WASHINGTON – The House on Monday passed three pieces of legislation from the Financial Services Committee’s Task Force to Investigate Terror Finance.
During a June hearing, Terror Task Force Chairman Fitzpatrick (R-PA) stressed the importance of adaptive legislation “This Task Force continues to note that illicit actors are adaptive; constantly evolving their money-laundering and financing techniques to better avoid detection. These techniques and practices - such as trade-based money laundering or the narcotics trade - often cross the jurisdictions of several different U. S. government agencies, making communication, coordination, and information sharing amongst agency personnel paramount.”
The House also passed financial services legislation that terminates exemptions for investment companies in U.S. Territories.
More information about the bills can be seen below:
H.R. 5322, the “U.S. Territories Investor Protection Act of 2016”
Sponsor: Rep. Velazquez (D-NY)
H.R. 5322, the U.S. Territories Investor Protection Act of 2016, amends Section 6(a)(1) of the Investment Company Act of 1940 to terminate an exemption for investment companies located in Puerto Rico, the Virgin Islands, and any other possession of the United States. Under current law, such companies are exempt from registration under the Act provided that their shares are sold solely to the residents of the territory or possession in which they are located.
The bill provides a three-year safe harbor for investment companies that currently enjoy this exemption. Additionally, the bill authorizes the SEC to further delay the effective date (or end of the exemption) for a maximum of three years following the initial three year safe harbor.
H.R. 5322 passed the Financial Services Committee on June 15, 2016 by a vote of 59-0.
H.R. 5322 passed the House on July 11, 2016 by voice vote.
H.R. 5469, to require the Secretary of the Treasury to direct the United States Executive Director at the International Monetary Fund to support the capacity of the International Monetary Fund to prevent money laundering and financing of terrorism.
Sponsor: Rep. Pearce (R-NM)
H.R. 5469 amends Title XVI of the International Financial Institutions Act to say that the Secretary of the Treasury shall instruct the United States Executive Director at the International Monetary Fund to support the use of the administrative budget of the Fund for technical assistance that strengthens the capacity of Fund members to prevent money laundering and the financing of terrorism. The bill also requires a report to Congress within one year after the date of the enactment of the act.
H.R. 5469 passed the House on July 11, 2016 by voice vote.
H.R. 5594, the “National Strategy for Combating Terrorist, Underground, and Other Illicit Financing Act”
Sponsor: Rep. Fitzpatrick (R-PA)
This bill requires the President, acting through the Treasury Secretary, to develop and publish an annual whole-of-government strategy to combat money laundering and terrorist financing. The proposal builds on a narrower requirement for a biannual report was required in a 1998 law, but the requirement expired and the last version was prepared in 2007. The bill aims to cause a greater movement towards a whole-of-government approach to stopping terror finance, money laundering and related illicit finance, by requiring interaction necessary to produce the report. In addition, results of the report will give Congress a roadmap for the allocation of resources or the addition of any necessary new authorities to keep ahead of innovations by criminals or terrorists. Importantly, the report must be updated annually: the previous report was biannual, but a two-year cycle would have completely missed the near-instantaneous birth and expansion of ISIS.
H.R. 5594 passed the House on July 11, 2016 by voice vote.
H.R. 5602, to amend title 31, United States Code, to authorize the Secretary of the Treasury to include all funds when issuing certain geographic targeting orders, and for other purposes.
Sponsor: Rep. Lynch (D-MA)
This bill amends the section of the United States Code that allows the Treasury Secretary to issue “geographical targeting orders” requiring more-detailed information to be reported to the Treasury department regarding certain types of transactions in a specific area for a limited amount of time. The current language allows the Secretary to seek more detailed reporting on transactions involving coins, currency or monetary instruments.
H.R. 5602 passed the House on July 11, 2016 by a vote of 356-47.
H.R. 5607, the “Enhancing Treasury's Anti-Terror Tools Act”
Sponsor: Rep. Pittenger (R-NC)
H.R. 5607 seeks to enhance a number of the tools that the Treasury Department uses in its efforts to combat the financing of terror, money laundering and related illicit finance. Each of the items received extensive discussion during the Committee’s Task Force to Investigate Terror Financing hearings. There are five major sections in the bill:
- The Treasury Secretary is directed to report to Congress on the number of fulltime Treasury attaches in embassies overseas and how anti-terror finance issues are handled in the embassies without fulltime Treasury attaches.
- Requirements are strengthened for temporary enhanced reporting of some types of business, as required by the Treasury secretary. These types of temporary enhanced reporting have helped identify and stop dealing in counterfeits and in drugs in the past.
- The Treasury Secretary is directed to report on the advisability and the implications of turning the Treasury Office of Terrorism and Financial Intelligence – which includes the FincEN financial intelligence unit and the OFAC sanctions enforcement unit -- into a standalone bureau, similar to the FBI.
- The Secretary is directed to report on aspects of a proposal to create a pilot program aimed at giving banks and credit unions greater comfort about offering account services to companies that seek to facilitate remittances of small amounts of money to Somalia.
- The Treasury Secretary is urged to work with counterpart finance ministers from other countries to integrate the other countries’ intelligence community more closely with their financial intelligence unit, as is the case with the Office of Terrorism and Financial Intelligence.
H.R. 5607 passed the House on July 11, 2016 by a vote of 362-45.