Washington, DC -- Senator Paul S. Sarbanes (D-MD), the Chairman of the Senate Banking, Housing and Urban Affairs Committee, hailed today's 21-0 Committee approval of the "International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001," legislation he authored as Chairman of the Committee.

"Terrorist attacks require major investments of time, planning, training, and practice - and the financial resources to pay the bills," said Sarbanes. "Terrorism is not a penny-ante proposition, and money laundering is the transmission belt that gives terrorists the means to carry out their campaigns."

"Money laundering is essentially a series of mechanisms that both exploit and subvert our financials institutions. Drug traffickers use these mechanisms; corrupt officials moving money from national treasuries to their private accounts; and terrorists use them. The flexible, targeted, limited authority the Act gives the Treasury is aimed directly at the money trails terrorists use. Passage of this legislation is long overdue and I applaud the hard work of the Committee in working out our differences to move this bill by a unanimous vote. It is my understanding that the bill will be included in the anti-terrorism legislation now moving to the Senate floor," Sarbanes concluded.

Specific provisions contained in the bill include:

-- The bill gives the Secretary of the Treasury authority to require special record keeping and reporting measures - to eliminate the curtains behind which launderers hide. The bill will give the Secretary - in consultation with other senior government officials and the Congress - the authority to designate a foreign jurisdiction, foreign financial institution, or class of international transactions as being of "primary money laundering concern." Then, the Secretary of the Treasury will be able to use these special measures, on a case-by-case basis, to deal more effectively with the money laundering that terrorists and other criminals employ.

-- The bill specifies the considerations the Secretary must take into account in making any determination, creating a well-marked record for review. The bill also contains provisions to supplement the Administrative Procedure Act to assure that any remedies - except short-term measures - are subject to full comment and collaboration with industry.

-- As a result of these steps, the Treasury Secretary will be better able to stop money from surreptitiously entering the US financial system. This, in turn, will increase the pressure on jurisdictions that have traditionally turned a blind eye to money laundering, to conform their laws to international standards. The passage of this legislation will make it much more difficult for international terrorist organizations to bring laundered money into the United States.

-- The bill also bars foreign banks that are pure shell banks from our banking system. The bill requires any foreign bank that uses US correspondent bank facilities to appoint an agent for service of process in the US, to assure that law enforcement officials can obtain records.

-- The bill allows the Treasury Secretary to issue specially crafted rules for private and correspondent banking relationships with problematic jurisdictions and foreign banks, while recognizing that correspondent and private banking are essential to normal banking operations.

-- The bill requires the Treasury, the Federal Reserve, and the SEC to jointly formulate a rule requiring broker-dealers to report on money laundering transactions - so that not only banks are subject to the rule.

-- Finally, the Act deals with the problem of cash smuggling - putting in a fix long sought both by members of Congress and the Department of Justice. And it makes clear that the proceeds of foreign government theft - such as, corruption in Russia, Indonesia, or anywhere else - cannot be safely hidden in US banks.

Sarbanes concluded by saying that "these tightly linked objectives are critical national objectives."

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