Office of Foreign Assets Control, U.S. Department of the Treasury

NARCOTICS: WHAT YOU NEED TO KNOW ABOUT U.S. SANCTIONS AGAINST DRUG
TRAFFICKERS

An overview of the Foreign Narcotics Kingpin Designation Act (21
U.S.C. 1901-1908, 8 U.S.C. 1182) and Executive Order 12978 of
October 21, 1995

FOREIGN NARCOTICS KINGPIN DESIGNATION ACT

On December 3, 1999, the President signed into law the Foreign Narcotics Kingpin
Designation Act (the “Kingpin Act”), 21 U.S.C. § 1901-1908, 8 U.S.C § 1182. The
related regulations are styled the "Foreign Narcotics Kingpin Sanctions
Regulations" (31 C.F.R. Part 598).

The Kingpin Act blocks all property and interests in property, subject to U.S.
jurisdiction, owned or controlled by significant foreign narcotics traffickers
as identified by the President. In addition, the Kingpin Act blocks the property
and interests in property, subject to U.S. jurisdiction, of foreign persons
designated by the Secretary of Treasury, in consultation with the Attorney
General, the Director of Central Intelligence, the Director of the Federal
Bureau of Investigation, the Administrator of the Drug Enforcement
Administration, the Secretary of Defense, and the Secretary of State, who are
found to be: (1) materially assisting in, or providing financial or
technological support for or to, or providing goods or services in support of,
the international narcotics trafficking activities of a person designated
pursuant to the Kingpin Act; (2) owned, controlled, or directed by, or acting
for or on behalf of, a person designated pursuant to the Kingpin Act; or (3)
playing a significant role in international narcotics trafficking.

Significant foreign narcotics traffickers and foreign persons designated by the
Secretary of the Treasury are referred to collectively as Specially Designated
Narcotics Traffickers. Foreign persons designated under the Kingpin Act are
referred to as "[SDNTK]s" on OFAC's listing of "Specially Designated Nationals
and Blocked Persons" to differentiate them from the Specially Designated
Narcotics Traffickers named under Executive Order 12978 (see below).

U.S. persons are prohibited from engaging in any transaction or dealing in
property or interests in property of [SDNTK]s and from engaging in any
transaction that evades or avoids the prohibitions of the Kingpin Act. These
prohibitions affect trade transactions as well as accounts, securities, and
other assets.

Corporate criminal penalties for violations of the Foreign Narcotics Kingpin
Designation Act range up to $10,000,000; individual penalties range up to
$5,000,000 and 30 years in prison. Civil penalties of up to $1,075,000 may also
be imposed administratively.

Please see the “Designations Pursuant to the Foreign Narcotics Kingpin
Designations Act” document for information regarding targets of the Kingpin Act:
http://www.treasury.gov/resource-center/sanctions/Programs/Documents/narco_desig
nations_kingpin.pdf. 
For additional identifying information and separate entries for each of the
aliases of all of the foreign persons named under the Kingpin Act see OFAC's SDN
list at www.treasury.gov/sdn.  The entries are styled "[SDNTK]."

EXECUTIVE ORDER 12978 OF OCTOBER 21, 1995

On October 21, 1995, President Clinton signed Executive Order 12978 entitled
“Blocking Assets and Prohibiting Transactions with Significant Narcotics
Traffickers” (the “Order”), which imposes sanctions with respect to narcotics
traffickers centered in Colombia.  Executive Order 12978 has been implemented by
the "Narcotics Trafficking Sanctions Regulations" at 31 CFR Part 536.

The Order blocks all property subject to U.S. jurisdiction in which there is any
interest of four principal figures in the Cali drug cartel who are listed in the
annex to the Order. Those four individuals are named as “Principal Individuals”
below. In addition, the Order 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”).  Those designated are referred to
as "[SDNT]s" on OFAC's listing of "Specially Designated Nationals and Blocked
Persons" to differentiate them from the Specially Designated Narcotics
Traffickers named under the Kingpin Act. Listed below are additional foreign
entities and individuals designated by the Office of Foreign Assets Control as
[SDNT]s pursuant  to the Order.

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 [SDNT]s, and
any transaction that evades or avoids, has the purpose of evading or avoiding,
or attempts to violate, the prohibitions contained in the Order.  This obviously
impacts trade transactions (involving, for example, letters of credit) as well
as accounts and other assets.

Designations of persons blocked pursuant to the Order are effective upon the
date of determination by the Director of the Office of Foreign Assets Control,
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.

Corporate criminal penalties for violations of the International Emergency
Economic Powers Act range up to $500,000; individual penalties range up to
$250,000 and 20 years in jail.  Civil penalties of up to $50,000 may also be
imposed administratively. 

Please see the “Designations Pursuant to Executive Order 12978” document for
information regarding targets of the Narcotics Trafficking Sanctions
Regulations:
http://www.treasury.gov/resource-center/sanctions/Programs/Documents/narco_desig
nations_eo12978.pdf.  For identifying information and separate entries for each
of the
aliases of all of the entities and other individuals named under this program,
please see OFAC's SDN list at www.treasury.gov/sdn.  The entries are styled
"[SDNT].

This document is explanatory only and does not have the force of law.  Executive
Order 12978, and its implementing Narcotics Trafficking Sanctions Regulations
(31 CFR Part 536), contain the legally binding provisions governing sanctions
against narcotics traffickers centered in Colombia.  The Foreign Narcotics
Kingpin Designation Act contains the legally binding provisions governing the
sanctions against significant foreign narcotics traffickers and their
organizations.  This document does not supplement or modify Executive Order
12978, 31 CFR Part 536, or the Foreign Narcotics Kingpin Designation Act.

The Treasury Department’s Office of Foreign Assets Control also administers
sanctions programs involving the Balkans, Belarus, Burma (Myanmar), Côte
d’Ivoire, Cuba, Democratic Republic of the Congo, Diamond Trading, Iran, Iraq,
Lebanon, Liberia, Libya, North Korea, Somalia, Sudan, Syria, Yemen, Zimbabwe as
well as highly enriched uranium, designated Terrorists and international
Narcotics Traffickers, Foreign Terrorist Organizations, Transnational Criminal
Organizations, and designated foreign persons who have engaged in activities
relating to the proliferation of weapons of mass destruction. For additional
information about these programs, please contact the:


OFFICE OF FOREIGN ASSETS CONTROL
U.S. Department of the Treasury
Washington, D.C. 20220
202/622-2490

3-28-13