H.Doc.105-160 EMERGENCY FUNDING REQUIREMENT ...

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105th Congress, 1st Session - - - - - - - - - - - House Document 105-159


 
 NATIONAL EMERGENCY WITH RESPECT TO SIGNIFICANT NARCOTICS TRAFFICKERS 
                         CENTERED IN COLOMBIA

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

A REPORT ON DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT 
  TO SIGNIFICANT NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA THAT WAS 
DECLARED IN EXECUTIVE ORDER NO. 12978 OF OCTOBER 21, 1995, PURSUANT TO 
                           50 U.S.C. 1703(c)


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October 22, 1997.--Referred to the Committee on International Relations 
                       and ordered to be printed


                                           The White House,
                                      Washington, October 15, 1997.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: 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.


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