Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. GRASSLEY:

S. 1837. A bill to combat money laundering and terrorist financing and for other purposes; to the Committee on the Judiciary.

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 2003.

Money laundering is a significant threat to our country because it undermines our national security, promotes corruption and funds terrorism. Money laundering operations as a whole include such mechanisms as structured transactions, wire fraud, over- and under-invoicing, and other activities designed to defraud and hide profits from illegal activities. All of these transactions undermine legitimate financial institutions by promoting corruption, funding criminal and terrorist operations, and by providing a method of profiting from illegal transactions such as drug trafficking and weapons sales.

We know that money laundering is the functional equivalent of a war industry for terrorist groups. Terrorist groups do not function in a bubble but will use whatever means available to obtain funding for their cause. Our attention and rhetoric are focused on identifying and halting those mechanisms used specifically by terrorist organizations such as charitable organizations, money service businesses and alternative remittance systems which are often referred to as hawalas. Frankly, the tools used to launder and disguise funds for terrorist organizations are similar, and quite often identical to, those used by many drug traffickers and criminal organizations to clean their own dirty money.

No matter how the funds are obtained and ultimately used, they are still dirty, and if we are ever going to get ahead of the curve, we must design a better way to identify and halt this flow of illegal funds. The bill I am introducing today includes several provisions that will strengthen our current money laundering and terrorist financing laws to enhance our ability to identify and eliminate various avenues used to launder money, whether it be for drug traffickers, criminal organizations or terrorists.

This bill adds several provisions to the list of specified unlawful activities within the RICO statute that serve as predicates for the money laundering statute including: burglary and embezzlement, illegal money transmitting businesses, alien smuggling, child exploitation and obscenity. It would close a loophole on securities fraud by including the purchase of securities with the sale of securities as a money laundering offense, and adds the unlawful use of Social Security numbers to the list of money laundering offenses.

It adds a provision to the civil forfeiture statute to include the forfeiture of property outside the U.S. territorial boundaries if it was used in the planning of the terrorist act that occurred within the jurisdiction of the United States and includes a parallel transaction provision which provides that all parts of a parallel or dependent financial transaction are considered a money laundering offense if one part of that transaction involves the proceeds of an unlawful activity.

Our best response to money laundering and terrorist financing threats is a comprehensive and coordinated response which must be laid out in an effective strategy. This bill also reauthorizes the National Money Laundering and Financial Crimes Strategy Act through 2006. This yearly strategy must identify the risks and threats we face. Without a comprehensive strategy, we cannot begin to implement laws and regulations that will effectively combat money laundering sources and shut down the system as a whole. Only when we have a systematic approach to money laundering will we be able to avoid the duplication and inconsistencies that currently plague our efforts.

This legislation is important to identifying particular money laundering operations and putting them out of business. I encourage you to pass this legislation to ensure our national security against the continued threat posed by terrorist financing and financial crimes.