II

104TH CONGRESS

1ST SESSION S. 307

To require the Secretary of the Treasury to design and issue new counterfeitresistant $100 currency.

IN THE SENATE OF THE UNITED STATES

JANUARY 31 (legislative day, JANUARY 30), 1995

Mr. LEAHY introduced the following bill; which was read twice and referred

to the Committee on Banking, Housing, and Urban Affairs

A BILL

To require the Secretary of the Treasury to design and

issue new counterfeit-resistant $100 currency.

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 ‘‘Counterfeiting and

5 Money Laundering Deterrence Act of 1995’’.

6 SEC. 2. FINDINGS AND PURPOSES.

7 (a) FINDINGS.—The Congress finds that—

8 (1) advances in technology have made United

9 States currency particularly susceptible to counter10 feiting;
2

•S 307 IS

1 (2) international organizations hostile to the

2 United States have produced counterfeits of the

3 United States $100 bill that are extremely difficult

4 to detect;

5 (3) the ability to counterfeit currency allows

6 terrorist organizations or other organizations hostile

7 to the United States to undermine the stability of

8 the United States currency;

9 (4) the ability to counterfeit currency provides

10 terrorist organizations or other organizations hostile

11 to the United States a ready source of negotiable

12 foreign currency with which such organizations can

13 fund activities opposed to the interests of the United

14 States;

15 (5) as shown by counterfeit-resistant currencies

16 of other countries, current technologies exist to

17 make a $100 denomination currency that is substan18 tially more difficult to counterfeit, without being un19 duly expensive to produce;

20 (6) implementing a new, counterfeit-resistant

21 currency would substantially impair terrorist organi22 zations or other organizations hostile to the United

23 States in efforts to undermine the stability of the

24 United States currency and would eliminate a source

25 of negotiable foreign currency with which such orga-
3

•S 307 IS

1 nizations could fund activities opposed to the inter2 ests of the United States;

3 (7) an essential aspect of the business of inter4 national drug trafficking is the ability to launder

5 large sums of hard currency quickly and inexpen6 sively;

7 (8) without the ability to convert large sums of

8 hard currency with near impunity into readily trans9 ferable accounts in financial institutions, inter10 national drug traffickers would be severely impeded

11 in their operations; and

12 (9) forcing international narcotics traffickers to

13 exchange all of their hard currency held in United

14 States $100 bills within a specified period of time

15 for a new, counterfeit-resistant currency would sig16 nificantly increase the cost of money laundering to

17 drug cartels, thereby reducing their profits.

18 (b) PURPOSES.—The purposes of this Act are—

19 (1) to provide for new, counterfeit-resistant

20 $100 currencies for use in the United States and

21 abroad to prevent counterfeiting by terrorist and

22 other hostile organizations; and

23 (2) to issue the new currency in a manner that

24 deters money laundering efforts of narcotics traffick25 ers.
4

•S 307 IS

1 SEC. 3. COUNTERFEIT-RESISTANT $100 DENOMINATION

2 CURRENCY.

3 (a) IN GENERAL.—Subchapter II of chapter 51 of

4 title 31, United States Code, is amended by adding at the

5 end the following new section:

6 ‘‘§ 5123. Counterfeit-resistant $100 currency

7 ‘‘(a) IN GENERAL.—Not later than 6 months after

8 the date of enactment of this section, the Secretary of the

9 Treasury (hereafter in this section referred to as the ‘Sec10 retary’), in consultation with the Attorney General of the

11 United States and the Administrator of the Drug Enforce12 ment Administration, shall design and designate a domes13 tic use $100 denomination bill and a nondomestic use

14 $100 denomination bill in accordance with the require15 ments of this section.

16 ‘‘(b) DESIGN SPECIFICATIONS.—

17 ‘‘(1) IN GENERAL.—The designs for the domes18 tic use and nondomestic use $100 currency shall in19 corporate—

20 ‘‘(A) watermarks, holograms, multicolored

21 patterns, multicolored dyes, or other features to

22 make the currency substantially more difficult

23 to counterfeit than $100 denomination United

24 States currency in circulation on the date of en25 actment of this section;
5

•S 307 IS

1 ‘‘(B) substantially different coloration or

2 markings to make the new currency clearly and

3 readily distinguishable on casual observance

4 from previously issued $100 denomination

5 United States currency; and

6 ‘‘(C) distinctive coloration such that the

7 domestic use $100 currency is clearly and read8 ily distinguishable on casual observance from

9 the nondomestic use $100 currency.

10 ‘‘(2) DOMESTIC USE DESIGN.—The domestic

11 use $100 currency shall state on its face, ‘This note

12 is legal tender for all debts, public and private, when

13 presented in the United States. This note shall not

14 constitute legal tender for any debts, public or pri15 vate, when presented outside of the United States.’.

16 ‘‘(3) NONDOMESTIC USE DESIGN.—The

17 nondomestic use $100 currency shall state on its

18 face, ‘This note is legal tender for all debts, public

19 and private, when presented outside of the United

20 States.’.

21 ‘‘(4) DESIGN CONSIDERATIONS.—In determin22 ing design features for $100 denomination domestic

23 use and nondomestic use currency in accordance

24 with this section, the Secretary shall consider—
6

•S 307 IS

1 ‘‘(A) the relative efficacy of particular de2 sign features in making a currency resistant to

3 counterfeiting; and

4 ‘‘(B) the costs of producing bills incor5 porating such features.

6 ‘‘(c) CURRENCY EXCHANGE.—

7 ‘‘(1) PLAN.—Not later than 12 months after

8 the date of enactment of this section, the Secretary

9 shall develop and begin implementation of a plan to

10 require the exchange of all existing $100 denomina11 tion United States currency held within and outside

12 of the United States for $100 denomination domes13 tic use and nondomestic use United States currency

14 issued in accordance with this section.

15 ‘‘(2) EXCHANGE REQUIREMENTS.—The plan es16 tablished under paragraph (1) shall require the cur17 rency to be exchanged—

18 ‘‘(A) at financial institutions regulated

19 under United States law and subject to United

20 States currency transaction reporting and other

21 money laundering deterrence requirements; or

22 ‘‘(B) at financial institutions that the Sec23 retary finds, because of treaty obligations, other

24 provisions of law, or other agreements, are re25 quired to report significant transactions in
7

•S 307 IS

1 United States currency to the United States

2 Treasury, and abide by such obligations.

3 ‘‘(3) 6-MONTH EXCHANGE PERIOD.—

4 ‘‘(A) IN GENERAL.—During the period be5 ginning on the date that is 12 months after the

6 date of enactment of this section and ending on

7 the date that is 18 months after that date of

8 enactment, the Secretary shall permit the ex9 change of circulating $100 denomination

10 United States currency for equal numbers of

11 the domestic use and nondomestic use $100

12 currency issued in accordance with this section

13 at institutions described in paragraph (2).

14 ‘‘(B) NON-NEGOTIABILITY.—Except for

15 claims pursuant to subsection (e), beginning on

16 the date that is 18 months after the date of en17 actment of this section, the United States

18 Treasury shall not recognize $100 denomination

19 United States currency issued prior to the date

20 that is 12 months after the date of enactment

21 of this section as constituting a negotiable claim

22 against the United States Treasury, and such

23 currency shall not constitute legal tender for

24 any debts, public or private.
8

•S 307 IS

1 ‘‘(d) DOMESTIC USE AND NONDOMESTIC USE CUR2 RENCY.—Beginning on the date that is 18 months after

3 the date of enactment of this section—

4 ‘‘(1) domestic use currency issued in accordance

5 with this section shall be recognized as constituting

6 a negotiable claim against the United States Treas7 ury only when presented within the United States,

8 and shall constitute legal tender for any debts, pub9 lic or private, only when presented in the United

10 States, but such currency may be exchanged for

11 equal values of $100 denomination nondomestic use

12 currency (or other United States currency) only at

13 financial institutions regulated by United States law

14 and subject to United States currency transaction

15 reporting and other money laundering deterrence re16 quirements; and

17 ‘‘(2) nondomestic use currency shall be recog18 nized as constituting a negotiable claim against the

19 United States Treasury, and legal tender for any

20 debts, public or private, only when presented outside

21 of the United States, but such currency may be ex22 changed for equal values of $100 denomination do23 mestic use currency (or other United States cur24 rency) at financial institutions regulated by United

25 States law and subject to United States currency
9

•S 307 IS

1 transaction reporting and other money laundering

2 deterrence requirements.

3 ‘‘(e) LATER EXCHANGE CRITERIA.—United States

4 currency in the $100 denomination issued prior to the

5 date that is 12 months after the date of enactment of this

6 section may be exchanged later than 18 months after that

7 date of enactment for either domestic use or nondomestic

8 use $100 denomination United States currency (or other

9 United States currency) only if the Secretary finds, based

10 on substantial evidence, that the $100 denomination

11 United States currency to be exchanged is not the pro12 ceeds of unlawful activity, and, if the amount of such cur13 rency to be exchanged totals more than $10,000, good

14 cause existed for not exchanging it during the exchange

15 period specified in subsection (c)(3).

16 ‘‘(f) FINANCING.—The Secretary, in coordination

17 with the Attorney General of the United States and the

18 Administrator of the Drug Enforcement Administration,

19 shall analyze the exchange of currency under this section

20 and determine the amount of existing $100 denomination

21 United States currency in circulation that is not ex22 changed for new domestic use or nondomestic use cur23 rency. Credit resulting from extinguished claims against

24 the United States Treasury for amounts that are not ex25 changed within the specified exchange period shall be used
10

•S 307 IS

1 to fund the requirements of this section. Any additional

2 credit shall be deposited into the general obligation fund

3 of the United States Treasury.

4 ‘‘(g) REGULATIONS.—The Secretary may promulgate

5 such regulations as may be necessary to implement this

6 section.’’.

7 (b) CONFORMING AMENDMENT.—The chapter analy8 sis for chapter 51, title 31, United States Code, is amend9 ed by inserting after the item relating to section 5122,

10 the following new item:

‘‘5123. Counterfeit-resistant $100 currency.’’.

11 SEC. 4. NOTICE OF CURRENCY EXCHANGE PERIOD.

12 Not later than 6 months after the date of enactment

13 of this Act, the Secretary of the Treasury shall develop

14 and begin implementation of a plan for providing notice

15 of the currency exchange requirements established in ac16 cordance with the amendment made by this Act to domes17 tic and foreign governments, financial institutions, and

18 other affected persons.

Æ