Counterfeiting and Money Laundering Deterrence Act of 1994

Summary: Counterfeiting and Money Laundering Deterrence Act of 1994 - Amends Federal monetary law to direct the Secretary of the Treasury to design and designate a counterfeit-resistant domestic use $100 denomination bill which shall be exchanged for existing currency according to prescribed guidelines.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Counterfeiting and Money Laundering 
Deterrence Act of 1994''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) advances in technology have made United States currency 
        particularly susceptible to counterfeiting;
            (2) international organizations hostile to the United 
        States have produced counterfeits of the United States $100 
        bill that are extremely difficult to detect;
            (3) the ability to counterfeit currency allows terrorist 
        organizations or other organizations hostile to the United 
        States to undermine the stability of the United States 
        currency;
            (4) the ability to counterfeit currency provides terrorist 
        organizations or other organizations hostile to the United 
        States a ready source of negotiable foreign currency with which 
        such organizations can fund activities opposed to the interests 
        of the United States;
            (5) as shown by counterfeit-resistant currencies of other 
        countries, current technologies exist to make a $100 
        denomination currency that is substantially more difficult to 
        counterfeit, without being unduly expensive to produce;
            (6) implementing a new, counterfeit-resistant currency 
        would substantially impair terrorist organizations or other 
        organizations hostile to the United States in efforts to 
        undermine the stability of the United States currency and would 
        eliminate a source of negotiable foreign currency with which 
        such organizations could fund activities opposed to the 
        interests of the United States;
            (7) an essential aspect of the business of international 
        drug trafficking is the ability to launder large sums of hard 
        currency quickly and inexpensively;
            (8) without the ability to convert large sums of hard 
        currency with near impunity into readily transferable accounts 
        in financial institutions, international drug traffickers would 
        be severely impeded in their operations; and
            (9) forcing international narcotics traffickers to exchange 
        all of their hard currency held in United States $100 bills 
        within a specified period of time for a new, counterfeit-
        resistant currency would significantly increase the cost of 
        money laundering to drug cartels, thereby reducing their 
        profits.
    (b) Purposes.--The purposes of this Act are--
            (1) to provide for new, counterfeit-resistant $100 
        currencies for use in the United States and abroad to prevent 
        counterfeiting by terrorist and other hostile organizations; 
        and
            (2) to issue the new currency in a manner that deters money 
        laundering efforts of narcotics traffickers.

SEC. 3. COUNTERFEIT-RESISTANT $100 DENOMINATION CURRENCY.

    (a) In General.--Subchapter II of chapter 51 of title 31, United 
States Code, is amended by adding at the end the following new section:
``Sec. 5123. Counterfeit-resistant $100 currency
    ``(a) In General.--Not later than 6 months after the date of 
enactment of this section, the Secretary of the Treasury (hereafter in 
this section referred to as the `Secretary'), in consultation with the 
Attorney General and the Administrator of the Drug Enforcement 
Administration, shall design and designate a domestic use $100 
denomination bill and a nondomestic use $100 denomination bill in 
accordance with the requirements of this section.
    ``(b) Design Specifications.--
            ``(1) In general.--The designs for the domestic use and 
        nondomestic use $100 currency shall incorporate--
                    ``(A) watermarks, holograms, multicolored patterns, 
                multicolored dyes, or other features to make the 
                currency substantially more difficult to counterfeit 
                than $100 denomination United States currency in 
                circulation on the date of enactment of this section;
                    ``(B) substantially different coloration or 
                markings to make the new currency clearly and readily 
                distinguishable on casual observance from previously 
                issued $100 denomination United States currency; and
                    ``(C) distinctive coloration such that the domestic 
                use $100 currency is clearly and readily 
                distinguishable on casual observance from the 
                nondomestic use $100 currency.
            ``(2) Domestic use design.--The domestic use $100 currency 
        shall state on its face, `This note is legal tender for all 
        debts, public and private, when presented in the United States. 
        This note shall not constitute legal tender for any debts, 
        public or private, when presented outside of the United 
        States.'.
            ``(3) Nondomestic use design.--The nondomestic use $100 
        currency shall state on its face, `This note is legal tender 
        for all debts, public and private, when presented outside of 
        the United States.'.
            ``(4) Design considerations.--In determining design 
        features for $100 denomination domestic use and nondomestic use 
        currency in accordance with this section, the Secretary shall 
        consider--
                    ``(A) the relative efficacy of particular design 
                features in making a currency resistant to 
                counterfeiting; and
                    ``(B) the costs of producing bills incorporating 
                such features.
    ``(c) Currency Exchange.--
            ``(1) Plan.--Not later than 12 months after the date of 
        enactment of this section, the Secretary shall develop and 
        begin implementation of a plan to require the exchange of all 
        existing $100 denomination United States currency held within 
        and outside of the United States for $100 denomination domestic 
        use and nondomestic use United States currency issued in 
        accordance with this section.
            ``(2) Exchange requirements.--The plan established under 
        paragraph (1) shall require the currency to be exchanged--
                    ``(A) at financial institutions regulated under 
                United States law and subject to United States currency 
                transaction reporting and other money laundering 
                deterrence requirements; or
                    ``(B) at financial institutions that the Secretary 
                finds, because of treaty obligations, other provisions 
                of law, or other agreements, are required to report 
                significant transactions in United States currency to 
                the United States Treasury, and abide by such 
                obligations.
            ``(3) 6-month exchange period.--
                    ``(A) In general.--During the period beginning on 
                the date that is 12 months after the date of enactment 
                of this section and ending on the date that is 18 
                months after that date of enactment, the Secretary 
                shall permit the exchange of circulating $100 
                denomination United States currency for equal numbers 
                of the domestic use and nondomestic use $100 currency 
                issued in accordance with this section at institutions 
                described in paragraph (2).
                    ``(B) Non-negotiability.--Except for claims 
                pursuant to subsection (e), beginning on the date that 
                is 18 months after the date of enactment of this 
                section, the United States Treasury shall not recognize 
                $100 denomination United States currency issued prior 
                to the date that is 12 months after the date of 
                enactment of this section as constituting a negotiable 
                claim against the United States Treasury, and such 
                currency shall not constitute legal tender for any 
                debts, public or private.
    ``(d) Domestic Use and Nondomestic Use Currency.--Beginning on the 
date that is 18 months after the date of enactment of this section--
            ``(1) domestic use currency issued in accordance with this 
        section shall be recognized as constituting a negotiable claim 
        against the United States Treasury only when presented within 
        the United States, and shall constitute legal tender for any 
        debts, public or private, only when presented in the United 
        States, but such currency may be exchanged for equal values of 
        $100 denomination nondomestic use currency (or other United 
        States currency) only at financial institutions regulated by 
        United States law and subject to United States currency 
        transaction reporting and other money laundering deterrence 
        requirements; and
            ``(2) nondomestic use currency shall be recognized as 
        constituting a negotiable claim against the United States 
        Treasury, and legal tender for any debts, public or private, 
        only when presented outside of the United States, but such 
        currency may be exchanged for equal values of $100 denomination 
        domestic use currency (or other United States currency) at 
        financial institutions regulated by United States law and 
        subject to United States currency transaction reporting and 
        other money laundering deterrence requirements.
    ``(e) Later Exchange Criteria.--United States currency in the $100 
denomination issued prior to the date that is 12 months after the date 
of enactment of this section may be exchanged later than 18 months 
after that date of enactment for either domestic use or nondomestic use 
$100 denomination United States currency (or other United States 
currency) only if the Secretary finds, based on substantial evidence, 
that the $100 denomination United States currency to be exchanged is 
not the proceeds of unlawful activity, and, if the amount of such 
currency to be exchanged totals more than $10,000, good cause existed 
for not exchanging it during the exchange period specified in 
subsection (c)(3).
    ``(f) Financing.--The Secretary, in coordination with the Attorney 
General of the United States and the Administrator of the Drug 
Enforcement Administration, shall analyze the exchange of currency 
under this section and determine the amount of existing $100 
denomination United States currency in circulation that is not 
exchanged for new domestic use or nondomestic use currency. Credit 
resulting from extinguished claims against the United States Treasury 
for amounts that are not exchanged within the specified exchange period 
shall be used to fund the requirements of this section. Any additional 
credit shall be deposited into the United States Treasury's general 
obligation fund.
    ``(g) Regulations.--The Secretary may promulgate such regulations 
as may be necessary to implement this section.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 51, 
title 31, United States Code, is amended by inserting after the item 
relating to section 5122, the following new item:

``5123. Counterfeit-resistant $100 currency.''.

SEC. 4. NOTICE OF CURRENCY EXCHANGE PERIOD.

    Not later than 6 months after the date of enactment of this Act, 
the Secretary of the Treasury shall develop and begin implementation of 
a plan for providing notice of the currency exchange requirements 
established in accordance with the amendment made by this Act to 
domestic and foreign governments, financial institutions, and other 
affected persons.