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Mr. CRAIG. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H.R. 1756, which was received from the House.

The PRESIDING OFFICER. The clerk will report.

The legislative clerk read as follows:

A bill (H.R. 1756) to amend chapter 53 of title 31, United States Code, to require the development and implementation by the Secretary of the Treasury of a national money laundering and related financial crimes strategy to combat money laundering and related financial crimes, and for other purposes.

The PRESIDING OFFICER. Is there objection to the immediate consideration of the bill?

There being no objection, the Senate proceeded to consider the bill.



Mr. CRAIG. Mr. President, Senators Grassley and D'Amato have an amendment to the desk.

The PRESIDING OFFICER. The clerk will report.

The legislative clerk read as follows:

The Senator from Idaho (Mr. Craig), for Mr. Grassley, for himself and Mr. D'Amato, proposes an amendment numbered 3828.

On page 2, strike line 21 and all that follows through page 3, line 3 and insert the following:

`(2) Money laundering and related financial crime: The term `money laundering and related financial crime'--

`(A) means the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States, or into, out of, or through United States financial institutions, as defined in section 5312 of title 31, United States Code; or

`(B) has the meaning given that term (or the term used for an equivalent offense) under State and local criminal statutes pertaining to the movement of illicit cash or cash equivalent proceeds.'.

Mr. GRASSLEY. Mr. President, I am pleased today to see this historic piece of legislation will pass the Senate. After much careful work with Senator D'Amato, the Treasury Department, and the Justice Department, as well as our colleagues in the other body, we have crafted a bill that I believe will lead to much improved coordination in fighting money laundering. I want to thank everyone involved for their hard work on this legislation.

The bill will hit the criminals where they feel it the most--in their pocketbooks. By implementing a strategy on a national level, hundreds of communities across our country will no longer be held hostage by these criminal enterprises. As you know, money laundering involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Through money laundering, the criminal transforms the monetary proceeds derived from the criminal activity into funds with an apparently legal source. Money laundering provides the resources from drug dealers, terrorists, arms dealers, and other criminals to operate and expand their criminal enterprises. Today, experts estimate that money laundering has grown into a $500 billion problem worldwide.

The Money Laundering and Related Financial Crimes Strategy Act of 1998 will authorize the Secretary of the Treasury, in consultation with the Attorney General and other relevant agencies, to coordinate and implement a national strategy to address the exploitation of our Nation's payment systems to facilitate money laundering and related financial crimes. I look forward to the delivery of this first strategy next February, and believe it will be a valuable document not only for law enforcement agencies, but also for Congress as we look to react to the increasingly inventive ways criminals take advantage of our financial system. I hope this legislation will be the beginning of a serious effort by Congress to impact the growing threat of money laundering not only to our Nation, but worldwide.

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Mr. D'AMATO. Today, Mr. President, I urge my colleagues to support the passage of H.R.1756, the Money Laundering and Financial Crimes Strategy Act of 1997. I am glad that we have been able to reach this point. The House has sent over H.R.1756, a strong antimoney laundering tool for law enforcement, and after some negotiation, we have amended the language slightly. The House has agreed to accept the compromise and I have a letter from James E. Johnson, Under Secretary for Enforcement at the Treasury Department supporting the goals of this legislation. I ask unanimous consent that the letter be printed in the Record at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. D'AMATO. I believe we are now ready to proceed to passage of the bill providing sufficient time for the House to act.

Mr. President, this is an important tool for the counternarcotics effort. Drug traffickers and dealers are destroying our families, communities and the future of our children, and we must fight them with

Every weapon at our disposal. This bill will attack drug traffickers by making it harder for these criminals to profit from their illegal windfalls.

Mr. President, through money laundering, drug traffickers are able to take their blood money and launder it clean. Their ill gotten gains are then filtered throughout our economy. Money laundering sustains drug traffickers and arms dealers, as well as terrorists and other criminals searching for a way to prolong their illegal enterprises.

That is why I joined with Senator Grassley and Congresswoman Velazquez to develop the Money Laundering and Financial Crimes Strategy Act which the House passed on October 5, 1998. The bill will provide the means for federal, state and local crime fighters to pursue and prosecute the drug traffickers and those that finance their criminal trade.

This bill will allow the Secretary of the Treasury and the Attorney General to create a national money laundering strategy and designate high risk zones. State and local officials within these zones will be encouraged to form a task force and become eligible for enforcement and technical assistance and, most importantly, anti-money laundering grants.

Mr. President, let me explain why this is especially important for New York, where money launderers have benefited from the financial, trade and transportation systems in the metropolitan area. New York is the largest financial center in this country--and one of the top three international money centers in the world. Unfortunately, money launderers have used this infrastructure to pursue their own criminal activities.

Assistance by state and local officers in New York has been invaluable in stopping drug traffickers from sending money back to the cartels. In 1997, in the New York area, law enforcement officials determined that organized narcotics traffickers were using the services of unscrupulous money remitters and their agents to send the proceeds of drug sales back to the drug source countries.

Utilizing a temporary Geographical Targeting Order (GTO) for the New York metropolitan area, remitters and agents were required to report detailed information about the remittances of cash to Colombia of more than $750.

Within a week of the GTO's issuance, the local, state and federal agencies that made up the El Dorado Task Force found that money laundering activity in that area, Jackson Heights, dropped dramatically. The number of remittances to Colombia dropped 95 percent and the dollar amount dropped 97 percent (from $67 million to $2 million). The New York GTO resulted in the seizure of millions in currency that was diverted to bulk shipments through the air and seaports and most importantly, disrupted the profit back to the drug cartels.

Mr. President, this operation was a huge success--thanks to the cooperative efforts of federal, state and local law enforcement. We should build on that cooperation with this legislation.

Law enforcement efforts must follow the financial schemes and cash flows of the drug traffickers. As the drug cartels change their method of laundering their proceeds, law enforcement must respond. This bill provides law enforcement and prosecutors with the resources and flexibility to do just that. This monumental effort will cripple the drug traffickers where it hurts--in their pockets--and take an important step forward in our war on drugs.

I am proud to have cosponsored the Senate measure with Senator Grassley and to have worked with Representative Velazquez to enact this important tool in antidrug efforts.

I urge my colleagues to support this important anticrime bill.

Exhibit 1

Department of the Treasury,
Washington, DC, October 8, 1998.

Hon. Alfonse D'Amato,
Chairman, Senate Committee on Banking, Housing, and Urban Affairs, Washington, DC.

Dear Mr. Chairman: During the course of this year we have been following a bill introduced by Congresswoman Velazquez, the `Money Laundering and Related Financial Crimes Strategy Act' (H.R. 1756). On June 16, the Treasury Department provided testimony on H.R. 1756 indicating support for the bill's overall goals and objectives.

We continue to support these goals. We appreciate that Congresswoman Velazquez's bill recognizes the scope of the money laundering problem, and attempts to develop a mechanism to address these challenges. Developing an anti-money laundering strategy could prove useful in setting priorities and communicating them to Congress and the public. Moreover, money laundering enforcement is complex and resource-intensive. Enforcement of money laundering laws could benefit from proper coordination among federal, state, and local law enforcement.

We also appreciate the bill's goal of providing additional resources for state and local antimoney laundering activities. Financial crime investigations are complex and require specialized expertise, as well as resource commitments to follow leads that often take time to develop. Cases themselves may span years and are information-intensive. Because of this, state and local law enforcement could benefit from additional resources and expertise to fully join the fight against money laundering.

We look forward to continuing to work with you and your Committee in combating money laundering and other financial crimes.


James E. Johnson,
Under Secretary (Enforcement).

Mr. CRAIG. Mr. President, I ask unanimous consent that amendment be agreed to, the bill considered read a third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment (No. 3828) was agreed to.

The bill (H.R. 1756), as amended, was passed.

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