank--
                    ``(A) is an affiliate of a depository institution, 
                credit union, or foreign bank that maintains a physical 
                presence in the United States or a foreign country, as 
                applicable; and
                    ``(B) is subject to supervision by a banking 
                authority in the country regulating the affiliated 
                depository institution, credit union, or foreign bank 
                described in subparagraph (A), as applicable.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) the term `affiliate' means a foreign bank 
                that is controlled by or is under common control with a 
                depository institution, credit union, or foreign bank; 
                and
                    ``(B) the term `physical presence' means a place of 
                business that--
                            ``(i) is maintained by a foreign bank;
                            ``(ii) is located at a fixed address (other 
                        than solely an electronic address) in a country 
                        in which the foreign bank is authorized to 
                        conduct banking activities, at which location 
                        the foreign bank--
                                    ``(I) employs 1 or more individuals 
                                on a full-time basis; and
                                    ``(II) maintains operating records 
                                related to its banking activities; and
                            ``(iii) is subject to inspection by the 
                        banking authority which licensed the foreign 
                        bank to conduct banking activities.''.

SEC. 104. COOPERATIVE EFFORTS TO DETER MONEY LAUNDERING.

    (a) Cooperation Among Financial Institutions, Regulatory 
Authorities, and Law Enforcement Authorities.--
            (1) Regulations.--The Secretary shall, within 120 days 
        after the date of enactment of this Act, adopt regulations to 
        encourage further cooperation among financial institutions, 
        their regulatory authorities, and law enforcement authorities, 
        with the specific purpose of encouraging regulatory authorities 
        and law enforcement authorities to share with financial 
        institutions information regarding individuals, entities, and 
        organizations engaged in or reasonably suspected based on 
        credible evidence of engaging in terrorist acts or money 
        laundering activities.
            (2) Contents.--The regulations promulgated pursuant to 
        paragraph (1) may--
                    (A) require that each financial institution 
                designate 1 or more persons to receive information 
                concerning, and to monitor accounts of individuals, 
                entities, and organizations identified, pursuant to 
                paragraph (1); and
                    (B) further establish procedures for the protection 
                of the shared information, consistent with the 
                capacity, size, and nature of the institution to which 
                the particular procedures apply.
            (3) Rule of construction.--The receipt of information by a 
        financial institution pursuant to this section shall not 
        relieve or otherwise modify the obligations of the financial 
        institution with respect to any other person or account.
            (4) Use of information.--Information received by a 
        financial institution pursuant to this section shall not be 
        used for any purpose other than identifying and reporting on 
        activities that may involve terrorist acts or money laundering 
        activities.
    (b) Cooperation Among Financial Institutions.--Upon notice provided 
to the Secretary, 2 or more financial institutions and any association 
of financial institutions may share information with one another 
regarding individuals, entities, organizations, and countries suspected 
of possible terrorist or money laundering activities. A financial 
institution or association that transmits, receives, or shares such 
information for the purposes of identifying and reporting activities 
that may involve terrorist acts or money laundering activities shall 
not be liable to any person under any law or regulation of the United 
States, any constitution, law, or regulation of any State or political 
subdivision thereof, or under any contract or other legally enforceable 
agreement (including any arbitration agreement), for such disclosure or 
for any failure to provide notice of such disclosure to the person who 
is the subject of such disclosure, or any other person identified in 
the disclosure, except where such transmission, receipt, or sharing 
violates this section or regulations promulgated pursuant to this 
section.
    (c) Rule of Construction.--Compliance with the provisions of this 
Act requiring or allowing financial institutions and any association of 
financial institutions to disclose or share information regarding 
individuals, entities, and organizations engaged in or suspected of 
engaging in terrorist acts or money laundering activities shall not 
constitute a violation of the provisions of title V of the Gramm-Leach-
Bliley Act (Public Law 
2000
106-102).

SEC. 105. INCLUSION OF FOREIGN CORRUPTION OFFENSES AS MONEY LAUNDERING 
              CRIMES.

    Section 1956(c)(7)(B) of title 18, United States Code, is amended--
            (1) in clause (ii), by striking ``or destruction of 
        property by means of explosive or fire'' and inserting 
        ``destruction of property by means of explosive or fire, or a 
        crime of violence (as defined in section 16)'';
            (2) in clause (iii), by striking ``1978'' and inserting 
        ``1978)''; and
            (3) by adding at the end the following:
                            ``(iv) bribery of a public official, or the 
                        misappropriation, theft, or embezzlement of 
                        public funds by or for the benefit of a public 
                        official;
                            ``(v) smuggling or export control 
                        violations involving--
                                    ``(I) an item controlled on the 
                                United States Munitions List 
                                established under section 38 of the 
                                Arms Export Control Act (22 U.S.C. 
                                2778); or
                                    ``(II) an item controlled under 
                                regulations under the Export 
                                Administration Act of 1977 (15 C.F.R. 
                                Parts 730-774);
                            ``(vi) an offense with respect to which the 
                        United States would be obligated by a 
                        multilateral treaty, either to extradite the 
                        alleged offender or to submit the case for 
                        prosecution, if the offender were found within 
                        the territory of the United States; or
                            ``(vii) the misuse of funds of, or provided 
                        by, the International Monetary Fund in 
                        contravention of the Articles of Agreement of 
                        the Fund or the misuse of funds of, or provided 
                        by, any other international financial 
                        institution (as defined in section 1701(c)(2) 
                        of the International Financial Institutions Act 
                        (22 U.S.C. 262r(c)(2)) in contravention of any 
                        treaty or other international agreement to 
                        which the United States is a party, including 
                        any articles of agreement of the members of the 
                        international financial institution;''.

SEC. 106. ANTI-TERRORIST FORFEITURE PROTECTION.

    (a) Right to Contest.--An owner of property that is confiscated 
under any provision of law relating to the confiscation of assets of 
suspected international terrorists, may contest that confiscation by 
filing a claim in the manner set forth in the Federal Rules of Civil 
Procedure (Supplemental Rules for Certain Admiralty and Maritime 
Claims), and asserting as an affirmative defense that--
            (1) the property is not subject to confiscation under such 
        provision of law; or
            (2) the innocent owner provisions of section 983(d) of 
        title 18, United States Code, apply to the case.
    (b) Evidence.--In considering a claim filed under this section, the 
Government may rely on evidence that is otherwise inadmissible under 
the Federal Rules of Evidence, if a court determines that such reliance 
is necessary to protect the national security interests of the United 
States.
    (c) Other Remedies.--Nothing in this section shall limit or 
otherwise affect any other remedies that may be available to an owner 
of property under section 983 of title 18, United States Code, or any 
other provision of law.

SEC. 107. LONG-ARM JURISDICTION OVER FOREIGN MONEY LAUNDERERS.

    Section 1956(b) of title 18, United States Code, is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and moving the margins 
        2 ems to the right;
            (2) by inserting after ``(b)'' the following: 
        ``Penalties.--
            ``(1) In general.--'';
            (3) by inserting ``, or section 1957'' after ``or (a)(3)''; 
        and
            (4) by adding at the end the following:
            ``(2) Jurisdiction over foreign persons.--For purposes of 
        adjudicating an action filed or enforcing a penalty ordered 
        under this section, the district courts shall have jurisdiction 
        over any foreign person, including any financial institution 
        authorized under the laws of a foreign country, against whom 
        the action is brought, if service of process upon the foreign 
        person is made under the Federal Rules of Civil Procedure or 
        the laws of the country in which the foreign person is found, 
        and--
                    ``(A) the foreign person commits an offense under 
                subsection (a) involving a financial transaction that 
                occurs in whole or in part in the United States;
                    ``(B) the foreign person converts, to his or her 
                own use, property in which the United States has an 
                ownership interest by virtue of the entry of an order 
                of forfeiture by a court of the United States; or
                    ``(C) the foreign person is a financial institution 
                that maintains a bank account at a financial 
                institution in the United States.
            ``(3) Court authority over assets.--A court described in 
        paragraph (2) may issue a pretrial restraining order or take 
        any other action necessary to ensure that any bank account or 
        other property held by the defendant in the United States is 
        available to satisfy a judgment under this section.
            ``(4) Federal receiver.--
                    ``(A) In general.--A court described in paragraph 
                (2) may appoint a Federal Receiver, in accordance with 
                subparagraph (B) of this paragraph, to collect, 
                marshal, and take custody, control, and possession of 
                all assets of the defendant, wherever located, to 
                satisfy a judgment under this section or section 981, 
                982, or 1957, including an order of restitution to any 
                victim of a specified unlawful activity.
                    ``(B) Appointment and authority.--A Federal 
                Receiver described in subparagraph (A)--
                            ``(i) may be appointed upon application of 
                        a Federal prosecutor or a Federal or State 
                        regulator, by the court having jurisdiction 
                        over the defendant in the case;
                            ``(ii) shall be an officer of the court, 
                        and the powers of the Federal Receiver shall 
                        include the powers set out in section 754 of 
                        title 28, United States Code; and
                            ``(iii) shall have standing equivalent to 
                        that of a Federal prosecutor for the purpose of 
                        submitting requests to obtain information 
                        regarding the assets of the defendant--
                                    ``(I) from the Financial Crimes 
                                Enforcement Network of the Department 
                                of the Treasury; or
                                    ``(II) from a foreign country 
                                pursuant to a mutual legal assistance 
                                treaty, multilateral agreement, or 
                                other arrangement for international law 
                                enforcement assistance, provided that 
                                such requests are in accor
2000
dance with 
                                the policies and procedures of the 
                                Attorney General.''.

SEC. 108. LAUNDERING MONEY THROUGH A FOREIGN BANK.

    Section 1956(c) of title 18, United States Code, is amended by 
striking paragraph (6) and inserting the following:
            ``(6) the term `financial institution' includes--
                    ``(A) any financial institution, as defined in 
                section 5312(a)(2) of title 31, United States Code, or 
                the regulations promulgated thereunder; and
                    ``(B) any foreign bank, as defined in section 1 of 
                the International Banking Act of 1978 (12 U.S.C. 
                3101).''.

SEC. 109. FORFEITURE OF FUNDS IN UNITED STATES INTERBANK ACCOUNTS.

    (a) Forfeiture From United States Interbank Account.--Section 981 
of title 18, United States Code, is amended by adding at the end the 
following:
    ``(k) Interbank Accounts.--
            ``(1) In general.--
                    ``(A) In general.--For the purpose of a forfeiture 
                under this section or under the Controlled Substances 
                Act (21 U.S.C. 801 et seq.), if funds are deposited 
                into an account at a foreign bank, and that foreign 
                bank has an interbank account in the United States with 
                a covered financial institution (as defined in section 
                5318A of title 31), the funds shall be deemed to have 
                been deposited into the interbank account in the United 
                States, and any restraining order, seizure warrant, or 
                arrest warrant in rem regarding the funds may be served 
on the covered financial institution, and funds in the interbank 
account, up to the value of the funds deposited into the account at the 
foreign bank, may be restrained, seized, or arrested.
                    ``(B) Authority to suspend.--The Attorney General, 
                in consultation with the Secretary, may suspend or 
                terminate a forfeiture under this section if the 
                Attorney General determines that a conflict of law 
                exists between the laws of the jurisdiction in which 
                the foreign bank is located and the laws of the United 
                States with respect to liabilities arising from the 
                restraint, seizure, or arrest of such funds, and that 
                such suspension or termination would be in the interest 
                of justice and would not harm the national interests of 
                the United States.
            ``(2) No requirement for government to trace funds.--If a 
        forfeiture action is brought against funds that are restrained, 
        seized, or arrested under paragraph (1), it shall not be 
        necessary for the Government to establish that the funds are 
        directly traceable to the funds that were deposited into the 
        foreign bank, nor shall it be necessary for the Government to 
        rely on the application of section 984.
            ``(3) Claims brought by owner of the funds.--If a 
        forfeiture action is instituted against funds restrained, 
        seized, or arrested under paragraph (1), the owner of the funds 
        deposited into the account at the foreign bank may contest the 
        forfeiture by filing a claim under section 983.
            ``(4) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Interbank account.--The term `interbank 
                account' has the same meaning as in section 
                984(c)(2)(B).
                    ``(B) Owner.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `owner'--
                                    ``(I) means the person who was the 
                                owner, as that term is defined in 
                                section 983(d)(6), of the funds that 
                                were deposited into the foreign bank at 
                                the time such funds were deposited; and
                                    ``(II) does not include either the 
                                foreign bank or any financial 
                                institution acting as an intermediary 
                                in the transfer of the funds into the 
                                interbank account.
                            ``(ii) Exception.--The foreign bank may be 
                        considered the `owner' of the funds (and no 
                        other person shall qualify as the owner of such 
                        funds) only if--
                                    ``(I) the basis for the forfeiture 
                                action is wrongdoing committed by the 
                                foreign bank; or
                                    ``(II) the foreign bank 
                                establishes, by a preponderance of the 
                                evidence, that prior to the restraint, 
                                seizure, or arrest of the funds, the 
                                foreign bank had discharged all or part 
                                of its obligation to the prior owner of 
                                the funds, in which case the foreign 
                                bank shall be deemed the owner of the 
                                funds to the extent of such discharged 
                                obligation.''.
    (b) Bank Records.--Section 5318 of title 31, United States Code, is 
amended by adding at the end the following:
    ``(k) Bank Records Related to Anti-Money Laundering Programs.--
            ``(1) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Appropriate federal banking agency.--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).
                    ``(B) Incorporated terms.--The terms `correspondent 
                account', `covered financial institution', and `foreign 
                bank' have the same meanings as in section 5318A.
            ``(2) 120-hour rule.--Not later than 120 hours after 
        receiving a request by an appropriate Federal banking agency 
        for information related to anti-money laundering compliance by 
        a covered financial institution or a customer of such 
        institution, a covered financial institution shall provide to 
        the appropriate Federal banking agency, or make available at a 
        location specified by the representative of the appropriate 
        Federal banking agency, information and account documentation 
        for any account opened, maintained, administered or managed in 
        the United States by the covered financial institution.
            ``(3) Foreign bank records.--
                    ``(A) Summons or subpoena of records.--
                            ``(i) In general.--The Secretary or the 
                        Attorney General may issue a summons or 
                        subpoena to any foreign bank that maintains a 
                        correspondent account in the United States and 
                        request records related to such correspondent 
                        account, including records maintained outside 
                        of the United States relating to the deposit of 
                        funds into the foreign bank.
                            ``(ii) Service of summons or subpoena.--A 
                        summons or subpoena referred to in clause (i) 
                        may be served on the foreign bank in the United 
                        States if the foreign bank has a representative 
                        in the United States, or in a foreign country 
                        pursua
2000
nt to any mutual legal assistance treaty, 
                        multilateral agreement, or other request for 
                        international law enforcement assistance.
                    ``(B) Acceptance of service.--
                            ``(i) Maintaining records in the united 
                        states.--Any covered financial institution 
                        which maintains a correspondent account in the 
                        United States for a foreign bank shall maintain 
                        records in the United States identifying the 
                        owners of such foreign bank and the name and 
                        address of a person who resides in the United 
                        States and is authorized to accept service of 
                        legal process for records regarding the 
                        correspondent account.
                            ``(ii) Law enforcement request.--Upon 
                        receipt of a written request from a Federal law 
                        enforcement officer for information required to 
                        be maintained under this paragraph, the covered 
                        financial institution shall provide the 
                        information to the requesting officer not later 
                        than 7 days after receipt of the request.
                    ``(C) Termination of correspondent relationship.--
                            ``(i) Termination upon receipt of notice.--
                        A covered financial institution shall terminate 
                        any correspondent relationship with a foreign 
                        bank not later than 10 business days after 
                        receipt of written notice from the Secretary or 
                        the Attorney General that the foreign bank has 
                        failed--
                                    ``(I) to comply with a summons or 
                                subpoena issued under subparagraph (A); 
                                or
                                    ``(II) to initiate proceedings in a 
                                United States court contesting such 
                                summons or subpoena.
                            ``(ii) Limitation on liability.--A covered 
                        financial institution shall not be liable to 
                        any person in any court or arbitration 
                        proceeding for terminating a correspondent 
                        relationship in accordance with this 
                        subsection.
                            ``(iii) Failure to terminate 
                        relationship.--Failure to terminate a 
                        correspondent relationship in accordance with 
                        this subsection shall render the covered 
                        financial institution liable for a civil 
                        penalty of up to $10,000 per day until the 
                        correspondent relationship is so terminated.''.
    (c) Grace Period.--Financial institutions affected by section 5333 
of title 31 United States Code, as amended by this Act, shall have 60 
days from the date of enactment of this Act to comply with the 
provisions of that section.
    (d) Requests for Records.--Section 3486(a)(1) of title 18, United 
States Code, is amended by striking ``, or (II) a Federal offense 
involving the sexual exploitation or abuse of children'' and inserting 
``, (II) a Federal offense involving the sexual exploitation or abuse 
of children, or (III) money laundering, in violation of section 1956, 
1957, or 1960 of this title''.
    (e) Authority To Order Convicted Criminal To Return Property 
Located Abroad.--
            (1) Forfeiture of substitute property.--Section 413(p) of 
        the Controlled Substances Act (21 U.S.C. 853) is amended to 
        read as follows:
    ``(p) Forfeiture of Substitute Property.--
            ``(1) In general.--Paragraph (2) of this subsection shall 
        apply, if any property described in subsection (a), as a result 
        of any act or omission of the defendant--
                    ``(A) cannot be located upon the exercise of due 
                diligence;
                    ``(B) has been transferred or sold to, or deposited 
                with, a third party;
                    ``(C) has been placed beyond the jurisdiction of 
                the court;
                    ``(D) has been substantially diminished in value; 
                or
                    ``(E) has been commingled with other property which 
                cannot be divided without difficulty.
            ``(2) Substitute property.--In any case described in any of 
        subparagraphs (A) through (E) of paragraph (1), the court shall 
        order the forfeiture of any other property of the defendant, up 
        to the value of any property described in subparagraphs (A) 
        through (E) of paragraph (1), as applicable.
            ``(3) Return of property to jurisdiction.--In the case of 
        property described in paragraph (1)(C), the court may, in 
        addition to any other action authorized by this subsection, 
        order the defendant to return the property to the jurisdiction 
        of the court so that the property may be seized and 
        forfeited.''.
            (2) Protective orders.--Section 413(e) of the Controlled 
        Substances Act (21 U.S.C. 853(e)) is amended by adding at the 
        end the following:
            ``(4) Order to repatriate and deposit.--
                    ``(A) In general.--Pursuant to its authority to 
                enter a pretrial restraining order under this section, 
                including its authority to restrain any property 
                forfeitable as substitute assets, the court may order a 
                defendant to repatriate any property that may be seized 
                and forfeited, and to deposit that property pending 
                trial in the registry of the court, or with the United 
                States Marshals Service or the Secretary of the 
                Treasury, in an interest-bearing account, if 
                appropriate.
                    ``(B) Failure to comply.--Failure to comply with an 
                order under this subsection, or an order to repatriate 
                property under subsection (p), shall be punishable as a 
                civil or criminal contempt of court, and may also 
                result in an enhancement of the sentence of the 
                defendant under the obstruction of justice provision of 
                the Federal Sentencing Guidelines.''.

SEC. 110. PROCEEDS OF FOREIGN CRIMES.

    Section 981(a)(1)(B) of title 18, United States Code, is amended to 
read as follows:
            ``(B) Any property, real or personal, within the 
        jurisdiction of the United States, constituting, derived from, 
        or traceable to, any proceeds obtained directly or indirectly 
        from an offense against a foreign nation, or any property used 
        to facilitate such an offense, if the offense--
                    ``(i) involves the manufacture, importation, sale, 
                or distribution of a controlled substance (as that term 
                is defined for purposes of the Controlled Substances 
                Act), or any other conduct described in section 
                1956(c)(7)(B);
                    ``(ii) would be punishable within the jurisdiction 
                of the foreign nation by death or imprisonment for a 
                term exceeding 1 year; and
                    ``(iii) would be punishable under the laws of the 
                United States by imprisonment for a term exceeding 1 
                year, if the act or activity constituting the offense 
                had occurred within the jurisdiction of the United 
                States.''.

SEC. 111. EXCLUSION OF ALIENS INVOLVED IN MONEY LAUNDERING.

    Section 212(a)(2) of the Immigration and 
2000
Nationality Act of 1952 (8 
U.S.C. 1182(a)(2)) is amended by adding at the end the following:
                    ``(I) Money laundering activities.--Any alien who 
                the consular officer or the Attorney General knows or 
                has reason to believe is or has been engaged in 
                activities which, if engaged in within the United 
                States would constitute a violation of section 1956 or 
                1957 of title 18, United States Code, or has been a 
                knowing assister, abettor, conspirator, or colluder 
                with others in any such illicit activity is 
                inadmissible.''.

SEC. 112. CORPORATION REPRESENTED BY A FUGITIVE.

    Section 2466 of title 18, United States Code, is amended by 
designating the present matter as subsection (a), and adding at the end 
the following:
    ``(b) Subsection (a) may be applied to a claim filed by a 
corporation if any majority shareholder, or individual filing the claim 
on behalf of the corporation is a person to whom subsection (a) 
applies.''.

SEC. 113. ENFORCEMENT OF FOREIGN JUDGMENTS.

    Section 2467 of title 28, United States Code, is amended--
            (1) in subsection (d), by adding the following after 
        paragraph (2):
            ``(3) Preservation of property.--To preserve the 
        availability of property subject to a foreign forfeiture or 
        confiscation judgment, the Government may apply for, and the 
        court may issue, a restraining order pursuant to section 983(j) 
        of title 18, United States Code, at any time before or after an 
        application is filed pursuant to subsection (c)(1). The court, 
        in issuing the restraining order--
                    ``(A) may rely on information set forth in an 
                affidavit describing the nature of the proceeding 
                investigation underway in the foreign country, and 
                setting forth a reasonable basis to believe that the 
                property to be restrained will be named in a judgment 
                of forfeiture at the conclusion of such proceeding; or
                    ``(B) may register and enforce a restraining order 
                has been issued by a court of competent jurisdiction in 
                the foreign country and certified by the Attorney 
                General pursuant to subsection (b)(2).
        No person may object to the restraining order on any ground 
        that is the subject to parallel litigation involving the same 
        property that is pending in a foreign court.'';
            (2) in subsection (b)(1)(C), by striking ``establishing 
        that the defendant received notice of the proceedings in 
        sufficient time to enable the defendant'' and inserting 
        ``establishing that the foreign nation took steps, in 
        accordance with the principles of due process, to give notice 
        of the proceedings to all persons with an interest in the 
        property in sufficient time to enable such persons'';
            (3) in subsection (d)(1)(D), by striking ``the defendant in 
        the proceedings in the foreign court did not receive notice'' 
        and inserting ``the foreign nation did not take steps, in 
accordance with the principles of due process, to give notice of the 
proceedings to a person with an interest in the property''; and
            (4) in subsection (a)(2)(A), by inserting ``, any violation 
        of foreign law that would constitute a violation of an offense 
        for which property could be forfeited under Federal law if the 
        offense were committed in the United States'' after ``United 
        Nations Convention''.

SEC. 114. INCREASE IN CIVIL AND CRIMINAL PENALTIES FOR MONEY 
              LAUNDERING.

    (a) Civil Penalties.--Section 5321(a) of title 31, United States 
Code, is amended by adding at the end the following:
            ``(7) Penalties for international counter money laundering 
        violations.--The Secretary may impose a civil money penalty in 
        an amount equal to not less than 2 times the amount of the 
        transaction, but not more than $1,000,000, on any financial 
        institution or agency that violates any provision of subsection 
        (i) or (j) of section 5318 or any special measures imposed 
        under section 5318A.''.
    (b) Criminal Penalties.--Section 5322 of title 31, United States 
Code, is amended by adding at the end the following:
    ``(d) A financial institution or agency that violates any provision 
of subsection (i) or (j) of section 5318, or any special measures 
imposed under section 5318A, or any regulation prescribed under 
subsection (i) or (j) of section 5318 or section 5318A, shall be fined 
in an amount equal to not less than 2 times the amount of the 
transaction, but not more than $1,000,000.''.

SEC. 115. REPORT AND RECOMMENDATION.

    Not later than 30 months after the date of enactment of this Act, 
the Secretary, in consultation with the Attorney General, the Federal 
banking agencies (as defined at section 3 of the Federal Deposit 
Insurance Act), the Securities and Exchange Commission, and such other 
agencies as the Secretary may determine, at the discretion of the 
Secretary, shall evaluate the operations of the provisions of this 
title and make recommendations to Congress as to any legislative action 
with respect to this title as the Secretary may determine to be 
necessary or advisable.

SEC. 116. REPORT ON EFFECTIVENESS.

    The Secretary shall report annually on measures taken pursuant to 
this title, and shall submit the report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and to the Committee on 
Financial Services of the House of Representatives.

SEC. 117. CONCENTRATION ACCOUNTS AT FINANCIAL INSTITUTIONS.

    Section 5318(h) of title 31, United States Code, as amended by 
section 202 of this Act, is amended by adding at the end the following:
            ``(3) Concentration accounts.--The Secretary may issue 
        regulations under this subsection that govern maintenance of 
        concentration accounts by financial institutions, in order to 
        ensure that such accounts are not used to prevent association 
        of the identity of an individual customer with the movement of 
        funds of which the customer is the direct or beneficial owner, 
        which regulations shall, at a minimum--
                    ``(A) prohibit financial institutions from allowing 
                clients to direct transactions that move their funds 
                into, out of, or through the concentration accounts of 
                the financial institution;
                    ``(B) prohibit financial institutions and their 
                employees from informing customers of the existence of, 
                or the means of identifying, the concentration accounts 
                of the institution; and
                    ``(C) require each financial institution to 
                establish written procedures governing the 
                documentation of all transactions involving a 
                concentration account, which procedures shall ensure 
                that, any time a transaction involving a concentration 
                account commingles funds belonging to 1 or more 
                customers, the identity of, and specific amount 
                belonging to, each customer is documented.''.

    TITLE II--CURRENCY TRANSACTION REPORTING AMENDMENTS AND RELATED 
                              IMPROVEMENTS

 SEC. 201. AMENDMENTS RELATING TO REPORTING OF SUSPICIOUS ACTIVITIES.

    (a) Amendment Relating to Civil Liability Immunity for 
Disclosures.--Section 5318(g)(3) of title 31, United States Code, is 
amended to read as follows:
            ``(3) Liability for disclosures.--
                    ``(A) In general.--Any financial institution that 
                makes a voluntary disclosure of any possible violation 
                of law or regulation to a government agency or makes a 
                disclosure pursuant to 
2000
this subsection or any other 
                authority, and any director, officer, employee, or 
                agent of such institution who makes, or requires 
                another to make any such disclosure, shall not be 
                liable to any person under any law or regulation of the 
                United States, any constitution, law, or regulation of 
                any State or political subdivision of any State, or 
                under any contract or other legally enforceable 
                agreement (including any arbitration agreement), for 
                such disclosure or for any failure to provide notice of 
                such disclosure to the person who is the subject of 
                such disclosure or any other person identified in the 
                disclosure.
                    ``(B) Rule of construction.--Subparagraph (A) shall 
                not be construed as creating--
                            ``(i) any inference that the term `person', 
                        as used in such subparagraph, may be construed 
                        more broadly than its ordinary usage so as to 
                        include any government or agency of government; 
                        or
                            ``(ii) any immunity against, or otherwise 
                        affecting, any civil or criminal action brought 
                        by any government or agency of government to 
                        enforce any constitution, law, or regulation of 
                        such government or agency.''.
    (b) Prohibition on Notification of Disclosures.--Section 5318(g)(2) 
of title 31, United States Code, is amended to read as follows:
            ``(2) Notification prohibited.--
                    ``(A) In general.--If a financial institution or 
                any director, officer, employee, or agent of any 
                financial institution, voluntarily or pursuant to this 
                section or any other authority, reports a suspicious 
                transaction to a government agency--
                            ``(i) the financial institution, director, 
                        officer, employee, or agent may not notify any 
                        person involved in the transaction that the 
                        transaction has been reported; and
                            ``(ii) no officer or employee of the 
                        Federal Government or of any State, local, 
                        tribal, or territorial government within the 
                        United States, who has any knowledge that such 
                        report was made may disclose to any person 
                        involved in the transaction that the 
                        transaction has been reported, other than as 
                        necessary to fulfill the official duties of 
                        such officer or employee.
                    ``(B) Disclosures in certain employment 
                references.--
                            ``(i) Rule of construction.--
                        Notwithstanding the application of subparagraph 
                        (A) in any other context, subparagraph (A) 
                        shall not be construed as prohibiting any 
                        financial institution, or any director, 
                        officer, employee, or agent of such 
                        institution, from including information that 
                        was included in a report to which subparagraph 
                        (A) applies--
                                    ``(I) in a written employment 
                                reference that is provided in 
                                accordance with section 18(v) of the 
                                Federal Deposit Insurance Act in 
                                response to a request from another 
                                financial institution, except that such 
                                written reference may not disclose that 
                                such information was also included in 
                                any such report or that such report was 
                                made; or
                                    ``(II) in a written termination 
                                notice or employment reference that is 
                                provided in accordance with the rules 
                                of the self-regulatory organizations 
                                registered with the Securities and 
                                Exchange Commission, except that such 
                                written notice or reference may not 
                                disclose that such information was also 
                                included in any such report or that 
                                such report was made.
                            ``(ii) Information not required.--Clause 
                        (i) shall not be construed, by itself, to 
                        create any affirmative duty to include any 
                        information described in clause (i) in any 
                        employment reference or termination notice 
                        referred to in clause (i).''.

SEC. 202. ANTI-MONEY LAUNDERING PROGRAMS.

    Section 5318(h) of title 31, United States Code, is amended to read 
as follows:
    ``(h) Anti-Money Laundering Programs.--
            ``(1) In general.--In order to guard against money 
        laundering through financial institutions, each financial 
        institution shall establish anti-money laundering programs, 
        including, at a minimum--
                    ``(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), and may 
        exempt from the application of those standards any financial 
        institution that is not subject to the provisions of the rules 
        contained in part 103 of title 31, of the Code of Federal 
        Regulations, or any successor rule thereto, for so long as such 
        financial institution is not subject to the provisions of such 
        rules.''.

SEC. 203. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING ORDERS AND 
              CERTAIN RECORDKEEPING REQUIREMENTS, AND LENGTHENING 
              EFFECTIVE PERIOD OF GEOGRAPHIC TARGETING ORDERS.

    (a) Civil Penalty for Violation of Targeting Order.--Section 
5321(a)(1) of title 31, United States Code, is amended--
            (1) by inserting ``or order issued'' after ``subchapter or 
        a regulation prescribed''; and
            (2) by inserting ``, or willfully violating a regulation 
        prescribed under section 21 of the Federal Deposit Insurance 
        Act or section 123 of Public Law 91-508,'' after ``sections 
        5314 and 5315)''.
    (b) Criminal Penalties for Violation of Targeting Order.--Section 
5322 of title 31, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by inserting ``or order issued'' after 
                ``willfully violating this subchapter or a regulation 
                prescribed''; and
                    (B) by inserting ``, or willfully violating a 
                regulation prescribed under section 21 of the Federal 
                Deposit Insurance Act or section 123 of Public Law 91-
                508,'' after ``under section 5315 or 5324)''; and
            (2) in subsection (b)--
                    (A) by inserting ``or order issued'' after 
                ``willfully violating this subchapter or a regulation 
                prescribed''; and
                    (B) by inserting ``or willfully violating a 
       
2000
         regulation prescribed under section 21 of the Federal 
                Deposit Insurance Act or section 123 of Public Law 91-
                508,'' after ``under section 5315 or 5324),''.
    (c) Structuring Transactions To Evade Targeting Order or Certain 
Recordkeeping Requirements.--Section 5324(a) of title 31, United States 
Code, is amended--
            (1) by inserting a comma after ``shall'';
            (2) by striking ``section--'' and inserting ``section, the 
        reporting or recordkeeping requirements imposed by any order 
        issued under section 5326, or the recordkeeping requirements 
        imposed by any regulation prescribed under section 21 of the 
        Federal Deposit Insurance Act or section 123 of Public Law 91-
        508--'';
            (3) in paragraph (1), by inserting ``, to file a report or 
        to maintain a record required by an order issued under section 
        5326, or to maintain a record required pursuant to any 
        regulation prescribed under section 21 of the Federal Deposit 
        Insurance Act or section 123 of Public Law 91-508'' after 
        ``regulation prescribed under any such section''; and
            (4) in paragraph (2), by inserting ``, to file a report or 
        to maintain a record required by any order issued under section 
        5326, or to maintain a record required pursuant to any 
        regulation prescribed under section 5326, or to maintain a 
        record required pursuant to any regulation prescribed under 
        section 21 of the Federal Deposit Insurance Act or section 123 
        of Public Law 91-508,'' after ``regulation prescribed under any 
        such section''.
    (d) Lengthening Effective Period of Geographic Targeting Orders.--
Section 5326(d) of title 31, United States Code, is amended by striking 
``more than 60'' and inserting ``more than 180''.

SEC. 204. ANTI-MONEY LAUNDERING STRATEGY.

    (a) Strategy.--Section 5341(b) of title 31, United States Code, is 
amended by adding at the end the following:
            ``(12) Data regarding funding of terrorism.--Data 
        concerning money laundering efforts related to the funding of 
        acts of international terrorism, and efforts directed at the 
        prevention, detection, and prosecution of such funding.''.

SEC. 205. AUTHORIZATION TO INCLUDE SUSPICIONS OF ILLEGAL ACTIVITY IN 
              WRITTEN EMPLOYMENT REFERENCES.

    Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is 
amended by adding at the end the following:
    ``(v) Written Employment References May Contain Suspicions of 
Involvement in Illegal Activity.--
            ``(1) Authority to disclose information.--Notwithstanding 
        any other provision of law, any insured depository institution, 
        and any director, officer, employee, or agent of such 
        institution, may disclose in any written employment reference 
        relating to a current or former institution-affiliated party of 
        such institution which is provided to another insured 
        depository institution in response to a request from such other 
        institution, information concerning the possible involvement of 
        such institution-affiliated party in potentially unlawful 
        activity.
            ``(2) Information not required.--Nothing in paragraph (1) 
        shall be construed, by itself, to create any affirmative duty 
        to include any information described in paragraph (1) in any 
        employment reference referred to in paragraph (1).
            ``(3) Malicious intent.--Notwithstanding any other 
        provision of this subsection, voluntary disclosure made by an 
        insured depository institution, and any director, officer, 
        employee, or agent of such institution under this subsection 
        concerning potentially unlawful activity that is made with 
        malicious intent or otherwise, shall not be shielded from 
        liability from the person identified in the disclosure.
            ``(4) Definition.--For purposes of this subsection, the 
        term `insured depository institution' includes any uninsured 
        branch or agency of a foreign bank.''.

SEC. 206. BANK SECRECY ACT ADVISORY GROUP.

    Section 1564 of the Annunzio-Wylie Anti-Money Laundering Act (31 
U.S.C. 5311 note) is amended--
            (1) in subsection (a), by inserting ``, of nongovernmental 
        organizations advocating financial privacy,'' after ``Drug 
        Control Policy''; and
            (2) in subsection (c), by inserting ``, other than 
        subsections (a) and (d) of such Act which shall apply'' before 
        the period at the end.

SEC. 207. AGENCY REPORTS ON RECONCILING PENALTY AMOUNTS.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of the Treasury and the Federal banking agencies (as defined 
in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) 
shall each submit their respective reports to the Congress containing 
recommendations on possible legislation to conform the penalties 
imposed on depository institutions (as defined in section 3 of the 
Federal Deposit Insurance Act) for violations of subchapter II of 
chapter 53 of title 31, United States Code, to the penalties imposed on 
such institutions under section 8 of the Federal Deposit Insurance Act 
(12 U.S.C. 1818).

SEC. 208. REPORTING OF SUSPICIOUS ACTIVITIES BY SECURITIES BROKERS AND 
              DEALERS; INVESTMENT COMPANY STUDY.

    (a) 270-Day Regulation Deadline.--Not later than 270 days after the 
date of enactment of this Act, the Secretary of the Treasury, after 
consultation with the Securities and Exchange Commission and the Board 
of Governors of the Federal Reserve System, shall issue final 
regulations requiring registered brokers and dealers to file reports of 
suspicious financial transactions, consistent with the requirements 
applicable to financial institutions, and directors, officers, 
employees, and agents of financial institutions under section 5318(g) 
of title 31, United States Code.
    (b) Report on Investment Companies.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, Secretary of the Treasury, the Board of 
        Governors of the Federal Reserve System, and the Securities and 
        Exchange Commission shall jointly submit a report to Congress 
        on recommendations for effective regulations to apply the 
        requirements of subchapter II of chapter 53 of title 31, United 
        States Code, to investment companies, pursuant to section 
        5312(a)(2)(I) of title 31, United States Code.
            (2) Definition.--For purposes of this section, the term 
        ``investment company''--
                    (A) has the same meaning as in section 3 of the 
                Investment Company Act of 1940 (15 U.S.C. 80a-3); and
                    (B) any person that, but for the exceptions 
                provided for in paragraph (1) or (7) of section 3(c) of 
                the Investment Company Act of 1940 (15 U.S.C. 80a-
                3(c)), would be an investment company.
            (3) Additional recommendations.--In its report, the 
        Securities and Exchange Commission may make different 
        recommendations for different types of entities covered by this 
        section.
            (4) Beneficial ownership of personal holding companies.--
        The report described in paragraph (1) shall also include 
        recommendations as to whether the Secretary should promulgate 
        regulations to treat any corporation or business or other 
        grantor trust whose assets are predominantly securities, bank 
        certificates of deposit, or other securities or investment 
        instruments (other than such as relate to operating 
        subsidiaries of such corporation or trust) and that has 5 or 
        fewer common shareholders or holders of beneficial or other 
        equity interest, as a financial institution within the meaning 
        of that phrase in section 5312(a)(2)(I) and whet
2000
her to require 
        such corporations or trusts to disclose their beneficial owners 
        when opening accounts or initiating funds transfers at any 
        domestic financial institution.

SEC. 209. SPECIAL REPORT ON ADMINISTRATION OF BANK SECRECY PROVISIONS.

    (a) Report Required.--Not later than 6 months after the date of 
enactment of this Act, the Secretary shall submit a report to the 
Congress relating to the role of the Internal Revenue Service in the 
administration of subchapter II of chapter 53 of title 31, United 
States Code (commonly known as the ``Bank Secrecy Act'').
    (b) Contents.--The report required by subsection (a)--
            (1) shall specifically address, and contain recommendations 
        concerning--
                    (A) whether it is advisable to shift the processing 
                of information reporting to the Department of the 
                Treasury under the Bank Secrecy Act provisions to 
                facilities other than those managed by the Internal 
                Revenue Service; and
                    (B) whether it remains reasonable and efficient, in 
                light of the objective of both anti-money-laundering 
                programs and Federal tax administration, for the 
                Internal Revenue Service to retain authority and 
                responsibility for audit and examination of the 
                compliance of money services businesses and gaming 
                institutions with those Bank Secrecy Act provisions; 
                and
            (2) shall, if the Secretary determines that the information 
        processing responsibility or the audit and examination 
        responsibility of the Internal Revenue Service, or both, with 
        respect to those Bank Secrecy Act provisions should be 
        transferred to other agencies, include the specific 
        recommendations of the Secretary regarding the agency or 
        agencies to which any such function should be transferred, 
        complete with a budgetary and resources plan for expeditiously 
        accomplishing the transfer.

SEC. 210. BANK SECRECY PROVISIONS AND ANTI-TERRORIST ACTIVITIES OF 
              UNITED STATES INTELLIGENCE AGENCIES.

    (a) Amendment relating to the Purposes of the Bank Secrecy Act.--
Section 5311 of title 31, United States Code, is amended by inserting 
before the period at the end the following: ``, or in the conduct of 
intelligence or counterintelligence activities, including analysis, to 
protect against international terrorism''.
    (b) Amendment Relating to Reporting of Suspicious Activities.--
Section 5318(g)(4)(B) of title 31, United States Code, is amended by 
striking ``or supervisory agency'' and inserting ``, supervisory 
agency, or United States intelligence agency for use in the conduct of 
intelligence or counterintelligence activities, including analysis, to 
protect against international terrorism''.
    (c) Amendment Relating to Availability of Reports.--Section 5319 of 
title 31, United States Code, is amended to read as follows:
``Sec. 5319. Availability of reports
    ``The Secretary of the Treasury shall make information in a report 
filed under this subchapter available to an agency, including any State 
financial institutions supervisory agency or United States intelligence 
agency, upon request of the head of the agency. The report shall be 
available for a purpose that is consistent with this subchapter. The 
Secretary may only require reports on the use of such information by 
any State financial institutions supervisory agency for other than 
supervisory purposes or by United States intelligence agencies. 
However, a report and records of reports are exempt from disclosure 
under section 552 of title 5.''.
    (d) Amendment Relating to the Purposes of the Bank Secrecy Act 
Provisions.--Section 21(a) of the Federal Deposit Insurance Act (12 
U.S.C. 1829b(a)) is amended to read as follows:
    ``(a) Congressional Findings and Declaration of Purpose.--
            ``(1) Findings.--Congress finds that--
                    ``(A) adequate records maintained by insured 
                depository institutions have a high degree of 
                usefulness in criminal, tax, and regulatory 
                investigations or proceedings, and that, given the 
                threat posed to the security of the Nation on and after 
                the terrorist attacks against the United States on 
                September 11, 2001, such records may also have a high 
                degree of usefulness in the conduct of intelligence or 
                counterintelligence activities, including analysis, to 
                protect against domestic and international terrorism; 
                and
                    ``(B) microfilm or other reproductions and other 
                records made by insured depository institutions of 
                checks, as well as records kept by such institutions, 
                of the identity of persons maintaining or authorized to 
act with respect to accounts therein, have been of particular value in 
proceedings described in subparagraph (A).
            ``(2) Purpose.--It is the purpose of this section to 
        require the maintenance of appropriate types of records by 
        insured depository institutions in the United States where such 
        records have a high degree of usefulness in criminal, tax, or 
        regulatory investigations or proceedings, recognizes that, 
        given the threat posed to the security of the Nation on and 
        after the terrorist attacks against the United States on 
        September 11, 2001, such records may also have a high degree of 
        usefulness in the conduct of intelligence or 
        counterintelligence activities, including analysis, to protect 
        against international terrorism.''.
    (e) Amendment Relating to the Purposes of the Bank Secrecy Act.--
Section 123(a) of Public Law 91-508 (12 U.S.C. 1953(a)) is amended to 
read as follows:
    ``(a) Regulations.--If the Secretary determines that the 
maintenance of appropriate records and procedures by any uninsured bank 
or uninsured institution, or any person engaging in the business of 
carrying on in the United States any of the functions referred to in 
subsection (b), has a high degree of usefulness in criminal, tax, or 
regulatory investigations or proceedings, and that, given the threat 
posed to the security of the Nation on and after the terrorist attacks 
against the United States on September 11, 2001, such records may also 
have a high degree of usefulness in the conduct of intelligence or 
counterintelligence activities, including analysis, to protect against 
international terrorism, he may by regulation require such bank, 
institution, or person.''.
    (f) Amendments to the Right to Financial Privacy Act.--The Right to 
Financial Privacy Act of 1978 is amended--
            (1) in section 1112(a) (12 U.S.C. 3412(a)), by inserting 
        ``, or intelligence or counterintelligence activity, 
        investigation or analysis related to international terrorism'' 
        after ``legitimate law enforcement inquiry''; and
            (2) in section 1114(a)(1) (12 U.S.C. 3414(a)(1))--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(C) a Government authority authorized to conduct 
                investigations of, or intelligence or 
                counterintelligence analyses related to, international 
                terrorism for the purpose of conducting such 
                investigations or analyses.''.
    (g) Amendment to the Fair Credit Reporting Act.--The Fair Credit 
Reporting Act (15 U.S.C. 1681 et seq.) is amended by adding at the end 
the following new section:

``SEC. 626. DISCLOSURES TO GOVERNMENTAL AGENCIES FOR COUNTERTERRORISM 
              PURPOSES.

    ``(a) Discl
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osure.--Notwithstanding section 604 or any other 
provision of this title, a consumer reporting agency shall furnish a 
consumer report of a consumer and all other information in a consumer's 
file to a government agency authorized to conduct investigations of, or 
intelligence or counterintelligence activities or analysis related to, 
international terrorism when presented with a written certification by 
such government agency that such information is necessary for the 
agency's conduct or such investigation, activity or analysis.
    ``(b)  Form of Certification.--The certification described in 
subsection (a) shall be signed by the Secretary of the Treasury.
    ``(c) Confidentiality.--No consumer reporting agency, or officer, 
employee, or agent of such consumer reporting agency, shall disclose to 
any person, or specify in any consumer report, that a government agency 
has sought or obtained access to information under subsection (a).
    ``(d) Rule of Construction.--Nothing in section 625 shall be 
construed to limit the authority of the Director of the Federal Bureau 
of Investigation under this section.
    ``(e) Safe Harbor.--Notwithstanding any other provision of this 
subchapter, any consumer reporting agency or agent or employee thereof 
making disclosure of consumer reports or other information pursuant to 
this section in good-faith reliance upon a certification of a 
governmental agency pursuant to the provisions of this section shall 
not be liable to any person for such disclosure under this subchapter, 
the constitution of any State, or any law or regulation of any State or 
any political subdivision of any State.''.

SEC. 211. REPORTING OF SUSPICIOUS ACTIVITIES BY HAWALA AND OTHER 
              UNDERGROUND BANKING SYSTEMS.

    (a) Definition for Subchapter.--Section 5312(a)(2)(R) of title 31, 
United States Code, is amended to read as follows:
                    ``(R) a licensed sender of money or any other 
                person who engages as a business in the transmission of 
                funds, including through an informal value transfer 
                banking system or network of people facilitating the 
                transfer of value domestically or internationally 
                outside of the conventional financial institutions 
                system;''.
    (b) Money Transmitting Business.--Section 5330(d)(1)(A) of title 
31, United States Code, is amended by inserting before the semicolon 
the following: ``or any other person who engages as a business in the 
transmission of funds, including through an informal value transfer 
banking system or network of people facilitating the transfer of value 
domestically or internationally outside of the conventional financial 
institutions system;''.
    (c) Applicability of Rules.--Section 5318 of title 31, United 
States Code, as amended by this Act, is amended by adding at the end 
the following:
    ``(l) Applicability of Rules.--Any rules promulgated pursuant to 
the authority contained in section 21 of the Federal Deposit Insurance 
Act (12 U.S.C. 1829b) shall apply, in addition to any other financial 
institution to which such rules apply, to any person that engages as a 
business in the transmission of funds, including through an informal 
value transfer banking system or network of people facilitating the 
transfer of value domestically or internationally outside of the 
conventional financial institutions system.''.
    (d) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of the Treasury shall report to Congress on the 
need for any additional legislation relating to informal value transfer 
banking systems or networks of people facilitating the transfer of 
value domestically or internationally outside of the conventional 
financial institutions system, counter money laundering and regulatory 
controls relating to underground money movement and banking systems, 
such as the system referred to as `hawala', including whether the 
threshold for the filing of suspicious activity reports under section 
5318(g) of title 31, United States Code should be lowered in the case 
of such systems.

SEC. 212. USE OF AUTHORITY OF UNITED STATES EXECUTIVE DIRECTORS.

    (a) Action by the President.--If the President determines that a 
particular foreign country has taken or has committed to take actions 
that contribute to efforts of the United States to respond to, deter, 
or prevent acts of international terrorism, the Secretary of the 
Treasury may, consistent with other applicable provisions of law, 
instruct the United States Executive Director of each international 
financial institution to use the voice and vote of the Executive 
Director to support any loan or other utilization of the funds of 
respective institutions for such country, or any public or private 
entity within such country.
    (b) Use of Voice and Vote.--The Secretary of the Treasury may 
instruct the United States Executive Director of each international 
financial institution to aggressively use the voice and vote of the 
Executive Director to require an auditing of disbursements at such 
institutions to ensure that no funds are paid to persons who commit, 
threaten to commit, or support terrorism.
    (c) Definition.--For purposes of this section, the term 
``international financial institution'' means an institution described 
in section 1701(c)(2) of the International Financial Institutions Act 
(22 U.S.C. 262r(c)(2)).

                       TITLE III--CURRENCY CRIMES

SEC. 301. BULK CASH SMUGGLING.

    (a) Findings.--Congress finds that--
            (1) effective enforcement of the currency reporting 
        requirements of chapter 53 of title 31, United States Code 
        (commonly referred to as the Bank Secrecy Act), and the 
        regulations promulgated thereunder, has forced drug dealers and 
        other criminals engaged in cash-based businesses to avoid using 
        traditional financial institutions;
            (2) in their effort to avoid using traditional financial 
        institutions, drug dealers, and other criminals are forced to 
        move large quantities of currency in bulk form to and through 
        the airports, border crossings, and other ports of entry where 
        it can be smuggled out of the United States and placed in a 
        foreign financial institution or sold on the black market;
            (3) the transportation and smuggling of cash in bulk form 
        may, at the time of enactment of this Act, be the most common 
        form of money laundering, and the movement of large sums of 
        cash is one of the most reliable warning signs of drug 
        trafficking, terrorism, money laundering, racketeering, tax 
        evasion, and similar crimes;
            (4) the intentional transportation into or out of the 
        United States of large amounts of currency or monetary 
        instruments, in a manner designed to circumvent the mandatory 
        reporting provisions of chapter 53 of title 31, United States 
        Code, is the equivalent of, and creates the same harm as, the 
        smuggling of goods;
            (5) the arrest and prosecution of bulk cash smugglers is an 
        important part of law enforcement's effort to stop the 
        laundering of criminal proceeds, but the couriers who attempt 
        to smuggle the cash out of the United States are typically low-
        level employees of large criminal organizations, and are easily 
        replaced, and therefore only the confiscation of the smuggled 
        bulk cash can effectively break the cycle of criminal activity 
        of which the laundering of bulk cash is a critical part;
            (6) the penalties for violations of the currency reporting 
        requirements of the chapter 53 of title 31, United States Code, 
        are insufficient to provide a deterrent to the laundering of 
        criminal proceeds;
            (7) because the only criminal violation under Federal law 
        before the date of enactment of this Act was a reporting 
        offense, the law does not adequately pro
2000
vide for the 
        confiscation of smuggled currency; and
            (8) if the smuggling of bulk cash were itself an offense, 
        the cash could be confiscated as the corpus delicti of the 
        smuggling offense.
    (b) Purposes.--The purposes of this section are--
            (1) to make the act of smuggling bulk cash itself a 
        criminal offense;
            (2) to authorize forfeiture of any cash or instruments of 
        the smuggling offense;
            (3) to emphasize the seriousness of the act of bulk cash 
        smuggling; and
            (4) to prescribe guidelines for determining the amount of 
        property subject to such forfeiture in various situations.
    (c) Bulk Cash Smuggling Offense.--
            (1) In general.--Subchapter II of chapter 53 of title 31, 
        United States Code, is amended by adding at the end the 
        following:
``Sec. 5331. Bulk cash smuggling
    ``(a) Criminal Offense.--
            ``(1) In general.--Whoever, with the intent to evade a 
        currency reporting requirement under section 5316, knowingly 
        conceals more than $10,000 in currency or other monetary 
        instruments on his or her person or in any conveyance, article 
        of luggage, merchandise, or other container, and transports or 
        transfers or attempts to transport or transfer the currency or 
        monetary instruments from a place within the United States to a 
        place outside of the United States, or from a place outside of 
        the United States to a place within the United States, shall be 
        guilty of a currency smuggling offense and subject to 
        punishment under subsection (b).
    ``(b) Penalties.--
            ``(1) Prison term.--A person convicted of a currency 
        smuggling offense under subsection (a), or a conspiracy to 
        commit such an offense, shall be imprisoned for not more than 5 
        years.
            ``(2) Forfeiture.--
                    ``(A) In general.--In addition to a prison term 
                under paragraph (1), the court, in imposing sentence, 
                shall order that the defendant forfeit to the United 
                States any property, real or personal, involved in the 
                offense, and any property traceable to such property, 
                subject to subsection (d).
                    ``(B) Applicability of other laws.--The seizure, 
                restraint, and forfeiture of property under this 
                section shall be governed by section 413 of the 
                Controlled Substances Act (21 U.S.C. 853). If the 
                property subject to forfeiture is unavailable, and the 
                defendant has no substitute property that may be 
                forfeited pursuant to section 413(p) of that Act, the 
                court shall enter a personal money judgment against the 
                defendant in an amount equal to the value of the 
                unavailable property.
    ``(c) Seizure of Smuggling Cash.--
            ``(1) In general.--Any property involved in a violation of 
        subsection (a), or a conspiracy to commit such violation, and 
        any property traceable thereto, may be seized and, subject to 
        subsection (d), forfeited to the United States.
            ``(2) Applicable procedures.--A seizure and forfeiture 
        under this subsection shall be governed by the procedures 
        governing civil forfeitures under section 981(a)(1)(A) of title 
        18, United States Code.
    ``(d) Proportionality of Forfeiture.--
            ``(1) Mitigation.--Upon a showing by the property owner by 
        a preponderance of the evidence that the currency or monetary 
        instruments involved in the offense giving rise to the 
        forfeiture were derived from a legitimate source and were 
        intended for a lawful purpose, the court shall reduce the 
        forfeiture to the maximum amount that is not grossly 
        disproportional to the gravity of the offense.
            ``(2) Considerations.--In determining the amount of the 
        forfeiture under paragraph (1), the court shall consider all 
        aggravating and mitigating facts and circumstances that have a 
        bearing on the gravity of the offense, including--
                    ``(A) the value of the currency or other monetary 
                instruments involved in the offense;
                    ``(B) efforts by the person committing the offense 
                to structure currency transactions, conceal property, 
                or otherwise obstruct justice; and
                    ``(C) whether the offense is part of a pattern of 
                repeated violations of Federal law.
    ``(e) Rule of Construction.--For purposes of subsections (b) and 
(c), any currency or other monetary instrument that is concealed or 
intended to be concealed in violation of subsection (a) or a conspiracy 
to commit such violation, any article, container, or conveyance used or 
intended to be used to conceal or transport the currency or other 
monetary instrument, and any other property used or intended to be used 
to facilitate the offense, shall be considered property involved in the 
offense.''.
    (2) Clerical amendment.--The table of sections for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 5330 the following new item:

``5331. Bulk cash smuggling.''.
    (d) Currency Reporting Violations.--Section 5317(c) of title 31, 
United States Code, is amended to read as follows:
    ``(c) Forfeiture of Property.--
            ``(1) In general.--
                    ``(A) Criminal forfeiture.--The court, in imposing 
                sentence for any violation of section 5313, 5316, or 
                5324, or any conspiracy to commit such violation, shall 
                order the defendant to forfeit all property, real or 
                personal, involved in the offense and any property 
                traceable thereto.
                    ``(B) Applicable procedures.--Forfeitures under 
                this paragraph shall be governed by the procedures set 
                forth in section 413 of the Controlled Substances Act 
                (21 U.S.C. 853), and the guidelines set forth in 
                paragraph (3) of this subsection.
            ``(2) Civil forfeiture.--Any property involved in a 
        violation of section 5313, 5316, or 5324, or any conspiracy to 
        commit such violation, and any property traceable thereto, may 
        be seized and, subject to paragraph (3), forfeited to the 
        United States in accordance with the procedures governing civil 
        forfeitures in money laundering cases pursuant to section 
        981(a)(1)(A) of title 18, United States Code.
            ``(3) Mitigation.--In a forfeiture case under this 
        subsection, upon a showing by the property owner by a 
        preponderance of the evidence that any currency or monetary 
        instruments involved in the offense giving rise to the 
        forfeiture were derived from a legitimate source, and were 
        intended for a lawful purpose, the court shall reduce the 
        forfeiture to the maximum amount that is not grossly 
disproportional to the gravity of the offense. In determining the 
amount of the forfeiture, the court shall consider all aggravating and 
mitigating facts and circumstances that have a bearing on the gravity 
of the offense. Such circumstances include, but are not limited to, the 
following: the value of the currency or other monetary instruments 
involved in the offense; efforts by the person committing the offense 
to structure currency transactions, conceal property, or otherwise 
obstruct justice; and whether the offense is part of a pattern of 
repeated violations.''.
    (e) Conforming Amendments.--Title 18, United States Code, is 
amended--
            (1) in section 981(a)(1)(A) by striking ``of section 
        5313(a) or 5324(a) of title 31, or''; and
            (2) in section 982(a)(1), striking ``of section 531
1069
3(a), 
        5316, or 5324 of title 31, or''.

                   TITLE IV--ANTICORRUPTION MEASURES

SEC. 401. CORRUPTION OF FOREIGN GOVERNMENTS AND RULING ELITES.

    It is the sense of Congress that, in deliberations between the 
United States Government and any other country on money laundering and 
corruption issues, the United States Government should--
            (1) emphasize an approach that addresses not only the 
        laundering of the proceeds of traditional criminal activity but 
        also the increasingly endemic problem of governmental 
        corruption and the corruption of ruling elites;
            (2) encourage the enactment and enforcement of laws in such 
        country to prevent money laundering and systemic corruption;
            (3) make clear that the United States will take all steps 
        necessary to identify the proceeds of foreign government 
        corruption which have been deposited in United States financial 
        institutions and return such proceeds to the citizens of the 
        country to whom such assets belong; and
            (4) advance policies and measures to promote good 
        government and to prevent and reduce corruption and money 
        laundering, including through instructions to the United States 
        Executive Director of each international financial institution 
        (as defined in section 1701(c) of the International Financial 
        Institutions Act) to advocate such policies as a systematic 
        element of economic reform programs and advice to member 
        governments.

SEC. 402. SUPPORT FOR THE FINANCIAL ACTION TASK FORCE ON MONEY 
              LAUNDERING.

    It is the sense of Congress that--
            (1) the United States should continue to actively and 
        publicly support the objectives of the Financial Action Task 
        Force on Money Laundering (hereafter in this section referred 
        to as the ``FATF'') with regard to combating international 
        money laundering;
            (2) the FATF should identify noncooperative jurisdictions 
        in as expeditious a manner as possible and publicly release a 
        list directly naming those jurisdictions identified;
            (3) the United States should support the public release of 
        the list naming noncooperative jurisdictions identified by the 
        FATF;
            (4) the United States should encourage the adoption of the 
        necessary international action to encourage compliance by the 
        identified noncooperative jurisdictions; and
            (5) the United States should take the necessary 
        countermeasures to protect the United States economy against 
        money of unlawful origin and encourage other nations to do the 
        same.

SEC. 403. TERRORIST FUNDING THROUGH MONEY LAUNDERING.

    It is the sense of the Congress that, in deliberations and 
negotiations between the United States Government and any other country 
regarding financial, economic, assistance, or defense issues, the 
United States should encourage such other country--
            (1) to take actions which would identify and prevent the 
        transmittal of funds to and from terrorists and terrorist 
        organizations; and
            (2) to engage in bilateral and multilateral cooperation 
        with the United States and other countries to identify 
        suspected terrorists, terrorist organizations, and persons 
        supplying funds to and receiving funds from terrorists and 
        terrorist organizations.




                                                       Calendar No. 185

107th CONGRESS

  1st Session

                                S. 1511

_______________________________________________________________________

                                 A BILL

   To combat international money laundering, thwart the financing of 
  terrorism, and protect the United States financial system, and for 
                            other purposes.

_______________________________________________________________________

                            October 9, 2001

                 Read twice and placed on the calendar

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