# Housing and Community Development Act of 1992/Title XV/Subtitle B
## SUBTITLE B—NONBANK FINANCIAL INSTITUTIONS AND GENERAL PROVISIONS
### SEC. 1511. IDENTIFICATION OF FINANCIAL INSTITUTIONS.

    (a) IN GENERAL—
       Subchapter II of chapter 53 of title 31, United States Code, is amended by inserting after section 5326 the following new section:
          ``Sec. 5327. Identification of financial institutions
             ``(a) REGULATIONS REQUIRED— The Secretary of the Treasury shall prescribe regulations requiring each depository institution to identify any customer (of the depository institution) which—
                ``(1) is a financial institution described in—
                   ``(A) any subparagraph of section 5312(a)(2) other than subparagraphs (A) through (G); or
                   ``(B) any regulation under any such subparagraph; and
                ``(2) has any account with the depository institution.
             ``(b) REPORTS REQUIRED— Each depository institution shall report the names of and other information about financial institution customers required to be identified under subsection (a) to the Secretary at such times and in such manner as the Secretary shall prescribe by regulation.
             ``(c) REPORTING OFFENSES— No person shall cause or attempt to cause any depository institution to fail to file a report required by this section or to file a report containing a material omission or misstatement of fact.
             ``(d) AVAILABILITY OF REPORTS— The Secretary shall provide reports filed under subsection (b) to appropriate State financial institution supervisory agencies for supervisory purposes.
             ``(e) DEPOSITORY INSTITUTION DEFINED— For purposes of this section, the term ``depository institution´´ means any financial institution described in subparagraph (A), (B), (C), (D), (E), or (F) of section 5312(a)(2).´´.
    (b) TECHNICAL AND CONFORMING AMENDMENT—
       Section 5321(a) of title 31, United States Code, is amended by adding at the end the following new paragraph:
                ``(7) FINANCIAL INSTITUTION IDENTIFICATION VIOLATIONS—
                   ``(A) PENALTY AUTHORIZED— The Secretary may impose a civil money penalty on any person who willfully violates any provision of section 5327 or any regulation prescribed under such section.
                   ``(B) MAXIMUM AMOUNT LIMITATION— The amount of any civil money penalty imposed under subparagraph (A) shall not exceed $10,000 per day for each day during which a report remains unfiled or a report containing a material omission or misstatement of fact remains uncorrected.´´.
    (c) 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 5326 the following new item:
          ``5327. Identification of financial institutions.´´.
    (d) EFFECTIVE DATE OF REGULATIONS—
       The initial final regulations prescribed pursuant to section 5327 of title 31, United States Code (as added by subsection (a) of this section) shall take effect before January 1, 1994.

### SEC. 1512. PROHIBITION OF ILLEGAL MONEY TRANSMITTING BUSINESSES.

    (a) IN GENERAL—
       Chapter 95 of title 18, United States Code, is amended by adding at the end the following section:
          ``Sec. 1960. Prohibition of illegal money transmitting businesses
             ``(a) Whoever conducts, controls, manages, supervises, directs, or owns all or part of a business, knowing the business is an illegal money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.
             ``(b) As used in this section—
                ``(1) the term ``illegal money transmitting business´´ means a money transmitting business that affects interstate or foreign commerce in any manner or degree and which is knowingly operated in a State—
                   ``(A) without the appropriate money transmitting State license; and
                   ``(B) where such operation is punishable as a misdemeanor or a felony under State law;
                ``(2) the term ``money transmitting´´ includes but is not limited to transferring funds on behalf of the public by any and all means including but not limited to transfers within this country or to locations abroad by wire, check, draft, facsimile, or courier; and
                ``(3) the term ``State´´ means any State of the United States, the District of Columbia, the Northern Mariana Islands, and any commonwealth, territory, or possession of the United States.´´.
    (b) CLERICAL AMENDMENT—
       The table of sections for chapter 95 of title 18, United States Code, is amended by adding at the end the following item:
          ``1960. Prohibition of illegal money transmitting businesses.´´.
    (c) CRIMINAL FORFEITURE—
       Section 982(a)(1) of title 18, United States Code, is amended by striking ``or 1957´´ and inserting ``, 1957, or 1960´´.

### SEC. 1513. COMPLIANCE PROCEDURES.

    Section 5318(a)(2) of title 31, United States Code, is amended by inserting ``or to guard against money laundering´´ before the semicolon.

### SEC. 1514. NONDISCLOSURE OF ORDERS.

    Section 5326 of title 31, United States Code, is amended by adding at the end the following:
             ``(c) NONDISCLOSURE OF ORDERS— No financial institution or officer, director, employee or agent of a financial institution subject to an order under this section may disclose the existence of, or terms of, the order to any person except as prescribed by the Secretary.´´.

### SEC. 1515. PROVISIONS RELATING TO RECORDKEEPING WITH RESPECT TO CERTAIN FUNDS TRANSFERS.

    (a) RECORDKEEPING REGULATIONS REQUIRED—
       Section 21(b) of the Federal Deposit Insurance Act (12 U.S.C. 1829b(b)) is amended—
          (1) by striking ``(b) Where´´ and inserting ``(b) Recordkeeping Regulations—
                ``(1) IN GENERAL— Where´´; and
          (2) by adding at the end the following new paragraphs:
                ``(2) DOMESTIC FUNDS TRANSFERS— Whenever the Secretary and the Board of Governors of the Federal Reserve System (hereafter in this section referred to as the `Board´) determine that the maintenance of records, by insured depository institutions, of payment orders which direct transfers of funds over wholesale funds transfer systems has a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, the Secretary and the Board shall jointly prescribe regulations to carry out the purposes of this section with respect to the maintenance of such records.
                ``(3) International funds transfers—
                   ``(A) IN GENERAL— The Secretary and the Board shall jointly prescribe, after consultation with State banking supervisors, final regulations requiring that insured depository institutions, businesses that provide check cashing services, money transmitting businesses, and businesses that issue or redeem money orders, travelers' checks or other similar instruments maintain such records of payment orders which—
                      ``(i) involve international transactions; and
                      ``(ii) direct transfers of funds over wholesale funds transfer systems or on the books of any insured depository institution, or on the books of any business that provides check cashing services, any money transmitting business, and any business that issues or redeems money orders, travelers' checks or similar instruments, that will have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.
                   ``(B) FACTORS FOR CONSIDERATION— In prescribing the regulations required under subparagraph (A), the Secretary and the Board shall consider—
                      ``(i) the usefulness in criminal, tax, or regulatory investigations or proceedings of any record required to be maintained pursuant to the proposed regulations; and
                      ``(ii) the effect the recordkeeping required pursuant to such proposed regulations will have on the cost and efficiency of the payment system.
                   ``(C) Availability of records— Any records required to be maintained pursuant to the regulations prescribed under subparagraph (A) shall be submitted or made available to the Secretary or the Board upon request.´´.
    (b) TECHNICAL AND CONFORMING AMENDMENTS—
       Section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b) is amended—
          (1) in subsection (c), by striking ``Each insured´´ and inserting ``Subject to the requirements of any regulations prescribed jointly by the Secretary and the Board under paragraph (2) or (3) of subsection (b), each insured´´;
          (2) in subsection (e), by striking ``Whenever any´´ and inserting ``Subject to the requirements of any regulations prescribed jointly by the Secretary and the Board under paragraph (2) or (3) of subsection (b), whenever any´´; and
          (3) in subsection (f), by striking ``In addition to´´ and inserting ``Subject to the requirements of any regulations prescribed jointly by the Secretary and the Board under paragraph (2) or (3) of subsection (b) and in addition to´´.
    (c) EFFECTIVE DATE OF REGULATIONS—
       The initial final regulations prescribed pursuant to section 21(b)(3) of the Federal Deposit Insurance Act (as added by subsection (a)(2) of this section) shall take effect before January 1, 1994.

### SEC. 1516. USE OF CERTAIN RECORDS.

    Section 1112(f) of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3412(f)) is amended—
          (1) in paragraph (1), by inserting ``or the Secretary of the Treasury´´ after ``the Attorney General´´; and
          (2) in paragraph (2), by inserting ``and only for criminal investigative purposes relating to money laundering and other financial crimes by the Department of the Treasury´´ after ``the Department of Justice´´.

### SEC. 1517. SUSPICIOUS TRANSACTIONS AND FINANCIAL INSTITUTION ANTI-MONEY LAUNDERING PROGRAMS.

    (a) REPORTING REQUIREMENT—
       Section 5324 of title 31, United States Code, is amended by inserting ``or section 5325 or regulations prescribed under such section 5325´´ after ``section 5313(a)´´ each place such term appears.
    (b) SUSPICIOUS TRANSACTIONS AND ENFORCEMENT PROGRAMS—
       Section 5314 of title 31, United States Code, is amended by adding at the end the following new subsections:
             ``(g) REPORTING OF SUSPICIOUS TRANSACTIONS—
                ``(1) IN GENERAL— The Secretary may require any financial institution, and any director, officer, employee, or agent of any financial institution, to report any suspicious transaction relevant to a possible violation of law or regulation.
                ``(2) NOTIFICATION PROHIBITED— A financial institution, and a director, officer, employee, or agent of any financial institution, who voluntarily reports a suspicious transaction, or that reports a suspicious transaction pursuant to this section or any other authority, may not notify any person involved in the transaction that the transaction has been reported.
                ``(3) LIABILITY FOR DISCLOSURES— Any financial institution that makes a disclosure of any possible violation of law or regulation or a disclosure pursuant to this subsection or any other authority, and any director, officer, employee, or agent of such institution, shall not be liable to any person under any law or regulation of the United States or any constitution, law, or regulation of any State or political subdivision thereof, for such disclosure or for any failure to notify the person involved in the transaction or any other person of such disclosure.
             ``(h) ANTI-MONEY LAUNDERING PROGRAMS—
                ``(1) IN GENERAL— In order to guard against money laundering through financial institutions, the Secretary may require financial institutions to carry out anti-money laundering programs, including at a minimum
                   ``(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).´´.

### SEC. 1518. ANTI-MONEY LAUNDERING TRAINING TEAM.

    The Secretary of the Treasury and the Attorney General shall jointly establish a team of experts to assist and provide training to foreign governments and agencies thereof in developing and expanding their capabilities for investigating and prosecuting violations of money laundering and related laws.

### SEC. 1519. INTERNATIONAL MONEY LAUNDERING REPORTS.

    (a) UNITED STATES OBJECTIVES—
       Section 481(a)(1) of the Foreign Assistance Act of 1961 (22 U.S.C. 2291(a)(1)) is amended—
          (1) by striking out ``and´´ at the end of subparagraph (D);
          (2) by redesignating subparagraph (E) as subparagraph (F); and
          (3) by inserting after subparagraph (D) the following new subparagraph:
                   ``(E) the objective of the United States in dealing with the problem of international money laundering should be to ensure that countries adopt comprehensive domestic measures against money laundering and cooperative with each other in narcotics money laundering investigations, prosecutions, and related forfeiture actions; and´´
    (b) ANNUAL REPORTS—
       Section 481(e) of that Act (22 U.S.C. 2291(e)) is amended—
          (1) by redesignating paragraphs (7) and (8) as paragraphs (8) and (9), respectively; and
          (2) by inserting after paragraph (6) the following new paragraph (7):
                ``(7)(A) Each report pursuant to this subsection shall include a report on major money laundering countries. This report shall specify—
                      ``(i) which countries are major money laundering countries;
                      ``(ii) which countries identified pursuant to clause (i) have financial institutions engaging in currency transactions involving international narcotics trafficking proceeds that include significant amounts of United States currency or currency derived from illegal drug sales in the United States or that otherwise significantly affect the United States;
                      ``(iii) which countries identified pursuant to clause (ii) have not reached agreement with the United States authorities on a mechanism for exchanging adequate records in connection with narcotics investigations and proceedings;
                      ``(iv) which countries identified pursuant to clause (iii)—
                         ``(I) are negotiating in good faith with the United States to establish such a record-exchange mechanism, or
                         ``(II) have adopted laws or regulations that ensure the availability to appropriate United States Government personnel and those of other governments of adequate records in connection with narcotics investigations and proceedings; and
                      ``(v) which countries identified pursuant to clause (i)—
                         ``(I) have ratified the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and are taking steps to implement that Convention and other applicable agreements and conventions such as the recommendations of the Financial Action Task Force, the policy directive of the European Community, the legislative guidelines of the Organization of American States, and other similar declarations, and
                         ``(II) have entered into bilateral agreements for the exchange of information on money-laundering with countries other than the United States,
                   ``(B) In addition, for each major money laundering country, the report shall include findings on the country's adoption of law and regulations considered essential to prevent narcotics-related money laundering. Such findings shall include whether a country has—
                      ``(i) criminalized narcotics money laundering;
                      ``(ii) required banks and other financial institutions to know and record the identity of customers engaging in significant transactions, including the recording of large currency transactions at thresholds appropriate to that country's economic situation;
                      ``(iii) required banks and other financial institutions to maintain, for an adequate time, records necessary to reconstruct significant transactions through financial institutions in order to be able to respond quickly to information requests from appropriate government authorities in narcotics-related money laundering cases;
                      ``(iv) required or allowed financial institutions to report suspicious transactions;
                      ``(v) established systems for identifying, tracing, freezing, seizing, and forfeiting narcotics-related assets;
                      ``(vi) enacted laws for the sharing of seized narcotics assets with other governments;
                      ``(vii) cooperated, when requested, with appropriate law enforcement agencies of other governments investigating financial crimes related to narcotics; and
                      ``(viii) addressed the problem on international transportation of illegal-source currency and monetary instruments.
                   ``The report shall also detail instances of refusals to cooperate with foreign governments, and any actions taken by the United States Government and any international organization to address such obstacles, including the imposition of sanctions or penalties.
                   ``(C) The report shall also include information on multilateral and bilateral strategies pursued by the Department of State, the Department of Justice, the Department of the Treasury, and other relevant United States Government agencies, either collectively or individually, to ensure the cooperation of foreign governments with respect to narcotics-related money laundering.
                   ``(D) The report shall include specific detail to demonstrate that all United States Government agencies are pursuing a common strategy with respect to achieving international cooperation against money laundering and are pursuing a common strategy with respect to major money laundering countries, including a summary of United States objectives on a country-by-country basis.
                   ``(E) As used in this paragraph, the term ``major money laundering country´´ means a country whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.´´.
    (c) DEFINITION OF MAJOR DRUG-TRANSIT COUNTRY—
       Section 481(i)(5) of that Act (22 U.S.C. 2291(i)(5)) is amended—
          (1) by inserting ``or´´ at the end of subparagraph (A);
          (2) by striking out ``or´´ at the end of subparagraph (B) and inserting in lieu thereof a period; and
          (3) by striking out subparagraph (C).