Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2019

To improve the prohibitions on money laundering, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2019 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Transportation or transhipment of blank checks in bearer form. Sec. 3. Bulk cash smuggling. Sec. 4. Section 1957 violations involving commingled funds and aggregated transactions. Sec. 5. Charging money laundering as a course of conduct. Sec. 6. Illegal money services businesses. Sec. 7. Concealment money laundering. Sec. 8. Freezing bank accounts of persons arrested for offenses involving the movement of money across international borders. Sec. 9. Prohibiting money laundering through hawalas, other informal value transfer systems, and closely related transactions. Sec. 10. Technical amendment to restore wiretap authority for certain money laundering and counterfeiting offenses. Sec. 11. Making the international money laundering statute apply to tax evasion. Sec. 12. Conduct in aid of counterfeiting. Sec. 13. Administrative subpoenas for money laundering cases. Sec. 14. Obtaining foreign bank records from banks with United States correspondent accounts. Sec. 15. Danger pay allowance. Sec. 16. Clarification of Secret Service authority to investigate money laundering. Sec. 17. Prohibition on concealment of ownership of account. Sec. 18. Prohibition on concealment of the source of assets in monetary transactions. Sec. 19. Rule of construction. 2. Transportation or transhipment of blank checks in bearer form Section 5316 of title 31, United States Code, is amended by adding at the end the following: (e) Monetary instruments with amount left blank For purposes of this section, a monetary instrument in bearer form that has the amount left blank, such that the amount could be filled in by the bearer, shall be considered to have a value of more than $10,000 if the instrument was drawn on an account that contained, or was intended to contain more than $10,000 at the time— (1) the instrument was transported; or (2) the instrument was negotiated or was intended to be negotiated. . 3. Bulk cash smuggling Section 5332(b) of title 31, United States Code, is amended— (1) in paragraph (1), by striking 5 years 10 years (2) by redesignating paragraphs (2), (3), and (4), as paragraphs (3), (4), and (5), respectively; (3) by inserting after paragraph (1) the following: (2) Fine (A) In general Whoever violates this section shall be fined under title 18. (B) Enhanced fine for aggravated cases Whoever violates this section while violating another law of the United States, other than section 5316 or 5324(c) of this title, or as a part of a pattern of any unlawful activity, including a violation of section 5316 or 5324(c) of this title, shall be fined double the amount provided in subsection (b)(3) or (c)(3) of section 3571 of title 18. ; and (4) in paragraph (5), as redesignated, by striking paragraph (2) paragraph (3) 4. Section 1957 violations involving commingled funds and aggregated transactions Section 1957 of title 18, United States Code, is amended by adding at the end the following: (g) In a prosecution for an offense under this section, the Government may satisfy the $10,000 monetary transaction value requirement under subsection (a) by showing that— (1) the monetary transaction involved the transfer, withdrawal, encumbrance, or other disposition of more than $10,000 from an account in which more than $10,000 in proceeds of specified unlawful activity was commingled with other funds; or (2) the defendant conducted a series of monetary transactions in amounts of not more than $10,000 that— (A) exceeded $10,000 in the aggregate; and (B) were closely related to each other as demonstrated by factors such as— (i) the time period between the transactions; (ii) the identity of the parties involved; (iii) the nature or purpose of the transactions; and (iv) the manner in which the transactions were conducted. . 5. Charging money laundering as a course of conduct Section 1956 of title 18, United States Code, is amended— (1) in subsection (h), by striking or section 1957 , section 1957, or section 1960 (2) by adding at the end the following: (j) Multiple violations Multiple violations of this section that are part of the same scheme or continuing course of conduct may be charged, at the election of the Government, in a single count in an indictment or information. . 6. Illegal money services businesses (a) In general Section 1960 of title 18, United States Code, is amended by striking subsections (a) and (b) and inserting the following: (a) Offense Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of a covered money services business that— (1) is operated without an appropriate license in a State where such operation is punishable as a misdemeanor or a felony under State law, whether or not the person knows that the operation is required to be licensed or that the operation is so punishable; (2) fails to comply with the money services business registration requirements under section 5330 of title 31, or regulations prescribed under that section, whether or not the person knows that the operation is required to comply with those registration requirements; or (3) otherwise engages in a transaction involving funds that the person knows have been derived from a criminal offense or are intended to be used to promote or support unlawful activity, shall be punished as provided in subsection (b). (b) Criminal penalty Any person who violates— (1) subsection (a) shall be fined in accordance with this title, imprisoned for not more than 5 years, or both; and (2) subsection (a) by conducting, controlling, managing, supervising, directing, or owning all or part of a covered money services business that engaged in activity as a covered money services business involving more than $1,000,000 during a 12-month period, or by engaging in a transaction or transactions involving more than $1,000,000 during a 12-month period, shall be fined double the amount provided in subsection (b)(3) or (c)(3) (as applicable) of section 3571, imprisoned for not more than 10 years, or both. (c) Definitions In this section— (1) the term covered money services business (A) operates on behalf of the public; and (B) affects interstate or foreign commerce in any manner or degree; (2) the term money services business (A) has the meaning given the term in section 5330 of title 31 and any regulations prescribed under that section; and (B) includes a person that engages in the transfer, transportation, or exchange of currency, funds, or value that substitutes for currency by any and all means, even when not performed for profit; and (3) the term State . (b) Technical and conforming amendments (1) Section 1960 of title 18, United States Code (A) Section heading Section 1960 of title 18, United States Code, is amended in the section heading— (i) by striking unlicensed illegal (ii) by striking transmitting services (B) Table of sections The table of sections for chapter 95 1960. Prohibition of illegal money services businesses. . (2) Section 5330 of title 31, United States Code (A) Headings Section 5330 of title 31, United States Code, is amended— (i) in the section heading, by striking transmitting services (ii) in subsection (c)— (I) in the subsection heading, by striking transmitting services (II) in paragraph (1), in the paragraph heading, by striking transmitting services (III) in paragraph (2), in the paragraph heading, by striking transmitting services (iii) in subsection (d)(1), in the paragraph heading, by striking transmitting services (B) Text Section 5330 of title 31, United States Code, is amended— (i) by striking money transmitting business money services business (ii) in subsection (a)(3), by striking money transmitting businesses a money services business (C) Table of sections The table of sections for subchapter II of chapter 53 5330. Registration of money services businesses. . 7. Concealment money laundering Section 1956(a) of title 18, United States Code, is amended— (1) in paragraph (1)(B), by striking knowing that Federal law, (B) knowing that the transaction— (i) conceals or disguises, or is intended to conceal or disguise, the nature, source, location, ownership, or control of the proceeds of some form of unlawful activity; or (ii) avoids, or is intended to avoid, a transaction reporting requirement under State or Federal law, ; and (2) in paragraph (2)(B), by striking knowing that Federal law, (B) knowing that— (i) the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity; and (ii) the transportation, transmission, or transfer— (I) conceals or disguises, or is intended to conceal or disguise, the nature, source, location, ownership, or control of the proceeds of some form of unlawful activity; or (II) avoids, or is intended to avoid, a transaction reporting requirement under State or Federal law, . 8. Freezing bank accounts of persons arrested for offenses involving the movement of money across international borders Section 981(b) of title 18, United States Code, is amended by adding at the end the following: (5) (A) If a person is arrested or charged in connection with an offense described in subparagraph (C) involving the movement of funds into or out of the United States, the Attorney General may apply to any Federal judge or magistrate judge in the district in which the arrest is made or the charges are filed for an ex parte order restraining any account held by the person arrested or charged for not more than 30 days, except that such 30-day time period may be extended for good cause shown at a hearing conducted in the manner provided in Rule 43(c) of the Federal Rules of Civil Procedure. The court may receive and consider evidence and information submitted by the Government that would be inadmissible under the Federal Rules of Evidence. (B) The application for the restraining order referred to in subparagraph (A) shall— (i) identify the offense for which the person has been arrested or charged; (ii) identify the location and description of the accounts to be restrained; and (iii) state that the restraining order is needed to prevent the removal of the funds in the account by the person arrested or charged, or by other persons associated with that person, during the time needed by the Government to conduct such investigation as may be necessary to establish whether there is probable cause to believe that the funds in the accounts are subject to forfeiture in connection with the commission of any criminal offense. (C) A restraining order may be issued under subparagraph (A) if a person is arrested or charged with any offense for which forfeiture is authorized under— (i) this title; (ii) title 31; or (iii) the Controlled Substances Act ( 21 U.S.C. 801 (D) For purposes of this paragraph— (i) the term account (ii) the term account held by the person arrested or charged (E) Restraint under this paragraph shall not be deemed a seizure for purposes of section 983(a). (F) A restraining order issued under this paragraph may be executed in any district in which the subject account is found, or transmitted to the central authority of any foreign State for service in accordance with any treaty or other international agreement. . 9. Prohibiting money laundering through hawalas, other informal value transfer systems, and closely related transactions The matter following section 1956(a)(1)(B)(ii) of title 18, United States Code, is amended by striking For purposes of this paragraph, a financial transaction For purposes of this paragraph and section 1957, a financial transaction or a monetary transaction, as applicable, 10. Technical amendment to restore wiretap authority for certain money laundering and counterfeiting offenses (a) Currency reporting offenses Section 2516(1)(g) of title 18, United States Code, is amended by striking or section 5324 of title 31, United States Code (relating to structuring transactions to evade reporting requirement prohibited) or section 5324, 5331, or 5332 of that title (relating to evasion of Federal transaction reporting requirements) (b) Money laundering Section 2516(1)(c) of title 18, United States Code, is amended by inserting section 1960 (relating to illegal money services businesses), section 659 (c) Counterfeiting Section 2516(1)(d) of title 18, United States Code, is amended by striking or 473 473, 474, or 474A 11. Making the international money laundering statute apply to tax evasion Section 1956(a)(2)(A) of title 18, United States Code, is amended— (1) by inserting (i) with the intent to promote (2) by adding at the end the following: (ii) with the intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or . 12. Conduct in aid of counterfeiting (a) In general Section 474(a) of title 18, United States Code, is amended by inserting after the paragraph beginning Whoever has in his control, custody, or possession any plate Whoever, with intent to defraud, has custody, control, or possession of any material, tool, machinery, or other equipment that can be used to make, alter, forge, or counterfeit any obligation or other security of the United States or any part of such obligation or security, except under the authority of the Secretary of the Treasury; or . (b) Foreign obligations and securities Section 481 of title 18, United States Code, is amended by inserting after the paragraph beginning Whoever, with intent to defraud Whoever, with intent to defraud, has custody, control, or possession of any material, tool, machinery, or other equipment that can be used to make, alter, forge, or counterfeit any obligation or other security of any foreign government, bank, or corporation; or . (c) Counterfeit acts Section 470 of title 18, United States Code, is amended by striking or 474 474, or 474A (d) Strengthening deterrents to counterfeiting Section 474A of title 18, United States Code, is amended— (1) in subsection (a), by inserting , custody, control (2) in subsection (b)— (A) by inserting , custody, control (B) by striking any essentially identical feature or device adapted to the making of any such obligation or security, any material or other thing made after or in similitude of any such deterrent, (3) by adding at the end the following: (d) Whoever has in his control, custody, or possession any obligation or security of the United States or any foreign government from which the ink or other distinctive counterfeit deterrent has been completely or partially removed, except under the authority of the Secretary of the Treasury, is guilty of a class B felony. . 13. Administrative subpoenas for money laundering cases Section 3486(a) of title 18, United States Code, is amended— (1) in paragraph (1)(A)— (A) in the matter preceding clause (i), by striking of relating to (B) in clause (ii), by striking or (C) in clause (iii)— (i) by striking section 3056 section 3056(a) (ii) by striking the Treasury, Homeland Security; or (D) by inserting after clause (iii) the following: (iv) an offense under section 1956, 1957, or 1960 of this title, or section 5313, 5316, 5324, 5331, or 5332 of title 31, or an offense against a foreign nation constituting specified unlawful activity under section 1956 of this title, or a criminal or civil forfeiture based upon an offense enumerated in this subparagraph or for which enforcement could be brought under section 2467 of title 28, the Attorney General, the Secretary of Homeland Security, or the Secretary of the Treasury, ; and (2) in paragraph (6)(B)— (A) in clause (iii), by striking or (B) in clause (iv), by striking the period and inserting ; or (C) by adding at the end following: (v) dissipation, destruction, removal, transfer, damage, encumbrance, or other unavailability of property that may become subject to forfeiture or an enforcement action under section 2467 of title 28. . 14. Obtaining foreign bank records from banks with United States cor­re­spon­dent accounts (a) Grand jury and trial subpoenas Section 5318(k) of title 31, United States Code, is amended— (1) in paragraph (1)— (A) by redesignating subparagraph (B) as subparagraph (C); and (B) by inserting after subparagraph (A) the following: (B) Covered financial institution The term covered financial institution ; and (2) by striking paragraph (3) and inserting the following: (3) Foreign bank records (A) Subpoena of records (i) In general Notwithstanding subsection (b), the Secretary of the Treasury or the Attorney General may issue a subpoena to any foreign bank that maintains a correspondent account in the United States and request any records relating to the correspondent account or any account at the foreign bank, including records maintained outside of the United States, that are the subject of any— (I) investigation of a violation of a criminal law of the United States; or (II) civil forfeiture action. (ii) Production of records The foreign bank on which a subpoena described in clause (i) is served shall produce all requested records and authenticate all requested records with testimony in the manner described in— (I) rule 902(12) of the Federal Rules of Evidence; or (II) section 3505 of title 18. (iii) Issuance and service of subpoena A subpoena described in clause (i)— (I) shall designate— (aa) a return date; and (bb) the judicial district in which the related investigation is proceeding; and (II) may be served— (aa) in person; (bb) by mail or fax in the United States if the foreign bank has a representative in the United States; or (cc) in a foreign country under any mutual legal assistance treaty, multilateral agreement, or other request for international legal or law enforcement assistance. (iv) Relief from subpoena (I) In general At any time before the return date of the subpoena described in clause (i), the foreign bank on which the subpoena is served may petition the district court of the United States for the judicial district in which the related investigation is proceeding, as designated in the subpoena, to modify or quash— (aa) the subpoena; or (bb) the prohibition against disclosure described in subparagraph (C). (II) Conflict with foreign secrecy or confidentiality An assertion that compliance with the subpoena would conflict with a provision of foreign secrecy or confidentiality law shall not be a basis for quashing or modifying the subpoena. (B) Acceptance of service (i) Maintaining records in the United States Any covered financial institution that maintains a correspondent account in the United States for a foreign bank shall maintain records in the United States identifying— (I) the owners of such foreign bank; and (II) the name and address of a person who— (aa) resides in the United States; and (bb) is authorized to accept service of legal process for records covered under this subsection. (ii) Law enforcement request Upon receipt of a written request from a Federal law enforcement officer for information required to be maintained under this paragraph, a covered financial institution shall provide the information to the requesting officer not later than 7 days after receipt of the request. (C) Nondisclosure of subpoena (i) In general No officer, director, partner, employee, or shareholder of, or agent or attorney for, a foreign bank on which a subpoena is served under this paragraph shall, directly or indirectly, notify any account holder involved or any person named in the subpoena issued under subparagraph (A)(i) and served on such an institution about the existence or contents of such subpoena. (ii) Damages Upon application by the Attorney General for a violation of this subparagraph, a foreign bank on which a subpoena is served under this paragraph shall be liable to the United States Government for a civil penalty in an amount equal to— (I) double the amount of the suspected criminal proceeds sent through the correspondent account of the foreign bank in the related investigation; or (II) if no such proceeds can be identified, $250,000. (D) Enforcement (i) In general If a foreign bank fails to obey a subpoena issued under subparagraph (A)(i), the Attorney General may invoke the aid of the district court of the United States for the judicial district in which the investigation or related proceeding is occurring to compel compliance with the subpoena. (ii) Court orders and contempt of court The court may— (I) issue an order requiring the foreign bank to appear before the Secretary of the Treasury or the Attorney General to produce— (aa) certified records, in accordance with— (AA) rule 902(12) of the Federal Rules of Evidence; or (BB) section 3505 of title 18; or (bb) testimony regarding the production of such records; and (II) punish any failure to obey an order issued under subclause (I) as contempt of court. (iii) Service of process All process in a case under this subparagraph shall be served on the foreign bank in the same manner as described in subparagraph (A)(iii). (E) Termination of correspondent relationship (i) Termination upon receipt of notice A covered financial institution shall terminate any correspondent relationship with a foreign bank not later than 10 business days after the date on which the covered financial institution receives written notice from the Secretary of the Treasury or the Attorney General if, after consultation with the other, the Secretary of the Treasury or Attorney General, as applicable, determines that the foreign bank has failed— (I) to comply with a subpoena issued under subparagraph (A)(i); or (II) to prevail in proceedings before— (aa) the appropriate district court of the United States after challenging such a subpoena under subparagraph (A)(iv)(I); or (bb) a court of appeals of the United States after appealing a decision of a district court of the United States under item (aa). (ii) Limitation on liability A covered financial institution shall not be liable to any person in any court or arbitration proceeding for terminating a correspondent relationship under this subparagraph or complying with a nondisclosure order under subparagraph (C). (iii) Failure to terminate relationship A covered financial institution that fails to terminate a correspondent relationship under clause (i) shall be liable for a civil penalty in an amount that is not more than $10,000 for each day that the covered financial institution fails to terminate the relationship. (F) Enforcement of civil penalties Upon application by the United States, any funds held in the correspondent account of a foreign bank that is maintained in the United States with a covered financial institution may be seized by the United States to satisfy any civil penalties that are imposed— (i) under subparagraph (C)(ii); or (ii) by the court for contempt under subparagraph (D). . (b) Fair Credit Reporting Act amendment Section 604(a)(1) of the Fair Credit Reporting Act ( 15 U.S.C. 1681b(a)(1) (1) by striking , or a , a (2) by inserting , or a subpoena issued in accordance with section 5318 of title 31, United States Code, or section 3486 of title 18, United States Code grand jury (c) Obstruction of justice Section 1510(b)(3)(B) of title 18, United States Code, is amended— (1) in the matter preceding clause (i), by striking or a Department of Justice subpoena (issued under section 3486 of title 18) , a subpoena issued under section 3486 of this title, or an order or subpoena issued in accordance with section 3512 of this title, section 5318 of title 31, or section 1782 of title 28, (2) in clause (i) by inserting , 1960, or an offense against a foreign nation constituting specified unlawful activity under section 1956, or a foreign offense for which enforcement of a foreign forfeiture judgment could be brought under section 2467 of title 28 1957 (d) Right to financial privacy act Section 1120(b)(1)(A) of the Right to Financial Privacy Act of 1978 ( 12 U.S.C. 3420(b)(1)(A) (1) by striking or 1957 , 1957, or 1960 (2) by striking and 5324 , 5322, 5324, 5331, and 5332 15. Danger pay allowance Section 151 of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 ( 5 U.S.C. 5928 Drug Enforcement Administration or Federal Bureau of Investigation Drug Enforcement Administration, the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection, or the United States Secret Service 16. Clarification of Secret Service authority to investigate money laundering Section 3056(b)(3) of title 18, United States Code, is amended— (1) by inserting money laundering, structured transactions, documents or devices, (2) by striking federally insured 17. Prohibition on concealment of ownership of account (a) In general Subchapter II of chapter 53 5333. Prohibition on concealment of ownership of account (a) In general No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the ownership or control of an account or assets held in an account with a financial institution. (b) Penalties A person convicted of an offense under subsection (a), or a conspiracy to commit such offense, shall be imprisoned for not more than 10 years, fined not more than $1,000,000, or both. (c) Forfeiture (1) Criminal forfeiture (A) In general The court, in imposing penalties under subsection (b), shall order that the defendant forfeit to the United States any property involved in the offense, or a conspiracy to commit such offense, and any property traceable thereto. (B) Procedure Section 413 of the Controlled Substances Act ( 21 U.S.C. 853 (2) Civil forfeiture (A) In general Any property involved in a violation of subsection (a), or a conspiracy to commit such violation, and any property traceable thereto may be seized and forfeited to the United States. (B) Procedure Seizures and forfeitures under this paragraph shall be governed by the provisions of chapter 46 (3) Treatment of certain property as involved in the offense In this subsection, the term property involved in (d) Financial Institution In this section, the term financial institution (1) implement a customer identification program under this title, or the regulations promulgated under this title; or (2) conduct customer due diligence under this title, or the regulations promulgated under this title. . (b) Table of sections The table of sections for subchapter II of chapter 53 5333. Prohibition on concealment of ownership of account. 18. Prohibition on concealment of the source of assets in monetary transactions (a) In general Subchapter II of chapter 53 5334. Prohibition on concealment of the source of assets in monetary transactions (a) In general No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the ownership or control of assets involved in a monetary transaction if— (1) the person or entity who owns or controls such assets is a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure, as set forth in this title or the regulations promulgated under this title; and (2) the aggregate value of the assets involved in one or more such transactions is not less than $1,000,000. (b) Source of funds No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the source of funds in a monetary transaction that— (1) involves an entity found to be a primary money laundering concern under section 5318A or the regulations promulgated under this title; and (2) violates the prohibitions or conditions prescribed under section 5318A(b)(5) or the regulations promulgated under this title. (c) Penalties A person convicted of an offense under subsection (a) or (b), or a conspiracy to commit such offense, shall be imprisoned for not more than 10 years, fined not more than $1,000,000, or both. (d) Forfeiture (1) Criminal forfeiture (A) In general The court, in imposing sentence under subsection (c), shall order that the defendant forfeit to the United States any property involved in the offense and any property traceable thereto. (B) Procedure The seizure, restraint, and forfeiture of property under this paragraph shall be governed by section 413 of the Controlled Substances Act ( 21 U.S.C. 853 (2) Civil forfeiture (A) In general Any property involved in a violation of subsection (a) or (b), or a conspiracy to commit such violation, and any property traceable thereto may be seized and forfeited to the United States. (B) Procedure Seizures and forfeitures under this paragraph shall be governed by the provisions of chapter 46 (e) Definitions In this section— (1) the term financial institution (2) the term monetary transaction (A) including any transaction that would be a financial transaction under section 1956(c)(4)(B) of title 18; and (B) not including any transaction necessary to preserve a person’s right to representation as guaranteed by the Sixth Amendment to the Constitution of the United States. . (b) Table of sections The table of sections for subchapter II of chapter 53 5334. Prohibition on concealment of the source of assets in monetary transactions. 19. Rule of construction Nothing in this Act, or any amendment made by this Act, shall be construed to apply to the authorized law enforcement, protective, or intelligence activities of the United States or of an intelligence agency of the United States.

Summary: Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2019 This bill makes changes to anti-money laundering requirements under federal criminal and banking laws. Among the changes, the bill specifies that a blank check drawn on an account containing more than $10,000 is a monetary instrument subject to international transport reporting requirements, increases the maximum criminal penalties for bulk cash smuggling, and permits the government to charge a defendant with a single count of money laundering for multiple violations that are part of the same scheme or continuing course of conduct.