S. 473

Combating Money Laundering and Terrorist Financing Act of 2007

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Contents

II

110th CONGRESS

1st Session

S. 473

IN THE SENATE OF THE UNITED STATES

February 1, 2007

Mr. Grassley introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To improve the prohibitions on money laundering, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Combating Money Laundering and Terrorist Financing Act of 2007.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—Money laundering

Sec. 101. Specified unlawful activity.

Sec. 102. Making the domestic money laundering statute apply to

reverse money laundering and interstate transportation.

Sec. 103. Procedure for issuing subpoenas in money laundering cases.

Sec. 104. Transportation or transhipment of blank checks in bearer form.

Sec. 105. Bulk cash smuggling.

Sec. 106. Violations involving commingled funds and structured transactions.

Sec. 107. Charging money laundering as a course of conduct.

Sec. 108. Illegal money transmitting businesses.

Sec. 109. Knowledge that the property is the proceeds of a specific felony.

Sec. 110. Extraterritorial jurisdiction.

Sec. 111. Conduct in aid of counterfeiting.

Sec. 112. Use of proceeds derived from criminal investigations.

TITLE II—Technical amendments

Sec. 201. Technical amendments to sections 1956 and 1957 of title 18.

I

Money laundering

101.

Specified unlawful activity

Section 1956(c)(7) of title 18, United States Code, is amended to read as follows:

(7)

the term specified unlawful activity means—

(A)

any act or activity constituting an offense in violation of the laws of the United States or any State punishable by imprisonment for a term exceeding 1 year; and

(B)

any act or activity occurring outside of the United States that would constitute an offense covered under subparagraph (A) if the act or activity had occurred within the jurisdiction of the United States or any State;

.

102.

Making the domestic money laundering statute apply to reverse money laundering and interstate transportation

(a)

In general

Section 1957 of title 18, United States Code, is amended—

(1)

in the heading, by inserting or in support of criminal activity after specified unlawful activity;

(2)

in subsection (a), by striking Whoever and inserting the following:

(1)

Whoever

; and

(3)

by adding at the end the following:

(2)

Whoever—

(A)

in any of the circumstances set forth in subsection (d)—

(i)

conducts or attempts to conduct a monetary transaction involving property of a value that is greater than $10,000; or

(ii)

transports, attempts to transport, or conspires to transport property of a value that is greater than $10,000;

(B)

in or affecting interstate commerce; and

(C)

either—

(i)

knowing that the property was derived from some form of unlawful activity; or

(ii)

with the intent to promote the carrying on of specified unlawful activity;

shall be fined under this title, imprisoned for a term of years not to exceed the statutory maximum for the unlawful activity from which the property was derived or the unlawful activity being promoted, or both.

.

(b)

Chapter Analysis

The item relating to section 1957 in the table of sections for chapter 95 of title 18, United States Code, is amended to read as follows:

1957. Engaging in monetary transactions in property derived from specified unlawful activity or in support of criminal activity.

.

103.

Procedure for issuing subpoenas in money laundering cases

(a)

In general

Section 986 of title 18, United States Code, is amended by adding at the end the following:

(e)

Procedure for Issuing Subpoenas

The Attorney General, the Secretary of the Treasury, or the Secretary of Homeland Security may issue a subpoena in any investigation of a violation of sections 1956, 1957 or 1960, or sections 5316, 5324, 5331 or 5332 of title 31, United States Code, in the manner set forth under section 3486.

.

(b)

Grand jury and trial subpoenas

Section 5318(k)(3)(A)(i) of title 31, United States Code, is amended—

(1)

by striking related to such correspondent account;

(2)

by striking or the Attorney General and inserting , the Attorney General, or the Secretary of Homeland Security; and

(3)

by adding at the end the following:

(iii)

Grand jury or trial subpoena

In addition to a subpoena issued by the Attorney General, Secretary of the Treasury, or the Secretary of Homeland Security under clause (i), a subpoena under clause (i) includes a grand jury or trial subpoena requested by the Government.

.

(c)

Fair credit reporting act amendment

Section 604(a)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681b(a)(1)) is amended—

(1)

by striking or; and

(2)

by inserting before the period the following: , or an investigative subpoena issued under section 5318 of title 31, United States Code.

(d)

Obstruction of justice

Section 1510(b) of title 18, United States Code, is amended—

(1)

in paragraph (2)(A), by inserting or an investigative subpoena issued under section 5318 of title 31, United States Code after grand jury subpoena; and

(2)

in paragraph (3)(B), by inserting , an investigative subpoena issued under section 5318 of title 31, United States Code, after grand jury subpoena.

(e)

Right to financial privacy act

Section 1120 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3420) is amended—

(1)

in subsection (a)(1), by inserting or to the Government after to the grand jury; and

(2)

in subsection (b)(1), by inserting , or an investigative subpoena issued pursuant to section 5318 of title 31, United States Code, after grand jury subpoena.

104.

Transportation or transhipment of blank checks in bearer form

Section 5316 of title 31, United States Code, is amended by adding at the end the following:

(e)

Monetary instruments with amount left blank

For purposes of this section, a monetary instrument in bearer form that has the amount left blank, such that the amount could be filled in by the bearer, shall be considered to have a value equal to the highest value of the funds in the account on which the monetary instrument is drawn during the time period the monetary instrument was being transported or the time period it was negotiated or was intended to be negotiated.

.

105.

Bulk cash smuggling

Section 5332 of title 31, United States Code, is amended—

(1)

in subsection (b)(1), by striking 5 years and inserting 10 years; and

(2)

by adding the end the following:

(d)

Investigative authority

Violations of this section may be investigated by the Attorney General, the Secretary of the Treasury, the Secretary of Homeland Security, and the Postal Service.

.

106.

Violations involving commingled funds and structured transactions

Section 1957(f) of title 18, United States Code, is amended—

(1)

in paragraph (2) by striking and at the end;

(2)

in paragraph (3), by striking the period and inserting a semicolon; and

(3)

by adding at the end the following:

(4)

the term monetary transaction in criminally derived property that is of a value greater than $10,000 includes—

(A)

a monetary transaction involving the transfer, withdrawal, encumbrance or other disposition of more than $10,000 from a bank account in which more than $10,000 in proceeds of specified unlawful activity have been commingled with other funds;

(B)

a series of monetary transactions in amounts under $10,000 that exceed $10,000 in the aggregate and that are closely related to each other in terms of such factors as time, the identity of the parties involved, the nature and purpose of the transactions, and the manner in which they are conducted; and

(C)

any financial transaction covered under section 1956(j) that involves more than $10,000 in proceeds of specified unlawful activity; and

(5)

the term monetary transaction involving property of a value that is greater than $10,000 includes a series of monetary transactions in amounts under $10,000 that exceed $10,000 in the aggregate and that are closely related to each other in terms of such factors as time, the identity of the parties involved, the nature and purpose of the transactions, and the manner in which they are conducted.

.

107.

Charging money laundering as a course of conduct

(a)

In general

Section 1956 of title 18, United States Code, is amended by adding at the end the following:

(j)

Multiple violations

Multiple violations of this section 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.

.

(b)

Conspiracies

Section 1956(h) of title 18, United States Code, is amended by striking or section 1957 and inserting , section 1957, or section 1960.

108.

Illegal money transmitting businesses

(a)

Technical amendments

(1)

In general

Section 1960 of title 18, United States Code, is amended—

(A)

in the heading by striking unlicensed and inserting illegal;

(B)

in subsection (a), by striking unlicensed and inserting illegal; and

(C)

in subsection (b)(1), by striking unlicensed and inserting illegal.

(2)

Chapter Analysis

The item relating to section 1960 in the table of sections for chapter 95 of title 18, United States Code, is amended to read as follows:

1960. Prohibition of illegal money transmitting businesses.

.

(b)

Definition of business To include informal value transfer systems and money brokers for drug cartels

Section 1960(b) of title 18, United States Code, is amended—

(1)

in paragraph (2), by striking and at the end;

(2)

in paragraph (3), by striking the period and inserting ; and; and

(3)

by adding at the end the following:

(4)

the term business includes any person or association of persons, formal or informal, licensed or unlicenced, that provides money transmitting services on behalf of any third party in return for remuneration or other consideration.

.

(c)

Prohibition of unlicensed money transmitting businesses

Section 1960(b)(1)(B) of title 18, United States Code, is amended by inserting the following before the semicolon: , whether or not the defendant knew that the operation was required to comply with such registration requirements.

(d)

Authority To investigate

Section 1960 of title 18, United States Code, is amended by adding at the end the following:

(c)

Authority To investigate

Violations of this section may be investigated by the Attorney General, the Secretary of the Treasury, and the Secretary of Homeland Security.

.

109.

Knowledge that the property is the proceeds of a specific felony

(a)

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.

(b)

Intent To conceal or disguise

Section 1956(a) of title 18, United States Code, is amended—

(1)

in paragraph (1)(B)(i), by striking specified unlawful activity and inserting some form of unlawful activity; and

(2)

in paragraph (2)(B)(i), by striking specified unlawful activity and inserting some form of unlawful activity.

110.

Extraterritorial jurisdiction

Section 1956(f)(1) of title 18, United States Code, is amended by inserting or has an effect in the United States after conduct occurs in part in the United States.

111.

Conduct in aid of counterfeiting

(a)

In general

Section 474(a) of title 18, United States Code, is amended by inserting after the paragraph beginning Whoever has in his control, custody, or possession any plate the following:

Whoever, with intent to defraud, has custody, control, or possession of any material that can be used to make, alter, forge, or counterfeit any obligation or other security of the United States or any part of such obligation or security, except under the authority of the Secretary of the Treasury; or

.

(b)

Foreign obligations and securities

Section 481 of title 18, United States Code, is amended by inserting after the paragraph beginning Whoever, with intent to defraud the following:

Whoever, with intent to defraud, has custody, control, or possession of any material that can be used to make, alter, forge, or counterfeit any obligation or other security of any foreign government, bank, or corporation; or

.

(c)

Counterfeit acts

Section 470 of title 18, United States Code, is amended by striking or 474 and inserting 474, or 474A.

(d)

Strengthening deterrents to counterfeiting

Section 474A of title 18, United States Code is amended—

(1)

in subsection (a)—

(A)

by inserting , custody, after control;

(B)

by inserting , forging, or counterfeiting after to the making;

(C)

by striking such obligation and inserting obligation; and

(D)

by inserting of the United States after or other security;

(2)

in subsection (b)—

(A)

by inserting , custody, after control;

(B)

striking any essentially identical feature or device and inserting any material or other thing made after or in the similitude of any such deterrent; and

(C)

by inserting , forging, or counterfeiting after to the making;

(3)

by redesignating subsection (c) as subsection (d); and

(4)

by inserting after subsection (b) the following:

(c)

Whoever has in his control, custody, or possession any altered obligation or security of the United States or any foreign government adapted to the making, forging, or counterfeiting of any obligation or security of the United States or any foreign government, except under the authority of the Secretary of the Treasury, is guilty of a class B felony.

.

112.

Use of proceeds derived from criminal investigations

(a)

Authority of Secret Service

During fiscal years 2008 through 2010, with respect to any undercover investigative operation of the United States Secret Service (in this section referred to as the Secret Service) which is necessary for the detection and prosecution of crimes against the United States—

(1)

sums authorized in any such fiscal year to be appropriated for the Secret Service, including any unobligated balances available from prior fiscal years, may be used to purchase property, buildings, and other facilities, and to lease space, within the United States, the District of Columbia, and the territories and possessions of the United States, without regard to—

(A)

sections 1341 and 3324 of title 31 of the United States Code;

(B)

section 8141 of title 40 of the United States Code;

(C)

sections 3732(a) and 3741 of the Revised Statutes of the United States (41 U.S.C. 11(a) and 22); and

(D)

sections 304(a) and 305 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 254(a) and 255);

(2)

sums authorized in any such fiscal year to be appropriated for the Secret Service, including any unobligated balances available from prior fiscal years, may be used—

(A)

to establish or to acquire proprietary corporations or business entities as part of an undercover investigative operation; and

(B)

to operate such corporations or business entities on a commercial basis, without regard to sections 9102 and 9103 of title 31 of the United States Code;

(3)

sums authorized in any such fiscal year to be appropriated for the Secret Service, including any unobligated balances available from prior fiscal years, and the proceeds seized, earned, or otherwise accrued from any such undercover investigative operation, may be deposited in banks or other financial institutions, without regard to—

(A)

section 648 of title 18 of the United States Code; and

(B)

section 3302 of title 31 of the United States Code; and

(4)

proceeds seized, earned, or otherwise accrued from any such undercover investigative operation may be used to offset the necessary and reasonable expenses incurred in such operation, without regard to section 3302 of title 31 of the United States Code.

(b)

Written certification of Director required

(1)

In general

The authority granted under subsection (a) may be exercised only upon the written certification of the Director of the Secret Service or the Director's designee.

(2)

Content of certification

Each certification issued under paragraph (1) shall state that any action authorized under paragraph (1), (2), (3), or (4) of subsection (a) is necessary to conduct the undercover investigative operation.

(3)

Duration of certification

Each certification issued under paragraph (1) shall continue in effect for the duration of the undercover investigative operation, without regard to fiscal years.

(c)

Transfer of proceeds to Treasury

As soon as practicable after the proceeds from an undercover investigative operation with respect to which an action is authorized and carried out under paragraphs (3) and (4) of subsection (a) are no longer necessary for the conduct of such operation, such proceeds, or the balance of such proceeds, remaining at the time shall be deposited in the Treasury of the United States as miscellaneous receipts.

(d)

Corporations with a high net value

(1)

In general

If a corporation or business entity established or acquired as part of an undercover investigative operation under subsection (a)(2) having a net value of over $50,000 is to be liquidated, sold, or otherwise disposed of, the Secret Service, as much in advance as the Director of the Secret Service or the Director's designee determines is practicable, shall report the circumstances of such liquidation, sale, or other disposition to the Secretary of Homeland Security.

(2)

Transfer of proceeds to Treasury

The proceeds of any liquidation, sale, or other disposition of any corporation or business entity under paragraph (1) shall, after all other obligations are met, be deposited in the Treasury of the United States as miscellaneous receipts.

(e)

Audits

The Secret Service shall—

(1)

conduct, on a quarterly basis, a detailed financial audit of each completed undercover investigative operation where a written certification was issued pursuant to this section; and

(2)

report the results of each such audit in writing to the Secretary of Homeland Security.

II

Technical amendments

201.

Technical amendments to sections 1956 and 1957 of title 18

(a)

Unlawful activity

Section 1956(c) of title 18, United States Code, is amended—

(1)

in paragraph (2), by striking conducts and inserting conduct; and

(2)

in paragraph (7)(F), by inserting , as defined in section 24(a) before the semicolon.

(b)

Property from unlawful activity

Section 1957 of title 18, United States Code, is amended—

(1)

in subsection (a), by striking engages or attempts to engage in and inserting conducts or attempts to conduct; and

(2)

in subsection (f)—

(A)

in paragraph (2), by striking and at the end;

(B)

in paragraph (3), by striking the period and inserting ; and; and

(C)

by adding at the end the following:

(4)

the term conduct has the meaning given such term under section 1956(c)(2).

.