OFAC Licensure for Investigators Act

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

Mr. Speaker, I rise in support of H.R. 1450, the OFAC Licensure for Investigators Act, sponsored by Representative Beatty.

This bill would require the Secretary of the Treasury to develop a pilot program at the Office of Foreign Assets Control, OFAC, by which private-sector firms like blockchain analytics firms or the financial intelligence units within correspondent banks could receive a license to send or receive nominal financial transactions to and through sanctioned entities. These small amounts could yield big details that could further our understanding of what is happening and by whom in sanctions evasion and money laundering investigations.

We need what this bill proposes because as the global anti-money laundering and countering the financing of terrorism regime has become increasingly effective in detecting and deterring the abuse of the financial system, bad actors have often moved their transactions into illicit markets and spaces or used technologies and methods that are harder to track.

Investigative efforts by firms and in-house functions dedicated to tracking down these attempts to avoid detection help banks and governments, among others, to identify bad actors, accounts, and typologies used by criminals and terrorists. They are limited, however, in how far they can see into these dirty operations.

One of those limitations in the visibility into the financial transactions of bad actors is due to sanctions, which appropriately and forcefully prevents parties from engaging with targets of sanctions. Investigators, whether in private firms or large bank intelligence units, must stop a transaction after finding evidence that suggests that a wallet, account, or address may be associated with a sanctioned person. With the specific licenses envisioned by this bill, OFAC would closely manage narrow and explicit exceptions to its sanctions programs to allow investigators to engage with sanctioned persons in order to gain more visibility into the opaque networks and practices.

Again, OFAC would be limited to allowing only nominal amounts for such traceable transfers. The bill also ensures that there is robust oversight of this process, requiring the recipients of these specific licenses to report to OFAC monthly on their findings. This is similar in concept to the keep-open letters that government officials provide to financial institutions to keep open suspicious accounts so the government can watch the transactions and follow the money.

That is because H.R. 1450 would help investigators better follow the money to make their sanctions and money laundering investigations more fruitful for the United States Government, banks, and others that employ such services.

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

Mr. Speaker, I yield 3 minutes to the gentlewoman from Ohio (Mrs. Beatty), who is also the ranking member of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions, and is the sponsor of this bill.

Mr. Speaker, this bill, H.R. 1450, the OFAC Licensure for Investigators Act from Representative Beatty would develop a program at the Department of the Treasury that would allow financial crime investigators, including those at the Office of Foreign Assets Control, that is OFAC, to better trace and understand the efforts by bad actors to evade sanctions and launder funds. By allowing nominal amounts to be directed through certain accounts with stringent U.S. Government oversight, banks, government agencies, and others seeking knowledge about how these bad actors behave and are connected will benefit. This bill will help to keep our financial system and national security secure.

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

Mr. Speaker, I thank Congresswoman Waters for yielding.

I rise in support of my bipartisan bill, H.R. 1450, the OFAC, Licensure for Investigators Act, which I am very proud to co-lead with my colleague, the gentleman from Iowa (Mr. Nunn).

This bill, Mr. Speaker, requires the Secretary of the Treasury to develop a special licensing pilot program within the Office of Terrorism and Financial Intelligence, and it will be administered by the Office of Foreign Assets Control.

This pilot project would grant private-sector firms a temporary specific license to conduct nominal financial transactions with sanctioned entities to assist with law enforcement investigations. These private firms would be, for example, as you have heard, Mr. Speaker, blockchain analytics firms or the financial intelligence units within corresponding banks.

The commonsense legislation seeks to enhance the tools at our disposal to investigate sanctioned individuals and entities and to hold bad actors accountable, and that is very important.

This concept is similar to, as you have heard by our ranking member, Mr. Speaker, a keep-open letter, which is when the government asks a bank to keep a suspicious illicit account open. As it stands now, private financial firms are currently limited to their capacity to engage with sanctioned entities due to a robust sanction regime.

That also means that it is impossible to access data about bad actors' networks and methods, intelligence that would be of great assistance to law enforcement agents, to government, to consumers of their products, and the financial industry overall, Mr. Speaker.

So by giving OFAC the authority to tailor the parameters of the specific licensure pilot program, this legislation enhances our investigatory toolbox while guaranteeing essential protections.

For example, the specific license would be well-defined and narrowly applied, ensuring that private firms only conduct nominal transactions, for example, $5, $10, so they can collect better data and intelligence.

Lastly, the program would have strict oversight, requiring that licensure recipients provide detailed monthly reports to OFAC on their activities and findings under the license.

This innovative bill harnesses the vast resources of the private sector and allows the Federal Government to work collaboratively with financial firms to further our national security goals.

Mr. Speaker, I urge my colleagues to join our chairman, our ranking member, and my colleague, Mr. Nunn, in supporting this bill.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1450) 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.

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

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

Mr. Speaker, I rise in strong support of H.R. 1450, the OFAC Licensure for Investigators Act.

When it comes to combating illicit finance, effective public-private partnerships are critical. Tracking and disrupting sophisticated crime networks requires cooperation between our government and private-sector experts.

These partnerships play an integral role in our ability to safeguard the U.S. financial system and our national security.

Mrs. Beatty's commonsense bill authorizes private-sector firms, operating under an OFAC license, to conduct nominal transactions with sanctioned entities, allowing them to more effectively trace funds and uncover illicit networks during financial crime investigations.

The gentlewoman and I agree that while the private sector can provide a helping hand in tracking down bad actors, it is ultimately the government's responsibility to provide clear legal guidance and guardrails to support their efforts.

Mr. Speaker, I urge all my colleagues to join me in supporting this bill, and I reserve the balance of my time.

Mr. Speaker, I include the Congressional Budget Office estimate for this bill in the Record.

Mr. Speaker, I yield 1 minute to the gentleman from Iowa (Mr. Nunn) to talk about the aspects of this bill from his perspective of being a former intelligence officer.

Mr. Speaker, I urge a ``yes'' vote, and I yield back the balance of my time.

Mr. Speaker, I rise in strong support of the bipartisan OFAC Licensure for Investigators Act, which I am proud to co-lead with my friend on the other side of the aisle, the Representative from Ohio (Mrs. Beatty).

Terrorist networks like Iran's Islamic Revolutionary Guard Corps, the Russian Mafia, and North Korean cybercriminals are no longer relying solely on traditional cash couriers or shell companies. They now exploit financial platforms, adopting increasingly sophisticated approaches to fund acts of terrorism.

These organizations adapt quickly, using every loophole in the global financial system to mask the origin and the destination of their funds.

Fortunately, the United States is home to some of the world's most advanced financial technology firms and data analytics companies.

Just this spring, the FBI, working hand in hand with blockchain forensics firms, seized $1.5 billion in stolen digital assets from the North Korea-affiliated Lazarus Group. That is why I am so proud to be able to work together on legislation which establishes a pilot program within the Department of the Treasury to enable private-sector firms to collaborate with Treasury to enhance our investigative leads. These teams, working together, fusing the best information, help provide a vital tool in combating the evolving threats posed by terrorism.

I thank Representative Beatty and the House Financial Services Committee for their leadership.