I
105TH CONGRESS
1ST SESSION
H. R. 1756
To amend chapter 53 of title 31, United States Code, to require the develop-
ment and implementation by the Secretary of the Treasury of a national
money laundering and related financial crimes strategy to combat money
laundering and related financial crimes, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 3, 1997
Ms. VELA´ZQUEZ (for herself, Mr. LEACH, Mr. GONZALEZ, and Mr. BACHUS)
introduced the following bill; which was referred to the Committee on
Banking and Financial Services, and in addition to the Committee on the
Judiciary, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend chapter 53 of title 31, United States Code, to
require the development and implementation by the Sec-
retary of the Treasury of a national money laundering
and related financial crimes strategy to combat money
laundering and related 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,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Money Laundering and
Financial Crimes Strategy Act of 1997’’.
SEC. 2. MONEY LAUNDERING AND RELATED FINANCIAL
CRIMES.
(a) IN GENERAL.—Chapter 53 of title 31, United
States Code is amended by adding at the end the following
new subchapter:
‘‘Subchapter III—Money Laundering and
Related Financial Crimes
‘‘SEC. 5341. DEFINITIONS.
‘‘For purposes of this subtitle, the following defini-
tions shall apply:
‘‘(1) DEPARTMENT OF THE TREASURY LAW EN-
FORCEMENT
ORGANIZATIONS.—The term ‘Depart-
ment of the Treasury law enforcement organizations’
has the meaning given to such term in section
9703(p)(1).
‘‘(2) MONEY LAUNDERING AND RELATED FI-
NANCIAL CRIME.—The term ‘money laundering and
related financial crime’ means an offense under this
subchapter, chapter II of title I of Public Law 91–
508 (12 U.S.C. 1951, et seq.; commonly referred to
as the ‘Bank Secrecy Act’), or section 1956, 1957,
or 1960 of title 18 or any related Federal, State, or
local criminal offense.
‘‘(3) SECRETARY.—The term ‘Secretary’ means
the Secretary of the Treasury.
‘‘SEC. 5342. NATIONAL MONEY LAUNDERING AND RELATED
FINANCIAL CRIMES STRATEGY.
‘‘(a) DEVELOPMENT
AND SUBMISSION
TO CON-
GRESS.—
‘‘(1) BIENNIAL STRATEGY.—Before the end of
the 180-day period beginning on the date of the en-
actment of this subtitle and before February 1 of
every 2d subsequent year, the President, acting
through the Secretary, shall develop a national strat-
egy for combating money laundering and related fi-
nancial crimes which shall be submitted to the Con-
gress.
‘‘(2) SEPARATE PRESENTATION OF CLASSIFIED
MATERIAL.—Any part of the strategy that involves
information which is properly classified under cri-
teria established by Executive Order shall be submit-
ted to the Congress separately.
‘‘(b) DEVELOPMENT OF STRATEGY.—The national
strategy for combating money laundering and related fi-
nancial crimes shall address any area the President, acting
through the Secretary, considers appropriate, including
the following:
‘‘(7) ASSESSMENT OF FUNDING.—A complete
assessment of how the proposed budget is intended
to implement the strategy and whether the funding
levels contained in the proposed budget are sufficient
to implement the strategy.
‘‘(8) DESIGNATED
AREAS.—A description of
geographical areas designated as ‘high-risk money
laundering and related financial crime areas’ in ac-
cordance with, but not limited to, section 5343.
(9) PERSONS CONSULTED.—Persons or officers
consulted by the Secretary pursuant to subsection
(d).
‘‘(10) DATA
REGARDING
TRENDS
IN
MONEY
LAUNDERING AND RELATED FINANCIAL CRIMES.—
The need for additional information necessary for
the purpose of developing and analyzing data in
order to ascertain financial crime trends.
‘‘(11) IMPROVED COMMUNICATIONS SYSTEMS.—
A plan for enhancing the compatibility of automated
information and facilitating access of the Federal
Government and State and local governments to
timely, accurate, and complete information.
‘‘(c) EFFECTIVENESS REPORT.—At the time each bi-
ennial national strategy for combating financial crimes is
transmitted by the President to the Congress (other than
the 1st transmission of any such strategy) pursuant to
subsection (a), the Secretary shall submit a report con-
taining an evaluation of the effectiveness of policies to
combat money laundering and related financial crimes.
‘‘(d) CONSULTATIONS.—In developing the national
strategy for combating money laundering and related fi-
nancial crimes, the Secretary shall consult with—
‘‘(1) Department of the Treasury law enforce-
ment organizations involved in the detection, preven-
tion, and suppression of money laundering and relat-
ed financial crimes;
‘‘(2) the Attorney General;
‘‘(3) the Board of Governors of the Federal Re-
serve System and other Federal banking agencies
and the National Credit Union Administration
Board;
‘‘(4) State and local officials, including State
and local prosecutors;
‘‘(5) the Securities and Exchange Commission;
‘‘(6) the Commodities and Futures Trading
Commission;
‘‘(7) to the extent appropriate, State and local
officials responsible for financial institution and fi-
nancial market regulation;
‘‘(8) any other State or local government au-
thority, to the extent appropriate;
‘‘(9) any other Federal Government authority
or instrumentality, to the extent appropriate; and
‘‘(10) representatives of the private financial
services sector, to the extent appropriate.
‘‘SEC. 5343. HIGH-RISK MONEY LAUNDERING AND RELATED
FINANCIAL CRIME AREAS.
‘‘(a) FINDINGS AND PURPOSE.—
‘‘(1) FINDINGS.—The Congress finds the fol-
lowing:
‘‘(A) Money laundering and related finan-
cial crimes frequently appear to be concentrated
in particular geographic areas, financial sys-
tems, industry sectors, or financial institutions.
‘‘(B) While the Secretary has the respon-
sibility to act with regard to Federal offenses
which are being committed in a particular local-
ity or are directed at a single institution, be-
cause modern financial systems and institutions
are interconnected to a degree which was not
possible until recently, money laundering and
other related financial crimes are likely to have
local, State, national, and international effects
wherever they are committed.
‘‘(2) PURPOSE AND OBJECTIVE.—It is the pur-
pose of this section to provide a mechanism for des-
ignating any area where money laundering or a re-
lated financial crime appears to be occurring at a
higher than average rate such that—
‘‘(A) a comprehensive approach to the
problem of such crime in such area can be de-
veloped, in cooperation with State and local law
enforcement agencies, which utilizes the author-
ity of the Secretary to prevent such activity; or
‘‘(B) such area can be targeted for law en-
forcement action.
‘‘(b) ELEMENT OF NATIONAL STRATEGY.—The des-
ignation of certain areas as areas in which money launder-
ing and related financial crimes are extensive or present
a substantial risk shall be an element of the national strat-
egy developed pursuant to section 5342(b).
‘‘(c) DESIGNATION OF AREAS.—
‘‘(1) DESIGNATION BY SECRETARY.—The Sec-
retary, after taking into consideration the factors
specified in subsection (d), shall designate any geo-
graphical area, industry, sector, or institution in the
United States in which money laundering and relat-
ed financial crimes are extensive or present a sub-
stantial risk as a ‘high-risk money laundering and
related financial crimes area’.
‘‘(2) CASE-BY-CASE DETERMINATION.—In addi-
tion to the factors specified in subsection (d), any
designation of any area under paragraph (1) shall be
made on the basis of a determination by the Sec-
retary that the particular area, industry, sector, or
institution is being victimized by, or is particularly
vulnerable to, money laundering and related finan-
cial crimes.
‘‘(3) SPECIFIC INITIATIVES.—Any head of a de-
partment, bureau, or law enforcement agency, in-
cluding any State or local prosecutor, involved in the
detection, prevention, and suppression of money
laundering and related financial crimes and any
State or local official or prosecutor may submit—
‘‘(A) a written request for the designation
of any area as a high-risk money laundering
and related financial crimes area; or
‘‘(B) a written request for funding under
section 5345 for a specific prevention or en-
forcement initiative, or to determine the extent
of financial criminal activity, in an area.
‘‘(d) FACTORS.—In considering the designation of
any area as a high-risk money laundering and related fi-
nancial crimes area, the Secretary shall, to the extent ap-
propriate, take into account the following factors:
‘‘(1) The population of the area and the demo-
graphics of the population.
‘‘(2) The number of bank and nonbank finan-
cial institution transactions which originate in such
area or involve institutions located in such area.
‘‘(3) The number of stock or commodities
transactions which originate in such area or involve
institutions located in such area.
‘‘(4) Whether the area is a key transportation
hub with any international ports or airports or an
extensive highway system.
‘‘(5) Whether the area is an international cen-
ter for banking or commerce.
‘‘(6) The extent to which financial crimes and
financial crime-related activities in such area are
having a harmful impact in other areas of the coun-
try.
‘‘(7) The number or nature of requests for in-
formation or analytical assistance which—
‘‘(A) are made to the analytical component
of the Department of the Treasury; and
‘‘(B) originate from law enforcement or
regulatory authorities located in such area or
involve institutions or businesses located in such
area or residents of such area.
‘‘(8) Whether the area is or has been the sub-
ject of active money laundering investigations.
‘‘(9) The volume or nature of suspicious activity
reports originating in the area.
‘‘(10) The volume or nature of currency trans-
action reports or reports of cross-border movements
of currency or monetary instruments originating in
the area.
‘‘(11) Whether, and how often, the area has
been the subject of a geographical targeting order
under section 5326 before being considered for such
designation.
‘‘(12) Observed changes in trends and patterns
of money laundering activity.
‘‘(13) Unusual patterns, anomalies, growth, or
other changes in the volume or nature of core eco-
nomic statistics or indicators.
‘‘(14) Statistics or indicators of unusual or un-
explained volumes of cash transactions.
‘‘(15) Unusual patterns, anomalies, or changes
in the volume or nature of transactions conducted
through financial institutions operating within or
outside the United States.
‘‘(16) The extent to which State and local gov-
ernments and State and local law enforcement agen-
cies have committed resources to respond to the fi-
nancial crime problem in the area and the degree to
which the commitment of such resources reflects a
determination by such government and agencies to
address the problem aggressively.
‘‘(17) The extent to which a significant increase
in the allocation of Federal resources to combat fi-
nancial crimes in such area is necessary to provide
an adequate State and local response to financial
crimes and financial crime-related activities in such
area.
‘‘SEC. 5344. DESIGNATION OF LEAD AGENCY.
‘‘(a) IN GENERAL.—The Secretary shall coordinate
and develop a national strategy for combating money laun-
dering and financial crimes.
‘‘(b) FEDERAL RESPONSES AUTHORIZED.—With re-
spect to any area designated under section 5343 as a high-
risk money laundering and related financial crimes area,
the Secretary may take the following initiatives:
‘‘(1) Recommend increases in Federal assist-
ance which the Secretary determines is necessary to
combat financial crimes in such areas.
‘‘(2) Establish joint cooperative efforts, and co-
ordinate enforcement activities, among Federal law
enforcement organizations involved in the detection,
prevention, and suppression of money laundering
and related financial crimes and State and local law
enforcement agencies with respect to financial
crimes in such area.
‘‘SEC. 5345. GRANTS FOR FIGHTING MONEY LAUNDERING
AND RELATED FINANCIAL CRIMES.
‘‘(a) PROGRAM AUTHORIZED.—
‘‘(1) IN GENERAL.—After the end of the 1-year
period beginning on the date the 1st national strat-
egy for combating money laundering and related fi-
nancial crimes is submitted to the Congress in ac-
cordance with section 5342, and subject to sub-
section (b), the Secretary may review, select, and
award grants for State or local law enforcement
agencies and prosecutors to provide funding nec-
essary to investigate and prosecute money launder-
ing and related financial crimes in high-risk money
laundering and related financial crime areas.
‘‘(2) SPECIAL
PREFERENCE.—Special pref-
erence shall be given to applications submitted to the
Secretary which demonstrate collaborative efforts of
2 or more State and local law enforcement agencies
or prosecutors who have a history of Federal, State,
and local cooperative law enforcement and prosecu-
torial efforts in responding to such criminal activity.
‘‘(b) AUTHORIZATION.—There are authorized to be
appropriated such sums as may be necessary for fiscal
years beginning after fiscal year 1998 to carry out this
section.’’.
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 53 of title 31, United States Code,
is amended by adding at the end the following items relat-
ing to the subchapter added by subsection (a) of this sec-
tion:
‘‘SUBCHAPTER III—MONEY LAUNDERING AND RELATED FINANCIAL CRIMES
‘‘Sec. 5341. Definitions.
‘‘Sec. 5342. National money laundering and related financial crimes strat-
egy.
‘‘Sec. 5343. High-intensity and high-risk money laundering and related fi-
nancial crime areas.
‘‘Sec. 5344. Designation of lead agency.
‘‘Sec. 5345. Grants for fighting money laundering and related financial
crimes.’’.
SEC. 3. BUDGETS FOR LAW ENFORCEMENT ACTIVITIES RE-
LATING TO MONEY LAUNDERING AND RELAT-
ED FINANCIAL CRIMES.
Section 1105 of title 31, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(h) The Director of the Office of Management and
Budget shall establish the funding for law enforcement ac-
tivities with respect to money laundering and related fi-
nancial crimes for each applicable department or agency
as a separate object class in each budget annually submit-
ted to the Congress under this section.’’.
(b) REPORT AND RECOMMENDATIONS.—Before the
end of the 5-year period beginning on the date the 1st
national strategy for combating money laundering and re-
lated financial crimes is submitted to the Congress pursu-
ant to section 5342(a)(1) of title 31, United States Code,
the Secretary of the Treasury shall submit a report to the
Committee on Banking and Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate on the effective-
ness of and the need for the designation of areas, under
section 5343 of title 31, United States Code (as added
by section 2(a) of this Act), as high-risk money laundering
and related financial crime areas, together with such rec-
ommendations for legislation as the Secretary may deter-
mine to be appropriate to carry out the purposes of such
section.
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