22 October 1998
(Emergency continues regarding "grave" situation) (1650)
WASHINGTON -- President Clinton has told Congress that the illicit
drug situation in Colombia is "extremely grave."
In a letter to Vice President Gore in his capacity as president of the
Senate and to House of Representatives Speaker Newt Gingrich Oct. 22,
Clinton reported on developments since his last such letter one year
ago.
U.S. law mandates a yearly presidential report to Congress when a
state of emergency exists with respect to U.S. national and economic
security. Clinton declared such an emergency in October 1995
concerning Colombian drugs and has renewed the declaration and
reported so to Congress every year since.
Following is the White House text:
(begin text)
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).
(end text)