I
106TH CONGRESS
1ST SESSION
H. R. 2896
To combat money laundering and protect the United States financial system,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 21, 1999
Mr. LEACH (for himself, Mr. MCCOLLUM, Mr. LAFALCE, Mrs. ROUKEMA, Ms.
WATERS, Mr. BEREUTER, Mr. BAKER, Mr. LAZIO, Mr. BACHUS, and Mr.
CASTLE) introduced the following bill; which was referred to the Com-
mittee on Banking and Financial Services, and in addition to the Com-
mittee on the Judiciary, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To combat money laundering and protect the United States
financial system, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Foreign Money Laun-
dering Deterrence and Anticorruption Act’’.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Money laundering enables international or-
ganized crime groups to control and legitimize pro-
ceeds from a wide variety of illegal activities includ-
ing theft, racketeering, terrorism, tax evasion, fraud,
insider trading, and traffic in narcotics, arms, and
other contraband. In many instances, these activities
impact United States citizens and territory and frus-
trate United States foreign policy.
(2) Money laundering by international criminal
enterprises challenges the legitimate authority of na-
tional governments, corrupts officials and profes-
sionals, endangers the financial and economic sta-
bility of nations, diminishes the efficiency of global
interest rate markets, and routinely violates legal
norms, property rights, and human rights.
(3) In some countries, such as Colombia, Mex-
ico, and Russia, the wealth and power of organized
criminal enterprises rival the wealth and power of
the government of the country.
(4) Organized criminal enterprises, such as the
Colombian and Mexican cartels, the Russian
‘‘mafiya’’, Sicilian crime families, and Chinese
gangs, are highly resistant to conventional law en-
forcement techniques, and the financial management
and organizational infrastructure of such enterprises
are highly sophisticated and difficult to track be-
cause of the globalization of the financial services in-
dustry.
(5) In addition to organized crime enterprises,
corrupt government officials around the world in-
creasingly employ sophisticated money laundering
schemes to conceal wealth they have plundered or
extorted from their nations or received as bribes,
and these practices weaken the legitimacy of foreign
states, threaten the integrity of international finan-
cial markets, and harm foreign populations—some-
times to the point of impoverishment.
(6) The existence of ‘‘offshore financial cen-
ters’’ (nations, regions, zones, and cities that in
many instances have virtually impenetrable financial
secrecy laws and weak financial regulatory and re-
porting regimes, which are tailored to violate or cir-
cumvent the laws of other nations) facilitates global
money laundering and, as some of the long-estab-
lished offshore financial centers begin to respond to
international pressure to implement internationally
acceptable standards, money-laundering transactions
have started migrating to new centers that have
been rapidly proliferating.
(7) Recent advances in communications and in-
formation technology, particularly in the field of on-
line transactions, have meant that offshore financial
centers, originally concentrated near the ‘‘onshore’’
nations whose rules they circumvented, are being es-
tablished in increasingly remote locations that are
difficult and costly for law enforcement and super-
visory authorities to monitor and visit.
SEC. 3. REQUIREMENTS RELATING TO TRANSACTIONS AND
ACCOUNTS WITH OR ON BEHALF OF FOREIGN
ENTITIES.
(a) IN GENERAL.—Subchapter II of chapter 53 of
title 31, United States Code, is amended by adding at the
end the following new section:
‘‘§ 5331. Requirements relating to transactions and
accounts with or on behalf of foreign en-
tities
‘‘(a) PROHIBITION ON OPENING OR MAINTAINING
ACCOUNTS BELONGING TO OR FOR THE BENEFIT OF UN-
IDENTIFIED OWNERS.—A financial institution may not
open or maintain any account in the United States for
a foreign entity or a representative of a foreign entity,
unless—
‘‘(1) the institution identifies, and maintains a
record of the identity of, each person having a direct
or beneficial ownership interest in the account; or
‘‘(2) some or all of the shares of the foreign en-
tity are publicly traded.
‘‘(b) PROHIBITION ON OPENING OR MAINTAINING
CORRESPONDENT ACCOUNTS OR CORRESPONDENT BANK
RELATIONSHIP WITH CERTAIN FOREIGN BANKS.—
‘‘(1) IN
GENERAL.—A depository institution
may not open or maintain a correspondent account
in the United States for or on behalf of a foreign
banking institution, or establish or maintain a cor-
respondent bank relationship with a foreign banking
institution, that—
‘‘(A) is organized under the laws of a juris-
diction outside the United States but is not li-
censed or permitted to offer, or is not offering,
any banking service to any resident of such ju-
risdiction; and
‘‘(B) is not subject to comprehensive su-
pervision or regulation on a consolidated basis
by the appropriate authorities in such jurisdic-
tion.
‘‘(2) EXCEPTION.—Paragraph (1) shall not
apply to a foreign banking institution, if the institu-
tion is an affiliate of—
‘‘(A) a depository institution; or
‘‘(B) a foreign bank (as defined in section
1(b)(7) of the International Banking Act of
1978) that is subject to comprehensive super-
vision or regulation on a consolidated basis by
the appropriate authorities in the foreign juris-
diction under whose laws it is organized.
‘‘(c) PROHIBITION ON OPENING OR MAINTAINING
PAYABLE-THROUGH ACCOUNTS FOR FOREIGN BANKING
INSTITUTIONS.—A depository institution may not open or
maintain a payable-through account in the United States
for a foreign banking institution, unless the depository in-
stitution is able—
‘‘(1) to identify each customer of the foreign
banking institution who is permitted to use the ac-
count; and
‘‘(2) with respect to each such customer, to ob-
tain the same information about the customer that
it obtains, in the ordinary course, with respect to a
customer residing in the United States who opens or
maintains an account through which they are au-
thorized to conduct the same transactions as may be
conducted through the payable-through account.
‘‘(d) DEFINITIONS.—Notwithstanding any other pro-
vision of this subchapter, for purposes of this section, the
following definitions shall apply:
‘‘(1) ACCOUNT.—The term ‘account’—
‘‘(A) means a formal banking or business
relationship established to provide regular serv-
ices, dealings, and other financial transactions;
and
‘‘(B) includes a demand deposit, savings
deposit, or other asset account and a credit ac-
count or other extension of credit.
‘‘(2) CORRESPONDENT
ACCOUNT.—The term
‘correspondent account’ means an account estab-
lished to receive deposits from and make payments
on behalf of a correspondent bank.
‘‘(3) CORRESPONDENT BANK.—The term ‘cor-
respondent bank’ means a depository institution that
accepts deposits from another financial institution
and provides services on behalf of such other finan-
cial institution.
‘‘(4) DEPOSITORY INSTITUTION.—The term ‘de-
pository institution’ has the meaning given such
term in section 19(b)(1)(A) of the Federal Reserve
Act.
‘‘(5) FOREIGN
BANKING
INSTITUTION.—The
term ‘foreign banking institution’ means a foreign
entity that engages in the business of banking, and
includes foreign commercial banks, foreign merchant
banks, and other foreign institutions that engage in
banking activities usual in connection with the busi-
ness of banking in the countries where they are or-
ganized or operating.
‘‘(6) FOREIGN ENTITY.—The term ‘foreign en-
tity’ means an entity that is not organized under the
laws of the Federal Government of the United
States, any State of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa, the Com-
monwealth of the Northern Mariana Islands, the Re-
public of the Marshall Islands, the Federated States
of Micronesia, or the Republic of Palau.
‘‘(7) PAYABLE-THROUGH ACCOUNT.—The term
‘payable-through account’ means an account, includ-
ing a transaction account (as defined in section
19(b)(1)(C) of the Federal Reserve Act), opened at
a depository institution by a foreign banking institu-
tion by means of which the foreign banking institu-
tion permits its customers to engage, either directly
or through a sub-account, in banking activities usual
in connection with the business of banking in the
United States.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter II of chapter 53 of title 31, United States
Code, is amended by inserting after the item relating to
section 5330 the following new item:
‘‘5331. Requirements relating to transactions and accounts with or on behalf of
foreign entities.’’.
(c) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply—
(1) with respect to accounts opened on or after
the date of the enactment of this Act, as of such
date; and
(2) with respect to accounts opened before the
date of the enactment of this Act, as of the end of
the 6-month period beginning on such date.
(d) RULE OF CONSTRUCTION.—No provision of the
amendment made by subsection (a) shall be construed as
requiring or authorizing a financial institution to disclose
any information described in such amendment to any
other entity.
SEC. 4. CORRUPTION IN FOREIGN GOVERNMENTS.
(a) IN GENERAL.—It is the sense of the Congress
that, in deliberations between the United States Govern-
ment and any other country on money laundering and cor-
ruption issues, the United States Government should—
(1) emphasize an approach that addresses not
only the laundering of the proceeds of traditional
criminal activity but also the increasingly endemic
problem of governmental corruption and the corrup-
tion of ruling elites; and
(2) encourage the enactment and enforcement
of laws in such country to prevent money laundering
and systemic corruption.
(b) UNITED STATES VOTES IN INTERNATIONAL FI-
NANCIAL INSTITUTIONS.—The Secretary of the Treasury
shall instruct the United States Executive Directors of
each international financial institution (as defined in sec-
tion 1701(c) of the International Financial Institutions
Act) to oppose any loan, disbursement, or other utilization
of resources by the international financial institution,
other than to address basic human needs, for any country
that the Secretary of the Treasury determines—
(1) has a high level of corruption;
(2) is not effectively implementing good govern-
ance and anticorruption measures; and
(3) is not taking meaningful steps to improve
good governance and reduce corruption.
(c) REPORT REQUIRED.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall submit an annual report to the Congress
on the deliberations between the United States and
other countries on money laundering and corruption
issues.
(2) CONTENTS OF REPORT.—Each report sub-
mitted under paragraph (1) shall contain—
(A) an assessment by the Secretary of the
extent of corruption in each country covered by
the report; and
(B) an assessment by the Secretary of the
extent to which such country maintains effec-
tive money laundering and corruption preven-
tion measures or is implementing such meas-
ures.
SEC. 5. AMENDMENTS RELATING TO REPORTING OF SUS-
PICIOUS ACTIVITIES.
(a) AMENDMENT RELATING TO CIVIL LIABILITY IM-
MUNITY FOR DISCLOSURES.—Section 5318(g)(3) of title
31, United States Code, is amended to read as follows:
‘‘(3) LIABILITY FOR DISCLOSURES.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law—
‘‘(i) any financial institution that—
‘‘(I) makes a disclosure of any
possible violation of law or regulation
to an appropriate government agency;
or
‘‘(II) makes a disclosure pursu-
ant to this subsection or any other au-
thority;
‘‘(ii) any director, officer, employee, or
agent of such institution who makes, or re-
quires another to make any such disclo-
sure; and
‘‘(iii) any independent public account-
ant who audits any such financial institu-
tion and makes a disclosure described in
clause (i),
shall not be liable to any person under any law
or regulation of the United States, any con-
stitution, law, or regulation of any State or po-
litical subdivision thereof, or under any contract
or other legally enforceable agreement (includ-
ing any arbitration agreement), for such disclo-
sure or for any failure to notify the person who
is the subject of such disclosure or any other
person identified in the disclosure.
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply to a disclosure or communica-
tion required under Federal securities law,
other than provisions of law that specifically
refer to the Currency and Foreign Transactions
Reporting Act of 1970.
‘‘(C) RULE OF CONSTRUCTION.—Subpara-
graph (A) shall not be construed as creating—
‘‘(i) any inference that the term ‘per-
son’, as used in such subparagraph, may
be construed more broadly than its ordi-
nary usage so to include any government
or agency of government; or
‘‘(ii) any immunity against, or other-
wise affecting, any civil or criminal action
brought by any government or agency of
government to enforce any constitution,
law, or regulation of such government or
agency.’’.
(b) PROHIBITION
ON NOTIFICATION
OF DISCLO-
SURES.—Section 5318(g)(2) of title 31, United States
Code, is amended to read as follows:
‘‘(2) NOTIFICATION PROHIBITED.—
‘‘(A) IN GENERAL.—If a financial institu-
tion, any director, officer, employee, or agent of
any financial institution, or any independent
public accountant who audits any financial in-
stitution, voluntarily or pursuant to this section
or any other authority, reports a suspicious
transaction to an appropriate government
agency—
‘‘(i) the financial institution, director,
officer, employee, agent, or accountant
may not notify any person involved in the
transaction that the transaction has been
reported and may not disclose any infor-
mation included in the report to any such
person; and
‘‘(ii) any other person, including any
officer or employee of any government,
who has any knowledge that such report
was made may not disclose to any person
involved in the transaction that the trans-
action has been reported or any informa-
tion included in the report.
‘‘(B) COORDINATION
WITH
PARAGRAPH
(5).—Subparagraph (A) shall not be construed
as prohibiting any financial institution, or any
director, officer, employee, or agent of such in-
stitution, from including, in a written employ-
ment reference that is provided in accordance
with paragraph (5) in response to a request
from another financial institution, information
that was included in a report to which subpara-
graph (A) applies, but such written employment
reference may not disclose that such informa-
tion was also included in any such report or
that such report was made.’’.
(c) AUTHORIZATION TO INCLUDE SUSPICIONS OF IL-
LEGAL ACTIVITY IN EMPLOYMENT REFERENCES.—Sec-
tion 5318(g) of title 31, United States Code, is amended
by adding at the end the following new paragraph:
‘‘(5) EMPLOYMENT REFERENCES MAY INCLUDE
SUSPICIONS OF INVOLVEMENT IN ILLEGAL ACTIV-
ITY.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of law and subject to subpara-
graph (B) of this paragraph and paragraph
(2)(C), any financial institution, and any direc-
tor, officer, employee, or agent of such institu-
tion, may disclose, in any written employment
reference relating to a current or former insti-
tution-affiliated party of such institution which
is provided to another financial institution in
response to a request from such other institu-
tion, information concerning the possible in-
volvement of such institution-affiliated party in
any suspicious transaction relevant to a possible
violation of law or regulation.
‘‘(B) LIMIT
ON
LIABILITY
FOR
DISCLO-
SURES.—A financial institution, and any direc-
tor, officer, employee, or agent of such institu-
tion, shall not be liable to any person under any
law or regulation of the United States, any con-
stitution, law, or regulation of any State or po-
litical subdivision thereof, or under any contract
or other legally enforceable agreement (includ-
ing any arbitration agreement), for any disclo-
sure under subparagraph (A), to the extent—
‘‘(i) the disclosure does not contain in-
formation which the institution, director,
officer, employee, agent, or accountant
knows to be false; and
‘‘(ii) the institution, director, officer,
employee, agent, or accountant has not
acted with malice or with reckless dis-
regard for the truth in making the disclo-
sure.
‘‘(C) INSTITUTION-AFFILIATED PARTY DE-
FINED.—For purposes of this paragraph, the
term ‘institution-affiliated party’ has the mean-
ing given to such term in section 3(u) of the
Federal Deposit Insurance Act, except such sec-
tion 3(u) shall be applied by substituting ‘finan-
cial institution’ for ‘insured depository institu-
tion’.’’.
(d) AMENDMENTS RELATING TO AVAILABILITY OF
SUSPICIOUS
ACTIVITY
REPORTS
FOR
OTHER
AGEN-
CIES.—Section 5319 of title 31, United States Code, is
amended—
(1) in the 1st sentence, by striking ‘‘5314, or
5316’’ and inserting ‘‘5313A, 5314, 5316, or
5318(g)’’;
(2) in the last sentence, by inserting ‘‘under
section 5313, 5313A, 5314, 5316, or 5318(g)’’ after
‘‘records of reports’’; and
(3) by adding the following new sentence after
the last sentence: ‘‘The Secretary of the Treasury
may permit the dissemination of information in any
such reports to any self-regulatory organization (as
defined in section 3(a)(26) of the Securities Ex-
change Act of 1934), if the Securities and Exchange
Commission determines that such dissemination is
necessary or appropriate to permit such organization
to perform its function under the Securities Ex-
change Act of 1934 and regulations prescribed
under such Act.’’.
SEC. 6. SPECIFIED UNLAWFUL ACTIVITIES FOR MONEY
LAUNDERING.
Section 1956(c)(7) of title 18, United States Code,
is amended—
(1) in subparagraph (B)—
(A) by striking clause (ii) and inserting the
following new clause:
‘‘(ii) any conduct constituting a crime
of violence;’’; and
(B) by adding at the end the following new
clauses:
‘‘(iv) fraud, or any scheme to defraud,
committed against a foreign government or
foreign governmental entity;
‘‘(v) bribery of a public official, or the
misappropriation, theft, or embezzlement
of public funds by or for the benefit of a
public official;
‘‘(vi) smuggling or export control vio-
lations involving munitions listed in the
United States Munitions List or tech-
nologies with military applications, as de-
SEC. 7. FALSE STATEMENTS TO FINANCIAL INSTITUTIONS
CONCERNING 
THE 
IDENTITY 
OF 
A 
CUS-
TOMER.
(a) IN GENERAL.—Chapter 47 of title 18, United
States Code (relating to fraud and false statements) is
amended by inserting after section 1007 the following new
section:
‘‘§ 1008. False statements concerning the identity of
customers of financial institutions
‘‘(a) IN
GENERAL.—Whoever knowingly in any
manner—
‘‘(1) falsifies, conceals, or covers up, or at-
tempts to falsify, conceal, or cover up, the identity
of any person in connection with any transaction
with a financial institution; or
‘‘(2) makes, or attempts to make, any materi-
ally false, fraudulent, or fictitious statement or rep-
resentation of the identity of any person in connec-
tion with a transaction with a financial institution;
or
‘‘(3) makes or uses, or attempts to make or
use, any false writing or document knowing the
same to contain any materially false, fictitious, or
fraudulent statement or entry concerning the iden-
tity of any person in connection with a transaction
with a financial institution; or
‘‘(4) uses or presents, or attempts to use or
present, in connection with a transaction with a fi-
nancial institution, an identification document or
means of identification the possession of which is a
violation of section 1028,
shall be fined under this title, imprisoned for not more
than 5 years, or both.
‘‘(b) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) IDENTIFICATION DOCUMENT AND MEANS
OF IDENTIFICATION.—The terms ‘identification doc-
ument’ and ‘means of identification’ have the mean-
ings given to such terms in section 1028(d).
‘‘(2) FINANCIAL INSTITUTION.—In addition to
the meaning given to the term ‘financial institution’
by section 20, the term ‘financial institution’ also
has the meaning given to such term in section
5312(a)(2) of title 31.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 1956(c)(7)(D) of title 18, United States Code (as
amended by section 6(2) of this Act) is amended by strik-
ing ‘‘1014 (relating to fraudulent loan’’ and inserting
‘‘section 1008 (relating to false statements concerning the
identity of customers of financial institutions), section
1014 (relating to fraudulent loan’’.
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 47 of title 18, United States Code, is amended
by inserting after the item relating to section 1007 the
following new item:
‘‘1008. False statements concerning the identity of customers of financial insti-
tutions.’’.
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