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Tucked into a bill that allocates tens of billions of dollars towards Ukraine’s defense is a provision that newly empowers U.S. officials to unilaterally designate foreign banks, accounts and transactions as a “primary money laundering concern” when linked to fentanyl trafficking.

Modeled on section 9714 of the Combating Russian Money Laundering Act of 2021, the provision, which President Joe Biden signed into law Wednesday, authorizes the Treasury Department to impose “special measures” on foreign targets linked to the crime—from requiring U.S. banks to keep detailed records of their payments to banning them from correspondent services altogether.

The bill separately requires the bureau responsible for imposing the special measures, Treasury’s Financial Crimes Enforcement Network, to issue guidance within six months to assist financial institutions in screening transactions for the proceeds of fentanyl and other synthetic opioids, and reporting those that appear suspicious.

Lawmakers further tasked FinCEN with reviewing suspicious activity reports filed on possible opioid-related transactions—or on the suspected “financing of suspected transnational criminal organizations”—before reviewing SARs that flag other potentially illicit payments.

The House of Representatives approved the legislation 360-58 on Saturday as part of a package with three other bills.

Together the bills, which landed at the White House after securing 79 votes in the Senate on Tuesday, appropriate $61 billion to Ukraine, $28 billion to Israel and to humanitarian assistance in Gaza, and $8 billion to Taiwan and other U.S. allies in the Asia Pacific.

Senate Banking Committee Chairman Sherrod Brown (D-OH) and Tim Scott, (R-SC) the panel’s ranking member, introduced the provision that would newly empower FinCEN on April 9 as part of the FEND off Fentanyl Act. Rep. Ruben Gallego (D-AZ) pitched a nearly identical proposal in May of last year.

The provision channels section 9713 of the Combating Russian Money Laundering Act, which FinCEN used for the first time in January 2023 in designating Bizlato, a Russia-linked cryptocurrency exchange, for handling bitcoins tied to “darknet markets or scams” and moving funds for ransomware perpetrators allegedly linked to the Kremlin.

One former FinCEN official told ACAMS moneylaundering.com that the provision builds on FinCEN’s power to impose the special measures described in section 311 of the Patriot Act, but only incrementally.

“It’s never a bad thing to have an extra tool in the toolbox, but it’s not like there are a lot of targets out there waiting for this,” the former official said on condition of anonymity.

However, unlike the legislation that became law Wednesday and the Combating Russian Money Laundering Act before it, section 311 of the Patriot Act requires FinCEN to formally propose a designation and solicit and evaluate feedback from the public before imposing a special measure against a selected target.

After launching a new Global Investigations Division in 2019 to bring more cases against suspected money launderers based outside the U.S., FinCEN used section 311 in October 2023 to designate the act of “mixing” cryptocurrency as a primary money laundering concern subject to enhanced recordkeeping requirements.

“FinCEN appreciates the continued support from Congress in its efforts to combat the scourge that is our nation’s opioid crisis,” a spokesperson for the bureau wrote in an emailed statement to moneylaundering.com.

Contact Fred Williams at fwilliams@acams.org