[House Document 106-56]
[From the U.S. Government Publishing Office]
106th Congress, 1st Session - - - - - - - - - - - - House Document 106-56
_________________________________________________________________________
6-MONTH PERIODIC REPORT ON 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)
May 3, 1999.--Message and accompanying papers referred to the Committee
on International Relations and ordered to be printed
__________
U.S. GOVERNMENT PRINTING OFFICE
69-011 WASHINGTON : 1999
To the Congress of the United States:
As required by 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), I
transmit herewith a 6-month periodic report on the national
emergency with respect to significant narcotics traffickers
centered in Colombia that was declared in Executive Order 12978
of October 21, 1995.
William J. Clinton.
The White House, May 3, 1999.
President's Periodic Report on the National Emergency With Respect to
Significant Narcotics Traffickers Centered in Colombia
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 No. 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, two of whom are now
deceased, who were principals in the so-called Cali drug cartel
centered in Colombia. These four principals 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, to: (a) play a significant
role in international narcotics trafficking centered in
Colombia; or (b) 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 prohibition 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 the
President's 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 name of one of the leaders of the Colombian North Coast
cartel, Julio Cesar Nasser David, who has been determined to
play a significant role in international narcotics trafficking
centered in Colombia, and 14 associated businesses and four
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 1995 Executive 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, more
than ten computer bulletin boards and two 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.
Since October 21, 1998, OFAC has blocked $25,000 resulting
from two financial transactions in violation of IEEPA and the
Regulations involving property in which a SDNT had an interest.
4. As of February 17, 1999, OFAC had issued twelve specific
licenses pursuant to Executive Order No. 12978. These licenses
were issued in accordance with established Treasury policy
authorizing the completion of pre-sanctions transactions, the
receipt of payment of legal 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 occupation by that company of office space
and business activities in Colombia.
5. The narcotics trafficking sanctions have had a
significant impact on the Colombia 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, including one criminal
investigation, and new reports of violations are being
aggressively pursued. Since the last report, OFAC has collected
one civil penalty in the amount of approximately $1,900 from a
U.S. company for violations of the Regulations involving the
transportation and dealing in goods in which an SDNT had an
interest. A second case is under civil penalty processing.
6. The expenses incurred by the Federal Government for the
six-month period from October 21, 1998, through April 20, 1999,
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 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 combating the actions of significant foreign
narcotics traffickers centered in Columbia 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 inflict on 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).