Virtual Currencies and Money Laundering: Legal Background, Enforcement Actions, and Legislative Proposals

Summary: Law enforcement officials have described money laundering—the process of making illegally obtained proceeds appear legitimate—as the "lifeblood" of organized crime. Recently, money launderers have increasingly turned to a new technology to conceal the origins of illegally obtained proceeds: virtual currency. Virtual currencies like Bitcoin, Ether, and Ripple are digital representations of value that, like ordinary currency, function as media of exchange, units of account, and stores of value. However, unlike ordinary currencies, virtual currencies are not legal tender, meaning they cannot be used to pay taxes and creditors need not accept them as payments for debt. While virtual currency enthusiasts tout their technological promise, a number of commentators have contended that the anonymity offered by these new financial instruments makes them an attractive vehicle for money laundering. Law enforcement officials, regulators, and courts have accordingly grappled with how virtual currencies fit into a federal anti-money laundering (AML) regime designed principally for traditional financial institutions.

Summary: The federal AML regime consists of two general categories of laws and regulations. First, federal law requires a range of "financial institutions" to abide by a variety of AML program, reporting, and recordkeeping requirements. Second, federal law criminalizes money laundering and various forms of related conduct.

Summary: Over the past decade, federal prosecutors and regulators have pursued a number of cases involving the application of these laws to virtual currencies. Specifically, federal prosecutors have brought money laundering charges against the creators of online marketplaces that allowed their users to exchange virtual currency for illicit goods and services. In one of these prosecutions, a federal district court held that transactions involving Bitcoin can serve as the predicate for money laundering charges. Federal prosecutors have also pursued charges against the developers of certain virtual currency payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of criminal activity. Specifically, prosecutors charged these developers with conspiring to commit money laundering and operating unlicensed money transmitting businesses. In adjudicating the second category of charges, courts have concluded that the relevant virtual currency payment systems were "unlicensed money transmitting businesses," rejecting the argument that the relevant criminal prohibition applies only to money transmitters that facilitate cash transactions. Finally, the Financial Crimes Enforcement Network (FinCEN)—the bureau within the Treasury Department responsible for administering the principal federal AML statute—has pursued a number of administrative enforcement actions against virtual currency exchangers, assessing civil penalties for failure to implement sufficient AML programs and report suspicious transactions.

Summary: As these prosecutions and enforcement actions demonstrate, virtual currencies have a number of features that make them attractive to criminals. Specifically, commentators have noted that money launderers are attracted to the anonymity, ease of cross-border transfer, lack of clear regulations, and settlement finality that accompanies virtual currency transactions. Several bills introduced in the 116th Congress are aimed at addressing these challenges. These bills would, among other things, commission agency analyses of the use of virtual currencies for illicit activities and clarify FinCEN's statutory powers and duties. Commentators have also identified legal uncertainty as an additional challenge facing prosecutors, regulators, and participants in virtual currency transactions. Moreover, a number of observers have argued that existing AML regulations are likely to stifle innovation by virtual currency developers. In response to these concerns about legal clarity and burdensome regulation, at least one legislative proposal contemplates exempting certain blockchain developers from various AML requirements.

L aw enforcement officials have described money laundering—the process of making illegally obtained proceeds appear legitimate—as the "lifeblood" of organized crime. According to one estimate, criminals launder roughly $1 trillion to $2 trillion annually worldwide, a sum that represents between 2% and 5% of global gross domestic product. Without the ability to conceal and spend these large sums of "dirty" money, criminal organizations "could operate only at a small fraction of current levels, and with far less flexibility."

Over the past decade, money launderers have turned to a new technology to conceal the origins of illegally obtained proceeds: virtual currency. Virtual currencies like Bitcoin, Ether, and Ripple are digital representations of value that, like ordinary currency, function as media of exchange, units of account, and stores of value. However, unlike ordinary currency, virtual currencies are not legal tender, meaning they cannot be used to pay taxes and creditors need not accept them as payments for debt. According to their proponents, virtual currencies (1) have the potential to offer cheaper and faster transactions than traditional bank-centric payment networks, (2) provide inflation-resistant alternatives to traditional fiat currencies, and (3) often involve promising new technologies (such as blockchain technology) that will spur innovation across a variety of fields. However, other commentators have argued that the anonymity offered by certain decentralized virtual currencies—that is, virtual currencies that are not issued or maintained by a central organization—makes them an attractive vehicle for money laundering. These observers have contended that criminals often use such virtual currencies not only to buy and sell illicit goods and services, but also to launder illegally obtained fiat currencies.

While it is difficult to definitively assess the volume of money laundered through virtual currencies, the virtual currency security firm CipherTrace has estimated that criminals laundered roughly $2.5 billion of Bitcoin on major exchanges between January 9, 2009, and September 20, 2018. An official from the Treasury Department's Financial Crimes Enforcement Network (FinCEN) has similarly indicated that virtual currencies have been "exploited to support billions of dollars of . . . suspicious activity." While such figures represent only a fraction of both global money laundering and virtual currency transaction volume, government officials have identified virtual currencies as a growth industry for money launderers that presents regulators and law enforcement with unique challenges.

This report provides a general overview of the application of federal anti-money laundering (AML) law to virtual currencies. First, the report outlines the basic architecture of federal AML law. Second, the report discusses administrative guidance concerning the application of federal AML law to virtual currencies. Third, the report reviews a number of prominent criminal prosecutions and administrative enforcement actions involving federal AML law and virtual currencies. Finally, the report discusses a number of legislative proposals to reform certain elements of the federal AML regime surrounding virtual currencies and further investigate the use of virtual currencies in criminal activities.

The federal AML regime consists of two general categories of laws and regulations. First, federal law requires a range of "financial institutions" to abide by a variety of AML compliance program, reporting, and recordkeeping requirements. Second, federal law criminalizes money laundering and various forms of related conduct.

Requirements for "Financial Institutions"

The Bank Secrecy Act (BSA) and its various amendments represent the centerpiece of the federal AML regime for "financial institutions"—a category that includes federally insured banks, securities brokers and dealers, currency exchanges, and money services businesses. Under the BSA and associated regulations, covered "financial institutions" must, among other things, establish AML programs that meet certain minimum standards, report certain types of transactions to the Treasury Department, and maintain certain financial records.

Specifically, the BSA requires "financial institutions" to establish AML programs that include, at a minimum, (1) the development of internal policies, procedures, and controls, (2) the designation of a compliance officer, (3) an ongoing employee training program, and (4) an independent audit function to test the program. "Financial institutions" must also report certain large currency transactions and suspicious activities to FinCEN—the bureau within the Treasury Department responsible for administering the BSA. Finally, the BSA and associated regulations require "financial institutions" to maintain certain types of records. FinCEN regulations require banks, for example, to retain records related to certain large transactions involving foreign banks and the taxpayer identification numbers associated with certain accounts.

Money services businesses (MSBs) represent one category of "financial institution" that must register with FinCEN and, like other "financial institutions," abide by AML program, reporting, and recordkeeping requirements. Under FinCEN's regulations, MSBs include a variety of specific categories of businesses, including "money transmitters"—that is, (1) persons who accept "currency, funds, or other value that substitutes for currency from one person" and transmit those items "to another location or person by any means," and (2) "[a]ny other person engaged in the transfer or funds." In addition to imposing regulatory requirements on MSBs, federal law makes it a crime to knowingly operate an "unlicensed money transmitting business." An entity qualifies as an "unlicensed money transmitting business" under this provision (Section 1960 of Title 18) if it

1. is "operated without an appropriate money transmitting license in a State where such operation is punishable as a misdemeanor or a felony"; 2. fails to comply with the BSA's federal registration requirement for "money transmitting businesses"; or 3. "otherwise involves the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity."

In addition to imposing various AML requirements on "financial institutions," federal law also criminalizes money laundering and certain related conduct. Specifically, 18 U.S.C. § 1956(a)(1) (Section 1956) makes it unlawful for a person who "know[s] that the property involved in a financial transaction represents the proceeds of some form of unlawful activity" to "conduct[] or attempt[] to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity" —

(A) (i) with the intent to promote the carrying on of specified unlawful activity; or

(ii) with intent to engage in conduct constituting [tax evasion or tax fraud]; or

(B) knowing that the transaction is designed in whole or in part—

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement under State or Federal law.

For purposes of this prohibition, the term "financial transaction" includes transactions "involving the movement of funds" and transactions "involving one or more monetary instruments."

Similarly, 18 U.S.C. § 1957(a) (the so-called "Spending Statute") prohibits monetary transactions in criminally derived property. Specifically, Section 1957(a) makes it unlawful to "knowingly engage[] or attempt[] to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity." In other words, unlike Section 1956, Section 1957 makes it a crime to knowingly spend the proceeds of specified unlawful activity, even if such spending does not promote such activity and is not designed to conceal the origins of the proceeds.

Because neither Congress nor FinCEN has formally amended the BSA regulatory regime in response to the advent of virtual currencies, prosecutors and regulators have been required to analyze whether virtual currency transactions and business models fall within some of the preexisting legal categories discussed above. In 2013, FinCEN attempted to clarify certain aspects of this analysis by issuing administrative guidance addressing the circumstances in which participants in virtual currency transactions qualify as MSBs.

In its 2013 guidance, FinCEN took the position that "users" of virtual currencies do not qualify as MSBs subject to federal registration requirements, while "administrators" and "exchangers" of virtual currencies may qualify as MSBs. Specifically, the guidance explained that users of virtual currencies—that is, persons who obtain virtual currencies to purchase goods or services—are not MSBs because they are not involved in money transmission. By contrast, FinCEN indicated that virtual currency administrators (persons "engaged as a business" in putting a virtual currency into circulation and who have the authority to withdraw such currency from circulation) and exchangers (persons "engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency") may be "money transmitters" and, by extension, MSBs. Specifically, FinCEN explained that virtual currency administrators and exchangers qualify as MSBs (unless they fall within a specific exemption) when they (1) "accept[] or transmit[] a convertible virtual currency," or (2) "buy[] or sell[] convertible virtual currency for any reason." Accordingly, under FinCEN's guidance, virtual currency issuers and exchangers will generally qualify as MSBs unless they fall within a specific statutory or regulatory exemption.

Over the past decade, federal prosecutors and regulators have pursued a number of cases involving the application of federal AML law to virtual currencies. In a number of criminal cases, federal prosecutors have brought money-laundering and certain related charges against the operators of online marketplaces and virtual currency payment systems used to disguise the proceeds of illicit activities. FinCEN has also brought civil enforcement actions against virtual currency exchangers for failure to comply with the BSA's AML program, reporting, and recordkeeping requirements.

Federal prosecutors have brought money-laundering charges against the creators of online marketplaces that allowed their users to exchange virtual currency for a range of illicit goods and services. In one of these prosecutions, a federal district court held that transactions involving Bitcoin can serve as the predicate for money-laundering charges.

In 2013, federal authorities shut down Silk Road, which they alleged was "the most sophisticated and extensive criminal marketplace on the Internet," enabling tens of thousands of users to anonymously buy and sell illegal drugs, malicious software, and other illicit goods and services. Federal prosecutors charged the site's creator with, among other things, conspiracy to commit money laundering under Section 1956. The prosecutors alleged that the site's creator conspired to conduct "financial transactions" involving the proceeds of unlawful activity—namely, narcotics trafficking and computer hacking—with the intent to promote the carrying on of such activity. In defending this charge, Silk Road's creator argued that his alleged conduct—facilitating the exchange of Bitcoin for illegal goods and services—did not involve "financial transactions" within the meaning of Section 1956, which defines that term to include (among other things) transactions "involving one or more monetary instruments." Specifically, the site's creator contended that because Bitcoin does not qualify as a "monetary instrument"—which Section 1956 defines to mean the currency of a country, personal checks, bank checks, money orders, investment securities, or negotiable instruments—transactions involving Bitcoin do not represent "financial transactions" under Section 1956.

The U.S. District Court for the Southern District of New York rejected this argument, holding that transactions involving Bitcoin can qualify as "financial transactions" under Section 1956 because they fall under a separate category of transactions identified by the relevant statutory definition: transactions involving "the movement of funds ." Specifically, the court reasoned that Bitcoin transactions involve "the movement of funds" because the term "funds" includes "money," which in turn refers to "an object used to buy things." Because Bitcoin can be used to buy things, the court reasoned that Bitcoin transactions involve "the movement of funds" and therefore qualify as "financial transactions" under Section 1956. As a result, the court explained, "[o]ne can money launder using Bitcoin."

Similarly, in 2017, federal prosecutors brought money-laundering conspiracy charges against the creator of AlphaBay, another online marketplace that allowed its users to exchange virtual currency for illicit goods and services. The prosecutors alleged that by facilitating the exchange of virtual currencies (including Bitcoin, Monero, and Ether) for illegal narcotics and other illicit goods and services, the site's creator had conspired to conduct "financial transactions" involving the proceeds of unlawful activities. However, the federal government dismissed these charges after AlphaBay's creator died in July 2017.

Virtual Currency Payment Systems Used for Illicit Purposes

Federal prosecutors have also pursued charges against the developers of certain virtual currency payment systems allegedly designed to facilitate illicit transactions and launder the proceeds of criminal activity. Specifically, prosecutors have charged these developers with conspiring to commit money laundering and operating unlicensed money transmitting businesses under Sections 1956 and 1960, respectively. In adjudicating the second category of charges, courts have concluded that the relevant virtual currency payment systems were "unlicensed money transmitting businesses" under Section 1960, rejecting the argument that the provision applies only to money transmitters that facilitate cash transactions.

In 2007, federal prosecutors charged e-Gold—an "alternative payment system" and virtual currency purportedly backed by stored physical gold—and its founders and director with money laundering and operating an unlicensed money transmitting business. The prosecutors alleged that e-Gold "was widely accepted as a payment mechanism for transactions involving credit card and identification fraud, high yield investment programs and other investment scams, and child exploitation" because of the anonymity it offered its users.

In charging the defendants for failing to register their business, prosecutors alleged that e-Gold operated as an "unlicensed money transmitting business" in each of the three ways identified by Section 1960—the provision criminalizing the operation of "unlicensed money transmitting businesses." Specifically, the prosecutors alleged that e-Gold (1) lacked a required state money transmitter license, (2) failed to comply with the BSA's federal registration requirements for "money transmitting businesses" (requirements set forth in Section 5330 of Title 31), and (3) was involved in the transmission of funds that were "known to have been derived from a criminal offense" or that were "intended to be used to promote and support unlawful activity."

In defending these charges, the defendants presented an intricate argument for the proposition that Section 1960 applies only to businesses that facilitate cash (as opposed to virtual currency) transactions. Specifically, the defendants argued that because Section 1960 does not define the term "money transmitting business," it must "borrow" the definition of that term in Section 5330—the BSA provision establishing federal registration requirements for "money transmitting businesses." The defendants further reasoned that (1) Section 5330 provides that an entity is a "money transmitting business" only if it must file currency transaction reports (CTRs), and (2) businesses that do not facilitate cash transactions need not file CTRs. Accordingly, under the defendants' theory, a business like e-Gold that does not facilitate cash transactions does not qualify as a "money transmitting business" under Section 5330 and (by extension) Section 1960.

The U.S. District Court for the District of Columbia rejected this argument, holding that e-Gold was indeed a "money transmitting business" under Section 1960 for two reasons. First, the court rejected the defendants' contention that Section 1960 must "borrow" Section 5330's definition of "money transmitting business." The court rejected this argument on the grounds that Section 1960 contains its own definition of the term "money transmitting" and does not reflect an intent to "borrow" the definition of "money transmitting business" from Section 5330. The court further explained that because e-Gold was a business engaged in "money transmitting" as defined by Section 1960—that is, "transferring funds on behalf of the public"—it was a "money transmitting business" under Section 1960.

Second, the court evaluated whether e-Gold also qualified as a "money transmitting business" under Section 5330—an issue that remained relevant because of the federal government's charge that the defendants violated Section 1960 by violating Section 5330's registration requirements . The court concluded that e-Gold was indeed a "money transmitting business" under Section 5330, rejecting the defendants' argument that e-Gold did not fall within that category because it was not required to file CTRs. Specifically, the court rejected the argument that a business is required to file CTRs only if it facilitates cash transactions. Instead, the court explained that because the statute imposing CTR obligations imposes such obligations when money transmitting businesses facilitate cash transactions (as opposed to if they facilitate such transactions), all money transmitting businesses have a continuing obligation to file CTRs "in the eventuality that they ever are involved" in a reportable cash transaction. The court accordingly concluded that because e-Gold was required to file CTRs and satisfied the other elements of the relevant statutory definition, e-Gold was a "money transmitting business" under Section 5330 even though it did not process cash transactions. After the court denied the defendants' motion to dismiss the charges for operating an unlicensed money transmitting business, the defendants pleaded guilty to those charges and money laundering.

Similarly, in May 2013, federal prosecutors charged the founder of Liberty Reserve—a Costa Rica-based virtual currency service—with conspiracy to commit money laundering, conspiracy to commit international money laundering, and operating an unlicensed money transmitting business. Liberty Reserve administered a virtual currency known as "LR" and described itself as a "payment processor and money transfer system." According to prosecutors, Liberty Reserve's founder "intentionally created, structured, and operated" the service "as a business venture designed to help criminals conduct illegal transactions and launder the proceeds of their crimes," facilitating a broad range of criminal activity that included identity theft, credit card fraud, computer hacking, child pornography, and narcotics trafficking. Specifically, Liberty Reserve allegedly facilitated such activity by allowing its users to set up accounts using fake names and, for an additional fee, hide their account numbers when sending funds within the system. Because of this anonymity, prosecutors alleged, Liberty Reserve became the "bank of choice for the criminal underworld," laundering over $6 billion between 2006 and 2013.

In defending the charge for operating an unlicensed money transmitting business, Liberty Reserve's founder argued that Liberty Reserve was not an "unlicensed money transmitting business" under Section 1960 because it did not transfer "funds" within the meaning of that provision. However, the U.S. District Court for the Southern District of New York rejected this argument, relying on an earlier case from the same district to conclude that virtual currencies are "funds" under Section 1960 because they can be "easily purchased in exchange for ordinary currency, act[] as a denominator of value, and [are] used to conduct financial transactions." Liberty Reserve's founder was ultimately convicted of operating an unlicensed money transmitting business and pleaded guilty to conspiring to commit money laundering.

FinCEN Enforcement Actions Against Virtual Currency Exchangers

Consistent with its 2013 guidance, FinCEN has pursued a number of administrative enforcement actions against virtual currency exchangers, assessing civil penalties for failure to implement sufficient AML programs and report suspicious transactions.

In 2015, FinCEN brought an enforcement action against California-based virtual currency developer and exchanger Ripple Labs, Inc. (Ripple), assessing a $700,000 civil penalty for failure to register as a MSB and failure to implement and maintain an effective AML program. At the time of the enforcement action, Ripple's virtual currency (XRP) was the second-largest virtual currency by market capitalization, trailing only Bitcoin. Ripple sold XRP in exchange for fiat currency without registering as a MSB until 2013, when it incorporated a subsidiary to engage in the relevant sales and transfers. While Ripple's subsidiary ultimately registered with FinCEN, it allegedly failed to fulfill its AML obligations under the BSA. Specifically, FinCEN alleged that Ripple's subsidiary failed to timely establish an AML program that met the BSA's requirements and lacked sufficient controls for implementing the program. Because of this absence of necessary controls, Ripple's subsidiary negotiated an approximately $250,000 transaction with a felon without adhering to its know-your-customer requirements and rejected a number of suspicious transactions without filing suspicious activity reports (SARs) with FinCEN. In response to FinCEN's allegations, Ripple and its subsidiary entered into a settlement agreement, committing to undertake a series of remedial measures and pay a $700,000 civil penalty.

In 2017, FinCEN brought another major enforcement action against BTC-e, one of the largest virtual currency exchanges in the world. FinCEN alleged that BTC-e facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking. FinCEN further contended that BTC-e willfully violated MSB registration requirements, failed to maintain an effective AML program, and failed to file required SARs. Specifically, FinCEN alleged that BTC-e did not verify basic information about its customers and failed to file SARs on thousands of suspicious transactions, including transactions involving Liberty Reserve and other entities that were widely known to be violating U.S. law. Because of this conduct, FinCEN assessed a $110 million civil money penalty against BTC-e and its founder.

Issues for Congress and Proposed Legislation

Regulatory Challenges Posed by Virtual Currencies

As these prosecutions and enforcement actions demonstrate, virtual currencies have a number of features that make them attractive to criminals. Specifically, commentators have noted that money launderers have been attracted by the anonymity, lack of clear regulations, and settlement finality that accompanies virtual currency transactions. The ease of transferring virtual currencies across international borders further complicates AML efforts, as AML regulations "are not widely applied internationally to virtual currency despite increasing evidence of misuse." The Treasury Department's 2018 Money Laundering Risk Assessment accordingly identified virtual currencies as a vulnerability in U.S. AML efforts. Several bills introduced in the 116th Congress aim to address to these challenges. These bills would, among other things, commission agency analyses of the use of virtual currencies for illicit activities and clarify that FinCEN's statutory powers and duties include international coordination on issues related to virtual currencies.

Commentators have also identified legal uncertainty as an additional challenge facing prosecutors, regulators, and participants in virtual currency transactions. Specifically, these observers have noted that applying the BSA's regulatory regime to virtual currencies requires analyzing novel business models using legal categories developed primarily for traditional financial institutions. While the weight of legal authority supports the application of some of these categories to certain virtual currency business models, at least one anomalous decision indicates that some judges demand more explicit indicia of congressional intent to apply existing law in this relatively new field. Moreover, a number of commentators have argued that providing greater legal certainty to legitimate virtual currency activities is necessary to preserve the United States' position as a "global leader" in encouraging technological innovation. This interest in legal clarity—in addition to a desire to shield certain virtual currency innovators from "expensive and onerous" AML requirements —has generated a legislative proposal to exempt certain blockchain developers from various money transmitter requirements.

Legislation Commissioning Agency Analyses

In January 2019, the House passed three bills that would commission studies concerning the use of virtual currencies for illicit purposes. H.R. 56 , the Financial Technology Protection Act, would establish an Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing (Task Force) led by the Treasury Secretary. The bill would direct the Task Force to (1) "conduct independent research on terrorist and illicit use of new financial technologies, including digital currencies," and (2) "develop legislative and regulatory proposals to improve counter-terrorist and counter-illicit financing efforts." H.R. 56 would further require the Task Force to annually report its findings to Congress. The bill would also establish two programs to incentivize members of the public to assist the federal government's efforts to combat the illicit use of virtual currencies. First, the bill would direct the Treasury Secretary to establish a reward of up to $450,000 for persons who "provide[] information leading to the conviction of an individual involved with terrorist use of digital currencies." Second, the bill would direct the Treasury Secretary to create a grant program "for the development of tools and programs to detect terrorist and illicit use of digital currencies." After passing the House in January 2019, H.R. 56 was referred to the Senate Committee on Banking, Housing, and Urban Affairs.

A second bill, H.R. 428 , the Homeland Security Assessment of Terrorists' Use of Virtual Currencies Act, would similarly commission an analysis of the use of virtual currencies by terrorists. Specifically, H.R. 428 would direct the Under Secretary of Homeland Security for Intelligence and Analysis to conduct a "threat assessment" analyzing "the actual and potential threat posed by individuals using virtual currency to carry out activities in furtherance of an act of terrorism, including the provision of material support or resources to a foreign terrorist organization." After passing the House in January 2019, H.R. 428 was referred to the Senate Committee on Homeland Security and Governmental Affairs.

Finally, H.R. 502 , the Fight Illicit Networks and Detect Trafficking Act (the FIND Trafficking Act), would direct the Government Accountability Office (GAO) to conduct a study "on how virtual currencies and online marketplaces are used to facilitate sex and drug trafficking." The bill would require GAO to provide Congress with a report summarizing the results of the study, together with any recommendations for legislative or regulatory action that would assist the federal government in combatting the use of virtual currencies to facilitate sex and drug trafficking. After passing the House in January 2019, H.R. 56 was referred to the Senate Committee on Banking, Housing, and Urban Affairs.

H.R. 1414, FinCEN Improvement Act of 2019

In March 2019, the House passed H.R. 1414 , the FinCEN Improvement Act of 2019. The bill would, among other things, clarify that FinCEN's statutory power to coordinate with foreign financial intelligence units on antiterrorism and AML initiatives "includ[es] matters involving emerging technologies or value that substitutes for currency." After passing the House in March 2019, H.R. 1414 was referred to the Senate Committee on Banking, Housing, and Urban Affairs.

H.R. 528, Blockchain Regulatory Certainty Act

In January 2019, H.R. 528 , the Blockchain Regulatory Certainty Act, was introduced in the House of Representatives. The bill would create a safe harbor from federal and state money transmitter licensing and registration requirements for certain blockchain developers. Specifically, the bill would provide that non controlling "blockchain developers" and providers of a "blockchain service" shall not be treated as "money transmitters," MSBs, "or any other State or Federal legal designation[s] requiring licensing or registration as a condition to acting as a blockchain developer or provider of a blockchain service." A blockchain developer or provider of a blockchain service would qualify as a noncontrolling developer or provider as long as it does not have control over users' digital currency in the regular course of business. Some commentators have argued that such a safe harbor is necessary to provide legal certainty to actors in the virtual currency space, including persons who contribute code to virtual currency platforms or develop blockchain-related software but do not take custody of others' virtual currency. However, another commentator has noted that it is "debat[able]" whether federal registration requirements apply to such persons. H.R. 528 was referred to the House Committee on Financial Services and the House Committee on the Judiciary in January 2019.


Use of National Statuary Hall: Assignment and Historic Events

Summary: Statuary Hall has been used as the setting for a variety of events, including memorial ceremonies and receptions for new Members of Congress, award presentations, and as media space after presidential addresses. This report identifies and categorizes uses of Statuary Hall since 2005.

Summary: Use of Statuary Hall is at the discretion of the Speaker of the House of Representatives. Under House Rule I, clause 3, the Speaker has the authority to assign unappropriated rooms on the House of Representatives side of the Capitol, including Statuary Hall. Use of Statuary Hall could also be authorized by House resolution, but no events since 2005 have been held in Statuary Hall on such authority.

Summary: Since 2005, 170 events have been held in Statuary Hall. Events held in Statuary Hall can be divided into four categories: (1) receptions and dinners, (2) ceremonies, (3) media events, and (4) memorial services. The report provides a brief explanation of each category and examples of activities in each category.

Between 1819 and 1857, the room currently called Statuary Hall served as the Hall of the House of Representatives. Upon the completion of the current House chamber in 1857, the fate of the old "Hall of the House" was debated for many years.

Perhaps the simplest was that it be converted into additional space for the Library of Congress, which was still housed in the Capitol. More drastic was the suggestion that the entire Hall be dismantled and replaced by two floors of committee rooms. Eventually, the idea of using the chamber as an art gallery was approved, and works intended for the Capitol extensions were put on exhibit; among these was the plaster model for the Statue of Freedom, which was later cast in bronze for the Capitol dome. The lack of wall space effectively prevented the hanging of large paintings, but the room seemed well suited to the display of statuary.

Beginning in November 1879, Statuary Hall was first used for events. The first two events were a reception and dinner for the Society of the Army of the Cumberland on November 20, 1879, and a ceremony to close the Centennial Safe on November 22, 1879.

Today, Statuary Hall is the home to many of the statues in the National Statuary Hall collection, which consists of two statues from each state.

A room in the House Wing of the Capitol may be reserved in one of two ways: through a chamber resolution or pursuant to the Speaker's authority. House Rule I, clause 3 provides the Speaker with the authority to assign unappropriated rooms (i.e., not already assigned to a committee, House leadership, or an officer of the House). House Rule I, clause 3 states

Except as otherwise provided by rule or law, the Speaker shall have general control of the Hall of the House, the corridors and passages in the part of the Capitol assigned to the use of the House, and the disposal of unappropriated rooms in that part of the Capitol.

For rooms jointly controlled by the House and Senate (e.g., the Rotunda and Emancipation Hall), a concurrent resolution is generally required to authorize use.

Initially adopted in 1811 to provide the Speaker with approval authority over events in the House chamber, clause 3 was last amended in 1911, to provide the Speaker with control over unappropriated rooms elsewhere in the House Wing of the Capitol. Since 1911, the Speaker has generally authorized use of rooms in the House Wing of the Capitol not otherwise appropriated.

Since 2005, 170 events have been held in Statuary Hall. The House Sergeant at Arms, whose office provided data for this report, defines an event as activity that prevents public access to Statuary Hall for a period of time. As a result, activities such as a brief wreath laying at a particular statue are not included. Table 1 reports the total number of events held in Statuary Hall since 2005. The Appendix provides the date of each event and a brief description.

Following receipt of the data from the House Sergeant at Arms, the Congressional Research Service (CRS) examined the events and divided them into four categories: (1) receptions and dinners, (2) ceremonies, (3) media events, and (4) memorial services. The following sections provide a brief explanation of each category and examples of activities. Table 2 reports the number of events since 2005, by category.

The largest percentage of events held in Statuary Hall (57.6%) were receptions or dinners, hosted by both official congressional entities and private groups. For example, the Joint Congressional Committee on the Inaugural Ceremonies held the Inaugural Luncheon in Statuary Hall in 2005, 2009, and 2013; and the Capitol Historical Society held a reception for new Members of Congress in the Hall in 2005 and 2013.

Ceremonies account for 28.8% of the events held in Statuary Hall since 2005. These ceremonies include presentations of awards, unveiling of official portraits, commemorations of event anniversaries, formal wreath layings, and prayer services. For example, the annual National Moment of Remembrance is held in Statuary Hall. In addition, prior to moving the statue to Emancipation Hall in the Capitol Visitor Center, an annual lei draping ceremony at King Kamehameha statue was held in Statuary Hall.

Statuary Hall has also been occasionally used as the location for media availability, primarily after a presidential address to a joint session of Congress in the House chamber. Media events represent 5.9% of the events held in Statuary Hall.

Since 2005, 13 memorial services (7.6%) for current or former Members of Congress have been held in Statuary Hall: for Representatives Robert Matsui (January 5, 2005); Juanita Millender-McDonald (May 17, 2007); Tom Lantos (February 14, 2008); Stephanie Tubbs Jones (September 10, 2008); John P. Murtha (March 30, 2010); Donald M. Payne (April 25, 2012); Speaker Thomas Foley (October 29, 2013); Mark Takai (September 14, 2016); Robert Michel (March 9, 2017); Louise Slaughter (April 18, 2018); and since 2016, an annual U.S. Association of Former Members of Congress memorial service to honor former Members who died in the past year.

Appendix. Events Held in Statuary Hall, 2005-2018

Since January 1, 2005, 170 events have been held in Statuary Hall. Table A-1 contains a chronological list of these events, the date of the event, and the event type.


Congress and the War in Yemen: Oversight and Legislation 2015-2019

Summary: This product provides an overview of the role Congress has played in shaping U.S. policy toward the conflict in Yemen. Summary tables provide information on legislative proposals considered in the 115th and 116th Congresses. Various legislative proposals have reflected a range of congressional perspectives and priorities, including with regard to

Summary: the authorization of the activities of the U.S. Armed Forces related to the conflict; the extent of U.S. logistical, material, advisory, and intelligence support for the coalition led by Saudi Arabia; the approval, disapproval, or conditioning of U.S. arms sales to Saudi Arabia; the appropriation of funds for U.S. operations in support of the Saudi-led coalition; the conduct of the Saudi-led coalition's air campaign and its adherence to international humanitarian law and the laws of armed conflict; the demand for greater humanitarian access to Yemen; the call for a wider government assessment of U.S. policy toward Yemen and U.S. support to parties to the conflict; the nature and extent of U.S.-Saudi counterterrorism and border security cooperation; and the role of Iran in supplying missile technology and other weapons to the forces of the Houthi movement.

Summary: The 116th Congress may continue to debate U.S. support for the Saudi-led coalition and Saudi Arabia's conduct of the war in Yemen, where fighting has continued since March 2015. The war has exacerbated a humanitarian crisis in Yemen that began in 2011; presently, the World Food Program reports that 20 million Yemenis face hunger in the absence of sustained food assistance. The difficulty of accessing certain areas of Yemen has made it hard for governments and aid agencies to count the war's casualties. Data collected by the U.S. and European-funded Armed Conflict Location & Event Data Project (ACLED) suggest that 60,000 Yemenis have been killed since January 2016.

Summary: The Trump Administration has opposed various congressional proposals, including initiatives to reject or condition proposed U.S. arms sales or to require an end to U.S. military support to Saudi-led coalition operations in Yemen. Many in Congress have condemned the October 2018 murder of Saudi journalist Jamal Khashoggi by Saudi government personnel, and in general, the incident appears to have exacerbated existing congressional concerns about Saudi leaders and the pace, scope, and direction of change in the kingdom's policies.

Summary: This product includes legislative proposals considered during the 115th and 116th Congresses. It does not include references to Yemen in Iran sanctions legislation, which are covered in CRS Report RS20871, Iran Sanctions. For additional information on the war in Yemen and Saudi Arabia, please see the following CRS products.

Summary: CRS Report R43960, Yemen: Civil War and Regional Intervention.

Summary: CRS Report RL33533, Saudi Arabia: Background and U.S. Relations.

Summary: CRS Insight IN10729, Yemen: Cholera Outbreak.

In March 2015, Saudi Arabia established a coalition of nations (hereinafter referred to as the Saudi-led coalition or the coalition) to engage in military operations in Yemen against the Ansar Allah/Houthi movement and loyalists of the previous president of Yemen, the late Ali Abdullah Saleh. During 2014, the United States joined Saudi Arabia in demanding that Houthi forces reverse their campaign to occupy the Yemeni capital of Sanaa, but the rapid onset of hostilities in March 2015 forced the Obama Administration to react quickly. At the start of the Saudi-led intervention on March 25, 2015, the Administration announced that the United States would provide "logistical and intelligence support" to the coalition's operations without taking "direct military action in Yemen in support of this effort." Soon thereafter, a joint U.S.-Saudi planning cell was established to coordinate military and intelligence support for the campaign. At the United Nations Security Council, the United States supported the passage of Resolution 2216 (April 2015), which, among other things, required member states to impose an arms embargo against the Houthi-Saleh forces and demanded that the Houthis withdraw from all areas seized during the current conflict.

Since the March 2015 Saudi-led coalition intervention in Yemen, Congress has taken an active role in debating and overseeing U.S. policy in the Arabian Peninsula. Members have considered legislative proposals seeking to reduce Yemeni civilian casualties resulting from the coalition's operations; improve deteriorating humanitarian conditions; end restrictions on the flow of goods and humanitarian aid; combat Iranian support for the Houthis; preserve maritime security in the Bab al Mandab Strait; and/or support continued Saudi-led coalition and U.S. efforts to counter Al Qaeda and Islamic State forces in Yemen.

Beyond Yemen, many Members have appeared to view the conflict through the prism of a broader regional rivalry between Saudi Arabia and Iran, and the U.S. effort to limit Iran's malign regional influence. Others lawmakers have viewed the Yemen conflict as indicative of what they perceive as problems in the U.S.-Saudi relationship, a concern that deepened after the killing of Saudi journalist Jamal Khashoggi by Saudi government personnel in October 2018. Congress has considered but has not enacted proposals to curtail or condition U.S. defense sales to Saudi Arabia.

Responding to the Saudi-led intervention in Yemen also appears to be reinvigorating some Members' interest in strengthening the role of Congress in foreign policy vis-à-vis the executive branch. Debate in Congress over Yemen has featured bipartisan statements of interest in asserting the prerogatives of the legislative branch to limit executive branch power, specifically using war powers legislation and the appropriations and authorization processes to curb U.S. military involvement in support of coalition operations. Congressional scrutiny of U.S. policy in Yemen also has led to legislative changes to global authorities, such as the Department of Defense's authority to enter into and use acquisition and cross servicing agreements with partner militaries.

Congress, the Obama Administration, and Yemen (2015-2016)

Congressional interest in the Yemen conflict has evolved and grown gradually and was not widespread at the outset of the coalition's March 2015 intervention in Yemen. In early to mid-2015, congressional interest in U.S. foreign policy in the Middle East centered on the Iran nuclear deal and Operation Inherent Resolve against the Islamic State in Iraq and Syria.

Several months after the March 2015 intervention, the Saudi-led coalition had not achieved a conclusive victory and what modest gains had been made on the ground were offset by mounting international criticism of growing civilian casualties from coalition air strikes. In Congress, several lawmakers began to express concern about the deteriorating humanitarian situation in Yemen.

In late September 2015, Representative Ted W. Lieu wrote a letter to the Joint Chiefs of Staff advocating for a halt to U.S. support for the Saudi-led coalition until it instituted safeguards to prevent civilian casualties. In October 2015, 10 Members of Congress wrote a letter to President Obama urging him to "work with our Saudi partners to limit civilian casualties to the fullest extent possible." In October 2015, Senator Markey stated that "I fear that our failure to strongly advocate diplomacy in Yemen over the past two years, coupled with our failure to urge restraint in the face of the crisis last spring, may put the viability of this critical [U.S.-Saudi] partnership at risk."

By the fall of 2015, as the Obama Administration tried to balance its concern for adhering to the laws of armed conflict with its support for Gulf partners, lawmakers began to express their concern over U.S. involvement in the coalition's intervention by scrutinizing U.S. arms sales to Saudi Arabia. When the Administration informally notified Congress of a proposed sale of precision guided munitions (PGMs) to Saudi Arabia, some Senators sought to delay its formal notification. After the formal notification in November 2015, Senate Foreign Relations Committee (SFRC) leaders jointly requested that the Administration notify Congress 30 days prior to associated shipments, marking the first use of this prior notification request authority. At that time, no related joint resolutions of disapproval on proposed sales of PGMs to the kingdom were introduced, but the delay and additional notification request demonstrated congressional concern.

By the one-year anniversary of the Saudi-led intervention in Yemen, a more defined opposition to U.S. support for the coalition had begun to coalesce amid repeated international documentation of human rights abuses and errant coalition airstrikes. In April 2016, legislation was introduced that sought to place conditions on future proposed sale notifications, previously approved sales, or transfers of PGMs to Saudi Arabia. Proposed amendments to FY2017 defense legislation would have added some similar conditions on the use of funds to implement sales of PGMs or prohibited the transfer of cluster munitions to Saudi Arabia. The PGM amendment was not considered, but the cluster munitions amendment was narrowly defeated in a June 2016 House floor vote.

In the spring and summer of 2016, the United Nations held multiple rounds of peace talks in Kuwait aimed at brokering an end to the conflict. From April 2016 to August 2016, the Saudi-led coalition had largely spared Yemen's capital Sanaa from aerial strikes as part of its commitment to the cessation of hostilities. When U.N.-mediated peace talks collapsed in August 2016, the Saudi-led coalition resumed bombing and the war intensified.

During the summer of 2016, the Obama Administration reduced some U.S. support for Saudi Arabia's air campaign in Yemen by withdrawing U.S. personnel assigned to a joint U.S.-Saudi planning cell. Nevertheless, overall U.S.-Saudi cooperation continued and, in August 2016, the Obama Administration notified Congress of a proposed sale of M1A2S tanks to Saudi Arabia. In response, some lawmakers wrote to request that President Obama withdraw the proposal, citing concerns about Yemen. In September 2016, joint resolutions of disapproval of the proposed tank sale were introduced in the Senate ( S.J.Res. 39 ) and House ( H.J.Res. 98 ). On September 21, 2016, the Senate voted to table a motion to discharge the SFRC from further consideration of S.J.Res. 39 (71-27, Record Vote 145). During debate over the motion, many Senators argued in favor of continued U.S. support for Saudi Arabia, with Senator Lindsey Graham remarking "To those who want to vote today to suspend this aid to Saudi Arabia, people in Iran will cheer you on."

In the wake of an October 2016 Saudi airstrike on a funeral hall in Sanaa that killed 140 people, the Obama Administration initiated a review of U.S. security assistance to Saudi Arabia. Based on that review, it put a hold on a planned sale of precision guided munitions (PGMs) to Saudi Arabia and limited intelligence sharing, but maintained counterterrorism cooperation and refueling for coalition aircraft.

In the final months of the Obama Administration, U.S. Armed Forces briefly exchanged fire with forces party to the conflict. In October 2016, Houthi-Saleh forces launched anti-ship missiles at U.S. Navy vessels on patrol off the coast of Yemen. The attacks against the U.S. ships marked the first time U.S. Armed Forces had come under direct fire in the war. The Obama Administration responded to the attacks against U.S. naval vessels by directing the Armed Forces to fire cruise missiles against Houthi-Saleh radar installations. The Obama Administration described the U.S. strikes as self-defense and indicated that it did not want to deepen its direct involvement in the conflict. In August and November 2016, then-Secretary of State John Kerry made several attempts to broker a peace initiative in Oman, but his efforts were rejected by the parties themselves.

By the end of 114 th Congress, the war in Yemen was becoming a more significant foreign policy issue for lawmakers. While a growing number of Members were becoming critical of the U.S. role in supporting the Saudi-led coalition amid a deteriorating humanitarian situation in Yemen, more lawmakers still viewed the conflict through a regional lens rather than as a localized affair. Amid significant congressional opposition to the 2015 nuclear agreement with Iran (Joint Comprehensive Plan of Action or JCPOA), some Members viewed Iran's support for the Houthi movement and the broader conflict in Yemen as an example of Iran's malign regional activities not directly addressed by the JCPOA. As the Houthis targeted Gulf state infrastructure on land and vessels at sea, their behavior was touted as evidence of Iran's growing capabilities to threaten U.S. and Gulf security.

Just as some Members considered the Yemen conflict primarily a proxy war between the Iran-backed Houthis and the Saudi-led coalition, others viewed it as a test of long-standing U.S. commitments to supporting Saudi Arabian security. Supporters of the relationship, while acknowledging that Saudi Arabia's conduct of the war was at times problematic, argued that to curtail U.S. arms sales or other defense support to the kingdom would weaken a vital partner that was under threat from a hostile nonstate actor on its southern border.

Others lawmakers charged that continued U.S. support for the coalition was not improving coalition behavior but damaging the U.S. reputation for upholding commitments to international law and human rights. Legislation seeking to limit U.S. arms sales to Saudi Arabia was not enacted in the 114 th Congress, but marked the beginning of the broader congressional debate that has continued.

As the Trump Administration prepared to assume office, human rights organizations and aid groups were pressing Congress to become more attuned to the growing humanitarian crisis in Yemen. Though the Obama Administration had taken some steps, particularly in late 2016, to limit U.S.-coalition cooperation and restrict deliveries of PGMs to Saudi Arabia, nongovernmental groups deemed such action as insufficient. According to Human Rights Watch, "Whatever conditionality the Obama administration thought it had created—in holding up the transfer of precision munitions near the tail end of Obama's term and suspending cluster munition transfers earlier—ultimately did not have meaningful impact in reining in the continued Saudi-led coalition attacks on civilians."

Congress, the Trump Administration, and Yemen (2017-2018)

From the beginning of his Administration, President Donald Trump has signaled strong support for the Saudi-led coalition's operations in Yemen as a bulwark against Iranian regional interference. He initiated a review of U.S. policy toward Yemen, including President Obama's October 2016 restrictions on U.S. arms sales and intelligence sharing to the coalition. On March 19, 2017, just prior to his visit to Saudi Arabia, President Trump notified Congress that he was proceeding with three proposed direct commercial sales of precision guided munitions technology deferred by the Obama Administration, subject to congressional review.

In May 2017, the Administration officially notified Congress of its intention to proceed with proposed sales of precision guided munitions technologies that the Obama Administration had deferred, while announcing plans to increase training for Saudi Arabia's air force on both targeting and the Law of Armed Conflict. Congress debated another resolution of disapproval ( S.J.Res. 42 ) of these proposed PGM sales in June 2017 (see below). After completing the policy review in July 2017, President Trump directed his Administration "to focus on ending the war and avoiding a regional conflict, mitigating the humanitarian crisis, and defending Saudi Arabia's territorial integrity and commerce in the Red Sea."

As President Trump entered office, the dynamics of the conflict in Yemen were changing, and the coalition launched a new offensive along Yemen's 280-mile western coastal plain ultimately aimed at taking the strategic Houthi-held port city of Hudaydah. In early 2017, the coalition's gradual advance toward Hudaydah, coupled with an ongoing deterioration in humanitarian conditions, sparked some Members of Congress to implore the Administration to improve aid access and negotiate a cease-fire. In March 2017, several House Members wrote a letter to then-Secretary of State Rex Tillerson urging him to "use all U.S. diplomatic tools to help open the Yemeni port of Hodeida [Hudaydah] to international humanitarian aid organizations." A month later, another group of House Members wrote to President Trump stating that Congress should approve any new U.S. support to the coalition amid its offensive against Hudaydah.

On June 13, 2017, the Senate debated another resolution ( S.J.Res. 42 ) to disapprove of three direct commercial sales of PGMs to Saudi Arabia. During Senate floor consideration over the motion to discharge the Senate Foreign Relations Committee from further consideration of S.J.Res. 42 , Members once again weighed various issues, such as the U.S.-Saudi bilateral relationship, countering Iran, and limiting U.S. involvement in the war in Yemen. Some lawmakers suggested that U.S. arms sales and military support to the coalition had enabled alleged violations of international humanitarian law, while others argued that U.S. support to the coalition improved its effectiveness and helps minimize civilian casualties.

For example, during floor debate, Senator Graham argued that "If we are worried about collateral damage in Yemen, I understand the concern. Precision weapons would help that cause, not hurt it." Senator Murphy retorted, saying "What we are asking for is to hold off on selling these precision-guided munitions until we get some clear promise—some clear assurance—from the Saudis that they are going to use these munitions only for military purposes and that they are going to start taking steps—real steps, tangible steps—to address the humanitarian crisis." On June 13, 2017, the Senate voted to reject the motion to discharge the Senate Foreign Relations Committee from further consideration (47-53, Record Vote 143), and a companion resolution was not taken up in the House ( H.J.Res. 102 ).

Representative Ro Khanna introduced a concurrent resolution ( H.Con.Res. 81 ) pursuant to the War Powers Resolution ( P.L. 93-148 ) in a bid to end U.S. support for the coalition's military intervention. After consultation between House leaders and supporters of the resolution on a compromise approach, the House agreed to delay expedited consideration of the resolution until after the November 2016 election and then adopted a nonbinding alternative ( H.Res. 599 , 366-30, 1 Present, Roll no. 623).

In his first year in office, while President Trump sought to improve relations with Saudi Arabia, counter Iran, and increase U.S. counterterrorism activity in Yemen, his Administration also at times took strong positions on the need for members of the coalition to improve humanitarian access, pursue a settlement to the conflict, and take measures to prevent civilian casualties.

After a Houthi-fired missile with alleged Iranian origins landed deep inside Saudi Arabia in November 2017, the coalition instituted a full blockade of all of Yemen's ports, including the main port of Hudaydah, exacerbating the country's humanitarian crisis. The White House issued four press statements on the conflict between November 8 and December 8, including a statement on December 6 in which President Trump called on Saudi Arabia to "completely allow food, fuel, water, and medicine to reach the Yemeni people who desperately need it. This must be done for humanitarian reasons immediately."

On December 20, 2017, the Saudi-led coalition announced that it would end its blockade of Hudaydah port for a 30-day period and permit the delivery of four U.S.-funded cranes to Yemen to increase the port's capability to off-load commercial and humanitarian goods. The next day, the White House issued a statement welcoming "Saudi Arabia's announcement of these humanitarian actions in the face of this major conflict."

As the Saudi-led coalition intervention entered its fourth year, some in the Senate also proposed use of the War Powers Resolution as a tool for ending U.S. support for the coalition's military intervention. On February 28, 2018, Senator Bernie Sanders introduced S.J.Res. 54 , a joint resolution to "direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress (except for those U.S. forces engaged in counterterrorism operations directed at al Qaeda or associated forces)." Efforts in the Senate followed a late 2017 attempt in the House (see Table 1 below), in which a concurrent resolution directing the President to remove U.S. forces from Yemen was tabled in favor of a House-passed nonbinding resolution.

Throughout 2018, between Congress and the Trump Administration and within Congress itself, there was disagreement as to whether U.S. forces assisting the Saudi-led coalition have been introduced into active or imminent hostilities for purposes of the War Powers Resolution. Some Members claimed that by providing support to the Saudi-led coalition, U.S. forces have been introduced into a "situation where imminent involvement in hostilities is clearly indicated" based on the criteria of the War Powers Resolution. The Trump Administration disagreed. In February 2018, the Acting Department of Defense General Counsel wrote to Senate leaders describing the extent of current U.S. support , and reported that "the United States provides the KSA-led coalition defense articles and services, including air-to-air refueling; certain intelligence support; and military advice, including advice regarding compliance with the law of armed conflict and best practices for reducing the risk of civilian casualties."

On March 20, 2018, the Senate considered S.J.Res. 54 on the floor. During debate, arguments centered on a number of issues, ranging from concern over exacerbating Yemen's humanitarian crisis to reasserting the role of Congress in authorizing the use of armed force abroad. After then-Foreign Relations Committee Chairman Senator Bob Corker promised to propose new legislation and hold hearings scrutinizing U.S. policy in Yemen, a majority of Senators voted to table a motion to discharge the Foreign Relations committee from further consideration of S.J.Res. 54 . Senator Robert Menendez made remarks expressing conditional support for Senator Corker's approach, a view shared by some other Senators who voted to table the motion.

The Foreign Relations Committee held a hearing on Yemen a month later. In parallel testimony before Congress, U.S. defense officials stated that while the United States refueled Saudi aircraft and provided advice on targeting techniques, CENTCOM did not track coalition aircraft after they were refueled and did not provide advice on specific targets. Then-Assistant Secretary of Defense for International Security Affairs Robert S. Karem testified that "It's correct that we do not monitor and track all of the Saudi aircraft aloft over Yemen." During the same hearing, U.S. officials acknowledged that pressure from Congress has altered how the Administration deals with the coalition over the Yemen conflict. Acting Assistant Secretary of State for Near Eastern Affairs David Satterfield told Senator Todd Young and the SFRC the following:

Senator, your efforts, the efforts of your colleagues in this body and on this Committee have been exceedingly helpful in allowing the Administration to send a message from whole of government regarding the very specific concerns we have over any limitations, restrictions, constraints on the ability of both humanitarian and commercial goods specifically to include fuel to have unrestricted and expeditious entry into Yemen. And that messaging which comes from us, the Executive Branch, also comes from this body is extremely important.

After the promised hearing, the Senate Foreign Relations Committee also proposed new legislation to place conditions on U.S. assistance to the coalition. In May, the committee reported S.J.Res. 58 to the Senate; it would have prohibited the obligation or expenditure of U.S. funds for in-flight refueling operations of Saudi and Saudi-led coalition aircraft that were not conducting select types of operations if certain certifications cannot be made and maintained.

The Senate Armed Services Committee incorporated the provisions of the SFRC-reported text of S.J.Res. 58 as Section 1266 of the version of the FY2019 National Defense Authorization Act (NDAA) that it reported to the Senate on June 5, 2018 ( S. 2987 ). The provision was modified further and passed by both the House and Senate as Section 1290 of the conference version of the FY2019 NDAA ( H.R. 5515 ). It was signed into law as P.L. 115-232 in mid-August, giving the Administration until mid-September 2018 to make certain certifications. In a statement accompanying the President's signing of P.L. 115-232 into law, President Trump objected to provisions such as Section 1290, stating the Administration's view that such provisions "encompass only actions for which such advance certification or notification is feasible and consistent" with "[his] exclusive constitutional authorities as Commander in Chief and as the sole representative of the Nation in foreign affairs."

As Congress continued to question the role of the United States in supporting coalition operations in Yemen, the pace and scale of fighting on the ground increased dramatically by the summer of 2018. On June 12, 2018, the Saudi-led coalition launched "Operation Golden Victory," aimed at retaking the Red Sea port city of Hudaydah. As coalition forces engaged Houthi militants in and around Hudaydah, humanitarian organizations warned that if port operation ceased, famine could become widespread throughout northern Yemen. On June 12, nine Senators wrote a letter to Secretary of State Pompeo and then-Secretary of Defense Mattis saying, "We are concerned that pending military operations by the UAE and its Yemeni partners will exacerbate the humanitarian crisis by interrupting delivery of humanitarian aid and damaging critical infrastructure. We are also deeply concerned that these operations jeopardize prospects for a near-term political resolution to the conflict."

Several weeks later, Senator Robert Menendez, the ranking member on the Senate Foreign Relations Committee, placed a hold on a potential U.S. sale of precision guided munitions to Saudi Arabia and the United Arab Emirates. In a June 28 letter to Secretary of State Pompeo and Secretary of Defense Mattis, Senator Menendez said,

I am not confident that these weapons sales will be utilized strategically as effective leverage to push back on Iran's actions in Yemen, assist our partners in their own self-defense, or drive the parties toward a political settlement that saves lives and mitigates humanitarian suffering…. Even worse, I am concerned that our policies are enabling perpetuation of a conflict that has resulted in the world's worst humanitarian crisis.

On August 9, the coalition conducted an airstrike that hit a bus in a market near Dahyan, Yemen, in the northern Sa'ada governorate adjacent to the Saudi border. The strike reportedly killed 51 people, 40 of whom were children. The coalition claims that its airstrike was a "legitimate military operation" and conducted in response to a Houthi missile attack on the Saudi city of Jizan a day earlier that killed a Yemeni national in the kingdom. The U.S. State Department called on the Saudi-led coalition to conduct a "thorough and transparent investigation into the incident."

Several Members of Congress wrote to the Administration seeking additional information regarding U.S. operations in the wake of the August 2018 coalition strike at Dahyan. Several Senators also submitted an amendment to the FY2019 Defense Department appropriations act ( H.R. 6157 ) that would have prohibited the use of funds made available by the act to support the Saudi-led coalition operations in Yemen until the Secretary of Defense certifies in writing to Congress that the coalition air campaign "does not violate the principles of distinction and proportionality within the rules for the protection of civilians." The provision did not apply to support for ongoing counterterrorism operations against Al Qaeda and the Islamic State in Yemen.

On September 12, Secretary of State Mike Pompeo issued a certification that would allow the use of FY2019 defense funds to support in-flight refueling of coalition aircraft to continue, per the terms of Section 1290 (see discussion above) of the FY2019 National Defense Authorization Act (NDAA, P.L. 115-232 ). Some Members of Congress criticized the Administration's actions, asserting that the coalition has not met the act's specified benchmarks for avoiding civilian casualties in Yemen.

On September 26, several House Members introduced H.Con.Res. 138 , which sought to direct the President to remove U.S. Armed Forces from hostilities in Yemen, except for Armed Forces engaged in operations authorized under the 2001 Authorization for Use of Military Force, within 30 days unless and until a declaration of war or specific authorization for such use has been enacted into law. In response to a similar initiative in the Senate, the Administration submitted a detailed argument expressing its view that U.S. forces supporting Saudi-led coalition operations are not engaged in hostilities in Yemen.

By late 2018, the prospect of widespread famine in Yemen coupled with international reprobation over the killing of Jamal Khashoggi pressured the Administration and the coalition to accelerate moves toward peace talks. On October 30, then-Secretary of Defense James Mattis and Secretary of State Mike Pompeo called for all parties to reach a cease-fire and resume negotiations. On November 9, Secretary Mattis further announced that effective immediately, the coalition would use its own military capabilities—rather than U.S. capabilities—to conduct in-flight refueling in support of its operations in Yemen.

Though fighting continued along several fronts, on December 13, 2018, Special Envoy of the United Nations Secretary-General for Yemen Martin Griffiths brokered a cease-fire centered on the besieged Red Sea port city of Hudaydah (Yemen's largest port). As part of the U.N.-brokered deal (known as the Stockholm Agreement), the coalition and the Houthis agreed to redeploy their forces outside Hudaydah city and port. The United Nations agreed to chair a Redeployment Coordination Committee (RCC) to monitor the cease-fire and redeployment. The international community praised the Stockholm Agreement as a first step toward broader de-escalation and a possible road map to a comprehensive peace settlement.

Also on December 13, 2018, the Senate amended and passed S.J.Res. 54 (56-41), which, among other things, directed the President to remove U.S. forces from hostilities in Yemen, except U.S. forces engaged in operations directed at Al Qaeda or associated forces. In the House, lawmakers twice narrowly approved rules resolutions containing provisions that made similar resolutions directing the President to remove U.S. forces from hostilities in Yemen ineligible for expedited consideration ( H.Res. 1142 and H.Res. 1176 ). On December 13, the Senate also passed S.J.Res. 69 , which, among other things, expresses the sense of the Senate that Saudi Crown Prince Mohammed bin Salman is responsible for the murder of the journalist Jamal Khashoggi and that there is no statutory authorization for United States involvement in hostilities in the Yemen civil war.

The 115th Congress frequently debated the extent and terms of the United States' involvement in the ongoing conflict in Yemen. Lawmakers questioned the extent to which successive Administrations have adhered to existing law related to providing security assistance, including sales or transfers of defense goods and defense services, while upholding international human rights standards (e.g., 22 U.S.C. §2754 or 22 U.S.C. §2304). They also enacted new legislation that would condition or prohibit the use of U.S. funds for some activities related to Yemen and extend legislative oversight over the executive branch's policy toward the war in Yemen.

While the House and its Rules Committee voted to make resolutions with respect to war powers and Yemen ineligible for expedited consideration, the Senate passage of S.J.Res. 54 at the conclusion of the 115 th Congress demonstrated growth in congressional opposition to U.S. involvement in the Saudi-led coalition intervention in Yemen relative to previous years. Over time, the balance of votes shifted in favor of measures that could be described as critical or restrictive of U.S. support for Saudi-led coalition operations with regard to arms sales, oversight measures, and war powers measures.

Nevertheless, after nearly four years of conflict, it remains difficult to identify the locus of congressional consensus about Yemen. Many in the House and Senate state that they seek to preserve cooperative U.S.-Saudi relations in broad terms and express concern about Iranian activities in Yemen, while also expressing support for expanded humanitarian access and efforts to bring the conflict to a close. Some lawmakers express opposition to the intervention and U.S. involvement on moral grounds, citing errant coalition airstrikes and the prospect of a looming famine. Others argue the conflict's continuation creates opportunities for Iran and Sunni Islamist extremist groups to expand their influence and operations in Yemen. Still others may have come to oppose continued U.S. support for the intervention based on factors not directly related to Yemen itself, including the opaque mechanisms used by the executive branch to support the coalition and/or anger with the Saudi government over the killing of Jamal Khashoggi.

It remains to be seen whether recent congressional consideration of Yemen legislation is a harbinger of broader efforts by Members of Congress to reassert congressional prerogatives toward U.S. foreign policy writ large. Measures to enhance oversight over U.S. support to the Saudi-led coalition and U.S. strategy toward Yemen have received broad bipartisan support, while proponents of other recently considered arms sales and war powers measures have used mechanisms to ensure privileged consideration of their proposals.

The 116 th Congress may continue to debate U.S. support for the Saudi-led coalition and Saudi Arabia's conduct of the war in Yemen. It is uncertain whether lawmakers may also broaden the scope of their oversight activities beyond the current conflict to more fully address the root causes of Yemen's chronic instability. Even if the United States is no longer an active supporter of coalition military efforts, Yemen itself has been devastated by years of war and remains the world's worst humanitarian crisis. Experts expect Yemen to require sustained international attention and financial assistance in order to help local actors reach and sustain a political settlement. This suggests that Congress may grapple with questions about the conduct of U.S. diplomacy, the provision of U.S. security support, and the investment of U.S. assistance and defense funds for years to come.