IIB
107TH CONGRESS
1ST SESSION
H. R. 3004
IN THE SENATE OF THE UNITED STATES
OCTOBER 17, 2001
Received; read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
AN ACT
To combat the financing of terrorism and other financial
crimes, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Financial Anti-Terrorism Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—STRENGTHENING LAW ENFORCEMENT
Sec. 101. Bulk cash smuggling into or out of the United States.
Sec. 102. Forfeiture in currency reporting cases.
Sec. 103. Illegal money transmitting businesses.
Sec. 104. Long-arm jurisdiction over foreign money launderers.
Sec. 105. Laundering money through a foreign bank.
Sec. 106. Specified unlawful activity for money laundering.
Sec. 107. Laundering the proceeds of terrorism.
Sec. 108. Proceeds of foreign crimes.
Sec. 109. Penalties for violations of geographic targeting orders and certain
record keeping requirements.
Sec. 110. Exclusion of aliens involved in money laundering.
Sec. 111. Standing to contest forfeiture of funds deposited into foreign bank
that has a correspondent account in the United States.
Sec. 112. Subpoenas for records regarding funds in correspondent bank ac-
counts.
Sec. 113. Authority to order convicted criminal to return property located
abroad.
Sec. 114. Corporation represented by a fugitive.
Sec. 115. Enforcement of foreign judgments.
Sec. 116. Reporting provisions and anti-terrorist activities of United States in-
telligence agencies.
Sec. 117. Financial Crimes Enforcement Network.
Sec. 118. Prohibition on false statements to financial institutions concerning
the identity of a customer.
Sec. 119. Verification of identification.
Sec. 120. Consideration of anti-money laundering record.
Sec. 121. Reporting of suspicious activities by informal underground banking
systems, such as hawalas.
Sec. 122. Uniform protection authority for Federal reserve facilities.
Sec. 123. Reports relating to coins and currency received in nonfinancial trade
or business.
TITLE II—PUBLIC-PRIVATE COOPERATION
Sec. 201. Establishment of highly secure network.
Sec. 202. Report on improvements in data access and other issues.
Sec. 203. Reports to the financial services industry on suspicious financial ac-
tivities.
Sec. 204. Efficient use of currency transaction report system.
Sec. 205. Public-private task force on terrorist financing issues.
Sec. 206. Suspicious activity reporting requirements.
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Sec. 207. Amendments relating to reporting of suspicious activities.
Sec. 208. Authorization to include suspicions of illegal activity in written em-
ployment references.
Sec. 209. International cooperation on identification of originators of wire
transfers.
Sec. 210. Check truncation study.
TITLE III—COMBATTING INTERNATIONAL MONEY LAUNDERING
Sec. 301. Special measures for jurisdictions, financial institutions, or inter-
national transactions of primary money laundering concern.
Sec. 302. Special due diligence for correspondent accounts and private banking
accounts.
Sec. 303. Prohibition on United States correspondent accounts with foreign
shell banks.
Sec. 304. Anti-money laundering programs.
Sec. 305. Concentration accounts at financial institutions.
Sec. 306. International cooperation in investigations of money laundering, fi-
nancial crimes, and the finances of terrorist groups.
TITLE IV—CURRENCY PROTECTION
Sec. 401. Counterfeiting domestic currency and obligations.
Sec. 402. Counterfeiting foreign currency and obligations.
Sec. 403. Production of documents.
Sec. 404. Reimbursement.
TITLE I—STRENGTHENING LAW
ENFORCEMENT
SEC. 101. BULK CASH SMUGGLING INTO OR OUT OF THE
UNITED STATES.
(a) FINDINGS.—The Congress finds the following:
(1) Effective enforcement of the currency re-
porting requirements 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 insti-
tutions.
(2) In their effort to avoid using traditional fi-
nancial institutions, drug dealers and other criminals
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are forced to move large quantities of currency in
bulk form to and through the airports, border cross-
ings, and other ports of entry where the currency
can be smuggled out of the United States and 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, rack-
eteering, 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 cir-
cumvent the mandatory reporting provisions of sub-
chapter 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 em-
ployees of large criminal organizations, and thus are
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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 instru-
ments of the smuggling offense;
(3) to emphasize the seriousness of the act of
bulk cash smuggling; and
(4) to prescribe guidelines for determining the
amount of property subject to such forfeiture in var-
ious situations.
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(c) ENACTMENT OF BULK CASH SMUGGLING OF-
FENSE.—Subchapter II of chapter 53 of title 31, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 5331. 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 sec-
tion 5316, knowingly conceals more than $10,000 in
currency or other monetary instruments on the per-
son of such individual or in any conveyance, 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 out-
side 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 of-
fense and subject to punishment pursuant to sub-
section (b).
‘‘(2) CONCEALMENT
ON
PERSON.—For pur-
poses of this section, the concealment of currency on
the person of any individual includes concealment in
any article of clothing worn by the individual or in
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any luggage, backpack, or other container worn or
carried by such individual.
‘‘(b) PENALTY.—
‘‘(1) TERM OF IMPRISONMENT.—A person con-
victed of a currency smuggling offense under sub-
section (a), or a conspiracy to commit such offense,
shall be imprisoned for not more than 5 years.
‘‘(2) FORFEITURE.—In addition, the court, in
imposing sentence under paragraph (1), shall order
that the defendant forfeit to the United States, any
property, real or personal, involved in the offense,
and any property traceable to such property, subject
to subsection (d) of this section.
‘‘(3) PROCEDURE.—The seizure, restraint, and
forfeiture of property under this section shall be gov-
erned by section 413 of the Controlled Substances
Act.
‘‘(4) PERSONAL
MONEY
JUDGMENT.—If the
property subject to forfeiture under paragraph (2) is
unavailable, and the defendant has insufficient sub-
stitute property that may be forfeited pursuant to
section 413(p) of the Controlled Substances Act, the
court shall enter a personal money judgment against
the defendant for the amount that would be subject
to forfeiture.
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‘‘(c) CIVIL FORFEITURE.—
‘‘(1) IN GENERAL.—Any property involved in a
violation of subsection (a), or a conspiracy to com-
mit such violation, and any property traceable to
such violation or conspiracy, may be seized and, sub-
ject to subsection (d) of this section, forfeited to the
United States.
‘‘(2) PROCEDURE.—The seizure and forfeiture
shall be governed by the procedures governing civil
forfeitures in money laundering cases pursuant to
section 981(a)(1)(A) of title 18, United States Code.
‘‘(3) TREATMENT
OF
CERTAIN
PROPERTY
AS
INVOLVED IN THE OFFENSE.—For purposes of this
subsection and subsection (b), any currency or other
monetary instrument that is concealed or intended
to be concealed in violation of subsection (a) or a
conspiracy to commit such violation, any article, con-
tainer, or conveyance used, or intended to be used,
to conceal or transport the currency or other mone-
tary instrument, and any other property used, or in-
tended to be used, to facilitate the offense, shall be
considered property involved in the offense.’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subchapter II of chapter 53 of title 31, United States
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Code, is amended by inserting after the item relating to
section 5330, the following new item:
‘‘5331. Bulk cash smuggling into or out of the United States.’’.
SEC. 102. FORFEITURE IN CURRENCY REPORTING CASES.
(a) IN GENERAL.—Subsection (c) of section 5317 of
title 31, United States Code, is amended to read as fol-
lows:
‘‘(c) FORFEITURE.—
‘‘(1) IN GENERAL.—The court in imposing sen-
tence for any violation of section 5313, 5316, or
5324 of this title, or any conspiracy to commit such
violation, shall order the defendant to forfeit all
property, real or personal, involved in the offense
and any property traceable thereto.
‘‘(2) PROCEDURE.—Forfeitures under this sub-
section shall be governed by the procedures estab-
lished in section 413 of the Controlled Substances
Act and the guidelines established in paragraph (4).
‘‘(3) CIVIL
FORFEITURE.—Any property in-
volved in a violation of section 5313, 5316, or 5324
of this title, or any conspiracy to commit any such
violation, and any property traceable to any such
violation or conspiracy, may be seized and, subject
to paragraph (4), forfeited to the United States in
accordance with the procedures governing civil for-
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feitures in money laundering cases pursuant to sec-
tion 981(a)(1)(A) of title 18, United States Code.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 981(a)(1)(A) of title 18, United
States Code, is amended by striking ‘‘of section
5313(a) or 5324(a) of title 31, or’’.
(2) Section 982(a)(1) of title 18, United States Code,
is amended by striking ‘‘of section 5313(a), 5316, or 5324
of title 31, or’’.
SEC. 103. ILLEGAL MONEY TRANSMITTING BUSINESSES.
(a) SCIENTER REQUIREMENT FOR SECTION 1960
VIOLATION.—Section 1960 of title 18, United States
Code, is amended to read as follows:
‘‘§ 1960. Prohibition of unlicensed money transmit-
ting businesses
‘‘(a) Whoever knowingly conducts, controls, manages,
supervises, directs, or owns all or part of an unlicensed
money transmitting business, shall be fined in accordance
with this title or imprisoned not more than 5 years, or
both.
‘‘(b) As used in this section—
‘‘(1) the term ‘unlicensed money transmitting
business’ means a money transmitting business
which affects interstate or foreign commerce in any
manner or degree and—
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‘‘(A) is operated without an appropriate
money transmitting license in a State where
such operation is punishable as a misdemeanor
or a felony under State law, whether or not the
defendant knew that the operation was required
to be licensed or that the operation was so pun-
ishable;
‘‘(B) fails to comply with the money trans-
mitting 
business 
registration 
requirements
under section 5330 of title 31, United States
Code, or regulations prescribed under such sec-
tion; or
‘‘(C) otherwise involves the transportation
or transmission of funds that are known to the
defendant to have been derived from a criminal
offense or are intended to be used to be used
to promote or support unlawful activity;
‘‘(2) the term ‘money transmitting’ includes
transferring funds on behalf of the public by any
and all means including but not limited to transfers
within this country or to locations abroad by wire,
check, draft, facsimile, or courier; and
‘‘(3) the term ‘State’ means any State of the
United States, the District of Columbia, the North-
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ern Mariana Islands, and any commonwealth, terri-
tory, or possession of the United States.’’.
(b) 
SEIZURE
OF
ILLEGALLY
TRANSMITTED
FUNDS.—Section 981(a)(1)(A) of title 18, United States
Code, is amended by striking ‘‘or 1957’’ and inserting ‘‘,
1957 or 1960’’.
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 95 of title 18, United States Code, is amended
in the item relating to section 1960 by striking ‘‘illegal’’
and inserting ‘‘unlicensed’’.
SEC. 104. LONG-ARM JURISDICTION OVER FOREIGN MONEY
LAUNDERERS.
Section 1956(b) of title 18, United States Code, is
amended—
(1) by striking ‘‘(b) Whoever’’ and inserting
‘‘(b)(1) Whoever’’;
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(3) by striking ‘‘subsection (a)(1) or (a)(3),’’
and inserting ‘‘subsection (a)(1) or (a)(2) or section
1957,’’; and
(4) by adding at the end the following new
paragraphs:
‘‘(2) For purposes of adjudicating an action filed or
enforcing a penalty ordered under this section, the district
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courts shall have jurisdiction over any foreign person, in-
cluding any financial institution authorized under the laws
of a foreign country, against whom the action is brought,
if—
‘‘(A) service of process upon such foreign per-
son is made under the Federal Rules of Civil Proce-
dure or the laws of the country where the foreign
person is found; and
‘‘(B) the foreign person—
‘‘(i) commits an offense under subsection
(a) involving a financial transaction that occurs
in whole or in part in the United States;
‘‘(ii) converts to such person’s own use
property in which the United States has an
ownership interest by virtue of the entry of an
order of forfeiture by a court of the United
States; or
‘‘(iii) is a financial institution that main-
tains a correspondent bank account at a finan-
cial institution in the United States.
‘‘(3) The court may issue a pretrial restraining order
or take any other action necessary to ensure that any bank
account or other property held by the defendant in the
United States is available to satisfy a judgment under this
section.’’.
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SEC. 105. LAUNDERING MONEY THROUGH A FOREIGN
BANK.
Section 1956(c)(6) of title 18, United States Code,
is amended to read as follows:
‘‘(6) the term ‘financial institution’ includes any
financial institution described in section 5312(a)(2)
of title 31, United States Code, or the regulations
promulgated thereunder, as well as any foreign
bank, as defined in paragraph (7) of section 1(b) of
the International Banking Act of 1978 (12 U.S.C.
3101(7));’’.
SEC. 106. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY
LAUNDERING.
(a) IN GENERAL.—Section 1956(c)(7) of title 18,
United States Code, is amended—
(1) in subparagraph (B)—
(A) by striking clause (ii) and inserting the
following new clause:
‘‘(ii) any act or acts constituting a
crime of violence, as defined in section 16
of this title;’’; and
(B) by inserting after clause (iii) the fol-
lowing new clauses:
‘‘(iv) bribery of a public official, or
the misappropriation, theft, or embezzle-
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ment of public funds by or for the benefit
of a public official;
‘‘(v) smuggling or export control viola-
tions involving munitions listed in the
United States Munitions List or tech-
nologies with military applications as de-
fined in the Commerce Control List of the
Export Administration Regulations; or
‘‘(vi) an offense with respect to which
the United States would be obligated by a
bilateral treaty either to extradite the al-
leged offender or to submit the case for
prosecution, if the offender were found
within the territory of the United States;’’;
and
(2) in subparagraph (D)—
(A) by inserting ‘‘section 541 (relating to
goods falsely classified),’’ before ‘‘section 542’’;
(B) by inserting ‘‘section 922(1) (relating
to the unlawful importation of firearms), sec-
tion 924(n) (relating to firearms trafficking),’’
before ‘‘section 956’’;
(C) by inserting ‘‘section 1030 (relating to
computer fraud and abuse),’’ before ‘‘1032’’;
and
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(D) by inserting ‘‘any felony violation of
the Foreign Agents Registration Act of 1938,
as amended,’’ before ‘‘or any felony violation of
the Foreign Corrupt Practices Act’’.
(b) RULE OF CONSTRUCTION.—None of the changes
or amendments made by the Financial Anti-Terrorism Act
of 2001 shall expand the jurisdiction of any Federal or
State court over any civil action or claim for monetary
damages for the nonpayment of taxes or duties under the
revenue laws of a foreign state, or any political subdivision
thereof, except as such actions or claims are authorized
by United States treaty that provides the United States
and its political subdivisions with reciprocal rights to pur-
sue such actions or claims in the courts of the foreign
state and its political subdivisions.
SEC. 107. LAUNDERING THE PROCEEDS OF TERRORISM.
Section 1956(c)(7)(D) of title 18, United States
Code, is amended by inserting ‘‘or 2339B’’ after ‘‘2339A’’.
SEC. 108. PROCEEDS OF FOREIGN CRIMES.
Section 981(a)(1)(B) of title 18, United States Code,
is amended to read as follows:
‘‘(B) Any property, real or personal, within the
jurisdiction of the United States, constituting, de-
rived from, or traceable to, any proceeds obtained di-
rectly or indirectly from an offense against a foreign
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nation, or any property used to facilitate such of-
fense, if—
‘‘(i) the offense involves the manufacture,
importation, sale, or distribution of a controlled
substance (as such term is defined for the pur-
poses of the Controlled Substances Act), or any
other 
conduct 
described 
in 
section
1956(c)(7)(B),
‘‘(ii) the offense would be punishable with-
in the jurisdiction of the foreign nation by
death or imprisonment for a term exceeding one
year, and
‘‘(iii) the offense would be punishable
under the laws of the United States by impris-
onment for a term exceeding one year if the act
or activity constituting the offense had occurred
within the jurisdiction of the United States.’’.
SEC. 109. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC
TARGETING ORDERS AND CERTAIN RECORD
KEEPING REQUIREMENTS.
(a) CIVIL PENALTY FOR VIOLATION OF TARGETING
ORDER.—Section 5321(a)(1) of title 31, United States
Code, is amended—
(1) by inserting ‘‘or order issued’’ after ‘‘sub-
chapter or a regulation prescribed’’; and
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(2) by inserting ‘‘, or willfully violating a regu-
lation prescribed under section 21 of the Federal
Deposit Insurance Act or section 123 of Public Law
91–508,’’ after ‘‘sections 5314 and 5315)’’.
(b) CRIMINAL PENALTIES FOR VIOLATION OF TAR-
GETING ORDER.—
Section 5322 of title 31, United States Code, is
amended—
(1) in subsection (a)—
(A) by inserting ‘‘or order issued’’ after
‘‘willfully violating this subchapter or a regula-
tion prescribed’’; and
(B) by inserting ‘‘, or willfully violating a
regulation prescribed under section 21 of the
Federal Deposit Insurance Act or section 123
of Public Law 91–508,’’ after ‘‘under section
5315 or 5324)’’;
(2) in subsection (b)—
(A) by inserting ‘‘or order issued’’ after
‘‘willfully violating this subchapter or a regula-
tion prescribed’’; and
(B) by inserting ‘‘or willfully violating a
regulation prescribed under section 21 of the
Federal Deposit Insurance Act or section 123
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(1) FEDERAL DEPOSIT INSURANCE ACT.—Sec-
tion 21(j)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1829b(j)(1)) is amended by striking
‘‘$10,000’’ and inserting ‘‘the greater of—
‘‘(A) the amount (not to exceed $100,000)
involved in the transaction (if any) with respect
to which the violation occurred; or
‘‘(B) $25,000’’.
(2) PUBLIC
LAW
91–508.—Section 125(a) of
Public Law 91–508 (12 U.S.C. 1955(a)) is amended
by striking ‘‘$10,000’’ and inserting ‘‘the greater
of—
‘‘(1) the amount (not to exceed $100,000) in-
volved in the transaction (if any) with respect to
which the violation occurred; or
‘‘(2) $25,000’’.
(e) CRIMINAL PENALTIES FOR VIOLATION OF CER-
TAIN RECORD KEEPING REQUIREMENTS.—
(1) SECTION 126.—Section 126 of Public Law
91–508 (12 U.S.C. 1956) is amended to read as fol-
lows:
‘‘SEC. 126. CRIMINAL PENALTY.
‘‘A person that willfully violates this chapter, section
21 of the Federal Deposit Insurance Act, or a regulation
prescribed under this chapter or that section 21, shall be
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fined not more than $250,000, or imprisoned for not more
than 5 years, or both.’’.
(2) SECTION 127.—Section 127 of Public Law
91–508 (12 U.S.C. 1957) is amended to read as fol-
lows:
‘‘SEC. 127. ADDITIONAL CRIMINAL PENALTY IN CERTAIN
CASES.
‘‘A person that willfully violates this chapter, section
21 of the Federal Deposit Insurance Act, or a regulation
prescribed under this chapter or that section 21, while vio-
lating another law of the United States or as part of a
pattern of any illegal activity involving more than
$100,000 in a 12-month period, shall be fined not more
than $500,000, imprisoned for not more than 10 years,
or both.’’.
SEC. 110. EXCLUSION OF ALIENS INVOLVED IN MONEY
LAUNDERING.
(a) IN GENERAL.—Section 212 of the Immigration
and Nationality Act, as amended (8 U.S.C. 1182), is
amended in subsection (a)(2)—
(1) by redesignating subparagraphs (D), (E),
(F), (G), and (H) as subparagraphs (E), (F), (G),
(H), and (I), respectively; and
(2) by inserting after subparagraph (C) the fol-
lowing new subparagraph (D):
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‘‘(D) MONEY LAUNDERING ACTIVITIES.—
‘‘(i) IN GENERAL.—Any alien who the
consular officer or the Attorney General
knows or has reason to believe is or has
been engaged in activities which if engaged
in within the United States would con-
stitute a violation of the money laundering
provisions section 1956, 1957, or 1960 of
title 18, United States Code, or has know-
ingly assisted, abetted, or conspired or
colluded with others in any such illicit ac-
tivity is inadmissible.
‘‘(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 finan-
cial or other benefit from such illicit activ-
ity of that alien, and knew or reasonably
should have known that the financial or
other benefit was the product of such illicit
activity, is inadmissible, except that the
Attorney General may, in the full discre-
tion of the Attorney General, waive the ex-
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clusion of the spouse, son, or daughter of
an alien under this clause if the Attorney
General determines that exceptional cir-
cumstances exist that justify such waiv-
er.’’.
(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. 111. 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 at the end the following new sub-
section:
‘‘(k) CORRESPONDENT BANK ACCOUNTS.—
‘‘(1) TREATMENT
OF
ACCOUNTS
OF
COR-
RESPONDENT BANK IN DOMESTIC FINANCIAL INSTI-
TUTIONS.—
‘‘(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
foreign financial institution, and that foreign fi-
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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
account in the foreign financial institution may
be seized, arrested or restrained.
‘‘(B) AUTHORITY TO SUSPEND.—The At-
torney General, in consultation with the Sec-
retary, may suspend or terminate a forfeiture
under this section if the Attorney General de-
termines that a conflict of law exists between
the laws of the jurisdiction 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.
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‘‘(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
required to establish that such funds are directly
traceable to the funds that were deposited into the
respondent 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 para-
graph (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 pro-
vided in clause (ii), the term ‘owner’—
‘‘(I) means the person who was
the owner, as that term is defined in
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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 inter-
bank 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
action is wrongdoing committed by
the foreign bank; or
‘‘(II) the foreign bank estab-
lishes, by a preponderance of the evi-
dence, that prior to the restraint, sei-
zure, or arrest of the funds, the for-
eign bank had discharged all or part
of its obligation to the prior owner of
the funds, in which case the foreign
bank shall be deemed the owner of the
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funds to the extent of such discharged
obligation.’’.
SEC. 112. 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
section 5331 (as added by section 101) the following new
section:
‘‘§ 5332. Subpoenas for records
‘‘(a) DESIGNATION BY FOREIGN FINANCIAL INSTI-
TUTION OF AGENT.—Any foreign financial institution that
has a correspondent bank account at a financial institu-
tion in the United States shall designate a person residing
in the United States as a person authorized to accept a
subpoena for bank records or other legal process served
on the foreign financial institution.
‘‘(b) MAINTENANCE OF RECORDS BY DOMESTIC FI-
NANCIAL 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
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funds transferred to or from the correspondent ac-
count.
‘‘(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 insti-
tution.
‘‘(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 title 18,
and may be served on the representative designated
by the foreign financial institution pursuant to sub-
section (a) to accept legal process in the United
States, or in a foreign country pursuant to any mu-
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tual legal assistance treaty, multilateral agreement,
or other request for international law enforcement
assistance.
‘‘(d) CORRESPONDENT ACCOUNT DEFINED.—For
purposes 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 (as added by section 101) 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
section shall apply after the end of the 30-day period be-
ginning 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,’’.
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SEC. 113. 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
deposited with, a third party;
‘‘(C) has been placed beyond the jurisdic-
tion of the court;
‘‘(D) has been substantially diminished in
value; or
‘‘(E) has been commingled with other
property which cannot be divided without dif-
ficulty.
‘‘(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
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of any property described in subparagraphs (A)
through (E) of paragraph (1), as applicable.
‘‘(3) RETURN
OF
PROPERTY
TO
JURISDIC-
TION.—In the case of property described in para-
graph (1)(C), the court may, in addition to any
other action authorized by this subsection, order the
defendant to return 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
Controlled 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 sec-
tion, the court may order a defendant 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 Treasury, in an in-
terest-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,
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and may also result in an enhancement of the sen-
tence of the defendant under the obstruction of jus-
tice provision of the Federal Sentencing Guide-
lines.’’.
SEC. 114. CORPORATION REPRESENTED BY A FUGITIVE.
Section 2466 of title 28, United States Code, is
amended 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. 115. 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 pre-
serve the availability of property subject to a foreign
forfeiture or confiscation judgment, the Government
may apply for, and the court may issue, a restrain-
ing order pursuant to section 983(j) of title 18,
United States Code, at any time before or after an
application is filed pursuant to subsection (c)(1).
The court, in issuing the restraining order—
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‘‘(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 con-
clusion of such proceeding; or
‘‘(B) may register and enforce a restrain-
ing order that has been issued by a court of
competent 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
involving the same property that is pending in a for-
eign 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 per-
sons with an interest in the property in sufficient
time to enable such persons’’;
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(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 for-
feited under Federal law if the offense were com-
mitted in the United States’’ after ‘‘United Nations
Convention’’.
SEC. 116. 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 super-
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visory agency’’ and inserting ‘‘, supervisory agency, or
United States intelligence agency for use in the conduct
of intelligence or counterintelligence activities, including
analysis, to protect against international terrorism’’.
(c) AMENDMENT RELATING
TO AVAILABILITY
OF
REPORTS.—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 informa-
tion in a report filed under this subchapter available to
an agency, including any State financial institutions su-
pervisory agency, United States intelligence agency or self-
regulatory organization registered with the Securities and
Exchange Commission or the Commodity Futures Trading
Commission, upon request of the head of the agency or
organization. The report shall be available for a purpose
that is consistent with this subchapter. The Secretary may
only require reports on the use of such information by any
State financial institutions supervisory agency for other
than supervisory purposes or by United States intelligence
agencies. However, a report and records of reports are ex-
empt from disclosure under section 552 of title 5.’’.
(d) AMENDMENT RELATING TO THE RETENTION OF
RECORDS
BY INSURED DEPOSITORY INSTITUTIONS.—
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Section 21(a) of the Federal Deposit Insurance Act (12
U.S.C. 1829b(a)) is amended—
(1) in paragraph (1), by inserting ‘‘, or in the
conduct of intelligence or counterintelligence activi-
ties, including analysis, to protect against inter-
national terrorism’’ after ‘‘proceedings’’; and
(2) in paragraph (2), by inserting ‘‘, or in the
conduct of intelligence or counterintelligence activi-
ties, including analysis, to protect against inter-
national terrorism’’ before the period at the end.
(e) AMENDMENT RELATING TO THE RETENTION OF
RECORDS BY UNINSURED INSTITUTIONS.—Section 123(a)
of Public Law 91–508 (12 U.S.C. 1953(a)) is amended
by inserting ‘‘, or in the conduct of intelligence or counter-
intelligence activities, including analysis, to protect
against international terrorism’’ after ‘‘proceedings’’.
(f) 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 enforce-
ment inquiry’’;
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(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
counterintelligence analyses related to, inter-
national terrorism for the purpose of con-
ducting such investigations or analyses.’’; and
(3) 
in 
section 
1120(a)(2) 
(12 
U.S.C.
3420(a)(2)), by inserting ‘‘, or for a purpose author-
ized by section 1112(a)’’ before the semicolon at the
end.
(g) 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
sections designated as section 624 (15 U.S.C.
1681u) (relating to disclosure to FBI for coun-
terintelligence purposes) as section 625; and
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(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
agency 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 infor-
mation is necessary for the agency’s conduct or such inves-
tigation, activity or analysis.
‘‘(b) FORM
OF CERTIFICATION.—The certification
described in subsection (a) shall be signed by a supervisory
official designated by the head of a Federal agency or an
officer of a Federal agency whose appointment to office
is required to be made by the President, by and with the
advice and consent of the Senate.
‘‘(c) CONFIDENTIALITY.—No consumer reporting
agency, or officer, employee, or agent of such consumer
reporting agency, shall disclose to any person, or specify
in any consumer report, that a government agency has
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sought or obtained access to information under subsection
(a).
‘‘(d) RULE OF CONSTRUCTION.—Nothing in section
625 shall be construed to limit the authority of the Direc-
tor of the Federal Bureau of Investigation under this sec-
tion.
‘‘(e) SAFE HARBOR.—Notwithstanding any other
provision 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 gov-
ernmental agency pursuant to the provisions of this sec-
tion shall not be liable to any person for such disclosure
under this subchapter, the constitution of any State, or
any law or regulation of any State or any political subdivi-
sion 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.’’.
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(h) APPLICATION OF AMENDMENTS.—The amend-
ments made by this section shall apply with respect to re-
ports filed or records maintained on, before, or after the
date of the enactment of this Act.
SEC. 117. 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 Finan-
cial Crimes Enforcement Network shall be the Di-
rector who shall be appointed by the Secretary of the
Treasury.
‘‘(2) DUTIES
AND
POWERS.—The duties and
powers of the Director are as follows:
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‘‘(A) Advise and make recommendations
on matters relating to financial intelligence, fi-
nancial criminal activities, and other financial
activities to the Under Secretary for Enforce-
ment.
‘‘(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 finan-
cial agency transactions and relationships,
foreign currency transactions, 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 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.
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‘‘(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
Secretary 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 crimi-
nal tax and forfeiture proceedings;
‘‘(iii) identify possible instances of
noncompliance with subchapters II and III
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 responsi-
bility for enforcing compliance with such
provisions and other appropriate Federal
regulatory agencies;
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‘‘(iv) evaluate and recommend possible
uses of special currency reporting require-
ments under section 5326;
‘‘(v) determine emerging trends and
methods in money laundering and other fi-
nancial crimes;
‘‘(vi) support the conduct of intel-
ligence or counterintelligence activities, in-
cluding analysis, to protect against inter-
national terrorism; and
‘‘(vii) support government initiatives
against money laundering.
‘‘(D) Establish and maintain a financial
crimes communications center to furnish law
enforcement authorities with intelligence infor-
mation related to emerging or ongoing inves-
tigations and undercover operations.
‘‘(E) Furnish research, analytical, and in-
formational services to financial institutions,
appropriate Federal regulatory 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
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Treasury for Enforcement, in the interest of de-
tection, prevention, and prosecution of ter-
rorism, organized crime, money laundering, and
other financial crimes.
‘‘(F) Establish and maintain a special unit
dedicated to assisting Federal, State, local, and
foreign law enforcement and regulatory authori-
ties in combatting the use of informal, nonbank
networks and payment and barter system mech-
anisms 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 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.
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‘‘(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 Treas-
ury 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 trans-
mittal of information to, entry of information into,
and withdrawal of information from, the data main-
tenance 
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 re-
ports and other reports, or such other means as
the Secretary may provide, to identify informa-
tion that warrants immediate action; and
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‘‘(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
relationships 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 meth-
ods for improving compliance with the reporting require-
ments 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
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period thereafter. 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 sec-
tion 309 the following new item:
‘‘310. Financial Crimes Enforcement Network’’.
SEC. 118. 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 at-
tempts to falsify, conceal, or cover up, the identity
of any person in connection with any transaction
with a financial institution;
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‘‘(2) makes, or attempts to make, any materi-
ally false, fraudulent, or fictitious statement or rep-
resentation of the identity of any person in connec-
tion with a transaction with a financial institution;
‘‘(3) makes or uses, or attempts to make or
use, any false writing or document knowing the
same to contain any materially false, fictitious, or
fraudulent statement or entry concerning the iden-
tity of any person in connection with a transaction
with a financial institution; or
‘‘(4) uses or presents, or attempts to use or
present, in connection with a transaction with a fi-
nancial institution, an identification document or
means of identification the possession of which is a
violation of section 1028;
shall be fined under this title, imprisoned not more than
5 years, or both.
‘‘(b) DEFINITIONS.—In this section, the following
definitions shall apply:
‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi-
nancial institution’—
‘‘(A) has the same meaning as in section
20; and
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‘‘(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
financial institutions), section 1014 (relating to
fraudulent 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 insti-
tutions.’’.
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SEC. 119. VERIFICATION OF IDENTIFICATION.
(a) IN GENERAL.—Section 5318 of title 31, United
States Code, is amended by adding at the end the fol-
lowing new subsection:
‘‘(i) 
IDENTIFICATION
AND
VERIFICATION
OF
ACCOUNTHOLDERS.—
‘‘(1) IN
GENERAL.—Subject to the require-
ments of this subsection, the Secretary of the Treas-
ury shall prescribe regulations setting forth the min-
imum standards regarding customer identification
that shall apply in connection with the opening of an
account at a financial institution.
‘‘(2) MINIMUM
REQUIREMENTS.—The regula-
tions shall, at a minimum, require financial institu-
tions to implement procedures for—
‘‘(A) verifying the identity of any person
seeking to open an account to the extent rea-
sonable 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 lists of known or suspected
terrorists or terrorist organizations provided to
the financial institution by any government
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agency to determine whether a person seeking
to open an account appears 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 ac-
counts, and the various types of identifying informa-
tion 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 (including financial activities subject to the ju-
risdiction of the Commodity Futures Trading Com-
mission), the regulations prescribed by the Secretary
under paragraph (1) shall be prescribed jointly with
each Federal functional regulator (as defined in sec-
tion 509 of the Gramm-Leach-Bliley Act, including
the Commodity Futures Trading Commission) ap-
propriate for such financial institution.
‘‘(5) EXEMPTIONS.—The Secretary of the
Treasury (and, in the case of any financial institu-
tion described in paragraph (4), any Federal agency
described in such paragraph) may, by regulation or
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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
prescribe.
‘‘(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
Secretary of the Treasury, in consultation with the Fed-
eral 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;
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(2) requiring foreign nationals to apply for and
obtain, before opening an account with a domestic
financial 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
maintained by relevant Government agencies for
purposes of verifying the identities of foreign nation-
als seeking to open accounts at those institutions
and agencies.
SEC. 120. 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 combatting 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 applica-
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tion 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 FED-
ERAL 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
effectiveness of any insured depository institution in-
volved in the proposed merger transaction in com-
batting 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 applica-
tion submitted to the responsible agency under section
18(c) of the Federal Deposit Insurance Act after Decem-
ber 31, 2000, which has not been approved by all appro-
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priate responsible agencies before the date of the enact-
ment of this Act.
SEC. 121. 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 net-
work of people facilitating the transfer of value
domestically or internationally outside of the
conventional 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 trans-
mission of funds, including through an informal value
transfer banking system or network of people facilitating
the transfer of value domestically or internationally out-
side of the conventional financial institutions system’’.
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(c) APPLICABILITY OF RULES.—Section 5318 of title
31, United States Code, as amended by this Act, is
amended by adding at the end the following:
‘‘(l) APPLICABILITY
OF RULES.—Any rules pre-
scribed pursuant to the authority contained in section 21
of the Federal Deposit Insurance Act shall apply, in addi-
tion to any other financial institution to which such rules
apply, to any person that engages as a business in the
transmission of funds, including through an informal
value transfer banking system or network of people facili-
tating 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 re-
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ports under section 5318(g) of title 31, United
States Code should be lowered in the case of such
systems.
SEC. 122. UNIFORM PROTECTION AUTHORITY FOR FED-
ERAL 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 FED-
ERAL RESERVE FACILITIES.—
‘‘(1) Notwithstanding any other provision of
law, to authorize personnel to act as law enforce-
ment 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 safe-
guard the bank’s premises, grounds, property, per-
sonnel, 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
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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 offi-
cers shall have access to law enforcement informa-
tion 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 enforcement 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 pursu-
ant to regulations prescribed by the Board and ap-
proved by the Attorney General.’’.
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SEC. 123. 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 inserting
after section 5332 (as added by section 112 of this title)
the following new section:
‘‘SEC. 5333. 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 busi-
ness, receives more than $10,000 in coins or cur-
rency in 1 transaction (or 2 or more related trans-
actions),
shall file a report described in subsection (b) with respect
to such transaction (or related transactions) with the Fi-
nancial Crimes Enforcement Network at such time and
in such manner as the Secretary may, by regulation, pre-
scribe.
‘‘(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 pre-
scribe;
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‘‘(2) contains—
‘‘(A) the name and address, and such
other identification information as the Sec-
retary may require, of the person from whom
the coins or currency was received;
‘‘(B) the amount of coins or currency re-
ceived;
‘‘(C) the date and nature of the trans-
action; and
‘‘(D) such other information, including the
identification of the person filing the report, as
the Secretary may prescribe.
‘‘(c) EXCEPTIONS.—
‘‘(1) AMOUNTS RECEIVED BY FINANCIAL INSTI-
TUTIONS.—Subsection 
(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 prescribed 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.—
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‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘currency’ includes—
‘‘(A) foreign currency; and
‘‘(B) to the extent provided in regulations
prescribed by the Secretary, any monetary in-
strument (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 ac-
count 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
TRANS-
ACTIONS.—
(1) IN
GENERAL.—Section 5324 of title 31,
United States Code, is amended—
(A) by redesignating subsections (b) and
(c) as subsections (c) and (d), respectively; and
(B) by inserting after subsection (a) the
following new subsection:
‘‘(b) DOMESTIC
COIN
AND
CURRENCY
TRANS-
ACTIONS INVOLVING NONFINANCIAL TRADES OR BUSI-
NESSES.—No person shall for the purpose of evading the
report requirements of section 5333 or any regulation pre-
scribed under such section—
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‘‘(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 sec-
tion 5333 or any regulation prescribed under such
section that contains a material omission or
misstatement of fact; or
‘‘(3) structure or assist in structuring, or at-
tempt to structure or assist in structuring, any
transaction with 1 or more nonfinancial trades or
businesses.’.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—
(A) The heading for subsection (a) of sec-
tion 5324 of title 31, United States Code, is
amended by inserting ‘‘INVOLVING FINANCIAL
INSTITUTIONS’’ after ‘‘TRANSACTIONS’.
(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 BUSI-
NESS.—
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(1) IN GENERAL.—Section 5312(a) of title 31,
United States Code, is amended—
(A) by redesignating paragraphs (4) and
(5) as paragraphs (5) and (6), respectively; and
(B) by inserting after paragraph (3) the
following new paragraph:
‘‘(4) NONFINANCIAL
TRADE
OR
BUSINESS.—
The term ‘nonfinancial trade or business’ means any
trade or business other than a financial institution
that is subject to the reporting requirements of sec-
tion 5313 and regulations prescribed under such sec-
tion.’’.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENTS.—
(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 sec-
tions 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
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(ii) by inserting ‘‘or nonfinancial
trades or businesses’’ after ‘‘financial insti-
tutions’’ each place such term appears.
(C) Section 981(a)(1)(A) of title 18,
United States Code, is amended by striking
‘‘5313(a) or 5324(a) of title 31,’’ and inserting
‘‘5313(a) or 5333 of title 31, or subsection (a)
or (b) of section 5324 of such title,’’.
(D) Section 982(a)(1) of title 18, United
States Code, is amended by inserting ‘‘5333,’’
after ‘‘5313(a),’’.
(c) CLERICAL AMENDMENT.—The tables 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:
‘‘5333. Reports relating to coins and currency received in nonfinancial trade or
business.’’.
(f) REGULATIONS.—Regulations which the Secretary
of the Treasury 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 the enact-
ment of this Act.
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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 title I of
Public Law 91–508, or section 21 of the Federal
Deposit Insurance 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 ensure 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 Treasury, after consulting with appropriate Federal
functional regulators (as defined in section 509 of the
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Gramm-Leach-Bliley Act), shall report to the Congress on
the following issues:
(1) 
DATA
COLLECTION
AND
ANALYSIS.—
Progress made since such date of enactment in
meeting the requirements 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 preven-
tion and detection information among and between
Federal law enforcement agencies, including an iden-
tification of all Federal law enforcement data sys-
tems 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 activi-
ties are conducted in compliance with sub-
chapter II of chapter 53 of title 31, United
States Code, and section 21 of the Federal De-
posit Insurance Act.
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(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
Federal Deposit Insurance Act with respect to
private 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:
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(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 regu-
latory investigations and proceedings and the useful-
ness 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
reports were interfering with effective law enforce-
ment, the Congress reformed the currency trans-
action 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 main-
tain accounts at an institution into which fre-
quent cash deposits are made.
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(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 interfering with ef-
fective 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
provisions as a way of reducing the submission
of currency transaction reports that have little
or no value for law enforcement purposes, in-
cluding improvements in the systems in effect
at financial institutions for regular review of
the exemption procedures used at the institu-
tion and the training of personnel in its effec-
tive use.
(2) REPORT REQUIRED.—The Secretary of the
Treasury shall submit a report to the Congress be-
fore the end of the 90-day period beginning on the
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date of the enactment of this Act containing the
findings and conclusions of the Secretary with re-
gard to the study required under subsection (a) and
such recommendations for legislative or administra-
tive action as the Secretary determines to be appro-
priate.
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
adding at the end the following new subsection:
‘‘(d) TERRORIST FINANCING ISSUES.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall provide, either within the Bank Se-
crecy Act Advisory Group, or as a subcommittee or
other adjunct of the Advisory Group, for a task
force of representatives from agencies and officers
represented on the Advisory Group, a representative
of the Director of the Office of Homeland Security,
and representatives of financial institutions, private
organizations that represent the financial services in-
dustry, 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
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and within the United States, including through
the use of charitable organizations, nonprofit
organizations, and nongovernmental organiza-
tions, and the extent to which financial institu-
tions in the United States are unwittingly in-
volved in such finances and the extent to which
such institutions 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 re-
spective 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
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Act shall not apply to the task force established pur-
suant to paragraph (1).’’.
SEC. 206. SUSPICIOUS ACTIVITY REPORTING REQUIRE-
MENTS.
(a) DEADLINE FOR SUSPICIOUS ACTIVITY REPORT-
ING REQUIREMENTS FOR REGISTERED BROKERS AND
DEALERS.—The Secretary of the Treasury, in consulta-
tion with the Securities and Exchange Commission, shall
publish proposed regulations in the Federal Register be-
fore January 1, 2002, requiring brokers and dealers reg-
istered with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 to submit sus-
picious 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 REQUIRE-
MENTS FOR FUTURES COMMISSION MERCHANTS, COM-
MODITY TRADING ADVISORS, AND COMMODITY POOL OP-
ERATORS.—The Secretary of the Treasury, in consultation
with the Commodity Futures Trading Commission, may
prescribe regulations requiring futures commission mer-
chants, commodity 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.
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SEC. 207. AMENDMENTS RELATING TO REPORTING OF SUS-
PICIOUS ACTIVITIES.
(a) AMENDMENT RELATING TO CIVIL LIABILITY IM-
MUNITY FOR DISCLOSURES.—Section 5318(g)(3) of title
31, United States Code, is amended to read as follows:
‘‘(3) LIABILITY FOR DISCLOSURES.—
‘‘(A) IN GENERAL.—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 fail-
ure to provide notice of such disclosure to any
person.
‘‘(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
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be construed more broadly than its ordi-
nary usage so to include any government
or agency of government; or
‘‘(ii) any immunity against, or other-
wise affecting, any civil or criminal action
brought by any government or agency of
government to enforce any constitution,
law, or regulation of such government or
agency.’’.
(b) PROHIBITION
ON NOTIFICATION
OF DISCLO-
SURES.—Section 5318(g)(2) of title 31, United States
Code, is amended to read as follows:
‘‘(2) NOTIFICATION PROHIBITED.—
‘‘(A) IN GENERAL.—If a financial institu-
tion 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
Federal Government or of any State, local,
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tribal, 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
director, officer, employee, or agent of such in-
stitution, from including, in a written employ-
ment reference that is provided in accordance
with section 18(v) of the Federal Deposit Insur-
ance Act in response to a request from another
financial institution or a written termination
notice or employment reference that is provided
in accordance with the rules of the self-regu-
latory organizations registered with the Securi-
ties and Exchange Commission or the Com-
modity Futures Trading Commission, informa-
tion that was included in a report to which sub-
paragraph (A) applies, but such written employ-
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ment reference may not disclose that such in-
formation 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 fol-
lowing new subsection:
‘‘(w) WRITTEN EMPLOYMENT REFERENCES MAY
CONTAIN SUSPICIONS OF INVOLVEMENT IN ILLEGAL AC-
TIVITY.—
‘‘(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—
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‘‘(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 in-
clusion of the name of the originator in wire transfer
instructions sent to the United States and other
countries, with the information to remain with the
transfer from its origination until the point of dis-
bursement; and
(2) report annually to the Committee on Finan-
cial Services of the House of Representatives and
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the Committee on Banking, Housing, and Urban Af-
fairs of the Senate on—
(A) progress toward the goal enumerated
in paragraph (1), as well as impediments to im-
plementation 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 180-day period beginning on
the date of the enactment of this Act, the Secretary of
the Treasury, in consultation with the Attorney General
and the Board of Governors of the Federal Reserve Sys-
tem, shall conduct a study of the impact on—
(1) crime prevention (including money laun-
dering and terrorism);
(2) law enforcement;
(3) the financial services industry (including the
technical, operational, and economic impact on the
industry) and customers of such industry;
(4) the payment system (including the liquidity,
stability, and efficiency of the payment system and
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the ability to monitor and access the flow of funds);
and
(5) the 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
migration away from paper checks. The study shall also
include an analysis of the benefits and burdens of pro-
moting check electronification on the foregoing entities.
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
section 5318 the following new section:
‘‘§ 5318A. Special measures for jurisdictions, financial
institutions, or international transactions
of primary money laundering concern
‘‘(a) 
INTERNATIONAL
COUNTER-MONEY
LAUN-
DERING REQUIREMENTS.—
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‘‘(1) IN GENERAL.—The Secretary may require
domestic financial institutions and domestic financial
agencies to take 1 or more of the special measures
described in subsection (b) if the Secretary finds
that reasonable grounds exist for concluding that a
jurisdiction outside of the United States, 1 or more
financial institutions operating outside of the United
States, 1 or more classes of transactions within, or
involving, 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
paragraphs (1) through (4) of subsection (b) is im-
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posed (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
period 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
System, any other appropriate Federal banking
agency (as defined in section 3 of the Federal
Deposit Insurance Act), the Secretary of State,
the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the
National Credit Union Administration Board,
and in the sole discretion of the Secretary such
other agencies and interested parties as the
Secretary may find to be appropriate; and
‘‘(B) shall consider—
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‘‘(i) whether similar action has been
or is being taken by other nations or multi-
lateral groups;
‘‘(ii) whether the imposition of any
particular special measure would create a
significant competitive disadvantage, in-
cluding any undue cost or burden associ-
ated with compliance, for financial institu-
tions organized or licensed in the United
States;
‘‘(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;
and
‘‘(iv) the effect on national security
and foreign policy.
‘‘(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.
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‘‘(b) SPECIAL MEASURES.—The special measures re-
ferred to in subsection (a), with respect to a jurisdiction
outside of the United States, financial institution oper-
ating 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
CERTAIN 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
institutions operating outside of the United
States, 1 or more classes of transactions within,
or involving, a jurisdiction outside of the United
States, or 1 or more types of accounts if the
Secretary finds any such jurisdiction, institu-
tion, 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
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such period of time, as the Secretary shall de-
termine, 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 reason-
able and practicable to obtain and retain
the information; 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 domes-
tic financial agency to take such steps as the Sec-
retary may determine to be reasonable and prac-
ticable to obtain and retain information concerning
the beneficial ownership of any account opened or
maintained in the United States by a foreign person
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(other than a foreign entity whose shares are subject
to public reporting requirements or are listed and
traded on a regulated exchange or trading market),
or a representative of such a foreign person, that in-
volves a jurisdiction outside of the United States, 1
or more financial institutions operating outside of
the United States, 1 or more classes of transactions
within, or involving, 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 laun-
dering concern.
‘‘(3) INFORMATION RELATING TO CERTAIN PAY-
ABLE-THROUGH ACCOUNTS.—If the Secretary finds
a jurisdiction outside of the United States, 1 or
more financial 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 Secretary may require any domestic fi-
nancial institution or domestic financial agency that
opens or maintains a payable-through account in the
United States for a foreign financial institution in-
volving any such jurisdiction or any such financial
institution operating outside of the United States, or
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a payable through account 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 such financial
institution who is permitted to use, or whose
transactions are routed through, such payable-
through 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.
‘‘(4) INFORMATION RELATING TO CERTAIN COR-
RESPONDENT ACCOUNTS.—If the Secretary finds a
jurisdiction outside of the United States, 1 or more
financial 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 Secretary may require any domestic financial in-
stitution or domestic financial agency that opens or
maintains a correspondent account in the United
States for a foreign financial institution involving
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any such jurisdiction or any such financial institu-
tion operating outside of the United States, or a cor-
respondent account through which any such trans-
action 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
correspondent 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 OPEN-
ING OR MAINTAINING CERTAIN CORRESPONDENT OR
PAYABLE-THROUGH
ACCOUNTS.—If the Secretary
finds a jurisdiction outside of the United States, 1
or more financial institutions operating outside of
the United States, or 1 or more classes of trans-
actions within, or involving, a jurisdiction outside of
the United States to be of primary money laun-
dering concern, the Secretary, in consultation with
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the Secretary of State, the Attorney General, and
the Chairman of the Board of Governors of the Fed-
eral Reserve System, may prohibit, or impose condi-
tions upon, the opening or maintaining in the United
States of a correspondent account or payable-
through account by any domestic financial institu-
tion or domestic financial agency for or on behalf of
a foreign banking institution, if such correspondent
account or payable-through account involves any
such jurisdiction or institution, or if any such trans-
action may be conducted through such cor-
respondent account or payable-through account.
‘‘(c) CONSULTATIONS
AND INFORMATION TO BE
CONSIDERED 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 fi-
nancial institutions operating outside of the United
States, 1 or more classes of transactions within, or
involving, 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
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in subsection (b), the Secretary shall consult with
the Secretary of State, and the Attorney General.
‘‘(2) ADDITIONAL CONSIDERATIONS.—In mak-
ing a finding described in paragraph (1), the Sec-
retary shall consider in addition such information as
the Secretary determines to be relevant, including
the following 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
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that jurisdiction and the size of the econ-
omy of the jurisdiction;
‘‘(v) the extent to which that jurisdic-
tion is characterized as an offshore bank-
ing or secrecy haven by credible inter-
national organizations or multilateral ex-
pert 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 juris-
diction is characterized by high levels of of-
ficial or institutional corruption.
‘‘(B) INSTITUTIONAL
FACTORS.—In the
case of a decision to apply 1 or more of the spe-
cial measures described in subsection (b) only
to a financial institution or institutions, or to a
transaction or class of transactions, or to a type
of account, or to all 3, within or involving a
particular jurisdiction—
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‘‘(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
transactions involving the jurisdiction and
institutions operating in the jurisdiction,
that the purposes of this subchapter con-
tinue to be fulfilled, and to guard against
international money laundering and other
financial crimes.
‘‘(d) NOTIFICATION
OF SPECIAL MEASURES IN-
VOKED 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 Rep-
resentatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate of any such action.
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‘‘(e) DEFINITIONS.—Notwithstanding any other pro-
vision of this subchapter, for purposes of this section, the
following 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
regular services, dealings, and other finan-
cial transactions; and
‘‘(ii) includes a demand deposit, sav-
ings deposit, or other transaction or asset
account and a credit account or other ex-
tension of credit.
‘‘(B) CORRESPONDENT
ACCOUNT.—The
term ‘correspondent account’ means an account
established to receive deposits from, make pay-
ments on behalf of a foreign financial institu-
tion, or handle other financial transactions re-
lated 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
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a foreign financial institution by means of
which the foreign financial institution permits
its customers to engage, either directly or
through a subaccount, in banking activities
usual in connection with the business of bank-
ing in the United States.
‘‘(D) SECRETARY.—The term ‘Secretary’
means the Secretary of the Treasury.
‘‘(2) DEFINITIONS
APPLICABLE
TO
INSTITU-
TIONS OTHER THAN BANKS.—With respect to any fi-
nancial institution other than a bank, the Secretary
shall, after consultation with the appropriate Fed-
eral functional regulators (as defined in section 509
of the Gramm-Leach-Bliley Act), define by regula-
tion 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 Sec-
retary shall prescribe regulations defining beneficial
ownership of an account for purposes of this sub-
chapter. Such regulations shall address issues re-
lated to an individual’s authority to fund, direct, or
manage the account (including the power to direct
payments into or out of the account), and an indi-
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vidual’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 in-
come 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 appro-
priate.’’.
(b) FINANCIAL INSTITUTIONS SPECIFIED IN SUB-
CHAPTER II OF CHAPTER 53 OF TITLE 31, UNITED
STATES CODE.—
(1) CREDIT
UNIONS.—Subparagraph (E) of
section 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:
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‘‘(1) CERTAIN
INSTITUTIONS
INCLUDED
IN
DEFINITION.—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
regulator’’ includes the Commodity Futures Trading
Commission.
(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 inter-
national 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 119 of this Act) the following new
subsection:
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‘‘(j) DUE DILIGENCE FOR UNITED STATES PRIVATE
BANKING AND CORRESPONDENT BANK ACCOUNTS IN-
VOLVING FOREIGN PERSONS.—
‘‘(1) IN GENERAL.—Each financial institution
that establishes, maintains, administers, or manages
a private banking account or a correspondent ac-
count 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 poli-
cies, procedures, and controls to detect and report
instances of money laundering through those ac-
counts.
‘‘(2) SPECIAL STANDARDS FOR CERTAIN COR-
RESPONDENT ACCOUNTS.—
‘‘(A) IN
GENERAL.—Subparagraph (B)
shall apply if a correspondent account is re-
quested or maintained by, or on behalf of, a
foreign bank operating—
‘‘(i) under an offshore banking li-
cense; or
‘‘(ii) under a banking license issued
by a foreign country that has been
designated—
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‘‘(I) as noncooperative with inter-
national anti-money laundering prin-
ciples or procedures by an intergov-
ernmental 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 sub-
paragraph (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-
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dering and report any suspicious trans-
actions under section 5318(g); and
‘‘(iii) to ascertain whether such for-
eign bank provides correspondent accounts
to other foreign banks and, if so, the iden-
tity of those foreign banks and related due
diligence 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
institution 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 fig-
ure, or any immediate family member or close
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associate of a senior foreign political figure, to
prevent, 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 condi-
tion of the license, prohibits the licensed entity
from conducting banking activities with the citi-
zens of, or with the local currency of, the coun-
try 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
deposits 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 ben-
eficial ownership interest in the account;
and
‘‘(iii) is assigned to, or is administered
or managed by, in whole or in part, an of-
ficer, employee, or agent of a financial in-
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stitution 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 enactment of the Financial Anti-Terrorism Act
of 2001, the Secretary, in consultation with the ap-
propriate Federal functional regulators (as defined
in section 509 of the Gramm-Leach-Bliley Act) shall
further define and clarify, by regulation, the require-
ments 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
amended by inserting after subsection (j) (as added by sec-
tion 302 of this title) the following new subsection:
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‘‘(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
FOREIGN 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 indi-
rectly provide banking services to another for-
eign bank that does not have a physical pres-
ence 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 in-
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stitution from providing a correspondent account to
a foreign 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 affili-
ated depository institution, credit union, or for-
eign bank, described in subparagraph (A), as
applicable.
‘‘(4) DEFINITIONS.—For purposes of this sec-
tion, 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 in-
stitution, 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.
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‘‘(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
laundering programs, including, at a minimum—
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‘‘(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-Terrorism Act of 2001, or any successor to
such regulations, for so long as such financial insti-
tution is not subject to the provisions of such regula-
tions.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect at the end of the 180-day
period beginning on the date of the enactment of this Act.
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(c) DATE OF APPLICATION OF REGULATIONS; FAC-
TORS 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
regulations to implement the amendment made by sub-
section (a). In prescribing such regulations, the Secretary
shall consider the extent to which the requirements im-
posed under such regulations are commensurate with the
size, location, and activities of the financial institutions
to which such regulations 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 Sec-
retary may prescribe regulations under this sub-
section that govern maintenance of concentration ac-
counts by financial institutions, in order to ensure
that such accounts are not used to prevent associa-
tion of the identity of an individual customer with
the movement of funds of which the customer is the
direct or beneficial owner, which regulations shall, at
a minimum—
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‘‘(A) prohibit financial institutions from al-
lowing clients to direct transactions that move
their funds into, out of, or through the con-
centration accounts of the financial institution;
‘‘(B) prohibit financial institutions and
their employees from informing customers of
the existence of, or the means of identifying,
the concentration accounts of the institution;
and
‘‘(C) require each financial institution to
establish written procedures governing the doc-
umentation of all transactions involving a con-
centration account, which procedures shall en-
sure that, any time a transaction involving a
concentration account commingles funds belong-
ing to 1 or more customers, the identity of, and
specific amount belonging to, each customer is
documented.’’.
SEC. 306. INTERNATIONAL COOPERATION IN INVESTIGA-
TIONS OF MONEY LAUNDERING, FINANCIAL
CRIMES, AND THE FINANCES OF TERRORIST
GROUPS.
(a) NEGOTIATIONS.—
(1) IN GENERAL.—It is the sense of the Con-
gress that, in addition to the existing requirements
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of section 4702 of the Anti-Drug Abuse Act of 1988,
the President should direct the Secretary of State,
the Attorney General, or the Secretary of the Treas-
ury, as appropriate and in consultation with the
Board of Governors of the Federal Reserve System,
to seek to enter into negotiations with the appro-
priate financial supervisory agencies and other offi-
cials of any foreign country the financial institutions
of which do business with United States financial in-
stitutions or which may be utilized by any foreign
terrorist 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.
(2) PURPOSES
OF
NEGOTIATIONS.—It is the
sense of the Congress that, in carrying out any ne-
gotiations described in paragraph (1), the President
should direct the Secretary of State, the Attorney
General, or the Secretary of the Treasury, as appro-
priate, to seek to enter into and further cooperative
efforts, voluntary information exchanges, the use of
letters rogatory, mutual legal assistance treaties,
and international agreements to—
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(A) ensure that foreign banks and other fi-
nancial institutions maintain adequate records
of—
(i) large United States currency
transactions; and
(ii) transaction and account informa-
tion relating to any foreign terrorist orga-
nization (as designated under section 219
of the Immigration and Nationality Act),
any person who is a member or representa-
tive of any such organization, or any per-
son engaged in money laundering or finan-
cial or other crimes; and
(B) establish a mechanism whereby such records
may be made available to United States law enforce-
ment officials and domestic financial institution su-
pervisors, when appropriate.
(b) REPORTS.—
(1) IN GENERAL.—Not later than 1 year after
the date of the enactment of this Act and annually
thereafter, the Secretary of State, in conjunction
with the Attorney General and the Secretary of the
Treasury, shall submit a report to the Congress, on
the progress in any negotiations described in sub-
section (a).
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(2) 
IDENTIFICATION
OF
CERTAIN
COUN-
TRIES.—In any report submitted under paragraph
(1), the Secretary of State 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 by
any foreign terrorist organization (as des-
ignated under section 219 of the Immigration
and Nationality Act), any person who is a mem-
ber 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 ob-
jectives of subparagraphs (A) and (B) of sub-
section (a)(2).
(3) REPORT ON PENALTIES AND SANCTIONS.—
If the President determines that—
(A) a foreign country is described in sub-
paragraphs (A) and (B) of paragraph (2); and
(B) such country—
(i) is not negotiating in good faith to
reach an agreement described in subsection
(a)(2); or
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(ii) has not complied with, or a finan-
cial institution of such country has not
complied with, a request, made by an offi-
cial of the United States Government au-
thorized to make such request, for infor-
mation regarding a foreign terrorist orga-
nization (as designated under section 219
of the Immigration and Nationality Act), a
person who is a member or representative
of any such organization, or a person en-
gaged in money laundering for or with any
such organization,
and the President imposes any penalties or sanctions
on such country or financial institutions of such
country on the basis of such determination, the Sec-
retary of State shall submit a report to the Congress
describing the facts and circumstances of the case
before the end of the 60-day period beginning on the
date such sanctions and penalties take effect.