Money Laundering and Financial Crimes Strategy Act of 1998
PL 105-310 (H.R.1756), enacted 10/30/1998

PUBLIC LAW 105-310—OCT. 30, 1998 
112 STAT. 2941 
Public Law 105-310 
105th Congress 
An Act 
To amend chapter 53 of title 31, United States Code, to require the development 
and implementation by the Secretary of the Treasury of a national money launder-
ing 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 Representatives 
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 1998". 
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 
''§5340. Definitions 
"For purposes of this subchapter, the following definitions shall 
apply: 
"(1) 
DEPARTMENT OF THE TREASURY LAW ENFORCEMENT 
ORGANIZATIONS.—^The term 'Department of the Treasury law 
enforcement organizations' has the meaning given to such term 
in section 9703(p)(l). 
"(2) MONEY LAUNDERING AND RELATED FINANCIAL CRIME.— 
The term 'money laundering and related financial crime'— 
"(A) means the movement of illicit cash or cash equiva-
lent proceeds into, out of, or through the United States, 
or into, out of, or through United States financial institu-
tions, as defined in section 5312 of title 31, United States 
Code; or 
"(B) has the meaning given that term (or the term 
used for an equivalent offense) under State and local crimi-
nal statutes pertaining to the movement of illicit cash 
or cash equivalent proceeds. 
"(3) SECRETARY.—^The term 'Secretary' means the Secretary 
of the Treasury. 
"(4) ATTORNEY GENERAL.—^The term 'Attorney General' 
means the Attorney General of the United States. 
Oct. 30, 1998 
[H.R. 1756] 
Money 
Laundering and 
Financial Crimes 
Strategy Act of 
1998. 
31 u s e 5301 
note. 
112 STAT. 2942 
PUBLIC LAW 105-310—OCT. 30, 1998 
"PART 1—^NATIONAL MONEY LAUNDERING AND RELATED FINANCIAL 
CRIMES STRATEGY 
'^§5341. National money laundering and related financial 
crimes strategy 
President. 
"(a) DEVELOPMENT AND TRANSMITTAL TO CONGRESS.— 
"(1) DEVELOPMENT.—^The President, acting through the Sec-
retary and in consultation with the Attorney General, shall 
develop a national strategy for combating money laundering 
and related financial crimes. 
"(2) TRANSMITTAL TO CONGRESS.—By February 1 of 1999, 
2000, 2001, 2002, and 2003, the President shall submit a 
national strategy developed in accordance with paragraph (1) 
to the Congress. 
"(3) SEPARATE PRESENTATION OF CLASSIFIED MATERIAL.— 
Any part of the strategy that involves information which is 
properly classified under criteria established by Executive 
Order shall be submitted to the Congress separately in classi-
fied form. 
"(b) DEVELOPMENT OF STRATEGY.—^The national strategy for 
combating money laundering and related financial crimes shall 
address any area the President, acting through the Secretary and 
in consultation with the Attorney General, considers appropriate, 
including the following: 
"(1) GOALS, OBJECTIVES, AND PRIORITIES.—Comprehensive, 
research-based goals, objectives, and priorities for reducing 
money laundering and related financial crime in the United 
States. 
"(2) PREVENTION.—Coordination of regulatory and other 
efforts to prevent the exploitation of financial systems in the 
United States for money laundering and related 
financial 
crimes, including a requirement that the Secretary shall— 
Regulations. 
"(A) regularly review enforcement efforts under this 
subchapter and other provisions of law and, when appro-
priate, modify existing regulations or prescribe new regula-
tions for purposes of preventing such criminal activity; 
and 
"(B) coordinate prevention efforts and other enforce-
ment action with the Board of Governors of the Federal 
Reserve System, the Securities and Exchange Commission, 
the Federal Trade Commission, other Federal banking 
agencies, the National Credit Union Administration Board, 
and such other Federal agencies as the Secretary, in con-
sultation with the Attorney General, determines to be 
appropriate. 
"(3) DETECTION AND PROSECUTION INITIATIVES.—A descrip-
tion of operational initiatives to improve detection and prosecu-
tion of money laundering and related financial crimes and 
the seizure and forfeiture of proceeds and instrumentalities 
derived from such crimes. 
"(4) ENHANCEMENT OF THE ROLE OF THE PRIVATE FINANCIAL 
SECTOR IN PREVENTION.—^The enhancement of partnerships 
between the private financial sector and law enforcement agen-
cies with regard to the prevention and detection of money 
laundering and related financial crimes, including providing 
incentives to strengthen internal controls and to adopt on an 
industrywide basis more effective policies. 
PUBLIC LAW 105-310—OCT. 30, 1998 
112 STAT. 2943 
"(5) 
ENHANCEMENT 
OF 
INTERGOVERNMENTAL 
COOPERA-
TION.—^The enhancement of— 
"(A) cooperative efforts between the Federal Govern-
ment and State and local officials, including State and 
local prosecutors and other law enforcement officials; and 
"(B) cooperative efforts among the several States and 
between State and local officials, including State and local 
prosecutors and other law enforcement officials, 
for financial crimes control which could be utilized or should 
be encouraged. 
"(6) PROJECT AND BUDGET PRIORITIES.—A 3-year projection 
for program and budget priorities and achievable projects for 
reductions in financial crimes. 
"(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 accordance with, but not limited to, 
section 5342. 
"(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 informa-
tion necessary for the purpose of developing and smalyzing 
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 Grovemment and State and 
local governments to timely, accurate, and complete informa-
tion. 
"(c) EFFECTIVENESS REPORT.—^At the time each national strat-
egy for combating financial crimes is transmitted by the President 
to the Congress (other than the first transmission of any such 
strategy) pursuant to subsection (a), the Secretary shall submit 
a report containing an evaluation of the effectiveness of policies 
to combat money laundering and related financial crimes. 
"(d) CONSULTATIONS.—In addition to the consultations required 
under this section with the Attorney Greneral, in developing the 
national strategy for combating money laundering and related 
financial crimes, the Secretary shall consult with— 
"(1) the Board of Governors of the Federal Reserve System 
and other Federal banking agencies and the National Credit 
Union Administration Board; 
"(2) State and local officials, including State and local 
prosecutors; 
"(3) the Securities and Exchange Commission; 
"(4) the Commodities and Futures Trading Commission; 
"(5) the Director of the Office of National Drug Control 
Policy, with respect to money laundering and related financial 
crimes involving the proceeds of drug trafficking; 
"(6) the Chief of the United States Postal Inspection Serv-
ice; 
"(7) to the extent appropriate. State and local officials 
responsible for financial institution and financial market regu-
lation; 
112 STAT. 2944 
PUBLIC LAW 105-310—OCT. 30, 1998 
"(8) any other State or local government authority, to the 
extent appropriate; 
"(9) any other Federal Government authority or instrumen-
tality, to the extent appropriate; and 
"(10) representatives of the private financial services sector, 
to the extent appropriate. 
*
*
§ 5342. High-risk money laundering and related financial 
crime areas 
"(a) FINDINGS AND PURPOSE.— 
"(1) FINDINGS.—The Congress finds the following: 
"(A) Money laundering and related financial crimes 
frequently 
appear 
to be 
concentrated 
in 
particular 
geographic areas, financial systems, industry sectors, or 
financial institutions. 
"(B) While the Secretary has the responsibility to act 
with regard to Federal offenses which are being committed 
in a particular locality or are directed at a single institu-
tion, because modem financial systems and institutions 
are interconnected to a degree which was not possible 
until recently, money laundering and other related finan.-
cial crimes are likely to have local, State, national, and 
international effects wherever they are committed. 
"(2) PURPOSE AND OBJECTIVE.—It is the purpose of this 
section to provide a mechanism for designating any area where 
money laundering or a related 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 developed, in cooperation with 
State and local law enforcement agencies, which utilizes 
the authority of the Secretary to prevent such activity; 
or 
"(B) such area can be targeted for law enforcement 
action. 
"(b) ELEMENT OF NATIONAL STRATEGY.—The designation of cer-
tain areas as areas in which money laundering and related financial 
crimes are extensive or ju'esent a substantial risk shall be an 
element of the national strategy developed pursuant to section 
5341(b). 
"(c) DESIGNATION OF AREAS.— 
"(1) DESIGNATION BY SECRETARY.—The Secretary, after tak-
ing into consideration the factors specified in subsection (d), 
shall designate any geographical area, industry, sector, or 
institution in the United States in which money laundering 
and related financial crimes are extensive or present a substan-
tial risk as a 'high-risk money laundering and related financial 
crimes area'. 
"(2) CASE-BY-CASE DETERMINATION IN CONSULTATION WITH 
THE ATTORNEY GENERAL.—In addition 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 
Secretary, in consultation with the Attorney General, that the 
particular area, industry, sector, or institution is being victim-
ized by, or is particularly vulnerable to, money laundering 
and related financial crimes. 
"(3) SPECIFIC INITIATIVES.—Any head of a department, 
bureau, or law enforcement agency, including any State or 
PUBLIC LAW 105-310—OCT. 30, 1998 
112 STAT. 2945 
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 5351 
for a specific prevention or enforcement 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 financial crimes area, 
the Secretary shall, to the extent appropriate and in consultation 
with the Attorney General, take into account the following factors: 
"(1) The population of the area. 
"(2) The number of bank and nonbank financial 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 center 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 country. 
"(7) The number or nature of requests for information 
or anal3^ical assistance which— 
"(A) are made to the analytical component of the 
Department of the Treasury; and 
"(B) originate fi'om law enforcement or regulatory 
authorities located in such area or involve institutions or 
businesses located in such area or residents of such area. 
"(8) The volume or nature of suspicious activity reports 
originating in the area. 
"(9) The volume or nature of currency transaction reports 
or reports of cross-border movements of currency or monetary 
instruments originating in, or transported through, the area. 
"(10) Whether, and how often, the area has been the subject 
of a geographical targeting order. 
"(11) Observed changes in trends and patterns of money 
laundering activity. 
"(12) Unusual patterns, anomalies, growth, or other 
changes in the volume or nature of core economic statistics 
or indicators. 
"(13) Statistics or indicators of unusual or unexplained 
volumes of cash transactions. 
"(14) Unusual patterns, anomalies, or changes in the vol-
ume or nature of transactions conducted through 
financial 
institutions operating within or outside the United States. 
"(15) The extent to which State and local governments 
and State and local law enforcement agencies have committed 
resources to respond to the financial crime problem in the 
area and the degree to which the commitment of such resources 
112 STAT. 2946 
PUBLIC LAW 105-310—OCT. 30, 1998 
reflects a determination by such government and agencies to 
address the problem aggressively. 
"(16) The extent to which a significant increase in the 
allocation of Federal resources to combat financial crimes in 
such area is necessary to provide an adequate State and local 
response to financial crimes and financial crime-related activi-
ties in such area. 
"PART 2—FINANCIAL CRIME-FREE COMMUNITIES SUPPORT PROGRAM 
**§5351. Establishment of financial crime-free communities 
support program 
"(a) ESTABLISHMENT.—^The Secretary of the Treasury, in con-
sultation with the Attorney General, shall establish a program 
to support local law enforcement efforts in the development and 
implementation of a program for the detection, prevention, and 
suppression of money laundering and related financial crimes. 
"(b) PROGRAM.—In carrying out the program, the Secretary 
of the Treasury, in consultation with the Attorney General, shall— 
Grants. 
"(1) make and track grants to grant recipients; 
"(2) provide for technical assistance and training, data 
collection, and dissemination of information on state-of-the-
art practices that the Secretary determines to be effective in 
detecting, preventing, and suppressing money laundering and 
related financial crimes; and 
"(3) provide for the general administration of the program. 
"(c) ADMINISTRATION.—^The Secretary shall appoint an adminis-
trator to carry out the program. 
"(d) CONTRACTING.—^The Secretary may employ any necessary 
staff and may enter into contracts or agreements with Federal 
and State law enforcement agencies to delegate authority for the 
execution of grants and for such other activities necessary to carry 
out this chapter. 
*'§ 5352. Program authorization 
"(a) GRANT ELIGIBILITY.—^To be eligible to receive an initial 
grant or a renewal grant under this part, a State or local law 
enforcement agency or prosecutor shall meet each of the following 
criteria: 
"(1) APPLICATION.—^The State or local law enforcement 
agency or prosecutor shall submit an application to the Sec-
retary in accordance with section 5353(a)(2). 
"(2) ACCOUNTABILITY.—^The State or local law enforcement 
agency or prosecutor shall— 
"(A) establish a system to measure and report out-
comes— 
"(i) consistent with common indicators and evalua-
tion protocols established by the Secretary, in consulta-
tion with the Attorney General; and 
"(ii) approved by the Secretary; 
"(B) conduct biennial surveys (or incorporate local sur-
veys in existence at the time of the evaluation) to measure 
the progress and effectiveness of the coalition; and 
"(C) provide assurances that the entity conducting an 
evaluation under this paragraph, or from which the 
applicant receives information, has experience in gathering 
PUBLIC LAW 105-310—OCT. 30, 1998 
112 STAT. 2947 
data related to money laundering and related financial 
crimes. 
"(b) GRANT AMOUNTS.— 
"(1) GRANTS.— 
"(A) IN GENERAL.—Subject to subparagraph (D), for 
a fiscal year, the Secretary of the Treasury, in consultation 
with the Attorney General, may grant to an eligible 
applicant under this section for that fiscal year, an amount 
determined by the Secretary of the Treasury, in consulta-
tion with the Attorney General, to be appropriate. 
"(B) SUSPENSION OF GRANTS.—If such grant recipient 
fails to continue to meet the criteria specified in subsection 
(a), the Secretary may suspend the grant, after providing 
written notice to the grant recipient and an opportunity 
to appeal. 
"(C) RENEWAL GRANTS.—Subject to subparagraph (D), 
the Secretary may award a renewal grant to a grant recipi-
ent under this subparagraph for each fiscal year following 
the fiscal year for which an initial grant is awarded. 
"(D) LIMITATION.—^The amount of a grant award under 
this paragraph may not exceed $750,000 for a fiscal year. 
"(2) GRANT AWARDS.— 
"(A) IN GENERAL.—Except as provided in subparagraph 
(B), the Secretary may, with respect to a community, make 
a grant to one eligible applicant that represents that 
community. 
"(B) EXCEPTION.—The Secretary may make a grant 
to more than one eligible applicant that represent a commu-
nity if— 
"(i) the eligible coalitions demonstrate that the 
coalitions are collaborating with one another; and 
"(ii) each of the coalitions has independently met 
the requirements set forth in subsection (a). 
"(c) CONDITION RELATING TO PROCEEDS OF ASSET FORFEIT-
URES.— 
"(1) IN GENERAL.—No grant may be made or renewed under 
this part to any State or local law enforcement agency or 
prosecutor unless the agency or prosecutor agrees to donate 
to the Secretary of the Treasury for the program established 
under this part any amount received by such agency or prosecu-
tor (after the grant is made) pursuant to any criminal or 
civil forfeiture under chapter 46 of title 18, United States 
Code, or any similar provision of State law. 
"(2) SCOPE OF APPLICATION.—Paragraph (1) shall not apply 
to any amount received by a State or local law enforcement 
agency or prosecutor pursuant to any criminal or civil forfeiture 
referred to in such paragraph in excess of the aggregate amount 
of grants received by such agency or prosecutor under this 
part. 
"(d) ROLLING GRANT APPLICATION PERIODS.—In establishing 
the program under this part, the Secretary shall take such action 
as may be necessary to ensure, to the extent practicable, that— 
"(1) applications for grants under this part may be filed 
at any time during a fiscal year; and 
"(2) some portion of the funds appropriated under this 
part for any such fiscal year will remain available for grant 
applications filed later in the fiscal year. 
112 STAT. 2948 
PUBLIC LAW 105-310—OCT. 30, 1998 
**§5353. Information 
collection 
and 
dissemination 
with 
respect to grant recipients 
"(a) APPLICANT AND GRANTEE INFORMATION.— 
"(1) APPLICATION PROCESS.—^The Secretary shall issue 
requests for proposal, as necessary, regarding, with respect 
to the grants awarded under section 5352, the application proc-
ess, grant renewal, and suspension or withholding of renewal 
grants. Each application under this paragraph shall be in writ-
ing and shall be subject to review by the Secretary. 
"(2) REPORTING.—^The Secretary shall, to the maximum 
extent practicable and in a manner consistent with applicable 
law, minimize reporting requirements by a grant recipient and 
expedite any application for a renewal grant made under this 
part. 
"(b) ACTIVITIES OF SECRETARY.—The Secretary may— 
"(1) evaluate the utility of specific initiatives relating to 
the purposes of the program; 
"(2) conduct an evaluation of the program; and 
"(3) disseminate information described in this subsection 
to— 
"(A) eligible State local law enforcement agencies or 
prosecutors; and 
"(B) the general public. 
^§5354. Grants for fighting money laundering and related 
financial 
crimes 
"(a) IN GENERAL.— After the end of the 1-year period beginning 
on the date the first national strategy for combating money launder-
ing and related financial crimes is submitted to the Congress in 
accordance with section 5341, and subject to subsection (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 laundering and related 
financial crimes in high-risk money laundering and related financial 
crime areas. 
"(b) SPECIAL PREFERENCE.—Special preference shall be given 
to applications submitted to the Secretary which demonstrate 
collaborative efforts of two or more State and local law enforcement 
agencies or prosecutors who have a history of Federal, State, and 
local cooperative law enforcement and prosecutorial efforts in 
responding to such criminal activity. 
*'§ 5355. Authorization of appropriations 
"There are authorized to be appropriated the following amounts 
for the following fiscal years to carry out the purposes of this 
subchapter: 
"For Hscal year: 
The amount authorized is: 
1999 
$5,000,000. 
2000 
$7,500,000. 
2001 
$10,000,000. 
2002 
$12,500,000. 
2003 
$15,000,000.". 
(b) CLERICAL AMENDMENT.—The table of subchapters for chap-
ter 53 of title 31, United States Code, is amended by adding at 
the end the following item: 
PUBLIC LAW 105-310—OCT. 30, 1998 
112 STAT. 2949 
"SUBCHAPTER III—MONEY LAUNDERING AND RELATED FINANCIAL 
CRIMES 
"5340. Definitions. 
"PART i—NATIONAL MONEY LAUNDERING AND RELATED FINANCIAL CRIMES STRATEGY 
"5341. National money laundering and related financial crimes strategy. 
"5342. High-risk money laundering and related financial crime areas. 
"PART 2—^FINANCIAL CRIME-FREE COMMUNITIES SUPPORT PROGRAM 
"5351. Establishment of financial crime-fi-ee communities support program. 
"5352. Program authorization. 
"5353. Information collection and dissemination with respect to grant recipients. 
"5354. Grants for fighting money laundering and related financial crimes. 
"5355. Authorization of appropriations.". 
(c) REPORT AND RECOMMENDATIONS.—Before the end of the 3i use 5342 
5-year period beginning on the date the first national strategy note. 
for combating money laundering and related financial crimes is 
submitted to the Congress pursuant to section 5341(a)(1) of title 
31, United States Code (as added by section 2(a) of this Act), 
the Secretary of the Treasury, in consultation with the Attorney 
General, shall submit a report to the Committee on Banking and 
Financial Services and the Committee on the Judiciary of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs and the Committee on the Judiciary of the Senate 
on the effectiveness of and the need for the designation of areas, 
under section 5342 of title 31, United States Code (as added by 
such section 2(a)), as high-risk money laundering and related finan-
cial crime areas, together with recommendations for such legislation 
as the Secretary and the Attorney General may determine to be 
appropriate to carry out the purposes of such section. 
Approved October 30, 1998. 
LEGISLATIVE HISTORY—H.R. 1756: 
HOUSE REPORTS: No. 105-608, Pt. 1 (Comm. on Banking and Financial Services). 
CONGRESSIONAL RECORD, Vol. 144 (1998): 
Oct. 5, considered and passed House. 
Oct. 15, considered and passed Senate, amended. 
Oct. 16, House concurred in Senate amendment.