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H.R. 5594 (114th): National Strategy for Combating Terrorist, Underground, and Other Illicit Financing Act


The text of the bill below is as of Jul 11, 2016 (Passed the House).


I

114th CONGRESS

2d Session

H. R. 5594

IN THE HOUSE OF REPRESENTATIVES

AN ACT

To require the establishment of a national strategy for combating the financing of terrorism and related financial crimes, and for other purposes.

1.

Short title

This Act may be cited as the National Strategy for Combating Terrorist, Underground, and Other Illicit Financing Act.

2.

Findings

The Congress finds the following:

(1)

The financing of terrorism and related forms of illicit finance present a direct threat to national security and a threat to global stability.

(2)

New terrorist groups or threats can form quickly, and other groups change tactics to adapt, creating a constantly changing terrorist environment, presenting ever-changing risks and challenges to programs to disrupt the financing of terrorism and related forms of illicit finance.

(3)

As demonstrated in hearings before the Task Force to Investigate Terrorism Financing, terrorists in some instances have formed symbiotic relationships with, or are taking over, transnational crime syndicates, so that funding for both terrorism and profits from crime flow in the same fashion and often are indistinguishable.

(4)

Methods of concealing the movement of illicit funding change quickly in a globalized economy, and rapid technological changes and financial innovation pose new risks that may be increasingly difficult for governments to stay abreast of without an agile, constantly adjusted strategy to spot, disrupt, and prevent the financing of terrorism and related forms of illicit finance.

(5)

A bipartisan requirement to create a national anti-money laundering strategy enacted in 1998 expired in 2007. Given the rapid globalization and rapid technology changes of the financial sector, an updated strategy focused on the financing of terrorism is necessary.

(6)

It is important for the Government to have a unified strategy to fight financial crime and to update it annually, both to accommodate new and developing threats and to help Congress develop legislative and funding priorities.

(7)

An effective strategy to counter terrorism financing is a critical component of the broader counter terrorism strategy of the United States.

3.

Development of national strategy

(a)

In general

The President, acting through the Secretary of the Treasury (the Secretary) shall, in consultation with the Attorney General, the Secretaries of State, Defense, and Homeland Security, the Director of National Intelligence and the appropriate Federal banking agencies, develop a national strategy for combating the financing of terrorism and related forms of illicit finance.

(b)

Transmittal to Congress

By June 1 each year following the date of the enactment of this Act, the President shall submit to the appropriate congressional committees a national strategy developed in accordance with subsection (a).

(c)

Evaluation of existing efforts and broader strategy

The President shall accompany each strategy submitted under subsection (b) with a report that—

(1)

describes the effectiveness of efforts to enforce existing prohibitions against illicit finance;

(2)

describes how the United States is addressing the highest levels of risk identified in the National Money Laundering Risk Assessment and the National Terrorist Financing Risk Assessment published by the Department of the Treasury;

(3)

evaluates the effectiveness of United States efforts to fight illicit finance at actually preventing, discovering, and countering terrorist financing and other forms of illicit finance (and the effectiveness of those efforts that the United States coordinates with foreign nations); and

(4)

describes how the strategy submitted under subsection (b) is integrated into, and supports, the broader counter terrorism strategy of the United States.

(d)

Separate presentation of classified material

Any part of the national strategy that involves information which is properly classified under criteria established by the President shall be submitted to the Congress separately in a classified annex and, if requested by the chairman or ranking Member of one of the appropriate congressional committees, as a briefing at an appropriate level of security.

4.

Contents

(a)

In general

The strategy described under section 3 shall contain, at a minimum, the following:

(1)

Threats, goals, objectives, and priorities

A comprehensive, research-based, long-range, quantifiable discussion of threats, goals, objectives, and priorities for disrupting, preventing and reducing the number, dollar value, and effects of illicit finance in the United States and foreign countries that impact the security of the United States.

(2)

Coordination

A discussion of methods to best coordinate such efforts with international, State, and local officials, law enforcement, regulators, and financial institutions.

(3)

Reviews and proposed changes

Reviews of enforcement efforts, relevant regulations and relevant provisions of law and, when appropriate, discussions of proposed changes determined to be appropriate to ensure that the United States pursues coordinated and effective efforts at all levels of government in the fight against illicit finance and with international partners.

(4)

Detection and prosecution initiatives

A description of efforts to improve detection and prosecution of illicit finance, including efforts to ensure that—

(A)

subject to legal restrictions, all appropriate data collected by the Government that is relevant to the efforts described in this Act be available in a timely fashion to all appropriate Federal departments and agencies and, as appropriate and consistent with section 314 of the USA PATRIOT Act, to financial institutions to assist them in efforts to comply with laws aimed at curbing illicit finance; and

(B)

appropriate efforts are undertaken to ensure that Federal departments and agencies charged with reducing and preventing illicit finance make thorough use of publicly available data in furtherance of this effort.

(5)

The role of the private financial sector in prevention of illicit finance

A discussion of ways to enhance partnerships between the private financial sector and Federal departments and agencies with regard to the prevention and detection of illicit money laundering finance, including—

(A)

efforts to facilitate compliance with laws aimed at stopping such illicit finance while maintaining the effectiveness of such efforts; and

(B)

providing incentives to strengthen internal controls and to adopt on an industry-wide basis more effective policies.

(6)

Enhancement of intergovernmental cooperation

A discussion of ways to combat illicit finance by enhancing—

(A)

cooperative efforts between Federal, State, and local officials, including State and local prosecutors and other law enforcement officials;

(B)

to the extent possible, cooperative efforts among States and between State and local officials, including State and local regulators, prosecutors, and law enforcement officials; and

(C)

cooperative efforts with and between governments of countries and with and between multinational institutions with expertise in fighting illicit finance.

(7)

Project and budget priorities

A 3-year projection for program and budget priorities and achievable projects for reductions in illicit finance.

(8)

Assessment of funding

A complete assessment of how the proposed budget described under paragraph (7) is intended to implement the strategy described in this Act and whether the funding levels contained in the proposed budget are sufficient to implement the strategy, including a discussion of the extent to which funding for such efforts is or should be funded from fines, settlements, seizures or forfeitures related to illicit finance.

(9)

Trend analysis

Data regarding trends in illicit finance, with a special focus on the funding of terrorism.

(10)

Enforcement report

A report containing an evaluation of the enforcement of policies to combat illicit finance.

(11)

Enforcement

A discussion of the current policies of the United States to enforce the provisions of the Bank Secrecy Act and related laws regarding the financing of terrorism and other forms of illicit finance, together with recommendations for improving enforcement.

(12)

Treasury attachés

A discussion of the Department of the Treasury attachés, including—

(A)

a list of embassies where Department of the Treasury attachés are posted and a discussion of their effectiveness in the fight against illicit finance;

(B)

a list of the United States embassies at which a Department of the Treasury attaché is assigned for temporary duty, the length of such assignments, and the reason why such assignments are not considered to be permanent assignments;

(C)

how the Department of the Treasury’s interests relating to economic and anti-terror finance issues are handled at other embassies, including a discussion of the reporting structure by which such issues are brought to the direct attention of the ambassador; and

(D)

the effect of not having more attachés in embassies that are most vulnerable to illicit finance threats and a discussion of whether the Department of the Treasury’s economic or anti-illicit finance issues are thought to be under-represented in some embassies or regions.

(13)

Illicit finance and cyber crime

A discussion of terrorist financing and other forms of illicit finance that involve cyber attacks, evolving forms of value transfer, including so-called crypto currencies, and other methods that are computer, telecommunications, or Internet-based.

(14)

Technology

An analysis of current and developing ways to leverage technology to improve the effectiveness of the fight against the financing of terror and other forms of illicit finance, including the use of big data analytics, the merging of publicly sourced data with Bank Secrecy Act data and with other forms of secure Government data to increase such effectiveness, and ways to enhance the role of the private sector in combating illicit finance.

5.

Definitions

For purposes of this Act:

(1)

Appropriate congressional committees

The term appropriate congressional committees means the Committee on Financial Services, Committee on Foreign Affairs, Committee on Armed Services, Committee on Homeland Security, and the Permanent Select Committee on Intelligence of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs, Committee on Foreign Relations, Committee on Armed Services, Committee on Homeland Security and Governmental Affairs, and the Select Committee on Intelligence of the Senate.

(2)

Appropriate Federal banking agencies

The term appropriate Federal banking agencies has the meaning given that term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

(3)

Bank Secrecy Act

The term Bank Secrecy Act means—

(A)

section 21 of the Federal Deposit Insurance Act;

(B)

chapter 2 of title I of Public Law 91–508; and

(C)

subchapter II of chapter 53 of title 31, United States Code.

(4)

Illicit finance

The term illicit finance means the financing of terrorism, money laundering, and other forms of illicit or underground financing or other illicit finance domestically and internationally, as defined by the President.

(5)

State

The term State means each of the several States, the District of Columbia, and each territory or possession of the United States.

Passed the House of Representatives July 11, 2016.

Karen L. Haas,

Clerk.