Ofac Licensure for Investigators Act

Floor Speech

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Mr. McHENRY. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 6370) to require the Office of Foreign Assets Control to develop a program under which private sector firms may receive a license to conduct nominal financial transactions in furtherance of the firms' investigations, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 6370

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 ``OFAC Licensure for Investigators Act''. SEC. 2. SENDING AND RECEIVING OF NOMINAL AMOUNTS.

(a) In General.--The Director of the Office of Foreign Assets Control shall, not later than 1 year after the date of the enactment of this section, establish a pilot program under which a private sector firm may receive a license to conduct nominal financial transactions in furtherance of the firm's investigations.

(b) Coordination.--When establishing and carrying out the pilot program required under subsection (a), the Director of the Office of Foreign Assets Control shall coordinate with the Director of the Financial Crimes Enforcement Network for the purposes of supporting activities of the Financial Crimes Enforcement Network Exchange, as described in section 310(d) of title 31 of the United States Code.

(c) Reporting on Activities.--Each private sector firm that receives a license described under subsection (a) shall submit a detailed monthly report to the Director of the Office of Foreign Assets Control on the activities of the firm conducted under such license.

(d) Report to Congress.--

(1) In general.--On the date that is 1 year after the date on which the pilot program is established under this section, and annually thereafter until the end of the 1-year period beginning on the date the pilot program is terminated, the Director of the Office of Foreign Assets Control shall submit a report to the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate containing--

(A) the number of licenses requested under the pilot program;

(B) the number of licenses granted under the pilot program; and

(C) a broad discussion of the utility of the pilot program.

(2) Classified briefing.--After submission of each report required under paragraph (1), the Director of the Office of Foreign Assets Control shall provide the Committees on Financial Services and Foreign Affairs of the House of Representatives and the Committees on Banking, Housing, and Urban Affairs and Foreign Relations of the Senate with a classified briefing containing--

(A) additional detail on the applicants for a license under the pilot program;

(B) identification of the firms granted a license;

(C) information on the operation of the pilot program, including how long each license lasted and the personnel needed to manage the pilot program;

(D) information gleaned by the Office of Foreign Assets Control from running the pilot program;

(E) the utility of that information;

(F) any obstacles to the operation or utility of the pilot program; and

(G) any recommendations for improving or extending the pilot program.

(e) Termination.--The pilot program established by the Director of the Office of Foreign Assets Control under subsection (a) shall terminate on the date that is 5 years after the date on which the Director of the Office of Foreign Assets Control establishes such program.
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Mr. McHENRY. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in support of H.R. 6370, the OFAC Licensure for Investigators Act, introduced by my friend, the ranking member of the National Security, Illicit Finance, and International Financial Institutions Subcommittee, Mrs. Beatty.

The gentlewoman from Ohio has been an adept legislator in committee and great as an ally and fearsome as a foe. It has been good to work with her on solid policy.

I think this is an important matter for us. Illicit finance internationally and domestically is something we want to tackle, and we want to tackle this through solid policy that can be passed in a bipartisan way.

Since Hamas' October 7 terrorist attack on Israel, we have witnessed the ramifications of bad actors using the financial system to further their acts of terrorism.

This bill would enhance the tools in Treasury's arsenal to go after sanctioned individuals and entities while also holding them accountable in their financial activities.

There is already a well-established practice in traditional financial investigations where a law enforcement agency can request that financial institutions keep open criminal accounts in order to help track the illicit flows of money.

This bill mirrors that practice.

The bill requires the Secretary of the Treasury to develop a pilot program administered by the Office of Foreign Assets Control to allow private sector firms under a temporary and specific license to conduct nominal financial transactions to and through sanctioned entities to further their investigations.

OFAC, the Office of Foreign Assets Control, is a very important tool, one of our most powerful tools of protecting free people around the world and the flow of funds and tracking those flow of funds.

OFAC's licenses are authorized to OFAC to engage in transactions that would otherwise be prohibited. Mrs. Beatty's bill would allow, for example, blockchain analytics firms to work with OFAC to trace wallets controlled by bad actors. The power of blockchain lies within its immutable ledger that cannot be altered and allows analysis firms to see the movement of value every step along the way.

Mrs. Beatty's bill is a crucial step in the right direction. The Treasury Department will be required to keep Congress informed of OFAC's activities and findings under the license. With strict oversight and Treasury's ability to continue to follow the money and follow the value, the United States will be better positioned to go after terrorists and other bad actors and entities.

I thank Mrs. Beatty for her legislation and for her important work on this topic, and I urge my colleagues to support it.

House of Representatives, Committee on Foreign Affairs, Washington, DC, January 5, 2024. Hon. Patrick McHenry, Chairman, Committee on Financial Services, Washington, DC.

Dear Chairman McHenry: Thank you for consulting with the Committee on Foreign Affairs on H.R. 6370, the OFAC Licensure for Investigators Act. Based on your commitment to incorporate agreed edits into the suspension text, I agree that Foreign Affairs may be discharged from further consideration of the bill, so that it may proceed expeditiously to the House Floor.

This agreement is made with the understanding that it does not in any way diminish or alter the jurisdiction of the Committee on Foreign Affairs, or prejudice our jurisdictional prerogatives on this measure or similar legislation in the future.

Thank you for agreeing to place our exchange of letters into the Record during Floor consideration. I look forward to continuing to work together as this bill moves through the legislative process. Sincerely, Michael McCaul, Chairman. ____ House of Representatives, Committee on Financial Services, Washington, DC, January 4, 2024. Hon. Michael McCaul, Chairman, Committee on Foreign Affairs, Washington, DC.

Dear Chairman McCaul: Thank you for agreeing to be discharged from further consideration of H.R. 6370, the OFAC Licensure for Investigators Act, so that it may proceed expeditiously to the House Floor. I agree that by foregoing consideration of H.R. 6370 at this time, you do not waive any jurisdiction over the subject matter contained in this or similar legislation, and that you will be appropriately consulted and involved on this or similar legislation as it moves forward.

As discussed, I will seek to place a copy of our exchange of letters on this bill in the Congressional Record during floor consideration thereof. Sincerely, Patrick McHenry, Chairman, Committee on Financial Services.

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Mr. McHENRY. Madam Speaker, I yield myself such time as I may consume to engage in a colloquy with the gentlewoman from Ohio.

Madam Speaker, I have heard concerns from Members about the definition of ``nominal transactions'' in the bill. As we saw in OFAC's August 22 designation of Tornado Cash, U.S. persons may have received unsolicited nominal amounts of virtual currency from Tornado Cash. These nominal amounts could be as small as a fraction of a penny. The term ``nominal amounts'' is a term of art within OFAC, but, understandably, Members are worried that this license could allow for the financing of terror activities.

Prior to today's floor proceedings, OFAC and my staff discussed capping licenses at $10. A fraction of a penny spread across $10 could provide an immense amount of data on illicit actors and their funding mechanisms.

I think it is important to reiterate on the record for Members that this bill is not intended to allow a license for greater than $10. Is that something that the gentlewoman would agree with?

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Mr. McHENRY. I yield to the gentlewoman from Ohio (Mrs. Beatty).

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Mr. McHENRY. Madam Speaker, I thank the bill's sponsor for this and for her addressing an important matter, which is money laundering internationally and at home is a severe problem. It is a severe problem with regulated financial institutions, and we have longstanding laws and rules and folks that are engaged in Justice and at Treasury that are highly adept at this.

We have new technologies that emerge each day and new approaches to launder value or money. The movement of digital money is complex. With blockchain technology it makes it much easier because then you basically can follow what is on the blockchain, and it is there for the public to see and for our experts in government to follow very well.

We want to make sure that they are given the full tools to track that illicit finance wherever it may be using the best techniques and technology available to anyone in the world. We want to make sure that we stay on top of this and curb illicit finance the best that we possibly can.

We have the best laws, the best rules, and the best people working to protect our people here and abroad.

Madam Speaker, I thank Mrs. Beatty for her leadership here on this important issue.

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Mr. McHENRY. Madam Speaker, I yield myself the balance of my time.

Madam Speaker, I would just reiterate that Mrs. Beatty's bill is a crucial step in the right direction, and the Treasury Department will be required to keep Congress informed of OFAC's activities and findings under the license.

Madam Speaker, I urge my colleagues to support this bill, and I yield back the balance of my time.

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Mr. McHENRY.

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