FIND Trafficking Act

IIB 116TH CONGRESS 1ST SESSION H. R. 502 IN THE SENATE OF THE UNITED STATES JANUARY 29, 2019 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To require the Comptroller General of the United States to carry out a study on how virtual currencies and online marketplaces are used to buy, sell, or facilitate the fi- nancing of goods or services associated with sex traf- ficking or drug trafficking, and for other purposes. VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 2 HR 502 RFS Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fight Illicit Networks 4 and Detect Trafficking Act’’ or the ‘‘FIND Trafficking 5 Act’’. 6 SEC. 2. FINDINGS. 7 The Congress finds the following: 8 (1) According to the Drug Enforcement Admin- 9 istration (DEA) 2017 National Drug Threat Assess- 10 ment, transnational criminal organizations are in- 11 creasingly using virtual currencies. 12 (2) In its 2015 National Money Laundering 13 Risk Assessment, the Department of the Treasury 14 concluded: ‘‘The development of virtual currencies is 15 an attempt to meet a legitimate market demand. Ac- 16 cording to a Federal Reserve Bank of Chicago econ- 17 omist, United States consumers want payment op- 18 tions that are versatile and that provide immediate 19 finality. No United States payment method meets 20 that description, although cash may come closest. 21 Virtual currencies can mimic cash’s immediate final- 22 ity and anonymity and are more versatile than cash 23 for online and cross-border transactions, making vir- 24 tual currencies vulnerable for illicit transactions.’’. 25 VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 3 HR 502 RFS (3) Virtual currencies have become a prominent 1 method to pay for goods and services associated with 2 illegal sex trafficking and drug trafficking, which are 3 two of the most detrimental and troubling illegal ac- 4 tivities facilitated by online marketplaces. 5 (4) Online marketplaces, including the dark 6 web, have become a prominent platform to buy, sell, 7 and advertise for illicit goods and services associated 8 with sex trafficking and drug trafficking. 9 (5) According to the International Labour Or- 10 ganization, in 2016, 4.8 million people in the world 11 were victims of forced sexual exploitation, and in 12 2014, the global profit from commercial sexual ex- 13 ploitation was $99 billion. 14 (6) In 2016, within the United States, the Cen- 15 ter for Disease Control estimated that there were 16 64,000 deaths related to drug overdose, and the 17 most severe increase in drug overdoses were those 18 associated with fentanyl and fentanyl analogs (syn- 19 thetic opioids), which amounted to over 20,000 over- 20 dose deaths. 21 (7) According to the United States Department 22 of the Treasury 2015 National Money Laundering 23 Risk Assessment, an estimated $64 billion is gen- 24 VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 4 HR 502 RFS erated annually from United States drug trafficking 1 sales. 2 (8) Illegal fentanyl in the United States origi- 3 nates primarily from China, and it is readily avail- 4 able to purchase through online marketplaces. 5 SEC. 3. GAO STUDY. 6 (a) STUDY REQUIRED.—The Comptroller General of 7 the United States shall conduct a study on how virtual 8 currencies and online marketplaces are used to facilitate 9 sex and drug trafficking. The study shall consider— 10 (1) how online marketplaces, including the dark 11 web, are being used as platforms to buy, sell, or fa- 12 cilitate the financing of goods or services associated 13 with sex trafficking or drug trafficking (specifically, 14 opioids and synthetic opioids, including fentanyl, 15 fentanyl analogs, and any precursor chemicals asso- 16 ciated with manufacturing fentanyl or fentanyl 17 analogs) destined for, originating from, or within the 18 United States; 19 (2) how financial payment methods, including 20 virtual currencies and peer-to-peer mobile payment 21 services, are being utilized by online marketplaces to 22 facilitate the buying, selling, or financing of goods 23 and services associated with sex or drug trafficking 24 VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 5 HR 502 RFS destined for, originating from, or within the United 1 States; 2 (3) how virtual currencies are being used to fa- 3 cilitate the buying, selling, or financing of goods and 4 services associated with sex or drug trafficking, des- 5 tined for, originating from, or within the United 6 States, when an online platform is not otherwise in- 7 volved; 8 (4) how illicit funds that have been transmitted 9 online and through virtual currencies are repatriated 10 into the formal banking system of the United States 11 through money laundering or other means; 12 (5) the participants (state and non-state actors) 13 throughout the entire supply chain that participate 14 in the buying, selling, or financing of goods and 15 services associated with sex or drug trafficking 16 (through online marketplaces or virtual currencies) 17 destined for, originating from, or within the United 18 States; 19 (6) Federal and State agency efforts to impede 20 the buying, selling, or financing of goods and serv- 21 ices associated with sex or drug trafficking through 22 online marketplaces or virtual currencies that are 23 destined for, originating from, or within the United 24 States, including efforts to prevent the proceeds 25 VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 6 HR 502 RFS from sex or drug trafficking from entering the 1 United States banking system through online mar- 2 ketplaces or virtual currencies; and 3 (7) to what extent can the immutable and 4 traceable nature of virtual currencies contribute to 5 the tracking and prosecution of illicit funding. 6 (b) SCOPE.—For the purposes of the study required 7 under subsection (a), the term ‘‘sex trafficking’’ means the 8 recruitment, harboring, transportation, provision, obtain- 9 ing, patronizing, or soliciting of a person for the purpose 10 of a commercial sex act that is induced by force, fraud, 11 or coercion, or in which the person induced to perform 12 such act has not attained 18 years of age. 13 (c) REPORT TO CONGRESS.—Not later than 1 year 14 after the date of enactment of this Act, the Comptroller 15 General of the United States shall submit to the Com- 16 mittee on Banking, Housing, and Urban Affairs of the 17 Senate and the Committee on Financial Services of the 18 House of Representatives a report summarizing the re- 19 sults of the study required under subsection (a), together 20 with any recommendations for legislative or regulatory ac- 21 tion that would improve the efforts of Federal agencies 22 VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS 7 HR 502 RFS to impede the use of virtual currencies and online market- 1 places in facilitating sex and drug trafficking. 2 Passed the House of Representatives January 28, 2019. Attest: KAREN L. HAAS, Clerk. VerDate Sep 11 2014 22:41 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H502.RFS H502 kjohnson on DSK79L0C42 with BILLS