S.Amdt. 3339

SA 3339. Mr. SCOTT of South Carolina submitted an amendment intended
to be proposed by him to the bill S. 2296, to authorize appropriations
for fiscal year 2026 for military activities of the Department of
Defense, for military construction, and for defense activities of the
Department of Energy, to prescribe military personnel strengths for
such fiscal year, and for other purposes; which was ordered to lie on
the table; as follows:

At the appropriate place, insert the following:

SEC. _____. CHINES LAUNDERING ERADICATION AND ACCOUNTABILITY
NETWORK.

(a) Findings.--
Congress finds the following:
(1) Chinese money laundering organizations are increasingly
being used by criminal entities such as Mexican transnational
criminal organizations to launder illicit funds.
(2) Chinese money laundering organizations have provided
criminal organizations a new money laundering option that is
low cost, can deliver funds to the traffickers in their home
countries immediately, and can guarantee payment of laundered
funds.
(3) Chinese money laundering organizations are using
Chinese-origin mobile applications, available in the United
States, to facilitate electronic fund transfers to conduct
illicit activity in the United States.
(4) Chinese-origin mobile applications, available in the
United States, facilitating electronic fund transfers are
generally not registered as money services businesses despite
providing money transmission services in the United States.
(5) Chinese-origin mobile applications generally do not
cooperate with United States law enforcement.
(b) Definitions.--In this section:
(1) Application.--The term ``application'' means a software
application or electronic service that may be run or directed
by a user on a computer, a mobile device, or any other
general purpose computing device.
(2) Application store.--The term ``application store''
means a publicly available website, software application,
electronic service, or platform provided by a device
manufacturer that--
(A) distributes applications from third-party developers to
users of a computer, a mobile device, or any other general
purpose computing device; and
(B) has more than 20,000,000 users in the United States.
(3) Digital asset.--The term ``digital asset'' means any
digital representation of value that is recorded on a
cryptographically secured distributed ledger.
(4) Money transmission service.--The term ``money
transmission servicer''--
(A) has the meaning given the term in section 1010.100(ff)
of title 31, Code of Federal Regulations);
(B) includes the acceptance of currency, funds, or value
that substitutes for currency from one person and the
transmission of such to another person or location by any
means; and
(C) does not include a service that solely provides
noncustodial digital asset wallet software that enables users
to store or transmit digital assets without the service
provider ever having access to or control over the private
keys or digital assets of the user.
(5) United states person.--The term ``United States
person'' means--
(A) a United States citizen or an alien lawfully admitted
for permanent residence to the United States;
(B) an entity established or organized under the laws of
the United States or of any jurisdiction within the United
States, including a foreign branch of such an entity; or
(C) any person in the United States.
(c) Sense of Congress.--It is the sense of Congress that
operators of applications providing money transmission
services but failing to comply with United States law should
not--
(1) be listed on application stores based in the United
States; and
(2) be accessible by United States persons.
(d) Clarification of Money Service Business Registration
Requirements With Respect to Funds Transferred Through
Applications Accessed by United States Persons.--
(1) Clarification of registration obligations.--Not later
than 365 days after the date of enactment of this Act, the
Secretary of the Treasury shall promulgate regulations, after
notice and an opportunity for comment, to clarify the
responsibility of applications available on application
stores and facilitating money transmission services for
United States persons to register as money services
businesses with the Financial Crimes Enforcement Network.
(2) Applicability of the bank secrecy act.--
(A) In general.--Subchapter II of chapter 53 of title 31,
United States Code, shall apply to operators of applications
that--
(i) are made available on application stores accessible
within the United States;
(ii) are used by individuals physically located in the
United States; and
(iii) provide a money transmission service.
(B) Money services businesses.--The operators described in
subparagraph (A) shall be deemed money services businesses
subject to all applicable requirements under subchapter II of
chapter 53 of title 31, United States Code, including
registration with the Financial Crimes Enforcement Network.
(3) Role of application stores.--If an application store
facilitates the distribution of an application that is
determined by the Secretary of the Treasury, in consultation
with the Director of the Financial Crimes Enforcement
Network, to be operating as an unregistered money services
business in violation of paragraph (2), the Secretary may
require the application store to cease distribution of the
application.
(4) Compliance measures and enforcement.--If an application
store fails to comply with an order issued under paragraph
(3), the Secretary of the Treasury may take enforcement
actions, including--
(A) bringing a civil action to enforce compliance in
accordance with section 5320 of title 31, United States Code;
(B) imposing civil monetary penalties in accordance with
section 5321 of title 31, United States Code; and
(C) referring for additional enforcement action under
applicable sanctions or financial crime statutes.
(5) Failure to register.--If the operator of an application
fails to register with the Financial Crimes Enforcement
Network described in paragraph (1), the Secretary of the
Treasury shall notify the operator of the application of its
noncompliance.
(6) Registration process.--An operator of an application
shall register as a money services business during the 90-day
period beginning on the date on which the operator of the
application receives a notification under paragraph (4).
(7) Noncompliance.--
(A) In general.--If the operator of the application is not
registered as a money services business after the expiration
of the 90-day period--
(i) the Secretary of the Treasury shall publish a
determination of noncompliance with the registration process
and list the operator of the application in the Federal
Register; and
(ii) the Secretary may order the removal of the application
from any application store.
(B) Subsequent compliance.--If an operator of the
application subsequently complies with the registration
requirements of this subsection and demonstrates ongoing
compliance with applicable provisions of subchapter II of
chapter 53 of title 31, United States Code, the Secretary of
the Treasury may authorize the application to be relisted on
application stores and shall update the Federal Register to
reflect the change in compliance status.
(8) Report.--Not later than 365 days after the date of
enactment of this Act, and every 365 days thereafter, the
Secretary of the Treasury shall submit to the Committee on
Banking, Housing, Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives of all actions taken by the Secretary under
this subsection.
(e) Sunset.--The provisions of this section shall cease to
have effect on the date that is 5 years after the date of
enactment of this Act.
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