II

107TH CONGRESS

1ST SESSION S. 1371

To combat money laundering and protect the United States financial system

by strengthening safeguards in private banking and correspondent banking, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 3, 2001

Mr. LEVIN (for himself, Mr. GRASSLEY, Mr. SARBANES, Mr. NELSON of Florida, Mr. KYL, and Mr. DEWINE) introduced the following bill; which was

read twice and referred to the Committee on Banking, Housing, and

Urban Affairs

A BILL

To combat money laundering and protect the United States

financial system by strengthening safeguards in private

banking and correspondent banking, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Money Laundering

5 Abatement Act’’.

6 SEC. 2. FINDINGS AND PURPOSE.

7 (a) FINDINGS.—Congress finds that—
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1 (1) money laundering, the process by which

2 proceeds from criminal activity are disguised as le3 gitimate money, is contrary to the national interest

4 of the United States, because it finances crime, un5 dermines the integrity of international financial sys6 tems, impedes the international fight against corrup7 tion and drug trafficking, distorts economies, and

8 weakens emerging democracies and international

9 stability;

10 (2) United States banks are frequently used to

11 launder dirty money, and private banking, which

12 provides services to individuals with large deposits,

13 and correspondent banking, which occurs when 1

14 bank provides financial services to another bank, are

15 specific banking sectors which are particularly vul16 nerable to money laundering;

17 (3) private banking is particularly vulnerable to

18 money laundering by corrupt foreign government of19 ficials because the services provided (offshore ac20 counts, secrecy, and large international wire trans21 fers) are also key tools used to launder money;

22 (4) correspondent banking is vulnerable to

23 money laundering because United States banks—
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1 (A) often fail to screen and monitor the

2 transactions of their high-risk foreign bank cli3 ents; and

4 (B) enable the owners and clients of the

5 foreign bank to get indirect access to the

6 United States banking system when they would

7 be unlikely to get access directly;

8 (5) the high-risk foreign bank that currently

9 poses the greatest money laundering risks in the

10 United States correspondent banking field is a shell

11 bank, which has no physical presence in any coun12 try, is not affiliated with any other bank, and is able

13 to evade day-to-day bank regulation; and

14 (6) United States anti-money laundering efforts

15 are currently impeded by outmoded and inadequate

16 statutory provisions that make United States inves17 tigations, prosecutions and forfeitures more difficult

18 when money laundering involves foreign persons, for19 eign banks, or foreign countries.

20 (b) PURPOSE.—The purpose of this Act is to mod21 ernize and strengthen existing Federal laws to combat

22 money laundering, particularly in the private banking and

23 correspondent banking fields when money laundering of24 fenses involve foreign persons, foreign banks, or foreign

25 countries.
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1 SEC. 3. INCLUSION OF FOREIGN CORRUPTION OFFENSES

2 AS MONEY LAUNDERING CRIMES.

3 Section 1956(c)(7)(B) of title 18, United States

4 Code, is amended—

5 (1) in clause (ii), by striking ‘‘or destruction of

6 property by means of explosive or fire’’ and inserting

7 ‘‘destruction of property by means of explosive or

8 fire, or a crime of violence (as defined in section

9 16)’’;

10 (2) in clause (iii), by striking ‘‘1978’’ and in11 serting ‘‘1978)’’; and

12 (3) by adding at the end the following:

13 ‘‘(iv) fraud, or any scheme or attempt

14 to defraud, against that foreign nation or

15 an entity of that foreign nation;

16 ‘‘(v) bribery of a public official, or the

17 misappropriation, theft, or embezzlement

18 of public funds by or for the benefit of a

19 public official;

20 ‘‘(vi) smuggling or export control vio21 lations involving—

22 ‘‘(I) an item controlled on the

23 United States Munitions List estab24 lished under section 38 of the Arms

25 Export Control Act (22 U.S.C. 2778);

26 or
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1 ‘‘(II) technologies with military

2 applications controlled on any control

3 list established under the Export Ad4 ministration Act of 1979 (50 U.S.C.

5 App. 2401 et seq.) or any successor

6 statute;

7 ‘‘(vii) an offense with respect to which

8 the United States would be obligated by a

9 multilateral treaty, either to extradite the

10 alleged offender or to submit the case for

11 prosecution, if the offender were found

12 within the territory of the United States;

13 or

14 ‘‘(viii) the misuse of funds of, or pro15 vided by, the International Monetary Fund

16 in contravention of the Articles of Agree17 ment of the Fund or the misuse of funds

18 of, or provided by, any other international

19 financial institution (as defined in section

20 1701(c)(2) of the International Financial

21 Institutions Act (22 U.S.C. 262r(c)(2)) in

22 contravention of any treaty or other inter23 national agreement to which the United

24 States is a party, including any articles of
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1 agreement of the members of the inter2 national financial institution;’’.

3 SEC. 4. ANTI-MONEY LAUNDERING MEASURES FOR UNITED

4 STATES BANK ACCOUNTS INVOLVING FOR5 EIGN PERSONS.

6 (a) REQUIREMENTS RELATING TO UNITED STATES

7 BANK ACCOUNTS INVOLVING FOREIGN PERSONS.—Sub8 chapter II of chapter 53 of title 31, United States Code,

9 is amended by inserting after section 5318 the following:

10 ‘‘§ 5318A. Requirements relating to United States

11 bank accounts involving foreign persons

12 ‘‘(a) DEFINITIONS.—

13 ‘‘(1) IN GENERAL.—In this section, the fol14 lowing definitions shall apply:

15 ‘‘(A) ACCOUNT.—The term ‘account’—

16 ‘‘(i) means a formal banking or busi17 ness relationship established to provide

18 regular services, dealings, or financial

19 transactions; and

20 ‘‘(ii) includes a demand deposit, sav21 ings deposit, or other transaction or asset

22 account, and a credit account or other ex23 tension of credit.

24 ‘‘(B) BRANCH OR AGENCY OF A FOREIGN

25 BANK.—The term ‘branch or agency of a for-
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1 eign bank’ has the meanings given those terms

2 in section 1 of the International Banking Act of

3 1978 (12 U.S.C. 3101).

4 ‘‘(C) CORRESPONDENT ACCOUNT.—The

5 term ‘correspondent account’ means an account

6 established for a depository institution, credit

7 union, or foreign bank.

8 ‘‘(D) CORRESPONDENT BANK.—The term

9 ‘correspondent bank’ means a depository insti10 tution, credit union, or foreign bank that estab11 lishes a correspondent account for and provides

12 banking services to a depository institution,

13 credit union, or foreign bank.

14 ‘‘(E) COVERED FINANCIAL INSTITUTION.—

15 The term ‘covered financial institution’

16 means—

17 ‘‘(i) a depository institution;

18 ‘‘(ii) a credit union; and

19 ‘‘(iii) a branch or agency of a foreign

20 bank.

21 ‘‘(F) CREDIT UNION.—The term ‘credit

22 union’ means any insured credit union, as de23 fined in section 101 of the Federal Credit

24 Union Act (12 U.S.C. 1752), or any credit

25 union that is eligible to make application to be-
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1 come an insured credit union pursuant to sec2 tion 201 of the Federal Credit Union Act (12

3 U.S.C. 1781).

4 ‘‘(G) DEPOSITORY INSTITUTION.—The

5 term ‘depository institution’ has the same

6 meaning as in section 3 of the Federal Deposit

7 Insurance Act (12 U.S.C. 1813).

8 ‘‘(H) FOREIGN BANK.—The term ‘foreign

9 bank’ has the same meaning as in section 1 of

10 the International Banking Act of 1978 (12

11 U.S.C. 3101).

12 ‘‘(I) FOREIGN COUNTRY.—The term ‘for13 eign country’ has the same meaning as in sec14 tion 1 of the International Banking Act of 1978

15 (12 U.S.C. 3101).

16 ‘‘(J) FOREIGN PERSON.—The term ‘for17 eign person’ means any foreign organization or

18 any individual resident in a foreign country or

19 any organization or individual owned or con20 trolled by such an organization or individual.

21 ‘‘(K) OFFSHORE BANKING LICENSE.—The

22 term ‘offshore banking license’ means a license

23 to conduct banking activities which, as a condi24 tion of the license, prohibits the licensed entity

25 from conducting banking activities with the citi-
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1 zens of, or with the local currency of, the for2 eign country which issued the license.

3 ‘‘(L) PRIVATE BANK ACCOUNT.—The term

4 ‘private bank account’ means an account (or

5 combination of accounts) that—

6 ‘‘(i) requires a minimum aggregate

7 deposit of funds or assets in an amount

8 equal to not less than $1,000,000;

9 ‘‘(ii) is established on behalf of 1 or

10 more individuals who have a direct or ben11 eficial ownership interest in the account;

12 and

13 ‘‘(iii) is assigned to, administered, or

14 managed in whole or in part by an em15 ployee of a financial institution acting as a

16 liaison between the institution and the di17 rect or beneficial owner of the account.

18 ‘‘(2) OTHER TERMS.—After consultation with

19 the Board of Governors of the Federal Reserve Sys20 tem, the Secretary may, by regulation, order, or oth21 erwise as permitted by law, define any term that is

22 used in this section and that is not otherwise defined

23 in this section or section 5312, as the Secretary

24 deems appropriate.
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1 ‘‘(b) UNITED STATES BANK ACCOUNTS WITH UN2 IDENTIFIED FOREIGN OWNERS.—

3 ‘‘(1) RECORDS.—

4 ‘‘(A) IN GENERAL.—A covered financial in5 stitution shall not establish, maintain, admin6 ister, or manage an account in the United

7 States for a foreign person or a representative

8 of a foreign person, unless the covered financial

9 institution maintains in the United States, for

10 each such account, a record identifying, by a

11 verifiable name and account number, each indi12 vidual or entity having a direct or beneficial

13 ownership interest in the account.

14 ‘‘(B) PUBLICLY TRADED CORPORATIONS.—

15 A record required under subparagraph (A) that

16 identifies an entity, the shares of which are

17 publicly traded on a stock exchange regulated

18 by an organization or agency that is a member

19 of and endorses the principles of the Inter20 national Organization of Securities Commis21 sions (in this section referred to as ‘publicly

22 traded’), is not required to identify individual

23 shareholders of the entity.

24 ‘‘(C) FOREIGN BANKS.—In the case of a

25 correspondent account that is established for a
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1 foreign bank, the shares of which are not pub2 licly traded, the record required under subpara3 graph (A) shall identify each of the owners of

4 the foreign bank, and the nature and extent of

5 the ownership interest of each such owner.

6 ‘‘(2) COMPLEX OWNERSHIP INTERESTS.—The

7 Secretary may, by regulation, order, or otherwise as

8 permitted by law, further delineate the information

9 to be maintained in the United States under para10 graph (1)(A), including information for accounts

11 with multiple, complex, or changing ownership inter12 ests.

13 ‘‘(c) PROHIBITION ON UNITED STATES COR14 RESPONDENT ACCOUNTS WITH FOREIGN SHELL

15 BANKS.—

16 ‘‘(1) IN GENERAL.—A covered financial institu17 tion shall not establish, maintain, administer, or

18 manage a correspondent account in the United

19 States for, or on behalf of, a foreign bank that does

20 not have a physical presence in any country.

21 ‘‘(2) PREVENTION OF INDIRECT SERVICE TO

22 FOREIGN SHELL BANKS.—A covered financial insti23 tution shall take reasonable steps to ensure that any

24 correspondent account established, maintained, ad25 ministered, or managed by that covered financial in-
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1 stitution in the United States for a foreign bank is

2 not being used by that foreign bank to indirectly

3 provide banking services to another foreign bank

4 that does not have a physical presence in any coun5 try.

6 ‘‘(3) EXCEPTION.—Paragraphs (1) and (2) do

7 not prohibit a covered financial institution from pro8 viding a correspondent account to a foreign bank, if

9 the foreign bank—

10 ‘‘(A) is an affiliate of a depository institu11 tion, credit union, or other foreign bank that

12 maintains a physical presence in the United

13 States or a foreign country, as applicable; and

14 ‘‘(B) is subject to supervision by a banking

15 authority in the country regulating the affili16 ated depository institution, credit union, or for17 eign bank, described in subparagraph (A), as

18 applicable.

19 ‘‘(4) DEFINITIONS.—For purposes of this

20 subsection—

21 ‘‘(A) the term ‘affiliate’ means a foreign

22 bank that is controlled by or is under common

23 control with a depository institution, credit

24 union, or foreign bank; and
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1 ‘‘(B) the term ‘physical presence’ means a

2 place of business that—

3 ‘‘(i) is maintained by a foreign bank;

4 ‘‘(ii) is located at a fixed address

5 (other than solely an electronic address) in

6 a country in which the foreign bank is au7 thorized to conduct banking activities, at

8 which location the foreign bank—

9 ‘‘(I) employs 1 or more individ10 uals on a full-time basis; and

11 ‘‘(II) maintains operating records

12 related to its banking activities; and

13 ‘‘(iii) is subject to inspection by the

14 banking authority which licensed the for15 eign bank to conduct banking activities.

16 ‘‘(d) DUE DILIGENCE FOR UNITED STATES PRIVATE

17 BANK AND CORRESPONDENT BANK ACCOUNTS INVOLV18 ING FOREIGN PERSONS.—

19 ‘‘(1) IN GENERAL.—Each covered financial in20 stitution that establishes, maintains, administers, or

21 manages a private bank account or a correspondent

22 account in the United States for a foreign person or

23 a representative of a foreign person shall establish

24 enhanced due diligence policies, procedures, and con-
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1 trols to prevent, detect, and report possible instances

2 of money laundering through those accounts.

3 ‘‘(2) MINIMUM STANDARDS.—The enhanced

4 due diligence policies, procedures, and controls re5 quired under paragraph (1) of this subsection, shall,

6 at a minimum, ensure that the covered financial

7 institution—

8 ‘‘(A) ascertains the identity of each indi9 vidual or entity having a direct or beneficial

10 ownership interest in the account, and obtains

11 sufficient information about the background of

12 the individual or entity and the source of funds

13 deposited into the account as is needed to

14 guard against money laundering;

15 ‘‘(B) monitors such accounts on an ongo16 ing basis to prevent, detect, and report possible

17 instances of money laundering;

18 ‘‘(C) conducts enhanced scrutiny of any

19 private bank account requested or maintained

20 by, or on behalf of, a senior foreign political fig21 ure, or any immediate family member or close

22 associate of a senior foreign political figure, to

23 prevent, detect, and report transactions that

24 may involve the proceeds of foreign corruption;
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1 ‘‘(D) conducts enhanced scrutiny of any

2 correspondent account requested or maintained

3 by, or on behalf of, a foreign bank operating—

4 ‘‘(i) under an offshore banking li5 cense; or

6 ‘‘(ii) under a banking license issued

7 by a foreign country that has been

8 designated—

9 ‘‘(I) as noncooperative with inter10 national anti-money laundering prin11 ciples or procedures by an intergov12 ernmental group or organization of

13 which the United States is a member;

14 or

15 ‘‘(II) by the Secretary as war16 ranting special measures due to

17 money laundering concerns; and

18 ‘‘(E) ascertains, as part of the enhanced

19 scrutiny under subparagraph (D), whether the

20 foreign bank provides correspondent accounts to

21 other foreign banks and, if so, the identity of

22 those foreign banks and related due diligence

23 information, as appropriate, under paragraph

24 (1).’’.
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1 (b) REGULATORY AUTHORITY.—After consultation

2 with the Board of Governors of the Federal Reserve Sys3 tem, the Secretary of the Treasury may, by regulation,

4 order, or otherwise as permitted by law, take measures

5 that the Secretary deems appropriate to carry out section

6 5318A of title 31, United States Code (as added by this

7 section).

8 (c) CONFORMING AMENDMENTS.—Section 5312(a) of

9 title 31, United States Code, is amended—

10 (1) by redesignating paragraph (5) as para11 graph (6); and

12 (2) by inserting after paragraph (4) the fol13 lowing:

14 ‘‘(5) ‘Secretary’ means the Secretary of the

15 Treasury, except as otherwise provided in this sub16 chapter.’’.

17 (d) CLERICAL AMENDMENT.—The table of sections

18 for subchapter II of chapter 53 of title 31, United States

19 Code, is amended by inserting after the item related to

20 section 5318 the following:

‘‘5318A. Requirements relating to United States bank accounts involving foreign

persons.’’.

21 (e) EFFECTIVE DATE.—Section 5318A of title 31,

22 United States Code, as added by this section, shall take

23 effect beginning 180 days after the date of enactment of

24 this Act with respect to accounts covered by that section
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1 that are opened before, on, or after the date of enactment

2 of this Act.

3 SEC. 5. LONG-ARM JURISDICTION OVER FOREIGN MONEY

4 LAUNDERERS.

5 Section 1956(b) of title 18, United States Code, is

6 amended by—

7 (1) redesignating paragraphs (1) and (2) as

8 subparagraphs (A) and (B), respectively;

9 (2) inserting ‘‘(1)’’ after ‘‘(b)’’;

10 (3) inserting ‘‘, or section 1957’’ after ‘‘or

11 (a)(3)’’; and

12 (4) adding at the end the following:

13 ‘‘(2) For purposes of adjudicating an action

14 filed or enforcing a penalty ordered under this sec15 tion, the district courts shall have jurisdiction over

16 any foreign person, including any financial institu17 tion authorized under the laws of a foreign country,

18 against whom the action is brought, if service of

19 process upon the foreign person is made under the

20 Federal Rules of Civil Procedure or the laws of the

21 country in which the foreign person is found, and—

22 ‘‘(A) the foreign person commits an offense

23 under subsection (a) involving a financial trans24 action that occurs in whole or in part in the

25 United States;
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1 ‘‘(B) the foreign person converts, to his or

2 her own use, property in which the United

3 States has an ownership interest by virtue of

4 the entry of an order of forfeiture by a court

5 of the United States; or

6 ‘‘(C) the foreign person is a financial insti7 tution that maintains a bank account at a fi8 nancial institution in the United States.

9 ‘‘(3) A court, described in paragraph (2), may

10 issue a pretrial restraining order or take any other

11 action necessary to ensure that any bank account or

12 other property held by the defendant in the United

13 States is available to satisfy a judgment under this

14 section.

15 ‘‘(4) A court, described in paragraph (2), may

16 appoint a Federal Receiver, in accordance with para17 graph (5), to collect, marshal, and take custody, con18 trol, and possession of all assets of the defendant,

19 wherever located, to satisfy a judgment under this

20 section or section 981, 982, or 1957, including an

21 order of restitution to any victim of a specified un22 lawful activity.

23 ‘‘(5) A Federal Receiver, described in para24 graph (4)—
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1 ‘‘(A) may be appointed upon application of

2 a Federal prosecutor or a Federal or State reg3 ulator, by the court having jurisdiction over the

4 defendant in the case;

5 ‘‘(B) shall be an officer of the court, and

6 the powers of the Federal Receiver shall include

7 the powers set out in section 754 of title 28,

8 United States Code; and

9 ‘‘(C) shall have standing equivalent to that

10 of a Federal prosecutor for the purpose of sub11 mitting requests to obtain information regard12 ing the assets of the defendant—

13 ‘‘(i) from the Financial Crimes En14 forcement Network of the Department of

15 the Treasury; or

16 ‘‘(ii) from a foreign country pursuant

17 to a mutual legal assistance treaty, multi18 lateral agreement, or other arrangement

19 for international law enforcement assist20 ance, provided that such requests are in

21 accordance with the policies and proce22 dures of the Attorney General.’’.
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1 SEC. 6. LAUNDERING MONEY THROUGH A FOREIGN BANK.

2 Section 1956(c) of title 18, United States Code, is

3 amended by striking paragraph (6) and inserting the fol4 lowing:

5 ‘‘(6) the term ‘financial institution’ includes—

6 ‘‘(A) any financial institution, as defined in

7 section 5312(a)(2) of title 31, United States

8 Code, or the regulations promulgated there9 under; and

10 ‘‘(B) any foreign bank, as defined in sec11 tion 1 of the International Banking Act of 1978

12 (12 U.S.C. 3101).’’.

13 SEC. 7. PROHIBITION ON FALSE STATEMENTS TO FINAN14 CIAL INSTITUTIONS CONCERNING THE IDEN15 TITY OF A CUSTOMER.

16 (a) IN GENERAL.—Chapter 47 of title 18, United

17 States Code, is amended by inserting after section 1007

18 the following:

19 ‘‘§ 1008. False statements concerning the identity of

20 customers of financial institutions

21 ‘‘(a) IN GENERAL.—Whoever knowingly in any

22 manner—

23 ‘‘(1) falsifies, conceals, or covers up, or at24 tempts to falsify, conceal, or cover up, the identity

25 of any person in connection with any transaction

26 with a financial institution;
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1 ‘‘(2) makes, or attempts to make, any materi2 ally false, fraudulent, or fictitious statement or rep3 resentation of the identity of any person in connec4 tion with a transaction with a financial institution;

5 ‘‘(3) makes or uses, or attempts to make or

6 use, any false writing or document knowing the

7 same to contain any materially false, fictitious, or

8 fraudulent statement or entry concerning the iden9 tity of any person in connection with a transaction

10 with a financial institution; or

11 ‘‘(4) uses or presents, or attempts to use or

12 present, in connection with a transaction with a fi13 nancial institution, an identification document or

14 means of identification the possession of which is a

15 violation of section 1028;

16 shall be fined under this title, imprisoned not more than

17 5 years, or both.

18 ‘‘(b) DEFINITIONS.—In this section, the following

19 definitions shall apply:

20 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi21 nancial institution’—

22 ‘‘(A) has the same meaning as in section

23 20; and
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1 ‘‘(B) in addition, has the same meaning as

2 in section 5312(a)(2) of title 31, United States

3 Code.

4 ‘‘(2) IDENTIFICATION DOCUMENT.—The term

5 ‘identification document’ has the same meaning as

6 in section 1028(d).

7 ‘‘(3) MEANS OF IDENTIFICATION.—The term

8 ‘means of identification’ has the same meaning as in

9 section 1028(d).’’.

10 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

11 (1) TITLE 18, UNITED STATES CODE.—Section

12 1956(c)(7)(D) of title 18, United States Code, is

13 amended by striking ‘‘1014 (relating to fraudulent

14 loan’’ and inserting ‘‘section 1008 (relating to false

15 statements concerning the identity of customers of

16 financial institutions), section 1014 (relating to

17 fraudulent loan’’.

18 (2) TABLE OF SECTIONS.—The table of sections

19 for chapter 47 of title 18, United States Code, is

20 amended by inserting after the item relating to sec21 tion 1007 the following:

‘‘1008. False statements concerning the identity of customers of financial institutions.’’.
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1 SEC. 8. CONCENTRATION ACCOUNTS AT FINANCIAL INSTI2 TUTIONS.

3 Section 5318(h) of title 31, United States Code, is

4 amended by adding at the end the following:

5 ‘‘(3) CONCENTRATION ACCOUNTS.—The Sec6 retary shall issue regulations under this subsection

7 that govern maintenance of concentration accounts

8 by financial institutions, in order to ensure that such

9 accounts are not used to prevent association of the

10 identity of an individual customer with the move11 ment of funds of which the customer is the direct or

12 beneficial owner, which regulations shall, at a

13 minimum—

14 ‘‘(A) prohibit financial institutions from al15 lowing clients to direct transactions that move

16 their funds into, out of, or through the con17 centration accounts of the financial institution;

18 ‘‘(B) prohibit financial institutions and

19 their employees from informing customers of

20 the existence of, or the means of identifying,

21 the concentration accounts of the institution;

22 and

23 ‘‘(C) require each financial institution to

24 establish written procedures governing the doc25 umentation of all transactions involving a con26 centration account, which procedures shall en-
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1 sure that, any time a transaction involving a

2 concentration account commingles funds belong3 ing to 1 or more customers, the identity of, and

4 specific amount belonging to, each customer is

5 documented.’’.

6 SEC. 9. CHARGING MONEY LAUNDERING AS A COURSE OF

7 CONDUCT.

8 Section 1956(h) of title 18, United States Code, is

9 amended by —

10 (1) inserting ‘‘(1)’’ before ‘‘Any person’’; and

11 (2) adding at the end the following:

12 ‘‘(2) Any person who commits multiple violations of

13 this section or section 1957 that are part of the same

14 scheme or continuing course of conduct may be charged,

15 at the election of the Government, in a single count in

16 an indictment or information.’’.

17 SEC. 10. FUNGIBLE PROPERTY IN BANK ACCOUNTS.

18 (a) IN GENERAL.—Section 984 of title 18, United

19 States Code, is amended by striking subsection (b) and

20 inserting the following:

21 ‘‘(b) The provisions of this section may be invoked

22 only if the action for forfeiture was commenced by the sei23 zure or restraint of the property, or by the filing of a com24 plaint, within 2 years of the offense that is the basis for

25 the forfeiture.’’.
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1 (b) APPLICATION.—The amendment made by this

2 section shall apply to any offense committed on or after

3 the date which is 2 years before the date of enactment

4 of this Act.

5 SEC. 11. FORFEITURE OF FUNDS IN UNITED STATES INTER6 BANK ACCOUNTS.

7 (a) FORFEITURE FROM UNITED STATES INTERBANK

8 ACCOUNT.—Section 981 of title 18, United States Code,

9 is amended by adding at the end the following:

10 ‘‘(k) INTERBANK ACCOUNTS.—

11 ‘‘(1) IN GENERAL.—For the purpose of a for12 feiture under this section or under the Controlled

13 Substances Act (21 U.S.C. 801 et seq.), if funds are

14 deposited into an account at a foreign bank, and

15 that foreign bank has an interbank account in the

16 United States with a covered financial institution (as

17 defined in section 5318A of title 31), the funds shall

18 be deemed to have been deposited into the interbank

19 account in the United States, and any restraining

20 order, seizure warrant, or arrest warrant in rem re21 garding the funds may be served on the covered fi22 nancial institution, and funds in the interbank ac23 count, up to the value of the funds deposited into

24 the account at the foreign bank, may be restrained,

25 seized, or arrested.
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1 ‘‘(2) NO REQUIREMENT FOR GOVERNMENT TO

2 TRACE FUNDS.—If a forfeiture action is brought

3 against funds that are restrained, seized, or arrested

4 under paragraph (1), it shall not be necessary for

5 the Government to establish that the funds are di6 rectly traceable to the funds that were deposited into

7 the foreign bank, nor shall it be necessary for the

8 Government to rely on the application of section

9 984.

10 ‘‘(3) CLAIMS BROUGHT BY OWNER OF THE

11 FUNDS.—If a forfeiture action is instituted against

12 funds restrained, seized, or arrested under para13 graph (1), the owner of the funds deposited into the

14 account at the foreign bank may contest the for15 feiture by filing a claim under section 983.

16 ‘‘(4) DEFINITIONS.—For purposes of this sub17 section, the following definitions shall apply:

18 ‘‘(A) INTERBANK ACCOUNT.—The term

19 ‘interbank account’ has the same meaning as in

20 section 984(c)(2)(B).

21 ‘‘(B) OWNER.—

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), the term ‘owner’—

24 ‘‘(I) has the same meaning as in

25 section 983(d)(6); and
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1 ‘‘(II) does not include any foreign

2 bank or other financial institution act3 ing as an intermediary in the transfer

4 of funds into the interbank account

5 and having no ownership interest in

6 the funds sought to be forfeited.

7 ‘‘(ii) EXCEPTION.—The foreign bank

8 may be considered the ‘owner’ of the funds

9 (and no other person shall qualify as the

10 owner of such funds) only if—

11 ‘‘(I) the basis for the forfeiture

12 action is wrongdoing committed by

13 the foreign bank; or

14 ‘‘(II) the foreign bank estab15 lishes, by a preponderance of the evi16 dence, that prior to the restraint, sei17 zure, or arrest of the funds, the for18 eign bank had discharged all or part

19 of its obligation to the prior owner of

20 the funds, in which case the foreign

21 bank shall be deemed the owner of the

22 funds to the extent of such discharged

23 obligation.’’.
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•S 1371 IS

1 (b) BANK RECORDS.—Section 5318 of title 31,

2 United States Code, is amended by adding at the end the

3 following:

4 ‘‘(i) BANK RECORDS RELATED TO ANTI-MONEY

5 LAUNDERING PROGRAMS.—

6 ‘‘(1) DEFINITIONS.—For purposes of this sub7 section, the following definitions shall apply:

8 ‘‘(A) APPROPRIATE FEDERAL BANKING

9 AGENCY.—The term ‘appropriate Federal bank10 ing agency’ has the same meaning as in section

11 3 of the Federal Deposit Insurance Act (12

12 U.S.C. 1813).

13 ‘‘(B) INCORPORATED TERMS.—The terms

14 ‘correspondent account’, ‘covered financial insti15 tution’, and ‘foreign bank’ have the same mean16 ings as in section 5318A.

17 ‘‘(2) 48-HOUR RULE.—Not later than 48 hours

18 after receiving a request by an appropriate Federal

19 banking agency for information related to anti20 money laundering compliance by a covered financial

21 institution or a customer of such institution, a cov22 ered financial institution shall provide to the appro23 priate Federal banking agency, or make available at

24 a location specified by the representative of the ap25 propriate Federal banking agency, information and
29

•S 1371 IS

1 account documentation for any account opened,

2 maintained, administered or managed in the United

3 States by the covered financial institution.

4 ‘‘(3) FOREIGN BANK RECORDS.—

5 ‘‘(A) SUMMONS OR SUBPOENA OF

6 RECORDS.—

7 ‘‘(i) IN GENERAL.—The Secretary or

8 the Attorney General may issue a sum9 mons or subpoena to any foreign bank that

10 maintains a correspondent account in the

11 United States and request records related

12 to such correspondent account.

13 ‘‘(ii) SERVICE OF SUMMONS OR SUB14 POENA.—A summons or subpoena referred

15 to in clause (i) may be served on the for16 eign bank in the United States if the for17 eign bank has a representative in the

18 United States, or in a foreign country pur19 suant to any mutual legal assistance trea20 ty, multilateral agreement, or other request

21 for international law enforcement assist22 ance.

23 ‘‘(B) ACCEPTANCE OF SERVICE.—

24 ‘‘(i) MAINTAINING RECORDS IN THE

25 UNITED STATES.—Any covered financial
30

•S 1371 IS

1 institution which maintains a cor2 respondent account in the United States

3 for a foreign bank shall maintain records

4 in the United States identifying the owners

5 of such foreign bank and the name and ad6 dress of a person who resides in the United

7 States and is authorized to accept service

8 of legal process for records regarding the

9 correspondent account.

10 ‘‘(ii) LAW ENFORCEMENT REQUEST.—

11 Upon receipt of a written request from a

12 Federal law enforcement officer for infor13 mation required to be maintained under

14 this paragraph, the covered financial insti15 tution shall provide the information to the

16 requesting officer not later than 7 days

17 after receipt of the request.

18 ‘‘(C) TERMINATION OF CORRESPONDENT

19 RELATIONSHIP.—

20 ‘‘(i) TERMINATION UPON RECEIPT OF

21 NOTICE.—A covered financial institution

22 shall terminate any correspondent relation23 ship with a foreign bank not later than 10

24 days after receipt of written notice from
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•S 1371 IS

1 the Secretary or the Attorney General that

2 the foreign bank has failed—

3 ‘‘(I) to comply with a summons

4 or subpoena issued under subpara5 graph (A); or

6 ‘‘(II) to initiate proceedings in a

7 United States court contesting such

8 summons or subpoena.

9 ‘‘(ii) LIMITATION ON LIABILITY.—A

10 covered financial institution shall not be

11 liable to any person in any court or arbi12 tration proceeding for terminating a cor13 respondent relationship in accordance with

14 this subsection.

15 ‘‘(iii) FAILURE TO TERMINATE RELA16 TIONSHIP.—Failure to terminate a cor17 respondent relationship in accordance with

18 this subsection shall render the covered fi19 nancial institution liable for a civil penalty

20 of up to $10,000 per day until the cor21 respondent relationship is so terminated.’’.

22 (c) AUTHORITY TO ORDER CONVICTED CRIMINAL TO

23 RETURN PROPERTY LOCATED ABROAD.—

24 (1) FORFEITURE OF SUBSTITUTE PROPERTY.—

25 Section 413 of the Controlled Substances Act (21
32

•S 1371 IS

1 U.S.C. 853) is amended by striking subsection (p)

2 and inserting the following:

3 ‘‘(p) FORFEITURE OF SUBSTITUTE PROPERTY.—

4 ‘‘(1) IN GENERAL.—Paragraph (2) of this sub5 section shall apply, if any property described in sub6 section (a), as a result of any act or omission of the

7 defendant—

8 ‘‘(A) cannot be located upon the exercise of

9 due diligence;

10 ‘‘(B) has been transferred or sold to, or

11 deposited with, a third party;

12 ‘‘(C) has been placed beyond the jurisdic13 tion of the court;

14 ‘‘(D) has been substantially diminished in

15 value; or

16 ‘‘(E) has been commingled with other

17 property which cannot be divided without dif18 ficulty.

19 ‘‘(2) SUBSTITUTE PROPERTY.—In any case de20 scribed in any of subparagraphs (A) through (E) of

21 paragraph (1), the court shall order the forfeiture of

22 any other property of the defendant, up to the value

23 of any property described in subparagraphs (A)

24 through (E) of paragraph (1), as applicable.
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•S 1371 IS

1 ‘‘(3) RETURN OF PROPERTY TO JURISDIC2 TION.—In the case of property described in para3 graph (1)(C), the court may, in addition to any

4 other action authorized by this subsection, order the

5 defendant to return the property to the jurisdiction

6 of the court so that the property may be seized and

7 forfeited.’’.

8 (2) PROTECTIVE ORDERS.—Section 413(e) of

9 the Controlled Substances Act (21 U.S.C. 853(e)) is

10 amended by adding at the end the following:

11 ‘‘(4) ORDER TO REPATRIATE AND DEPOSIT.—

12 ‘‘(A) IN GENERAL.—Pursuant to its au13 thority to enter a pretrial restraining order

14 under this section, including its authority to re15 strain any property forfeitable as substitute as16 sets, the court may order a defendant to repa17 triate any property that may be seized and for18 feited, and to deposit that property pending

19 trial in the registry of the court, or with the

20 United States Marshals Service or the Sec21 retary of the Treasury, in an interest-bearing

22 account, if appropriate.

23 ‘‘(B) FAILURE TO COMPLY.—Failure to

24 comply with an order under this subsection, or

25 an order to repatriate property under sub-
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•S 1371 IS

1 section (p), shall be punishable as a civil or

2 criminal contempt of court, and may also result

3 in an enhancement of the sentence of the de4 fendant under the obstruction of justice provi5 sion of the Federal Sentencing Guidelines.’’.

6 SEC. 12. EFFECTIVE DATE.

7 Except as otherwise provided in this Act, this Act,

8 and the amendments made by this Act, shall take effect

9 90 days after the date of enactment of this Act.

Æ