‘‘(ii) 
RELATED
INDIVIDUALS.—Any
alien who the consular officer or the Attor-
ney General knows or has reason to believe
is the spouse, son, or daughter of an alien
inadmissible under clause (i), has, within
the previous 5 years, obtained any financial
or other benefit from such illicit activity of
that alien, and knew or reasonably should
have known that the financial or other ben-
efit was the product of such illicit activity,
is inadmissible, except that the Attorney
General may, in the full discretion of the
Attorney General, waive the exclusion of the
spouse, son, or daughter of an alien under
this clause if the Attorney General deter-
mines that exceptional circumstances exist
that justify such waiver.’’.
(b) 
CONFORMING
AMENDMENT.—Section
212(h)(1)(A)(i) of the Immigration and Nationality Act, as
amended (8 U.S.C. 1182), is amended by striking ‘‘(D)(i)
or (D)(ii)’’ and inserting ‘‘(E)(i) or (E)(ii)’’.
SEC. 114. STANDING TO CONTEST FORFEITURE OF FUNDS
DEPOSITED INTO FOREIGN BANK THAT HAS A
CORRESPONDENT ACCOUNT IN THE UNITED
STATES.
Section 981 of title 18, United States Code, is amended
by adding the following after the last subsection:
‘‘(k) CORRESPONDENT BANK ACCOUNTS.—
‘‘(1) 
TREATMENT
OF
ACCOUNTS
OF
COR-
RESPONDENT BANK IN DOMESTIC FINANCIAL INSTITU-
TIONS.—
‘‘(A) IN GENERAL.—For the purpose of a
forfeiture under this section or under the Con-
trolled Substances Act, if funds are deposited
into a dollar-denominated bank account in a for-
eign financial institution, and that foreign fi-
nancial institution has a correspondent account
with a financial institution in the United
States, the funds deposited into the foreign fi-
nancial institution (the respondent bank) shall
be deemed to have been deposited into the cor-
respondent account in the United States, and
any restraining order, seizure warrant, or arrest
warrant in rem regarding such funds may be
served on the correspondent bank, and funds in
the correspondent account up to the value of the
funds deposited into the dollar-denominated ac-
count in the foreign financial institution may be
seized, arrested or restrained.
‘‘(B) AUTHORITY TO SUSPEND.—The Attor-
ney General, in consultation with the Secretary,
may suspend or terminate a forfeiture under this
section if the Attorney General determines that a
conflict of law exists between the laws of the ju-
risdiction in which the foreign bank is located
and the laws of the United States with respect to
liabilities arising from the restraint, seizure, or
arrest of such funds, and that such suspension or
termination would be in the interest of justice
and would not harm the national interests of the
United States.
‘‘(2) NO
REQUIREMENT
FOR
GOVERNMENT
TO
TRACE
FUNDS.—If a forfeiture action is brought
against funds that are restrained, seized, or arrested
under paragraph (1), the Government shall not be re-
quired to establish that such funds are directly trace-
able to the funds that were deposited into the respond-
ent bank, nor shall it be necessary for the Government
to rely on the application of Section 984 of this title.
‘‘(3) CLAIMS
BROUGHT
BY
OWNER
OF
THE
FUNDS.—If a forfeiture action is instituted against
funds seized, arrested, or restrained under paragraph
(1), the owner of the funds may contest the forfeiture
by filing a claim pursuant to section 983.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) CORRESPONDENT ACCOUNT.—The term
‘correspondent account’ has the meaning given to
the 
term 
‘interbank 
account’ 
in 
section
984(c)(2)(B).
‘‘(B) OWNER.—
‘‘(i) IN GENERAL.—Except as provided
in clause (ii), the term ‘owner’—
‘‘(I) means the person who was
the owner, as that term is defined in
section 983(d)(6), of the funds that
were deposited into the foreign bank at
the time such funds were deposited;
and
‘‘(II) does not include either the
foreign bank or any financial institu-
tion acting as an intermediary in the
transfer of the funds into the interbank
account.
‘‘(ii) EXCEPTION.—The foreign bank
may be considered the ‘owner’ of the funds
(and no other person shall qualify as the
owner of such funds) only if—
‘‘(I) the basis for the forfeiture ac-
tion is wrongdoing committed by the
foreign bank; or
‘‘(II) the foreign bank establishes,
by a preponderance of the evidence,
that prior to the restraint, seizure, or
arrest of the funds, the foreign bank
had discharged all or part of its obliga-
tion to the prior owner of the funds, in
which case the foreign bank shall be
deemed the owner of the funds to the
extent of such discharged obligation.’’.
SEC. 115. SUBPOENAS FOR RECORDS REGARDING FUNDS IN
CORRESPONDENT BANK ACCOUNTS.
(a) IN GENERAL.—Subchapter II of chapter 53 of title
31, United States Code, is amended by inserting after sec-
tion 5331 (as added by section 101) the following new sec-
tion:
‘‘§ 5332. Subpoenas for records
‘‘(a) DESIGNATION BY FOREIGN FINANCIAL INSTITU-
TION OF AGENT.—Any foreign financial institution that
has a correspondent bank account at a financial institution
in the United States shall designate a person residing in
the United States as a person authorized to accept a sub-
poena for bank records or other legal process served on the
foreign financial institution.
‘‘(b) MAINTENANCE OF RECORDS BY DOMESTIC FINAN-
CIAL INSTITUTION.—
‘‘(1) IN GENERAL.—Any domestic financial in-
stitution that maintains a correspondent bank ac-
count for a foreign financial institution shall main-
tain records regarding the names and addresses of the
owners of the foreign financial institution, and the
name and address of the person who may be served
with a subpoena for records regarding any funds
transferred to or from the correspondent account.
‘‘(2) PROVISION TO LAW ENFORCEMENT AGEN-
CY.—A domestic financial institution shall provide
names and addresses maintained under paragraph
(1) to a Government authority (as defined in section
1101(3) of the Right to Financial Privacy Act of
1978) within 7 days of the receipt of a request, in
writing, for such records.
‘‘(c) ADMINISTRATIVE SUBPOENA.—
‘‘(1) IN GENERAL.—The Attorney General and
the Secretary of the Treasury may each issue an ad-
ministrative subpoena for records relating to the de-
posit of any funds into a dollar-denominated account
in a foreign financial institution that maintains a
correspondent account at a domestic financial institu-
tion.
‘‘(2) MANNER
OF
ISSUANCE.—Any subpoena
issued by the Attorney General or the Secretary of the
Treasury under paragraph (1) shall be issued in the
manner described in section 3486 of this title, and
may be served on the representative designated by the
foreign financial institution pursuant to subsection
(a) to accept legal process in the United States, or in
a foreign country pursuant to any mutual legal as-
sistance treaty, multilateral agreement, or other re-
quest for international law enforcement assistance.
‘‘(d) CORRESPONDENT ACCOUNT DEFINED.—For pur-
poses of this section, the term ‘correspondent account’ has
the same meaning as the term ‘interbank account’ as such
term is defined in section 984(c)(2)(B) of title 18, United
States Code.’’.
(b) CLERICAL AMENDMENTS.—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
5331 the following new item:
‘‘5332. Subpoenas for records.’’.
(c) EFFECTIVE DATE.—Section 5332(a) of title 31,
United States Code, (as added by subsection (a) of this sec-
tion shall apply after the end of the 30-day period begin-
ning on the date of the enactment of this Act.
(d) 
REQUESTS
FOR
RECORDS.—Section
3486(a)(1)(A)(i) of title 18, United States Code, is amended
by striking ‘‘; or (II) a Federal offense involving the sexual
exploitation or abuse of children,’’ and inserting ‘‘, (II) a
Federal offense involving the sexual exploitation or abuse
of children, or (III) a money laundering offense in violation
of section 1956, 1957 or 1960 of this title,’’.
SEC. 116. AUTHORITY TO ORDER CONVICTED CRIMINAL TO
RETURN PROPERTY LOCATED ABROAD.
(a) FORFEITURE OF SUBSTITUTE PROPERTY.—Sec-
tion 413(p) of the Controlled Substances Act (21 U.S.C.
853) is amended to read as follows:
‘‘(p) FORFEITURE OF SUBSTITUTE PROPERTY.—
‘‘(1) IN GENERAL.—Paragraph (2) of this sub-
section shall apply, if any property described in sub-
section (a), as a result of any act or omission of the
defendant—
‘‘(A) cannot be located upon the exercise of
due diligence;
‘‘(B) has been transferred or sold to, or de-
posited with, a third party;
‘‘(C) has been placed beyond the jurisdiction
of the court;
‘‘(D) has been substantially diminished in
value; or
‘‘(E) has been commingled with other prop-
erty which cannot be divided without difficulty.
‘‘(2) SUBSTITUTE PROPERTY.—In any case de-
scribed in any of subparagraphs (A) through (E) of
paragraph (1), the court shall order the forfeiture of
any other property of the defendant, up to the value
of any property described in subparagraphs (A)
through (E) of paragraph (1), as applicable.
‘‘(3) RETURN OF PROPERTY TO JURISDICTION.—
In the case of property described in paragraph (1)(C),
the court may, in addition to any other action au-
thorized by this subsection, order the defendant to re-
turn the property to the jurisdiction of the court so
that the property may be seized and forfeited.’’.
(b) PROTECTIVE ORDERS.—Section 413(e) of the Con-
trolled Substances Act (21 U.S.C. 853(e)) is amended by
adding at the end the following:
‘‘(4) ORDER TO REPATRIATE AND DEPOSIT.—
‘‘(A) IN GENERAL.—Pursuant to its authority to
enter a pretrial restraining order under this section,
including its authority to restrain any property for-
feitable as substitute assets, the court may order a de-
fendant to repatriate any property that may be seized
and forfeited, and to deposit that property pending
trial in the registry of the court, or with the United
States Marshals Service or the Secretary of the Treas-
ury, in an interest-bearing account, if appropriate.
‘‘(B) FAILURE TO COMPLY.—Failure to comply
with an order under this subsection, or an order to
repatriate property under subsection (p), shall be
punishable as a civil or criminal contempt of court,
and may also result in an enhancement of the sen-
tence of the defendant under the obstruction of justice
provision of the Federal Sentencing Guidelines.’’.
SEC. 117. CORPORATION REPRESENTED BY A FUGITIVE.
Section 2466 of title 28, United States Code, is amend-
ed by designating the present matter as subsection (a), and
adding at the end the following:
‘‘(b) Subsection (a) may be applied to a claim filed
by a corporation if any majority shareholder, or individual
filing the claim on behalf of the corporation is a person
to whom subsection (a) applies.’’.
SEC. 118. ENFORCEMENT OF FOREIGN JUDGMENTS.
Section 2467 of title 28, United States Code, is
amended—
(1) in subsection (d), by inserting after para-
graph (2) the following new paragraph:
‘‘(3) PRESERVATION OF PROPERTY.—To preserve
the availability of property subject to a foreign for-
feiture or confiscation judgment, the Government may
apply for, and the court may issue, a restraining
order pursuant to section 983(j) of title 18, United
States Code, at any time before or after an applica-
tion is filed pursuant to subsection (c)(1). The court,
in issuing the restraining order—
‘‘(A) may rely on information set forth in
an affidavit describing the nature of the pro-
ceeding or investigation underway in the foreign
country, and setting forth a reasonable basis to
believe that the property to be restrained will be
named in a judgment of forfeiture at the conclu-
sion of such proceeding; or
‘‘(B) may register and enforce a restraining
order that has been issued by a court of com-
petent jurisdiction in the foreign country and
certified by the Attorney General pursuant to
subsection (b)(2).
No person may object to the restraining order on any
ground that is the subject of parallel litigation involv-
ing the same property that is pending in a foreign
court.’’;
(2) in subsection (b)(1)(C), by striking ‘‘estab-
lishing that the defendant received notice of the pro-
ceedings in sufficient time to enable the defendant’’
and inserting ‘‘establishing that the foreign nation
took steps, in accordance with the principles of due
process, to give notice of the proceedings to all persons
with an interest in the property in sufficient time to
enable such persons’’;
(3) in subsection (d)(1)(D), by striking ‘‘the de-
fendant in the proceedings in the foreign court did
not receive notice’’ and inserting ‘‘the foreign nation
did not take steps, in accordance with the principles
of due process, to give notice of the proceedings to a
person with an interest in the property’’; and
(4) in subsection (a)(2)(A), by inserting ‘‘, any
violation of foreign law that would constitute a viola-
tion of an offense for which property could be forfeited
under Federal law if the offense were committed in
the United States’’ after ‘‘United Nations Conven-
tion’’.
SEC. 119. REPORTING PROVISIONS AND ANTI-TERRORIST
ACTIVITIES 
OF 
UNITED 
STATES 
INTEL-
LIGENCE AGENCIES.
(a) AMENDMENT RELATING TO THE PURPOSES OF
CHAPTER 53 OF TITLE 31, UNITED STATES CODE.—Sec-
tion 5311 of title 31, United States Code, is amended by
inserting before the period at the end the following: ‘‘, or
in the conduct of intelligence or counterintelligence activi-
ties, including analysis, to protect against international
terrorism’’.
(b) AMENDMENT RELATING TO REPORTING OF SUS-
PICIOUS ACTIVITIES.—Section 5318(g)(4)(B) of title 31,
United States Code, is amended by striking ‘‘or supervisory
agency’’ and inserting ‘‘, supervisory agency, or United
States intelligence agency for use in the conduct of intel-
ligence or counterintelligence activities, including analysis,
to protect against international terrorism’’.
(c) AMENDMENT RELATING TO AVAILABILITY OF RE-
PORTS.—Section 5319 of title 31, United States Code, is
amended to read as follows:
‘‘§ 5319. Availability of reports
‘‘The Secretary of the Treasury shall make information
in a report filed under this subchapter available to an agen-
cy, including any State financial institutions supervisory
agency or United States intelligence agency, upon request
of the head of the agency. The report shall be available for
a purpose that is consistent with this subchapter. The Sec-
retary may only require reports on the use of such informa-
tion by any State financial institutions supervisory agency
for other than supervisory purposes or by United States in-
telligence agencies. However, a report and records of reports
are exempt from disclosure under section 552 of title 5.’’.
(d) AMENDMENTS TO THE RIGHT TO FINANCIAL PRI-
VACY ACT.—The Right to Financial Privacy Act of 1978
is amended—
(1) in section 1112(a) (12 U.S.C. 3412(a)), by
inserting ‘‘, or intelligence or counterintelligence ac-
tivity, investigation or analysis related to inter-
national terrorism’’ after ‘‘legitimate law enforcement
inquiry’’;
(2) 
in 
section 
1114(a)(1) 
(12 
U.S.C.
3414(a)(1))—
(A) in subparagraph (A), by striking ‘‘or’’
at the end;
(B) in subparagraph (B), by striking the
period at the end and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(C) a Government authority authorized to
conduct investigations of, or intelligence or coun-
terintelligence analyses related to, international
terrorism for the purpose of conducting such in-
vestigations or analyses.’’; and
(3) in section 1120(a)(2) (12 U.S.C. 3420(a)(2)),
by inserting ‘‘, or for a purpose authorized by section
1112(a)’’ before the semicolon at the end.
(e) AMENDMENT TO THE FAIR CREDIT REPORTING
ACT.—
(1) IN GENERAL.—The Fair Credit Reporting
Act (15 U.S.C. 1681 et seq.) is amended—
(A) by redesignating the second of the 2 sec-
tions designated as section 624 (15 U.S.C.
1681u) (relating to disclosure to FBI for coun-
terintelligence purposes) as section 625; and
(B) by adding at the end the following new
section:
‘‘§ 626. Disclosures to governmental agencies for
counterterrorism purposes
‘‘(a) DISCLOSURE.—Notwithstanding section 604 or
any other provision of this title, a consumer reporting agen-
cy shall furnish a consumer report of a consumer and all
other information in a consumer’s file to a government
agency authorized to conduct investigations of, or intel-
ligence or counterintelligence activities or analysis related
to, international terrorism when presented with a written
certification by such government agency that such informa-
tion is necessary for the agency’s conduct or such investiga-
tion, activity or analysis.
‘‘(b) FORM OF CERTIFICATION.—The certification de-
scribed in subsection (a) shall be signed by the Secretary
of the Treasury, or an officer designated by the Secretary
from among officers of the Department of the Treasury
whose appointments to office are required to be made by
the President, by and with the advice and consent of the
Senate.
‘‘(c) CONFIDENTIALITY.—No consumer reporting agen-
cy, or officer, employee, or agent of such consumer reporting
agency, shall disclose to any person, or specify in any con-
sumer report, that a government agency has sought or ob-
tained access to information under subsection (a).
‘‘(d) RULE OF CONSTRUCTION.—Nothing in section
625 shall be construed to limit the authority of the Director
of the Federal Bureau of Investigation under this section.
‘‘(e) SAFE HARBOR.—Notwithstanding any other pro-
vision of this subchapter, any consumer reporting agency
or agent or employee thereof making disclosure of consumer
reports or other information pursuant to this section in
good-faith reliance upon a certification of a governmental
agency pursuant to the provisions of this section shall not
be liable to any person for such disclosure under this sub-
chapter, the constitution of any State, or any law or regula-
tion of any State or any political subdivision of any
State.’’.
(2) CLERICAL AMENDMENTS.—The table of sec-
tions for the Fair Credit Reporting Act (15 U.S.C.
1681 et seq.) is amended—
(A) by redesignating the second of the 2
items designated as section 624 as section 625;
and
(B) by inserting after the item relating to
section 625 (as so redesignated) the following
new item:
‘‘626. Disclosures to governmental agencies for counterterrorism purposes.’’.
SEC. 120. FINANCIAL CRIMES ENFORCEMENT NETWORK.
(a) IN GENERAL.—Subchapter I of chapter 3 of title
31, United States Code, is amended—
(1) by redesignating section 310 as section 311;
and
(2) by inserting after section 309 the following
new section:
‘‘§ 310. Financial Crimes Enforcement Network
‘‘(a) IN GENERAL.—The Financial Crimes Enforce-
ment Network established by order of the Secretary of the
Treasury (Treasury Order Numbered 105-08) on April 25,
1990, shall be a bureau in the Department of the Treasury.
‘‘(b) DIRECTOR.—
‘‘(1) APPOINTMENT.—The head of the Financial
Crimes Enforcement Network shall be the Director
who shall be appointed by the President, by and with
the consent of the Senate, to a term of 4 years.
‘‘(2) DUTIES
AND
POWERS.—The duties and
powers of the Director are as follows:
‘‘(A) Advise and make recommendations on
matters relating to financial intelligence, finan-
cial criminal activities, and other financial ac-
tivities to the Under Secretary for Enforcement.
‘‘(B) Maintain a government-wide data ac-
cess service, with access, in accordance with ap-
plicable legal requirements, to the following:
‘‘(i) Information collected by the De-
partment of the Treasury, including report
information filed under subchapters II and
III of chapter 53 of this title (such as re-
ports on cash transactions, foreign financial
agency transactions and relationships, for-
eign currency transactions, exporting and
importing monetary instruments, and sus-
picious activities), chapter 2 of Public Law
91–508, section 21 of the Federal Deposit
Insurance Act and section 6050I of the In-
ternal Revenue Code of 1986.
‘‘(ii) Information regarding national
and international currency flows.
‘‘(iii) Other records and data main-
tained by other Federal, State, local, and
foreign agencies, including financial and
other records developed in specific cases.
‘‘(iv) Other privately and publicly
available information.
‘‘(C) Analyze and disseminate the available
data in accordance with applicable legal require-
ments and policies and guidelines established by
the Secretary of the Treasury and the Under Sec-
retary for Enforcement to—
‘‘(i) identify possible criminal activity
to appropriate Federal, State, local, and
foreign law enforcement agencies;
‘‘(ii) support ongoing criminal finan-
cial investigations and prosecutions and re-
lated proceedings, including civil and
criminal tax and forfeiture proceedings;
‘‘(iii) identify possible instances of
noncompliance with subchapters II and III
of chapter 53 of this title, chapter 2 of Pub-
lic Law 91–508, and section 21 of the Fed-
eral Deposit Insurance Act to Federal agen-
cies with statutory responsibility for enforc-
ing compliance with such provisions and
other appropriate Federal regulatory agen-
cies;
‘‘(iv) evaluate and recommend possible
uses of special currency reporting require-
ments under section 5326; and
‘‘(v) determine emerging trends and
methods in money laundering and other fi-
nancial crimes.
‘‘(D) Establish and maintain a financial
crimes communications center to furnish law en-
forcement authorities with intelligence informa-
tion related to emerging or ongoing investiga-
tions and undercover operations.
‘‘(E) Furnish research, analytical, and in-
formational services to financial institutions, ap-
propriate Federal regulatory agencies with re-
gard to financial institutions, and appropriate
Federal, State, local, and foreign law enforce-
ment authorities, in accordance with policies
and guidelines established by the Secretary of the
Treasury or the Under Secretary of the Treasury
for Enforcement, in the interest of detection, pre-
vention, and prosecution of terrorism, organized
crime, money laundering, and other financial
crimes.
‘‘(F) Establish and maintain a special unit
dedicated to combatting the use of informal,
nonbank networks and payment and barter sys-
tem mechanisms that permit the transfer of
funds or the equivalent of funds without records
and without compliance with criminal and tax
laws.
‘‘(G) Provide computer and data support
and data analysis to the Secretary of the Treas-
ury for tracking and controlling foreign assets.
‘‘(H) Coordinate with financial intelligence
units in other countries on anti-terrorism and
anti-money laundering initiatives, and similar
efforts.
‘‘(I) Administer the requirements of sub-
chapters II and III of chapter 53 of this title,
chapter 2 of Public Law 91–508, and section 21
of the Federal Deposit Insurance Act, to the ex-
tent delegated such authority by the Secretary of
the Treasury.
‘‘(J) Such other duties and powers as the
Secretary of the Treasury may delegate or pre-
scribe.
‘‘(c) REQUIREMENTS RELATING TO MAINTENANCE AND
USE OF DATA BANKS.—The Secretary of the Treasury shall
establish and maintain operating procedures with respect
to the government-wide data access service and the financial
crimes communications center maintained by the Financial
Crimes Enforcement Network which provide—
‘‘(1) for the coordinated and efficient transmittal
of information to, entry of information into, and
withdrawal of information from, the data mainte-
nance 
system 
maintained 
by 
the 
Network,
including—
‘‘(A) the submission of reports through the
Internet or other secure network, whenever pos-
sible;
‘‘(B) the cataloguing of information in a
manner that facilitates rapid retrieval by law
enforcement personnel of meaningful data; and
‘‘(C) a procedure that provides for a prompt
initial review of suspicious activity reports and
other reports, or such other means as the Sec-
retary may provide, to identify information that
warrants immediate action; and
‘‘(2) in accordance with section 552a of title 5
and the Right to Financial Privacy Act of 1978, ap-
propriate standards and guidelines for determining—
‘‘(A) who is to be given access to the infor-
mation maintained by the Network;
‘‘(B) what limits are to be imposed on the
use of such information; and
‘‘(C) how information about activities or re-
lationships which involve or are closely associ-
ated with the exercise of constitutional rights is
to be screened out of the data maintenance sys-
tem.
‘‘(d) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated for the Financial Crimes
Enforcement Network such sums as may be necessary for
fiscal years 2002, 2003, 2004, and 2005.’’.
(b) COMPLIANCE WITH EXISTING REPORTS COMPLI-
ANCE.—The Secretary of the Treasury shall study methods
for improving compliance with the reporting requirements
established in section 5314 of title 31, United States Code,
and shall submit a report on such study to the Congress
by the end of the 6-month period beginning on the date of
the enactment of this Act and each 1-year period thereafter.
The initial report shall include historical data on compli-
ance with such reporting requirements.
(c) CLERICAL AMENDMENT.—The table of sections for
subchapter I of chapter 3 of title 31, United States Code,
is amended—
(1) by redesignating the item relating to section
310 as section 311; and
(2) by inserting after the item relating to section
309 the following new item:
‘‘310. Financial Crimes Enforcement Network’’.
SEC. 121. CUSTOMS SERVICE BORDER SEARCHES.
Section 5317(b) of title 31, United States Code, is
amended to read as follows:
‘‘(b) SEARCHES AT BORDER.—
‘‘(1) IN
GENERAL.—For purposes of ensuring
compliance with the laws enforced by the United
States Customs Service, a customs officer may stop
and search, at the border and without a search war-
rant, any vehicle, vessel, aircraft, or other conveyance,
any envelope or other container, and any person en-
tering, transiting, or departing from the United
States.
‘‘(2) INTERNATIONAL
SHIPMENTS
OF
MAIL.—
With respect to shipments of international mail that
are exported or imported by the United States Postal
Service, the Customs Service and other appropriate
Federal agencies shall, subject to paragraph (3),
apply the customs laws of the United States and all
other laws relating to the importation or exportation
of such shipments in the same manner to both ship-
ments by the United States Postal Service and simi-
lar shipments by private companies.
‘‘(3) SAFEGUARDS.—No provision of this sub-
section shall be construed as authorizing any customs
officer or any other person to read any correspond-
ence unless—
‘‘(A) a search warrant has been issued pur-
suant to Rule 41 of the Federal Rules of Crimi-
nal Procedure which permits such correspond-
ence to be read; or
‘‘(B) the sender or addressee of the cor-
respondence has given written consent for any
such action.’’.
SEC. 122. PROHIBITION ON FALSE STATEMENTS TO FINAN-
CIAL INSTITUTIONS CONCERNING THE IDEN-
TITY OF A CUSTOMER.
(a) IN GENERAL.—Chapter 47 of title 18, United
States Code, is amended by inserting after section 1007 the
following:
‘‘§ 1008. False statements concerning the identity of
customers of financial institutions
‘‘(a) IN GENERAL.—Whoever, in connection with in-
formation submitted to or requested by a financial institu-
tion, knowingly in any manner—
‘‘(1) falsifies, conceals, or covers up, or attempts
to falsify, conceal, or cover up, the identity of any
person in connection with any transaction with a fi-
nancial institution;
‘‘(2) makes, or attempts to make, any materially
false, fraudulent, or fictitious statement or representa-
tion of the identity of any person in connection with
a transaction with a financial institution;
‘‘(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 identity of any per-
son 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 not more than
5 years, or both.
‘‘(b) DEFINITIONS.—In this section, the following defi-
nitions shall apply:
‘‘(1) FINANCIAL INSTITUTION.—The term ‘finan-
cial institution’—
‘‘(A) has the same meaning as in section 20;
and
‘‘(B) in addition, has the same meaning as
in section 5312(a)(2) of title 31, United States
Code.
‘‘(2) IDENTIFICATION
DOCUMENT.—The term
‘identification document’ has the same meaning as in
section 1028(d).
‘‘(3) MEANS
OF
IDENTIFICATION.—The term
‘means of identification’ has the same meaning as in
section 1028(d).’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) TITLE 18, UNITED STATES CODE.—Section
1956(c)(7)(D) of title 18, United States Code, is
amended by striking ‘‘1014 (relating to fraudulent
loan’’ and inserting ‘‘section 1008 (relating to false
statements concerning the identity of customers of fi-
nancial institutions), section 1014 (relating to fraud-
ulent loan’’.
(2) TABLE OF SECTIONS.—The table of sections
for chapter 47 of title 18, United States Code, is
amended by inserting after the item relating to sec-
tion 1007 the following:
‘‘1008. False statements concerning the identity of customers of financial institu-
tions.’’.
SEC. 123. VERIFICATION OF IDENTIFICATION.
(a) IN GENERAL.—Section 5318 of title 31, United
States Code, is amended by adding at the end the following
new subsection:
‘‘(i) 
IDENTIFICATION
AND
VERIFICATION
OF
ACCOUNTHOLDERS.—
‘‘(1) IN GENERAL.—Subject to the requirements
of this subsection, the Secretary of the Treasury shall
prescribe regulations setting forth the minimum
standards regarding customer identification that shall
apply in connection with the opening of an account
at a financial institution.
‘‘(2) MINIMUM REQUIREMENTS.—The regulations
shall, at a minimum, require financial institutions to
implement procedures for—
‘‘(A) verifying the identity of any person
seeking to open an account to the extent reason-
able and practicable;
‘‘(B) maintaining records of the informa-
tion used to verify a person’s identity, including
name, address, and other identifying informa-
tion;
‘‘(C) consulting applicable lists of known or
suspected terrorists or terrorist organizations
generated by government agencies to determine
whether a person seeking to open an account ap-
pears on any such list.
‘‘(3) FACTORS
TO
BE
CONSIDERED.—In pre-
scribing regulations under this subsection, the Sec-
retary shall take into consideration the various types
of accounts maintained by various types of financial
institutions, the various methods of opening accounts,
and the various types of identifying information
available.
‘‘(4) CERTAIN FINANCIAL INSTITUTIONS.—In the
case of any financial institution the business of which
is engaging in financial activities described in section
4(k) of the Bank Holding Company Act of 1956 (in-
cluding financial activities subject to the jurisdiction
of the Commodity Futures Trading Commission), the
regulations prescribed by the Secretary under para-
graph (1) shall be prescribed jointly with each Fed-
eral functional regulator (as defined in section 509 of
the Gramm-Leach-Bliley Act, including the Com-
modity Futures Trading Commission) appropriate
for such financial institution.
‘‘(5) EXEMPTIONS.—The Secretary of the Treas-
ury (and, in the case of any financial institution de-
scribed in paragraph (4), any Federal agency de-
scribed in such paragraph) may, by regulation or
order, exempt any financial institution or type of ac-
count from the requirements of any regulation pre-
scribed under this subsection in accordance with such
standards and procedures as the Secretary may pre-
scribe.
‘‘(6) EFFECTIVE DATE.—Final regulations pre-
scribed under this subsection shall take effect before
the end of the 1-year period beginning on the date of
the enactment of the Financial Anti-Terrorism Act of
2001.’’.
(b) STUDY
AND
REPORT
REQUIRED.—Within 6
months after the date of the enactment of this Act, the Sec-
retary of the Treasury, in consultation with the Federal
functional regulators (as defined in section 509 of the
Gramm-Leach-Bliley Act) and other appropriate Govern-
ment agencies, shall submit a report to the Congress con-
taining recommendations for—
(1) determining the most timely and effective
way to require foreign nationals to provide domestic
financial institutions and agencies with appropriate
and accurate information, comparable to that which
is required of United States nationals, concerning
their identity, address, and other related information
necessary to enable such institutions and agencies to
comply with the requirements of this section;
(2) requiring foreign nationals to apply for and
obtain, before opening an account with a domestic fi-
nancial institution, an identification number which
would function similarly to a Social Security number
or tax identification number; and
(3) establishing a system for domestic financial
institutions and agencies to review information main-
tained by relevant Government agencies for purposes
of verifying the identities of foreign nationals seeking
to open accounts at those institutions and agencies.
SEC. 124. CONSIDERATION OF ANTI-MONEY LAUNDERING
RECORD.
(a) BANK HOLDING COMPANY ACT OF 1956.—
(1) IN
GENERAL.—Section 3(c) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1842(c)) is
amended by adding at the end the following new
paragraph:
‘‘(6) MONEY
LAUNDERING.—In every case the
Board shall take into consideration the effectiveness of
the company or companies in combating and pre-
venting money laundering activities, including in
overseas branches.’’.
(2) SCOPE
OF
APPLICATION.—The amendment
made by paragraph (1) shall apply with respect to
any application submitted to the Board of Governors
of the Federal Reserve System under section 3 of the
Bank Holding Company Act of 1956 after December
31, 2000, which has not been approved by the Board
before the date of the enactment of this Act.
(b) MERGERS SUBJECT TO REVIEW UNDER FEDERAL
DEPOSIT INSURANCE ACT.—
(1) IN GENERAL.—Section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)) is
amended—
(A) by redesignating paragraph (11) as
paragraph (12); and
(B) by inserting after paragraph (10), the
following new paragraph:
‘‘(11) MONEY LAUNDERING.—In every case, the
responsible agency shall take into consideration the ef-
fectiveness of any insured depository institution in-
volved in the proposed merger transaction in com-
bating and preventing money laundering activities,
including in overseas branches.’’.
(2) SCOPE
OF
APPLICATION.—The amendment
made by paragraph (1) shall apply with respect to
any application submitted to the responsible agency
under section 18(c) of the Federal Deposit Insurance
Act after December 31, 2000, which has not been ap-
proved by all appropriate responsible agencies before
the date of the enactment of this Act.
SEC. 125. REPORTING OF SUSPICIOUS ACTIVITIES BY IN-
FORMAL UNDERGROUND BANKING SYSTEMS,
SUCH AS HAWALAS.
(a) DEFINITION
FOR SUBCHAPTER.—Subparagraph
(R) of section 5312(a)(2) of title 31, United States Code,
is amended to read as follows:
‘‘(R) a licensed sender of money or any
other person who engages as a business in the
transmission of funds, including through an in-
formal value transfer banking system or network
of people facilitating the transfer of value domes-
tically or internationally outside of the conven-
tional financial institutions system;’’.
(b) 
MONEY
TRANSMITTING
BUSINESS.—Section
5330(d)(1)(A) of title 31, United States Code, is amended
by inserting before the semicolon the following: ‘‘or any
other person who engages as a business in the transmission
of funds, including through an informal value transfer
banking system or network of people facilitating the trans-
fer of value domestically or internationally outside of the
conventional financial institutions system’’.
(c) APPLICABILITY OF RULES.—Section 5318 of title
31, United States Code, as amended by this title, is amend-
ed by adding at the end the following:
‘‘(l) APPLICABILITY OF RULES.—Any rules prescribed
pursuant to the authority contained in section 21 of the
Federal Deposit Insurance Act shall apply, in addition to
any other financial institution to which such rules apply,
to any person that engages as a business in the trans-
mission of funds, including through an informal value
transfer banking system or network of people facilitating
the transfer of value domestically or internationally outside
of the conventional financial institutions system.’’.
(d) REPORT.—Not later than 1 year after the date of
enactment of this Act, the Secretary of the Treasury shall
report to Congress on the need for any additional legislation
relating to—
(1) informal value transfer banking systems or
networks of people facilitating the transfer of value
domestically or internationally outside of the conven-
tional financial institutions system;
(2) anti-money laundering controls; and
(3) regulatory controls relating to underground
money movement and banking systems, such as the
system referred to as ‘‘hawala’’, including whether the
threshold for the filing of suspicious activity reports
under section 5318(g) of title 31, United States Code
should be lowered in the case of such systems.
TITLE II—PUBLIC-PRIVATE
COOPERATION
SEC. 201. ESTABLISHMENT OF HIGHLY SECURE NETWORK.
(a) IN GENERAL.—The Secretary of the Treasury shall
establish a highly secure network in the Financial Crimes
Enforcement Network that—
(1) allows financial institutions to file reports
required under subchapter II or III of chapter 53 of
title 31, United States Code, chapter 2 of Public Law
91–508, or section 21 of the Federal Deposit Insur-
ance Act through the network; and
(2) provides financial institutions with alerts
and other information regarding suspicious activities
that warrant immediate and enhanced scrutiny.
(b) EXPEDITED DEVELOPMENT.—The Secretary of the
Treasury shall take such action as may be necessary to en-
sure that the website required under subsection (a) is fully
operational before the end of the 9-month period beginning
on the date of the enactment of this Act.
SEC. 202. REPORT ON IMPROVEMENTS IN DATA ACCESS
AND OTHER ISSUES.
Before the end of the 6-month period beginning on the
date of the enactment of this Act, the Secretary of the Treas-
ury shall report to the Congress on the following issues:
(1) DATA COLLECTION AND ANALYSIS.—Progress
made since such date of enactment in meeting the re-
quirements of section 310(c) of title 31, United States
Code (as added by this Act).
(2) BARRIERS
TO
EXCHANGE
OF
FINANCIAL
CRIME
INFORMATION.—Technical, legal, and other
barriers to the exchange of financial crime prevention
and detection information among and between Fed-
eral law enforcement agencies, including an identi-
fication of all Federal law enforcement data systems
between which or among which data cannot be shared
for whatever reason.
(3) PRIVATE BANKING.—Private banking activi-
ties in the United States, including information on
the following:
(A) The nature and extent of private bank-
ing activities in the United States.
(B) Regulatory efforts to monitor private
banking activities and ensure that such activities
are conducted in compliance with subchapter II
of chapter 53 of title 31, United States Code, and
section 21 of the Federal Deposit Insurance Act.
(C) With regard to financial institutions
that offer private banking services, the policies
and procedures of such institutions that are de-
signed to ensure compliance with the require-
ments of subchapter II of chapter 53 of title 31,
United States Code, and section 21 of the Fed-
eral Deposit Insurance Act with respect to pri-
vate banking activity.
SEC. 203. REPORTS TO THE FINANCIAL SERVICES INDUS-
TRY ON SUSPICIOUS FINANCIAL ACTIVITIES.
At least once each calendar quarter, the Secretary of
the Treasury shall—
(1) publish a report containing a detailed anal-
ysis identifying patterns of suspicious activity and
other investigative insights derived from suspicious
activity reports and investigations conducted by Fed-
eral, State, and local law enforcement agencies to the
extent appropriate; and
(2) distribute such report to financial institu-
tions (as defined in section 5312 of title 31, United
States Code).
SEC. 204. EFFICIENT USE OF CURRENCY TRANSACTION RE-
PORT SYSTEM.
(a) FINDINGS.—The Congress finds the following:
(1) The Congress established the currency trans-
action reporting requirements in 1970 because the
Congress found then that such reports have a high de-
gree of usefulness in criminal, tax, and regulatory in-
vestigations and proceedings and the usefulness of
such reports has only increased in the years since the
requirements were established.
(2) In 1994, in response to reports and testi-
mony that excess amounts of currency transaction re-
ports were interfering with effective law enforcement,
the Congress reformed the currency transaction report
exemption requirements to provide—
(A) mandatory exemptions for certain re-
ports that had little usefulness for law enforce-
ment, such as cash transfers between depository
institutions and cash deposits from government
agencies; and
(B) discretionary authority for the Sec-
retary of the Treasury to provide exemptions,
subject to criteria and guidelines established by
the Secretary, for financial institutions with re-
gard to regular business customers that maintain
accounts at an institution into which frequent
cash deposits are made.
(3) Today there is evidence that some financial
institutions are not utilizing the exemption system, or
are filing reports even if there is an exemption in ef-
fect, with the result that the volume of currency trans-
action reports is once again interfering with effective
law enforcement.
(b) STUDY AND REPORT.—
(1) STUDY
REQUIRED.—The Secretary of the
Treasury shall conduct a study of—
(A) the possible expansion of the statutory
exemption system in effect under 5313 of title 31,
United States Code; and
(B) methods for improving financial insti-
tution utilization of the statutory exemption pro-
visions as a way of reducing the submission of
currency transaction reports that have little or
no value for law enforcement purposes, including
improvements in the systems in effect at finan-
cial institutions for regular review of the exemp-
tion procedures used at the institution and the
training of personnel in its effective use.
(2) REPORT REQUIRED.—The Secretary of the
Treasury shall submit a report to the Congress before
the end of the 90-day period beginning on the date of
the enactment of this Act containing the findings and
conclusions of the Secretary with regard to the study
required under subsection (a) and such recommenda-
tions for legislative or administrative action as the
Secretary determines to be appropriate.
SEC. 205. PUBLIC-PRIVATE TASK FORCE ON TERRORIST FI-
NANCING ISSUES.
Section 1564 of the Annunzio-Wylie Anti-Money
Laundering Act (31 U.S.C. 5311 note) is amended by add-
ing at the end the following new subsection:
‘‘(d) TERRORIST FINANCING ISSUES.—
‘‘(1) IN GENERAL.—The Secretary of the Treas-
ury shall provide, either within the Bank Secrecy Act
Advisory Group, or as a subcommittee or other ad-
junct of the Advisory Group, for a task force of rep-
resentatives from agencies and officers represented on
the Advisory Group, a representative of the Director
of the Office of Homeland Security, and representa-
tives of financial institutions, private organizations
that represent the financial services industry, and
other interested parties to focus on—
‘‘(A) issues specifically related to the fi-
nances of terrorist groups, the means terrorist
groups use to transfer funds around the world
and within the United States, including through
the use of charitable organizations, nonprofit or-
ganizations, and nongovernmental organizations,
and the extent to which financial institutions in
the United States are unwittingly involved in
such finances and the extent to which such insti-
tutions are at risk as a result;
‘‘(B) the relationship, particularly the fi-
nancial relationship, between international nar-
cotics traffickers and foreign terrorist organiza-
tions, the extent to which their memberships
overlap and engage in joint activities, and the
extent to which they cooperate with each other in
raising and transferring funds for their respec-
tive purposes; and
‘‘(C) means of facilitating the identification
of accounts and transactions involving terrorist
groups and facilitating the exchange of informa-
tion concerning such accounts and transactions
between financial institutions and law enforce-
ment organizations.
‘‘(2) APPLICABILITY
OF
OTHER
PROVISIONS.—
Sections 552, 552a, and 552b of title 5, United States
Code, and the Federal Advisory Committee Act shall
not apply to the task force established pursuant to
paragraph (1).’’.
SEC. 206. SUSPICIOUS ACTIVITY REPORTING REQUIRE-
MENTS.
(a) DEADLINE FOR SUSPICIOUS ACTIVITY REPORTING
REQUIREMENTS FOR REGISTERED BROKERS AND DEAL-
ERS.—The Secretary of the Treasury, in consultation with
the Securities and Exchange Commission, shall publish pro-
posed regulations in the Federal Register before January
1, 2002, requiring brokers and dealers registered with the
Securities and Exchange Commission under the Securities
Exchange Act of 1934 to submit suspicious activity reports
under section 5318(g) of title 31, United States Code. Such
regulations shall be published in final form no later than
June 1, 2002.
(b) SUSPICIOUS ACTIVITY REPORTING REQUIREMENTS
FOR
FUTURES
COMMISSION
MERCHANTS, COMMODITY
TRADING ADVISORS, AND COMMODITY POOL OPERATORS.—
The Secretary of the Treasury, in consultation with the
Commodity Futures Trading Commission, may prescribe
regulations requiring futures commission merchants, com-
modity trading advisors, and commodity pool operators
registered under the Commodity Exchange Act to submit
suspicious activity reports under section 5318(g) of title 31,
United States Code.
SEC. 207. AMENDMENTS RELATING TO REPORTING OF SUS-
PICIOUS ACTIVITIES.
(a) AMENDMENT RELATING TO CIVIL LIABILITY IMMU-
NITY 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.—Any financial institu-
tion that makes a voluntary disclosure of any
possible violation of law or regulation to a gov-
ernment agency or makes a disclosure pursuant
to this subsection or any other authority, and
any director, officer, employee, or agent of such
institution who makes, or requires another to
make any such disclosure, shall not be liable to
any person under any law or regulation of the
United States, any constitution, law, or regula-
tion of any State or political subdivision of any
State, or under any contract or other legally en-
forceable agreement (including any arbitration
agreement), for such disclosure or for any failure
to provide notice of such disclosure to any per-
son.
‘‘(B) 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 ordinary
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 agen-
cy.’’.
(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 or any director, officer, employee, or agent
of any financial institution, voluntarily or pur-
suant to this section or any other authority, re-
ports a suspicious transaction to a government
agency—
‘‘(i) the financial institution, director,
officer, employee, or agent may not notify
any person involved in the transaction that
the transaction has been reported; and
‘‘(ii) no officer or employee of the Fed-
eral Government or of any State, local, trib-
al, or territorial government within the
United States, who has any knowledge that
such report was made may disclose to any
person involved in the transaction that the
transaction has been reported other than as
necessary to fulfill the official duties of such
officer or employee.
‘‘(B) DISCLOSURES
IN
CERTAIN
EMPLOY-
MENT
REFERENCES.—Notwithstanding the ap-
plication of subparagraph (A) in any other con-
text, subparagraph (A) shall not be construed as
prohibiting any financial institution, or any di-
rector, officer, employee, or agent of such institu-
tion, from including, in a written employment
reference that is provided in accordance with sec-
tion 18(v) of the Federal Deposit Insurance Act
in response to a request from another financial
institution or a written termination notice or
employment reference that is provided in accord-
ance with the rules of the self-regulatory organi-
zations registered with the Securities and Ex-
change Commission, information that was in-
cluded in a report to which subparagraph (A)
applies, but such written employment reference
may not disclose that such information was also
included in any such report or that such report
was made.’’.
SEC. 208. AUTHORIZATION TO INCLUDE SUSPICIONS OF IL-
LEGAL ACTIVITY IN WRITTEN EMPLOYMENT
REFERENCES.
Section 18 of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended by adding at the end the following
new subsection:
‘‘(w) WRITTEN EMPLOYMENT REFERENCES MAY CON-
TAIN SUSPICIONS OF INVOLVEMENT IN ILLEGAL ACTIV-
ITY.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, any insured depository institution,
and any director, officer, employee, or agent of such
institution, may disclose in any written employment
reference relating to a current or former institution-
affiliated party of such institution which is provided
to another insured depository institution in response
to a request from such other institution, information
concerning the possible involvement of such institu-
tion-affiliated party in potentially unlawful activity,
to the extent—
‘‘(A) the disclosure does not contain infor-
mation which the institution, director, officer,
employee, or agent knows to be false; and
‘‘(B) the institution, director, officer, em-
ployee, or agent has not acted with malice or
with reckless disregard for the truth in making
the disclosure.
‘‘(2) DEFINITION.—For purposes of this sub-
section, the term ‘insured depository institution’ in-
cludes any uninsured branch or agency of a foreign
bank.’’.
SEC. 209. INTERNATIONAL COOPERATION ON IDENTIFICA-
TION OF ORIGINATORS OF WIRE TRANSFERS.
The Secretary of the Treasury shall—
(1) in consultation with the Attorney General
and the Secretary of State, take all reasonable steps
to encourage foreign governments to require the inclu-
sion of the name of the originator in wire transfer in-
structions sent to the United States and other coun-
tries, with the information to remain with the trans-
fer from its origination until the point of disburse-
ment; and
(2) report annually to the Committee on Finan-
cial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs
of the Senate on—
(A) progress toward the goal enumerated in
paragraph (1), as well as impediments to imple-
mentation and an estimated compliance rate;
and
(B) impediments to instituting a regime in
which all appropriate identification, as defined
by the Secretary, about wire transfer recipients
shall be included with wire transfers from their
point of origination until disbursement.
SEC. 210. CHECK TRUNCATION STUDY.
Before the end of the 90-day period beginning on the
date of the enactment of this Act, the Secretary of the Treas-
ury, in consultation with the Attorney General and the
Board of Governors of the Federal Reserve System, shall
conduct a study of the impact on crime prevention, law en-
forcement, and the administration of consumer protection
laws of any policy of the Board of Governors of the Federal
Reserve System relating to the promotion of check
electronification, through truncation or other means, or mi-
gration from paper checks.
TITLE III—COMBATTING INTER-
NATIONAL 
MONEY 
LAUN-
DERING
SEC. 301. SPECIAL MEASURES FOR JURISDICTIONS, FINAN-
CIAL 
INSTITUTIONS, 
OR 
INTERNATIONAL
TRANSACTIONS OF PRIMARY MONEY LAUN-
DERING CONCERN.
(a) IN GENERAL.—Subchapter II of chapter 53 of title
31, United States Code, is amended by inserting after sec-
tion 5318 the following new section:
‘‘§ 5318A. Special measures for jurisdictions, financial
institutions, or international transactions
of primary money laundering concern
‘‘(a) INTERNATIONAL COUNTER-MONEY LAUNDERING
REQUIREMENTS.—
‘‘(1) IN GENERAL.—The Secretary may require
domestic financial institutions and domestic financial
agencies to take 1 or more of the special measures de-
scribed in subsection (b) if the Secretary finds that
reasonable grounds exist for concluding that a juris-
diction outside of the United States, 1 or more finan-
cial institutions operating outside of the United
States, 1 or more classes of transactions within, or in-
volving, a jurisdiction outside of the United States, or
1 or more types of accounts is of primary money
laundering concern, in accordance with subsection (c).
‘‘(2) FORM
OF
REQUIREMENT.—The special
measures described in—
‘‘(A) subsection (b) may be imposed in such
sequence or combination as the Secretary shall
determine;
‘‘(B) paragraphs (1) through (4) of sub-
section (b) may be imposed by regulation, order,
or otherwise as permitted by law; and
‘‘(C) subsection (b)(5) may be imposed only
by regulation.
‘‘(3) DURATION OF ORDERS; RULEMAKING.—Any
order by which a special measure described in para-
graphs (1) through (4) of subsection (b) is imposed
(other than an order described in section 5326)—
‘‘(A) shall be issued together with a notice
of proposed rulemaking relating to the imposi-
tion of such special measure; and
‘‘(B) may not remain in effect for more
than 120 days, except pursuant to a regulation
prescribed on or before the end of the 120-day pe-
riod beginning on the date of issuance of such
order.
‘‘(4) PROCESS FOR SELECTING SPECIAL MEAS-
URES.—In selecting which special measure or meas-
ures to take under this subsection, the Secretary—
‘‘(A) shall consult with the Chairman of the
Board of Governors of the Federal Reserve Sys-
tem, any other appropriate Federal banking
agency (as defined in section 3 of the Federal
Deposit Insurance Act), the Securities and Ex-
change Commission, the National Credit Union
Administration Board, and in the sole discretion
of the Secretary such other agencies and inter-
ested parties as the Secretary may find to be ap-
propriate; and
‘‘(B) shall consider—
‘‘(i) whether similar action has been or
is being taken by other nations or multilat-
eral groups;
‘‘(ii) whether the imposition of any
particular special measure would create a
significant competitive disadvantage, in-
cluding any undue cost or burden associated
with compliance, for financial institutions
organized or licensed in the United States;
and
‘‘(iii) the extent to which the action or
the timing of the action would have a sig-
nificant adverse systemic impact on the
international payment, clearance, and set-
tlement system, or on legitimate business
activities involving the particular jurisdic-
tion, institution, or class of transactions.
‘‘(5) NO LIMITATION ON OTHER AUTHORITY.—
This section shall not be construed as superseding or
otherwise restricting any other authority granted to
the Secretary, or to any other agency, by this sub-
chapter or otherwise.
‘‘(b) SPECIAL MEASURES.—The special measures re-
ferred to in subsection (a), with respect to a jurisdiction
outside of the United States, financial institution operating
outside of the United States, class of transaction within,
or involving, a jurisdiction outside of the United States,
or 1 or more types of accounts are as follows:
‘‘(1) RECORDKEEPING AND REPORTING OF CER-
TAIN FINANCIAL TRANSACTIONS.—
‘‘(A) IN GENERAL.—The Secretary may re-
quire any domestic financial institution or do-
mestic financial agency to maintain records, file
reports, or both, concerning the aggregate
amount of transactions, or concerning each
transaction, with respect to a jurisdiction out-
side of the United States, 1 or more financial in-
stitutions operating outside of the United States,
1 or more classes of transactions within, or in-
volving, a jurisdiction outside of the United
States, or 1 or more types of accounts if the Sec-
retary finds any such jurisdiction, institution, or
class of transactions to be of primary money
laundering concern.
‘‘(B) FORM OF RECORDS AND REPORTS.—
Such records and reports shall be made and re-
tained at such time, in such manner, and for
such period of time, as the Secretary shall deter-
mine, and shall include such information as the
Secretary may determine, including—
‘‘(i) the identity and address of the
participants in a transaction or relation-
ship, including the identity of the origi-
nator of any funds transfer;
‘‘(ii) the legal capacity in which a par-
ticipant in any transaction is acting;
‘‘(iii) the identity of the beneficial
owner of the funds involved in any trans-
action, in accordance with such procedures
as the Secretary determines to be reasonable
and practicable to obtain and retain the in-
formation; and
‘‘(iv) a description of any transaction.
‘‘(2) INFORMATION
RELATING
TO
BENEFICIAL
OWNERSHIP.—In addition to any other requirement
under any other provision of law, the Secretary may
require any domestic financial institution or domestic
financial agency to take such steps as the Secretary
may determine to be reasonable and practicable to ob-
tain and retain information concerning the beneficial
ownership of any account opened or maintained in
the United States by a foreign person (other than a
foreign entity whose shares are subject to public re-
porting requirements or are listed and traded on a
regulated exchange or trading market), or a represent-
ative of such a foreign person, that involves a juris-
diction outside of the United States, 1 or more finan-
cial institutions operating outside of the United
States, 1 or more classes of transactions within, or in-
volving, a jurisdiction outside of the United States, or
1 or more types of accounts if the Secretary finds any
such jurisdiction, institution, transaction, or account
to be of primary money laundering concern.
‘‘(3) INFORMATION RELATING TO CERTAIN PAY-
ABLE-THROUGH ACCOUNTS.—If the Secretary finds a
‘‘(4) INFORMATION RELATING TO CERTAIN COR-
RESPONDENT ACCOUNTS.—If the Secretary finds a ju-
risdiction outside of the United States, 1 or more fi-
nancial institutions operating outside of the United
States, or 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States
to be of primary money laundering concern, the Sec-
retary may require any domestic financial institution
or domestic financial agency that opens or maintains
a correspondent account in the United States for a
foreign financial institution involving any such juris-
diction or any such financial institution operating
outside of the United States, or a correspondent ac-
count through which any such transaction may be
conducted, as a condition of opening or maintaining
such account—
‘‘(A) to identify each customer (and rep-
resentative of such customer) of any such finan-
cial institution who is permitted to use, or whose
transactions are routed through, such cor-
respondent account; and
‘‘(B) to obtain, with respect to each such
customer (and each such representative), infor-
mation that is substantially comparable to that
which the depository institution obtains in the
ordinary course of business with respect to its
customers residing in the United States.
‘‘(5) PROHIBITIONS OR CONDITIONS ON OPENING
OR MAINTAINING CERTAIN CORRESPONDENT OR PAY-
ABLE-THROUGH ACCOUNTS.—If the Secretary finds a
jurisdiction outside of the United States, 1 or more fi-
nancial institutions operating outside of the United
States, or 1 or more classes of transactions within, or
involving, a jurisdiction outside of the United States
to be of primary money laundering concern, the Sec-
retary, in consultation with the Secretary of State,
the Attorney General, and the Chairman of the Board
of Governors of the Federal Reserve System, may pro-
hibit, or impose conditions upon, the opening or
maintaining in the United States of a correspondent
account or payable-through account by any domestic
financial institution or domestic financial agency for
or on behalf of a foreign banking institution, if such
correspondent account or payable-through account in-
volves any such jurisdiction or institution, or if any
such transaction may be conducted through such cor-
respondent account or payable-through account.
‘‘(c) CONSULTATIONS AND INFORMATION TO BE CON-
SIDERED
IN
FINDING
JURISDICTIONS, INSTITUTIONS,
TYPES OF ACCOUNTS, OR TRANSACTIONS TO BE OF PRI-
MARY MONEY LAUNDERING CONCERN.—
‘‘(1) IN GENERAL.—In making a finding that
reasonable grounds exist for concluding that a juris-
diction outside of the United States, 1 or more finan-
cial institutions operating outside of the United
States, 1 or more classes of transactions within, or in-
volving, a jurisdiction outside of the United States, or
1 or more types of accounts is of primary money
laundering concern so as to authorize the Secretary to
take 1 or more of the special measures described in
subsection (b), the Secretary shall consult with the
Secretary of State, and the Attorney General.
‘‘(2) ADDITIONAL CONSIDERATIONS.—In making
a finding described in paragraph (1), the Secretary
shall consider in addition such information as the
Secretary determines to be relevant, including the fol-
lowing potentially relevant factors:
‘‘(A) JURISDICTIONAL
FACTORS.—In the
case of a particular jurisdiction—
‘‘(i) evidence that organized criminal
groups, international terrorists, or both,
have transacted business in that jurisdic-
tion;
‘‘(ii) the extent to which that jurisdic-
tion or financial institutions operating in
that jurisdiction offer bank secrecy or spe-
cial regulatory advantages to nonresidents
or nondomiciliaries of that jurisdiction;
‘‘(iii) the substance and quality of ad-
ministration of the bank supervisory and
counter-money laundering laws of that ju-
risdiction;
‘‘(iv) the relationship between the vol-
ume of financial transactions occurring in
that jurisdiction and the size of the economy
of the jurisdiction;
‘‘(v) the extent to which that jurisdic-
tion is characterized as an offshore banking
or secrecy haven by credible international
organizations or multilateral expert groups;
‘‘(vi) whether the United States has a
mutual legal assistance treaty with that ju-
risdiction, and the experience of United
States law enforcement officials, and regu-
latory officials in obtaining information
about transactions originating in or routed
through or to such jurisdiction; and
‘‘(vii) the extent to which that jurisdic-
tion is characterized by high levels of offi-
cial or institutional corruption.
‘‘(B) INSTITUTIONAL FACTORS.—In the case
of a decision to apply 1 or more of the special
measures described in subsection (b) only to a fi-
nancial institution or institutions, or to a trans-
action or class of transactions, or to a type of ac-
count, or to all 3, within or involving a par-
ticular jurisdiction—
‘‘(i) the extent to which such financial
institutions, transactions, or types of ac-
counts are used to facilitate or promote
money laundering in or through the juris-
diction;
‘‘(ii) the extent to which such institu-
tions, transactions, or types of accounts are
used for legitimate business purposes in the
jurisdiction; and
‘‘(iii) the extent to which such action is
sufficient to ensure, with respect to trans-
actions involving the jurisdiction and insti-
tutions operating in the jurisdiction, that
the purposes of this subchapter continue to
be fulfilled, and to guard against inter-
national money laundering and other fi-
nancial crimes.
‘‘(d) NOTIFICATION OF SPECIAL MEASURES INVOKED
BY THE SECRETARY.—Not later than 10 days after the date
of any action taken by the Secretary under subsection
(a)(1), the Secretary shall notify, in writing, the Committee
on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs
of the Senate of any such action.
‘‘(e) DEFINITIONS.—Notwithstanding any other provi-
sion of this subchapter, for purposes of this section, the fol-
lowing definitions shall apply:
‘‘(1) BANK DEFINITIONS.—The following defini-
tions shall apply with respect to a bank:
‘‘(A) ACCOUNT.—The term ‘account’—
‘‘(i) means a formal banking or busi-
ness relationship established to provide reg-
ular services, dealings, and other financial
transactions; and
‘‘(ii) includes a demand deposit, sav-
ings deposit, or other transaction or asset
account and a credit account or other exten-
sion of credit.
‘‘(B) CORRESPONDENT ACCOUNT.—The term
‘correspondent account’ means an account estab-
lished to receive deposits from, make payments
on behalf of a foreign financial institution, or
handle other financial transactions related to
such institution.
‘‘(C) PAYABLE-THROUGH
ACCOUNT.—The
term ‘payable-through account’ means an ac-
count, including a transaction account (as de-
fined in section 19(b)(1)(C) of the Federal Re-
serve Act), opened at a depository institution by
a foreign financial institution by means of which
the foreign financial institution permits its cus-
tomers to engage, either directly or through a
subaccount, in banking activities usual in con-
nection with the business of banking in the
United States.
‘‘(D) SECRETARY.—The term ‘Secretary’
means the Secretary of the Treasury.
‘‘(2) DEFINITIONS APPLICABLE TO INSTITUTIONS
OTHER THAN BANKS.—With respect to any financial
institution other than a bank, the Secretary shall,
after consultation with the appropriate Federal func-
tional regulators (as defined in section 509 of the
Gramm-Leach-Bliley Act), define by regulation the
term ‘account’, and shall include within the meaning
of that term, to the extent, if any, that the Secretary
deems appropriate, arrangements similar to payable-
through and correspondent accounts.
‘‘(3) REGULATORY DEFINITION.—The Secretary
shall promulgate regulations defining beneficial own-
ership of an account for purposes of this subchapter.
Such regulations shall address issues related to an in-
dividual’s authority to fund, direct, or manage the
account (including the power to direct payments into
or out of the account), and an individual’s material
interest in the income or corpus of the account, and
shall ensure that the identification of individuals
under this section does not extend to any individual
whose beneficial interest in the income or corpus of
the account is immaterial.
‘‘(4) OTHER
TERMS.—The Secretary may, by
regulation, further define the terms in paragraphs (1)
and (2) and define other terms for the purposes of this
section, as the Secretary deems appropriate.’’.
(b) FINANCIAL INSTITUTIONS SPECIFIED
IN SUB-
CHAPTER II OF CHAPTER 53 OF TITLE 31, UNITED STATES
CODE.—
(1) CREDIT UNIONS.—Subparagraph (E) of sec-
tion 5312(2) of title 31, United States Code, is
amended to read as follows:
‘‘(E) any credit union;’’.
(2) FUTURES
COMMISSION
MERCHANT; COM-
MODITY TRADING ADVISOR; COMMODITY POOL OPER-
ATOR.—Section 5312 of title 31, United States Code,
is amended by adding at the end the following new
subsection:
‘‘(c) ADDITIONAL DEFINITIONS.—For purposes of this
subchapter, the following definitions shall apply:
‘‘(1) CERTAIN INSTITUTIONS INCLUDED IN DEFI-
NITION.—The term ‘financial institution’ (as defined
in subsection (a)) includes the following:
‘‘(A) Any futures commission merchant,
commodity trading advisor, or commodity pool
operator registered, or required to register, under
the Commodity Exchange Act.’’.
(3) CFTC INCLUDED.—For purposes of this Act
and any amendment made by this Act to any other
provision of law, the term ‘‘Federal functional regu-
lator’’ includes the Commodity Futures Trading Com-
mission.
(c) 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
5318 the following new item:
‘‘5318A. Special measures for jurisdictions, financial institutions, or international
transactions of primary money laundering concern.’’.
SEC. 302. SPECIAL DUE DILIGENCE FOR CORRESPONDENT
ACCOUNTS 
AND 
PRIVATE 
BANKING 
AC-
COUNTS.
(a) IN GENERAL.—Section 5318 of title 31, United
States Code, is amended by inserting after subsection (i)
(as added by section 123 of this Act) the following new sub-
section:
‘‘(j) DUE DILIGENCE FOR UNITED STATES PRIVATE
BANKING AND CORRESPONDENT BANK ACCOUNTS INVOLV-
ING FOREIGN PERSONS.—
‘‘(1) IN GENERAL.—Each financial institution
that establishes, maintains, administers, or manages
a private banking account or a correspondent account
in the United States for a non-United States person,
including a foreign individual visiting the United
States, or a representative of a non-United States
person, shall establish appropriate, specific, and,
where necessary, enhanced due diligence policies, pro-
cedures, and controls to detect and report instances of
money laundering through those accounts.
‘‘(2) MINIMUM STANDARDS FOR CORRESPONDENT
ACCOUNTS.—
‘‘(A) 
IN
GENERAL.—Subparagraph 
(B)
shall apply if a correspondent account is re-
quested or maintained by, or on behalf of, a for-
eign bank operating—
‘‘(i) under an offshore banking license;
or
‘‘(ii) under a banking license issued by
a 
foreign 
country 
that 
has 
been
designated—
‘‘(I) as noncooperative with inter-
national anti-money laundering prin-
ciples or procedures by an intergovern-
mental group or organization of which
the United States is a member with
which designation the Secretary of the
Treasury concurs; or
‘‘(II) by the Secretary as war-
ranting special measures due to money
laundering concerns.
‘‘(B) POLICIES, PROCEDURES, AND
CON-
TROLS.—The enhanced due diligence policies,
procedures, and controls required under para-
graph (1) for foreign banks described in subpara-
graph (A) shall, at a minimum, ensure that the
financial institution in the United States takes
reasonable steps—
‘‘(i) to ascertain for any such foreign
bank, the shares of which are not publicly
traded, the identity of each of the owners of
the foreign bank, and the nature and extent
of the ownership interest of each such
owner;
‘‘(ii) to conduct enhanced scrutiny of
such account to guard against money laun-
dering and report any suspicious trans-
actions under section 5318(g); and
‘‘(iii) to ascertain whether such foreign
bank provides correspondent accounts to
other foreign banks and, if so, the identity
of those foreign banks and related due dili-
gence information, as appropriate under
paragraph (1).
‘‘(3) MINIMUM STANDARDS FOR PRIVATE BANK-
ING ACCOUNTS.—If a private banking account is re-
quested or maintained by, or on behalf of, a non-
United States person, then the due diligence policies,
procedures, and controls required under paragraph
(1) shall, at a minimum, ensure that the financial in-
stitution takes reasonable steps—
‘‘(A) to ascertain the identity of the nomi-
nal and beneficial owners of, and the source of
funds deposited into, such account as needed to
guard against money laundering and report any
suspicious transactions under section 5318(g);
and
‘‘(B) to conduct enhanced scrutiny of any
such account that is requested or maintained by,
or on behalf of, a senior foreign political figure,
or any immediate family member or close asso-
ciate of a senior foreign political figure, to pre-
vent, detect, and report transactions that may
involve the proceeds of foreign corruption.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) OFFSHORE
BANKING
LICENSE.—The
term ‘offshore banking license’ means a license to
conduct banking activities which, as a condition
of the license, prohibits the licensed entity from
conducting banking activities with the citizens
of, or with the local currency of, the country
which issued the license.
‘‘(B) PRIVATE BANK ACCOUNT.—The term
‘private bank account’ means an account (or any
combination of accounts) that—
‘‘(i) requires a minimum aggregate de-
posits of funds or other assets of not less
than $1,000,000;
‘‘(ii) is established on behalf of 1 or
more individuals who have a direct or bene-
ficial ownership interest in the account; and
‘‘(iii) is assigned to, or is administered
or managed by, in whole or in part, an offi-
cer, employee, or agent of a financial insti-
tution acting as a liaison between the fi-
nancial institution and the direct or bene-
ficial owner of the account.
‘‘(5) REGULATORY AUTHORITY.—Before the end
of the 6-month period beginning on the date of the en-
actment of the Financial Anti-Terrorism Act of 2001,
the Secretary, in consultation with the appropriate
Federal functional regulators (as defined in section
509 of the Gramm-Leach-Bliley Act) shall further de-
fine and clarify, by regulation, the requirements of
this subsection.’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall take effect beginning 180 days after the date
of the enactment of this Act with respect to accounts covered
by subsection (j) of section 5318 of title 31, United States
Code (as added by this section) that are opened before, on,
or after the date of the enactment of this Act.
SEC. 
303. 
PROHIBITION 
ON 
UNITED 
STATES 
COR-
RESPONDENT 
ACCOUNTS 
WITH 
FOREIGN
SHELL BANKS.
Section 5318 of title 31, United States Code, is amend-
ed by inserting after subsection (j) (as added by section 302
of this title) the following new subsection:
‘‘(k) 
PROHIBITION
ON
UNITED
STATES
COR-
RESPONDENT ACCOUNTS WITH FOREIGN SHELL BANKS.—
‘‘(1) IN
GENERAL.—A depository institution
shall not establish, maintain, administer, or manage
a correspondent account in the United States for, or
on behalf of, a foreign bank that does not have a
physical presence in any country.
‘‘(2) PREVENTION OF INDIRECT SERVICE TO FOR-
EIGN SHELL BANKS.—
‘‘(A) IN
GENERAL.—A depository institu-
tion shall take reasonable steps to ensure that
any correspondent account established, main-
tained, administered, or managed by that insti-
tution in the United States for a foreign bank is
not being used by that foreign bank to indirectly
provide banking services to another foreign bank
that does not have a physical presence in any
country.
‘‘(B) REGULATIONS.—The Secretary shall,
in regulations, delineate reasonable steps nec-
essary for a depository institution to comply
with this subsection.
‘‘(3) EXCEPTION.—Paragraphs (1) and (2) shall
not be construed as prohibiting a depository institu-
tion from providing a correspondent account to a for-
eign bank, if the foreign bank—
‘‘(A) is an affiliate of a depository institu-
tion, credit union, or other foreign bank that
maintains a physical presence in the United
States or a foreign country, as applicable; and
‘‘(B) is subject to supervision by a banking
authority in the country regulating the affiliated
depository institution, credit union, or foreign
bank, described in subparagraph (A), as applica-
ble.
‘‘(4) DEFINITIONS.—For purposes of this section,
the following definitions shall apply:
‘‘(A) 
AFFILIATE.—The 
term 
‘affiliate’
means a foreign bank that is controlled by or is
under common control with a depository institu-
tion, credit union, or foreign bank.
‘‘(B) DEPOSITORY INSTITUTION.—The ‘de-
pository institution’—
‘‘(i) has the meaning given such term
in section 3 of the Federal Deposit Insur-
ance Act; and
‘‘(ii) includes a credit union.
‘‘(C) 
PHYSICAL
PRESENCE.—The 
term
‘physical presence’ means a place of business
that—
‘‘(i) is maintained by a foreign bank;
‘‘(ii) is located at a fixed address
(other than solely an electronic address) in
a country in which the foreign bank is au-
thorized to conduct banking activities, at
which location the foreign bank—
‘‘(I) employs 1 or more individ-
uals on a full-time basis; and
‘‘(II) maintains operating records
related to its banking activities; and
‘‘(iii) is subject to inspection by the
banking authority which licensed the for-
eign bank to conduct banking activities.’’.
SEC. 304. ANTI-MONEY LAUNDERING PROGRAMS.
(a) IN GENERAL.—Section 5318(h) of title 31, United
States Code, is amended to read as follows:
‘‘(h) ANTI-MONEY LAUNDERING PROGRAMS.—
‘‘(1) IN GENERAL.—In order to guard against
money laundering through financial institutions, each
financial institution shall establish anti-money laun-
dering programs, including, at a minimum—
‘‘(A) the development of internal policies,
procedures, and controls;
‘‘(B) the designation of an officer of the fi-
nancial institution responsible for compliance;
‘‘(C) an ongoing employee training pro-
gram; and
‘‘(D) an independent audit function to test
programs.
‘‘(2) REGULATIONS.—The Secretary may, after
consultation with the appropriate Federal functional
regulators (as defined in section 509 of the Gramm-
Leach-Bliley Act), prescribe minimum standards for
programs established under paragraph (1), and may
exempt from the application of those standards any
financial institution that is not subject to the provi-
sions of the regulations contained in part 103 of title
31, of the Code of Federal Regulations, as in effect on
the date of the enactment of the Financial Anti-Ter-
rorism Act of 2001, or any successor to such regula-
tions, for so long as such financial institution is not
subject to the provisions of such regulations.’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect at the end of the 180-day period
beginning on the date of the enactment of this Act.
(c) DATE OF APPLICATION OF REGULATIONS; FACTORS
TO BE TAKEN INTO ACCOUNT.—Before the end of the 180-
day period beginning on the date of the enactment of this
Act, the Secretary of the Treasury shall prescribe regula-
tions to implement the amendment made by subsection (a).
In prescribing such regulations, the Secretary shall consider
the extent to which the requirements imposed under such
regulations are commensurate with the size, location, and
activities of the financial institutions to which such regula-
tions apply.
SEC. 305. CONCENTRATION ACCOUNTS AT FINANCIAL IN-
STITUTIONS.
Section 5318(h) of title 31, United States Code (as
amended by section 304) is amended by adding at the end
the following:
‘‘(3) CONCENTRATION ACCOUNTS.—The Secretary
may prescribe regulations under this subsection that
govern maintenance of concentration accounts by fi-
nancial institutions, in order to ensure that such ac-
counts are not used to prevent association of the iden-
tity of an individual customer with the movement of
101
(1) IN GENERAL.—In addition to the require-
ments of section 4702 of the Anti-Drug Abuse Act of
1988, the Secretary of the Treasury (hereinafter in
this section referred to as the ‘‘Secretary’’), in con-
sultation with the Attorney General, the Secretary of
State, and the Board of Governors of the Federal Re-
serve System, shall enter into negotiations with the
appropriate financial supervisory agencies and other
officials of any foreign country the financial institu-
tions of which do business with United States finan-
cial institutions or which may be utilized by any for-
eign terrorist organization (as designated under sec-
tion 219 of the Immigration and Nationality Act),
any person who is a member or representative of any
such organization, or any person engaged in money
laundering or financial or other crimes.
(2) PURPOSES OF NEGOTIATIONS.—In carrying
out negotiations under paragraph (1), the Secretary
shall seek to enter into and further cooperative efforts,
voluntary information exchanges, the use of letters
rogatory, mutual legal assistance treaties, and inter-
national agreements to—
(A) ensure that foreign banks and other fi-
nancial institutions maintain adequate records
of—
102
(i) large United States currency trans-
actions; and
(ii) transaction and account informa-
tion relating to any foreign terrorist organi-
zation (as designated under section 219 of
the Immigration and Nationality Act), any
person who is a member or representative of
any such organization, or any person en-
gaged in money laundering or financial or
other crimes; and
(B) establish a mechanism whereby such
records may be made available to United States
law enforcement officials and domestic financial
institution supervisors, when appropriate.
(b) REPORTS.—
(1) INTERIM REPORT.—Not later than 1 year
after the date of the enactment of this Act, the Sec-
retary shall submit an interim report to the Congress
on progress in the negotiations under subsection (a).
(2) FINAL REPORT.—Not later than 2 years after
the date of the enactment of this Act, the Secretary
shall submit a final report to the President and the
Congress, on the outcome of negotiations under sub-
section (a).
103
(3) IDENTIFICATION OF CERTAIN COUNTRIES.—
In the report submitted under paragraph (2), the Sec-
retary shall identify countries—
(A) with respect to which the Secretary de-
termines there is evidence that the financial in-
stitutions in such countries are being utilized,
knowingly or unwittingly, by any foreign ter-
rorist organization (as designated under section
219 of the Immigration and Nationality Act),
any person who is a member or representative of
any such organization, or any person engaged in
money laundering or financial or other crimes;
and
(B) which have not reached agreement with
United States authorities to meet the objectives of
subparagraphs (A) and (B) of subsection (a)(2).
(c) AUTHORITY FOR OTHER ACTION.—
(1) IN GENERAL.—If the President determines
that—
(A) a foreign country is described in sub-
paragraphs (A) and (B) of subsection (b)(3); and
(B) such country—
(i) is not negotiating in good faith to
reach an agreement described in subsection
(a)(2); or
104
(ii) or a financial institution of such
country, has not complied with a request,
made by an official of the United States
Government authorized to make such re-
quest, for information regarding a foreign
terrorist organization (as designated under
section 219 of the Immigration and Nation-
ality Act), a person who is a member or
representative of any such organization, or
a person engaged in money laundering for
or with any such organization,
the President may impose appropriate penalties and
sanctions on such country and, except as provided in
paragraph (3), financial institutions of such country.
(2) PENALTIES AND SANCTIONS.—The penalties
and sanctions which may be imposed by the President
under 
paragraph 
(1) 
include 
temporarily 
or
permanently—
(A) prohibiting such persons, institutions,
or other entities as the President may designate
in any such country from participating in any
United States dollar clearing or wire transfer
system; and
(B) prohibiting such persons, institutions or
entities as the President may designate in such
105
countries from maintaining an account with any
bank or other financial institution chartered
under the laws of the United States or any State.
(3) EXEMPTION FOR CERTAIN FINANCIAL INSTI-
TUTIONS.—Financial institutions that maintain ade-
quate records shall be exempt from such penalties and
sanctions.
SEC. 307. PROHIBITION ON ACCEPTANCE OF ANY BANK IN-
STRUMENT FOR UNLAWFUL INTERNET GAM-
BLING.
(a) IN GENERAL.—No person engaged in the business
of betting or wagering may knowingly accept, in connection
with the participation of another person in unlawful Inter-
net gambling—
(1) credit, or the proceeds of credit, extended to
or on behalf of such other person (including credit ex-
tended through the use of a credit card);
(2) an electronic fund transfer or funds trans-
mitted by or through a money transmitting business,
or the proceeds of an electronic fund transfer or
money transmitting service, from or on behalf of the
other person;
(3) any check, draft, or similar instrument
which is drawn by or on behalf of the other person
106
and is drawn on or payable at or through any finan-
cial institution; or
(4) the proceeds of any other form of financial
transaction as the Secretary may prescribe by regula-
tion which involves a financial institution as a payor
or financial intermediary on behalf of or for the ben-
efit of the other person.
(b) DEFINITIONS.—For purposes of this Act, the fol-
lowing definitions shall apply:
(1) BETS
OR
WAGERS.—The term ‘‘bets or
wagers’’—
(A) means the staking or risking by any
person of something of value upon the outcome of
a contest of others, a sporting event, or a game
subject to chance, upon an agreement or under-
standing that the person or another person will
receive something of greater value than the
amount staked or risked in the event of a certain
outcome;
(B) includes the purchase of a chance or op-
portunity to win a lottery or other prize (which
opportunity to win is predominantly subject to
chance);
(C) includes any scheme of a type described
in section 3702 of title 28, United States Code;
107
(D) includes any instructions or informa-
tion pertaining to the establishment or movement
of funds in an account by the bettor or customer
with the business of betting or wagering; and
(E) does not include—
(i) any activity governed by the securi-
ties laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of
1934) for the purchase or sale at a future
date of securities (as that term is defined in
section 3(a)(10) of such Act);
(ii) any transaction on or subject to
the rules of a contract market designated
pursuant to the Commodity Exchange Act;
(iii) any over-the-counter derivative
instrument;
(iv) any contract of indemnity or
guarantee;
(v) any contract for insurance;
(vi) any deposit or other transaction
with a depository institution (as defined in
section 3(c) of the Federal Deposit Insur-
ance Act);
108
(vii) any participation in a simula-
tion sports game or an educational game or
contest that—
(I) is not dependent solely on the
outcome of any single sporting event or
nonparticipant’s singular individual
performance in any single sporting
event;
(II) has an outcome that reflects
the relative knowledge and skill of the
participants with such outcome deter-
mined predominantly by accumulated
statistical results of sporting events;
and
(III) offers a prize or award to a
participant that is established in ad-
vance of the game or contest and is not
determined by the number of partici-
pants or the amount of any fees paid
by those participants; and
(viii) any transaction with a business
licensed by a State.
(2) BUSINESS OF BETTING OR WAGERING.—The
term ‘‘business of betting or wagering’’ does not in-
clude, other than for purposes of subsection (e), any
109
creditor, credit card issuer, insured depository insti-
tution, financial institution, operator of a terminal
at which an electronic fund transfer may be initiated,
money transmitting business, or international, na-
tional, regional, or local network utilized to effect a
credit transaction, electronic fund transfer, stored
value product transaction, or money transmitting
service, or any participant in such network.
(3) INTERNET.—The term ‘‘Internet’’ means the
international computer network of interoperable pack-
et switched data networks.
(4) UNLAWFUL INTERNET GAMBLING.—The term
‘‘unlawful Internet gambling’’ means to place, receive,
or otherwise transmit a bet or wager by any means
which involves the use, at least in part, of the Inter-
net where such bet or wager is unlawful under any
applicable Federal or State law in the State in which
the bet or wager is initiated, received, or otherwise
made.
(5) OTHER TERMS.—
(A) 
CREDIT; 
CREDITOR; 
AND
CREDIT
CARD.—The terms ‘‘credit’’, ‘‘creditor’’, and
‘‘credit card’’ have the meanings given such
terms in section 103 of the Truth in Lending
Act.
110
(B) ELECTRONIC
FUND
TRANSFER.—The
term ‘‘electronic fund transfer’’—
(i) has the meaning given such term in
section 903 of the Electronic Fund Transfer
Act; and
(ii) includes any fund transfer covered
by Article 4A of the Uniform Commercial
Code, as in effect in any State.
(C) FINANCIAL INSTITUTION.—The term ‘‘fi-
nancial institution’’ has the meaning given such
term in section 903 of the Electronic Fund
Transfer Act.
(D) MONEY TRANSMITTING BUSINESS AND
MONEY
TRANSMITTING
SERVICE.—The 
terms
‘‘money transmitting business’’ and ‘‘money
transmitting service’’ have the meanings given
such terms in section 5330(d) of title 31, United
States Code.
(E) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of the Treasury.
(c) CIVIL REMEDIES.—
(1) JURISDICTION.—The district courts of the
United States shall have original and exclusive juris-
diction to prevent and restrain violations of this sec-
tion by issuing appropriate orders in accordance with
111
this section, regardless of whether a prosecution has
been initiated under this section.
(2) PROCEEDINGS.—
(A) INSTITUTION
BY
FEDERAL
GOVERN-
MENT.—
(i) IN GENERAL.—The United States,
acting through the Attorney General, may
institute proceedings under this subsection
to prevent or restrain a violation of this sec-
tion.
(ii) RELIEF.—Upon application of the
United States under this subparagraph, the
district court may enter a preliminary in-
junction or an injunction against any per-
son to prevent or restrain a violation of this
section, in accordance with Rule 65 of the
Federal Rules of Civil Procedure.
(B) INSTITUTION BY STATE ATTORNEY GEN-
ERAL.—
(i) IN GENERAL.—The attorney general
of a State (or other appropriate State offi-
cial) in which a violation of this section al-
legedly has occurred or will occur may in-
stitute proceedings under this subsection to
prevent or restrain the violation.
112
(ii) RELIEF.—Upon application of the
attorney general (or other appropriate State
official) of an affected State under this sub-
paragraph, the district court may enter a
preliminary injunction or an injunction
against any person to prevent or restrain a
violation of this section, in accordance with
Rule 65 of the Federal Rules of Civil Proce-
dure.
(C) INDIAN LANDS.—
(i) 
IN
GENERAL.—Notwithstanding
subparagraphs (A) and (B), for a violation
that is alleged to have occurred, or may
occur, on Indian lands (as that term is de-
fined in section 4 of the Indian Gaming
Regulatory Act)—
(I) the United States shall have
the enforcement authority provided
under subparagraph (A);
(II) the enforcement authorities
specified in an applicable Tribal-State
compact negotiated under section 11 of
the Indian Gaming Regulatory Act
shall be carried out in accordance with
that compact; and