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 ‘‘Money Laundering and
Financial Crimes Strategy Act of 1998’’.
SEC. 2. MONEY LAUNDERING AND RELATED FINANCIAL
CRIMES.
(a) IN GENERAL.—Chapter 53 of title 31, United
States Code is amended by adding at the end the following
new subchapter:
‘‘SUBCHAPTER III—MONEY LAUNDERING AND
RELATED FINANCIAL CRIMES
‘‘§ 5340. Definitions
‘‘For purposes of this subchapter, the following defi-
nitions shall apply:
‘‘(1) DEPARTMENT OF THE TREASURY LAW EN-
FORCEMENT
ORGANIZATIONS.—The term ‘Depart-
ment of the Treasury law enforcement organizations’
has the meaning given to such term in section
9703(p)(1).
‘‘(2) MONEY LAUNDERING AND RELATED FI-
NANCIAL CRIME.—The term ‘money laundering and
related financial crime’ means an offense under sub-
chapter II of this chapter, chapter II of title I of
Public Law 91–508 (12 U.S.C. 1951, et seq.; com-
monly referred to as the ‘Bank Secrecy Act’), or sec-
tion 1956, 1957, or 1960 of title 18 or any related
Federal, State, or local criminal offense.
‘‘(3) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Treasury.
‘‘(4) ATTORNEY GENERAL.—The term ‘Attor-
ney General’ means the Attorney General of the
United States.
‘‘PART 1—NATIONAL MONEY LAUNDERING AND
RELATED FINANCIAL CRIMES STRATEGY
‘‘§ 5341. National money laundering and related fi-
nancial crimes strategy
‘‘(a) DEVELOPMENT
AND TRANSMITTAL
TO CON-
GRESS.—
‘‘(1) DEVELOPMENT.—The President, acting
through the Secretary and in consultation with the
Attorney General, shall develop a national strategy
for combating money laundering and related finan-
cial crimes.
‘‘(2) TRANSMITTAL
TO
CONGRESS.—By Feb-
ruary 1 of 1999, 2000, 2001, 2002, and 2003, the
President shall submit a national strategy developed
in accordance with paragraph (1) to the Congress.
‘‘(3) SEPARATE PRESENTATION OF CLASSIFIED
MATERIAL.—Any part of the strategy that involves
information which is properly classified under cri-
teria established by Executive Order shall be submit-
ted to the Congress separately in classified form.
‘‘(b) DEVELOPMENT OF STRATEGY.—The national
strategy for combating money laundering and related fi-
nancial crimes shall address any area the President, acting
through the Secretary and in consultation with the Attor-
ney General, considers appropriate, including the follow-
ing:
‘‘(1) GOALS, OBJECTIVES, AND PRIORITIES.—
Comprehensive, research-based goals, objectives, and
priorities for reducing money laundering and related
financial crime in the United States.
‘‘(2) PREVENTION.—Coordination of regulatory
and other efforts to prevent the exploitation of fi-
nancial systems in the United States for money
laundering and related financial crimes, including a
requirement that the Secretary shall—
‘‘(A) regularly review enforcement efforts
under this subchapter and other provisions of
law and, when appropriate, modify existing reg-
ulations or prescribe new regulations for pur-
poses of preventing such criminal activity; and
‘‘(B) coordinate prevention efforts and
other enforcement action with the Board of
Governors of the Federal Reserve System, the
Securities and Exchange Commission, the Fed-
eral Trade Commission, other Federal banking
agencies, the National Credit Union Adminis-
tration Board, and such other Federal agencies
as the Secretary, in consultation with the Attor-
ney General, determines to be appropriate.
‘‘(3) DETECTION
AND
PROSECUTION
INITIA-
TIVES.—A description of operational initiatives to
improve detection and prosecution of money launder-
ing and related financial crimes and the seizure and
forfeiture of proceeds and instrumentalities derived
from such crimes.
‘‘(4) ENHANCEMENT
OF
THE
ROLE
OF
THE
PRIVATE FINANCIAL SECTOR IN PREVENTION.—The
enhancement of partnerships between the private fi-
nancial sector and law enforcement agencies with re-
gard to the prevention and detection of money laun-
dering and related financial crimes, including provid-
ing incentives to strengthen internal controls and to
adopt on an industrywide basis more effective poli-
cies.
‘‘(5) ENHANCEMENT OF INTERGOVERNMENTAL
COOPERATION.—The enhancement of—
‘‘(A) cooperative efforts between the Fed-
eral Government and State and local officials,
including State and local prosecutors and other
law enforcement officials; and
‘‘(B) cooperative efforts among the several
States and between State and local officials, in-
cluding State and local prosecutors and other
law enforcement officials,
for financial crimes control which could be utilized
or should be encouraged.
‘‘(6) PROJECT AND BUDGET PRIORITIES.—A 3-
year projection for program and budget priorities
and achievable projects for reductions in financial
crimes.
‘‘(7) ASSESSMENT OF FUNDING.—A complete
assessment of how the proposed budget is intended
to implement the strategy and whether the funding
levels contained in the proposed budget are sufficient
to implement the strategy.
‘‘(8) DESIGNATED
AREAS.—A description of
geographical areas designated as ‘high-risk money
laundering and related financial crime areas’ in ac-
cordance with, but not limited to, section 5342.
‘‘(9) PERSONS CONSULTED.—Persons or offi-
cers consulted by the Secretary pursuant to sub-
section (d).
‘‘(10) DATA
REGARDING
TRENDS
IN
MONEY
LAUNDERING AND RELATED FINANCIAL CRIMES.—
The need for additional information necessary for
the purpose of developing and analyzing data in
order to ascertain financial crime trends.
‘‘(11) IMPROVED COMMUNICATIONS SYSTEMS.—
A plan for enhancing the compatibility of automated
information and facilitating access of the Federal
Government and State and local governments to
timely, accurate, and complete information.
‘‘(c) EFFECTIVENESS REPORT.—At the time each
national strategy for combating financial crimes is trans-
mitted by the President to the Congress (other than the
1st transmission of any such strategy) pursuant to sub-
section (a), the Secretary shall submit a report containing
an evaluation of the effectiveness of policies to combat
money laundering and related financial crimes.
‘‘(d) CONSULTATIONS.—In addition to the consulta-
tions required under this section with the Attorney Gen-
eral, in developing the national strategy for combating
money laundering and related financial crimes, the Sec-
retary shall consult with—
‘‘(1) the Board of Governors of the Federal Re-
serve System and other Federal banking agencies
and the National Credit Union Administration
Board;
‘‘(2) State and local officials, including State
and local prosecutors;
‘‘(3) the Securities and Exchange Commission;
‘‘(4) the Commodities and Futures Trading
Commission;
‘‘(5) the Director of the Office of National
Drug Control Policy, with respect to money launder-
ing and related financial crimes involving the pro-
ceeds of drug trafficking;
‘‘(6) the Chief of the United States Postal In-
spection Service;
‘‘(7) to the extent appropriate, State and local
officials responsible for financial institution and fi-
nancial market regulation;
‘‘(8) any other State or local government au-
thority, to the extent appropriate;
‘‘(9) any other Federal Government authority
or instrumentality, to the extent appropriate; and
‘‘(10) representatives of the private financial
services sector, to the extent appropriate.
‘‘§ 5342. High-risk money laundering and related fi-
nancial crime areas
‘‘(a) FINDINGS AND PURPOSE.—
‘‘(1) FINDINGS.—The Congress finds the fol-
lowing:
‘‘(A) Money laundering and related finan-
cial crimes frequently appear to be concentrated
in particular geographic areas, financial sys-
tems, industry sectors, or financial institutions.
‘‘(B) While the Secretary has the respon-
sibility to act with regard to Federal offenses
which are being committed in a particular local-
ity or are directed at a single institution, be-
cause modern financial systems and institutions
are interconnected to a degree which was not
possible until recently, money laundering and
other related financial crimes are likely to have
local, State, national, and international effects
wherever they are committed.
‘‘(2) PURPOSE AND OBJECTIVE.—It is the pur-
pose of this section to provide a mechanism for des-
ignating any area where money laundering or a re-
lated financial crime appears to be occurring at a
higher than average rate such that—
‘‘(A) a comprehensive approach to the
problem of such crime in such area can be de-
veloped, in cooperation with State and local law
enforcement agencies, which utilizes the author-
ity of the Secretary to prevent such activity; or
‘‘(B) such area can be targeted for law en-
forcement action.
‘‘(b) ELEMENT OF NATIONAL STRATEGY.—The des-
ignation of certain areas as areas in which money launder-
ing and related financial crimes are extensive or present
a substantial risk shall be an element of the national strat-
egy developed pursuant to section 5341(b).
‘‘(c) DESIGNATION OF AREAS.—
‘‘(1) DESIGNATION BY SECRETARY.—The Sec-
retary, after taking into consideration the factors
specified in subsection (d), shall designate any geo-
graphical area, industry, sector, or institution in the
United States in which money laundering and relat-
ed financial crimes are extensive or present a sub-
stantial risk as a ‘high-risk money laundering and
related financial crimes area’.
‘‘(2) CASE-BY-CASE
DETERMINATION
IN
CON-
SULTATION WITH THE ATTORNEY GENERAL.—In ad-
dition to the factors specified in subsection (d), any
designation of any area under paragraph (1) shall be
made on the basis of a determination by the Sec-
retary, in consultation with the Attorney General,
that the particular area, industry, sector, or institu-
tion is being victimized by, or is particularly vulner-
able to, money laundering and related financial
crimes.
‘‘(3) SPECIFIC INITIATIVES.—Any head of a de-
partment, bureau, or law enforcement agency, in-
cluding any State or local prosecutor, involved in the
detection, prevention, and suppression of money
laundering and related financial crimes and any
State or local official or prosecutor may submit—
‘‘(A) a written request for the designation
of any area as a high-risk money laundering
and related financial crimes area; or
‘‘(B) a written request for funding under
section 5351 for a specific prevention or en-
forcement initiative, or to determine the extent
of financial criminal activity, in an area.
‘‘(d) FACTORS.—In considering the designation of
any area as a high-risk money laundering and related fi-
nancial crimes area, the Secretary shall, to the extent ap-
propriate and in consultation with the Attorney General,
take into account the following factors:
‘‘(1) The population of the area.
‘‘(2) The number of bank and nonbank finan-
cial institution transactions which originate in such
area or involve institutions located in such area.
‘‘(3) The number of stock or commodities
transactions which originate in such area or involve
institutions located in such area.
‘‘(4) Whether the area is a key transportation
hub with any international ports or airports or an
extensive highway system.
‘‘(5) Whether the area is an international cen-
ter for banking or commerce.
‘‘(6) The extent to which financial crimes and
financial crime-related activities in such area are
having a harmful impact in other areas of the coun-
try.
‘‘(7) The number or nature of requests for in-
formation or analytical assistance which—
‘‘(A) are made to the analytical component
of the Department of the Treasury; and
‘‘(B) originate from law enforcement or
regulatory authorities located in such area or
involve institutions or businesses located in such
area or residents of such area.
‘‘(8) The volume or nature of suspicious activity
reports originating in the area.
‘‘(16) The extent to which a significant increase
in the allocation of Federal resources to combat fi-
nancial crimes in such area is necessary to provide
an adequate State and local response to financial
crimes and financial crime-related activities in such
area.
‘‘PART 2—FINANCIAL CRIME-FREE COMMUNITIES
SUPPORT PROGRAM
‘‘§ 5351. Establishment of financial crime-free commu-
nities support program
‘‘(a) ESTABLISHMENT.—The Secretary of the Treas-
ury, in consultation with the Attorney General, shall es-
tablish a program to support local law enforcement efforts
in the development and implementation of a program for
the detection, prevention, and suppression of money laun-
dering and related financial crimes.
‘‘(b) PROGRAM.—In carrying out the program, the
Secretary of the Treasury, in consultation with the Attor-
ney General, shall—
‘‘(1) make and track grants to grant recipients;
‘‘(2) provide for technical assistance and train-
ing, data collection, and dissemination of informa-
tion on state-of-the-art practices that the Secretary
determines to be effective in detecting, preventing,