Letter to Congressional Leaders Reporting on the National Emergency With Respect to Narcotics Traffickers Centered in Colombia

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 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).

The Department of the Treasury issued another Notice adding the names of one additional entity and three additional individuals, as well as expanded information regarding addresses and pseudonyms, to the list of SDNTs on November 29, 1995, (60 Fed. Reg. 61288).

On March 8, 1996, OFAC published a Notice in the Federal Register adding the names of 138 additional individuals and 60 entities designated pursuant to the Order, and revising information for 8 individuals on the list of blocked persons contained in the notices published on November 29, 1995, and October 24, 1995. (61 Fed. Reg. 9523).

3. On January 21, 1997, OFAC published a Notice in the Federal Register adding the names of 57 individuals and 21 entities designated pursuant to the Order, and revising information for 58 individuals and 1 entity (62 Fed. Reg. 2903). In addition, the name of one individual specially designated narcotics trafficker was removed from the list. These changes were effective January 15, 1997.

These 78 new names brought the total list of SDNTs to 359. Each of the 78 newly designated entities and individuals has been determined to be owned or controlled or to act for or on behalf of the Cali cartel's Helmer "Pacho" Herrera Buitrago organization. The newly identified SDNTs included several large poultry processing plants and farms, investment and import/ export firms, real estate businesses, a consulting firm, a lumber distributor, and a construction company, all located in Colombia.

The additional name and address information includes one previously designated company controlled by the Herrera Buitrago family and 58 previously designated individuals from either the Herrera Buitrago or the Rodriguez Orejuela organizations of the Cali cartel.

Effective February 28, 1997, OFAC issued the Narcotics Trafficking Sanctions Regulations (NTSR), 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).

4. On April 17, 1997, OFAC added to appendices A and B to 31 C.F.R. chapter V the names 46 individuals and 11 entities, and revised information concerning 25 individuals, 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, other specially designated narcotics traffickers (62 Fed. Reg. 19500, April 22, 1997).

On July 30, 1997, OFAC published the names of seven businesses and seven associated individuals determined to be acting as fronts for the Cali cartel in Colombia (62 Fed. Reg. 41850, August 4, 1997). The seven newly designated companies are successors to firms previously designated because they were owned or controlled by the Rodriguez Orejuela, Herrera Buitrago, or Santacruz Londono families of the Cali cartel. This action is part of the ongoing interagency implementation of Executive Order 12978 of October 21, 1995. These 14 names were added to the previous SDNT list bringing to a total of 428 businesses and individuals with whom financial and business dealings are prohibited and whose assets are blocked under the Order. All 428 SDNTs were determined to be owned or controlled by, or to act for or on behalf of, persons designated in or pursuant to the Order.

The seven newly named companies include a major poultry farm as well as investment, construction, and real estate firms that have undergone name changes since the time of their original designations as SDNT entities. The OFAC has determined that the kingpins and agents of the Cali cartel continue to exert ultimate control over them. The seven newly designated individuals all have been determined to act for or on behalf of these seven successor entities. The OFAC, in coordination with the Departments of Justice and State, is continuing to expand the list of SDNTs, including both organizations and individuals, as additional information is developed.

On September 9, 1997, OFAC amended appendices A and B to 31 C.F.R. chapter V by removing the names of two individuals previously designated as specially designated narcotics traffickers. All real and personal property of these individuals, including all accounts not otherwise subject to blocking in which they have an interest, are unblocked; and all lawful transactions involving United States persons and these individuals are authorized (62 Fed. Reg. 48177, September 15, 1997). Copies of these amendments are attached to this report.

5. The 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 State and Federal regulatory agencies, automated clearing houses, and State and independent banking associations across the country. The OFAC contacted all major securities industry associations and regulators. It posted electronic notices on the Internet and over 10 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.

6. As of August 15, 1997, 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.

7. The expenses incurred by the Federal Government in the 6-month period from April 21 through October 20, 1997, 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 $800,000. Personnel costs were largely centered in the Department of the Treasury (particularly in the Office of Foreign Assets Control, the Office of the General Counsel, and the U.S. Customs Service), 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.

8. Executive Order 12978 provides this 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 U.S. commitment to end the scourge that such traffickers have wrought 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—is 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).

Sincerely,

WILLIAM J. CLINTON