[House Document 107-57]
[From the U.S. Government Publishing Office]



                                     

107th Congress, 1st Session - - - - - - - - - - - - - House Document 107-57


 
   PERIODIC REPORT ON SIGNIFICANT NARCOTICS TRAFFICKERS CENTERED IN 
                               COLUMBIA

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

  A 6-MONTH PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO 
    SIGNIFICANT NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA THAT WAS 
 DECLARED IN EXECUTIVE ORDER 12978 OF OCTOBER 21, 1995, PURSUANT TO 50 
                             U.S.C. 1622(d)




 April 24, 2001.--Referred to the Committee on International Relations 
                       and ordered to be printed
                                           The White House,
                                        Washington, April 17, 2001.
Hon. Dennis J. Hastert,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: As required by 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, 50 U.S.C. 
1703(c), I transmit herewith a 6-month periodic report on the 
national emergency with respect to significant narcotics 
traffickers centered in Colombia that was declared in Executive 
Order 12978 of October 21, 1995.
            Sincerely,
                                                    George W. Bush.
 President's Periodic Report on the National Emergency With Respect to 
         Significant Narcotics Traffickers Centered in Colombia

    I hereby report to the Congress on developments over the 
course of the past 6 months 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). Sanctions imposed against 
significant narcotics traffickers centered in Colombia pursuant 
to Executive Order 12978 are separate from, and independent of, 
sanctions imposed pursuant to the Foreign Narcotics Kingpin 
Designation Act (Pub. L. 106-120, Title VIII). This report 
covers sanctions imposed and persons named as specially 
designated narcotics traffickers (``SDNTs'') pursuant to 
Executive Order 12978, but does not cover those persons 
identified pursuant to the Foreign Narcotics Kingpin 
Designation Act, which are addressed in a separate report as 
provided in that Act.
    1. On December 7, 2000, the Treasury Department's Office of 
Foreign Assets Control (``OFAC'') amended the appendices to 31 
C.F.R. chapter V (65 Fed. Reg. 80749) by adding the names of 
eight individuals and eight entities determined to play a 
significant role in international narcotics trafficking 
centered in Colombia or determined to be owned or controlled 
by, or to act for or on behalf of, existing SDNTs. In the same 
Notice, OFAC also amended the appendices by adding supplemental 
infomation for 16 individuals previously designated as SDNTs.
    Additions and deletions to the list of SDNTs during the 
life of the program have brought it to a total of 548 names 
(comprised of nine principals, 228 entities, and 311 
individuals). These are persons or entities with whom financial 
and business dealings are prohibited and whose assets are 
blocked under Executive Order 12978. The list of SDNTs now 
includes kingpins, associates, and businesses from Colombia's 
Cali, North Valle, and North Coast drug cartels. The SDNT list 
will continue to be expanded to include additional drug 
trafficking organizations centered in Colombia and their 
fronts.
    2. As of March 6, 2001, OFAC issued four licenses during 
the current reporting period. These licenses were issued in 
accordance with established Treasury policy authorizing the 
receipt of payment of legal fees for representation of SDNTs in 
proceedings within the United States arising from the 
imposition of sanctions, and certain administrative 
transactions.
    OFAC has disseminated and routinely updated details of this 
program to the financial, securities, and international trade 
communities by both electronic and conventional media. This 
included bulletins to banking institutions via the Federal 
Reserve System and the Clearing House Interbank Payments System 
(CHIPS). The same material is also provided to the U.S. Embassy 
in Bogota for distribution to U.S. companies operating in 
Colombia.
    During the reporting period, as of March 6, 2001, six 
financial transactions totaling more than $671,000 were 
reported to OFAC as having been blocked. Since the last report, 
OFAC has collected two civil monetary penalties totaling more 
than $13,500 for violations of the Narcotics Trafficking 
Sanctions Regulations, 31 CFR Part 536. One financial 
institution and one company remitted penalties for violative 
transactions involving SDNTs. A third penalty proceeding 
remains underway.
    3. The narcotics trafficking sanctions have had a 
significant impact on the Colombian drug cartels, with some 
being forced out of business and others suffering financially. 
More than a third of all the narcotics traffickers' business 
enterprises that OFAC has identified to date as SDNTs are 
involved in the pharmaceutical or agricultural sectors. These 
also have been among the most successful investments for the 
drug cartels and are those hardest hit by the sanctions. Of the 
228 business entities designated as SDNTs as of March 2, 2001, 
nearly 60, with an estimated annual aggregate income of more 
than $230 million, have been liquidated or are in the process 
of liquidation. As a result of OFAC designations, Colombian 
banks have closed SDNT accounts in large numbers, affecting 
more than 200 SDNT entities and individuals. The cooperation of 
the Colombian authorities and the Colombian financial and 
business sectors contributes significantly to the impact these 
sanctions are having on the designated business entities of the 
drug cartels.
    4. The expenses incurred by the Federal Government in the 
6-month period from October 21, 2000 through April 20, 2001, 
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 $570,0000. 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.
    5. Executive Order 12978 provides the Government of the 
United States with a tool for combating 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 the benefit of trade with 
the United States by preventing U.S. persons from engaging in 
any commercial dealings with them, their front companies, and 
their agents. Executive Order 12978 and its associated SDNT 
list demonstrate the United States' commitment to end the 
damage that such traffickers wreak upon society in the United 
States and abroad. The SDNT list will continue to be expanded 
to include additional Colombian drug trafficking organizations 
and their fronts. 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 signicant developments pursuant 
to 50 U.S.C. 1703(c).