I
103D CONGRESS
1ST SESSION
H. R. 3235
To amend subchapter II of chapter 53 of title 31, United States Code,
to improve enforcement of antimoney laundering laws, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1993
Mr. GONZALEZ (for himself and Mr. NEAL of North Carolina) introduced the
following bill; which was referred to the Committee on Banking, Finance
and Urban Affairs
NOVEMBER 10, 1993
Additional sponsors: Mr. FLAKE, Mr. KANJORSKI, Mr. PICKLE, Mr.
VELA´ZQUEZ, and Mr. HINCHEY
A BILL
To amend subchapter II of chapter 53 of title 31, United
States Code, to improve enforcement of antimoney laun-
dering laws, 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 ‘‘Antimoney Laundering
Act of 1993’’.
SEC. 2. REFORM OF CTR EXEMPTION REQUIREMENTS TO
REDUCE NUMBER AND SIZE OF REPORTS
CONSISTENT 
WITH 
EFFECTIVE 
LAW 
EN-
FORCEMENT.
(a) IN GENERAL.—Section 5313 of title 31, United
States Code, is amended by adding at the end the follow-
ing new subsections:
‘‘(d) MANDATORY EXEMPTIONS FROM REPORTING
REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury 
shall 
exempt, 
pursuant 
to 
section
5318(a)(5), a depository institution from the report-
ing requirements of subsection (a) (and regulations
prescribed under such subsection) with respect to
transactions between the depository institution and
the following categories of entities:
‘‘(A) Another depository institution.
‘‘(B) A department or agency of the
United States, any State, or any political sub-
division of any State, including any entity es-
tablished under the laws of the United States,
any State, or any political subdivision of any
State, or under an interstate compact between
2 or more States, which exercises governmental
authority on behalf of the United States, the
State, or the political subdivision.
‘‘(C) Any business or category of business
the reports on which have little or no value for
law enforcement purposes.
‘‘(2) NOTICE OF EXEMPTION.—The Secretary
of the Treasury shall publish in the Federal Register
at such times as the Secretary determines to be ap-
propriate (but not less frequently than once each
year) a list of all the entities whose transactions
with a depository institution are exempt under this
subsection from the reporting requirements of sub-
section (a) (and regulations prescribed under such
subsection).
‘‘(e) DISCRETIONARY EXEMPTIONS FROM REPORT-
ING REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury 
may 
exempt, 
pursuant 
to 
section
5318(a)(5), a depository institution from the report-
ing requirements of subsection (a) (and regulations
prescribed under such subsection) with respect to
transactions between the depository institution and a
qualified business customer of the institution on the
basis of information submitted to the Secretary by
the institution in accordance with procedures which
the Secretary shall establish.
‘‘(2) QUALIFIED
BUSINESS
CUSTOMER
DE-
FINED.—For purposes of this subsection, the term
‘qualified business customer’ means a business
which—
‘‘(A) maintains a transaction account (as
defined in section 19(b)(1)(C) of the Federal
Reserve Act) at the depository institution;
‘‘(B) frequently engages in transactions
with the depository institution which are subject
to the reporting requirements of subsection (a)
(and regulations prescribed under such sub-
section); and
‘‘(C) meets criteria which the Secretary de-
termines are sufficient to ensure that the pur-
poses of this subchapter are carried out without
requiring a report with respect to such trans-
actions.
‘‘(3) CRITERIA
FOR
EXEMPTION.—The Sec-
retary of the Treasury shall establish, by regulation,
the criteria for granting and maintaining an exemp-
tion under paragraph (1).
‘‘(4) GUIDELINES.—
‘‘(A) IN GENERAL.—The Secretary of the
Treasury shall establish guidelines for deposi-
gle officer or agency of the United States to
whom such reports shall be made.
‘‘(B) DUTY OF DESIGNEE.—The officer or
agency of the United States designated by the
Secretary of the Treasury pursuant to subpara-
graph (A) shall refer any report of a suspicious
transaction to the appropriate law enforcement
or supervisory agency.
‘‘(C) COORDINATION
WITH
OTHER
RE-
PORTING
REQUIREMENTS.—Subparagraph (A)
shall not be construed as precluding any super-
visory agency for any financial institution from
requiring the financial institution to submit any
information or report to the agency or another
agency pursuant to any provision of law other
than this subsection.
‘‘(D) REPORTS.—
‘‘(i) REPORTS REQUIRED.—The Sec-
retary of the Treasury shall submit an an-
nual report to the Congress at the times
required under clause (ii) on the number of
suspicious transactions reported to the offi-
cer or agency designated under subpara-
graph (A) during the period covered by the
report and the disposition of such reports.
‘‘(ii) TIME
FOR
SUBMITTING
RE-
PORTS.—The 1st report required under
clause (i) shall be filed before the end of
the 1-year period beginning on the date of
the enactment of the Antimoney Launder-
ing Act of 1993 and each subsequent re-
port shall be filed within 90 days after the
end of each of the 5 calendar years which
begin after such date of enactment.’’.
(b) DESIGNATION REQUIRED TO BE MADE EXPEDI-
TIOUSLY.—The initial designation of an officer or agency
of the United States pursuant to the amendment made
by subsection (a) shall be made before the end of the 180-
day period beginning on the date of the enactment of this
Act.
SEC. 4. BANKING AGENCY PILOT PROGRAMS TO IDENTIFY
MONEY LAUNDERING SCHEMES.
Before the end of the 6-month period beginning on
the date of the enactment of this Act, the Comptroller of
the Currency and the Board of Governors of the Federal
Reserve System shall each establish a pilot program de-
signed to test the feasibility of using examiners employed
by the agency to identify money laundering schemes in-
volving depository institutions for which the agency is the
appropriate Federal banking agency (as defined in section
3(q) of the Federal Deposit Insurance Act.
SEC. 5. NEGOTIABLE INSTRUMENTS DRAWN ON FOREIGN
BANKS SUBJECT TO RECORDKEEPING AND
REPORTING REQUIREMENTS.
Section 5312(a)(3) of title 31, United States Code,
is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A);
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) as the Secretary of the Treasury shall
provide by regulation, checks, drafts, notes,
money orders, and other similar instruments
which are drawn on or by a foreign financial in-
stitution and are not in bearer form.’’.
SEC. 6. IMPOSITION OF CIVIL MONEY PENALTIES BY AP-
PROPRIATE FEDERAL BANKING AGENCIES.
Section 5321 of title 31, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(e) DELEGATION OF ASSESSMENT AUTHORITY TO
BANKING AGENCIES.—
‘‘(1) IN
GENERAL.—The Secretary of the
Treasury shall delegate, in accordance with section
5318(a)(1) and subject to such terms and conditions
as the Secretary may impose in accordance with
paragraph (3), any authority of the Secretary to as-
sess a civil money penalty under this section on de-
pository institutions (as defined in section 3 of the
Federal Deposit Insurance Act) to the appropriate
Federal banking agencies (as defined in such section
3).
‘‘(2) AUTHORITY
OF
AGENCIES.—Subject to
any term or condition imposed by the Secretary of
the Treasury under paragraph (3), the provisions of
this section shall apply to an appropriate Federal
banking agency to which is delegated any authority
of the Secretary under this section in the same man-
ner such provisions apply to the Secretary.
‘‘(3) TERMS AND CONDITIONS.—
‘‘(A) IN GENERAL.—The Secretary of the
Treasury shall prescribe by regulation the terms
and conditions which shall apply to any delega-
tion under paragraph (1).
‘‘(B) MAXIMUM
DOLLAR
AMOUNT.—The
terms and conditions authorized under subpara-
graph (A) may include, in the Secretary’s sole
discretion, a limitation on the amount of any
civil penalty which may be assessed by an ap-
propriate Federal banking agency pursuant to a
delegation under paragraph (1).’’.
SEC. 7. UNIFORM STATE LICENSING AND REGULATION OF
CHECK 
CASHING, 
CURRENCY 
EXCHANGE,
AND MONEY TRANSMITTING BUSINESSES.
(a) UNIFORM LAWS AND ENFORCEMENT.—For pur-
poses of preventing money laundering and protecting the
payment system from fraud and abuse, it is the sense of
the Congress that the several States should—
(1) establish uniform laws for licensing and reg-
ulating businesses which—
(A) provide check cashing, currency ex-
change, or money transmitting or remittance
services, or issue or redeem money orders, trav-
elers’ checks, and other similar instruments;
and
(B) are not depository institutions (as de-
fined in section 19(b)(1)(A) of the Federal Re-
serve Act); and
(2) provide sufficient resources to the appro-
priate State agency to enforce such laws and regula-
tions prescribed pursuant to such laws.
(b) MODEL STATUTE.—It is the sense of the Con-
gress that the several States should develop, through the
auspices of the National Conference of Commissioners on
Uniform State Laws, the American Law Institute, or such
other forum as the States may determine to be appro-
priate, a model statute to carry out the goals described
in subsection (a) which would include the following:
(1) LICENSING
REQUIREMENTS.—A require-
ment that any business described in subsection
(a)(1) be licensed and regulated by an appropriate
State agency in order to engage in any such activity
within the State.
(2) LICENSING
STANDARDS.—A requirement
that—
(A) in order for any business described in
subsection (a)(1) to be licensed in the State, the
appropriate State agency shall review and ap-
prove—
(i) the business record and the capital
adequacy of the business seeking the li-
cense; and
(ii) the competence, experience, integ-
rity, and financial ability of any individual
who—
(I) is a director, officer, or super-
visory employee of such business; or
(II) owns or controls such busi-
ness; and
(B) any record, on the part of any business
seeking the license or any person referred to in
subparagraph (A)(ii), of—
(i) any criminal activity;
(ii) any fraud or other act of personal
dishonesty;
(iii) any act, omission, or practice
which constitutes a breach of a fiduciary
duty; or
(iv) any suspension or removal, by any
agency or department of the United States
or any State, from participation in the con-
duct of any federally or State licensed or
regulated business,
may be grounds for the denial of any such li-
cense by the appropriate State agency.
(3) PROCEDURES
TO
ENSURE
COMPLIANCE
WITH FEDERAL CASH TRANSACTION REPORTING RE-
QUIREMENTS.—A civil or criminal penalty for oper-
ating any business referred to in paragraph (1)
without establishing and complying with appropriate
procedures to ensure compliance with subchapter II
of chapter 53 of title 31, United States Code (relat-
ing to records and reports on monetary instruments
transactions).
(4) CRIMINAL PENALTIES FOR OPERATION OF
BUSINESS WITHOUT A LICENSE.—A criminal penalty
for operating any business referred to in paragraph
(1) without a license within the State after the end
of an appropriate transition period beginning on the
date of the enactment of such model statute by the
State.
(c) STUDY REQUIRED.—The Secretary of the Treas-
ury shall conduct a study of—
(1) the progress made by the several States in
developing and enacting a model statute which—
(A) meets the requirements of subsection
(b); and
(B) furthers the goals of—
(i) preventing money laundering by
businesses which are required to be li-
censed under any such statute; and
(ii) protecting the payment system, in-
cluding the receipt, payment, collection,
and clearing of checks, from fraud and
abuse by such businesses; and
(2) the adequacy of—
(A) the activity of the several States in en-
forcing the requirements of such statute; and
(B) the resources made available to the ap-
propriate State agencies for such enforcement
activity.
(d) REPORT REQUIRED.—Before the end of the 3-
year period beginning on the date of the enactment of this
Act and by the end of each of the first 2 1-year periods
beginning after the end of such 3-year period, the Sec-
retary of the Treasury shall submit a report to the Con-
gress containing the findings and recommendations of the
Secretary in connection with the study under subsection
(c), together with such recommendations for legislative
and administrative action as the Secretary may determine
to be appropriate, including any recommendation pursu-
ant to subsection (e).
(e) RECOMMENDATIONS FOR INCENTIVES OR SANC-
TIONS IN CASES OF INADEQUATE REGULATION AND EN-
FORCEMENT BY STATES.—If the Secretary of the Treas-
ury determines that any State has failed—
(1) to enact a statute which meets the require-
ments described in subsection (b);
(2) to undertake adequate activity to enforce
such statute; or
(3) to make adequate resources available to the
appropriate State agency for such enforcement activ-
ity,
the report submitted pursuant to subsection (d) shall con-
tain recommendations for legislation establishing incen-
tives which may be provided or sanctions which may be
imposed to remedy such failure.
SEC. 8. REGISTRATION OF MONEY TRANSMITTING BUSI-
NESSES TO PROMOTE EFFECTIVE LAW EN-
FORCEMENT.
(a) FINDINGS AND PURPOSES.—
(1) FINDINGS.—The Congress hereby finds the
following:
(A) Money transmitting businesses are
subject to the recordkeeping and reporting re-
quirements of subchapter II of chapter 53 of
title 31, United States Code.
(B) Money transmitting businesses are
largely unregulated businesses and are fre-
quently used in sophisticated schemes to—
(i) transfer large amounts of money
which are the proceeds of unlawful enter-
prises; and
(ii) evade the requirements of such
subchapter II, the Internal Revenue Code
of 1986, and other laws of the United
States.
(C) Information on the identity of money
transmitting businesses and the names of the
persons who own or control, or are officers or
employees of, a money transmitting business
would have a high degree of usefulness in crimi-
nal, tax, or regulatory investigations and pro-
ceedings.
(2) PURPOSE.—It is the purpose of this section
to establish a registration requirement for businesses
engaged in providing check cashing, currency ex-
change, or money transmitting or remittance serv-
ices, or issuing or redeeming money orders, travel-
ers’ checks, and other similar instruments to assist
the Secretary of the Treasury, the Attorney General,
and other supervisory and law enforcement agencies
to effectively enforce the criminal, tax, and regu-
latory laws and prevent such money transmitting
businesses from engaging in illegal activities.
(b) IN GENERAL.—Subchapter II of chapter 53 of
title 31, United States Code, is amended by adding at the
end the following new section:
‘‘§ 5329. Registration of money transmitting busi-
nesses
‘‘(a) REGISTRATION
WITH
SECRETARY
OF
THE
TREASURY REQUIRED.—
‘‘(1) IN GENERAL.—Any person who owns or
controls a money transmitting business which is not
a depository institution (as defined in section
19(b)(1)(A) of the Federal Reserve Act) shall reg-
ister the business (whether or not the business is li-
censed as a money transmitting business in any
State) with the Secretary of the Treasury before the
end of the 180-day period beginning on the later
of—
‘‘(A) the date of the enactment of this Act;
or
‘‘(B) the date the business is established.
‘‘(2) FORM AND MANNER OF REGISTRATION.—
Subject to the requirements of subsection (b), the
Secretary of the Treasury shall prescribe, in regula-
tions, the form and manner for registering a money
transmitting business pursuant to paragraph (1).
‘‘(3) BUSINESSES REMAIN SUBJECT TO STATE
LAW.—This section shall not be construed as super-
seding any requirement of State law relating to
money transmitting businesses operating in such
State.
‘‘(4) FALSE AND INCOMPLETE INFORMATION.—
The filing of false or materially incomplete informa-
tion in connection with the registration of a money
transmitting business shall be considered as a failure
to comply with the requirements of this subsection.
‘‘(b) CONTENTS OF REGISTRATION.—The registra-
tion of a money transmitting business under subsection
(a) shall include the following information:
‘‘(1) The name and location of the business.
‘‘(2) The name and address of each person
who—
‘‘(A) owns or controls the business;
‘‘(B) is an director or officer of the busi-
ness; or
‘‘(C) otherwise participates in the conduct
of the affairs of the business.
‘‘(3) The name and address of any depository
institution at which the business maintains a trans-
action account (as defined in section 19(b)(1)(C) of
the Federal Reserve Act).
‘‘(4) Such other information as the Secretary of
the Treasury may require.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) MONEY
TRANSMITTING
BUSINESS.—The
term ‘money transmitting business’ means any busi-
ness other than the United States Postal Service
which—
‘‘(A) provides check cashing, currency ex-
change, or money transmitting or remittance
services, or issues or redeems money orders,
travelers’ checks, and other similar instruments;
‘‘(B) is required to file reports under sec-
tion 5313; and
‘‘(C) is not a depository institution (as de-
fined in section 19(b)(1)(A) of the Federal Re-
serve Act).
‘‘(2) MONEY
TRANSMITTING
SERVICE.—The
term ‘money transmitting service’ includes accepting
currency or funds denominated in the currency of
any country and transmitting the currency or funds,
or the value of the currency or funds, by any means
through a financial agency or institution, a Federal
reserve bank or other facility of the Board of Gov-
ernors of the Federal Reserve System, or an elec-
tronic funds transfer network.
‘‘(d) CIVIL PENALTY
FOR FAILURE TO COMPLY
WITH REGISTRATION REQUIREMENTS.—
‘‘(1) IN GENERAL.—Any person who fails to
comply with the money transmitting business reg-
istration requirements under subsection (a) or regu-
lations prescribed under such subsection shall be lia-
ble to the United States for a civil penalty of $5,000
for each such violation.
‘‘(2) CONTINUING VIOLATION.—Each day a vio-
lation described in paragraph (1) continues shall
constitute a separate violation for purposes of such
paragraph.
‘‘(3) ASSESSMENTS.—Any penalty imposed
under this subsection shall be assessed and collected
by the Secretary of the Treasury in the manner pro-
vided in section 5321 and any such assessment shall
be subject to the provisions of such section.’’.
(c) CRIMINAL PENALTY FOR FAILURE TO COMPLY
WITH
REGISTRATION
REQUIREMENTS.—Section
1960(b)(1) of title 18, United States Code, is amended
to read as follows:
‘‘(1) the term ‘illegal money transmitting busi-
ness’ means a money transmitting business which
affects interstate or foreign commerce in any man-
ner or degree and—
‘‘(A) is intentionally operated without an
appropriate money transmitting license in a
State where such operation is punishable as a
misdemeanor or a felony under State law; or
‘‘(B) fails to comply with the money trans-
mitting 
business 
registration 
requirements
under section 5329 of title 31, United States
Code, or regulations prescribed under such sec-
tion;’’.
(d) CIVIL FORFEITURE.—Section 981(a)(1)(A) of
title 18, United States Code, is amended by striking ‘‘or
of section 1956 or 1957 of this title,’’ and inserting ‘‘,
of section 1956, 1957, or 1960 of this title,’’.
(e) CLERICAL AMENDMENT.—The table of sections
for chapter 53 of title 31, United States Code, is amended
by inserting after the item relating to section 5328 the
following new item:
‘‘5329. Registration of money transmitting businesses.’’.
SEC. 9. UNIFORM FEDERAL REGULATION OF CASINOS.
AMENDMENT TO DEFINITION OF FINANCIAL INSTI-
TUTION TO SPECIFICALLY INCLUDE CERTAIN CASINOS.—
Section 5312(a)(2) of title 31, United States Code, is
amended—
(1) by redesignating subparagraphs (X) and
(Y) as subparagraphs (Y) and (Z), respectively; and
(2) by inserting after subparagraph (W) the fol-
lowing new subparagraph:
‘‘(X) a casino, gambling casino, or gaming
establishment with an annual gaming revenue
of more than $1,000,000 which—
‘‘(i) is licensed as a casino or gam-
bling casino under the laws of any State or
any political subdivision of any State; or
‘‘(ii) is an Indian gaming operation
conducted under or pursuant to the Indian
Gaming Regulatory Act other than an op-
eration which is limited to class I gaming
(as defined in section 4(6) of such Act).’’.
SEC. 10. UNIFORM FEDERAL ADMINISTRATION OF RECORD-
KEEPING AND REPORTING REQUIREMENTS.
(a) IN GENERAL.—Section 5318 of title 31, United
States Code, is amended by adding at the end the follow-
ing new subsection:
‘‘(i) UNIFORM ADMINISTRATION OF SUBCHAPTER.—
‘‘(1) NO
EXEMPTIONS.—No exemption from
any recordkeeping or reporting requirement of this
subchapter, including paragraph (1), or of any regu-
lation prescribed pursuant to this subchapter may be
granted to—
‘‘(A) any State or any political subdivision
of a State on behalf of any financial institution
which but, for such exemption, would be re-
quired to maintain records or file reports under
this subchapter or regulations prescribed by the
Secretary of the Treasury pursuant to this sub-
chapter; or
‘‘(B) any financial institution on the basis
that any State, any political subdivision of any
State, or any officer, agency, or other authority
of any such State or political subdivision regu-
lates or examines such institution.
‘‘(2) REPORTS REQUIRED TO BE FILED WITH
FEDERAL AGENCY.—Any report required under this
subchapter or regulations prescribed by the Sec-
retary of the Treasury pursuant to this subchapter
shall be filed by the person required to make the re-
port with the Secretary of the Treasury or an officer
or agency of the United States designated by the
Secretary to receive such report.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
Section 5318(a) of title 31, United States Code, is amend-
ed—
(1) in paragraph (1), by inserting ‘‘or (i)’’ after
‘‘subsection (b)(2)’’; and
(2) in paragraph (5), by inserting ‘‘except as
provided in subsection (i),’’ before ‘‘prescribe an ap-
propriate exemption’’.
(c) REVOCATION OF PRIOR EXEMPTION.—Any ex-
emption granted under subchapter II of chapter 53 of title
31, United States Code, by the Secretary of the Treasury
before the date of the enactment of the Antimoney Laun-
dering Act of 1993 to any State or local government on
behalf of any financial institution (as defined in such sub-
chapter) is hereby revoked as of the end of the 30-day
period beginning on the date of the enactment of this Act.
SEC. 11. TREASURY STUDY OF CASHIERS’ CHECKS.
(a) STUDY REQUIRED.—The Secretary of the Treas-
ury shall conduct a study to determine—
(1) the extent to which the practice of issuing
of cashiers’ checks by financial institutions is vulner-
able to money laundering schemes;
(2) the extent to which additional recordkeeping
requirements should be imposed on financial institu-
tions which issue cashiers’ checks; and
(3) such other factors relating to the use and
regulation of cashiers’ checks as the Secretary deter-
mines to be appropriate.
(b) REPORT REQUIRED.—Before the end of the 180-
day period beginning on the date of the enactment of this
Act, the Secretary of the Treasury shall submit a report
to the Congress containing—
(1) the findings and conclusions of the Sec-
retary in connection with the study conducted pursu-
ant to subsection (a); and
(2) such recommendations for legislative and
administrative action as the Secretary may deter-
mine to be appropriate.
Æ
HR 3235 SC——2
HR 3235 SC——3