I
106TH CONGRESS
1ST SESSION
H. R. 1471
To eliminate money laundering in the private banking system, to require
the Secretary of the Treasury to warn insured depository institutions
of foreign countries in which there is a concentration of money laundering
activities, to amend the Bank Holding Company Act of 1956 to require
the Board of Governors of the Federal Reserve System to include money
laundering activities in the consideration of applications under section
3 of such Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 15, 1999
Ms. WATERS introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To eliminate money laundering in the private banking sys-
tem, to require the Secretary of the Treasury to warn
insured depository institutions of foreign countries in
which there is a concentration of money laundering ac-
tivities, to amend the Bank Holding Company Act of
1956 to require the Board of Governors of the Federal
Reserve System to include money laundering activities
in the consideration of applications under section 3 of
such Act, 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
Prevention Act of 1999’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress makes the following
findings:
(1) Money laundering is a serious problem: be-
tween $100,000,000,000 and $300,000,000,000 in
United States currency is ‘‘laundered’’ each year
and the total dollar amount involved in international
money laundering likely exceeds $500,000,000,000.
(2) Money laundering is critical to the survival
of the illicit drug trade, which has annual worldwide
revenues of more than $400,000,000,000, more than
8 percent of the total value of international trade.
(3) United States financial institutions are a
critical link in our efforts to combat money laun-
dering.
(4) Highly secretive and loosely regulated pri-
vate banking services that cater to wealthy clients
are particularly vulnerable to use by drug traffickers
for money laundering purposes, and it is estimated
that private banking services have banking assets
ranging 
from 
$200,000,000,000 
to
$300,000,000,000.
(b) PURPOSES.—The purposes of this Act are as fol-
lows:
(1) To ensure that United States financial in-
stitutions make combating money laundering the
highest of priorities.
(2) To close the existing gaps in law that allow
money laundering to flourish in the private banking
system.
(3) To designate foreign high-intensity money
laundering areas for the purpose of targeting areas
of concentrated money laundering activities.
(4) To require the Board of Governors of the
Federal Reserve System to take into account money
laundering activities in the consideration of applica-
tions under section 3 of the Bank Holding Company
Act of 1956.
SEC. 3. REPORT ON PRIVATE BANKING ACTIVITIES.
(a) IN GENERAL.—Before the end of the 1-year pe-
riod beginning on the date of the enactment of this Act,
the Secretary of the Treasury, in consultation with the
Federal banking agencies (as defined in section 3(z) of
the Federal Deposit Insurance Act) shall submit a report
on private banking activities in the United States 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.
(b) CONTENTS OF REPORT.—The report required
under subsection (a) shall include information on the fol-
lowing:
(1) The nature and extent of private banking
activities in the United States.
(2) Regulatory efforts to monitor private bank-
ing activities and ensure that such activities are con-
ducted in compliance with subchapter II of chapter
53 of title 31, United States Code, and section 21
of the Federal Deposit Insurance Act.
(3) The policies and procedures of depository
institutions that are designed to ensure compliance
by such institutions with the requirements of sub-
chapter II of chapter 53 of title 31, United States
Code, and section 21 of the Federal Deposit Insur-
ance Act.
(c) PRIVATE BANKING ACTIVITIES DEFINED.—For
purposes of this section, the term ‘‘private banking activi-
ties’’ includes, with respect to a financial institution, per-
sonalized services, such as money management, financial
advice, and investment services, that are provided to indi-
viduals with a high net worth and are not provided gen-
erally to all clients of the financial institution.
SEC. 4. REQUIRE THAT ANTI-MONEY LAUNDERING PRO-
GRAMS 
PROHIBIT 
MONEY 
LAUNDERING
THROUGH CONCENTRATION ACCOUNTS AT
FINANCIAL 
INSTITUTIONS 
BY 
REQUIRING
THE AVAILABILITY OF CERTAIN ACCOUNT IN-
FORMATION.
Section 5318(h) of title 31, United States Code, is
amended by adding at the end the following new para-
graph:
‘‘(3) AVAILABILITY OF CERTAIN ACCOUNT IN-
FORMATION.—The Secretary of the Treasury shall
prescribe regulations under this subsection which re-
quire financial institutions to maintain all accounts
in such a way as to ensure that—
‘‘(A) the name of the account holder and
the number of the account are associated with
all account activity of the account holder; and
‘‘(B) all such information is available for
purposes of account supervision and law en-
forcement.’’
SEC. 
5. 
DESIGNATION 
OF 
FOREIGN 
HIGH-INTENSITY
MONEY LAUNDERING AREAS.
(a) IN GENERAL.—Subchapter III of chapter 53 of
title 31, United States Code (as added by the Money
Laundering and Financial Crimes Strategy Act of 1998)
is amended by adding at the end the following new part:
‘‘PART 3—INTERNATIONAL MONEY LAUNDERING AND
RELATED FINANCIAL CRIMES
‘‘§ 5361. Designation of foreign high-intensity money
laundering areas
‘‘(a) IN GENERAL.—The Secretary, in consultation
with the Federal banking agencies, shall develop criteria
for identifying areas outside the United States in which
money laundering activities are concentrated.
‘‘(b) DESIGNATION.—The Secretary shall designate
as a high-intensity money laundering area any foreign
country in which there is an area identified, in accordance
with the criteria developed pursuant to subsection (a), as
an area in which money laundering activities are con-
centrated.
‘‘(c) NOTICE AND WARNING.—Upon the designation,
under subsection (b), of a country as a high-intensity
money laundering area, the Secretary shall provide—
‘‘(1) a written notice to each insured depository
institution (as defined in section 3 of the Federal
Deposit Insurance Act), and each depository institu-
tion holding company (as defined in such section 3)
that controls an insured depository institution, of
the identity of the country designated; and
‘‘(2) a written warning that there is a con-
centration of money laundering activity in such
country.
(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 item:
‘‘PART 3—INTERNATIONAL MONEY LAUNDERING AND RELATED FINANCIAL
CRIMES
‘‘5361. Designation of foreign high-intensity money laundering areas.’’.
SEC. 6. DOUBLE THE CRIMINAL PENALTIES FOR VIOLA-
TIONS INVOLVING HIGH-INTENSITY MONEY
LAUNDERING AREAS.
(a) IN GENERAL.—Section 5322 of title 31, United
States Code, is amended by adding at the end the fol-
lowing new subsection:
‘‘(d) DOUBLED PENALTY.—The court may double
the sentence of fine or imprisonment, or both, that could
otherwise be imposed on any person for a violation de-
scribed in subsection (a) or (b) if the person commits the
violation with respect to a transaction involving a person
in, a relationship maintained for a person in, or a trans-
port of a monetary instrument involving a foreign country,
knowing that a designation of the foreign country as a
high-intensity money laundering area under section 5361
was in effect at the time of the violation.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to any violation
committed on or after the date of the enactment of this
Act.
SEC. 7. AMENDMENT TO SECTION 3 OF THE BANK HOLDING
COMPANY ACT OF 1956.
(a) 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—
‘‘(A) the Board shall take into consider-
ation the effectiveness of the company or com-
panies in combating and preventing money
laundering activities, including in overseas
branches;
‘‘(B) the Board shall not consider any ap-
plication under this section involving any com-
pany which is the subject of any—
‘‘(i) pending Federal investigation of
possible money laundering or other related
financial crimes; or
‘‘(ii) pending Federal prosecution for
money laundering or other related financial
crimes,
until such investigation or prosecution is com-
pleted and a finding is made, except that this
subparagraph shall not apply if the period for
such completion and the making of findings ex-
ceeds 3 years; and
‘‘(C) the Board shall disapprove any appli-
cation under this section involving any company
which has been found criminally or civilly liable
for money laundering or any related financial
crime during the 5-year period preceding the
consideration of such application by the
Board.’’.
(b) SCOPE OF APPLICATION.—The amendment made
by subsection (a) shall apply with respect to any applica-
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, 1997, which
has not been approved by the Board before the date of
the enactment of this Act.
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