Date: 1986-09-10
Speaker: ST GERMAIN (democrat)
Chamber: H

for his diligent efforts in bringing us here today. He and I introduced legislation back in July to stop money laundering schemes and smurfing and to help make drug trafficking a business which is going out of business. we hope. Subtitle A of title Vthe comprehensive Money Laundering Prevention Act amends the Bank Secrecy Act. the Right to Financial Privacy Act. and the Change in Bank and Savings and Loan Control Acts to establish new requirements and procedures in order to combat money laundering. In hearings before the Subcommittee on Financial Institutions. we received testimony that the drug trade generates an estimated $80 billion a yearall in cash. The drug traffickers are desperate to launder their illegal money into legitimatelooking funds. According to Business Week. IRS officials have seized currency being shipped in or out of the United States in vacuum cleaners. Monopoly games. cereal boxes. and boxes of disposable diapers. How will title V of this omnibus antidrug bill help in the fight against drugs? By stopping the practice of money laundering through our Nations financial institutions. we will hurt the drug traffickers where they care the mostin their pocketbooks. First. the legislation amends the Bank Secrecy Act to make "smurfing" illegal. Smurfing is the act of structuring transactions in order to avoid the $10.000 reporting requirement threshold. The Banking Committees legislation strikes another blow at money launderers by allowing property related to money laundering to be seized and forfeited to the Federal Government. A second area of law that the Banking Committees legislation amends to help law enforcement in cracking down on money laundering is the Right to Financial Privacy Act. The committee In this title attempts to strike a balance between the privacy rights of financial Institution customers and the need of law enforcement agencies to obtain financial records in legitimate investigations. The Privacy Act amendments contained in title V of this omnibus antidrug bill clarify the type of information a financial institution may voluntarily give to law enforcement officials. hopefully laying to rest the doubts raised by financial institutions on this matter. A third area of law which this title addresses is the Change in Bank Control and Change in Savings and Loan Control Acts. This title would require the appropriate regulatory agencies to conduct even more thorough investigations of person(s) applying to acquire control of a financial institution. The regulators are also given additional time to review applications for change in control. Finally. the committee recognized that the drug problemand related problems such as money launderingare not just confined to our Nation. This proposed legislation requires the Secretary of the Treasury. in consultation with the Federal Reserve Board. to initiate international discussions to establish an information exchange system with respect to eliminating the international flow of money derived from illicit drug operations and other criminal activities. The Banking Committee reported this legislation title V last July by a vote of 47 to 0. The Banking Committees provisions deserve our full and strong support. H.R. 5484 deserves our full and strong support.