I
107TH CONGRESS
1ST SESSION
H. R. 1114
To combat international money laundering and protect the United States
financial system, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 20, 2001
Mr. LAFALCE (for himself and Ms. VELA´ZQUEZ) introduced the following bill;
which was referred to the Committee on Financial Services
A BILL
To combat international money laundering and protect the
United States financial system, 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; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘International Counter-Money Laundering and Foreign
Anticorruption Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I—INTERNATIONAL COUNTER-MONEY LAUNDERING
MEASURES
Sec. 101. Special measures for jurisdictions, financial institutions, or inter-
national transactions of primary money laundering concern.
TITLE II—CURRENCY TRANSACTION REPORTING AMENDMENTS
AND RELATED IMPROVEMENTS
Sec. 201. Amendments relating to reporting of suspicious activities.
Sec. 202. Penalties for violations of geographic targeting orders and certain
recordkeeping requirements, and lengthening effective period of
geographic targeting orders.
Sec. 203. Authorization to include suspicions of illegal activity in written em-
ployment references.
Sec. 204. Bank Secrecy Act Advisory Group.
Sec. 205. Agency reports on reconciling penalty amounts.
TITLE III—ANTICORRUPTION MEASURES
Sec. 301. Corruption of foreign governments and ruling elites.
Sec. 302. Support for the Financial Action Task Force on Money Laundering.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds as follows:
(1) Money laundering, estimated by the Inter-
national Monetary Fund to amount to between 2
and 5 percent of global gross domestic product
which is at least $600,000,000,000 annually, pro-
vides the financial fuel that permits transnational
criminal enterprises to conduct and expand their op-
erations to the detriment of the safety and security
of American citizens.
(2) Money launderers subvert legitimate finan-
cial mechanisms and banking relationships by using
them as protective covering for the movement of
criminal proceeds and, by so doing, can undermine
the integrity of our financial institutions and of the
global financial and trading systems upon which our
prosperity and growth depend.
(3) Money launderers rely upon the existence
and use of certain jurisdictions outside the United
States that offer bank secrecy and special tax or
regulatory advantages to nonresidents, and often
complement those advantages with weak financial
supervisory and regulatory regimes.
(4) Certain kinds of transactions involving such
offshore jurisdictions—for example, those trans-
actions specifically designed to offer anonymity or
the avoidance of regulatory scrutiny—make it dif-
ficult for law enforcement officials and regulators to
follow the trail of money earned by criminals and or-
ganized international criminal enterprises that un-
dermine United States national interests and traffic
in human misery, whether they are narcotics dealers,
terrorists, arms smugglers, traffickers in human
beings, or those whose frauds prey upon law abiding
citizens.
(5) Certain banking relationships between fi-
nancial institutions in the United States and finan-
cial institutions located in such offshore jurisdic-
tions, such as correspondent and payable-through
accounts, are particularly vulnerable to abuse be-
cause of the difficulty in obtaining accurate informa-
tion about the beneficial owners whose funds pass
through such accounts.
(6) The ability to mount effective counter-meas-
ures to international money launderers requires na-
tional, as well as bilateral and multilateral action,
using tools specially designed for that effort.
(7) The Basle Committee on Banking Regula-
tion and Supervisory Practices and the Financial
Action Task Force on Money Laundering, both of
which the United States is a member, have each
adopted international anti-money laundering prin-
ciples and recommendations.
(b) PURPOSES.—The purposes of this Act are as fol-
lows:
(1) To ensure that banking transactions and fi-
nancial relationships, the conduct of such trans-
actions and relationships, or both, do not contravene
the purposes of subchapter II of chapter 53 of title
31, United States Code, section 21 of the Federal
Deposit Insurance Act, and chapter 2 of title I of
Public Law 91–508, or facilitate the evasion of any
such provision, to ensure that the purposes of such
subchapter II continue to be fulfilled, and to guard
against international money laundering and other fi-
nancial crimes.
‘‘§ 5318A. Special measures for jurisdictions, financial
institutions, or international transactions
of primary money laundering concern
‘‘(a) 
INTERNATIONAL
COUNTER-MONEY
LAUN-
DERING REQUIREMENTS.—
‘‘(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 the United States, 1 or more fi-
nancial institutions operating outside the United
States, or 1 or more classes of transactions within,
or involving, a jurisdiction outside the United States
is of primary money laundering concern, in accord-
ance with subsection (c).
‘‘(2) FORM
OF
REQUIREMENT.—The special
measures described in subsection (b) may be im-
posed by regulation, order, or otherwise as permitted
by law, and in such sequence or combination, as the
Secretary shall determine.
‘‘(3) PROCESS FOR SELECTING SPECIAL MEAS-
URES.—
‘‘(A) CONSULTATION.—In selecting which
special measure or measures to take under this
subsection, the Secretary shall consult with the
Chairman of the Board of Governors of the
Federal Reserve System and, in the Secretary’s
sole discretion, such other agencies and inter-
ested parties as the Secretary may find to be
appropriate.
‘‘(B) FACTORS.—The Secretary also shall
consider—
‘‘(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; and
‘‘(iii) the extent to which the action
would have a significant adverse systemic
impact on the international payment, clear-
ance and settlement system, or on legiti-
mate business activities involving the par-
ticular jurisdiction, institution, or class of
transactions.
‘‘(4) NO LIMITATION ON OTHER AUTHORITY.—
This section shall not be construed as superseding or
otherwise restricting any other authority granted to
the Secretary, or to any other agency, by this sub-
chapter or otherwise.
‘‘(b) SPECIAL MEASURES.—The special measures re-
ferred to in subsection (a), with respect to a jurisdiction
outside the United States, financial institution operating
outside the United States, or class of transaction within,
or involving, a jurisdiction outside the United States, 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 the United States, 1 or more financial in-
stitutions operating outside the United States,
or 1 or more classes of transactions within, or
involving, a jurisdiction outside the United
States, if the Secretary finds any such jurisdic-
tion, institution, or class of transactions to be
of primary money laundering concern.
‘‘(B) FORM OF RECORDS AND REPORTS.—
Such records and reports shall be made and re-
tained at such time, in such manner, and for
such period of time, as the Secretary shall 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) information concerning the bene-
ficial ownership of the funds involved in
any transaction, in accordance with steps
the Secretary has determined to be reason-
able and practicable to obtain and retain
such information; and
‘‘(iv) a description of any transaction.
‘‘(2) INFORMATION RELATING TO BENEFICIAL
OWNERSHIP.—In addition to any other requirement
under any other law, the Secretary may require any
domestic financial institution or domestic financial
agency to take such steps as the Secretary may de-
termine to be reasonable and practicable to obtain
and retain information concerning the beneficial
ownership of any account opened or maintained in
the United States by a foreign person (other than a
foreign entity whose shares are subject to public re-
porting requirements or are listed and traded on a
regulated exchange or trading market), or a rep-
resentative of such a foreign person, that involves a
jurisdiction outside the United States, 1 or more fi-
nancial institutions operating outside the United
States, or 1 or more classes of transactions within,
or involving, a jurisdiction outside the United States,
if the Secretary finds any such jurisdiction, institu-
tion, or transaction to be of primary money laun-
dering concern.
‘‘(3) INFORMATION RELATING TO CERTAIN PAY-
ABLE-THROUGH ACCOUNTS.—If the Secretary finds
a jurisdiction outside the United States, 1 or more
financial institutions operating outside the United
States, or 1 or more classes of transactions within,
or involving, a jurisdiction outside the United States
to be of primary money laundering concern, the Sec-
retary may require any domestic financial institution
or domestic financial agency that opens or maintains
a payable-through account in the United States for
a foreign financial institution involving any such ju-
risdiction or any such financial institution operating
outside the United States, or a payable-through ac-
count through which any such transaction may be
conducted, as a condition of opening or maintaining
such account, to—
‘‘(A) 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) obtain, with respect to each such cus-
tomer (and each such representative), the same
information that the depository institution ob-
tains in the ordinary course of business with re-
spect to its customers residing in the United
States.
‘‘(4) INFORMATION RELATING TO CERTAIN COR-
RESPONDENT ACCOUNTS.—If the Secretary finds a
jurisdiction outside the United States, 1 or more fi-
nancial institutions operating outside the United
States, or 1 or more classes of transactions within,
or involving, a jurisdiction outside the United States
to be of primary money laundering concern, the Sec-
retary may require any domestic financial institution
or domestic financial agency that opens or maintains
a correspondent account in the United States for a
foreign financial institution involving any such juris-
diction or any such financial institution operating
outside the United States, or a correspondent ac-
count through which any such transaction may be
conducted, as a condition of opening or maintaining
such account, to—
‘‘(A) 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) obtain, with respect to each such cus-
tomer (and each such representative), the same
information that the depository institution ob-
tains in the ordinary course 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 the United States, 1 or
more financial institutions operating outside the
United States, or 1 or more classes of transactions
within, or involving, a jurisdiction outside the United
States to be of primary money laundering concern,
the Secretary, in consultation with the Secretary of
State, the Attorney General, and the Chairman of
the Board of Governors of the Federal Reserve Sys-
tem, may prohibit, or impose conditions upon, the
opening or maintaining in the United States of a
correspondent account or payable-through account
by any domestic financial institution or domestic fi-
nancial agency for or on behalf of a foreign banking
institution if such correspondent account or payable-
through account involves any such jurisdiction or in-
stitution, or if any such transaction may be con-
ducted through such correspondent account or pay-
able-through account.
‘‘(c) CONSULTATIONS
AND INFORMATION TO BE
CONSIDERED IN FINDING JURISDICTIONS, INSTITUTIONS,
OR TRANSACTIONS TO BE OF PRIMARY MONEY LAUN-
DERING CONCERN.—
‘‘(1) IN GENERAL.—In making a finding that
reasonable grounds exist for concluding that a juris-
diction outside the United States, 1 or more finan-
cial institutions operating outside the United States,
or 1 or more classes of transactions within, or in-
volving, a jurisdiction outside the United States is of
primary money laundering concern so as to author-
ize the Secretary to invoke 1 or more of the special
measures of subsection (b), the Secretary shall con-
sult with the Secretary of State, the Attorney Gen-
eral, the Secretary of Commerce, and the United
States Trade Representative.
‘‘(2) INFORMATION.—The Secretary also shall
consider such information as the Secretary considers
to be relevant, including the following potentially rel-
evant factors:
‘‘(A) 
In 
the 
case 
of 
a 
particular
jurisdiction—
‘‘(i) the extent to which that jurisdic-
tion or financial institutions operating
therein offer bank secrecy or special tax or
regulatory advantages to nonresidents or
nondomiciliaries of such jurisdiction;
‘‘(ii) the substance and quality of ad-
ministration of that jurisdiction’s bank su-
pervisory and counter-money laundering
laws;
‘‘(iii) the relationship between the vol-
ume of financial transactions occurring in
that jurisdiction and the size of the juris-
diction’s economy;
‘‘(iv) the extent to which that jurisdic-
tion is characterized as a tax haven or off-
shore banking or secrecy haven by credible
international organizations or multilateral
expert groups;
‘‘(v) whether the United States has a
mutual legal assistance treaty with that ju-
risdiction, and the experience of United
States law enforcement officials, regulatory
officials, and tax administrators in obtain-
ing information about transactions origi-
nating in or routed through or to such ju-
risdiction; and
‘‘(vi) the extent to which that jurisdic-
tion is characterized by high levels of offi-
cial or institutional corruption.
‘‘(B) In the case of a decision to apply 1
or more of the special measures described in
subsection (b) only to a financial institution or
institutions, or to a transaction or class of
transactions, or to both, within, or involving, a
particular jurisdiction—
‘‘(i) the extent to which such financial
institutions or transactions are used to fa-
cilitate or promote money laundering in or
through the jurisdiction;
‘‘(ii) the extent to which such institu-
tions or transactions are used for legiti-
mate business purposes in such jurisdic-
tion; and
‘‘(iii) the extent to which such action
is sufficient to ensure, with respect to
transactions involving such jurisdiction and
institutions operating in such 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.—Within 10 days after the
date of any action taken by the Secretary under subsection
(a)(1), the Secretary shall notify, in writing, the Com-
mittee on Banking and Financial Services of the House
of Representatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate of any such action.
‘‘(e) DEFINITIONS.—Notwithstanding any other pro-
vision of this subchapter, for purposes of this section, the
following definitions shall apply:
‘‘(1) DEFINED TERMS.—
‘‘(A) BANK DEFINITIONS.—The following
definitions shall apply with respect to a bank:
‘‘(i) ACCOUNT.—The term ‘account’—
‘‘(I) means a formal banking or
business relationship established to
provide regular services, dealings, and
other financial transactions; and
‘‘(II) includes a demand deposit,
savings deposit, or other transaction
or asset account and a credit account
or other extension of credit.
‘‘(ii) CORRESPONDENT
ACCOUNT.—
The term ‘correspondent account’ means
an account established to receive deposits
from and make payments on behalf of a
foreign financial institution.
‘‘(iii) PAYABLE-THROUGH ACCOUNT.—
The term ‘payable-through account’ means
an account, including a transaction ac-
count (as defined in section 19(b)(1)(C) of
the Federal Reserve Act), opened at a de-
pository institution by a foreign financial
institution by means of which the foreign
financial institution permits its customers
to engage, either directly or through a sub-
account, in banking activities usual in con-
nection with the business of banking in the
United States.
‘‘(B) DEFINITIONS APPLICABLE TO INSTI-
TUTIONS OTHER THAN BANKS.—With respect
to any financial institution other than a bank,
the Secretary shall define, by regulation, order,
or otherwise as permitted by law, the term ‘ac-
count’ and shall include within the meaning of
such term arrangements similar to payable-
through and correspondent accounts.
‘‘(2) OTHER TERMS.—The Secretary may, by
regulation, order, or otherwise as permitted by law,
further define the terms in paragraph (1) and define
other terms for the purposes of this section, as the
Secretary deems appropriate.’’.
(b) 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.’’.