[Congressional Record Volume 144, Number 48 (Monday, April 27, 1998)]
[Senate]
[Pages S3652-S3653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 REPORT CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO SIGNIFICANT 
     NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA--MESSAGE FROM THE 
                           PRESIDENT--PM 117

  The PRESIDING OFFICER laid before the Senate the following message 
from the President of the United States, together with an accompanying 
report; which was referred to the Committee on Banking, Housing, and 
Urban Affairs.

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

[[Page S3653]]

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), 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 Executive 
Order 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 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 designated individuals. 
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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