    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [April 24, 1998]
    [Pages 625-627]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Reporting on the National Emergency With Respect
    to Narcotics Traffickers Centered in Colombia
    April 24, 1998

    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

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    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, Augusthree 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 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 designated individuals. One
    of the largest SDNT commercial entities, a discount drugstore with

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    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.

    Note: This letter was released by the Office of the Press Secretary on
    April 27.