SECTION 1 Impact of the Colombian Drug Cartels Economic Sanctions Program SECTION 2 Cali Cartel SECTION 3 North Valle Cartel SECTION 4 North Coast Cartel APPENDIX A Authorities APPENDIX B Designation Announcements and Charts IMPACT REPORT Economic Sanctions Against COLOMBIAN DRUG CARTELS Office of Foreign Assets Control U.S. Department of the Treasury March 2007 www.treas.gov/ofac DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220 STATEMENT FROM THE DIRECTOR OF THE OFFICE OF FOREIGN ASSETS CONTROL Treasury’s Office of Foreign Assets Control (“OFAC”) integrates regulatory, national security, investigative, enforcement, and intelligence elements towards a single goal: eff ective implemen- tation of economic sanctions programs against foreign threats and adversaries. OFAC currently administers and enforces more than 30 economic sanctions programs pursuant to Presidential and Congressional mandates,1 targeting select foreign countries and regimes, terrorist organiza- tions, proliferators of weapons of mass destruction, and narcotics traffickers. OFAC acts under general Presidential wartime and national emergency powers, as well as specific legislation, to prohibit transactions and freeze (or “block”) assets within the United States or in possession or control of U.S. persons, including their foreign branches. These programs are administered in conjunction with diplomatic, law enforcement and occasionally military action. Since 1995, the Executive Branch has developed an array of “targeted” sanctions programs that focus on drug cartels and traffickers, international terrorist groups, proliferators of weapons of mass destruc- tion, members of hostile regimes, and other individuals and groups whose activities threaten U.S. interests. Narcotics traffickers operating on a global scale require an extensive support network, includ- ing procurement, logistics, transportation, communications, security, money laundering, and other facilitation. Disguising the sometimes vast profits derived from major drug operations requires the purchase of ostensibly legitimate enterprises capable of handling business on an international scale. These illicitly funded “corporate empires” can be extensive, complex, and undermine the integrity of financial systems. They are also one of the drug cartels’ greatest vulnerabilities. To combat the threats of violence, corruption, and harm posed by narcotics traffi ckers and their networks, President Clinton signed Executive Order 12978 in October 1995, declaring a nation- al emergency with respect to significant foreign narcotics traffickers centered in Colombia. The impact of these sanctions has been significant and, at times, dramatic. When OFAC desig- nates an individual or entity, any assets within the United States or the possession or control of a U.S. person anywhere in the world, must be frozen. Trade with or through the United States is cut off. Moreover, many non-U.S. businesses and banks have voluntarily severed all ties with individuals and entities that OFAC has listed. As a result, designated persons may lose access to their bank accounts outside the United States, disrupting their operations and freedom of ac- cess. Finally, in many cases, Colombian authorities have taken law enforcement actions against designated companies or properties after OFAC listed them. Collectively, these actions have 1. Some of these programs are no longer in effect but still require some residual administrative and enforcement activities. III disrupted more than $1 billion worth of assets—in blockings, seizures, forfeitures, and the fail- ure of enterprises—and economically isolated the individuals who own and manage the enter- prises. The Director of the Office of National Drug Control Policy (“ONDCP”), in fact, stated that OFAC’s efforts have resulted in “the forfeiture of billions of dollars worth of drug-related assets.” This report reviews the SDNT program’s achievements over the past 11 years, as it has targeted the leaders of Colombia’s Cali, North Valle, and North Coast drug cartels. It is our hope that the report will provide a useful window into the history and achievements of this program, as well as lessons for refining sanctions targeting and implementation in the future in this and other programs. AdamJ.Szubin Director Office of Foreign Assets Control IV CONTENTS STATEMENT FROM THE DIRECTOR OF THE OFFICE OF FOREIGN ASSETS CONTROL ............................................................................................................................ III OVERVIEW OF SDNT COLOMBIA PROGRAM............................................................................. 1 SECTION 1: IMPACT OF THE COLOMBIAN DRUG CARTELS ECONOMIC SANCTIONS PROGRAM ................................................................................................................... 5 SECTION 2: CALI CARTEL................................................................................................................ 15 RODRIGUEZ OREJUELA Organization ................................................................................................................17 SANTACRUZ LONDOÑO Organization ..............................................................................................................27 HERRERA BUITRAGO Organization ......................................................................................................................31 VALENCIA TRU JILLO Organization .......................................................................................................................35 SECTION 3: NORTH VALLE CARTEL.............................................................................................. 41 URDINOLA GRAJALES Organization.....................................................................................................................43 HENAO MONTOYA Organization ...........................................................................................................................47 RAMIREZ ABADIA Organization ..............................................................................................................................51 PATIÑO FOMEQUE Organization ............................................................................................................................55 MONTOYA SANCHEZ Organization. ....................................................................................................................59 GOMEZ BUSTAMANTE Organization ..................................................................................................................63 PUERTA PARRA and HERNANDEZ ZEA Organization .............................................................................67 RENTERIA MANTILLA Organization ...................................................................................................................71 GRAJALES LEMOS Organization ...............................................................................................................................77 VARELA Organization .......................................................................................................................................................83 CANO CORREA Organization .....................................................................................................................................87 SABOGAL ZULUAGA Organization ........................................................................................................................91 SECTION 4: NORTH COAST CARTEL ............................................................................................ 95 NASSER DAVID Organization ......................................................................................................................................97 APPENDIX A: AUTHORITIES............................................................................................................ 102 International Emergency Economic Powers Act (“IEEPA”) ...........................................................................102 Executive Order 12978 ........................................................................................................................................................107 Code of Federal Regulations- Title 31, Part 536 (31 CFR 536) .....................................................................110 18 U.S.C.§ 3571 ........................................................................................................................................................................123 APPENDIX B: DESIGNATION ANNOUNCEMENTS AND CHARTS......................................... 124 V ACRONYMS USED IN THIS IMPACT REPORT a.k.a. Also known as United Self Defense Forces of Colombia (Autodefenses Unidas de AUC Colombia) CFR Code of Federal Regulations DEA Drug Enforcement Administration E.O. Executive Order f.k.a. Formerly known as FBI Federal Bureau of Investigation FNK Foreign Narcotics Kingpin ICE U.S. Immigration and Customs Enforcement IEEPA International Emergency Economic Powers Act n.k.a. Now known as OFAC Office of Foreign Assets Control ONDCP Office of National Drug Control Policy RICO Racketeer Influenced and Corrupt Organization Act SDGT Specially Designated Global Terrorist SDN Specially Designated Nationals SDNT Specially Designated Narcotics Traffickers SDNTK Specially Designated Narcotics Traffi ckers Kingpins USC United States Code ACRONYMS OF BUSINESS TYPES A.V.V. Aruba Vrijgestelde Vennootschap (Aruban Exempt Corporation) Cia. Compañia (Company) E.U. Empresa Unipersonal (Sole Proprietorship)