National Strategy for Combating the Financing of Transnational Criminal Organizations Act

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4768) to require the President to develop a national strategy to combat the financial networks of transnational organized criminals, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on this bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 4768, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

I want to, at the outset, applaud and thank my colleague Mr. Kustoff from Tennessee for his leadership on this important legislation and for bringing this solution to the Congress and this solution to the American people.

As Members of Congress, our number one responsibility is the national security and the well-being of the American people. Unfortunately, transnational criminal organizations threaten the safety of Americans, and we must do

everything in our power to stop them. Transnational criminal organizations, or TCOs as they are called for short, are engaged in illegal business ventures around the world such as money laundering, cybercrime, and the trafficking of drugs, weapons, endangered species, and even human beings.

While TCOs may not be motivated by a particular radical, political, or religions ideology, they are motivated by money, and they will stop at nothing to get it. According to a 2011 report published by the Obama administration, entitled, ``Strategy to Combat Transnational Organized Crime,'' TCOs have dramatically ramped up their size, scope, and influence, and are even teaming up with terrorist organizations and corrupt foreign officials to expand their networks and conceal their illicit financial assets.

These TCOs cost the Western Hemisphere about 3.5 percent of gross domestic product annually, and they generate for themselves around $870 billion, which is roughly the value of the world's largest company, Apple.

President Trump, on February 9, 2017, issued Executive Order 13773 on ``Enforcing Federal Law with Respect to Transnational Criminal Organizations and Preventing International Trafficking.''

It states that TCOs in the form of transnational drug cartels have a stronghold in America and threaten the safety of the American people. From former President Obama to current President Trump, TCOs are recognized as a major risk to national security. That is why I am very pleased to see that my good friend from Tennessee, Congressman David Kustoff, has introduced H.R. 4768, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

This legislation requires the President, the Treasury Secretary, financial regulators, and other appropriate officials to create a national strategy to combat TCOs and their illicit use of financial networks. Specifically, the legislation requires them to identify and assess the largest TCO threats to the United States. It also mandates that the strategy include the identification of the people or groups that facilitate access to financial networks for the TCOs through laundering assets, such as, real estate, art and antiquities, smuggling bulk cash, exploitation of shell companies, and the use of covert cryptocurrencies and other cyber technologies.

The legislation also requires the strategy to include long-term and short-term goals, an explanation of how goals will be integrated into existing national security apparatuses, and, if needed, suggest legislative and regulatory changes to better fight against TCOs.

This legislation passed the House Committee on Financial Services with unanimous support in January, and it is my hope that it passes with unanimous support today on the House floor.

Mr. Speaker, in addition to Congressman Kustoff, I thank Chairman Hensarling and Ranking Member Waters for their hard work on this issue. Together we can, in a bipartisan way, empower our government to better fight transnational criminal organizations, making the American people safer and our economy stronger.

Mr. Speaker, I urge my colleagues to vote for H.R. 4768, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 5 minutes to the gentleman from Tennessee (Mr. Kustoff), a member of the House Financial Services Committee and a former United States Attorney from the Western District of Tennessee, who has brought considerable prosecutorial experience in drafting and authoring this legislation.

Mr. Speaker, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Rothfus), the vice chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit.

Mr. Speaker, I yield 3 minutes to the gentleman from North

Carolina (Mr. Budd), a member of the Financial Services Committee.

Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Gaetz).

Mr. Speaker, I yield myself the balance of my time.

I, once again, thank my colleagues for supporting this legislation. In particular, I thank the gentleman from Tennessee (Mr. Kustoff) for his leadership on this issue.

I would note, also, in addition to all of the many sound and persuasive arguments that have been offered for why we need this legislation, this National Strategy for Combating the Financing of Transnational Criminal Organizations Act, the National Fraternal Order of Police has endorsed this legislation, and I include in the Record their letter.

National Fraternal

Order of Police,

Washington, DC, February 15, 2018.

Hon. Paul D. Ryan,

Speaker of the House, House of Representatives, Washington,

Mr. Speaker, as a Member of Congress representing a State that has been ravaged by heroin and opioid addiction, I can't think of a more important thing for this Congress to do than to develop a national strategy for combating these transnational gangs that are preying on our communities.

Once again, I commend Mr. Kustoff for his leadership in this area and in this effort and in this fight. I applaud my colleagues for supporting the legislation on both sides of the aisle.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, if ever there is a time for Democrats and Republicans to come together in a bipartisan fashion, it would be around this issue, around an issue to combat the financing of transnational criminal organizations. That is what H.R. 4768 would do. Specifically, it would require the Secretary of the Treasury to lead the effort, in consultation with other key agencies and departments, and update the strategy to fight these organizations at least every 2 years.

Additionally, the legislation requires the administration to assess the key threats, financial support networks, and methods used by criminal groups to launder the proceeds of illicit activities. In passing this legislation, we will not only build upon but also cement the importance of the interagency approach taken by the prior administration in combating the impact of global criminal enterprises.

Indeed, in 2010, the Obama administration conducted a comprehensive assessment of organized crime, the first such review that had taken place since the mid-1990s. The assessment came to the alarming conclusion that the threat of global criminal networks had become more complex, volatile, and destabilizing and that such groups were proliferating, striking new and powerful alliances, and engaging in a growing range of illicit activities such as we have never seen before.

To combat this growing threat and lessen its impact both domestically and on our foreign partners, the Obama administration, in 2011, issued a comprehensive interagency strategy that identified 56 priority actions across five strategic objectives. One of these key objectives included breaking the economic power of transnational criminal networks and protecting strategic markets and the U.S. financial system from penetration and abuse by transnational organized crime. This strategic objective, in particular, resonates with me, as I have always believed strongly that following the money and using our economic leverage is the best way to counter illicit activity. This is especially true in countering transnational criminal organizations, whose primary objective is economic gain.

In a number of ways, this legislation before us will ensure that the Treasury, as well as the intelligence and broader U.S. national security apparatus, remains focused on some of the emerging threats posed by transnational organized crime groups; including, kleptocrats, human traffickers, drug traffickers, and cybercriminals.

Additionally, the legislation explicitly requires the administration to examine how such groups exploit the use of shell companies, misuse digital currencies and other cyber technologies.

I am also pleased that, with the concurrence of the chairman and the gentleman from Tennessee (Mr. Kustoff), the committee agreed to adopt an amendment offered by Ranking Member Waters that sharpens the bill's focus on the methods by which transnational organized crime groups launder illicit funds using real estate and other tangible goods, such as art and antiquities. These significant vulnerabilities have been identified as major threats to our national security and the integrity of our financial system by a broad range of bipartisan experts, including the Financial Crimes Enforcement Network and the Financial Action Task Force.

For example, just last year, FinCEN noted in a public advisory that: ``Real estate transactions and the real estate market have certain characteristics that make them vulnerable to abuse by illicit actors. . . . For these reasons and others, drug traffickers, corrupt officials, and other criminals can and have used real estate to conceal the existence and origins of their illicit funds.''

The entities and individuals that have sought to exploit real estate to conceal illicit funds includes Iranian banks subject to U.S. sanctions, Russian oligarchs and Russian-organized crime rings, as well as Venezuelan officials found to be engaged in narcotics trafficking.

The fact that these vulnerabilities are not merely theoretical and have been used by a wide range of criminal groups should disturb all of us. We also know that money laundering through the global art and antiquities market is another key method for washing illicit funds, and that is undoubtedly being exploited by well-organized transnational criminal groups. Indeed, we know that the looting and trafficking in cultural heritage is a source of revenue that has funded ISIS' heinous activities, and we know that the opaque characteristics of the high-end art market and its lack of basic anti-money-laundering requirements make it a target for illicit funds.

So I am pleased that the members of this committee were able to agree that real estate and art market vulnerabilities should be given due consideration when it comes to transnational organized crime. Again, this is one of those

subjects around which bipartisanship should be assumed.

Mr. Speaker, I urge all Members to join in this bipartisan effort and to support this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentlewoman from Arizona (Ms. Sinema), a cosponsor of this legislation and a distinguished member of the Financial Services Committee.

Mr. Speaker, obviously, as I said, we need a national strategy to combat the financing of transnational criminal organizations.

This legislation requires that such a strategy be put together. It is an issue that crosses virtually every partisan or ideological line. It is an example of legislation that we all can embrace and should support.

Mr. Speaker, I encourage my colleagues to do so, and I yield back the balance of my time.

Mr. Speaker, I thank the chairman for yielding.

Mr. Speaker, I rise today in support of my bill, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

On February 9 of 2017, last year, President Trump issued an executive order directing the Federal Government to combat international drug trafficking. Now, before I go any further, I want to take note that this executive order was issued in the third week of the Trump administration. This early action gives us an idea of how seriously we must take this issue. The executive order recognizes that illegal drugs are pouring into our country and they are threatening American safety, primarily at the hands of cartels and other transnational criminal organizations.

These criminal organizations are responsible, in large part, for the rising opioid epidemic sweeping across our Nation. Take my district of west Tennessee, where we continue to see a rise in the deaths caused by opioid overdoses. From heroin to fentanyl, and the more potent synthetic opioid known as carfentanil, we must continue to use every available resource to prevent the further destruction of our communities. We have got to say enough is enough.

The important legislation that we are discussing today will create a plan to track illicit money channels and cut them off at the source. Specifically, it directs the United States Treasury Department to develop a national strategy aimed at disrupting these financial crimes. The Treasury Department will work hand in hand with the Department of Defense, the Department of Homeland Security, the Department of Justice, the State Department, and the Office of the Director of National Intelligence to produce a yearly report outlining a strategy and detailing ways that the United States Government can continue to prevent these financial crimes.

For far too long, these criminal organizations have used illicit business ventures to further finance their activities, which range from money laundering and cybercrime to the trafficking of drugs, human trafficking, weapons trafficking, and trafficking in endangered species.

The United Nations Office on Drugs and Crime estimates that these cartel and transnational criminal organizations generate nearly $870 billion a year. This money is used to directly threaten the security and the prosperity of the United States of America and other countries in the Western Hemisphere. Our legislation is a critical step in disrupting this illicit finance and putting an end to the needless crimes committed by cartels.

As we have seen, these organizations have evolved in a continued effort to evade law enforcement. Therefore, in an effort to stay one step ahead of these bad actors, we have also got to evolve. These transnational organizations have developed interstate networks to and from the border in which drugs come up from Central America and the cash returns back to the country of origin. We simply cannot stand idly by as these activities continue. We must keep money out of the hands of those who intend to cause harm to our Nation.

I think this legislation does exactly that. I greatly appreciate the hard work done by my colleagues from the Financial Services Committee on this very important legislation. I urge all my colleagues to support its passage.

Mr. Speaker, I rise today in strong support of Mr. Kustoff's bill, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

Mr. Speaker, I want to thank my friend for his leadership on this important issue, even if it does have a really, really long name.

I have seen firsthand how these transnational drug cartels can disrupt civil society. In my own district, the opioid epidemic has destroyed innocent people's lives, including kids, while transnational criminal organizations, or TCOs, profit on people's misery and their death.

TCOs have brought heroin to our streets and, along with it, increased crime, placing additional burdens on law enforcement in local communities.

We are in crisis mode, and targeted steps need to be taken to address this epidemic at all phases. We have to crack down on the pusher on the street. We have to crack down on the drug cartels. We have to crack down on the drug companies that have made a profit from overprescription and filling suspect orders.

Most of all, we have to crack down on the intricate faceless and unbelievably complex international criminal organizations that allow the profits from these activities into our economy.

We must eradicate the international illicit financing networks that are the linchpin of any criminal organization's operations. But we don't have a unified national plan.

Luckily, this committee has an opportunity to make a difference by coming up with a national strategy and plan to attack transnational criminal organizations' finances.

Mr. Kustoff's bill would direct the Secretary of the Treasury to provide that plan, a vital first step towards addressing the threat posed by the growing sophistication of illicit financing networks.

Passing this bill is a significant step toward an effective, sustained national strategy to attack the funding that makes these TCOs possible.

Therefore, it is critical that we continue to maximize cooperation among Federal departments to keep our policies ahead of these transnational criminals.

Mr. Speaker, I urge adoption of Mr. Kustoff's timely and important piece of legislation.

Mr. Speaker, I rise in support of H.R. 4768, the National Strategy for Combating the Financing of Transnational Criminal Organizations Act.

Mr. Speaker, according to the Drug Enforcement Administration's Phoenix division, the Sinaloa cartel is the biggest, most violent, and nastiest organization threatening Arizonans, even bigger than MS-13. It is a dangerous and highly sophisticated organization. Sinaloa smuggles heroin and methamphetamine across the border into Arizona and, with it, a pattern of crime, intimidation, and addiction that rips at the very fabric of our communities.

Arizonans know we need to be tough, smart, and aggressive to confront Sinaloa and other cartels. Our bill cracks down on the drug cartels and other international crime syndicates that threaten Arizona families and our quality of life by hitting them where it hurts: their bank accounts.

Drug cartels like Sinaloa obtain wealth and power through money laundering; cybercrime; and human, drugs, and weapons smuggling. To stop the drug cartels and protect Arizona families, we need a comprehensive approach to cut off the money that fuels their operations.

That is why Congressman Kustoff from Tennessee and I introduced H.R. 4768. This bill requires the administration to develop and execute a strategy that cuts off funding and other resources for transnational criminal organizations and to routinely report to Congress and the American people on the strategy's progress.

Our bill is a commonsense solution that protects Arizona families, communities, and businesses from the threats of transnational organized crime.

By focusing on the money, we take a meaningful step in combating cybercrime, money laundering, drug trafficking, and human trafficking, as well as other issues that transnational criminals bring to our communities.

I thank Chairman Hensarling and Ranking Member Waters for supporting this important legislation, and I will continue working with my colleagues across the aisle to keep Arizona families safe.