16 October 2001

House Passes Anti-Money Laundering Measure 412-1

Washington -- The House of Representatives has overwhelmingly passed a bill to disrupt money flows to terrorists after a controversial measure was dropped.

The bill passed by the House 412-1 October 16 to give more authority to the Treasury secretary and attorney general to thwart money laundering and the financing of terrorist groups now must be reconciled with the bill passed earlier by the Senate.

The Senate wrapped its anti-money laundering bill in an anti-terrorism legislative package. The House separated anti-terrorism and anti-money-laundering legislation.

To become law a final money laundering bill must be passed both the House and Senate and be signed by the president.

The House bill would prevent corrupt foreign officials from having access to the U.S. financial system and would strengthen bulk cask smuggling laws.

The dropped provision would have prohibited the use of credit and debit cards for payment at Internet gambling sites. The Federal Bureau of Investigation has linked some such sites, many of which operate offshore, with terrorists' money laundering. Industry opponents of the provision said it would have put credit card companies in a law-enforcement position and cost them a lot of money to implement.

The House bill would:

• Prohibit foreign financial institutions from establishing or managing accounts in the United States for foreign shell banks -- those that do not have a physical presence in any country.

• Permit enforcement authorities to seize money in an account involving a U.S. and a foreign bank if they suspect the money is linked to criminal activity.

• Authorize authorities to monitor underground banking systems, or networks of brokers, that enable individuals to transfer cash from one country to recipients in another country without the funds crossing borders or the transactions recorded.

• Authorize the Treasury secretary or attorney general to subpoena the records of an account maintained in the United States by a foreign bank.

• Prohibit non-U.S. persons from entering the United States if the attorney general knows or believes such persons are or have been involved in money laundering.

• Increase penalties for counterfeiting domestic and foreign currency, including counterfeiting by analog, digital or electronic image.