Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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By Mr. GRASSLEY (for himself and Mr. BAUCUS):

S. 2401. A bill to amend the Internal Revenue Code of 1986 to extend certain energy tax incentives, and for other purposes; to the Committee on Finance.

Mr. GRASSLEY. Mr. President, I rise to speak in support of a bill that I am introducing today, the Combating Money Laundering and Terrorist Financing Act of 2006.

I first introduced the Combating Money Laundering and Terrorist Financing Act in 2003 to address what I saw as a significant threat to the security of our Nation. Money laundering is an issue of profound importance to our national security because it undermines financial stability by infiltrating and using legitimate financial institutions to hide the illegitimate source of these funds. Money laundering also affects our national security simply because money is the motivating factor for so much of the criminal activities that affect our daily lives, from shoplifting and petty theft to drug trafficking and multi-million dollar stock frauds.

We also know that money laundering is a key tool for terrorist groups because it fuels their ability to spread murder, fear and destruction throughout the world. One of the 9/11 Commission Report recommendations stated that, ``Vigorous efforts to track terrorist financing must remain front and center in the U.S. counter-terrorism efforts.'' The Commission expressed its concerns about terrorist financing and ``the need to crack down on terrorist organizations and curtail their funding.'' I strongly share the Commission's concerns and support their recommendations that they provided in their final report.

However, I am very concerned about the 9/11 Commission's Final Report Card, released on December 5, 2005, which gave the U.S. Government an A- for our ``vigorous efforts against terror financing.'' After the release of the 9/11 Commission Report and nearly 4 years after the terrorist attacks on the World Trade Center and the Pentagon, our Government is still too ill-equipped and fraught with in-fighting to rate an A- for its efforts. While we have made significant strides in identifying the methods used to earn, store and move this money, we are still far behind the curve on shutting down the flow of illicit financing permanently.

Billions of dollars continue to be funneled to terrorist and criminal organizations after being laundered for these organizations around the world. Therefore, we must continue to increase the pressure we put on these organizations until we reach the point where their ever-changing money laundering methods are no longer convenient, profitable or effective.

The legislation I am introducing today includes several provisions that will strengthen our current money laundering laws by streamlining a number of statutes, clarifying language in the current law and closing loopholes that are often exploited by criminal organizations. As our new anti-money laundering laws have proven to be effective and make money laundering through traditional financial institutions more difficult, criminals are forced to shift methods to launder their illegally gained funds. As these criminals change their tactics, so must we. Allow me to tell you about some of the key changes that this bill includes to meet these challenges.

To begin with, under current law there are over 200 ``specified unlawful activities'' or ``SUA's'' that serve as predicate offenses for money laundering charges. As criminals continue to alter their methods of laundering illegal funds, this list of required ``SUA's'' is sure to grow. My legislation will eliminate the need to continually update the statutes by consolidating the growing list of ``specified unlawful activities'' to include all offenses punishable by imprisonment for more than 1 year. This legislation also recognizes the global aspect of money laundering by including foreign offenses that would be illegal money laundering offenses had they occurred within U.S. jurisdiction.

This bill also simplifies current law by allowing the government to charge money laundering acts as a ``course of conduct.'' Currently, in most circuits, courts are required to charge each money laundering transaction as a separate count. This legislation allows, but does not require, courts to charge a series of money laundering offenses as a ``course of conduct.'' This change would reduce the time and expense currently incurred by courts that are required to charge and prosecute each separate violation of the money laundering laws.

As new laws have made money laundering through traditional financial institutions more difficult, criminals are turning to riskier methods of moving their money. One growing area is bulk cash smuggling, and as such, this bill increases the penalty for bulk cash smuggling to 10 years.

In addition, many ``money service businesses,'' or ``MSB's'' have also come under increased scrutiny because of their suspected role in moving funds from the United States to terrorist organizations throughout the world. Another provision of my legislation amends Section 373 of the USA PATRIOT Act regarding money service businesses to read ``illegal'' instead of ``unlicensed'' to ensure that the law covers any money service business that promotes unlawful activity as a course of business.

Another money laundering technique is for couriers to carry checks that are complete except for the dollar amount. Under this approach the couriers attempt to avoid U.S. Customs reporting requirements through the movement of monetary instruments that are in bearer form and are worth over $10,000. Even though the blank checks are in bearer form, they argue that the value being left blank is not over $10,000 and does not need to be reported. Once they and the blank check reach their destination, all they need to do is to fill in the amount, whatever that may be, and have it negotiated. This legislation removes any confusion as to whether this act is a violation of the reporting requirement. This bill would resolve this issue by clarifying that a check in bearer form, with an amount left blank shall be deemed to have a value equal to the highest amount in the bank account that it is drawn upon while the check was being transported, or when the blank check is cashed or intended to be cashed.

My legislation eliminates confusion or ambiguity about the definition of ``commingled funds,'' and structured transactions. ``Commingling of funds'' is a method often used by criminals to disguise illegal money from legal money by mixing the funds together in one account. ``Structured transactions'' is a method used to circumvent our monetary transaction reporting requirements by breaking monetary transactions into several smaller dollar amounts so as to avoid a Government reporting requirement if the transaction had been only one transaction with a value over $10,000. Plus, this legislation clarifies extraterritorial jurisdiction to include money laundering acts that have an effect in the United States.

Often, money couriers are intercepted before they reach the collection point but are released because they claim that they didn't know that the money was derived illegally. My bill ensures that the courier can no longer be released from responsibility in the money laundering chain by claiming ignorance about how the money was derived, which means the law enforcement agency can get both the courier and the money off the street.

Finally, this bill updates counterfeiting statutes to keep them current with new technology and devices, such as holograms, that are used to produce counterfeits of U.S. obligations and securities.

The battle against terrorism and organized criminal groups must be fought on many fronts--including the financial front. We know that we have made strides in this area as evidenced by the money launderers' use of different techniques. As important as it is to learn what techniques these criminals use, it is just as important to act upon this knowledge. If we can shut down the flow of illegal money, whether generated by drug sales or in support of terrorist activities, I believe we will make a significant impact on the demise of these criminal and terrorist groups. This bill is important to identifying particular criminal and terrorist financing operations and putting them out of business. I urge my colleagues to support my legislation and strengthen our national efforts against the continued threat of terrorist financing and financial crimes.

I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

S. 2402

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By Mr. GRASSLEY (for himself, Mr. Kyl, Mr. Cornyn, Mr. DeWine, and Mr. Graham):

S. 2402. A bill to improve the prohibitions on money laundering, and for other purposes; to the Committee on the Judiciary.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the text of a bill introduced by me today that may be cited as the ``Alternative Energy Extender Act'' be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

S. 2401

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