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[CITE: 31USC5318]

 
                       TITLE 31--MONEY AND FINANCE
 
                           SUBTITLE IV--MONEY
 
                    CHAPTER 53--MONETARY TRANSACTIONS
 
 SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
 
Sec. 5318. Compliance, exemptions, and summons authority

    (a) General Powers of Secretary.--The Secretary of the Treasury may 
(except under section 5315 of this title and regulations prescribed 
under section 5315)--
        (1) except as provided in subsection (b)(2), delegate duties and 
    powers under this subchapter to an appropriate supervising agency 
    and the United States Postal Service;
        (2) require a class of domestic financial institutions to 
    maintain appropriate procedures to ensure compliance with this 
    subchapter and regulations prescribed under this subchapter or to 
    guard against money laundering;
        (3) examine any books, papers, records, or other data of 
    domestic financial institutions relevant to the recordkeeping or 
    reporting requirements of this subchapter;
        (4) summon a financial institution, an officer or employee of a 
    financial institution (including a former officer or employee), or 
    any person having possession, custody, or care of the reports and 
    records required under this subchapter, to appear before the 
    Secretary of the Treasury or his delegate at a time and place named 
    in the summons and to produce such books, papers, records, or other 
    data, and to give testimony, under oath, as may be relevant or 
    material to an investigation described in subsection (b);
        (5) exempt from the requirements of this subchapter any class of 
    transactions within any State if the Secretary determines that--
            (A) under the laws of such State, that class of transactions 
        is subject to requirements substantially similar to those 
        imposed under this subchapter; and
            (B) there is adequate provision for the enforcement of such 
        requirements; and

        (6) prescribe an appropriate exemption from a requirement under 
    this subchapter and regulations prescribed under this subchapter. 
    The Secretary may revoke an exemption under this paragraph or 
    paragraph (5) by actually or constructively notifying the parties 
    affected. A revocation is effective during judicial review.

    (b) Limitations on Summons Power.--
        (1) Scope of power.--The Secretary of the Treasury may take any 
    action described in paragraph (3) or (4) of subsection (a) only in 
    connection with investigations for the purpose of civil enforcement 
    of violations of this subchapter, section 21 of the Federal Deposit 
    Insurance Act, section 411 \1\ of the National Housing Act, or 
    chapter 2 of Public Law 91-508 (12 U.S.C. 1951 et seq.) or any 
    regulation under any such provision.
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    \1\ See References in Text note below.
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        (2) Authority to issue.--A summons may be issued under 
    subsection (a)(4) only by, or with the approval of, the Secretary of 
    the Treasury or a supervisory level delegate of the Secretary of the 
    Treasury.

    (c) Administrative Aspects of Summons.--
        (1) Production at designated site.--A summons issued pursuant to 
    this section may require that books, papers, records, or other data 
    stored or maintained at any place be produced at any designated 
    location in any State or in any territory or other place subject to 
    the jurisdiction of the United States not more than 500 miles 
    distant from any place where the financial institution operates or 
    conducts business in the United States.
        (2) Fees and travel expenses.--Persons summoned under this 
    section shall be paid the same fees and mileage for travel in the 
    United States that are paid witnesses in the courts of the United 
    States.
        (3) No liability for expenses.--The United States shall not be 
    liable for any expense, other than an expense described in paragraph 
    (2), incurred in connection with the production of books, papers, 
    records, or other data under this section.

    (d) Service of Summons.--Service of a summons issued under this 
section may be by registered mail or in such other manner calculated to 
give actual notice as the Secretary may prescribe by regulation.
    (e) Contumacy or Refusal.--
        (1) Referral to attorney general.--In case of contumacy by a 
    person issued a summons under paragraph (3) or (4) of subsection (a) 
    or a refusal by such person to obey such summons, the Secretary of 
    the Treasury shall refer the matter to the Attorney General.
        (2) Jurisdiction of court.--The Attorney General may invoke the 
    aid of any court of the United States within the jurisdiction of 
    which--
            (A) the investigation which gave rise to the summons is 
        being or has been carried on;
            (B) the person summoned is an inhabitant; or
            (C) the person summoned carries on business or may be found,

    to compel compliance with the summons.
        (3) Court order.--The court may issue an order requiring the 
    person summoned to appear before the Secretary or his delegate to 
    produce books, papers, records, and other data, to give testimony as 
    may be necessary to explain how such material was compiled and 
    maintained, and to pay the costs of the proceeding.
        (4) Failure to comply with order.--Any failure to obey the order 
    of the court may be punished by the court as a contempt thereof.
        (5) Service of process.--All process in any case under this 
    subsection may be served in any judicial district in which such 
    person may be found.

    (f) Written and Signed Statement Required.--No person shall qualify 
for an exemption under subsection (a)(5) \2\ unless the relevant 
financial institution prepares and maintains a statement which--
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    \2\ See References in Text note below.
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        (1) describes in detail the reasons why such person is qualified 
    for such exemption; and
        (2) contains the signature of such person.
    (g) Reporting of Suspicious Transactions.--
        (1) In general.--The Secretary may require any financial 
    institution, and any director, officer, employee, or agent of any 
    financial institution, to report any suspicious transaction relevant 
    to a possible violation of law or regulation.
        (2) Notification prohibited.--A financial institution, and a 
    director, officer, employee, or agent of any financial institution, 
    who voluntarily reports a suspicious transaction, or that reports a 
    suspicious transaction pursuant to this section or any other 
    authority, may not notify any person involved in the transaction 
    that the transaction has been reported.
        (3) Liability for disclosures.--Any financial institution that 
    makes a disclosure of any possible violation of law or regulation or 
    a disclosure pursuant to this subsection or any other authority, and 
    any director, officer, employee, or agent of such institution, shall 
    not be liable to any person under any law or regulation of the 
    United States or any constitution, law, or regulation of any State 
    or political subdivision thereof, for such disclosure or for any 
    failure to notify the person involved in the transaction or any 
    other person of such disclosure.
        (4) Single designee for reporting suspicious transactions.--
            (A) In general.--In requiring reports under paragraph (1) of 
        suspicious transactions, the Secretary of the Treasury shall 
        designate, to the extent practicable and appropriate, a single 
        officer or agency of the United States to whom such reports 
        shall be made.
            (B) Duty of designee.--The officer or agency of the United 
        States designated by the Secretary of the Treasury pursuant to 
        subparagraph (A) shall refer any report of a suspicious 
        transaction to any appropriate law enforcement or supervisory 
        agency.
            (C) Coordination with other reporting requirements.--
        Subparagraph (A) shall not be construed as precluding any 
        supervisory agency for any financial institution from requiring 
        the financial institution to submit any information or report to 
        the agency or another agency pursuant to any other applicable 
        provision of law.

    (h) Anti-Money Laundering Programs.--
        (1) In general.--In order to guard against money laundering 
    through financial institutions, the Secretary may require financial 
    institutions to carry out anti-money laundering programs, including 
    at a minimum \3\
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    \3\ So in original. Probably should be followed by a dash.
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            (A) the development of internal policies, procedures, and 
        controls,
            (B) the designation of a compliance officer,
            (C) an ongoing employee training program, and
            (D) an independent audit function to test programs.

        (2) Regulations.--The Secretary may prescribe minimum standards 
    for programs established under paragraph (1).

(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 999; Pub. L. 99-570, title I, 
Sec. 1356(a), (b), (c)(2), Oct. 27, 1986, 100 Stat. 3207-23, 3207-24; 
Pub. L. 100-690, title VI, Secs. 6185(e), 6469(c), Nov. 18, 1988, 102 
Stat. 4357, 4377; Pub. L. 102-550, title XV, Secs. 1504(d)(1), 1513, 
1517(b), Oct. 28, 1992, 106 Stat. 4055, 4058, 4059; Pub. L. 103-322, 
title XXXIII, Sec. 330017(b)(1), Sept. 13, 1994, 108 Stat. 2149; Pub. L. 
103-325, title IV, Secs. 403(a), 410, 413(b)(1), Sept. 23, 1994, 108 
Stat. 2245, 2252, 2254.)

                                          Historical and Revision Notes
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---------------------------------
           Revised Section                   Source (U.S. Code)                
Source (Statutes at Large)
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---------------------------------
5318.................................  31:1054(a), (b)(1st sentence).  Oct. 26,
 1970, Pub. L. 91-508, Secs.
                                                                        205(a),
 (b)(1st sentence), 206, 84 Stat.
                                                                        1120.
                                       31:1055.
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---------------------------------

    In the section, before clause (1), the words ``have the 
responsibility to assure compliance with the requirements of this 
chapter'' in 31:1054(a) are omitted as unnecessary because of section 
321 of the revised title. The words ``(except under section 5315 of this 
title and regulations prescribed under section 5315)'' are added because 
31:1141-1143 was not enacted as a part of the Currency and Foreign 
Transactions Reporting Act that is restated in this subchapter. In 
clause (1), the words ``duties and powers'' are substituted for 
``responsibilities'' for consistency in the revised title and with other 
titles of the United States Code. The words ``bank supervisory agency, 
or other'' are omitted as surplus. In clause (2), the words ``by 
regulation'' and ``as he may deem'' are omitted as surplus. The words 
``and regulations prescribed under this subchapter'' are added because 
of the restatement. In clause (3), the word ``prescribe'' is substituted 
for ``make'' in 31:1055 for consistency in the revised title and with 
other titles of the Code. The words ``otherwise imposed'', 31:1055(1st 
sentence), and the words ``in his discretion'' are omitted as surplus.

                       References in Text

    Section 21 of the Federal Deposit Insurance Act, referred to in 
subsec. (b)(1), is classified to section 1829b of Title 12, Banks and 
Banking.
    Section 411 of the National Housing Act, referred to in subsec. 
(b)(1), which was classified to section 1730d of Title 12, was repealed 
by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103 Stat. 363.
    Chapter 2 of Public Law 91-508 (12 U.S.C. 1951 et seq.), referred to 
in subsec. (b)(1), probably means chapter 2 (Secs. 121 to 129) of title 
I of Pub. L. 91-508, Oct. 26, 1970, 84 Stat. 1116, which is classified 
generally to chapter 21 (Sec. 1951 et seq.) of Title 12. For complete 
classification of chapter 2 to the Code, see Tables.
    Subsection (a)(5), referred to in subsec. (f), was redesignated 
subsection (a)(6) by section 410(a)(2) of Pub. L. 103-325.


                               Amendments

    1994--Subsec. (a)(5). Pub. L. 103-325, Sec. 410(a), added par. (5). 
Former par. (5) redesignated (6).
    Subsec. (a)(6). Pub. L. 103-325, Sec. 410(b), inserted ``under this 
paragraph or paragraph (5)'' after ``revoke an exemption'' in 
penultimate sentence.
    Pub. L. 103-325, Sec. 410(a)(2), redesignated par. (5) as (6).
    Subsec. (g). Pub. L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-
325, Sec. 413(b)(1), amended directory language of Pub. L. 102-550, 
Sec. 1517(b), identically. See 1992 Amendment note below.
    Subsec. (g)(4). Pub. L. 103-325, Sec. 403(a), added par. (4).
    Subsec. (h). Pub. L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-
325, Sec. 413(b)(1), amended directory language of Pub. L. 102-550, 
Sec. 1517(b), identically. See 1992 Amendment note below.
    1992--Subsec. (a)(1). Pub. L. 102-550, Sec. 1504(d)(1), substituted 
``supervising agency and the United States Postal Service'' for 
``supervising agency or the Postal Inspection Service and the Postal 
Service''.
    Subsec. (a)(2). Pub. L. 102-550, Sec. 1513, inserted before 
semicolon ``or to guard against money laundering''.
    Subsecs. (g), (h). Pub. L. 102-550, Sec. 1517(b), as amended by Pub. 
L. 103-322, Sec. 330017(b)(1), and Pub. L. 103-325, Sec. 413(b)(1), 
added subsecs. (g) and (h).
    1988--Subsec. (a)(1). Pub. L. 100-690, Sec. 6469(c), inserted ``or 
the Postal Inspection Service'' after ``appropriate supervising 
agency''.
    Pub. L. 100-690, Sec. 6185(e), inserted ``and the Postal Service'' 
after ``appropriate supervising agency''.
    1986--Pub. L. 99-570, Sec. 1356(c)(2), substituted ``Compliance, 
exemptions, and summons authority'' for ``Compliance and exemptions'' in 
section catchline.
    Subsec. (a). Pub. L. 99-570, Sec. 1356(a)(1)-(5), designated 
existing provisions as subsec. (a), added subsec. heading, inserted 
``except as provided in subsection (b)(2),'' in par. (1), added pars. 
(3) and (4), and redesignated former par. (3) as (5).
    Subsecs. (b) to (e). Pub. L. 99-570, Sec. 1356(a)(6), added subsecs. 
(b) to (e).
    Subsec. (f). Pub. L. 99-570, Sec. 1356(b), added subsec. (f).


                    Effective Date of 1994 Amendment

    Section 330017(b)(1) of Pub. L. 103-322 and section 413(b)(1) of 
Pub. L. 103-325 provided that the identical amendments made by those 
sections are effective Oct. 28, 1992.


                                 Reports

    Section 403(b) of Pub. L. 103-325 provided that:
    ``(1) Reports required.--The Secretary of the Treasury shall submit 
an annual report to the Congress at the times required under paragraph 
(2) on the number of suspicious transactions reported to the officer or 
agency designated under section 5318(g)(4)(A) of title 31, United States 
Code, during the period covered by the report and the disposition of 
such reports.
    ``(2) Time for submitting reports.--The 1st report required under 
paragraph (1) shall be filed before the end of the 1-year period 
beginning on the date of enactment of the Money Laundering Suppression 
Act of 1994 [Sept. 23, 1994] and each subsequent report shall be filed 
within 90 days after the end of each of the 5 calendar years which begin 
after such date of enactment.''


              Designation Required To Be Made Expeditiously

    Section 403(c) of Pub. L. 103-325 provided that: ``The initial 
designation of an officer or agency of the United States pursuant to the 
amendment made by subsection (a) [amending this section] shall be made 
before the end of the 180-day period beginning on the date of enactment 
of this Act [Sept. 23, 1994].''


        Improvement of Identification of Money Laundering Schemes

    Section 404 of Pub. L. 103-325 provided that:
    ``(a) Enhanced Training, Examinations, and Referrals by Banking 
Agencies.--Before the end of the 6-month period beginning on the date of 
enactment of this Act [Sept. 23, 1994], each appropriate Federal banking 
agency shall, in consultation with the Secretary of the Treasury and 
other appropriate law enforcement agencies--
        ``(1) review and enhance training and examination procedures to 
    improve the identification of money laundering schemes involving 
    depository institutions; and
        ``(2) review and enhance procedures for referring cases to any 
    appropriate law enforcement agency.
    ``(b) Improved Reporting of Criminal Schemes by Law Enforcement 
Agencies.--The Secretary of the Treasury and each appropriate law 
enforcement agency shall provide, on a regular basis, information 
regarding money laundering schemes and activities involving depository 
institutions to each appropriate Federal banking agency in order to 
enhance each agency's ability to examine for and identify money 
laundering activity.
    ``(c) Report to Congress.--The Financial Institutions Examination 
Council shall submit a report on the progress made in carrying out 
subsection (a) and the usefulness of information received pursuant to 
subsection (b) to the Congress by the end of the 1-year period beginning 
on the date of enactment of this Act.
    ``(d) Definition.--For purposes of this section, the term 
`appropriate Federal banking agency' has the same meaning as in section 
3 of the Federal Deposit Insurance Act [12 U.S.C. 1813].''

                  Section Referred to in Other Sections

    This section is referred to in sections 5313, 5321, 5322 of this 
title.
