OFAC Licensure for Investigators Act

Madam Speaker, I move to suspend the rules and pass the bill (H.R. 6370) to require the Office of Foreign Assets Control to develop a program under which private sector firms may receive a license to conduct nominal financial transactions in furtherance of the firms' investigations, and for other purposes, as amended.

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

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

Madam Speaker, I rise in support of H.R. 6370, the OFAC Licensure for Investigators Act, introduced by my friend, the ranking member of the National Security, Illicit Finance, and International Financial Institutions Subcommittee, Mrs. Beatty.

The gentlewoman from Ohio has been an adept legislator in committee and great as an ally and fearsome as a foe. It has been good to work with her on solid policy.

I think this is an important matter for us. Illicit finance internationally and domestically is something we want to tackle, and we want to tackle this through solid policy that can be passed in a bipartisan way.

Since Hamas' October 7 terrorist attack on Israel, we have witnessed the ramifications of bad actors using the financial system to further their acts of terrorism.

This bill would enhance the tools in Treasury's arsenal to go after sanctioned individuals and entities while also holding them accountable in their financial activities.

There is already a well-established practice in traditional financial investigations where a law enforcement agency can request that financial institutions keep open criminal accounts in order to help track the illicit flows of money.

This bill mirrors that practice.

The bill requires the Secretary of the Treasury to develop a pilot program administered by the Office of Foreign Assets Control to allow private sector firms under a temporary and specific license to conduct nominal financial transactions to and through sanctioned entities to further their investigations.

OFAC, the Office of Foreign Assets Control, is a very important tool, one of our most powerful tools of protecting free people around the world and the flow of funds and tracking those flow of funds.

OFAC's licenses are authorized to OFAC to engage in transactions that would otherwise be prohibited. Mrs. Beatty's bill would allow, for example, blockchain analytics firms to work with OFAC to trace wallets controlled by bad actors. The power of blockchain lies within its immutable ledger that cannot be altered and allows analysis firms to see the movement of value every step along the way.

Mrs. Beatty's bill is a crucial step in the right direction. The Treasury Department will be required to keep Congress informed of OFAC's activities and findings under the license. With strict oversight and Treasury's ability to continue to follow the money and follow the value, the United States will be better positioned to go after terrorists and other bad actors and entities.

I thank Mrs. Beatty for her legislation and for her important work on this topic, and I urge my colleagues to support it.

Madam Speaker, I reserve the balance of my time.

House of Representatives,

Committee on Foreign Affairs,

Washington, DC, January 5, 2024.

Hon. Patrick McHenry,

Chairman, Committee on Financial Services,

Washington, DC.

Dear Chairman McHenry: Thank you for consulting with the

Committee on Foreign Affairs on H.R. 6370, the OFAC Licensure

for Investigators Act. Based on your commitment to

incorporate agreed edits into the suspension text, I agree

that Foreign Affairs may be discharged from further

consideration of the bill, so that it may proceed

expeditiously to the House Floor.

This agreement is made with the understanding that it does

not in any way diminish or alter the jurisdiction of the

Committee on Foreign Affairs, or prejudice our jurisdictional

prerogatives on this measure or similar legislation in the

future.

Thank you for agreeing to place our exchange of letters

into the Record during Floor consideration. I look forward to

continuing to work together as this bill moves through the

legislative process.

Sincerely,

Michael McCaul,

Chairman.

Madam Speaker, I yield myself such time as I may consume to engage in a colloquy with the gentlewoman from Ohio.

Madam Speaker, I have heard concerns from Members about the definition of ``nominal transactions'' in the bill. As we saw in OFAC's August 22 designation of Tornado Cash, U.S. persons may have received unsolicited nominal amounts of virtual currency from Tornado Cash. These nominal amounts could be as small as a fraction of a penny. The term ``nominal amounts'' is a term of art within OFAC, but, understandably, Members are worried that this license could allow for the financing of terror activities.

Prior to today's floor proceedings, OFAC and my staff discussed capping licenses at $10. A fraction of a penny spread across $10 could provide an immense amount of data on illicit actors and their funding mechanisms.

I think it is important to reiterate on the record for Members that this bill is not intended to allow a license for greater than $10. Is that something that the gentlewoman would agree with?

I yield to the gentlewoman from Ohio (Mrs. Beatty).

Madam Speaker, I thank the bill's sponsor for this and for her addressing an important matter, which is money laundering internationally and at home is a severe problem. It is a severe problem with regulated financial institutions, and we have longstanding laws and rules and folks that are engaged in Justice and at Treasury that are highly adept at this.

We have new technologies that emerge each day and new approaches to launder value or money. The movement of digital money is complex. With blockchain technology it makes it much easier because then you basically can follow what is on the blockchain, and it is there for the public to see and for our experts in government to follow very well.

We want to make sure that they are given the full tools to track that illicit finance wherever it may be using the best techniques and technology available to anyone in the world. We want to make sure that we stay on top of this and curb illicit finance the best that we possibly can.

We have the best laws, the best rules, and the best people working to protect our people here and abroad.

Madam Speaker, I thank Mrs. Beatty for her leadership here on this important issue.

Madam Speaker, I have no further speakers, I am prepared to close, and I reserve the balance of my time.

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

Madam Speaker, I would just reiterate that Mrs. Beatty's bill is a crucial step in the right direction, and the Treasury Department will be required to keep Congress informed of OFAC's activities and findings under the license.

Madam Speaker, I urge my colleagues to support this bill, and I yield back the balance of my time.

Madam Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

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

I rise in support of my bill, H.R. 6370, the OFAC Licensure for Investigators Act, which is cosponsored by Mr. Nunn of Iowa. I also thank the chairman and my friend for his support.

The global regime to counter money laundering and terrorist financing is becoming increasingly effective at detecting and deterring the abuse of our financial markets. However, we must stay ahead of the bad actors, who in many cases are moving into darker corners of the financial system and using technologies and methods that are harder to trace.

Private investigative firms, some with unique technologies and analytic methods, should be enlisted to help banks and governments, among others, identify the criminals and the terrorists, their bank accounts, and their typologies.

Today, these private firms are limited in how far they can see into a bad actor's operations. One of those limitations is due to sanctions, which appropriately prevent parties from engaging with sanctioned targets. However, as a result, whether in analytic firms or large bank intelligence units, the good guys have to stop their investigations upon finding evidence that suggest that a wallet or account or address may be associated with a sanctioned individual or entity.

There is a workaround today, but it is far too limited. Treasury's Office of Foreign Assets Control, or OFAC, provides licenses to individual parties and transactions which allow for narrow exceptions to its sanctions program. My bill requires OFAC to design a pilot licensing program that would allow investigators to apply to OFAC for permission to get a step further and engage with sanctioned persons under certain conditions to gain more visibility into opaque networks and practices.

The investigators could only use nominal amounts but would be able to trace where the money goes. Ensuring that there is robust oversight in this process, the bill mandates that recipients of these specific licenses must report to OFAC monthly on their findings.

This program would be similar to when government officials ask financial institutions to keep open suspicious accounts so the government could then go and watch the transactions, and while they are doing that, they are able to follow the money.

Madam Speaker, I urge my colleagues to support this innovative and bipartisan bill, and I reserve the balance of my time.

Will the gentleman yield?

Madam Speaker, I say to the gentleman that I would. I think that is a very fair question to ask. Let me just assure you that it is also my intent, as the sponsor of this bill, that the term ``nominal'' in this context should not be interpreted to be more than the $10 as you referenced, and I certainly understand why that concern came up. As you know, this bill is intended to enhance our efforts to stop terrorist financing. The kind of investigation that this bill is trying to allow for doesn't need more than a few dollars--or nominal, not to exceed $10--to be effective. We have seen this before, so I am very comfortable assuring you that we would define it as $10 or less.

I thank the gentleman for clarifying this. I, too, want to put on the record that it would be defined as the $10 mark, and I certainly thank the gentleman for his support on this legislation.

Madam Speaker, I have no further speakers, and I yield myself the balance of my time for the purpose of closing.

My colleague, Mr. Nunn, and I have devised a smart pilot program that would allow for private-sector investigators to engage in small-dollar transactions with sanctioned persons in order to gain valuable information about how networks and activities of those bad actors work.

I am pleased to say that we have agreed on the nominal amount of $10, and by creating a licensing program for such a person, both business and government will benefit from the information gained, improving visibility into criminal and terrorist financing networks. That is what this bill is all about.

Madam Speaker, for those reasons, I again urge my colleagues to support this bipartisan bill, and I yield back the balance of my time.