II

103D CONGRESS

2D SESSION S. 2158

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

IN THE SENATE OF THE UNITED STATES

MAY 25 (legislative day, MAY 16), 1994

Mr. LEAHY (for himself and Mr. KERRY) 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 1994’’.

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;
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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-
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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.
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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 and the

11 Administrator of the Drug Enforcement Administration,

12 shall design and designate a domestic use $100 denomina13 tion bill and a nondomestic use $100 denomination bill

14 in accordance with the requirements of this section.

15 ‘‘(b) DESIGN SPECIFICATIONS.—

16 ‘‘(1) IN GENERAL.—The designs for the domes17 tic use and nondomestic use $100 currency shall in18 corporate—

19 ‘‘(A) watermarks, holograms, multicolored

20 patterns, multicolored dyes, or other features to

21 make the currency substantially more difficult

22 to counterfeit than $100 denomination United

23 States currency in circulation on the date of en24 actment of this section;

25 ‘‘(B) substantially different coloration or

26 markings to make the new currency clearly and
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1 readily distinguishable on casual observance

2 from previously issued $100 denomination

3 United States currency; and

4 ‘‘(C) distinctive coloration such that the

5 domestic use $100 currency is clearly and read6 ily distinguishable on casual observance from

7 the nondomestic use $100 currency.

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

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

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

11 presented in the United States. This note shall not

12 constitute legal tender for any debts, public or pri13 vate, when presented outside of the United States.’.

14 ‘‘(3) NONDOMESTIC USE DESIGN.—The

15 nondomestic use $100 currency shall state on its

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

17 and private, when presented outside of the United

18 States.’.

19 ‘‘(4) DESIGN CONSIDERATIONS.—In determin20 ing design features for $100 denomination domestic

21 use and nondomestic use currency in accordance

22 with this section, the Secretary shall consider—

23 ‘‘(A) the relative efficacy of particular de24 sign features in making a currency resistant to

25 counterfeiting; and
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1 ‘‘(B) the costs of producing bills incor2 porating such features.

3 ‘‘(c) CURRENCY EXCHANGE.—

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

5 the date of enactment of this section, the Secretary

6 shall develop and begin implementation of a plan to

7 require the exchange of all existing $100 denomina8 tion United States currency held within and outside

9 of the United States for $100 denomination domes10 tic use and nondomestic use United States currency

11 issued in accordance with this section.

12 ‘‘(2) EXCHANGE REQUIREMENTS.—The plan es13 tablished under paragraph (1) shall require the cur14 rency to be exchanged—

15 ‘‘(A) at financial institutions regulated

16 under United States law and subject to United

17 States currency transaction reporting and other

18 money laundering deterrence requirements; or

19 ‘‘(B) at financial institutions that the Sec20 retary finds, because of treaty obligations, other

21 provisions of law, or other agreements, are re22 quired to report significant transactions in

23 United States currency to the United States

24 Treasury, and abide by such obligations.

25 ‘‘(3) 6-MONTH EXCHANGE PERIOD.—
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1 ‘‘(A) IN GENERAL.—During the period be2 ginning on the date that is 12 months after the

3 date of enactment of this section and ending on

4 the date that is 18 months after that date of

5 enactment, the Secretary shall permit the ex6 change of circulating $100 denomination Unit7 ed States currency for equal numbers of the do8 mestic use and nondomestic use $100 currency

9 issued in accordance with this section at institu10 tions described in paragraph (2).

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

12 claims pursuant to subsection (e), beginning on

13 the date that is 18 months after the date of en14 actment of this section, the United States

15 Treasury shall not recognize $100 denomination

16 United States currency issued prior to the date

17 that is 12 months after the date of enactment

18 of this section as constituting a negotiable claim

19 against the United States Treasury, and such

20 currency shall not constitute legal tender for

21 any debts, public or private.

22 ‘‘(d) DOMESTIC USE AND NONDOMESTIC USE CUR23 RENCY.—Beginning on the date that is 18 months after

24 the date of enactment of this section—
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1 ‘‘(1) domestic use currency issued in accordance

2 with this section shall be recognized as constituting

3 a negotiable claim against the United States Treas4 ury only when presented within the United States,

5 and shall constitute legal tender for any debts, pub6 lic or private, only when presented in the United

7 States, but such currency may be exchanged for

8 equal values of $100 denomination nondomestic use

9 currency (or other United States currency) only at

10 financial institutions regulated by United States law

11 and subject to United States currency transaction

12 reporting and other money laundering deterrence re13 quirements; and

14 ‘‘(2) nondomestic use currency shall be recog15 nized as constituting a negotiable claim against the

16 United States Treasury, and legal tender for any

17 debts, public or private, only when presented outside

18 of the United States, but such currency may be ex19 changed for equal values of $100 denomination do20 mestic use currency (or other United States cur21 rency) at financial institutions regulated by United

22 States law and subject to United States currency

23 transaction reporting and other money laundering

24 deterrence requirements.
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1 ‘‘(e) LATER EXCHANGE CRITERIA.—United States

2 currency in the $100 denomination issued prior to the

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

4 section may be exchanged later than 18 months after that

5 date of enactment for either domestic use or nondomestic

6 use $100 denomination United States currency (or other

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

8 on substantial evidence, that the $100 denomination Unit9 ed States currency to be exchanged is not the proceeds

10 of unlawful activity, and, if the amount of such currency

11 to be exchanged totals more than $10,000, good cause ex12 isted for not exchanging it during the exchange period

13 specified in subsection (c)(3).

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

15 with the Attorney General of the United States and the

16 Administrator of the Drug Enforcement Administration,

17 shall analyze the exchange of currency under this section

18 and determine the amount of existing $100 denomination

19 United States currency in circulation that is not ex20 changed for new domestic use or nondomestic use cur21 rency. Credit resulting from extinguished claims against

22 the United States Treasury for amounts that are not ex23 changed within the specified exchange period shall be used

24 to fund the requirements of this section. Any additional
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1 credit shall be deposited into the United States Treasury’s

2 general obligation fund.

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

4 such regulations as may be necessary to implement this

5 section.’’.

6 (b) CONFORMING AMENDMENT.—The chapter analy7 sis for chapter 51, title 31, United States Code, is amend8 ed by inserting after the item relating to section 5122,

9 the following new item:

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

10 SEC. 4. NOTICE OF CURRENCY EXCHANGE PERIOD.

11 Not later than 6 months after the date of enactment

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

13 and begin implementation of a plan for providing notice

14 of the currency exchange requirements established in ac15 cordance with the amendment made by this Act to domes16 tic and foreign governments, financial institutions, and

17 other affected persons.

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