6 May 1998 Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html ------------------------------------------------------------------------- [DOCID: f:h3745ih.txt] 105th CONGRESS 2d Session H. R. 3745 To prevent money laundering. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES April 29, 1998 Mr. McCollum (for himself, Mr. Schumer, Mr. Hastert, Mr. Portman, Mr. Goss, and Mr. Solomon) introduced the following bill; which was referred to the Committee on the Judiciary _______________________________________________________________________ A BILL To prevent money laundering. 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 Act of 1998''. SEC. 2. TABLE OF CONTENTS. The table of contents for this Act is as follows: Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Illegal money transmitting businesses. Sec. 4. Restraint of assets of persons arrested abroad. Sec. 5. Access to records in bank secrecy jurisdictions. Sec. 6. Civil money laundering jurisdiction. Sec. 7. Laundering money through a foreign bank. Sec. 8. Specified unlawful activity for money laundering. Sec. 9. Criminal forfeiture for money laundering conspiracies. Sec. 10. Subpoenas for bank records. Sec. 11. Admissibility of foreign business records. Sec. 12. Charging money laundering as a course of conduct. Sec. 13. Venue in money laundering cases. Sec. 14. Technical amendment to restore wiretap authority for certain money laundering offenses. Sec. 15. Knowledge that the property is the proceeds of a felony. Sec. 16. Money purchased on the black market. Sec. 17. Asset forfeiture transfers. Sec. 18. Receipt and deposit amendment. Sec. 19. Coverage of foreign bank branches in the territories. SEC. 3. ILLEGAL MONEY TRANSMITTING BUSINESSES. (a) Civil Forfeiture for Money Transmitting Violation.--Section 981(a)(1)(A) of title 18, United States Code, is amended by striking ``or 1957'' and inserting ``, 1957 or 1960''. (b) Scienter Requirement for Section 1960 Violation.--Section 1960 of title 18, United States Code, is amended by adding at the end the following: ``(c) For the purposes of proving a violation of this section involving an illegal money transmitting business as defined in subsection (b)(1)(A), it shall be sufficient for the Government to prove that the defendant knew that the money transmitting business lacked a license required by State law. It shall not be necessary to show that the defendant knew that the operation of such a business without the required license was an offense punishable under State law.''. SEC. 4. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD. Section 981(b) of title 18, United States Code, is amended by adding at the end the following: ``(3) If any person is arrested or charged in a foreign country in connection with an offense that would give rise to the forfeiture of property in the United States under this section or under the Controlled Substances Act, the Attorney General may apply to any Federal judge or magistrate judge in the district where the property is located for an ex parte order restraining the property subject to forfeiture for not more than 30 days, except that the time may be extended for good cause shown at a hearing conducted in the manner provided in rule 43(e) of the Federal Rules of Civil Procedure. The application for the restraining order shall set forth the nature and circumstances of the foreign charges and the basis for belief that the person arrested or charged has property in the United States that would be subject to forfeiture, and shall contain a statement that the restraining order is needed to preserve the availability of property for such time as is necessary to receive evidence from the foreign country or elsewhere in support of probable cause for the seizure of the property under this subsection.''. SEC. 5. ACCESS TO RECORDS IN BANK SECRECY JURISDICTIONS. Section 986 of title 18, United States Code, is amended by adding at the end the following: ``(d) In any civil forfeiture case, or in any ancillary proceeding in any criminal forfeiture case governed by section 413(n) of the Controlled Substances Act (21 U.S.C. 853(n)), where-- ``(1) financial records located in a foreign country may be material-- ``(A) to any claim or to the ability of the Government to respond to such claim; or ``(B) in a civil forfeiture case, to the Government's ability to establish the forfeitability of the property; and ``(2) it is within the capacity of the claimant to waive the claimant's rights under such secrecy laws, or to obtain the records directly so that the records can be made available, the refusal of the claimant to provide the records in response to a discovery request or take the action necessary otherwise to make the records available shall result in the dismissal of the claim with prejudice. This subsection does not affect the claimant's rights to refuse production on the basis of any privilege guaranteed by the Constitution or laws of the United States.''. SEC. 6. CIVIL MONEY LAUNDERING JURISDICTION. Section 1956(b) of title 18, United States Code, is amended-- (1) by inserting ``(1)'' after ``(b)''; (2) by redesignating present paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; (3) by inserting ``, or section 1957'' after ``or (a)(3)''; and (4) by adding at the end the following: ``(2) For purposes of adjudicating an action filed or enforcing a penalty ordered under this section, the district courts shall have jurisdiction over any foreign person, including any financial institution authorized under the laws of a foreign country, that commits an offense under subsection (a) involving a financial transaction that occurs in whole or in part in the United States, if that service of process upon such foreign person is made under the Federal Rules of Civil Procedure or the laws of the country where the foreign person is found. ``(3) The court may issue a pretrial restraining order or take any other action necessary to ensure that any bank account or other property held by the defendant in the United States is available to satisfy a judgment under this section.''. SEC. 7. LAUNDERING MONEY THROUGH A FOREIGN BANK. Section 1956(c)(6) of title 18, United States Code, is amended to read as follows: ``(6) the term `financial institution' includes any financial institution described in section 5312(a)(2) of title 31, United States Code, or the regulations promulgated thereunder, as well as any foreign bank, as defined in paragraph (7) of section 1(b) of the International Banking Act of 1978 (12 U.S.C. 3101(7)).''. SEC. 8. SPECIFIED UNLAWFUL ACTIVITY FOR MONEY LAUNDERING. (a) In General.--Section 1956(c)(7) of title 18, United States Code, is amended-- (1) in subparagraph (B)-- (A) so that clause (ii) reads as follows: ``(ii) any conduct constituting a crime of violence;''; and (B) by inserting after clause (iii) the following: ``(iv) fraud, or any scheme to defraud, committed against a foreign government or foreign governmental entity; ``(v) bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official; ``(vi) smuggling or export control violations involving munitions listed in the United States Munitions List or technologies with military applications as defined in the Commerce Control List of the Export Administration Regulations; or ``(vii) an offense with respect to which the United States would be obligated by a multilateral treaty either to extradite the alleged offender or to submit the case for prosecution, if the offender were found within the territory of the United States.''; (2) in subparagraph (D)-- (A) by inserting ``section 541 (relating to goods falsely classified),'' before ``section 542''; (B) by inserting ``section 924(m) (relating to firearms trafficking),'' before ``section 956''; (C) by inserting ``section 1030 (relating to computer fraud and abuse),'' before ``1032''; and (D) by inserting ``any felony violation of the Foreign Agents Registration Act of 1938, as amended,'' before ``or any felony violation of the Foreign Corrupt Practices Act''; and (3) in subparagraph (E)-- (A) by inserting ``section 42 or 43 of this title (commonly called the Lacey Act),'' after ``a felony violation of''; (B) by inserting ``the Clean Air Act (42 U.S.C. 7401 et seq.),'' after ``the Safe Drinking Water Act (42 U.S.C. 300f et seq.),''. (b) National Security.--Section 1956(d) of title 18, United States Code, is amended by adding at the end the following: ``This section does not apply to any official conduct by a representative of, or to an action which is authorized by and conducted on behalf of, the United States Government.''. SEC. 9. CRIMINAL FORFEITURE FOR MONEY LAUNDERING CONSPIRACIES. Section 982(a)(1) of title 18, United States Code, is amended by inserting ``, or a conspiracy to commit any such offense'' after ``of this title''. SEC. 10. SUBPOENAS FOR BANK RECORDS. Section 986 of title 18, United States Code, is amended-- (1) in subsection (a)-- (A) by striking ``section 1956, 1957, or 1960 of this title, section 5322 or 5324 of title 31, United States Code'' and inserting ``section 981 or 982 of this title''; (B) by inserting ``before or'' before ``after''; (C) by striking ``in rem''; and (D) by striking the last sentence; and (2) in subsection (c), by inserting ``or the Federal Rules of Criminal Procedure'' after ``Procedure''. SEC. 11. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS. (a) In General.--Chapter 163 of title 28, United States Code, is amended by adding at the end the following: ``Sec. 2466. Foreign records ``(a) In a civil proceeding in a court of the United States, including civil forfeiture proceedings and proceedings in the United States Claims Court and the United States Tax Court, a foreign record of regularly conducted activity, or copy of such record, obtained pursuant to an official request, shall not be excluded as evidence by the hearsay rule if a foreign certification, also obtained pursuant to the same official request or subsequent official request that adequately identifies such foreign record, attests that-- ``(1) such record was made, at or near the time of the occurrence of the matters set forth, by (or from information transmitted by) a person with knowledge of those matters; ``(2) such record was kept in the course of a regularly conducted business activity; ``(3) the business activity made such a record as a regular practice; and ``(4) if such record is not the original, such record is a duplicate of the original; unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. ``(b) A foreign certification under this section shall authenticate such record or duplicate. ``(c) As soon as practicable after a responsive pleading has been filed, a party intending to offer in evidence under this section a foreign record of regularly conducted activity shall provide written notice of that intention to each other party. A motion opposing admission in evidence of such record shall be made by the opposing party and determined by the court before trial. Failure by a party to file such motion before trial shall constitute a waiver of objection to such record or duplicate, but the court for cause shown may grant relief from the waiver. ``(d) As used in this section-- ``(1) the term `foreign record of regularly conducted activity' means a memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, maintained in a foreign country; ``(2) the term `foreign certification' means a written declaration made and signed in a foreign country by the custodian of a record of regularly conducted activity or another qualified person, that if falsely made, would subject the maker to criminal penalty under the law of that country; ``(3) the term `business' includes business, institution, association, profession, occupation, and calling of every kind whether or not conducted for profit; and ``(4) the term `official request' means a letter rogatory, a request under an agreement, treaty or convention, or any other request for information or evidence made by a court of the United States or an authority of the United States having law enforcement responsibility to a court or other authority of a foreign country.''. (b) Clerical Amendment.--The table of sections at the beginning of chapter 163 of title 28, United States Code, is amended by inserting at the end the following new item: ``2466. Foreign records.''. SEC. 12. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT. Section 1956(h) of title 18, United States Code, is amended-- (1) by inserting ``(1)'' before ``Any person''; and (2) by adding at the end the following: ``(2) Any person who commits multiple violations of this section or section 1957 that are part of the same scheme or continuing course of conduct may be charged, at the election of the Government, in a single count in an indictment or information.''. SEC. 13. VENUE IN MONEY LAUNDERING CASES. Section 1956 of title 18, United States Code, is amended, by adding at the end the following subsection: ``(i) Venue.--(1) Except as provided in paragraph (2), a prosecution for an offense under this section or section 1957 may be brought in any district in which the financial or monetary transaction is conducted, or where a prosecution for the underlying specified unlawful activity could be brought. ``(2) A prosecution for an attempt or conspiracy offense under this section or section 1957 may be brought in the district where venue would lie for the completed offense under paragraph (1), or in any other district where an act in furtherance of the attempt or conspiracy took place.''. SEC. 14. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY FOR CERTAIN MONEY LAUNDERING OFFENSES. Section 2516(1)(g) of title 18, United States Code, is amended by striking ``a violation of section 5322 of title 31, United States Code (dealing with the reporting of currency transactions)'' and inserting ``a violation of section 5322 or 5324 of title 31, United States Code (dealing with the reporting and illegal structuring of currency transactions)''. SEC. 15. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A FELONY. Section 1956(c)(1) of title 18, United States Code, is amended by inserting ``, and regardless of whether or not the person knew that the activity constituted a felony'' before the semicolon at the end. SEC. 16. MONEY PURCHASED ON THE BLACK MARKET. (a) In General.--Section 981(a) of title 18, United States Code, is amended by adding at the end the following: ``(3) A person asserting an innocent owner defense under paragraph (2), or any other provision of law, in currency, monetary instruments or funds purchased from a money broker must be a bona fide purchaser for value without reason to know that the currency, monetary instruments or funds were subject to forfeiture, and must establish that such person took all reasonable affirmative steps to determine the source of the currency, monetary instruments or funds, or to verify that the currency, monetary instruments or funds were not derived from illegal activity. ``(4) For purposes of paragraph (3)-- ``(A) the term `money broker' means any person who sells or exchanges currency, monetary instruments or funds, either in the United States or in a foreign country, either independently, or through any parallel market, black market, casa de cambio, or other currency exchange business; and ``(B) what constitutes `all reasonable affirmative steps' depends on the facts and circumstances surrounding the transaction, but if the money broker is a financial institution, as defined in section 20 of this title, the purchaser takes `all reasonable affirmative steps' if the purchaser conducts the transaction at the financial institution during normal business hours in an arms-length transaction and has no reason to know that the currency, monetary instruments, or funds were derived from or used to commit any unlawful activity.''. (b) Application.--The amendments made by this section shall apply to any case pending on the effective date of this Act. SEC. 17. ASSET FORFEITURE TRANSFERS. Section 511(e)(1)(E)(iii) of the Controlled Substances Act (21 U.S.C. 881(e)(1)(E)(iii)) is amended by inserting ``, or to a country that has not been so certified, if the Secretary of State finds that transfer to be in the national interest'' before the period. SEC. 18. RECEIPT AND DEPOSIT AMENDMENT. The United States Sentencing Commission shall amend or promulgate sentencing guidelines to provide that the sentence for an offense under section 1957 of title 18, United States Code, if the transaction in criminally derived property consists of a deposit of that property in a financial institution without any intent to disguise or conceal the nature, location, source, ownership, or control of such proceeds, shall not exceed the sentence for the offense giving rise to such property by more than one offense level. SEC. 19. COVERAGE OF FOREIGN BANK BRANCHES IN THE TERRITORIES. Section 20(9) of title 18, United States Code, is amended by inserting ``, except that, for purposes of the application of that definition, the term `State' as used in such Act includes a commonwealth, territory, or possession of the United States'' after ``Banking Act of 1978''. ------------------------------------------------------------------------- Source: http://www.usdoj.gov/opa/pr/1998/March/095.htm.html FOR IMMEDIATE RELEASE AG TUESDAY, MARCH 3, 1998 (202) 616-2777 JUSTICE DEPARTMENT SUBMITS LEGISLATION TO COMBAT INTERNATIONAL MONEY LAUNDERING WASHINGTON, D.C. -- The Justice Department today submitted legislation to Congress to address the international laundering of criminal proceeds, the "Money Laundering Act of 1998." "This legislation recognizes that we need new tools to target money launderers, including international drug merchants," said Attorney General Janet Reno. The bill is part of an on-going Justice Department and Treasury Department effort to address issues related to international money laundering. The bill would expand the list of "specified unlawful activities" which constitute the predicate offenses for money laundering to include an array of foreign crimes, including crimes of violence, terrorism, fraud and corruption. These changes will allow for the prosecution of those who commit such crimes in another country and attempt to launder the proceeds through U.S. institutions. In addition, the bill would: * make it possible to restrain the assets in the United States of a person arrested abroad, and to restrain the domestic assets of a foreign bank that is engaged in money laundering in violation of U.S. law. * codify the fugitive disentitlement doctrine to bar a fugitive from contesting the forfeiture of his property while remaining outside the reach of federal law enforcement. This tool could be used with great effectiveness against foreign criminals who launder their money in the United States but remain safely overseas, resisting extradition. * extend the money laundering statutes to reach transactions involving foreign banks and enhance federal prosecutors' access to foreign bank records and make them admissible in federal courts. * strengthen U.S. money laundering laws by making it clear that a transaction involves criminal proceeds even if such proceeds have been commingled with other funds, and by allowing prosecutors to file money laundering charges in the district where the underlying criminal offense is being prosecuted. "If enacted, this bill will enable the United States to combat the ability of criminals to launder the proceeds of their criminal activity without regard to international borders," Reno said. ### 98-095