Carl Levin

Mr. LEVIN

Mr. LEVIN. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, October 25, 2001, at 2:30 p.m., in open session to receive testimony on the role of the Department of Defense in homeland security.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Subcommittee on Emerging Threats and Capabilities of the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, October 25, 2001, at 10 a.m., in closed and open session to receive testimony on the dark winter scenario and bioterrorism.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on October 25, 2001, for the purpose of holding a hearing on terrorism insurance.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, October 25, 2001, at a time to be determined to hold a business meeting. Agenda The Committee will consider and vote on the following nominations: Mr. Brian Carlson, of Virginia, to be Ambassador to the Republic of Latvia; Mr. Joseph DeThomas, of Pennsylvania, to be Ambassador to the Republic of Estonia; Mr. Edward Fox, of Ohio, to be an Assistant Administrator (Legislative and Public Affairs) of the United States Agency for International Development; Mr. Kent Hill, of Massachusetts, to be an Assistant Administrator (for Europe and Eurasia) of the United States Agency for International Development; Mr. Cameron Hume, of New York, to be Ambassador to the Republic of South Africa; Ms. Bonnie McElveen-Hunter, of North Carolina, to be Ambassador to the Republic of Finland; Ms. Margaret McMillion, of the District of Columbia, to be Ambassador to the Republic of Rwanda; Ms. Wanda Nesbitt, of Pennsylvania, to be Ambassador to the Republic of Madagascar; Mr. John Ordway, of California, to be Ambassador to the Republic of Armenia; Mr. John Palmer, of Mississippi, to be Ambassador to the Republic of Portugal; Ms. Anne Peterson, of Virginia, to be an Assistant Administrator (Global Health) of the United States Agency for International Development; Mr. Robert Royall, of South Carolina, to be Ambassador to the United Republic of Tanzania; Mr. Clifford Sobel, of New Jersey, to be Ambassador to the Kingdom of the Netherlands; and Mr. John Turner, of Wyoming, to be Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Senate Select Committee On Intelligence be authorized to hold a closed hearing on intelligence matters on Thursday, October 25, 2001, at 2:30 p.m., in room S-407 in the Capitol.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia of the Committee on Governmental Affairs be authorized to meet on Thursday, October 25, 2001, at 9:30 a.m., for a hearing entitled `Promoting the Best Interests of Children: Proposals to Establish a Family Court in the District of Columbia Superior Court.''

Mr. LEVIN

Mr. LEVIN. We welcome that. Mr. President, I ask unanimous consent that the Senator from Oregon be added as a cosponsor to this amendment.

Mr. LEVIN. Mr. President, the good Senator from Wisconsin has really worked with us on so many issues. I appreciate very much what he has just said. With that assurance, I am satisfied, and I intend to withdraw this amendment. I think, however, there may be another speaker on this amendment. I will not withdraw it if there is another speaker. I will withhold that at this time.

Mr. LEVIN

Mr. LEVIN. Mr. President, the antiterrorism bill which the Senate is about to pass reflects the sentiments the American people have expressed since the events of September 11--that we must act swiftly and strongly to defend our country without sacrificing our most cherished values. The Senate antiterrorism legislation meets that test. It responds to these dangerous times by giving law enforcement agencies important new tools to use in combating terrorism without denigrating the principles of due process and fairness embedded in our Constitution. The bill is not perfect. In fact, during the Senate's consideration of its bill, I supported three amendments offered by Senator Feingold. Each of the Feingold amendments would have strengthened privacy protections for American citizens without undermining law enforcement efforts to investigate terrorists. One amendment would have maintained limits in Federal and State law on law enforcement access to personal records, particularly with regards to sensitive medical and financial information. A second amendment would have required law enforcement to ascertain that a surveillance target under the antiterrorism bill's expanded wiretap authority was actually in the house that was bugged or using the phone that was tapped before surveillance could be initiated. The third amendment that I supported would have placed sensible limits on the government's ability to intercept computer communications. Among these limits were the type of investigation and the length of surveillance in which the government could utilize new surveillance authority provided in the antiterrorism bill. While the amendments I supported were not adopted the bill before us is much stronger from a civil liberties standpoint than the legislation that was initially proposed by the administration. This is due in large part to the strong commitment to civil liberties and the tireless efforts of Senate Judiciary Committee Chairman Patrick Leahy. The bill also bolsters Federal criminal laws against terrorism in several important areas, including extending the statute of limitations for terrorist offenses and modernizing surveillance laws to permit investigators to keep pace with new technologies like cell phones and the Internet. Michigan's economy and security depend on the Federal Government providing adequate resources for inspection and law enforcement at the State's northern border. I am pleased that the final bill now before us also includes significant new funding to increase security and improve traffic flow at the northern border. Finally, this legislation includes a landmark set of provisions that I have been proud to sponsor that will strengthen and modernize U.S. anti-money laundering laws. Osama bin Laden has boasted that his modern new recruits know the ``cracks'' in ``Western financial systems'' like they know the ``lines in their hands.'' Enactment of this bill will help seal the cracks that allow terrorists and other criminals to use our financial systems against us. The final money laundering provisions appear in Title 3 of the bill and represent a significant advance over existing law. Here are some of the anti-money laundering provisions that I authored and that are included in the final bill. For the first time, all U.S. financial institutions--not only banks but securities firms, insurance companies, money transmitters, and other businesses that transfer funds or engage in large cash transactions--will have a legal obligation to exercise due diligence before allowing a foreign financial institution to open a correspondent account with them and thereby gain entry into the U.S. financial system. For the first time, U.S. banks and securities firms will be barred from opening accounts for foreign shell banks that have no physical presence anywhere and no affiliation with another bank. For the first time, U.S. prosecutors will be able to freeze and seize a depositor's funds in a foreign financial institution's correspondent account to the same extent under civil forfeiture laws as a depositor's funds in other U.S. financial accounts. For the first time, foreign corruption offenses such as bribery and misappropriation of funds by a public official will qualify as predicate offenses that can trigger a U.S. money laundering prosecution. Still other provisions in the bill give U.S. law enforcement a host of new tools to investigate and prosecute money laundering crimes, especially crimes involving a foreign financial institution. Here are some of the other key provisions in the bill that make landmark changes in U.S. anti-money laundering laws. For the first time, all U.S. financial institutions will have a legal obligation to verify the identity of their customers, and all customers will have a legal obligation to tell the truth about who they are. For the first time, all U.S. financial institutions will be required to have anti-money laundering programs. For the first time, the U.S. Treasury Secretary will have legal authority to designate specific foreign financial institutions, jurisdictions, transactions or accounts as a ``primary money laundering concern'' and use special measures to restrict or prohibit their access to the U.S. marketplace. For the first time, bulk cash smuggling over U.S. borders will be a prosecutable crime, and suspect funds will be subject to forfeiture proceedings. Just like we are tightening our border controls to restrict access to the United States across its physical borders, the bill's anti-money laundering provisions will tighten our financial controls to restrict access into the U.S. financial system. They will require our financial institutions to take new steps, to do more work, and to exercise greater caution before opening up the financial system of the United States. When the anti-money laundering provisions first passed the Senate on October 11, I gave a floor statement explaining a number of the provisions that had been taken from the Levin-Grassley anti-money laundering bill, S. 1371. While I do not want to repeat all of that legislative history here, some important improvements were made during the House-Senate negotiations that I would like to comment on in order to explain their intent and impact. First is the shell bank ban in Section 313 of the final bill. That provision appeared in both the House and Senate bills, with only a few differences. The primary difference is that the House provision applied only to ``depository institutions,'' while the Senate bill was intended to ban both U.S. banks and U.S. securities firms from opening accounts for shell banks. The final bill takes the broader approach advocated by the Senate and applies the shell bank ban to both U.S. banks and U.S. securities firms. This broader ban is intended to make sure that neither U.S. banks nor U.S. securities firms open accounts for shell banks, which carry the highest money laundering risks in the banking world. This broader ban means, for example, that a bank that had shell banks as clients and was required to close those accounts under this provision would not be able to circumvent the ban simply by switching its shell bank clients to accounts at an affiliated broker-dealer. The goal instead is to close off the U.S. financial system to shell banks and institute a broad ban on shell bank accounts. In my floor statement of October 11, I explained the related requirement in Section 313 that U.S. financial institutions take reasonable steps to ensure that other foreign banks are not allowing their U.S. accounts to be used by shell banks. The purpose of this language is to prevent shell banks from getting indirect access to the U.S. financial system by operating through a correspondent account belonging to another foreign bank. That requirement was included in both the House and Senate bills, and in the final version of the legislation. It is a key provision because it will put pressure on all foreign financial institutions that want to do business in the United States to cut off the access that shell banks now enjoy in too many countries around the world. I also explained on October 11 that the shell bank ban contains one exception that is intended to be narrowly construed to protect the U.S. financial system from shell banks to the greatest extent possible. This exception, which is identical in both the House and Senate bills and is unchanged in the final version of the legislation, allows U.S. financial institutions to open an account for a shell bank that meets two tests: the shell bank is affiliated with another bank that maintains a physical presence, and the shell bank is subject to supervision by the banking regulator of that affiliated bank. The intent of this exception is to allow U.S. financial institutions to do business with shell branches of large, established banks on the understanding that the bank regulator of the large, established bank will also supervise the established bank's branch offices worldwide, including any shell branch. As explained in my earlier floor statement, U.S. financial institutions are cautioned not to abuse this exception, to exercise both restraint and common sense in using it, and to refrain from doing business with any shell operation that is affiliated with a poorly regulated bank. The House-Senate negotiations also added a new provision to Section 313 giving U.S. financial institutions a 60-day period to wind up and close any existing accounts for shell banks and to institute the reasonable procedures called for to ensure that other correspondent accounts with foreign financial institutions are not being used by shell banks. As I suggested on October 11, one possible approach with respect to other correspondent accounts would be for the U.S. financial institution to develop standard language asking the foreign financial institution to certify that it is not and will not allow any shell bank to use its U.S. accounts and then to rely on that certification absent any evidence to the contrary. A second provision I want to discuss in detail is the due diligence requirement in Section 312 of the final bill. This provision also appeared in both the House and Senate bills, again with only a few differences in wording. This provision is intended to tighten U.S. anti-money laundering controls by requiring all U.S. financial institutions to exercise due diligence when opening or managing correspondent or private banking accounts for foreign financial institutions or wealthy foreign individuals. The purpose of this requirement is to function as a preventative measure to stop rogue foreign financial institutions, terrorists or other criminals from using U.S. financial accounts to gain access to the U.S. financial system. The most important change made to the due diligence requirement during the House-Senate negotiations was to make the definitional provisions in section 311 also apply to section 312. Specifically, the House and Senate negotiators amended what is now Section 311(e) to make sure that its provisions would be applied to both the new 31 U.S.C. 5318A and the new subsections (i) and (j) of 31 U.S.C. 5318 created by Sections 311, 312 and 313 of the final bill. As I mentioned in my floor statement on October 11, one of the key changes that the Senate Banking Committee made to the due diligence requirement when they took that provision from the Levin-Grassley bill, S. 1371, was to make the due diligence requirement apply to all U.S. financial institutions, not just banks. The Banking Committee expanded the scope of the due diligence requirement by deleting the Levin- Grassley references to ``banks'' and substituting the term ``financial institutions'' which, in Section 5312(a)(2) of the Bank Secrecy Act, includes not only banks, but also securities firms, insurance companies, money exchanges, and many other businesses that transfer funds or carry out large cash transactions. The House Financial Services Committee adopted the same approach as the Senate Committee, using the term ``financial institution'' in its due diligence provision rather than, for example, the term ``depository institution'' which the House Committee used in its version of the shell bank ban. The bottom line, then, is that both the House and Senate expanded the due diligence provision to apply to all U.S. financial institutions, not just banks. During the House-Senate negotiations on the final version of the anti-money laundering legislation, Section 311(e) of the bill was amended to make it applicable to both the due diligence requirement created by Section 312 and to the shell bank ban created by Section 313. Section 311(e) establishes several new definitions for such terms as ``account'' and ``correspondent account,'' and also directs or authorizes the Treasury Secretary to issue regulations to clarify other terms. By making those definitions and regulatory authority applicable to the due diligence requirement and shell bank ban, the House-Senate negotiators helped ensure that the same terms would be used consistently across Sections 311, 312 and 313. In addition, the change helps clarify the scope of the due diligence and shell bank provisions in several respects. First, the change makes the definition of ``account'' applicable to the due diligence requirement. This definition makes it clear that the due diligence requirement is intended to apply to a wide variety of bank accounts provided to foreign financial institutions or private banking clients, including checking accounts, savings accounts, investment accounts, trading accounts, or accounts granting lines of credit or other credit arrangements. The clear message is that, before opening any type of account for a foreign financial institution or a wealthy foreign individual and giving that account holder access to the United States financial system, U.S. financial institutions must use due diligence to evaluate the money laundering risk, to detect and report possible instances of money laundering, and to deny access to terrorists or other criminals. The definition also ensures that the shell bank ban applies widely to bar a shell bank from attempting to open virtually any type of financial account available at a U.S. financial institution. Second, the change makes it clear that the definition of ``correspondent account'' applies to the due diligence requirement. This clarification is important, because the definition makes it clear that ``correspondent accounts'' are not confined to accounts opened for foreign banks, as specified in S. 1371, but encompass accounts opened for any ``foreign financial institution.'' This broader reach is in keeping with the effort of the Senate Banking Committee and the House Financial Services Committee to expand the due diligence requirement to apply to all financial institutions, not just banks. It means, for example, that U.S. financial institutions must use due diligence when opening accounts not only for foreign banks, but also for foreign securities firms, foreign insurance companies, foreign exchange houses, and other foreign financial businesses. Section 311(e)(4) authorizes the Treasury Secretary to further define terms used in subsection (e)(1), and Treasury may want to use that authority to issue regulatory guidance clarifying the scope of the term ``foreign financial institution'' to help U.S. financial institutions understand the extent of their due diligence obligation under the new 31 U.S.C. 5318(i). In fashioning this regulatory guidance, Treasury should keep in mind the intent of Congress in issuing this new due diligence requirement--to require all U.S. financial institutions to use greater care when allowing any foreign financial institution inside the U.S. financial system. The significance of applying the ``correspondent account'' definition to the shell bank ban is, again, to ensure that the ban applies widely to bar a shell bank from opening virtually any type of financial account available at a U.S. financial institution. Third, due to the change made by House-Senate negotiators, Section 311(e)(3) directs the Treasury Secretary to issue regulations defining ``beneficial ownership of an account'' for purposes of both the new 31 U.S.C. 5318A and the new subsections (i) and (j) of 31 U.S.C. 5318. How the regulations define ``beneficial ownership'' will have profound implications for these new provisions as well as for other aspects of U.S. anti-money laundering laws. Section 311(e)(3) directs Treasury to address three sets of issues in defining beneficial ownership: the significance of ``an individual's authority to fund, direct, or manage the account''; the significance of ``an individual's material interest in the income or corpus of the account''; and the exclusion of individuals whose beneficial interest in the income or corpus of the account is immaterial.'' The issue of beneficial ownership is at the heart of the fight against terrorists and other criminals who want to use our financial institutions against us. Terrorists and other criminals want to hide their identity as well as the criminal origin of their funds so that they can use their U.S. accounts without alerting law enforcement. They want to use U.S. and international payment systems to move their funds to their operatives with no questions asked. They want to deposit their funds in interest-bearing accounts to increase the financial resources available to them. They want to set up credit card accounts and lines of credit that can be used to finance their illegal activities. Above all, they do not want U.S. financial institutions determining who exactly is the owner of their accounts, since that information can lead to closure of the accounts, seizure of assets, exposure of terrorist or criminal organizations, and other actions by law enforcement. After the September 11 attack, it is more critical than ever that U.S. financial institutions determine exactly who is the beneficial owner of the accounts they open. Another provision of the final bill, Section 326 which was authored by House Financial Services Committee Chairman Oxley, requires financial institutions to verify the identify of their customers. That provision gets at the same issue--that our financial institutions need to know who they are dealing with and who they are performing services for. Some financial institutions have pointed out the difficulties associated with determining the beneficial owner of certain accounts. But these are not new issues, and they can be dealt with in common sense ways. U.S. tax administrators and financial regulators have years of experience in framing ownership issues. Switzerland has had a beneficial ownership requirement in place for years, and in fact requires accountholders to sign a specific document, called ``Form A,'' declaring the identify of the account's beneficial owner. The difficulties associated with determining beneficial ownership can be addressed. There will, of course, be questions of interpretation. No one wants financial institutions to record the names of the stockholders of publicly traded companies. No one wants financial institutions to identify the beneficiaries of widely held mutual funds. That is why this section directs the Treasury Secretary to issue regulatory guidance in this area. At the same time, there are those who are hoping to convince Treasury to turn the definition of beneficial ownership inside out, and declare that attorneys or trustees or asset managers who direct payments into or out of an account on behalf of unnamed parties can somehow qualify as the ``beneficial owner of the account.'' Others will want to convince Treasury that offshore shell corporations or trusts can qualify as the beneficial owner of the accounts they open. But those are exactly the types of accounts that terrorists and criminals use to hide their identities and infiltrate U.S. financial institutions. And those are exactly the accounts for which U.S. financial institutions need to verify and evaluate the real beneficial owners. The beneficial ownership regulation will be a challenging undertaking. But there is plenty of expertise to draw upon, from FATF, the Basel Committee, U.S. financial and tax regulators, other countries with beneficial ownership requirements and, of course, from our own financial community. Fourth, Section 311(e)(2) directs the Treasury Secretary to issue regulations clarifying how the term ``account'' applies to financial institutions other than banks. This authority should be read in conjunction with Section 311(e)(4) which allows, but does not require, the Secretary to issue regulations defining other terms in the new 31 U.S.C. 5318A and the new subsections (i) and (j) of 31 U.S.C. 5318. These two regulatory sections should, in turn, be read in conjunction with Section 312(b)(1) which directs the Secretary to issue regulations further clarifying the due diligence policies, procedures and controls required under that section. Together, these grants of regulatory authority provide the Treasury Secretary with ample authority to issue regulatory guidance to help different types of financial institutions understand what is expected of them in the area of due diligence. Such guidance may be needed by banks, securities firms, insurance companies, exchange houses, money service businesses and other financial institutions. The guiding principle, again, is to ensure that U.S. financial institutions exercise appropriate due diligence before opening accounts for foreign financial institutions or wealthy foreign individuals seeking access to the U.S. financial system. These grants of regulatory authority can also be used by Treasury to ensure that the shell bank ban established by Section 313 is as broad and effective as possible to keep shell banks out of the U.S. financial system. Next is due diligence and correspondent banking. Section 312 imposes an ongoing, industry-wide legal obligation on all types of financial institutions operating in the United States to exercise appropriate care when opening and operating correspondent accounts for foreign financial institutions to safeguard the U.S. financial system from money laundering. The general obligation to establish appropriate and specific due diligence policies, procedures and controls when opening correspondent accounts is codified in a new 31 U.S.C. 5318(i)(1). Subsection 5318(i)(2) specifies additional, minimum standards for enhanced due diligence policies, procedures and controls that must be established by U.S. financial institutions for correspondent accounts opened for two specific categories of foreign banks: banks operating under offshore banking licenses and banks operating in foreign countries that have been designated as raising money laundering concerns. These two categories of foreign banks were identified due to their higher money laundering risks, as explained in the extensive staff report and hearing record of the Permanent Subcommittee on Investigations, copies of which I released earlier this year. Subsection 5318(i)(2) provides two alternative ways in which a foreign country can be designated as raising money laundering concerns. The first way is if a country is formally designated by an intergovernmental group or organization of which the United States is a member. Currently, the most well known such group is the Financial Action Task Force on Money Laundering, also known as FATF, which is composed of about 30 countries and is the leading international group fighting money laundering. In 2000, after a lengthy fact-finding and consultative process, FATF began issuing a list of countries that FATF's member countries formally agreed to designate as noncooperative with international anti-money laundering principles and procedures. This list, which names between 12 and 15 countries, is updated periodically and has become a powerful force for effecting change in the listed jurisdictions. The second way a country may be designated for purposes of the enhanced due diligence requirement is if the country is so designated by the Treasury Secretary under the procedures provided in the new Section 5318A. This second alternative enables the United States to act unilaterally as well as multilaterally to require U.S. financial institutions to take greater care in opening correspondent accounts for foreign banks in jurisdictions of concern. The House and Senate bills contained one minor difference in the wording of the provision regarding foreign country designations by an intergovernmental group or organization under the new 31 U.S.C. 5318(i)(2)(A)(ii)(I). The House bill included a phrase, not in the Senate bill, stating that the foreign country designation had to be one with which the Secretary of Treasury concurred, apparently out of concern that an intergovernmental group or organization might designate a country as noncooperative over the objection of the United States. The final version of the provision includes the House approach, but uses statutory language making it clear that U.S. concurrence in the foreign country designation may be provided by the U.S. representative to the relevant international group or organization, whether or not that representative is the Secretary of Treasury or some other U.S. official. The new 31 U.S.C. 5318(i)(2) states that the enhanced due diligence policies, procedures and controls that U.S. financial institutions must establish for correspondent accounts with offshore banks and banks in jurisdictions designated as raising money laundering concerns must include at least three elements. They must require the U.S. financial institution to ascertain the foreign bank's ownership, to carefully monitor the account to detect and report any suspicious activity, and to determine whether the foreign bank is allowing any other banks to use its U.S. correspondent account and, if so, the identity of those banks and related due diligence information. The three elements specified in Section 5318(i)(2) for enhanced due diligence policies, procedures and controls are not meant to be comprehensive. Additional reasonable steps would be appropriate before opening or operating accounts for these two categories of foreign banks, including steps to check the foreign bank's past record and local reputation, the jurisdiction's regulatory environment, the bank's major lines of business and client base, and the extent of the foreign bank's anti-money laundering program. Moreover, other categories of foreign financial institutions will also require use of enhanced due diligence policies, procedures and controls including, for example, offshore broker-dealers or investment companies, foreign money exchanges, foreign casinos, and other foreign money service businesses. Now I would like to discuss due diligence and private banking. The new Section 5318(i) also addresses due diligence requirements for private banking accounts. The private banking staff report issued by the Permanent Subcommittee on Investigations explains why these types of private banking accounts are especially vulnerable to money laundering and why initial and ongoing due diligence reviews are needed to detect and report any suspicious activity. The House and Senate versions of this provision were very similar. The primary difference between them is that the House bill included a definition of ``private banking accounts'' that originally appeared in the Levin-Grassley bill, S. 1371, while the Senate left the term undefined. The final version of Section 5318(i) includes the House definition. It has three elements. First, the account in question must require a $1 million minimum aggregate of deposits. Second, the account must be opened on behalf of living individuals with a direct or beneficial ownership interest in the account. Third, the account must be assigned to, administered, or managed in part by, a financial institution employee such as a private banker, relationship manager or account officer. The purpose of this definition is to require U.S. financial institutions to exercise due diligence when opening and operating private banking accounts with large balances controlled by wealthy foreign individuals with direct access to the financial professionals responsible for their accounts. U.S. financial institutions with private banking accounts are required by the new Section 5318(i)(1) to establish appropriate and specific due diligence policies, procedures and controls with respect to those accounts. Section 5318(i)(3) states that, at a minimum, the due diligence policies, procedures and controls must include reasonable steps to ascertain the identity of the accountholders, including the beneficial owners; to ascertain the source of funds deposited into the account; and to monitor the account to detect and report any suspicious activity. If the account is opened for or on behalf of a senior foreign political figure or a close family member or associate of the political figure, the U.S. financial institution must use enhanced due diligence policies, procedures and controls with respect to that account, including closely monitoring the account to detect and report any transactions that may involve the proceeds of foreign corruption. The enhanced due diligence requirements for private banking accounts involving senior foreign political figures are intended to work in tandem with the guidance issued on this subject by Treasury and federal banking regulators in January 2001. The accounts covered by the private banking definition are not confined to accounts at U.S. banks, but also cover accounts opened at other types of financial institutions, including securities firms which have developed lines of business offering similar types of accounts to wealthy foreign individuals. In addition, the section is intended to cover not only private banking accounts physically located inside the United States, but also private banking accounts that are physically located outside of the United States but managed by U.S. personnel from inside the United States. For example, the private banking investigation conducted by my Subcommittee found that it was a common practice for some U.S. private banks to open private banking accounts for foreign clients in an offshore or bank secrecy jurisdiction, but then to manage those accounts using private bankers located inside the United States. In such cases, the U.S. financial institution is required to exercise the same degree of due diligence in opening and managing those private banking accounts as it would if those accounts were physically located within the United States. Another area of inquiry involves the $1 million threshold. Some financial institutions have asked whether the $1 million minimum would be met if an account initially held less than the required threshold, or the account's total deposits dipped below the threshold amount on one or more occasions, or the same individual held accounts both inside and outside the private bank and kept the private bank account's total deposits below the threshold amount. Such inquires are reminiscent of structuring efforts undertaken to avoid certain anti-money laundering reporting requirements. Such structuring efforts have not been found acceptable in avoiding other anti-money laundering requirements, and the language of the private banking provision is intended to preclude such maneuvering here. The purpose of the private banking provision is to require U.S. financial institutions to exercise due diligence when opening or managing accounts with large deposits for wealthy foreign individuals who can use the services of a private banker or other employee to move funds, open offshore corporations or accounts, or engage in other financial transactions that carry money laundering risks. Because it is the intent of Congress to strengthen due diligence controls and protect the U.S. financial system to the greatest extent possible in the private banking area, the private banking definition should be interpreted in ways that will maximize the due diligence efforts of U.S. financial institutions. Finally, the House-Senate negotiators adjusted the effective date of the due diligence provision. The new effective date gives the Treasury Secretary 180 days to issue regulations clarifying the due diligence policies, procedures and controls required under the new 31 U.S.C. 5318(i). These regulations are, again, intended to provide regulatory guidance to the range of U.S. financial institutions that will be compelled to exercise due diligence before opening a private banking or correspondent banking account. Section 312(b) states that, whether or not the Treasury Secretary meets the 180-day deadline for regulations, the due diligence requirement will go into effect no later than 270 days after the date of enactment of the legislation. That means, whether or not the Treasury Secretary issues any regulations, after 270 days, U.S. financial institutions will be legally required to establish appropriate and specific due diligence policies, procedures and controls for their private banking and correspondent accounts, including enhanced due diligence policies, procedures and controls where necessary. In addition to due diligence and the Shell Bank provisions, my October 11 floor statement discusses several other bill provisions including those that add foreign corruption offenses to the list of crimes that can trigger a U.S. money laundering prosecution, and those that close a forfeiture loophole applicable to correspondent accounts for foreign financial institutions. I will not repeat that legislative history again, but I do want to mention one other provision that I authored to expand use of Federal receivers in money laundering and forfeiture proceedings. The Federal receivers provision is contained in Section 317 of the final bill, and I want to make three points about it. First, this provision comes out of the work of the Permanent Subcommittee on Investigations which found that many money laundering crimes include such complex flows of money across international lines that the average prosecutor does not have the time or resources needed to chase down the money, even when that money represents savings stolen or defrauded from hundreds of crime victims in the United States. In too many money laundering cases, the crime victims will never see one dime of their lost savings. The Federal receiver provision in Section 317 is intended to provide Federal prosecutors and the Federal and State regulators working with them the option of using a court-appointed receiver to chase down the laundered funds. Second, the provision is intended to allow any U.S. district court to appoint a Federal receiver in a money laundering or forfeiture proceeding, whether criminal or civil, if so requested by the Federal prosecutor or Federal or State regulator associated with the proceeding. The only restriction is that the court must have jurisdiction over the defendant whose assets the receiver will be pursuing. Jurisdiction may be determined in the context of the criminal or civil proceeding before the court, including under new language in other parts of Section 317 making it clear that a district court has jurisdiction over any foreign financial institution that has a correspondent account at a U.S. financial institution; over any foreign person who has committed a money laundering offense involving a financial transaction occurring in whole or in part in the United States; and over any foreign person that has converted to their own use property that is the subject of a U.S. forfeiture order, as happened in the Swiss American Bank case described in the Subcommittee's staff report. The third point about the Federal receiver provision is that it is intended to make it clear that Federal receivers appointed under U.S. money laundering laws may make requests and may obtain financial information from the U.S. Financial Crimes Enforcement Network in Treasury and from foreign countries as if the receiver were standing in the shoes of a federal prosecutor. This language is essential to increase the effectiveness of receivers who often have to work quickly, in foreign jurisdictions, in cooperation with foreign law enforcement and financial regulatory personnel, and who need clear statutory authority to make use of international information sharing arrangements available to assist U.S. law enforcement. The provision is intended to make it clear that the Federal receiver has the same access to international law enforcement assistance as a Federal prosecutor would if the prosecutor were personally attempting to recover the laundered funds. The language is also intended to make it clear that Federal receivers are bound by the same policies and procedures that bind all Federal prosecutors in such matters, and that Federal receivers have no authority to exceed any restrictions set by the Attorney General. Finally, I would like to take note of two other provisions that are included in the final bill. They are Section 352 authored by Senate Banking Committee Chairman Sarbanes to require all U.S. financial institutions to establish anti-money laundering programs, and Section 326 authored by House Financial Services Committee Chairman Oxley to require all U.S. financial institutions to verify the identity of their customers. Both are strong requirements that apply to all U.S. financial institutions and, in the case of the Oxley provision, to all financial accounts. Both represent important advances in U.S. anti- money laundering laws by codifying basic anti-money laundering requirements. I commend my colleagues for enacting these basic anti- money laundering controls into law and filling in some of the gaps that have made our anti-money laundering safeguards less comprehensive than they need to be. The clear intention of both the House and the Senate bills, and the final bill being enacted by Congress today, is to impose anti-money laundering requirements across the board that reach virtually all U.S. financial institutions. Congress has determined that broad anti-money laundering controls applicable to virtually all U.S. financial institutions are needed to seal the cracks in our financial systems that terrorists and other criminals are all too ready to exploit. There are many other noteworthy provisions of this legislation, from requirements involving legal service of subpoenas on foreign banks with U.S. accounts, to new ways to prosecute money laundering crimes, to new arrangements to increase cooperation among U.S. financial institutions, regulators and law enforcement to stop terrorists and other criminals from gaining access to the U.S. financial system. There just is not sufficient time to go into them all. To reiterate, the antiterrorism bill we have before us today would be very incomplete--only half of a toolbox--without a strong anti-money- laundering title to prevent foreign terrorists and other criminals from using our financial institutions against us. With the anti-money- laundering provisions in this bill, the antiterrorism bill gives our enforcement authorities a valuable set of additional tools to fight those who are attempting to terrorize this country. Osama bin Laden has boasted that his modern new recruits know, in his words, the ``cracks'' in ``Western financial systems'' like they know the ``lines in their own hands.'' Enactment of this bill with these provisions will help seal those cracks that allow terrorists and other criminals to use our own financial systems against us. The intention of this bill is to impose anti-money-laundering requirements across the board that reach virtually all U.S. financial institutions. Our Permanent Subcommittee on Investigations, which I chair, spent 3 years examining the weaknesses and the problems in our banking system with respect to money laundering by foreign customers, including foreign banks. Through 6 days of hearings and 2 major reports, one of which contained case studies on 10 offshore banks, we developed S. 1371 to strengthen our anti-money-laundering laws. A strong bipartisan group of Senators joined me in pressing for its enactment, including Senators Grassley, Sarbanes, Kyl, DeWine, Bill Nelson, Durbin, Stabenow, and Kerry. The major elements of S. 1371 are part of the legislation we are now considering. Finally, Mr. President, I want to give a few thank-yous. First, I thank Senator Sarbanes, chairman of the Senate Banking Committee. He saw the significance of the money laundering issue in the fight against terrorism, and I thank him for his quick action, his bipartisan inclusive approach, and his personal dedication to producing tough, meaningful legislation. I also thank him for allowing my staff to participate fully in the negotiations to reconcile the anti-money- laundering legislation passed by the House and the Senate. I extend my thanks and congratulations to the Senate Banking Committee and the House Financial Services Committee for a fine bipartisan product that will strengthen, modernize, and revitalize U.S. anti-money-laundering laws. Congressman Oxley and Congressman LaFalce jumped right into the issue, committed themselves to producing strong legislation, and did the hard work needed to produce it. The negotiations were a model of House-Senate collaboration, with bipartisan, productive discussions leading to a legislative product that is stronger than the legislation passed by either House and which is legislation in which this Congress can take pride. I also extend my thanks to Senator Daschle, Senator Lott, and Senator Leahy for taking the actions that were essential to ensure that the anti-money-laundering title was included in the antiterrorism bill. Senator Daschle made it very clear that without these provisions no antiterrorism bill would be complete. Senator Leahy took actions of all kinds to make sure that, in fact, the anti-money laundering provisions were included in the final bill. I thank Senator Grassley who joined me in this effort early on and who worked with me every step of the way win enactment of the anti- money laundering legislation into law. Senator Stabenow I thank for her quick and decisive action during the Banking Committee's consideration of this bill. Without her critical assistance, we would not be where we are today. I also thank Senator Kerry for his consistent, strong and informed role in fashioning this landmark legislation. Finally I want to give a few thank-yous to staff. Elise Bean of my staff first and foremost deserves all of our thanks for her heroic efforts on this legislation. She and Bob Roach of our Subcommittee staff led the Subcommittee investigations into money laundering and did very detailed work on private banking and correspondent banking that laid the groundwork for the legislation we are passing today. I want to thank them both. I want to thank Bill Olson of Senator Grassley's office for jumping in whenever needed and lending strong support to this legislative effort. Similar thanks go to John Phillips of Senator Kerry's office who was there at all hours to make sure this legislation happened. Similar thanks go to Senator Sarbanes' staff on the Senate Banking Committee--especially Steve Harris, Marty Gruenberg, Patience Singleton and Steve Kroll, who put in long hours, maintained a high degree of both competency and professionalism, and provided an open door for my staff to work with them. I also want to thank the staff of the House Financial Services Committee--Ike Jones, Carter McDowell, Jim Clinger and Cindy Fogleman. They put in long hours, knew the subject, and were dedicated to achieving a finished product of which we could all be proud. Our thanks also go to Laura Ayoud of the Senate Legislative Counsel's office who literally worked around the clock during the negotiations on this legislation and, through it all, kept a clear eye and a cheerful personality. Her work was essential to this product.

Mr. LEVIN. I thank the Senator.

Mr. LEVIN. Mr. President, I ask unanimous consent that after the remarks of the Senator from California, I be recognized for the time allotted to me.

Mr. LEVIN

Mr. LEVIN. Mr. President, on Tuesday, I received a letter on a very important subject that I wish to bring to the attention of my colleagues. The House of Representatives and the Senate are currently meeting in joint conference committee on the National Defense Authorization Act for Fiscal Year 2002. This bill has many provisions that are very important to our military and to our Nation, but one of the most important of these is a provision authorizing the President to conduct a new round of base closures in 2003. The Senate voted to support the request of the administration and of our military leaders to allow the Department of Defense, DOD, to rationalize, and where necessary reduce, their infrastructure. Allowing DOD to conduct a new round of base realignment and closures is necessary to stop wasting taxpayer money, to redirect funds to higher national security priorities, and to allow the transformation of our military. Transformation has never meant just buying new weapons. The letter I received is signed by eight former Secretaries of Defense. They write to tell the Congress that we must act to allow DOD to ensure our base structure supports for our forces and our war fighting plans. They warn us that forces tied up defending unneeded bases ``are forces unavailable for the campaign on terrorism'' and that resources devoted to unneeded facilities cannot be spent on the tools we will need to win this war. This letter is signed by Robert McNamara, Mel Laird, Jim Schlesinger, Harold Brown, Caspar Weinberger, Frank Carlucci, Bill Perry, and our former colleague Bill Cohen. I might add that two other former Secretaries of Defense, Vice President Cheney and our current Secretary Donald Rumsfeld, have asked the Congress for this authority on behalf of this administration. Every living current or former Secretary of Defense is telling us it is essential that we act to reduce our excess infrastructure. The Congress should listen to the voice of experience on this matter. These are the men who have had the awesome responsibility of protecting our Nation's security and running one of the world's largest, most complex organizations. These are the men who have been in the chain of command, who have had to make life and death decisions. When they tell us we need to act, we should listen, and we should act. I ask unanimous consent that this letter be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, public health professionals have an important role to play in the fight against gun violence. We need doctors and nurses to help educate their patients on the dangers associated with owning a firearm. Toward that end, Physicians for Social Responsibility has produced a booklet called ``Counseling Patients on Gun Violence Prevention: A Pocket Guide for Physicians and Nurses''. The booklet provides advice to medical professionals in talking to patients about risks related to keeping a gun in their homes. The booklet makes an important contribution the effort to reduce gun violence and I urge health professionals to read the booklet, share copies with their colleagues and talk about these issues with their patients. The booklet can be downloaded from the Physicians for Social Responsibility's web site or people can contact Physicians for Social Responsibility to request copies.

Mr. LEVIN

Mr. LEVIN. Mr. President, today I would like to pay tribute to the achievements of a beloved religious leader, heroic civil rights advocate, inspiring preacher and dedicated father from my home State of Michigan, Reverend Doctor Frederick George Sampson. For the past 30 years, my home town of Detroit has been able to claim Reverend Sampson as one of its own. However, his deep faith, keen intellect, and concern for others enabled him to touch the lives of countless people the world over. Born in Port Arthur, TX, Reverend Sampson's insatiable thirst for knowledge compelled him to earn three bachelor's degrees, two master's degrees, a doctor of divinity degree from Virginia Theological Seminary as well as certificates in economics and medicine. In addition, three colleges awarded him honorary degrees. While he was indeed a man of learning, Reverend Sampson was also a man of action who sought to integrate his education and faith into all he did. His learning and faith could be heard in his powerful sermons. Such was the influence of these sermons, that Ebony Magazine twice named Reverend Sampson as one of the Nation's ``Greatest Black Preachers in America.'' Central to all the Reverend's work was his untiring advocacy on behalf of the civil rights movement. A close aide to the Reverend Martin Luther King, Jr., Dr. Sampson helped organize the 1965 voting rights march in Montgomery, AL, and he helped write and edit many important speeches given during the early days of the civil rights movement. In addition, he was a life member of the National Association for the Advancement of Colored People as well as a former President of the Detroit branch of the NAACP. Much of the success of the civil rights movement has been due to the untiring efforts by people of faith, such as Reverend Sampson, who reminded us about the dignity and worth of all people regardless of their race, creed or gender. After serving two decades in various churches throughout the nation, Reverend Sampson came to Detroit to serve as Senior Pastor at the Tabernacle Missionary Baptist Church. During his tenure as pastor, this parish of 5,000 served as a beacon of hope to the entire community. Tabernacle Church cares for the body and mind as well as the soul, and Reverend Sampson deserves much of the credit for this. The church offers computer training, GED tutoring, runs a soup kitchen, administers a food pantry and among other things has a scholarship program in addition to its services and Bible studies. As one who early in his life deferred a career in medicine to serve God as a preacher, Reverend Sampson was able to use his role as a minister to increase awareness about health matters. Besides speaking extensively about health and spirituality, Reverend Sampson was able to display considerable courage in his personal life when he was diagnosed with prostate cancer. After this diagnosis, Reverend Sampson and his daughter Freda sought to highlight the threat that prostate cancer poses, particularly to African American males, by teaming with the American Cancer Society and the Southern Christian Leadership Conference to raise awareness of this disease. Reverend Sampson has been a community and spiritual leader for nearly five decades. I have been able to witness, firsthand, his passionate oratory, his love of his Lord and his commitment to helping others. Reverend Sampson touched the lives of all who met him. I know my Senate colleagues join me in commemorating the life of Reverend Doctor Frederick George Sampson, and in offering their condolences to his son Pastor Frederick Sampson III, his daughter Freda and his extended family.

Mr. LEVIN

Mr. LEVIN. Mr. President, this autumn from September 15th to October 15th, we commemorate the Nation's 33rd Hispanic Heritage Month. In 1968, Congress designated a week to celebrate Hispanic culture nationally. Twenty years later in 1988, the week-long festivity was transformed into a month-long variety of activities aimed at raising national awareness of the tradition and achievement of Hispanics in America. In that spirit I would like to recognize the initiating force behind this celebration, Gil Coronado. Colonel Coronado envisioned a week-long celebration of culture and pride and as founder and chairman of ``Heroes and Heritage: Saluting a Legacy of Hispanic Patriotism and Pride'' a non-profit organization, set forth to make his dream a reality. A hero himself, Colonel Coronado enlisted with the Air Force at age 16 and would serve for 30 years in Vietnam, Panama, Germany and Spain before he retired with over 35 awards including the Legion of Merit and the Bronze Star. Hispanic Americans like Colonel Coronado, have risen to the call of duty, defending the liberty and freedom the United States stands for, just as they continue to do so today in our armed services. Hispanic contributions to our culture and society go back almost 500 years, to when Juan Ponce de Leon first arrived in Florida in 1513. His fellow explorers like Alvarez de Pinela and Cabeza de Vaca would traverse what is now the American ``Sunbelt.'' In fact, the arrival of De Soto in Mississippi in 1541 is commemorated in one of the great historical canvases in the Rotunda of the Capitol building in which we work. Today, Hispanics continue to be pioneers in our society. Fernando Bujones was 19 when he became the first American to win a gold medal at the 1972 International Ballet Competition in Varma Bulgaria. Mari Luci Jamarillo would be appointed by President Jimmy Carter as the Ambassador to Honduras in 1977, distinguishing her as the first woman ambassador of Hispanic descent. I would also like to make special note of two people affiliated with my home state of Michigan. In 1990, Antonia Novello became the first female Hispanic U.S. Surgeon General. Dr. Novello started her medical career at University of Michigan where she was named ``Intern of the Year,'' the first woman to ever receive such an award. Detroit would also be the starting point for Jose Feliciano's musical career. A native of Puerto Rico, Feliciano was born blind, but he mastered multiple instruments like the 6 and 12 string guitars, the bass, banjo, mandolin, organ, bongo drums, piano, harpsichord, harmonica and trumpet. He would achieve stardom with his Latin-soul version of ``Light My Fire.'' However, he would gain even more popularity with his unorthodox blues- rock rendition of ``The Star-Spangled Banner'' during the 1968 World Series game in Detroit. These are just a few outstanding examples of Hispanic contributions to American society. It is a pleasure for me to stand today with my Senate colleagues as we continue to recognize the contributions of our Hispanic community during National Hispanic Heritage month.

Mr. LEVIN

Mr. LEVIN. Mr. President, an organization called Common Sense about Kids and Guns has developed a list of six gun safety tips that have been endorsed by a wide range of organizations from the National SAFE KIDS Campaign to the National Shooting Sport Foundation. Regardless of our differences of opinion on how to regulate firearms, I think we can all agree that these simple steps make a lot of sense. All gun owners should unload and lock up their guns, lock and store ammunition separately and keep keys where kids are unable to find them. In addition, parents should ask if guns are safely stored at places their kids visit or play, regularly talk with their kids about guns, and teach young children both not to touch guns and tell an adult if they find one. The Centers for Disease Control's National Center for Health Statistics reports that firearm deaths of children and teens is dropping. However, ignoring firearms related child homicides, there were still 1,300 kids killed in gun-related accidents and suicides in 1999. That number remains far too high. Remembering the six simple steps proposed by Common Sense about Kids and Guns can help cut that number even more.

Mr. LEVIN

Mr. LEVIN. Mr. President, I support the Carnahan amendment which addresses the issues faced by employees who have been dislocated as a result of the September 11 terrorist attacks against the United States. While we have not yet determined the full impact of the events of September 11 on our economy, the preliminary information from the Department of Labor estimates that over 200,000 U.S. jobs were eliminated in September. This includes a first-time unemployment claim increase of over 7,700 jobs in my own State of Michigan. Expectations are that the October unemployment claim numbers will be even higher. Many of these workers were individuals employed in the airline and travel related industries. The Carnahan amendment will help these workers by providing extended income support, training benefits and health care benefits. The issue of assisting dislocated workers should have been addressed last month when we passed legislation to assist the airline industry at a price tag of $15 billion. But over the objections of many of us, provisions to assist workers in the airline and travel industry were taken out of the airline industry assistance bill. We cannot continue to sit by idly while thousands of American workers lose their jobs because of the actions of terrorists. We now have an opportunity to assist workers who have been devastated economically by the tragic events of September 11. Senators who oppose assisting those workers should at least allow the Senate to debate the issue openly and vote quickly on the bill on its merits. The Carnahan amendment specifically addresses the current economic situation of employees of airlines, commercial aircraft manufacturers, suppliers to airlines and airports. This bill currently has bipartisan support and over 35 cosponsors. I would like to commend Senator Carnahan for her tireless efforts to assist dislocated workers. The Carnahan amendment would provide individuals who exhaust their 26-week eligibility for State unemployment insurance an additional 20 weeks of cash payments funded entirely by the Federal Government. The bill would also allow individuals who do not meet their States' requirements for unemployment insurance to receive 26 weeks of federally financed unemployment insurance. The bill would also allow individuals who would not be expected to return to their jobs within the airline industry to become eligible for retraining benefits. Individuals who would not be expected to return to their jobs, but who may find some alternative job within the airline industry, would be eligible for upgrade training. Finally under the provisions of the Carnahan amendment, the Federal Government would fully reimburse eligible individuals for their COBRA premiums so they can continue to be fully insured. Individuals who do not qualify for COBRA and are otherwise uninsured would be eligible for Medicaid with the Federal Government covering 100 percent of the premiums. These health care benefits would last for a maximum of 12 months. I can't stress enough the importance of assisting these dislocated workers. The tragedy of September 11 has brought American families closer together and given us all an opportunity to help those who have been directly affected by the terrorist attacks. I hope that in the Senate's newly found spirit of bipartisanship, we can agree to help those American workers who urgently need our assistance.

Mr. LEVIN

Mr. LEVIN. Madam President, I thank Chairman Leahy, Chairman Sarbanes, and members of their committees, for including our very strong anti-money-laundering provisions in the antiterrorism bill. The antiterrorism bill is simply incomplete unless it has anti-money- laundering provisions. Our provisions are strong provisions. They will help prevent terrorists and other criminals from using our banks to get their money into this country to fund their activities which are terrorizing this country. There apparently is going to be a continuing effort in the House of Representatives to strip the anti-money-laundering provisions, which we have worked so hard on, from the antiterrorism bill. It is my understanding the White House will support keeping those provisions in the bill. Our committees have worked very hard to keep our anti-money- laundering provisions in the antiterrorism bill. Unless these provisions are in there, we are providing the executive branch with only half a tool box in the fight against terrorism. Three years ago, the minority staff of the Permanent Subcommittee on Investigations which I now chair, began its investigation into money laundering using U.S. banks. Three years, three sets of hearings, two reports and a five-volume record on correspondent banking and money laundering was the result. We found, not surprisingly, that U.S. banks have accounts for foreign banks and that the customers of those foreign banks can then use the U.S. banks to move their money. But if foreign banks do a poor job of screening their customers, criminals and terrorists can end up using U.S. banks for their criminal purposes. We found that U.S. banks do a poor job in screening the foreign banks they accept as correspondent customers. Banks told us ``a bank is a bank is a bank'' but that's not true. There are good banks and bad banks. We found numerous banks where the bank was engaged in criminal activity or had such poor banking practices any criminal could be a customer. If a bad bank has a correspondent account with a U.S. bank, customers of that bad bank have access to U.S. financial system. Then criminals, including drug traffickers and terrorists, are able to use our financial systems to carry out their crimes. In response to what we learned, we developed a bill--S. 1371, the Money Laundering Abatement Act introduced in early August. It's a bipartisan bill, and I would like to recognize my cosponsors-- in particular, Senator Chuck Grassley who has helped to lead the fight for including this money laundering legislation on this anti-terrorism bill. The cosponsors in addition to Senator Grassley are: Senators Sarbanes, Kyl, DeWine, Bill Nelson, Durbin, Kerry and Stabenow. The provisions of this bill have been included in the legislation we are now considering. We now know that the September 11 terrorists used our financial institutions and systems to help accomplish their ends. They used checks, credit cards, and wire transfers involving U.S. banks in Florida, New York, Pennsylvania. We've seen the photos of two of the terrorists using an ATM machine. Osama bin Laden has bragged about it. There are reports of large, unpaid credit card bills. We know that current law is not tough enough in area of correspondent banking--the mechanism used to transfer money around the globe. There are too many holes that let in bad banks and bad actors, and we need to close them. Look at what we've learned just in the last few days about bin Laden and al-Qaida. Several U.S. banks have had correspondent accounts for a Sundanese bank called the al Shamal Islamic Bank. A 1996 State Department fact sheet states that bin Laden helped finance the bank in the amount of $50 million. A respected international newsletter on intelligence matters, Indigo Publications in March 16, 2000, said bin Laden remains a leading shareholder, although the al Shamal Bank apparently denies that. Testimony in the February 2001 criminal trial of the 1998 terrorist bombings of U.S. embassies in Kenya and Tanzania, revealed that a bin Laden associate who handled financial transactions for al-Qaida testified al-Qaida had a half dozen accounts at al Shamal bank, one of which was in bin Laden's name. The witness at that trial said in 1994 a bin Laden associate took $100,000--in cash, U.S. Dollars--out of the Shamal Bank gave it to the witness and told him to deliver it to an individual in Jordan, which he did. Another bin Ladin associate testified at the same trial that he received $250,000 by a wire transfer from the Shamal Bank to his account in a U.S. bank in Arlington, Texas, to purchase a plane in the United States for bin Laden. He said he personally delivered the plane to bin Laden. Why did this bank have a correspondent account with a U.S. bank? Why should we allow that to happen? Even today, when you look at the al Shamal bank website, the bank is still active and advertises an extensive correspondent bank network. Three U.S. banks are listed. One of those banks has closed its account, but the two other banks continue to have accounts, although the accounts are frozen. Those accounts are now inactive because Sudan, home country of al Shamal, is on the list of terrorist countries and any business with the government of those countries has to be approved. But the accounts were operational at one point in time. Moreover, al Shamal bank has correspondent accounts with other foreign banks which have accounts with U.S. banks. That means al Shamal bank can still be using the U.S. financial system through an account with a foreign bank that has a correspondent account with a U.S. bank. We call this nesting and it's a serious problem. It means the al Shamal bank and its customers can still use the U.S. banking system. The bill before us would require U.S. banks to do a lot more homework on the banks they allow to have correspondent accounts. Under the anti- terrorism bill, it is my belief and my hope that a bank like al Shamal would never be granted a correspondent account at a U.S. bank. The bill would also allow U.S. law enforcement to capture any illicit funds in a U.S. correspondent account. Now, if a criminal or terrorist has money in a foreign bank that has an account at U.S. bank and illicit money is being held in a U.S. account, law enforcement can't freeze that money unless the person is on the terrorist list or can prove that the foreign bank with the correspondent account is part of a criminal or terrorist act. That's an excessively hard threshold. This legislation would allow law enforcement to freeze money in correspondent accounts to the same extent they can freeze money in regular, individual accounts. We need all the tools possible in our arsenal to fight the financial network of terrorism. The money laundering provisions in this bill close the loopholes in existing law and provide additional tools for law enforcement to use. I thank Chairman Sarbanes and the other members of the Banking Committee for including so much of the Levin-Grassley anti-money laundering bill, S. 1371, in the Committee's bill. I also thank Chairman Leahy and the other Judiciary Committee members for including anti-money laundering provisions in title 3 of S. 1510, the anti- terrorism bill. Strengthening our anti-money laundering laws will strike a blow against terrorism by making it harder for terrorists to get the funds they need into United States; an anti-terrorism bill without these anti-money laundering provisions would be providing U.S. law enforcement with only half a toolbox against terrorism. I would like to take a few minutes to discuss a few key provisions from the Levin-Grassley bill that have been incorporated into S. 1510. These provisions are based on an extensive record of hearings and reports issued in connection with investigations conducted over the past few years by the Permanent Subcommittee on Investigations, which I chair, into money laundering in the correspondent and private banking fields. The four provisions I want to focus on are provisions that would ban foreign shell banks from the U.S. financial system; require U.S. financial institutions to exercise due diligence; add foreign corruption offenses to the crimes that can trigger a U.S. money laundering prosecution; and close a major forfeiture loophole involving foreign banks. First is the shell bank ban in Section 313 of S. 1510. This provision is a very important one, because it attempts to eliminate from the U.S. financial system one category of foreign banks that carry the highest money laundering risks in the banking world today. Those are foreign offshore shell banks which, as defined in the bill, are banks that have no physical presence anywhere and no affiliation with any bank that has a physical presence. Our Subcommittee investigation found that these shell banks carry the highest money laundering risks in the banking world, because they are inherently unavailable for effective oversight. There is no office where a bank regulator or law enforcement official can go to observe bank operations, review documents, talk to bank officials, or freeze funds. Only a few countries now issue licenses for unaffiliated shall banks; they include Nauru, Vanuatu, and Montenegro. Nauru alone is believed to maintain licenses for somewhere between 400 and 3,000 offshore shell banks, none of which are being actively supervised, and some of which are suspected of laundering funds for Russian organized crime. A staff report that we issued in February of this year includes four detailed case histories of offshore shell banks that were able to open correspondent accounts at U.S. banks and used them to move funds related to drug trafficking, bribe money and financial fraud money. The possibility that terrorists are also using shell banks to conduct their operations is real and cannot be ignored. That is why this provision seeks to exclude shell banks from the U.S. financial system. The provision flat-out prohibits U.S. financial institutions from opening accounts for shell banks. Period. It also requires U.S. financial institutions to take reasonable steps to make sure that other foreign banks are not allowing shell banks to use their U.S. accounts to gain entry to the U.S. financial system. The point is to prevent shell banks from getting direct or indirect access to U.S. financial accounts. The shell bank ban applies to both banks and securities firms operating in the United States, so that it is as broad and as effective as possible. The provision directs the Treasury Secretary to provide regulatory guidance to U.S. financial institutions on the reasonable steps they have to take to guard against shell banks using accounts opened for other foreign banks. One possible approach would be for U.S. financial institutions to include a new section in the standard language they use to open accounts for foreign banks asking the foreign bank to certify that it will not allow any shell bank to use its U.S. accounts. The U.S. financial institution could then rely on that certification, unless it encountered evidence to the contrary indicating that a shell bank was actually using the account, in which case the financial institution would have to take reasonable steps to evaluate that evidence and determine whether a shell bank was, in fact, using the U.S. account. The provision contains one exception to the shell bank ban, which should be narrowly construed to protect the U.S. financial system to the greatest extent possible. This exception allows U.S. financial institutions to open an account for a shell bank that is both affiliated with another bank that maintains a physical presence, and subject to supervision by the banking regulatory of that affiliated bank. This exception is intended to allow U.S. financial institutions to do business with shell branches of large, established banks on the ground that the regulator of the established bank can and does oversee all of that bank's branches, including any shell branch. This exception could, of course, be abused. It is possible that an established bank in a jurisdiction with weak banking and anti-money laundering controls could open a shell branch in another country with equally weak controls and try to use that shell branch to launder funds in ways that are unlikely to be detected or stopped by the bank regulator in its home jurisdiction. In that case, while the shell bank ban exception would not flat-out bar U.S. financial institutions from opening an account for the shell branch, another provision would come into play and require the U.S. financial institution to exercise enhanced due diligence before opening an account for this shell bank. I would hope that U.S. financial institutions would not open such an account--that they would exercise common sense and restraint and refrain from doing business with a shell operation that is affiliated with a poorly regulated bank and inherently resistant to effective oversight. Many U.S. financial institutions already have a policy against doing business with shell banks, but at least one major U.S. bank, Citibank, has a history of taking on shell banks as clients. In order to keep those clients, Citibank tried very hard to expand the exception in this section to also allow U.S. accounts for shell banks affiliated with financial service companies other than banks, such as securities firms or financial holding companies. The broad exception was firmly and explicitly rejected by both the Senate Banking Committee and the House Financial Services Committee, because it would have opened a gaping loophole in the shell bank ban and rendered the ban largely ineffective. All a shell bank would have had to do to evade the ban was establish an affiliated shell corporation and call it a financial services company in order to be eligible to open a U.S. bank account. The Citibank approach would, for example, have allowed a shell bank established by bin Laden's financial holding company, Taba Investments, to open accounts at U.S. banks and securities firms. That would perpetuate the very problem that the Senate investigation identified in two of its shell bank case histories involving M.A. Bank and Federal Bank, each of which opened Citibank accounts in New York and used those accounts to deposit suspect funds associated with drug trafficking and bribery. The exception to the shell bank ban is intended to be narrowly construed, and U.S. financial institutions will hopefully use great restraint in doing business with any shell bank that is not affiliated with a well known, well regulated bank. The shell bank ban is intended to close the U.S. financial marketplace to the money laundering risks posed by these banks, and it is my hope that other countries and the Financial Action Task Force on Money Laundering will follow the U.S. lead and take the same action in other jurisdictions. The next provision is the due diligence requirement in Section 312 of S. 1510. This is another critical provision that tightens up U.S. anti- money laundering controls by requiring U.S. financial institutions to exercise due diligence when opening and managing correspondent and private banking accounts for foreign banks and wealthy foreign individuals. The provision targets correspondent and private banking accounts, because these two areas have been identified by U.S. bank regulators as high risk areas for money laundering, and because Congressional investigations have documented money laundering abuses through them. For example, two weeks ago, I testified before the Banking Committee about a high risk foreign bank in Sudan that was able to open accounts at major banks around the world, including in the United States and, in 1994, used these accounts to funnel money to a bin Laden operative then living in Texas. On one occasion, he used a $250,000 wire transfer from the Sudanese bank to buy an airplane capable of transporting Stinger missiles, fly it to Sudan and deliver the keys to bin Laden. Six months earlier, we released a staff report with ten case histories of high risk foreign banks that used their U.S. accounts to transfer illicit proceeds associated with drug trafficking, financial fraud and other crimes. A year earlier, another staff report presented four case histories of senior foreign government officials or their relatives opening U.S. private banking accounts and using them to deposit millions of dollars in suspect funds. The bottom line is that U.S. banks need to do a much better job in screening the foreign banks and wealthy foreign individuals they allow to open accounts in the United States. The due diligence provision would address that problem. It would impose an ongoing, industry-wide legal obligation on all types of financial institutions operating in the United States to exercise greater care when opening accounts for foreign banks and wealthy foreign individuals. Its due diligence requirements are intended to function as preventative measures to stop dubious banks and as well as terrorists or other criminals from using foreign banks' U.S. accounts to gain access to the U.S. financial system. The general obligation to exercise due diligence with respect to all correspondent and private banking accounts is contained in paragraph (1). Paragraphs (2) and (3) then provide minimum standards for the enhanced due diligence that U.S. banks must exercise with respect to certain correspondent and private banking accounts. Paragraph (4)(B) gives the Treasury Secretary discretionary authority to issue regulatory guidance to further clarify the due diligence policies, procedures and controls required by paragraph (1). The regulatory authority granted in this section is intended to help financial institutions understand what is expected of them. The Secretary may want to issue regulations that help different types of financial institutions to understand their obligations under the due diligence provision. However, one caveat needs to be made with respect to the Secretary's exercise of this regulatory authority, and that involves how it is to be coordinated with Section 5318(a)(6), which authorizes the Secretary to grant ``appropriate exemptions'' from any particular money laundering requirement. There are going to be many efforts made by various groups of financial institutions to win an exemption from the due diligence requirements in this section--from insurance companies, to money transmitters, to offshore affiliates of large foreign banks. But the Committee's and the Senate's clear intention is to cover all major financial institutions operating in the United States. That is why Chairman Sarbanes changed the language in my bill, S. 1371, so that the due diligence requirement did not apply just to banks, but to all financial institutions as that term is defined in Section 5312(a)(2) of title 31. That broad coverage is exactly what is contemplated by this statute. The bottom line, then, is that the Secretary is intended to apply the due diligence requirements broadly to U.S. financial institutions, and not to grant an exemption without a very compelling justification. This same reasoning also applies to the shell bank ban. There will be some that will seek one exemption or another from the ban, asking the Treasury Secretary to use the authority available under Section 5318(a)(6). Again, the intent of the Committee and this Senate is to enact as comprehensive a shell bank ban as possible to protect the United States from the money laundering threat posed by shell banks. That means that the Secretary should refrain from granting any exemption to the shell bank ban without a very compelling justification. The third provision I want to discuss is the provision in Section 315 adding new foreign corruption offenses to the list of crimes that can trigger a U.S. money laundering prosecution. This is another important advance in U.S. anti-money laundering law. Right now, because foreign corruption offenses are not currently on the list of crimes that can trigger a U.S. money laundering prosecution, corrupt foreign leaders may be targeting U.S. financial institutions as a safe haven for their funds. This provision will make it clear to those who loot their countries, or accept bribes, or steal from their people, that their illicit money is not welcome here. Our banks do not want that money, and if it is deposited in U.S. banks, it is subject to seizure and the depositor may become subject to a money laundering prosecution. The fourth provision would close a major forfeiture loophole in U.S. law involving foreign banks. This provision is in Section 319(a) of S. 1510. It would make a depositor's funds in a foreign bank's U.S. correspondent account subject to the same civil forfeiture rules that apply to depositors funds in other U.S. bank accounts. Right now, due to a quirk in the law, U.S. law enforcement faces a significant and unusual legal barrier to seizing funds from a correspondent account. Unlike a regular U.S. bank account, it is not enough for U.S. law enforcement to show that criminal proceeds were deposited into the correspondent account; instead, because funds in a correspondent account are considered to be the funds of the foreign bank itself, the government must also show that the foreign bank was somehow part of the wrongdoing. That's not only a tough job, that can be an impossible job. In many cases, the foreign bank will not have been part of the wrongdoing, but that's a strange reason for letting the foreign depositor who was engaged in a wrongdoing escape forfeiture. And in those cases where the foreign bank may have been involved, no prosecutor will be able to allege it in a complaint without first getting the resources needed to chase the foreign bank abroad. Take, for example, the case of Barclays Bank which has frozen an account because of suspicious activity suggesting it may be associated with terrorism. If that account had been a correspondent account in the United States opened for Barclays Bank, U.S. law enforcement could have been unable to freeze the particular deposits suspected of being associated with terrorism, because the funds were in the Barclays correspondent account and Barclays itself was apparently unaware of any wrongdoing. That doesn't make sense. U.S. law enforcement should be able to freeze the funds. Section 319(a) would eliminate that quirk by placing civil forfeitures of funds in correspondent accounts on the same footing as forfeitures of funds in all other U.S. accounts. There is just no reason foreign banks should be shielded from forfeitures when U.S. banks would not be. Section 319 has many other important provisions as well, including provisions dealing with Federal Receivers, legal service on foreign banks and more. I want to again thank Senator Sarbanes and Senator Leahy and their staffs for their hard work and cooperative spirit in bringing this bill to the floor and including the provisions of our bill in it. I need to add that the hard work in passing this bill will be for naught if some of the banks have their way in the House and in Conference Committee. I'm very concerned with reports that there is an effort in the House to separate the money laundering and anti-terrorism bills, so money laundering will be considered separately. The banks should be working with us to figure out even more ways in which the money flow of terrorists can be shut down. Madam President, I ask unanimous consent to print letters of support for this legislation and testimony from the FBI in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, long-range fifty caliber sniper weapons are among the most powerful firearms legally available. According to a rifle catalogue cited in a 1999 report by minority staff on the House Government Reform committee, one manufacturer touted his product's ability to ``wreck several million dollars' worth of jet aircraft with one or two dollars' worth of cartridge.'' Some fifty caliber ammunition is even capable of piercing several inches of metal or exploding on impact. These weapons are not only powerful, but they're accurate. According to the Government Reform staff report, the most common fifty caliber weapon can accurately hit targets a mile away and can inflict damage to targets more than four miles away. Despite these facts, long-range fifty caliber weapons are less regulated than handguns. Buyers must simply be 18 years old and submit to a Federal background check. In addition, there is no Federal minimum age for possessing a fifty caliber weapon and no regulation on second- hand sales. Given the facts on fifty caliber weapons, I'm pleased that Senator Feinstein has introduced a bill, which I have cosponsored, that would change the way they're regulated. Senator Feinstein's bill would ensure that fifty caliber weapons could only be legally purchased though licensed dealers. Her bill would also ensure that they could not be purchased second-hand. Buyers would have to fill out license transfer applications with the ATF, supply fingerprints and submit to a detailed FBI criminal background check. By any measure Senator Feinstein's bill makes sense and I urge my colleagues to join me in cosponsoring the bill.

Mr. LEVIN

Mr. LEVIN. Mr. President, The bilateral trade agreement that the United States signed with Vietnam in July 2000 represents a milestone in U.S. relations with Vietnam. Building a foundation for a strong commercial relationship with Vietnam is not only in our economic interest, but it is in our security interest and our diplomatic interest. Vietnam has made comprehensive commitments, which will help open up Vietnam's market for products produced by U.S. workers, businesses and farmers. These commitments will not only help pave the way for changes in the Vietnamese economy, but in Vietnamese society as a whole. While the U.S.-Vietnam bilateral trade agreement is an important step forward in our diplomatic and commercial relationship, I am disappointed that the agreement does not address Vietnam's poor record of enforcing internationally-recognized core labor standards. The Government of Vietnam continues to deny its citizens the right of association, allows forced labor, and inadequately enforces its child labor and worker safety laws. Vietnam's poor labor conditions led President Clinton to sign a Memorandum of Understanding, MOU, with Vietnam in December 2000. This MOU, pledging U.S. technical assistance for Vietnam to improve its labor market conditions, is a start, but it does not require Vietnam to take specific steps to improve enforcement of existing laws and regulations. More is needed. I join my colleagues who have been urging the Administration to commit to enter into a textiles and apparel agreement with Vietnam that would include positive incentives for Vietnam to improve its labor conditions, similar to the agreement the U.S. has in place with Cambodia. Such an agreement is important to maintain a consistent U.S. trade policy that recognizes the competitive impact of labor market conditions. Additionally, if the United States fails to enter into a textile and apparel agreement with Vietnam similar to the agreement with Cambodia, the agreement with Cambodia may be undermined if businesses move production to Vietnam at the expense of Cambodia. The vote today inaugurates an annual review of whether the United States should extend normal trade relations, NTR, to Vietnam. As Congress undertakes these annual NTR reviews for Vietnam, we will closely monitor progress in reaching a textiles and apparel agreement, and Vietnam's respect for core labor rights.

Mr. LEVIN

Mr. LEVIN. I appreciate the Senator from Georgia, Mr. Cleland, bringing this issue to my attention. I also appreciate the fact that the Senators from Georgia, Maine, and Arkansas have sought a colloquy on this issue to avoid offering an amendment to the National Defense Authorization Act for Fiscal Year 2002 and thereby slowing its passage in this time of crisis. The current law requires the Department of Defense to ensure that its sales of excess materials from the National Defense Stockpile do not adversely affect the markets for those materials. It is especially important in our current economic situation that the Department not take actions that would harm the private sector. I fully expect that the Department will comply with the law and act prudently in this regard.

Mr. LEVIN

Mr. LEVIN. To the members of our committee, including the Presiding Officer who served so well to bring this bill to the floor; to Dave Lyles and our staff on this side of the aisle; Les Brownlee and his staff, but most important perhaps of all Senator Warner for, as always, his extraordinary efforts to produce a bill in a bipartisan fashion, I am truly indebted. More importantly, the Nation has been advantaged by his service, and I am very grateful personally to him for all of his efforts.

Mr. LEVIN. Mr. President, I ask unanimous consent that S. 1438, as passed the Senate, be printed as a Senate document.

Mr. LEVIN

Mr. LEVIN. I suggest the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. Mr. President, I want to commend the services of three midwesterners who are ending their terms on the Northeast-Midwest Institute's Board of Directors. Dean Dort, Charles Orlebeke, and David Williams have provided stable leadership, offered a wealth of ideas, and advanced the Institute's credibility. Dean Dort is vice president of international affairs for Deere & Company, which is headquartered in Moline, IL. He has been a criminal trial lawyer, a Federal Criminal Court Judge, the representative of the Secretary of the Army to the United States Congress, and Washington counsel for Deere & Company. Charles Orlebeke is a professor of urban planning and public affairs at the University of Illinois at Chicago. He previously served as executive assistant to Michigan Governor George Romney, founding dean of the urban planning and policy program at the University of Illinois at Chicago, and assistant under secretary and assistant secretary for policy development at the U.S. Department of Housing and Urban Development. David Williams is vice president of Earth Tech, an engineering firm based in Chicago. He has served as commissioner of public works for the City of Chicago; a member of the Illinois Public Utilities Commission; and city manager of Inkster, Michigan. The Northeast-Midwest Institute provides policy research for the bipartisan Northeast-Midwest Senate Coalition and its Great Lakes Task Force, which I co-chair with Senator Mike DeWine of Ohio. I again want to commend Dean Dort, Charles Orlebeke, and David Williams for their service on the board of the Northeast-Midwest Institute. They have provided valued counsel and helped increase that organization's reputation and effectiveness.