Summary of USA PATRIOT Act
Section by Section Analysis
THE UNITING AND STRENGTHENING AMERICA BY PROVIDING APPROPRIATE TOOLS REQUIRED TO INTERCEPT AND OBSTRUCT TERRORISM
(USA PATRIOT) ACT OF 2001, H.R. 3162
Sec. 1. Short title and table of contents. Both S. 1510 passed by the Senate on October 11, 2001 (the "Senate bill"), and H.R. 2975 passed by the House of Representatives on October 12, 2001, included this section containing the short title "Uniting and Strengthening America (USA) Act of 2001" and the table of contents for the Act. H.R. 3162, the bill subsequently passed by the House on October 24, 2001 (the "House bill"), changed the title to the "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001."
Sec. 2. Construction; severability. Both the House and Senate bills included this rule of construction to provide that any portion of this Act found to be invalid or unenforceable by its terms, or as applied to any person or circumstance, shall be construed to give it the maximum effect permitted by law and that any portion found invalid or unenforceable in its entirety shall be severable from the rest of the Act.
TITLE I—ENHANCING DOMESTIC SECURITY AGAINST TERRORISM
Sec. 101. Counterterrorism fund. Both the House and Senate bills included this provision to establish a counterterrorism fund in the Treasury of the United States, without affecting prior appropriations, to reimburse Department of Justice components for costs incurred in connection with terrorism and terrorism prevention, rebuild any Justice Department component damaged or destroyed as a result of a terrorism incident, pay terrorism-related rewards, conduct terrorism threat assessments, and reimburse Federal agencies for costs incurred in connection with detaining suspected terrorists in foreign countries. Not in original Administration proposal.
Sec. 102. Sense of Congress condemning discrimination against Arab and Muslim Americans. Both the House and Senate bills included this provision to condemn acts of violence and discrimination against Arab Americans, American Muslims, and Americans from South Asia, and to declare that every effort must be taken to protect their safety. Not in original Administration proposal.
Sec. 103. Increased funding for the technical support center at the Federal Bureau of Investigation. Both the House and Senate bills included this provision to authorize $200,000,000 per year for fiscal years 2002, 2003 and 2004 for the Technical Support Center established in section 811 of the Antiterrorism and Effective Death Penalty Act of 1996 to help meet the demands of activities to combat terrorism and enhance the technical support and tactical operations of the FBI. Not in original Administration proposal.
Sec. 104. Requests for Military Assistance to Enforce Prohibition in Certain Emergencies. Both the House and Senate bills included this provision to authorize the Attorney General to request military assistance in support of Department of Justice activities relating to the enforcement of 18 U.S.C. §2332a during an emergency situation involving a weapon of mass destruction. Current law references a statute that was repealed in 1998, relating to chemical weapons. Not in original Administration proposal.
Sec. 105. Expansion of National Electronic Crime Task Force Initiative. Both the House and Senate bills included this provision to allow the Secret Service to develop a national network of electronic crime task forces, based on the highly successful New York Electronic Crimes Task Force model, for the purpose of preventing, detecting, and investigating various forms of electronic crimes, including potential terrorist attacks against critical infrastructure and financial payment systems. Not in original Administration proposal.
Sec. 106. Presidential authority. Both the House and Senate bills included this provision to give to the President, in limited circumstances involving armed hostilities or attacks against the United States, the power to confiscate and vest in the United States the property of enemies of the United States during times of national emergency, which was permitted by the Trading with the Enemy Act, 50 app. U.S.C. § 5(b), until 1977, when the International Economic Emergency Act was passed. The new provision permits the President, when the United States is engaged in military hostilities or has been subject to attack, to confiscate property of any foreign country, person or organization involved in hostilities or attacks on the United States. This section also permits courts, when reviewing determinations made by the executive branch, to consider classified evidence ex parte and in camera. Same as original Administration proposal.
TITLE II—ENHANCED SURVEILLANCE PROCEDURES
[Note: Elimination of original Administration proposal to allow government use of wiretap information on U.S. citizens obtained illegally overseas in violation of the Fourth Amendment and of foreign government laws.]
Sec. 201. Authority to intercept wire, oral, and electronic communications relating to terrorism. Both the House and Senate bills included this provision to add criminal violations relating to terrorism to the list of predicate statutes in the criminal procedures for interception of communications under chapter 119 of title 18, United States Code. Not in original Administration proposal.
Sec. 202. Authority to intercept wire, oral, and electronic communications relating to computer fraud and abuse offenses. Both the House and Senate bills included this provision to add criminal violations relating to computer fraud and abuse to the list of predicate statutes in the criminal procedures for interception of communications under chapter 119 of title 18, United States Code. Not in original Administration proposal.
Sec. 203. Authority to share criminal investigative information. Both the House and Senate bills included provisions amending the criminal procedures for interception of communications under chapter 119 of title 18, United States Code, and the grand jury procedures under Rule 6(e) of the Federal Rules of Criminal Procedures to authorize disclosure of foreign intelligence information obtained by such interception or by a grand jury to any Federal law enforcement, intelligence, national security, national defense, protective or immigration personnel to assist the official receiving that information in the performance of his official duties. Section 203(a) requires that within a reasonable time after disclosure of any grand jury information, an attorney for the government notify the court of such disclosure and the departments, agencies or entities to which disclosure was made. Section 203(b) pertains to foreign intelligence information obtained by intercepting communications pursuant to a court-ordered wiretap. Section 203(c) also authorizes such disclosure of information obtained as part of a criminal investigation notwithstanding any other law.
The information must meet statutory definitions of foreign intelligence or counterintelligence or foreign intelligence information. Recipients may use that information only as necessary for their official duties, and use of the information outside those limits remains subject to applicable penalties, such as penalties for unauthorized disclosure under chapter 119, contempt penalties under Rule 6(e) and the Privacy Act. The Attorney General must establish procedures for disclosure of information that identifies a United States person, such as the current procedures established under Executive Order 12333 for the intelligence community. Modified Administration proposal to limit scope of personnel eligible to receive information. In case of grand jury information, limited proposal to require notification to court after disclosure.
Sec. 204. Clarification of intelligence exceptions from limitations on interception and disclosure of wire, oral, and electronic communications. Both the House and Senate bills included this provision to amend the criminal procedures for interception of wire, oral, and electronic communications in title 18, United States Code, to make clear that these procedures do not apply to the collection of foreign intelligence information under the statutory foreign intelligence authorities. Not in original Administration proposal.
Sec. 205. Employment of translators by the Federal Bureau of Investigation. Both the House and Senate bills included this provision to authorize the FBI Director to expedite the employment of personnel as translators to support counterterrorism investigations and operations without regard to applicable Federal personnel requirements and limitations. Not in original Administration proposal.
Sec. 206. Roving surveillance authority under the Foreign Intelligence Surveillance Act of 1978. Both the House and Senate bills included this provision to modify the Foreign Intelligence Surveillance Act ("FISA") to allow surveillance to follow a person who uses multiple communications devices or locations, a modification which conforms FISA to the parallel criminal procedure for electronic surveillance in 18 U.S.C. §2518(11)(b). The court order need not specify the person whose assistance to the surveillance is required (such as a particular communications common carrier), where the court finds that the actions of the target may have the effect of thwarting the identification of a specified person. Same as original Administration proposal.
Sec. 207. Duration of FISA surveillance of non-United States persons who are agents of foreign power. Both the House and Senate bills included this provision to change the initial period of a FISA order for a surveillance or physical search targeted against an agent of a foreign power from 90 to 120 days, and changes the period for extensions from 90 days to one year. One-year extensions for physical searches are subject to the requirement in current law that the judge find "probable cause to believe that no property of any United States person will be acquired during the period." Section 207 also changes the ordinary period for physical searches under FISA from 45 to 90 days. Narrower than Administration proposal which sought to eliminate the initial 90-day limitation and authorize surveillance for up to one year from the outset.
Sec. 208. Designation of judges. Both the House and Senate bills included this provision to increase the number of Federal district judges designated to serve on the FISA court from seven to 11, and requires that no less that 3 of the judges reside within 20 miles of the District of Columbia. Not in original Administration proposal.
Sec. 209. Seizure of voice-mail messages pursuant to warrants. Both the House and Senate bills included this provision to authorize government access to voice mails with a court order supported by probable cause in the same way e-mails currently may be accessed, and authorizes nationwide service with a single search warrant for voice mails. Current law, 18 U.S.C. §2510(1), defines "wire communication" to include "any electronic storage of such communication," with the result that the government must apply for a Title III wiretap order before it may obtain unopened voice mail messages held by a service provider. This section amends the definition of "wire communication" so that it no longer includes stored communications. It also amends 18 U.S.C. §2703 to specify that the government may use a search warrant (instead of a wiretap order) to compel the production of unopened voicemail, thus harmonizing the rules applicable to stored voice and non-voice (e.g., e-mail) communications. Same as Administration proposal.
Sec. 210. Scope of subpoenas for records of electronic communications. Both the House and Senate bills included this provision to broaden the types of records that law enforcement may obtain, pursuant to a subpoena, from electronic communications service providers by requiring providers to disclose the means and source of payment, including any bank account or credit card numbers. Current law allows the government to use a subpoena to compel communications providers to disclose a small class of records that pertain to electronic communications, limited to such records as the customer’s name, address, and length of service. 18 U.S.C. §2703(c)(1)(C). Investigators may not use a subpoena to obtain such records as credit card number or other form of payment and must use a court order. In many cases, users register with Internet service providers using false names, making the form of payment critical to determining the user’s true identity. Same as original Administration proposal.
Sec. 211. Clarification of scope. Both the House and Senate bills included provisions to amend the Cable Communications Policy Act to clarify that when a cable company acts as a telephone company or an Internet service provider, it must comply with the same laws governing the interception and disclosure of wire and electronic communications that apply to any other telephone company or Internet service provider. This section also expressly provides, however, that authorized disclosures under this provision do not include records that reveal customer cable viewing activity. Modified original Administration proposal to specify that targets do not receive advance notice of wiretap order and amends title 47 to accomplish same purpose as administration proposal.
Sec. 212. Emergency disclosure of electronic communications to protect life and limb. Both the House and Senate bills included this provision to amend 18 U.S.C. §2702 to authorize providers of electronic communications services to disclose the communications (or records of such communications) of their subscribers if the provider reasonably believes that an emergency involving immediate danger of death or serious physical injury to any person requires the disclosure of the information without delay. This section also corrects an anomaly in the current law by clearly permitting a provider to disclose non-content records (such as a subscriber’s log-in records) as well as the contents of the customer’s communications to protect their computer systems. Same as original Administration proposal.
Sec. 213. Authority for delaying notice of the execution of a warrant. Both the House and Senate bills included this provision to amend 18 U.S.C. §3103a to authorize a court to issue a search warrant in which the government is permitted to delay providing notice of the warrant’s execution. Consistent with the requirements of case law from the Second and Ninth Circuits, this section also provides several limitations on this authority. See United States v. Villegas, 899 F.2d 1324 (2d Cir. 1990); United States v. Freitas , 800 F.2d 1451 (9th Cir. 1986). First, delayed notice is authorized only in cases where the government has demonstrated reasonable cause to believe that providing immediate notice would have an adverse result as defined in 18 U.S.C. §2705. Second, the provision prohibits the government from seizing any tangible property or any wire or electronic communication or stored wire or electronic communication unless it makes a showing of reasonable necessity for the seizure. Third, the warrant must require the giving of notice within a reasonable time of the execution of the search. Narrower than original Administration proposal, which would have permitted delay as law enforcement saw fit.
Sec. 214. Pen register and trap and trace authority under FISA. Both the House and Senate bills included this provision to modify FISA provisions for pen register and trap and trace to eliminate the requirement to show to the court that the target is in contact with an "agent of a foreign power." It replaces this requirement with a determination that the pen register or trap and trace is relevant to an investigation to protect against international terrorism or clandestine intelligence activities or to obtain foreign intelligence information not concerning U.S. persons. Any investigation of a United States person may not be based solely on activities protected by the First Amendment. Narrower than original Administration proposal, which would simply have removed the "agent of a foreign power" requirement.
Sec. 215. Access to records and other items under the FISA. Both the House and Senate bills included this provision to remove the "agent of a foreign power" standard for court-ordered access to certain business records under FISA and expands the scope of court orders to include access to other records and tangible items. The authority may be used for an investigation to protect against international terrorism or clandestine intelligence activities or to obtain foreign intelligence information not concerning U.S. persons. An investigation of a United States person may not be based solely on activities protected by the First Amendment. Narrower than original Administration proposal, which would have removed requirements of court order and the "agent of a foreign power" showing.
Sec. 216. Modification of authorities relating to use of pen registers and trap and trace devices. Both the House and Senate bills included this provision to authorize courts to grant pen register and trap and trace orders that are valid anywhere in the nation. It also ensures that the pen register and trap and trace provisions apply to facilities other than telephone lines (e.g., the Internet). It specifically provides, however, that the grant of authority to capture "routing" and "addressing" information for Internet users does not authorize the interception of the content of any such communications. It further requires the government to use the latest available technology to insure that a pen register or trap and trace device does not intercept the content of any communications. Finally, it provides for a report to the court on each use of "Carnivore"-like devices on packet-switched data networks. Makes a number of improvements over Administration proposal, including exclusion of content, exclusion of ISP liability, and Carnivore report.
Sec. 217. Interception of computer trespasser communications. Both the House and Senate bills included this provision to allow computer service providers who are victims of attacks by computer trespassers to authorize persons acting under color of law to monitor trespassers on their computer systems in a narrow class of cases. A computer trespasser is defined as a person who accesses a protected computer without authorization and thus has no reasonable expectation of privacy in any communications transmitted to, through, or from the protected computer. However, it does not include a person known by the owner or operator of the protected computer to have an existing contractual relationship with the owner or operator for access to all or part of the protected computer. Narrower than original Administration proposal, which did not exclude service provider subscribers from definition of trespasser and did not limit interception authority to only those communications through the computer in question.
Sec. 218. Foreign intelligence information. Both the House and Senate bills included this provision to amend FISA to require a certification that "a significant purpose " rather than "the purpose" of a surveillance or search under FISA is to obtain foreign intelligence information. Narrower than Administration proposal, which would have allowed FISA surveillance if intelligence gathering was merely "a" purpose.
Sec. 219. Single-jurisdiction search warrants for terrorism. Both the House and Senate bills included this provision to amend Federal Rule of Criminal Procedure 41(a) to provide that warrants relating to the investigation of terrorist activities may be obtained in any district in which the activities related to the terrorism may have occurred, regardless of where the warrants will be executed. Same as Administration proposal.
Sec. 220. Nationwide service of search warrants for electronic surveillance. Both the House and Senate bills included this provision to amend 18 U.S.C. §2703(a) to authorize courts with jurisdiction over the offense to issue search warrants for electronic communications in electronic storage anywhere in the United States, without requiring the intervention of their counterparts in the districts where Internet service providers are located. Narrower than Administration proposal in that it limits forum shopping problem by limiting to courts with jurisdiction over the offense.
Sec. 221. Trade sanctions. Both the House and Senate bills included this provision to authorize the President unilaterally to restrict exports of agricultural products, medicine or medical devices to the Taliban or the territory of Afghanistan controlled by the Taliban. Narrower than original Administration proposal which would have undermined the congressional approval requirement, conferring upon the President control of agricultural and medical exports "to all designated terrorists and narcotics entities wherever they are located."
Sec. 222. Assistance to law enforcement agencies. Both the House and Senate bills included this provision that this Act does not impose any additional technical requirements on a provider of a wire or electronic communication service and that a provider of a wire or electronic communication service, landlord, custodian or other person who furnishes facilities or technical assistance pursuant to section 216 shall be reasonably compensated for expenditures incurred in providing such facilities or assistance. Not in original Administration proposal.
Sec. 223. Civil liability for certain unauthorized disclosures. H.R. 2975 included this provision to create civil liability for violations, including unauthorized disclosures, by law enforcement authorities of the electronic surveillance procedures set forth in title 18, United States Code (e.g., unauthorized disclosure of pen trap, wiretap, stored communications), or FISA information. Also requires administrative discipline of officials who engage in such unauthorized disclosures. Not in original Administration proposal.
Sec. 224. Sunset. H.R. 2975 included a provision to sunset certain amendments made by this title in 3 to 5 years. H.R. 3162 provides a 4-year sunset for sections 206, 201, 202, 203(b), 204, 206, 207, 209, 210, 212, 214, 215, 217, 218, 220, 223 -- at the end December 31, 2005, with the authorities "grandfathered" as to particular investigations based on offenses occurring prior to sunset. No sunset provided in original Administration proposal or S. 1510, and four-year sunset shorter than the five-year sunset in H.R. 2975.
Title III—INTERNATIONAL MONEY LAUNDERING ABATEMENT AND ANTI-TERRORIST FINANCING ACT OF 2001
[Note: Elimination of original Administration proposals to allow broad disclosure of individual tax return information; pre-trial restraint of legitimately obtained property in all criminal forfeiture cases; carve-out of tobacco companies from RICO liability for foreign excise taxes; and creation of new criminal offense to misrepresent identification when opening bank account. The Administration bill contained none of the money laundering provisions contained in either the Senate bill or H.R. 3004.]
Sec. 301. Short title. This section contains the short title of Title III, "International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001," which merges the short title of Title III of the Senate bill with the short title of H.R. 3004, which passed the House of Representatives on October 17, 2001 ("H.R. 3004"). This section also contains the table of contents for Title III.
Sec. 302. Findings and purposes. The Senate bill included this provision, which states the legislative findings and purposes in support of Title III.
Sec. 303. 4-Year congressional review; expedited consideration. Section 303, included in the Senate bill, provides that the provisions added and amendments made by Title III will terminate after September 30, 2004, if the Congress enacts a joint resolution to that effect, and that any such joint resolution will be given expedited consideration by the Congress.
Subtitle A. International Counter-Money Laundering and Related Measures.
Sec. 311. Special measures for jurisdictions, financial institutions, or international transactions or accounts of primary money laundering concern. Section 311, included in both the Senate bill and H.R. 3004, adds a new section 5318A to the Bank Secrecy Act, to give the Secretary of the Treasury, in consultation with other senior government officials, authority (in the Secretary’s discretion), to impose one or more of five new "special measures" against foreign jurisdictions, foreign financial institutions, transactions involving such jurisdictions or institutions, or one more types of accounts, that the Secretary, after consultation with Secretary of State and the Attorney General, determines to pose a "primary money laundering concern" to the United States. The special measures include: (1) requiring additional recordkeeping or reporting for particular transactions; (2) requiring the identification of the foreign beneficial owners of certain accounts at a U.S. financial institution; (3) requiring the identification of customers of a foreign bank who use an interbank payable-through account opened by that foreign bank at a U.S. bank; (4) requiring the identification of customers of a foreign bank who use an interbank correspondent account opened by that foreign bank at a U.S. bank; and (5) after consultation with the Secretary of State, the Attorney General, and the Chairman of the Federal Reserve Board, restricting or prohibiting the opening or maintaining of certain interbank correspondent or payable-through accounts. Measures (1) through (4) may not be imposed for more than 120 days except by regulation, and measure (5) may only be imposed by regulation.
Sec. 312. Special due diligence for correspondent accounts and private banking accounts. Section 312, included in both the Senate bill and H.R. 3004, adds a new subsection (i) to 31 U.S.C.§5318, to require a U.S. financial institution that maintains a correspondent account or private banking account for a non-United States person to establish appropriate and, if necessary, enhanced due diligence procedures to detect and report instances of money laundering. The new provision also creates minimum anti-money laundering due diligence standards for U.S. financial institutions that enter into correspondent banking relationships with banks that operate under offshore banking licenses or under banking licenses issued by countries that (1) have been designated as noncooperative with international counter money laundering principles by an international body with the concurrence of the U.S. representative to that body, or (2) have been the subject of special measures authorized by section 311. Finally, the new provision creates minimum anti-money laundering due diligence standards for maintenance of private banking accounts by U.S. financial institutions. New section 31 U.S.C §5318(i) will take effect 270 days after the date of enactment; the Secretary of the Treasury is required to issue regulations (in consultation with the appropriate Federal functional regulators) within 180 days of enactment further delineating the requirements of the new subsection, but the statute is to take effect whether or not such regulations are issued, and failure to issue final regulations shall in no way affect the enforceability of §5318(i) as added by section 312.
Sec. 313. Prohibition on United States correspondent accounts with foreign shell banks. Section 313, included in both the Senate bill and H.R. 3004, adds a new subsection (j) to 31 U.S.C. §5318, to bar depository institutions and brokers and dealers in securities operating in the United States from establishing, maintaining, administering, or managing correspondent accounts for foreign shell banks, other than shell bank vehicles affiliated with recognized and regulated depository institutions. The new 31 U.S.C. §5318(j) takes effect 60 days after enactment. The House receded to the Senate with respect to differences in the language of the versions of the provision in the Senate bill and H.R. 3004.
Sec. 314. Cooperative efforts to deter money laundering. Section 314, contained in the Senate bill, requires the Secretary of the Treasury to issue regulations, within 120 days of the date of enactment, to encourage cooperation among financial institutions, financial regulators and law enforcement officials, and to permit the sharing of information by law enforcement and regulatory authorities with such institutions regarding persons reasonably suspected, based on credible evidence, of engaging in terrorist acts or money laundering activities. This section also allows (with notice to the Secretary of the Treasury) the sharing of information among banks involving possible terrorist or money laundering activity, and requires the Secretary of the Treasury to publish, at least semiannually, a report containing a detailed analysis of patterns of suspicious activity and other appropriate investigative insights derived from suspicious activity reports and law enforcement investigations. The final text of this section includes section 203 (Reports to the Financial Services Industry on Suspicious Financial Activities) and portions of section 205 (Public-Private Task Force on Terrorist Financing Issues) of H.R. 3004.
Sec. 315. Inclusion of foreign corruption offenses as money laundering crimes. Section 315, included in both the Senate bill and H.R. 3004 in somewhat different language, amends 18 U.S.C. §1956 to include foreign corruption offenses, certain U.S. export control violations, certain customs and firearm offenses, certain computer fraud offenses, and felony violations of the Foreign Agents Registration Act of 1938, to the list of crimes that constitute "specified unlawful activities" for purposes of the criminal money laundering provisions.
Sec. 316. Anti-terrorist forfeiture protection. Section 316, included in the Senate bill, establishes procedures to protect the rights of persons whose property may be subject to confiscation in the exercise of the government’s anti-terrorism authority.
Sec. 317. Long-arm jurisdiction over foreign money launderers. Section 317, which was included in both the Senate bill and H.R. 3004, amends 18 U.S.C. §1956 to give United States courts "long-arm" jurisdiction over foreign persons committing money laundering offenses in the United States, over foreign banks opening U.S. bank accounts, and over foreign persons who convert assets ordered forfeited by a U.S. court. It also permits a Federal court dealing with such foreign persons to issue a pre-trial restraining order or take other action necessary to preserve property in the United States to satisfy an ultimate judgment. The Senate, but not the House, bill included language permitting the appointment by a Federal court of a receiver to collect and take custody of assets of a defendant to satisfy criminal or civil money laundering or forfeiture judgments; with respect to the latter provision, the House receded to the Senate.
Sec. 318. Laundering money through a foreign bank. Section 318, included in both the Senate bill and H.R. 3004, expands the definition of financial institution for purposes of 18 U.S.C. §§1956 and 1957 to include banks operating outside of the United States.
Sec. 319. Forfeiture of funds in United States interbank accounts. Section 319 combines sections 111, 112, and 113 of H.R. 3004 with section 319 of the Senate bill. This section amends 18 U.S.C. §981 to treat amounts deposited by foreign banks in interbank accounts with U.S. banks as having been deposited in the United States for purposes of the forfeiture rules, but grants the Attorney General authority, in the interest of justice and consistent with the United States’ national interest, to suspend a forfeiture proceeding, based on that presumption. This section also adds a new subsection (k) to 31 U.S.C. §5318 to require U.S. financial institutions to reply to a request for information from a U.S. regulator relating to anti-money laundering compliance within 120 hours of receipt of such a request, and to require foreign banks that maintain correspondent accounts in the United States to appoint agents for service of process within the United States. The new 31 U.S.C. 5318(k) authorizes the Attorney General and the Secretary of the Treasury to issue a summons or subpoena to any such foreign bank seeking records, wherever located, relating to such a correspondent account, and it requires U.S. banks to sever correspondent arrangements with foreign banks that do not either comply with or contest any such summons or subpoena. Finally, section 319 amends section 413 of the Controlled Substances Act to authorize United States courts to order a convicted criminal to return property located abroad and to order a civil forfeiture defendant to return property located abroad pending trial on the merits. With respect to the provisions requiring a response to certain requests for information by U.S. regulators within 120 hours of receipt and the requirement that correspondent relationships with foreign banks that do not either respond or challenge subpoenas issued under new 31 U.S.C. §5318(k) must be terminated, the House receded to the Senate. With respect to the power to order convicted criminals to return property located abroad, the Senate receded to the House.
Sec. 320. Proceeds of foreign crimes. Section 320, included in both the Senate bill and H.R. 3004, amends 18 U.S.C. §981 to permit the United States to institute forfeiture proceedings against the proceeds of foreign criminal offenses found in the United States.
Sec. 321. Financial institutions specified in subchapter II of chapter 53 of Title 31, United States Code. Section 321, included in H.R. 3004, amends 31 U.S.C. §5312(2) to add credit unions, futures commission merchants, commodity trading advisors, or commodity pool operators to the definition of financial institution for purposes of the Bank Secrecy Act, and to provide that the term "Federal functional regulator" includes the Commodity Futures Trading Commission for purposes of the Bank Secrecy Act.
Sec. 322. Corporation represented by a fugitive. Section 322, included in both the Senate bill and H.R. 3004, extends the prohibition against the maintenance of a forfeiture proceeding on behalf of a fugitive to include a proceeding by a corporation whose majority shareholder is a fugitive and a proceeding in which the corporation’s claim is instituted by a fugitive.
Sec. 323. Enforcement of foreign judgments. Section 323, included in both the Senate bill and H.R. 3004, permits the government to seek a restraining order to preserve the availability of property subject to a foreign forfeiture or confiscation judgment.
Sec. 324. Report and recommendation. Section 324, included in the Senate bill, directs the Secretary of the Treasury, in consultation with the Attorney General, the Federal banking agencies, the SEC, and other appropriate agencies to evaluate operation of the provisions of subtitle A of Title III of the Act and recommend to Congress any relevant legislative action, within 30 months of the date of enactment.
Sec. 325. Concentration accounts at financial institutions. Section 325, included in both the Senate bill and H.R. 3004, authorizes the Secretary of the Treasury to issue regulations concerning the maintenance of concentration accounts by U.S. depository institutions, to prevent an institution’s customers from anonymously directing funds into or through such accounts.
Sec. 326. Verification of identification. Section 326(a), included in H.R. 3004, adds a new subsection (l) to 31 U.S.C. §5318 to require the Secretary of the Treasury to prescribe by regulation, jointly with each Federal functional regulator, minimum standards for financial institutions and their customers regarding the identity of the customer that shall apply in connection with the opening of an account at a financial institution; the minimum standards shall require financial institutions to implement, and customers (after being given adequate notice) to comply with, reasonable procedures concerning verification of customer identity, maintenance of records of identity verification, and consultation at account opening of lists of known or suspected terrorists provided to the financial institution by a government agency. The required regulations are to be issued within one year of the date of enactment.
Section 326(b), included in both the Senate bill and H.R. 3004, requires the Secretary of the Treasury, again in consultation with the Federal functional regulators (as well as other appropriate agencies), to submit a report to Congress within six months of the date of enactment containing recommendations about the most effective way to require foreign nationals to provide financial institutions in the United States with accurate identity information, comparable to that required to be provided by U.S. nationals, and to obtain an identification number that would function similarly to a U.S. national’s tax identification number.
Sec. 327. Consideration of anti-money laundering record. Section 327, included in H.R. 3004, amends section 3(c) of the Bank Holding Company Act of 1956, and section 18(c) of the Federal Deposit Insurance Act to require the Federal Reserve Board and the Federal Deposit Insurance Corporation, respectively, to consider the effectiveness of a bank holding company or bank (within the jurisdiction of the appropriate agency) in combating money laundering activities, including in overseas branches, in ruling on any merger or similar application by the bank or bank holding company. The Senate receded to the House, with the agreement that the amendments will apply only to applications submitted after December 31, 2001.
Sec. 328. International cooperation on identification of originators of wire transfers. Section 328, included in H.R. 3004, requires the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State, to take all reasonable steps to encourage foreign governments to require the inclusion of the name of the originator in wire transfer instructions sent to the United States, and to report annually to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs concerning progress toward that goal.
Sec. 329. Criminal penalties. Section 329, included in the Senate bill, provides criminal penalties for officials who violate their trust in connection with the administration of Title III.
Sec. 330. International cooperation in investigations of money laundering, financial crimes, and the finances of terrorist groups. Section 330, included in H.R. 3004, states the sense of the Congress that the President should direct the Secretary of State, the Attorney General, or the Secretary of the Treasury, as appropriate and in consultation with the Federal Reserve Board, to seek negotiations with foreign financial supervisory agencies and other foreign officials, to ensure that foreign financial institutions maintain adequate records relating to any foreign terrorist organization or its membership, or any person engaged in money laundering or other financial crimes, and make such records available to U.S. law enforcement and financial supervisory personnel when appropriate.
Subtitle B. Bank Secrecy Act Amendments and Related Improvements.
Sec. 351. Amendments relating to reporting of suspicious activities. Section 351, included in both the Senate bill and H.R. 3004, restates 31 U.S.C. §5318(g)(3) to clarify the terms of the safe harbor from civil liability for financial institutions filing suspicious activity reports pursuant to 31 U.S.C. §5318(g). The amendments to subsection (g)(3) also create a safe harbor from civil liability for banks that provide information in employment references sought by other banks pursuant to the amendment to the Federal Deposit Insurance Act made by section 355. The House receded to the Senate with respect to minor differences in wording between the House and Senate versions of the provision.
Sec. 352. Anti-money laundering programs. Section 352, included in both the Senate bill and H.R. 3004, amends 31 U.S.C. §5318(h) to require financial institutions to establish anti-money laundering programs and grants the Secretary of the Treasury authority to set minimum standards for such programs. The Senate receded to the House with respect to a provision in H.R. 3004 that the anti-money laundering program requirement take effect at the end of the 180-day period beginning on the date of enactment of the Act and a related provision that the Secretary of the Treasury shall prescribe regulations before the end of that 180-day period that consider the extent to which the requirements imposed under amended §5318(h) are commensurate with the , location, and activities of the financial institutions to which the regulations apply.
Sec. 353. Penalties for violations of geographic targeting orders and certain recordkeeping requirements, and lengthening effective period of geographic targeting orders. Section 353, included generally in both the Senate bill and H.R. 3004, amends 31 U.S.C. §§5321, 5322, and 5324 to clarify that penalties for violation of the Bank Secrecy Act and its implementing regulations also apply to violations of Geographic Targeting Orders issued under 31 U.S.C. §3526, and to certain recordkeeping requirements relating to funds transfers. The House receded to a provision in the Senate bill that also amends 31 U.S.C. §5326 to make the period of a geographic target order 180 days.
Sec. 354. Anti-money laundering strategy. Section 354, included in the Senate bill, amends 31 U.S.C. §5341(b) to add "money laundering related to terrorist funding" to the list of subjects to be dealt with in the annual National Money Laundering Strategy prepared by the Secretary of the Treasury pursuant to the Money Laundering and Financial Crimes Strategy Act of 1998.
Sec. 355. Authorization to include suspicions of illegal activity in written employment references. Section 355, included in both the Senate bill and H.R. 3004, amends §18 of the Federal Deposit Insurance Act to permit (but not require) a bank to include information, in a response to a request for an employment reference by a second bank, about the possible involvement of a former institution-affiliated party in potentially unlawful activity. The House receded to the Senate with respect to a provision that the safe harbor from civil liability for a bank that provides information to a second bank applies unless the first bank acts with malicious intent.
Sec. 356. Reporting of suspicious activities by securities brokers and dealers; investment company study. Section 356(a), included generally in both the Senate bill and H.R. 3004, directs the Secretary of the Treasury, after consultation with the Securities and Exchange Commission and the Federal Reserve Board, to publish proposed regulations, on or before December 31, 2001, and final regulations on or before July 1, 2002, requiring broker-dealers to file suspicious activity reports. The Senate receded to the House with respect to the specific time requirements in section 356(a).
Sec. 356(b), included in H.R. 3004, authorizes the Secretary of the Treasury, in consultation with the Commodity Futures Trading Commission, to prescribe regulations requiring futures commission merchants, commodity trading advisors, and certain commodity pool operators to submit suspicious activity reports under 31 U.S.C. §5318(g).
Sec. 356(c), included in the Senate bill, requires the Secretary of the Treasury, the SEC and Federal Reserve Board to submit jointly to Congress, within one year of the date of enactment, recommendations for effective regulations to apply the provisions of 31 U.S.C. §§5311-30 to both registered and unregistered investment companies, as well as recommendations as to whether the Secretary should promulgate regulations treating personal holding companies as financial institutions that must disclose their beneficial owners when opening accounts or initiating funds transfers at any domestic financial institution.
Sec. 357. Special report on administration of bank secrecy provisions. Section 357, included in the Senate bill, directs the Secretary of the Treasury to submit a report to Congress, six months after the date of enactment, on the role of the IRS in the administration of the Bank Secrecy Act, with emphasis on whether IRS Bank Secrecy Act information processing responsibility (for reports filed by all financial institutions) or Bank Secrecy Act audit and examination responsibility (for certain non-bank financial institutions) should be retained or transferred.
Sec. 358. Bank Secrecy provisions and activities of the United States intelligence agencies. Section 358, included in the same general terms in both the Senate bill and H.R. 3004, contains amendments to various provisions of the Bank Secrecy Act, the Right to Financial Privacy Act, and the Fair Credit Reporting Act, to permit information to be used in the conduct of United States intelligence or counterintelligence activities to protect against international terrorism. This section combines the Senate and House provisions, with each body receding to the other in the case of particular language included in one version of the provision but not the other.
Sec. 359. Reporting of suspicious activities by underground banking systems. Section 359, included in both the Senate bill and H.R. 3004, clarifies that the Bank Secrecy Act treats certain underground banking systems as financial institutions, and that the funds transfer recordkeeping rules applicable to licensed money transmitters also apply to such underground systems. This section also directs the Secretary of the Treasury to report to Congress, within one year of the date of enactment, on the need for additional legislation or regulatory controls relating to underground banking systems. The House receded to the Senate with respect to certain technical changes in the definition of the underground banking systems at issue.
Sec. 360. Use of authority of the United States Executive Directors. Section 360, included in Senate bill, authorizes the Secretary of the Treasury to instruct the United States Executive Director of each of the international financial institutions (for example, the IMF and the World Bank) to use such Director’s " voice and vote" to support loans and other use of resources to benefit nations that the President determines to be contributing to United States efforts to combat international terrorism, and to require the auditing of each international financial institution to ensure that funds are not paid to persons engaged in or supporting terrorism.
Sec. 361. Financial crimes enforcement network. Section 361, included in H.R. 3004, adds a new §310 to subchapter I of chapter 3 of title 31, United States Code, to make the Financial Crimes Enforcement Network ("FinCEN") a bureau within the Department of the Treasury, to specify the duties of FinCEN’s Director, and to require the Secretary of the Treasury to establish operating procedures for the government-wide data access service and communications center that FinCEN maintains. Section 361 also authorizes appropriations for FinCEN for fiscal years 2002 through 2005. Finally, this section requires the Secretary to study methods for improving compliance with the reporting requirements for ownership of foreign bank and brokerage accounts by U.S. nationals imposed by regulations issued under 31 U.S.C. §5314. The required report is to be submitted within six months of the date of enactment and annually thereafter.
Sec. 362. Establishment of highly secure network. Section 362, included in H.R. 3004, directs the Secretary of the Treasury to establish, within nine months of enactment, a secure network with FinCEN that will allow financial institutions to file suspicious activity reports and provide such institutions with information regarding suspicious activities warranting special scrutiny.
Sec. 363. Increase in civil and criminal penalties for money laundering. Section 363, included in the Senate bill, increases from $100,000 to $1,000,000 the maximum civil and criminal penalties for a violation of provisions added to the Bank Secrecy Act by sections 311 and 312 of this Act.
Sec. 364. Uniform protection authority for Federal Reserve facilities. Section 364, included in H.R. 3004, authorizes certain Federal Reserve personnel to act as law enforcement officers and carry fire arms to protect and safeguard Federal Reserve employees and premises.
Sec. 365. Reports relating to coins and currency received in nonfinancial trade or business. Section 365, included in H.R. 3004, adds 31 U.S.C. §5331 (and makes related and conforming changes) to the Bank Secrecy Act to require any person who receives more than $10,000 in coins or currency, in one transaction or two or more related transactions in the course of that person’s trade or business, to file a report with respect to such transaction with FinCEN. Regulations implementing the new reporting requirement are to be promulgated within six months of enactment.
Sec. 366. Efficient use of currency transaction report system. Section 366, included in H.R. 3004, requires the Secretary of the Treasury to report to the Congress before the end of the one year period beginning on the date of enactment containing the results of a study of the possible expansion of the statutory system for exempting transactions from the currency transaction reporting requirements and ways to improve the use by financial institutions of the statutory exemption system as a way of reducing the volume of unneeded currency transaction reports.
Subtitle C. Currency Crimes.
Sec. 371. Bulk cash smuggling into or out of the United States. Section 371, included in both the Senate bill and H.R. 3004, but with different language relating to forfeiture, creates a new Bank Secrecy Act offense, 31 U.S.C. §5332, involving the bulk smuggling of more than $10,000 in currency in any conveyance, article of luggage or merchandise or container, either into or out of the United States, and related forfeiture provisions. The Senate receded to the House language.
Sec. 372. Forfeiture in currency reporting cases. Section 372, included in the Senate bill and H.R. 3004 with different language concerning mitigation, amends 31 U.S.C. §5317 to permit confiscation of funds in connection with currency reporting violations consistent with existing civil and criminal forfeiture procedures. The Senate receded to the House language.
Sec. 373. Illegal money transmitting businesses. Section 373, included in H.R. 3004, amends 18 U.S.C. §1960 to clarify the terms of the offense stated in that provision, relating to knowing operation of an unlicensed (under state law) or unregistered (under Federal law) money transmission business. This section also amends 18 U.S.C. §981(a) to authorize the seizure of funds involved in a violation of 18 U.S.C. §1960.
Sec. 374. Counterfeiting domestic currency and obligations. Section 374, included in H.R. 3004, makes a number of changes to the provisions of 18 U.S.C. §§470-473 relating to the maximum sentences for various counterfeiting offenses, and adds to the definition of counterfeiting in 18 U.S.C. §474 the making, acquiring, etc. of an analog, digital, or electronic image of any obligation or other security of the United States.
Sec. 375. Counterfeiting Foreign Currency and Obligations. Section 375, included in H.R. 3004, makes a number of changes to the provisions of 18 U.S.C. §§478-480 relating to the maximum sentences for various counterfeiting offenses involving foreign obligations or securities and adds to the definition of counterfeiting in 18 U.S.C. §481 the making, acquiring, etc. of an analog, digital, or electronic image of any obligation or other security of a foreign government.
Sec. 376. Laundering the proceeds of terrorism. This provision expands the scope of predicate offenses for laundering the proceeds of terrorism to include "providing material support or resources to terrorist organizations," as that crime is defined in 18 U.S.C. § 2339B of the criminal code. Same as original Administration proposal.
Sec. 377. Extraterritorial jurisdiction. This provision applies the financial crimes prohibitions to conduct committed abroad in situations where the tools or proceeds of the offense pass through or are in the United States. Same as original Administration proposal.
TITLE IV—PROTECTING THE BORDER
Subtitle A. Protecting the Northern Border.
Sec. 401. Ensuring adequate personnel on the Northern border. Both the House and Senate bills included this provision to authorize the Attorney General to waive any cap on the number of full time employees assigned to the INS on the northern border. Not in original Administration proposal.
Sec. 402. Northern border personnel. Both the House and Senate bills included this provision to authorize additional appropriations to allow for a tripling in personnel for the Border Patrol, INS Inspectors, and the US Customs Service in each State along the northern border, and an additional $50 million each to the INS and the US Customs Service to improve technology and acquire additional equipment for use at the northern border. Not in original Administration proposal.
Sec. 403. Access by the Department of State and the INS to certain identifying information in the criminal history records of visa applicants and applicants for admission to the United States. Both the House and Senate bills included this provision to give the State Department and INS access to the criminal history record information contained in the National Crime Information Center’s Interstate Identification Index, Wanted Persons File, and any other information mutually agreed upon between the Attorney General and the agency receiving access. Same as original Administration proposal.
Sec. 404. Limited authority to pay overtime. Both the House and Senate bills included this provision to allow the Attorney General to authorize overtime pay for INS employees in an amount in excess of $30,000 during calendar year 2001, to ensure that experienced personnel are available to handle the increased workload generated by the events of September 11, 2001. Same as original Administration proposal but based on a Leahy-Conyers proposal.
Sec. 405. Report on the integrated automated fingerprint identification system for points of entry and overseas consular posts. Both the House and Senate bills included this provision to require the Attorney General to report to Congress on the feasibility of enhancing the FBI’s Integrated Automated Fingerprint Identification System or other identification systems to identify foreign passport and visa holders who may be wanted in connection with a criminal investigation in the United States or abroad before issuing a visa to that person or their entry or exist from the United States. Not in original Administration proposal.
Subtitle B. Enhanced Immigration Provisions.
Sec. 411. Definitions relating to terrorism. Both the House and Senate bills included this provision to amend the definition of "engage in terrorist activity" to clarify that an alien who solicits funds or membership or provides material support to a certified terrorist organization is inadmissible and removable. Aliens who solicit funds or membership or provide material support to organizations not designated as terrorist organizations have the opportunity to show that they did not know and should not have known that their actions would further terrorist activity. This section also creates a definition of "terrorist organization," which is not defined under current law, for purposes of making an alien inadmissible or removable. It defines a terrorist organization as one that is (1) designated by the Secretary of State as a terrorist organization under the process supplied by current law; (2) designated by the Secretary of State as a terrorist organization for immigration purposes; or (3) a group of two or more individuals that commits terrorist activities or plans or prepares to commit (including locating targets for) terrorist activities. The changes made by this section will apply to actions taken by an alien before enactment with respect to any group that was at that time certified by the Secretary of State. Narrower than original Administration proposal by allowing an alien to show support for non-designated organization was offered without knowledge of organization’s terrorist activity.
Sec. 412. Mandatory detention of suspected terrorists; habeas corpus; judicial review. Both the House- and Senate-passed bills included provisions to grant the Attorney General the authority to certify that an alien meets the criteria of the terrorism grounds of the Immigration and Nationality Act, or is engaged in any other activity that endangers the national security of the United States, upon a "reasonable grounds to believe" standard, and take such aliens into custody. This authority is delegable only to the Deputy Attorney General. The Attorney General must either begin removal proceedings against such aliens or bring criminal charges within seven days, or release them from custody. An alien who is charged but ultimately found not to be removable is to be released from custody. An alien who is found to be removable but has not been removed, and whose removal is unlikely in the reasonably foreseeable future, may be detained if the Attorney General demonstrates that release of the alien will adversely affect national security or the safety of the community or any person. Judicial review of any action taken under this section, including review of the merits of the certification, is available through habeas corpus proceedings, with appeal to the U.S. Court of Appeals for the D.C. Circuit. The Attorney General shall review his certification of an alien every six months. Narrower than original Administration proposal in numerous ways, including placing a 7-day limit on detention without charge, ordering release of aliens found not to be removable, and more meaningful judicial review of Attorney General’s determination of national security risk posed by alien.
Sec. 413. Multilateral cooperation against terrorists. Both the House and Senate bills included this provision to provide new exceptions to the laws regarding disclosure of information from State Department records pertaining to the issuance of or refusal to issue visas to enter the U.S., and allows the sharing of this information with a foreign government on a case-by-case basis for the purpose of preventing, investigating, or punishing acts of terrorism. Based on original Administration proposal.
Sec. 414. Visa integrity and security. This section expresses the sense of the Congress that the Attorney General, in consultation with the Secretary of State, should fully implement the entry/exit system as expeditiously as practicable. Particular focus should be given to the utilization of biometric technology and the development of tamper-resistant documents. Not in original Administration proposal.
Sec. 415. Participation of Office of Homeland Security on Entry-Exit Task Force. This section includes the new Office of Homeland Security as a participant in the Entry and Exit Task Force established by the Immigration and Naturalization Service Data Management Improvement Act of 2000. Not in original Administration proposal.
Sec. 416. Foreign student monitoring program. This section seeks to implement the foreign student monitoring program created in 1996 by temporarily supplanting the collection of user fees mandated by the statute with an appropriation of $36,800,000 for the express purpose of fully and effectively implementing the program through January 2003. Thereafter, the program would be funded by user fees. Currently, all institutions of higher education that enroll foreign students or exchange visitors are required to participate in the monitoring program. This section expands the list of institutions to include air flight schools, language training schools, and vocational schools. Not in original Administration proposal.
Sec. 417. Machine readable passports. This section requires the Secretary of State to cond
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