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[House Document 107-134]
[From the U.S. Government Publishing Office]

                                     

107th Congress, 1st Session - - - - - - - - - - - House Document 107-134

 
PERIODIC REPORT ON THE NATIONAL EMERGENCY WITH RESPECT TO SIGNIFICANT 
              NARCOTICS TRAFFICKERS CENTERED IN COLOMBIA

                               __________

                                MESSAGE

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

 A SIX 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. 1641(c) AND 50 U.S.C. 1703(c)

  October 17, 2001.--Message and accompanying papers referred to the 
     Committee on International Relations and ordered to be printed
To the Congress of the United States:
    As required by section 401(c) of the National Emergencies 
Act, 50 U.S.C. 1641(c), and 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.

                                                    George W. Bush.
    The White House, October 16, 2001.
 President's Periodic Report on the National Emergency With Respect to 
         Significant Narcotics Trafficers Centered in Colombia

    I hereby report to the Congress on developments over the 
course of the past six 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) based upon information made 
available to me. 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 May 30, 2001, the Treasury Department's Office of 
Foreign Assets Control (``OFAC'') amended the appendices to 31 
C.F.R. chapter V (66 Fed. Reg. 29229) by adding the names of 
twenty-seven individuals and three entities determined to play 
a significant role in international narcotics trafficking 
centered in Colombia or to materially assist in, or provide 
financial or technological support for or goods or services in 
support of, other SDNTs or to be owned or controlled by, or to 
act for or on behalf of, other SDNTs.
    Additions and deletions to the list of SDNTs during the 
life of the program have brought it to a total of 578 names 
(comprised of ten principals, 231 entities, and 337 
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.
    2. As of August 30, 2001, OFAC had issued seven licenses 
during the current reporting period. Four licenses were issued 
for the release of blocked funds upon determination that there 
was no property interest of an SDNT involved. Three licenses 
were issued in accordance with established Treasury policy 
authorizing the receipt and payment of legal gas fees for 
reprsentation of SDNTs 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. 
Thisincluded 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 Columbia.
    3. During the reporting period, as of August 31, 2001, six 
financial transactions totaling approximately $95,000 were 
reported to OFAC as having been blocked. Since my last report, 
OFAC has collected one civil monetary penalty in the amount of 
$2.5 million from a U.S. company for violations of the 
Narcotics Trafficking Sanctions Regulations, 31 CFR Part 536. A 
second penalty proceeding is pending against another U.S. 
company for dealing in property in which an SDNT has an 
interest.
    4. 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. 
Of the 231 business entities designated as SDNT as of August 
24, 2001, more than 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. SDNTs are isolated financially and commercially 
from both the Colombian and U.S. business communities. The 
cooperation of the Colombian governmental 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.
    5. The expenses incurred by the Federal Government in the 
six-month period from April 21, 2001, through October 20, 2001, 
that are directly attributable to the exercise of powers and 
authorities conferred by the declaration of the national 
emergency with respect to SDNTs are estimated at more than $1 
million. 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.
    6. 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 such 
actions 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, as appropriate. 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 significant developments pursuant to 50 U.S.C. 
1703(c).

                                
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