25 October 2001
Congress Approves Anti-Money Laundering Measures
(Lawmakers target terrorist financing networks) (390)
Washington -- Both the Senate and House of Representatives have
cleared anti-money laundering legislation that aims to cut off
financing channels for terrorist networks.
The legislation is attached to a broader anti-terrorism bill, and was
approved in the House October 24 by a vote of 357-66. The Senate
followed suit the next day, with a 98-1 vote.
"I look forward to signing this strong bipartisan plan into law so
that we can combat terrorism and prevent future attacks," President
Bush said in a statement following the House vote.
Money laundering involves moving funds through financial institutions
or accounts to disguise their origin or purpose.
The money-laundering provisions of the terrorism bill include new
rules barring U.S. banks from most dealings with overseas "shell"
banks that have no physical presence anywhere.
They impose new requirements on so-called "correspondent accounts,"
which allow foreign banks to use U.S. banks' services, thus giving
them direct access to the U.S. financial system.
Provisions also require financial institutions that establish or
administer correspondent accounts to establish appropriate "due
diligence" policies for detecting and reporting instances of money
laundering through those accounts.
The bill gives the U.S. Treasury new powers to target foreign
countries and banks believed to present a money-laundering threat. It
requires U.S. banks to keep detailed records of dealings with those
institutions or jurisdictions.
The bill also makes it illegal to smuggle more than $10,000 in cash in
or out of the United States.
In an effort to keep the U.S. securities industry from acting as a
conduit for illicit money, the legislation gives the Treasury until
the end of the year to issue rules requiring securities brokers to
file reports with regulators on large, suspicious currency
transactions. U.S. banks already function under such requirements.
The measure also increases the monetary penalties for financial
institutions that violate international money-laundering laws. The
penalties must be worth at least two times the amount of the
transaction, but may not exceed $1,000,000.
Money laundering is estimated by the International Monetary Fund to
amount to between 2 and 5 percent of global gross domestic product,
which is at least $600,000 million annually.
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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