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103D CONGRESS

1ST SESSION H. R. 3385

To protect the integrity of the Nation’s financial system from international

counterfeiting and economic terrorism, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 27, 1993

Mr. LEACH (for himself and Mr. BACHUS of Alabama) introduced the following bill; which was referred jointly to the Committees on Banking, Finance and Urban Affairs, Foreign Affairs, and the Judiciary

A BILL

To protect the integrity of the Nation’s financial system

from international counterfeiting and economic terrorism,

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 ‘‘International Counter5 feiting Deterrence Act of 1993’’.
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1 SEC. 2. INTERNATIONAL COUNTERFEITING DETERRENCE

2 STRIKE FORCE.

3 (a) ESTABLISHMENT.—There is hereby established

4 the International Counterfeiting Deterrence Strike Force

5 (hereafter in this Act referred to as the ‘‘Strike Force’’).

6 (b) MEMBERSHIP.—

7 (1) IN GENERAL.—The Strike Force shall be

8 composed of 9 members as follows:

9 (A) The Secretary of the Treasury or a

10 designee of the Secretary.

11 (B) The Director of the Bureau of Engrav12 ing and Printing or a designee of the Director.

13 (C) The Chairman of the Board of Gov14 ernors of the Federal Reserve System or a des15 ignee of the Chairman.

16 (D) The Director of the United States Se17 cret Service or a designee of the Director.

18 (E) The Director of the Federal Bureau of

19 Investigation or a designee of the Director.

20 (F) The Director of the Central Intel21 ligence Agency or a designee of the Director.

22 (G) The Secretary of State or a designee

23 of the Secretary.

24 (H) The Attorney General or a designee of

25 the Attorney General.
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1 (I) The Assistant Secretary of the Treas2 ury for Enforcement.

3 (2) CHAIRPERSON.—The Chairperson of the

4 Strike Force shall be the Secretary of the Treasury.

5 (c) DUTIES.—

6 (1) IN GENERAL.—The Strike Force shall—

7 (A) assess the extent to which United

8 States currency is being counterfeited outside

9 the United States and the manner in which,

10 and the countries in which, such counterfeiting

11 takes place;

12 (B) assess the probable effect of such

13 counterfeiting on the United States and other

14 countries and the extent to which such activities

15 pose a threat to the domestic economy of the

16 United States, the payment system, and United

17 States financial institutions; and

18 (C) assess the extent to which counterfeit19 ing of United States currency which is engaged

20 in within and without the United States is mo21 tivated by economic terrorism with the intent to

22 disrupt the economy.

23 (2) INTERNATIONAL COOPERATION AND AGREE24 MENTS.—The Strike Force shall—
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1 (A) consider various means for achieving

2 greater international coordination and coopera3 tion in combating counterfeiting which occurs

4 outside of the country whose currency is the ob5 ject of the counterfeit; and

6 (B) propose international agreements

7 which the Strike Force considers appropriate

8 for achieving such coordination and coopera9 tion.

10 (3) ANNUAL REPORT.—The Strike Force shall

11 submit an annual report to the Congress on the

12 state of counterfeiting of United States currency in

13 the world and the activities of the Strike Force

14 under this section for the year covered by the report.

15 (d) EXECUTIVE DIRECTOR.—The Secretary of the

16 Treasury shall appoint an executive director of the Strike

17 Force from among employees of the Department of the

18 Treasury.

19 (e) NO ADDITIONAL PAY OR BENEFITS.—No officer

20 or employee of the Federal Government shall be entitled

21 to any additional pay or benefits by reason of service with

22 the Strike Force.

23 (f) COSTS AND EXPENSES.—The costs and expenses

24 incurred by the Strike Force after September 30, 1993,

25 shall be shared on a pro rata basis by the agencies and
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1 department’s represented on the Strike Force on the basis

2 of each such agency’s or department’s total budget for the

3 preceding fiscal year.

4 (g) ASSISTANCE FROM OTHER AGENCIES.—The

5 head of any element of the intelligence community and the

6 Secretary of Defense may provide the Strike Force with

7 such assistance as is appropriate to assist the Strike Force

8 in carrying out its functions.

9 SEC. 3. STUDIES OF COUNTERFEIT DETERRENCE AND EN10 HANCED DETECTION AND ENFORCEMENT

11 TECHNIQUES.

12 (a) IN GENERAL.—The Strike Force shall conduct a

13 study of all available technological devices and methods

14 which may be used to enhance detection and enforcement

15 techniques and procedures.

16 (b) FACTORS TO BE STUDIED.—The study conducted

17 under subsection (a) shall include a study of—

18 (1) various types of fibers, planchettes, optically

19 variable ink, watermarks, and optically variable de20 vices which may be used in producing currency;

21 (2) various methods for achieving thread en22 hancement in currency;

23 (3) various means for redesigning images on

24 currency;
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1 (4) other actions which may be taken to deter

2 the counterfeiting of United States currency;

3 (5) how much counterfeit currency has been de4 tected by the United States Government, including

5 the Board of Governors of the Federal Reserve Sys6 tem, and how much cost has been incurred by the

7 United States Government, including such Board,

8 with respect to counterfeit currency which has been

9 detected;

10 (6) methods and technologies that may be used

11 in the production of Federal reserve notes—

12 (A) to make such notes traceable through

13 the use of a scanning device; and

14 (B) to reduce the likelihood that the coun15 terfeiting of such notes can be achieved through

16 the use of color copying machines; and

17 (7) prudent measures which can be taken to

18 prevent the counterfeiting of United States currency

19 and to more readily identify circulating currency as

20 counterfeit.

21 (c) STUDY OF USES OF U.S. CURRENCY OVERSEAS

22 AND CORRELATION OF SUCH USES WITH COUNTERFEIT23 ING.—The Strike Force shall conduct a study of—

24 (1) the extent of the demand for United States

25 currency in other countries;
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1 (2) the reasons why United States currency is

2 obtained and used in such countries;

3 (3) the extent to which such demand or use in4 volves $100 Federal reserve notes or any other par5 ticular denomination; and

6 (4) the merits of abolishing $100 Federal re7 serve notes or producing such notes in a different

8 form or manner or with a different design as a de9 terrence to international counterfeiting.

10 (d) REPORT.—

11 (1) IN GENERAL.—Before the end of the 18-

12 month period beginning on the date of the enact13 ment of this Act, the Strike Force shall submit a re14 port to the Committee on Banking, Finance and

15 Urban Affairs of the House of Representatives and

16 the Committee on Banking, Housing, and Urban Af17 fairs of the Senate on the results of the studies con18 ducted pursuant to subsections (a) and (c).

19 (2) TREATMENT OF CERTAIN INFORMATION.—

20 If the Strike force determines that the inclusion of

21 any information in the report required under para22 graph (1) could reasonably be expected to interfere

23 with enforcement activities relating to counterfeiting

24 or to disclose technical information which would be

25 useful to persons engaged in counterfeiting, the in-
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1 formation shall not be included in the report and

2 shall be made available to the committees described

3 in such paragraph in a form other than as a public

4 document.

5 SEC. 4. CHANGES IN DESIGN OF CURRENCY.

6 Section 5114 of title 31, United States Code, is

7 amended by adding at the end the following new sub8 section:

9 ‘‘(d) CHANGES IN DESIGN OF CURRENCY.—

10 ‘‘(1) CURRENCY DESIGN COMMISSION.—There

11 is hereby established the Currency Design Commis12 sion consisting of the Secretary of the Treasury, the

13 Chairman of the Board of Governors of the Federal

14 Reserve System, and the Director of the Bureau of

15 Engraving and Printing, the chairperson of which

16 shall be the Secretary of the Treasury.

17 ‘‘(2) DESIGN CHANGES.—If any member of the

18 Currency Design Commission proposes that Federal

19 reserve notes of any denomination or any other

20 United States currency be redesigned, reformulated,

21 or otherwise produced in a different form or manner

22 for counterfeit deterrence purposes, and 1 other

23 member of the Commission concurs in such pro24 posal, the Secretary of the Treasury shall redesign,
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1 reformulate, or otherwise produce such notes or

2 other currency in accordance with such proposal.

3 ‘‘(3) ANCILLARY ACTIONS.—The Secretary of

4 the Treasury shall take such other action under this

5 section and other provisions of law as may be nec6 essary to carry out the requirement of paragraph

7 (2).’’.

8 SEC. 5. FOREIGN OFFICES AUTHORIZED.

9 For purposes of carrying out this Act and to assist

10 any agency or department which is represented on the

11 Strike Force in any investigation or enforcement action

12 with respect to international counterfeiting, the Strike

13 Force may maintain offices outside the United States.

14 SEC. 6. ANTICOUNTERFEITING TRAINING TEAM.

15 The Director of the United States Secret Service, in

16 consultation with the other members of the Strike Force,

17 shall establish a team of experts to assist and provide

18 training to foreign governments, and agencies and depart19 ments of foreign governments, in developing and expand20 ing any such government’s, agency’s, or department’s ca21 pabilities for detecting counterfeited currency, in general,

22 and for investigating and prosecuting activities involving

23 counterfeiting.
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1 SEC. 7. NEGOTIATIONS WITH COUNTRIES IN WHICH A SIG2 NIFICANT AMOUNT OF COUNTERFEITING OF

3 U.S. CURRENCY OCCURS.

4 (a) NEGOTIATIONS.—The Chairperson of the Strike

5 Force (hereafter in this section referred to as the ‘‘Chair6 person’’) shall seek to enter into negotiations with appro7 priate officials of any foreign country which the Chair8 person, in consultation with the heads of the other agen9 cies and departments represented on the Strike Force, has

10 reason to believe is a country in which a significant

11 amount of United States currency is counterfeited to nego12 tiate 1 or more international agreements with such coun13 try to—

14 (1) share information and technical expertise to

15 facilitate the detection of counterfeit currency of

16 such country or the United States within such coun17 try or the United States and the prosecution of the

18 parties responsible for such activity; and

19 (2) ensure cooperation between the law enforce20 ment officers of each party to the international

21 agreement in the investigation and prosecution of

22 counterfeiting activities.

23 (b) REPORTS.—

24 (1) INTERIM REPORT.—Before the end of the 1-

25 year period beginning on the date of the enactment

26 of this Act, the Chairperson shall submit an interim
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1 report to the Committee on Banking, Finance and

2 Urban Affairs of the House of Representatives and

3 the Committee on Banking, Housing, and Urban Af4 fairs of the Senate on any negotiations in which the

5 Chairperson is engaged pursuant to subsection (a)

6 and the progress in such negotiations.

7 (2) FINAL REPORT.—Before the end of the 2-

8 year period beginning on the date of the enactment

9 of this Act, the Chairperson shall submit a final re10 port to the President, the Committee on Banking,

11 Finance and Urban Affairs of the House of Rep12 resentatives, and the Committee on Banking, Hous13 ing, and Urban Affairs of the Senate on the outcome

14 of negotiations pursuant to subsection (a).

15 (3) IDENTIFICATION OF SUSPECT COUN16 TRIES.—The final report submitted under paragraph

17 (2) shall identify each foreign country which—

18 (A) the Chairperson, in consultation with

19 the heads of the other agencies and depart20 ments represented on the Strike Force, has rea21 son to believe is a country in which a significant

22 amount of United States currency is counter23 feited; and
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1 (B) has not reached an agreement de2 scribed in paragraphs (1) and (2) of subsection

3 (a) with the Chairperson.

4 (c) AUTHORITY OF THE PRESIDENT.—

5 (1) IN GENERAL.—If, after the end of the 2-

6 year period beginning on the date of the enactment

7 of this Act, the President determines, after consulta8 tion with the head of each agency or department

9 represented on the Strike Force, that a foreign

10 country—

11 (A) is a country in which a significant

12 amount of United States currency is counter13 feited;

14 (B) has not entered into an agreement de15 scribed in subsection (b) with the United

16 States; and

17 (C) is not negotiating in good faith to

18 reach any such agreement,

19 the President may take any action described in para20 graph (2) with respect to such country.

21 (2) ACTIONS AUTHORIZED.—The actions de22 scribed in this paragraph are as follows:

23 (A) Prohibiting, by Executive order, Fed24 eral reserve banks, depository institutions, and

25 all other persons engaged within the United
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1 States in the transfer of funds by any means,

2 including clearing checks, from—

3 (i) participating in any transfer of

4 funds, including wire and electronic funds

5 transfers, with any person of the foreign

6 country described in paragraph (1) and

7 any agency, department, or instrumentality

8 of the government of such country, includ9 ing the central bank of such country; or

10 (ii) accepting any deposit from or on

11 behalf of any such person, agency, depart12 ment, or instrumentality.

13 (B) Prohibiting, by Executive order, any

14 person of the foreign country described in para15 graph (1) and any agency, department, or in16 strumentality of the government of such coun17 try, including the central bank of such country,

18 from—

19 (i) participating in any wire or elec20 tronic fund transfer of funds with any

21 Federal reserve bank, depository institu22 tion, or other person within the United

23 States or otherwise participating in the

24 payment system in any way; or
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1 (ii) maintaining a deposit account

2 with any such bank, depository institution,

3 or person.

4 (3) CRIMINAL PENALTY.—Whoever knowingly

5 violates, within or without the United States, any

6 Executive order issued under this subsection shall be

7 fined under title 18, United States Code, imprisoned

8 for not more than 15 years, or both.

9 (4) DEFINITIONS.—For purposes of this sub10 section—

11 (A) DEPOSITORY INSTITUTION.—The term

12 ‘‘depository institution’’—

13 (i) has the meaning given to such

14 term in section 3(c) of the Federal Deposit

15 Insurance Act; and

16 (ii) includes any insured or

17 noninsured credit union (as defined in sec18 tion 101(7) of the Federal Credit Union

19 Act.

20 (B) PERSON OF THE FOREIGN COUN21 TRY.—The term ‘‘person of the foreign coun22 try’’ has the meaning given to the term ‘‘person

23 of a foreign country’’ in section 3502(d) of the

24 Primary Dealers Act of 1988.
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1 SEC. 8. AWARDS AUTHORIZED FOR COUNTERFEITING

2 CASES.

3 Section 524(c)(1)(B) of title 28, United States Code,

4 is amended by striking ‘‘1956 and 1957’’ and inserting

5 ‘‘470 through 492, 1956, and 1957’’.

6 SEC. 9. COUNTERFEITING UNITED STATES CURRENCY

7 ABROAD.

8 (a) IN GENERAL.—Chapter 25 of part I of title 18,

9 United States Code, is amended by inserting before sec10 tion 471 the following new section:

11 ‘‘§ 470. Counterfeit acts committed outside the United

12 States

13 ‘‘Whoever, outside the United States, engages in the

14 act of—

15 ‘‘(1) making, dealing, or possessing any coun16 terfeit obligation or other security of the United

17 States; or

18 ‘‘(2) making, dealing, or possessing any plate,

19 stone, digital information, or other thing, or any

20 part thereof, used to counterfeit such obligation or

21 security,

22 if such act would constitute a violation of section 471, 473,

23 or 474 of this title, if committed within the United States,

24 shall be fined under this title, imprisoned for not more

25 than 15 years, or both.’’.

26 (b) CLERICAL AMENDMENTS.—
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1 (1) TABLE OF SECTIONS.—The table of sections

2 for chapter 25 of part I of title 18, United States

3 Code, is amended by inserting before the item relat4 ing to section 471 the following new item:

‘‘470. Counterfeit acts committed outside the United States.’’.

5 (2) TABLE OF CHAPTERS.—The table of chap6 ters for part I of title 18, United States Code, is

7 amended by striking the item relating to chapter 25

8 and inserting the following new item:

‘‘25. Counterfeiting and forgery ................................................... 470’’.

9 SEC. 10. SANCTIONS AGAINST STATE-SUPPORTED COUN10 TERFEITING.

11 (a) RECOMMENDATIONS OF STRIKE FORCE.—The

12 Strike Force shall consider and recommend to the Con13 gress and the President sanctions which the Strike Force

14 determines to be appropriate against any foreign country

15 the government of which—

16 (1) engages in counterfeiting or other activities

17 in violation of section 470 of title 18, United States

18 Code; or

19 (2) knowingly or recklessly permits such coun20 terfeiting or activity to occur within such country

21 without conducting reasonably diligent investigations

22 or prosecutions of the persons or governmental units

23 involved in such conduct.
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1 (b) PROHIBITION ON EX-IM BANK SUPPORT FOR

2 COUNTRIES WHICH SUPPORT COUNTERFEITING OF

3 UNITED STATES CURRENCY.—Section 2(b) of the Export4 Import Bank Act of 1945 (12 U.S.C. 635(b)) is amended

5 by adding at the end the following new paragraph:

6 ‘‘(12) PROHIBITION RELATING TO STATE-SUP7 PORTED COUNTERFEITING.—The Bank may not

8 guarantee, insure, extend (or participate in the ex9 tension of) credit in connection with the export of

10 any good (other than food or an agricultural com11 modity) or service to any country if the President

12 determines that the government of such country—

13 ‘‘(A) engages in counterfeiting or other ac14 tivities in violation of section 470 of title 18,

15 United States Code; or

16 ‘‘(B) knowingly or recklessly permits such

17 counterfeiting or activity to occur within such

18 country without conducting reasonably diligent

19 investigations or prosecutions of the persons or

20 governmental units involved in such conduct.’’.

21 (c) LICENSE REQUIREMENT FOR COUNTRIES IN22 VOLVED IN STATE-SUPPORTED COUNTERFEITING.—Sec23 tion 6(j)(1) of the Export Administration Act of 1979 (50

24 U.S.C. App. 2405) is amended by adding at the end the

25 following subparagraph:
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1 ‘‘(C) The government of such country—

2 ‘‘(i) engages in counterfeiting or other

3 activities in violation of section 470 of title

4 18, United States Code; or

5 ‘‘(ii) knowingly or recklessly permits

6 such counterfeiting or other activity to

7 occur within such country without conduct8 ing reasonably diligent investigations or

9 prosecutions of the persons or govern10 mental units involved in such conduct.’’.

11 (d) PROHIBITION ON FOREIGN ASSISTANCE TO

12 COUNTRIES INVOLVED IN STATE-SUPPORTED COUNTER13 FEITING.—Chapter 1 of part III of the Foreign Assistance

14 Act of 1961 (22 U.S.C. 2351 et seq.) is amended by in15 serting after section 620A the following new section:

16 ‘‘SEC. 620B. PROHIBITION ON FOREIGN ASSISTANCE TO

17 COUNTRIES INVOLVED IN STATE-SUPPORTED

18 COUNTERFEITING.

19 ‘‘The United States shall not provide any assistance

20 under this Act, the Agricultural Trade Development and

21 Assistance Act of 1954, or the Peace Corps Act to any

22 country if the President determines that the government

23 of such country—
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1 ‘‘(1) engages in counterfeiting or other activi2 ties in violation of section 470 of title 18, United

3 States Code; or

4 ‘‘(2) knowingly or recklessly permits such coun5 terfeiting or activity to occur within such country

6 without conducting reasonably diligent investigations

7 or prosecutions of the persons or governmental units

8 involved in such conduct.’’.

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