October 22, 1998

TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE

                               THE WHITE HOUSE

                        Office of the Press Secretary
  For Immediate Release                                    October 22, 1998



                     TEXT OF A LETTER FROM THE PRESIDENT
               TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES
                       AND THE PRESIDENT OF THE SENATE


                        October 21, 1998




  Dear Mr. Speaker:   (Dear Mr. President:)

  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 inter-national 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.

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  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 signi-ficant 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 signifi-cant 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

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  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 periodi-cally to the Congress on significant developments
  pursuant to 50 U.S.C. 1703(c).

                                                Sincerely,



                                            WILLIAM J. CLINTON



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