text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Money Laundering Abatement Act of 
  1999''.
  
  SEC. 2. FINDINGS AND PURPOSE.
  
      (a) Findings.--Congress makes the following findings:
              (1) Money laundering is a serious problem that enables 
          criminals to reap the rewards of their crimes by hiding the 
          criminal source of their profits.
              (2) When carried out by using banks, money laundering 
          erodes the integrity of our financial institutions.
              (3) United States financial institutions are a critical 
          link in our efforts to combat money laundering.
              (4) In addition to organized crime enterprises, corrupt 
          government officials around the world increasingly employ 
          sophisticated money laundering schemes to conceal wealth they 
          have plundered or extorted from their nations or received as 
          bribes, and these practices weaken the legitimacy of foreign 
          states, threaten the integrity of international financial 
          markets, and harm foreign populations.
              (5) Private banking is a growing activity among financial 
          institutions based in and operating in the United States.
              (6) The high profitability, competition, high level of 
          secrecy, and close relationships of trust developed between 
          private bankers and their clients make private banking 
          vulnerable to money laundering.
              (7) The use by United States bankers of financial centers 
          located outside of the United States that have weak financial 
          regulatory and reporting regimes and no transparency 
          facilitates global money laundering.
      (b) Purpose.--The purpose of this Act is to eliminate the 
  weaknesses in Federal law that allow money laundering to flourish, 
  particularly in private banking activities.
  
  SEC. 3. IDENTIFICATION OF ACTUAL OR BENEFICIAL OWNERS OF ACCOUNTS.
  
      (a) Transactions and Accounts With or on Behalf of Foreign 
  Entities.--Subchapter II of chapter 53 of title 31, United States Code, 
  is amended by adding at the end the following:
  ``Sec. 5331. Requirements relating to transactions and accounts with or 
                on behalf of foreign entities
      ``(a) Definitions.--Notwithstanding any other provision of this 
  subchapter, in this section the following definitions shall apply:
              ``(1) Account.--The term `account'--
                      ``(A) means a formal banking or business 
                  relationship established to provide regular services, 
                  dealings, and other financial transactions; and
                      ``(B) includes a demand deposit, savings deposit, 
                  or other asset account and a credit account or other 
                  extension of credit.
              ``(2) Correspondent account.--The term `correspondent 
          account' means an account established to receive deposits from 
          and make payments on behalf of a correspondent bank.
              ``(3) Correspondent bank.--The term `correspondent bank' 
          means a depository institution that accepts deposits from 
          another financial institution and provides services on behalf 
          of such other financial institution.
              ``(4) Depository institution.--The term `depository 
          institution' has the same meaning as in section 19(b)(1)(A) of 
          the Federal Reserve Act.
              ``(5) Foreign banking institution.--The term `foreign 
          banking institution' means a foreign entity that engages in the 
          business of banking, and includes foreign commercial banks, 
          foreign merchant banks, and other foreign institutions that 
          engage in banking activities usual in connection with the 
          business of banking in the countries where they are organized 
          or operating.
              ``(6) Foreign entity.--The term `foreign entity' means an 
          entity that is not organized under the laws of the Federal 
          Government of the United States, any State of the United 
          States, the District of Columbia, or the Commonwealth of Puerto 
          Rico.
      ``(b) Prohibition on Opening or Maintaining Accounts Belonging to 
  or for the Benefit of Unidentified Owners.--A depository institution or 
  a branch of a foreign bank (as defined in section 1 of the 
  International Banking Act of 1978) may not open or maintain any account 
  in the United States for a foreign entity or a representative of a 
  foreign entity, unless--
              ``(1) for each such account, the institution completes and 
          maintains in the United States a form or record identifying, by 
          a verifiable name and account number, each person having a 
          direct or beneficial ownership interest in the account; or
              ``(2) some or all of the shares of the foreign entity are 
          publicly traded.
      ``(c) Prohibition on Opening or Maintaining Correspondent Accounts 
  or Correspondent Bank Relationship With Certain Foreign Banks.--A 
  depository institution, or branch of a foreign bank, as defined in 
  section 1 of the International Banking Act of 1978, may not open or 
  maintain a correspondent account in the United States for or on behalf 
  of a foreign banking institution, or establish or maintain a 
  correspondent bank relationship with a foreign banking institution 
  (other than in the case of an affiliate of a branch of a foreign bank), 
  that--
              ``(1) is organized under the laws of a jurisdiction outside 
          of the United States; and
              ``(2) is not subject to comprehensive supervision or 
          regulation on a consolidated basis by the appropriate 
          authorities in such jurisdiction.
      ``(d) 48-Hour Rule.--Not later than 48 hours after receiving a 
  request by the appropriate Federal banking agency (as defined in 
  section 3 of the Federal Deposit Insurance Act) for information related 
  to anti-money laundering compliance by a financial institution or a 
  customer of that institution, a financial institution shall provide to 
  the requesting agency, or make available at a location specified by the 
  representative of the agency, information and account documentation for 
  any account opened, maintained, or managed in the United States by the 
  financial institution.''.
      (b) Technical and Conforming Amendment.--The table of sections for 
  subchapter II of chapter 53 of title 31, United States Code, is amended 
  by inserting after the item relating to section 5330 the following:
  
  ``5331. Requirements relating to transactions and accounts with or on 
                              behalf of foreign entities.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply--
              (1) with respect to any account opened on or after the date 
          of enactment of this Act, as of such date; and
              (2) with respect to any account opened before the date of 
          enactment of this Act, as of the end of the 6-month period 
          beginning on such date.
  
  SEC. 4. PROPER MAINTENANCE OF CONCENTRATION ACCOUNTS AT FINANCIAL 
                INSTITUTIONS.
  
      Section 5318(h) of title 31, United States Code, is amended by 
  adding at the end the following:
              ``(3) Availability of certain account information.--The 
          Secretary shall prescribe regulations under this subsection 
          that govern maintenance of concentration accounts by financial 
          institutions, in order to ensure that such accounts are not 
          used to prevent association of the identity of an individual 
          customer with the movement of funds of which the customer is 
          the direct or beneficial owner, which regulations shall, at a 
          minimum--
                      ``(A) prohibit financial institutions from allowing 
                  clients to direct transactions that move their funds 
                  into, out of, or through the concentration accounts of 
                  the financial institution;
                      ``(B) prohibit financial institutions and their 
                  employees from informing customers of the existence of, 
                  or means of identifying, the concentration accounts of 
                  the institution; and
                      ``(C) require each financial institution to 
                  establish written procedures governing the 
                  documentation of all transactions involving a 
                  concentration account, which procedures shall ensure 
                  that, any time a transaction involving a concentration 
                  account commingles funds belonging to 1 or more 
                  customers, the identity of, and specific amount 
                  belonging to, each customer is documented.''.
  
  SEC. 5. DUE DILIGENCE REQUIRED FOR PRIVATE BANKING.
  
      The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
  amended by inserting after section 10 the following:
  
  ``SEC. 5A. DUE DILIGENCE.
  
      ``(a) Private Banking.--In fulfillment of its anti-money laundering 
  obligations under section 5318(h) of title 31, United States Code, each 
  depository institution that engages in private banking shall establish 
  due diligence procedures for opening and reviewing, on an ongoing 
  basis, accounts of private banking customers.
      ``(b) Minimum Standards.--The due diligence procedures required by 
  paragraph (1) shall, at a minimum, ensure that the depository 
  institution knows and verifies, through probative documentation, the 
  identity and financial background of each private banking customer of 
  the institution and obtains sufficient information about the source of 
  funds of the customer to meet the anti-money laundering obligations of 
  the institution.
      ``(c) Compliance Review.--The appropriate Federal banking agencies 
  shall review compliance with the requirements of this section as part 
  of each examination of a depository institution under this Act.
      ``(d) Regulations.--The Board of Governors of the Federal Reserve 
  System shall, after consultation with the other appropriate Federal 
  banking agencies, define the term `private banking' by regulation for 
  purposes of this section.''.
  
  SEC. 6. SUPPLEMENTATION OF CRIMES CONSTITUTING MONEY LAUNDERING.
  
      Section 1956(c)(7)(B) of title 18, United States Code, is amended--
              (1) by striking clause (ii) and inserting the following:
                              ``(ii) any conduct constituting a crime of 
                          violence;''; and
              (2) by adding at the end the following:
                              ``(iv) fraud, or any scheme to defraud, 
                          committed against a foreign government or 
                          foreign governmental entity under the laws of 
                          that government or entity;
                              ``(v) bribery of a foreign public official, 
                          or the misappropriation, theft, or embezzlement 
                          of public funds by or for the benefit of a 
                          foreign public official under the laws of the 
                          country in which the subject conduct occurred 
                          or in which the public official holds office;
                              ``(vi) smuggling or export control 
                          violations involving munitions listed in the 
                          United States Munitions List or technologies 
                          with military applications, as defined in the 
                          Commerce Control List of the Export 
                          Administration Regulations;
                              ``(vii) an offense with respect to which 
                          the United States would be obligated by a 
                          multilateral treaty either to extradite the 
                          alleged offender or to submit the case for 
                          prosecution, if the offender were found within 
                          the territory of the United States; or
                              ``(viii) the misuse of funds of, or 
                          provided by, the International Monetary Fund in 
                          contravention of the Articles of Agreement of 
                          the Fund or the misuse of funds of, or provided 
                          by, any other international financial 
                          institution (as defined in section 1701(c)(2) 
                          of the International Financial Institutions 
                          Act) in contravention of any international 
                          treaty or other international agreement to 
                          which the United States is a party, including 
                          any articles of agreement of the members of 
                          such international financial institution;''.
  
  SEC. 7. PROHIBITION ON FALSE STATEMENTS TO FINANCIAL INSTITUTIONS 
                CONCERNING THE IDENTITY OF A CUSTOMER.
  
      (a) In General.--Chapter 47 of title 18, United States Code 
  (relating to fraud and false statements), is amended by inserting after 
  section 1007 the following:
  ``Sec. 1008. False statements concerning the identity of customers of 
                financial institutions
      ``(a) In General.--Whoever knowingly in any manner--
              ``(1) falsifies, conceals, or covers up, or attempts to 
          falsify, conceal, or cover up, the identity of any person in 
          connection with any transaction with a financial institution;
              ``(2) makes, or attempts to make, any materially false, 
          fraudulent, or fictitious statement or representation of the 
          identity of any person in connection with a transaction with a 
          financial institution;
              ``(3) makes or uses, or attempts to make or use, any false 
          writing or document knowing the same to contain any materially 
          false, fictitious, or fraudulent statement or entry concerning 
          the identity of any person in connection with a transaction 
          with a financial institution; or
              ``(4) uses or presents, or attempts to use or present, in 
          connection with a transaction with a financial institution, an 
          identification document or means of identification the 
          possession of which is a violation of section 1028;
  shall be fined under this title, imprisoned not more than 5 years, or 
  both.
      ``(b) Definitions.--In this section:
              ``(1) Financial institution.--In addition to the meaning 
          given to the term `financial institution' by section 20, the 
          term `financial institution' also has the meaning given to such 
          term in section 5312(a)(2) of title 31.
              ``(2) Identification document and means of 
          identification.--The terms `identification document' and `means 
          of identification' have the meanings given to such terms in 
          section 1028(d).''.
      (b) Technical and Conforming Amendments.--
              (1) Title 18, united states code.--Section 1956(c)(7)(D) of 
          title 18, United States Code, is amended by striking ``1014 
          (relating to fraudulent loan'' and inserting ``section 1008 
          (relating to false statements concerning the identity of 
          customers of financial institutions), section 1014 (relating to 
          fraudulent loan''.
              (2) Table of sections.--The table of sections for chapter 
          47 of title 18, United States Code, is amended by inserting 
          after the item relating to section 1007 the following:
  
  ``1008. False statements concerning the identity of customers of 
                              financial institutions.''.
  
  SEC. 8. APPROPRIATION FOR FINCEN TO IMPLEMENT SAR/CTR ALERT DATABASE.
  
      There is authorized to be appropriated $1,000,000, to remain 
  available until expended, for the Financial Crimes Enforcement Network 
  of the Department of the Treasury to implement an automated database 
  that will alert law enforcement officials if Currency Transaction 
  Reports or Suspicious Activity Reports disclose patterns that may 
  indicate illegal activity, including any instance in which multiple 
  Currency Transaction Reports or Suspicious Activity Reports name the 
  same individual within a prescribed period of time.
  
  SEC. 9. LONG-ARM JURISDICTION OVER FOREIGN MONEY LAUNDERERS.
  
      Section 1956(b) of title 18, United States Code, is amended--
              (1) by redesignating paragraphs (1) and (2) as 
          subparagraphs (A) and (B), respectively;
              (2) by inserting ``(1)'' after ``(b)'';
              (3) by inserting ``, or section 1957'' after ``or (a)(3)''; 
          and
              (4) by adding at the end the following:
      ``(2) For purposes of adjudicating an action filed or enforcing a 
  penalty ordered under this section, the district courts shall have 
  jurisdiction over any foreign person, including any financial 
  institution authorized under the laws of a foreign country, that 
  commits an offense under subsection (a) involving a financial 
  transaction that occurs in whole or in part in the United States, if 
  service of process upon such foreign person is made under the Federal 
  Rules of Civil Procedure or the laws of the country in which the 
  foreign person is found.
      ``(3) The court may issue a pretrial restraining order or take any 
  other action necessary to ensure that any bank account or other 
  property held by the defendant in the United States is available to 
  satisfy a judgment under this section.''.
  
  SEC. 10. LAUNDERING MONEY THROUGH A FOREIGN BANK.
  
      Section 1956(c)(6) of title 18, United States Code, is amended to 
  read as follows:
              ``(6) the term `financial institution' includes--
                      ``(A) any financial institution described in 
                  section 5312(a)(2) of title 31, or the regulations 
                  promulgated thereunder; and
                      ``(B) any foreign bank, as defined in section 
                  1(b)(7) of the International Banking Act of 1978 (12 
                  U.S.C. 3101(7)).''.
  
  SEC. 11. EFFECTIVE DATE.
  
      Except as otherwise specifically provided in this Act, this Act and 
  the amendments made by this Act shall take effect 90 days after the 
  date of enactment of this Act.
target: (Sec. 3) Requires a financial institution to comply within 48 hours with a Federal banking agency request for anti- money laundering information.
  (Sec. 4) Instructs the Secretary of the Treasury to prescribe regulations governing maintenance of concentration accounts by financial institutions to ensure that such accounts are not used to prevent association of the identity of an individual customer with the movement of funds of which the customer is the direct or beneficial owner.
  (Sec. 5) Amends the Federal Deposit Insurance Act to require each depository institution engaging in private banking to establish due diligence procedures for ongoing review of private banking customer accounts.
  (Sec. 6) Amends Federal criminal law to: (1) expand the designations of unlawful laundering of monetary instruments; (2) impose a fine and imprisonment for false statements to financial institutions concerning the identity of a customer; and (3) grant district courts jurisdiction over any foreign person that commits a financial transaction offense in the United States, including court issuance of a pretrial restraining order.
  (Sec. 8) Authorizes appropriations for the Financial Crimes Enforcement Network of the Department of the Treasury to implement an automated database to alert law enforcement officials if Currency Transaction Reports or Suspicious Activity Reports disclose patterns of illegal activity, including multiple Currency Transaction Reports or Suspicious Activity Reports which name the same individual within a prescribed period of time.
feat_title: Money Laundering Abatement Act of 1999