[House Document 105-241]
[From the U.S. Government Publishing Office]



105th Congress, 2d Session  - - - - - - - - - - House Document 105-241


 
DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH RESPECT TO SIGNIFICANT 
              NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA

                               __________

                                MESSAGE

                                  FROM

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT 
  TO SIGNIFICANT NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA THAT WAS 
DECLARED IN EXECUTIVE ORDER NO. 12978 OF OCTOBER 21, 1995, PURSUANT TO 
                           50 U.S.C. 1703(c)





   April 27, 1998.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed


To the Congress of the United States:
    I hereby report to the Congress on the developments since 
my last report concerning the national emergency with respect 
to significant narcotics traffickers centered in Colombia that 
was declared in Executive Order 12978 of October 21, 1995. This 
report is submitted pursuant to section 401(c) of the National 
Emergencies Act, 50 U.S.C. 1641(c), and section 204(c) of the 
International Emergency Economic Powers Act (IEEPA), 50 U.S.C. 
1703(c).
    1. On October 21, 1995, I signed Executive Order 12978, 
``Blocking Assets and Prohibiting Transactions with Significant 
Narcotics Traffickers'' (the ``Order'') (60 Fed. Reg. 54579, 
October 24, 1995). The Order blocks all property subject to 
U.S. jurisdiction in which there is any interest of four 
significant foreign narcotics traffickers, one of whom is now 
deceased, who were principals in the so-called Cali drug cartel 
centered in Colombia. These persons are listed in the annex to 
the Order. The Order also blocks the property and interests in 
property of foreign persons determined by the Secretary of the 
Treasury, in consultation with the Attorney General and the 
Secretary of State, (a) to play a significant role in 
international narcotics trafficking centered in Colombia or (b) 
to materially assist in or provide financial or technological 
support for, or goods or services in support of, the narcotics 
trafficking activities of persons designated in or pursuant to 
the Order. In addition the Order blocks all property and 
interests in property subject to U.S. jurisdiction of persons 
determined by the Secretary of the Treasury, in consultation 
with the Attorney General and the Secretary of State, to be 
owned or controlled by, or to act for or on behalf of, persons 
designated in or pursuant to the Order (collectively 
``Specially Designated Narcotics Traffickers'' or ``SDNTs'').
    The Order further prohibits any transaction or dealing by a 
United States person or within the United States inproperty or 
interests in property of SDNTs, and any transaction that evades or 
avoids, has the purpose of evading or avoiding, or attempts to violate, 
the prohibitions contained in the Order.
    Designations of foreign persons blocked pursuant to the 
Order are effective upon the date of determination by the 
Director of the Department of the Treasury's Office of Foreign 
Assets Control (OFAC) acting under authority delegated by the 
Secretary of the Treasury. Public notice of blocking is 
effective upon the date of filing with the Federal Register, or 
upon prior actual notice.
    2. On October 24, 1995, the Department of the Treasury 
issued a notice containing 76 additional names of persons 
determined to meet the criteria set forth in Executive Order 
12978 (60 Fed. Reg. 54582, October 24, 1995). Additional 
notices expanding and updating the list of SDNTs were published 
on November 29, 1995 (60 Fed. Reg. 61288), March 8, 1996 (61 
Fed. Reg. 9523), and January 21, 1997 (62 Fed. Reg. 2903).
    Effective February 28, 1997, OFAC issued the Narcotics 
Trafficking Sanctions Regulations (``NTSR'' or the 
``Regulations''), 31 C.F.R. Part 536, to further implement my 
declaration of a national emergency and imposition of sanctions 
against significant foreign narcotics traffickers centered in 
Colombia (62 Fed. Reg. 9959, March 5, 1997).
    On April 17, 1997 (62 Fed. Reg. 19500, April 22, 1997), 
July 30, 1997 (62 Fed. Reg. 41850, August 4, 1997), and 
September 9, 1997 (62 Fed. Reg. 48177, September 15, 1997), 
OFAC amended appendices A and B to 31 C.F.R. chapter V, 
revising information concerning individuals and entities who 
have been determined to play a significant role in 
international narcotics trafficking centered in Colombia or 
have been determined to be owned or controlled by, or to act 
for or on behalf of, or to be acting as fronts for the Cali 
cartel in Colombia. These actions are part of the ongoing 
interagency implementation of ExecutiveOrder 12978 of October 
21, 1995. These changes to the previous SDNT list brought it to a total 
of 426 businesses and individuals with whom financial and business 
dealings are prohibited and whose assets are blocked under the Order.
    3. OFAC has disseminated and routinely updated details of 
this program to the financial, securities, and international 
trade communities by both electronic and conventional media. In 
addition to bulletins to banking institutions via the Federal 
Reserve System and the Clearing House Interbank Payments System 
(CHIPS), individual notices were provided to all relevant State 
and Federal regulatory agencies, automated clearing houses, and 
State and independent banking associations across the country. 
OFAC contacted all major securities industry associations and 
regulators. It posted electronic notices on the Internet and 
over 10 computer bulletin boards and 2 fax-on-demand services, 
and provided the same material to the U.S. Embassy in Bogota 
for distribution to U.S. companies operating in Colombia.
    4. As of March 25, 1998, OFAC had issued nine specific 
licenses pursuant to Executive Order 12978. These licenses were 
issued in accordance with established Treasury policy 
authorizing the completion of presanctions transactions and the 
provision of legal services to and payment of fees for 
representation of SDNTs in proceedings within the United States 
arising from the imposition of sanctions.
    5. The narcotics trafficking sanctions have had a 
significant impact on the Cali drug cartel. Of the 133 business 
entities designated as SDNTs as of February 20, 1998, 41, or 
nearly a third, having a combined net worth estimated at more 
than $45 million and a combined income of more than $200 
million, had been determined to have gone into liquidation. As 
a result of OFAC designations, 3 Colombian banks have closed 
about 300 SDNT accounts of nearly 100 designatedindividuals. 
One of the largest SDNT commercial entities, a discount drugstore with 
an annual income exceeding $136 million, has been reduced to operating 
on a cash basis. These specific results augment the less quantifiable 
but significant impact of denying the designated individuals and 
entities of the cartel access to U.S. financial and commercial 
facilities.
    Various enforcement actions carried over from prior 
reporting periods are continuing and new reports of violations 
are being aggressively pursued. Two criminal investigations are 
ongoing. Since my last report, OFAC has collected its first 
civil monetary penalty for violations of IEEPA and the 
Regulations under the program. OFAC collected $2,625 from a 
commercial agent for ocean-going oil tankers for violative 
funds transfers.
    6. The expenses incurred by the Federal Government in the 
6-month period from October 21, 1997, through April 20, 1998, 
that are directly attributable to the exercise of powers and 
authorities conferred by the declaration of the national 
emergency with respect to Significant Narcotics Traffickers are 
estimated at approximately $620,000. Personnel costs were 
largely centered in the Department of the Treasury 
(particularly in the Office of Foreign Assets Control, the U.S. 
Customs Service, and the Office of the General Counsel), the 
Department of Justice, and the Department of State. These data 
do not reflect certain costs of operations by the intelligence 
and law enforcement communities.
    7. Executive Order 12978 provides my Administration with a 
tool for combatting the actions of significant foreign 
narcotics traffickers centered in Colombia and the unparalleled 
violence, corruption, and harm that they cause in the United 
States and abroad. The Order is designed to deny these 
traffickers the benefit of any assets subject to the 
jurisdiction of the United States and to prevent United States 
persons from engaging in any commercial dealings with them, 
their front companies, and their agents. Executive Order 12978 
demonstrates the United States commitment to end the damage 
that such traffickers wreak upon society in the United States 
and abroad.
    The magnitude and the dimension of the problem in 
Colombia--perhaps the most pivotal country of all in terms of 
the world's cocaine trade--are extremely grave. I shall 
continue to exercise the powers at my disposal to apply 
economic sanctions against significant foreign narcotics 
traffickers and their violent and corrupting activities as long 
as these measures are appropriate, and will continue to report 
periodically to the Congress on significant developments 
pursuant to 50 U.S.C. 1703(c).

                                                William J. Clinton.
    The White House, April 24, 1998.

                                
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