S-307 104th CONGRESS 1st Session To require the Secretary of the Treasury to design and issue new counterfeit-resistant $100 currency. IN THE SENATE OF THE UNITED STATES January 31 (legislative day, January 30), 1995 Mr. Leahy introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require the Secretary of the Treasury to design and issue new counterfeit-resistant $100 currency. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the `Counterfeiting and Money Laundering Deterrence Act of 1995'. SEC. 2. FINDINGS AND PURPOSES. (a) Findings: The Congress finds that-- (1) advances in technology have made United States currency particularly susceptible to counterfeiting; (2) international organizations hostile to the United States have produced counterfeits of the United States $100 bill that are extremely difficult to detect; (3) the ability to counterfeit currency allows terrorist organizations or other organizations hostile to the United States to undermine the stability of the United States currency; (4) the ability to counterfeit currency provides terrorist organizations or other organizations hostile to the United States a ready source of negotiable foreign currency with which such organizations can fund activities opposed to the interests of the United States; (5) as shown by counterfeit-resistant currencies of other countries, current technologies exist to make a $100 denomination currency that is substantially more difficult to counterfeit, without being unduly expensive to produce; (6) implementing a new, counterfeit-resistant currency would substantially impair terrorist organizations or other organizations hostile to the United States in efforts to undermine the stability of the United States currency and would eliminate a source of negotiable foreign currency with which such organizations could fund activities opposed to the interests of the United States; (7) an essential aspect of the business of international drug trafficking is the ability to launder large sums of hard currency quickly and inexpensively; (8) without the ability to convert large sums of hard currency with near impunity into readily transferable accounts in financial institutions, international drug traffickers would be severely impeded in their operations; and (9) forcing international narcotics traffickers to exchange all of their hard currency held in United States $100 bills within a specified period of time for a new, counterfeit-resistant currency would significantly increase the cost of money laundering to drug cartels, thereby reducing their profits. (b) Purposes: The purposes of this Act are-- (1) to provide for new, counterfeit-resistant $100 currencies for use in the United States and abroad to prevent counterfeiting by terrorist and other hostile organizations; and (2) to issue the new currency in a manner that deters money laundering efforts of narcotics traffickers. SEC. 3. COUNTERFEIT-RESISTANT $100 DENOMINATION CURRENCY. (a) In General: Subchapter II of chapter 51 of title 31, United States Code, is amended by adding at the end the following new section: `Sec. 5123. Counterfeit-resistant $100 currency `(a) In General: Not later than 6 months after the date of enactment of this section, the Secretary of the Treasury (hereafter in this section referred to as the `Secretary'), in consultation with the Attorney General of the United States and the Administrator of the Drug Enforcement Administration, shall design and designate a domestic use $100 denomination bill and a nondomestic use $100 denomination bill in accordance with the requirements of this section. `(b) Design Specifications: `(1) In general: The designs for the domestic use and nondomestic use $100 currency shall incorporate-- `(A) watermarks, holograms, multicolored patterns, multicolored dyes, or other features to make the currency substantially more difficult to counterfeit than $100 denomination United States currency in circulation on the date of enactment of this section; `(B) substantially different coloration or markings to make the new currency clearly and readily distinguishable on casual observance from previously issued $100 denomination United States currency; and `(C) distinctive coloration such that the domestic use $100 currency is clearly and readily distinguishable on casual observance from the nondomestic use $100 currency. `(2) Domestic use design: The domestic use $100 currency shall state on its face, `This note is legal tender for all debts, public and private, when presented in the United S tates. This note shall not constitute legal tender for any debts, public or private, when presented outside of the United States.'. `(3) Nondomestic use design: The nondomestic use $100 currency shall state on its face, `This note is legal tender for all debts, public and private, when presented outside of the United States.'. `(4) Design considerations: In determining design features for $100 denomination domestic use and nondomestic use currency in accordance with this section, the Secretary shall consider-- `(A) the relative efficacy of particular design features in making a currency resistant to counterfeiting; and `(B) the costs of producing bills incorporating such features. `(c) Currency Exchange: `(1) Plan: Not later than 12 months after the date of enactment of this section, the Secretary shall develop and begin implementation of a plan to require the exchange of all existing $100 denomination United States currency held within and outside of the United States for $100 denomination domestic use and nondomestic use United States currency issued in accordance with this section. `(2) Exchange requirements: The plan established under paragraph (1) shall require the currency to be exchanged-- `(A) at financial institutions regulated under United States law and subject to United States currency transaction reporting and other money laundering deterrence requirements; or `(B) at financial institutions that the Secretary finds, because of treaty obligations, other provisions of law, or other agreements, are required to report significant transactions in United States currency to the United States Treasury, and abide by such obligations. `(3) 6-month exchange period: `(A) In general: During the period beginning on the date that is 12 months after the date of enactment of this section and ending on the date that is 18 months after that date of enactment, the Secretary shall permit the exchange of circulating $100 denomination United States currency for equal numbers of the domestic use and nondomestic use $100 currency issued in accordance with this section at institutions described in paragraph (2). `(B) Non-negotiability: Except for claims pursuant to subsection (e), beginning on the date that is 18 months after the date of enactment of this section, the United States Treasury shall not recognize $100 denomination United States currency issued prior to the date that is 12 months after the date of enactment of this section as constituting a negotiable claim against the United States Treasury, and such currency shall not constitute legal tender for any debts, public or private. `(d) Domestic Use and Nondomestic Use Currency: Beginning on the date that is 18 months after the date of enactment of this section-- `(1) domestic use currency issued in accordance with this section shall be recognized as constituting a negotiable claim against the United States Treasury only when presented within the United States, and shall constitute legal tender for any debts, public or private, only when presented in the United States, but such currency may be exchanged for equal values of $100 denomination nondomestic use currency (or other United States currency) only at financial institutions regulated by United States law and subject to United States currency transaction reporting and other money laundering deterrence requirements; and `(2) nondomestic use currency shall be recognized as constituting a negotiable claim against the United States Treasury, and legal tender for any debts, public or private, only when presented outside of the United States, but such currency may be exchanged for equal values of $100 denomination domestic use currency (or other United States currency) at financial institutions regulated by United States law and subject to United States currency transaction reporting and other money laundering deterrence requirements. `(e) Later Exchange Criteria: United States currency in the $100 denomination issued prior to the date that is 12 months after the date of enactment of this section may be exchanged later than 18 months after that date of enactment for either domestic use or nondomestic use $100 denomination United States currency (or other United States currency) only if the Secretary finds, based on substantial evidence, that the $100 denomination United States currency to be exchanged is not the proceeds of unlawful activity, and, if the amount of such currency to be exchanged totals more than $10,000, good cause existed for not exchanging it during the exchange period specified in subsection (c)(3). `(f) Financing: The Secretary, in coordination with the Attorney General of the United States and the Administrator of the Drug Enforcement Administration, shall analyze the exchange of currency under this section and determine the amount of existing $100 denomination United States currency in circulation that is not exchanged for new domestic use or nondomestic use currency. Credit resulting from extinguished claims against the United States Treasury for amounts that are not exchanged within the specified exchange period shall be used to fund the requirements of this section. Any additional credit shall be deposited into the general obligation fund of the United States Treasury. `(g) Regulations: The Secretary may promulgate such regulations as may be necessary to implement this section.'. (b) Conforming Amendment: The chapter analysis for chapter 51, title 31, United States Code, is amended by inserting after the item relating to section 5122, the following new item: `5123. Counterfeit-resistant $100 currency.'. SEC. 4. NOTICE OF CURRENCY EXCHANGE PERIOD. Not later than 6 months after the date of enactment of this Act, the Secretary of the Treasury shall develop and begin implementation of a plan for providing notice of the currency exchange requirements established in accordance with the amendment made by this Act to domestic and foreign governments, financial institutions, and other affected persons.