Special Measures to Fight Modern Threats Act
Bill: H.R.7128 | Sponsor: Rep. Himes, James A. (D-CT)
Policy area: Finance and Financial Sector

Summary:
Special Measures to Fight Modern Threats Act
This bill expands the special measures available to the Financial Crimes Enforcement Network (FinCEN) to combat money laundering regarding
Specifically, FinCEN 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 financial agency without requiring, as under current law, that such account be for or on behalf of a foreign banking institution.
Further, FinCEN may prohibit or impose conditions upon certain transmittals of funds to or from any domestic financial institution or domestic financial agency if such transmittal of funds involves any such jurisdiction, institution, class of transaction, or type of account.

To amend title 31, United States Code, to authorize the Secretary of 
      the Treasury to place prohibitions or conditions on certain 
   transmittals of funds in connection with jurisdictions, financial 
   institutions, international transactions, or types of accounts of 
                   primary money laundering concern.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Special Measures to Fight Modern 
Threats Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Financial Crimes Enforcement Network (FinCEN) is 
        the Financial Intelligence Unit of the United States tasked 
        with safeguarding the financial system from illicit use, 
        combating money laundering and its related crimes including 
        terrorism, and promoting national security.
            (2) Per statute, FinCEN may require domestic financial 
        institutions and financial agencies to take certain ``special 
        measures'' against jurisdictions, institutions, classes of 
        transactions, or types of accounts determined to be of primary 
        money laundering concern, providing the Secretary with a range 
        of options, such as enhanced record-keeping, that can be 
        adapted to target specific money laundering and terrorist 
        financing and to bring pressure on those that pose money 
        laundering threats.
            (3) This special-measures authority was granted in 2001, 
        when most cross-border transactions occurred through 
        correspondent or payable-through accounts held with large 
        financial institutions which serve as intermediaries to 
        facilitate financial transactions on behalf of other banks.
            (4) Innovations in financial services have transformed and 
        expanded methods of cross-border transactions that could not 
        have been envisioned 20 years ago when FinCEN was given its 
        special-measures authority.
            (5) These innovations, particularly through digital assets 
        and informal value transfer systems, while useful to legitimate 
        consumers and law enforcement, can be tools abused by bad 
        actors like sanctions evaders, fraudsters, money launderers, 
        and those who commit ransomware attacks on victimized U.S. 
        companies and which abuse the financial system to move and 
        obscure the proceeds of their crimes.
            (6) Ransomware attacks on U.S. companies requiring payments 
        in cryptocurrencies have increased in recent years, with the 
        U.S. Treasury estimating that ransomware payments in the United 
        States reached $590 million in just the first half of 2021, 
        compared to a total of $416 million in 2020.
            (7) In July 2021, the White House, with support of U.S. 
        allies, asserted that the People's Republic of China was 
        responsible for ransomware operations against private companies 
        that included demands of millions of dollars, including the 
        2021 ransomware attacks that breached Microsoft email systems 
        and affected thousands of consumers, State and local 
        municipalities, and government contractors attributed to a 
        cyber espionage group with links to the Chinese Ministry of 
        State Security.
            (8) As ransomware attacks organized by Chinese and other 
        foreign bad actors continue to grow in size and scope, 
        modernizing FinCEN's special measure authorities will empower 
        FinCEN to adapt its existing tools, monitor and obstruct global 
        financial threats, and meet the challenges of combating 21st 
        century financial crime.

SEC. 3. PROHIBITIONS OR CONDITIONS ON CERTAIN TRANSMITTALS OF FUNDS.

    Section 5318A of title 31, United States Code, is amended--
            (1) in subsection (a)(2)(C), by striking ``subsection 
        (b)(5)'' and inserting ``paragraphs (5) and (6) of subsection 
        (b)''; and
            (2) in subsection (b)--
                    (A) in paragraph (5), by striking ``for or on 
                behalf of a foreign banking institution''; and
                    (B) by adding at the end the following:
            ``(6) Prohibitions or conditions on certain transmittals of 
        funds.--If the Secretary finds a jurisdiction outside of the 
        United States, 1 or more financial institutions operating 
        outside of the United States, 1 or more types of accounts 
        within, or involving, a jurisdiction 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, in 
        consultation with the Secretary of State, the Attorney General, 
        and the Chairman of the Board of Governors of the Federal 
        Reserve System, may prohibit, or impose conditions upon certain 
        transmittals of funds (as such term may be defined by the 
        Secretary in a special measure issuance, by regulation, or as 
        otherwise permitted by law), to or from any domestic financial 
        institution or domestic financial agency if such transmittal of 
        funds involves any such jurisdiction, institution, type of 
        account, or class of transaction.''.
                                 <all>