H. R. 3162—58
‘‘(l) APPLICABILITY OF RULES.—Any rules promulgated pursuant
to the authority contained in section 21 of the Federal Deposit
Insurance Act (12 U.S.C. 1829b) shall apply, in addition to any
other financial institution to which such rules apply, to any person
that engages as a business in the transmission of funds, including
any person who engages as a business in an informal money transfer
system or any network of people who engage as a business in
facilitating the transfer of money 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 persons who
engage as a business in an informal money transfer system or
any network of people who engage as a business in facilitating
the transfer of money domestically or internationally outside of
the conventional financial institutions system, counter money laun-
dering and regulatory controls relating to underground money move-
ment and banking systems, 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.
SEC. 360. USE OF AUTHORITY OF UNITED STATES EXECUTIVE DIREC-
TORS.
(a) ACTION BY THE PRESIDENT.—If the President determines
that a particular foreign country has taken or has committed to
take actions that contribute to efforts of the United States to
respond to, deter, or prevent acts of international terrorism, the
Secretary may, consistent with other applicable provisions of law,
instruct the United States Executive Director of each international
financial institution to use the voice and vote of the Executive
Director to support any loan or other utilization of the funds of
respective institutions for such country, or any public or private
entity within such country.
(b) USE
OF VOICE
AND VOTE.—The Secretary may instruct
the United States Executive Director of each international financial
institution to aggressively use the voice and vote of the Executive
Director to require an auditing of disbursements at such institutions
to ensure that no funds are paid to persons who commit, threaten
to commit, or support terrorism.
(c) DEFINITION.—For purposes of this section, the term ‘‘inter-
national financial institution’’ means an institution described in
section 1701(c)(2) of the International Financial Institutions Act
(22 U.S.C. 262r(c)(2)).
SEC. 361. 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 Enforcement Network
established by order of the Secretary of the Treasury (Treasury
Order Numbered 105-08, in this section referred to as ‘FinCEN’)
on April 25, 1990, shall be a bureau in the Department of the
Treasury.
‘‘(b) DIRECTOR.—
H. R. 3162—59
‘‘(1) APPOINTMENT.—The head of FinCEN shall be the
Director, who shall be appointed by the Secretary of the
Treasury.
‘‘(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, financial criminal activi-
ties, and other financial activities to the Under Secretary
of the Treasury for Enforcement.
‘‘(B) Maintain a government-wide data access service,
with access, in accordance with applicable legal require-
ments, to the following:
‘‘(i) Information collected by the Department of
the Treasury, including report information filed under
subchapter II of chapter 53 of this title (such as reports
on cash transactions, foreign financial agency trans-
actions and relationships, foreign currency trans-
actions, 
exporting 
and 
importing 
monetary
instruments, and suspicious activities), chapter 2 of
title I of Public Law 91–508, and section 21 of the
Federal Deposit Insurance Act.
‘‘(ii) Information regarding national and inter-
national currency flows.
‘‘(iii) Other records and data maintained 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 requirements and policies
and guidelines established by the Secretary of the Treasury
and the Under Secretary of the Treasury for Enforcement
to—
‘‘(i) identify possible criminal activity to appro-
priate Federal, State, local, and foreign law enforce-
ment agencies;
‘‘(ii) support ongoing criminal financial investiga-
tions and prosecutions and related proceedings,
including civil and criminal tax and forfeiture pro-
ceedings;
‘‘(iii) identify possible instances of noncompliance
with subchapter II of chapter 53 of this title, chapter
2 of title I of Public Law 91–508, and section 21 of
the Federal Deposit Insurance Act to Federal agencies
with statutory responsibility for enforcing compliance
with such provisions and other appropriate Federal
regulatory agencies;
‘‘(iv) evaluate and recommend possible uses of spe-
cial currency reporting requirements under section
5326;
‘‘(v) determine emerging trends and methods in
money laundering and other financial crimes;
‘‘(vi) support the conduct of intelligence or counter-
intelligence activities, including analysis, to protect
against international terrorism; and
‘‘(vii) 
support 
government 
initiatives 
against
money laundering.
H. R. 3162—60
‘‘(D) Establish and maintain a financial crimes commu-
nications center to furnish law enforcement authorities
with intelligence information related to emerging or
ongoing investigations and undercover operations.
‘‘(E) Furnish research, analytical, and informational
services to financial institutions, appropriate Federal regu-
latory agencies with regard 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, prevention, and prosecution of terrorism, orga-
nized crime, money laundering, and other financial crimes.
‘‘(F) Assist Federal, State, local, and foreign law
enforcement and regulatory authorities in combatting the
use of informal, nonbank networks and payment and barter
system mechanisms that permit the transfer of funds or
the equivalent of funds without records and without compli-
ance with criminal and tax laws.
‘‘(G) Provide computer and data support and data anal-
ysis to the Secretary of the Treasury for tracking and
controlling foreign assets.
‘‘(H) Coordinate with financial intelligence units in
other countries on anti-terrorism and anti-money laun-
dering initiatives, and similar efforts.
‘‘(I) Administer the requirements of subchapter II of
chapter 53 of this title, chapter 2 of title I of Public Law
91–508, and section 21 of the Federal Deposit Insurance
Act, to the extent delegated such authority by the Secretary
of the Treasury.
‘‘(J) Such other duties and powers as the Secretary
of the Treasury may delegate or prescribe.
‘‘(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 FinCEN which provide—
‘‘(1) for the coordinated and efficient transmittal of informa-
tion to, entry of information into, and withdrawal of information
from, the data maintenance system maintained by the Network,
including—
‘‘(A) the submission of reports through the Internet
or other secure network, whenever possible;
‘‘(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 Secretary 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, appropriate standards
and guidelines for determining—
‘‘(A) who is to be given access to the information main-
tained by the Network;
‘‘(B) what limits are to be imposed on the use of such
information; and
H. R. 3162—61
‘‘(C) how information about activities or relationships
which involve or are closely associated with the exercise
of constitutional rights is to be screened out of the data
maintenance system.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated for FinCEN such sums as may be necessary
for fiscal years 2002, 2003, 2004, and 2005.’’.
(b) COMPLIANCE WITH REPORTING REQUIREMENTS.—The Sec-
retary 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 enactment of this Act and each 1-year period there-
after. The initial report shall include historical data on compliance
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. 362. ESTABLISHMENT OF HIGHLY SECURE NETWORK.
(a) IN GENERAL.—The Secretary 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 Insurance Act through the secure net-
work; and
(2) provides financial institutions with alerts and other
information regarding suspicious activities that warrant imme-
diate and enhanced scrutiny.
(b) EXPEDITED DEVELOPMENT.—The Secretary shall take such
action as may be necessary to ensure that the secure network
required under subsection (a) is fully operational before the end
of the 9-month period beginning on the date of enactment of this
Act.
SEC. 363. INCREASE IN CIVIL AND CRIMINAL PENALTIES FOR MONEY
LAUNDERING.
(a) CIVIL PENALTIES.—Section 5321(a) of title 31, United States
Code, is amended by adding at the end the following:
‘‘(7) PENALTIES FOR INTERNATIONAL COUNTER MONEY LAUN-
DERING VIOLATIONS.—The Secretary may impose a civil money
penalty in an amount equal to not less than 2 times the
amount of the transaction, but not more than $1,000,000, on
any financial institution or agency that violates any provision
of subsection (i) or (j) of section 5318 or any special measures
imposed under section 5318A.’’.
(b) CRIMINAL PENALTIES.—Section 5322 of title 31, United
States Code, is amended by adding at the end the following:
‘‘(d) A financial institution or agency that violates any provision
of subsection (i) or (j) of section 5318, or any special measures
imposed under section 5318A, or any regulation prescribed under
subsection (i) or (j) of section 5318 or section 5318A, shall be
H. R. 3162—62
fined in an amount equal to not less than 2 times the amount
of the transaction, but not more than $1,000,000.’’.
SEC. 364. UNIFORM PROTECTION AUTHORITY FOR FEDERAL RESERVE
FACILITIES.
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is
amended by adding at the end the following:
‘‘(q) UNIFORM PROTECTION AUTHORITY FOR FEDERAL RESERVE
FACILITIES.—
‘‘(1) Notwithstanding any other provision of law, to
authorize personnel to act as law enforcement officers to protect
and safeguard the premises, grounds, property, personnel,
including members of the Board, of the Board, or any Federal
reserve bank, and operations conducted by or on behalf of
the Board or a reserve bank.
‘‘(2) The Board may, subject to the regulations prescribed
under paragraph (5), delegate authority to a Federal reserve
bank to authorize personnel to act as law enforcement officers
to protect and safeguard the bank’s premises, grounds, property,
personnel, and operations conducted by or on behalf of the
bank.
‘‘(3) Law enforcement officers designated or authorized by
the Board or a reserve bank under paragraph (1) or (2) are
authorized while on duty to carry firearms and make arrests
without warrants for any offense against the United States
committed in their presence, or for any felony cognizable under
the laws of the United States committed or being committed
within the buildings and grounds of the Board or a reserve
bank if they have reasonable grounds to believe that the person
to be arrested has committed or is committing such a felony.
Such officers shall have access to law enforcement information
that may be necessary for the protection of the property or
personnel of the Board or a reserve bank.
‘‘(4) For purposes of this subsection, the term ‘law enforce-
ment officers’ means personnel who have successfully completed
law enforcement training and are authorized to carry firearms
and make arrests pursuant to this subsection.
‘‘(5) The law enforcement authorities provided for in this
subsection may be exercised only pursuant to regulations pre-
scribed by the Board and approved by the Attorney General.’’.
SEC. 365. REPORTS RELATING TO COINS AND CURRENCY RECEIVED
IN NONFINANCIAL TRADE OR BUSINESS.
(a) REPORTS REQUIRED.—Subchapter II of chapter 53 of title
31, United States Code, is amended by adding at the end the
following new section:
‘‘§ 5331. Reports relating to coins and currency received in
nonfinancial trade or business
‘‘(a) COIN AND CURRENCY RECEIPTS OF MORE THAN $10,000.—
Any person—
‘‘(1) who is engaged in a trade or business; and
‘‘(2) who, in the course of such trade or business, receives
more than $10,000 in coins or currency in 1 transaction (or
2 or more related transactions),
shall file a report described in subsection (b) with respect to such
transaction (or related transactions) with the Financial Crimes
H. R. 3162—63
Enforcement Network at such time and in such manner as the
Secretary may, by regulation, prescribe.
‘‘(b) FORM AND MANNER OF REPORTS.—A report is described
in this subsection if such report—
‘‘(1) is in such form as the Secretary may prescribe;
‘‘(2) contains—
‘‘(A) the name and address, and such other identifica-
tion information as the Secretary may require, of the person
from whom the coins or currency was received;
‘‘(B) the amount of coins or currency received;
‘‘(C) the date and nature of the transaction; and
‘‘(D) such other information, including the identifica-
tion of the person filing the report, as the Secretary may
prescribe.
‘‘(c) EXCEPTIONS.—
‘‘(1) AMOUNTS RECEIVED BY FINANCIAL INSTITUTIONS.—Sub-
section (a) shall not apply to amounts received in a transaction
reported under section 5313 and regulations prescribed under
such section.
‘‘(2) TRANSACTIONS
OCCURRING
OUTSIDE
THE
UNITED
STATES.—Except to the extent provided in regulations pre-
scribed by the Secretary, subsection (a) shall not apply to
any transaction if the entire transaction occurs outside the
United States.
‘‘(d) CURRENCY INCLUDES FOREIGN CURRENCY
AND CERTAIN
MONETARY INSTRUMENTS.—
‘‘(1) IN GENERAL.—For purposes of this section, the term
‘currency’ includes—
‘‘(A) foreign currency; and
‘‘(B) to the extent provided in regulations prescribed
by the Secretary, any monetary instrument (whether or
not in bearer form) with a face amount of not more than
$10,000.
‘‘(2) SCOPE OF APPLICATION.—Paragraph (1)(B) shall not
apply to any check drawn on the account of the writer in
a financial institution referred to in subparagraph (A), (B),
(C), (D), (E), (F), (G), (J), (K), (R), or (S) of section 5312(a)(2).’’.
(b) PROHIBITION ON STRUCTURING TRANSACTIONS.—
(1) IN GENERAL.—Section 5324 of title 31, United States
Code, is amended—
(A) by redesignating subsections (b) and (c) as sub-
sections (c) and (d), respectively; and
(B) by inserting after subsection (a) the following new
subsection:
‘‘(b) DOMESTIC COIN AND CURRENCY TRANSACTIONS INVOLVING
NONFINANCIAL TRADES OR BUSINESSES.—No person shall, for the
purpose of evading the report requirements of section 5333 or
any regulation prescribed under such section—
‘‘(1) cause or attempt to cause a nonfinancial trade or
business to fail to file a report required under section 5333
or any regulation prescribed under such section;
‘‘(2) cause or attempt to cause a nonfinancial trade or
business to file a report required under section 5333 or any
regulation prescribed under such section that contains a mate-
rial omission or misstatement of fact; or
H. R. 3162—64
‘‘(3) structure or assist in structuring, or attempt to struc-
ture or assist in structuring, any transaction with 1 or more
nonfinancial trades or businesses.’’.
(2) TECHNICAL AND CONFORMING AMENDMENTS.—
(A) The heading for subsection (a) of section 5324 of
title 31, United States Code, is amended by inserting
‘‘INVOLVING
FINANCIAL
INSTITUTIONS’’ 
after 
‘‘TRANS-
ACTIONS’’.
(B) Section 5317(c) of title 31, United States Code,
is amended by striking ‘‘5324(b)’’ and inserting ‘‘5324(c)’’.
(c) DEFINITION OF NONFINANCIAL TRADE OR BUSINESS.—
(1) IN GENERAL.—Section 5312(a) of title 31, United States
Code, is amended—
(A) by redesignating paragraphs (4) and (5) as para-
graphs (5) and (6), respectively; and
(B) by inserting after paragraph (3) the following new
paragraph:
‘‘(4) NONFINANCIAL TRADE OR BUSINESS.—The term ‘non-
financial trade or business’ means any trade or business other
than a financial institution that is subject to the reporting
requirements of section 5313 and regulations prescribed under
such section.’’.
(2) TECHNICAL AND CONFORMING AMENDMENTS.—
(A) Section 5312(a)(3)(C) of title 31, United States
Code, is amended by striking ‘‘section 5316,’’ and inserting
‘‘sections 5333 and 5316,’’.
(B) Subsections (a) through (f) of section 5318 of title
31, United States Code, and sections 5321, 5326, and 5328
of such title are each amended—
(i) by inserting ‘‘or nonfinancial trade or business’’
after ‘‘financial institution’’ each place such term
appears; and
(ii) by inserting ‘‘or nonfinancial trades or
businesses’’ after ‘‘financial institutions’’ each place
such term appears.
(c) CLERICAL AMENDMENT.—The table of sections for chapter
53 of title 31, United States Code, is amended by inserting after
the item relating to section 5332 (as added by section 112 of this
title) the following new item:
‘‘5331. Reports relating to coins and currency received in nonfinancial trade or busi-
ness.’’.
(f) REGULATIONS.—Regulations which the Secretary determines
are necessary to implement this section shall be published in final
form before the end of the 6-month period beginning on the date
of enactment of this Act.
SEC. 366. EFFICIENT USE OF CURRENCY TRANSACTION REPORT
SYSTEM.
(a) FINDINGS.—The Congress finds the following:
(1) The Congress established the currency transaction
reporting requirements in 1970 because the Congress found
then that such reports have a high degree of usefulness in
criminal, tax, and regulatory investigations 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 testimony that
excess amounts of currency transaction reports were interfering
H. R. 3162—65
with effective law enforcement, the Congress reformed the cur-
rency transaction report exemption requirements to provide—
(A) mandatory exemptions for certain reports that had
little usefulness for law enforcement, such as cash transfers
between depository institutions and cash deposits from
government agencies; and
(B) discretionary authority for the Secretary of the
Treasury to provide exemptions, subject to criteria and
guidelines established by the Secretary, for financial
institutions with regard 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 effect, with the result that
the volume of currency transaction reports is once again inter-
fering with effective law enforcement.
(b) STUDY AND REPORT.—
(1) STUDY REQUIRED.—The Secretary shall conduct a study
of—
(A) the possible expansion of the statutory exemption
system in effect under section 5313 of title 31, United
States Code; and
(B) methods for improving financial institution utiliza-
tion of the statutory exemption provisions 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 financial
institutions for regular review of the exemption 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 1-year
period beginning on the date of 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.
Subtitle C—Currency Crimes and
Protection
SEC. 371. BULK CASH SMUGGLING INTO OR OUT OF THE UNITED
STATES.
(a) FINDINGS.—The Congress finds the following:
(1) Effective enforcement of the currency reporting require-
ments of subchapter II of chapter 53 of title 31, United States
Code, and the regulations prescribed under such subchapter,
has forced drug dealers and other criminals engaged in cash-
based businesses to avoid using traditional financial institu-
tions.
(2) In their effort to avoid using traditional financial
institutions, drug dealers and other criminals are forced to
move large quantities of currency in bulk form to and through
the airports, border crossings, and other ports of entry where
the currency can be smuggled out of the United States and
H. R. 3162—66
placed in a foreign financial institution or sold on the black
market.
(3) The transportation and smuggling of cash in bulk form
may now be the most common form of money laundering,
and the movement of large sums of cash is one of the most
reliable warning signs of drug trafficking, terrorism, money
laundering, racketeering, tax evasion and similar crimes.
(4) The intentional transportation into or out of the United
States of large amounts of currency or monetary instruments,
in a manner designed to circumvent the mandatory reporting
provisions of subchapter II of chapter 53 of title 31, United
States Code,, is the equivalent of, and creates the same harm
as, the smuggling of goods.
(5) The arrest and prosecution of bulk cash smugglers
are important parts of law enforcement’s effort to stop the
laundering of criminal proceeds, but the couriers who attempt
to smuggle the cash out of the United States are typically
low-level employees of large criminal organizations, and thus
are easily replaced. Accordingly, only the confiscation of the
smuggled bulk cash can effectively break the cycle of criminal
activity of which the laundering of the bulk cash is a critical
part.
(6) The current penalties for violations of the currency
reporting requirements are insufficient to provide a deterrent
to the laundering of criminal proceeds. In particular, in cases
where the only criminal violation under current law is a
reporting offense, the law does not adequately provide for the
confiscation of smuggled currency. In contrast, if the smuggling
of bulk cash were itself an offense, the cash could be confiscated
as the corpus delicti of the smuggling offense.
(b) PURPOSES.—The purposes of this section are—
(1) to make the act of smuggling bulk cash itself a criminal
offense;
(2) to authorize forfeiture of any cash or instruments of
the smuggling offense; and
(3) to emphasize the seriousness of the act of bulk cash
smuggling.
(c) ENACTMENT
OF BULK CASH SMUGGLING OFFENSE.—Sub-
chapter II of chapter 53 of title 31, United States Code, is amended
by adding at the end the following:
‘‘§ 5332. Bulk cash smuggling into or out of the United States
‘‘(a) CRIMINAL OFFENSE.—
‘‘(1) IN GENERAL.—Whoever, with the intent to evade a
currency reporting requirement under section 5316, knowingly
conceals more than $10,000 in currency or other monetary
instruments on the person of such individual or in any convey-
ance, article of luggage, merchandise, or other container, and
transports or transfers or attempts to transport or transfer
such currency or monetary instruments from a place within
the United States to a place outside of the United States,
or from a place outside the United States to a place within
the United States, shall be guilty of a currency smuggling
offense and subject to punishment pursuant to subsection (b).
‘‘(2) CONCEALMENT ON PERSON.—For purposes of this sec-
tion, the concealment of currency on the person of any indi-
vidual includes concealment in any article of clothing worn