- Not enactedThe President has not signed this bill
- The senate has not voted
Committee on Banking, Housing, and Urban Affairs
- senate Committees
- The house has not voted
Committee on Financial ServicesIntroducedFebruary 7th, 2019
- house Committees
What is House Bill H.R. 1037?
Cost of House Bill H.R. 1037
In-Depth: Rep. Denver Riggleman (R-VA) reintroduced this bill from the 115th Congress as part of a package of four bills to address the issues of money laundering and criminal financing of terrorism. When he introduced these bills, Rep. Riggleman said:
“It is important for me to hit the ground running and start working on legislation that can attack some of the very real problems of terrorist financing and criminal money laundering. These four bills are serious measures designed to remedy real issues in our financial system and make an immediate impact.”
Last Congress, Rep. Mia Love (R-UT) introduced this bill as the Banking Transparency for Sanctioned Persons Act of 2018 (H.R. 6751). At that time, Rep. Love explained that even though U.S. banks are prohibited from doing business with a sanctioned person, banks in other countries can do business with them without penalty. Thus, she introduced this bill to put foreign banks on alert that Congress will be watching their dealings with human rights abusers and corrupt officials. Rep. Love said:
“Sharing this kind of information with Congress should be automatic, as licenses represent exemptions to our sanctions programs. Congressional oversight of sanctions is limited without visibility into the transactions Treasury is authorizing.”
This bill doesn’t have any cosponsors in the 116th Congress. Last Congress, this bill was sponsored by Rep. Mia Love (R-UT) without any cosponsors and passed the House by voice vote but didn’t receive a Senate committee vote.
Of Note: After 9/11, the U.S. and its allies launched an all-out effort to disrupt the international financial infrastructure supporting terrorists and international criminals. This campaign focused on international banks, which are the gateways of the global financial system, and relied on a handful of new authorities granted to U.S. agents in the days after 9/11. Those new authorities, signed into law by President George W. Bush, included giving Treasury Dept. officials far-reaching authority to freeze the assets and financial transactions of individuals and other entities suspected of supporting terrorism (E.O. 13224) and giving the Treasury Dept. broad powers to designate foreign jurisdictions and financial institutions as ‘primary money laundering concerns’ (under Section 311 of the PATRIOT Act).
Experts say these measures fundamentally reshaped the financial regulatory environment, sharply raising the risks for banks and other institutions engaged in suspicious activity, even unwittingly. This is due to the fact that penalties for sanctions violations can be huge in terms of fines, lost business, and reputational damage. Since 2009, U.S. federal and state authorities have been particularly rigorous in prosecuting banks, setting at least fifteen cases with fines over $100 million.
In a record settlement in 2014, France’s largest lender, BNP Paribas, pled guilty to processing billions of dollars for blacklisted Cuban, Iranian, and Sudanese entities and was fined nearly $9 billion (by far the largest such penalty in history) and lost the right to convert foreign currency into dollars for certain types of transactions for one year. In another case, in September 2005, Treasury officials labeled Banco Delta Asia a primary money laundering concern, alleging that the Macau-based bank was a “willing pawn for the North Korean government.” Within a week of Treasury’s allegation, Banco Delta Asia customers withdrew $133 million, representing 34% of the bank’s deposits, and other international banks severed ties with Pyongyang.
In recent years, the reach of U.S. sanctions has drawn criticism from some allies. French leadership criticized the U.S. prosecution of BNP Paribas as “unfair” and indicated there’d be “negative consequences” on bilateral, as well as U.S.-E.U., relations. At the time, French Finance Minister Michel Sapin said, “The extraterritoriality of American standards, linked to the use of the dollar, should drive Europe to mobilize itself to advance the use of the euro as a currency for international trade.”
- Sponsoring Rep. Denver Riggleman (R-VA) Press Release
- CBO Cost Estimate (115th Congress)
- Financial Regulation News (Coverage, 115th Congress)
- Council on Foreign Relations (CFR) Backgrounder (Context)
Summary by Lorelei Yang
(Photo Credit: iStockphoto.com / pfongabe33)