[House Document 105-336]
[From the U.S. Government Publishing Office]
105th Congress, 2d Session - - - - - - - - - House Document No. 105-336
DEVELOPMENTS CONCERNING NATIONAL EMERGENCY WITH NARCOTICS TRAFFICKERS
IN COLOMBIA
__________
COMMUNICATION
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)
December 17, 1998.--Referred to the Committee on International
Relations and ordered to be printed
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U.S. GOVERNMENT PRINTING OFFICE
69-011 WASHINGTON : 1998
The White House,
Washington, DC, October 21, 1998.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: 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 in property 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), September
9, 1997 (62 Fed. Reg. 48177, September 15, 1997), and June 1,
1998 (63 Fed. Reg. 29608, June 1, 1998), 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.
On May 27, 1998 (63 Fed. Reg. 28896, May 27, 1998), OFAC
amended appendices A and B to 31 C.F.R. chapter V, by expanding
the list for the first time beyond the Cali cartel by adding
the names of one of the leaders of Colombia's North Coast
cartel, Julio Ceasar Nasser David, who has been determined to
play a significant role in international narcotics trafficking
centered in Colombia, and 14 associated businesses and 4
individuals acting as fronts for the North Coast cartel. Also
added were six companies and one individual that 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 Executive Order 12978 of October 21, 1995.
These changes to the previous SDNT list brought it to a total
of 451 businesses and individuals with whom financial and
business dealings are prohibited and whose assets are blocked
under the Order. A copy of the amendment is attached to this
report.
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 September 4, 1998, OFAC had issued 11 specific
licenses pursuant to Executive Order 12978. These licenses were
issued in accordance with established Department of the
Treasury policy authorizing the completion of presanctions
transactions, 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, and
certain administrative transactions. In addition, a license was
issued to authorize a U.S. company in Colombia to make certain
payments to two SDNT entities in Colombia (currently under the
control of the Colombian government) for services provided to
the U.S. company in connection with the U.S. company's
occupation of office space and business activities in Colombia.
5. The narcotics trafficking sanctions have had a
significant impact on the Colombian drug cartels. Of the 154
business entities designated as SDNTs as of September 4, 1998,
44, with an estimated aggregate income of more than $210
million, had been liquidated or were in the process of
liquidation. As a result of OFAC designations, Colombian banks
have closed nearly 400 SDNT accounts, affecting nearly 200
SDNTs. 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. One criminal investigation is
ongoing and a second, not presented for prosecution, was
referred for civil penalty action, bringing the total of
referrals since my last report to five.
6. The expenses incurred by the Federal Government in the
6-month period from April 21 through October 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 $600,000. 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 this Administration with
a tool for combatting the actions of significant foreign
narcotics traffickers centered in Colombia and the 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 the traffickers, their front
companies, or their agents. Executive Order 12978 demonstrates
the United States commitment to end the damage that such
traffickers inflict upon society in the United States and
abroad.
The magnitude and scope 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 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).
Sincerely,
William J. Clinton.