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IdentifierCreatedClassificationOrigin
04BOGOTA4636 2004-05-06 21:15:00 CONFIDENTIAL//NOFORN Embassy Bogota
Cable title:  

ASSET SEIZURE AND DEMOBILIZATION FUNDING

Tags:   ECON KCRM PGOV PHUM PTER SNAR CO 
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					  C O N F I D E N T I A L SECTION 01 OF 02 BOGOTA 004636 

SIPDIS

NOFORN

E.O. 12958: DECL: 04/11/2014
TAGS: ECON KCRM PGOV PHUM PTER SNAR CO
SUBJECT: ASSET SEIZURE AND DEMOBILIZATION FUNDING

REF: SECSTATE 64720

Classified By: Ambassador William B. Wood; reason 1.4 (d)



1. (U) This is an Action Request (please see paragraphs 2 and
12) in reply to reftel request for information about
Colombian Law 793 of 2002, "La Ley de la Extincion de
Dominio."



--------------------------


Summary


--------------------------





2. (SBU) Colombia has two laws that address asset forfeiture
and seizure, one criminal (Law 600) and one civil (Law 793).
In addition, the draft "Law of Justice and Reparations"
currently before Congress contemplates "donations" of legal
assets to fund victims' compensation. Criminal seizures
under Law 600 are cumbersome and time-consuming, but civil
forfeiture under Law 793 is relatively efficient. Once goods
are under the GOC's control, however, there is no ready means
to liquidate them. Current laws limit how the GOC can use
seized assets, so the GOC currently has no plans to use them
to fund demobilization of illegal armed groups. The Embassy
is encouraging the GOC to identify assets -- forfeited or
otherwise government-owned -- that it could quickly
liquidate, and examining how the GOC could modify current
laws or draft new ones to facilitate liquidation of assets in
the future. In addition, the "Law of Justice and
Reparations" would, if approved in its current form, allow
the GOC to "encourage" wealthy leaders of illegal armed
groups entering into demobilization agreements to donate
substantial assets to the government which would redistribute
them as a form of reparations to victims. ACTION REQUEST:
Embassy requests Washington's assistance to help the GOC
develop an effective legal mechanism to liquidate seized
assets, both legally and illegally acquired by
narco-terrorists, and redistribute them to victims of
violence. End Action Request and Summary.



--------------------------


Colombian Asset Forfeiture and Seizure Laws


--------------------------





3. (U) Colombia has two laws that address asset forfeiture
and seizure: Law 793, which governs civil forfeitures, and
Law 600, which regulates criminal seizures. Assets forfeited
under Law 600 in narcotics cases as well as assets seized
pursuant to Law 793 are turned over to the National Narcotics
Affairs Office ("Direccion Nacional de Estupefacients," or
DNE), which uses the assets to subsidize anti-narcotics law
enforcement efforts. The Office of the Prosecutor General
("Fiscalia") manages assets seized or forfeited for
non-narcotics reasons. The Fiscalia has limited power to
dispose of these assets, although it can donate them to
specific charitable organizations.



4. (U) The GOC has no comprehensive estimate of its inventory
of assets seized in criminal proceedings and forfeitures,
although it has records of seized assets currently managed by
the DNE and a general, if imprecise, inventory of seized
assets held by the Fiscalia. Interagency seizure estimates
included in paragraph 5 include only property forfeited
civilly.



5. (U) According to the GOC, it has seized assets from civil
cases valued at nearly USD 215 million since Law 793 went
into effect in December 2002. In 2002, the GOC focused its
efforts on five departments and seized assets from the
Revolutionary Armed Forces of Colombia (FARC), National
Liberation Army (ELN), Popular Liberation Army (EPL), United
Self-Defense Forces of Colombia (AUC), and independent
narcotrafficking organizations totaling over 235 billion
Colombian pesos (nearly USD 83 million). Seizures in 2003
totaled more than 365 billion pesos (over USD 131 million),
as the GOC expanded operations into more departments and
targeted more narcotraffickers. However, the overwhelming
majority of these seizures were of real estate; less than 5
percent of seized assets were liquid.



6. (SBU) The Embassy has not been able to identify a legal
basis for GOC disposal/sale of forfeited assets. This poses
a severe constraint and helps explain why the assets remain
"locked up" in the GOC. The Embassy is doing its own legal
analysis to determine if there is an easy way to remedy this
problem. Those from whom assets have been seized would
probably fight an amendment to existing legislation.
Moreover, narcotraffickers have threatened anyone attempting
to put seized assets to productive use. Any sale or disposal
of assets would have to be accompanied by appropriate
security measures to ensure that the new owner survives the
transfer of ownership.



--------------------------


Ad Hoc Seizure Strategy


--------------------------





7. (C) Under the current forfeiture/seizure system, law
enforcement and military forces identify financial targets on
an ad hoc basis. No strategy exists to establish financial
target priorities or systematically develop joint,
interagency tactics for attacking them. For most criminal
and all civil cases, data goes to Fiscalia prosecutors;
however, the Fiscalia's processing is notoriously slow.
There is no distinction between terrorists and other
criminals under Colombian seizure laws.


--------------------------


Interagency Process


--------------------------





8. (U) Law 793 shifted the burden of proof in civil
forfeiture cases from the state to the individual, making all
goods illegal unless proven otherwise. The streamlined civil
forfeiture proceedings can be completed in 90 days.
Unfortunately, procedures for criminal seizures are still
cumbersome and excessively bureaucratic; there is no set
deadline or hierarchy for criminal cases and decisions take
place at the same speed as the corresponding trials. Various
law enforcement agencies, as well as the Fiscalia, have
authority to initiate seizure proceedings. Depending on the
crime, the Ministry of Interior and Justice, the Ministry of
Defense, the Inspector General's Office ("Procuraduria"),
National Narcotics Affairs Office, and/or the National
Comptroller General's Office can be involved in the process.



--------------------------


Demobilization Process


--------------------------





9. (U) Decree 128 of January 2003 outlines the process for
providing economic benefits to individuals who demobilize and
reincorporate into civilian life, but does not specify the
origin of such funds. Current law does not provide for the
use of seized assets to fund demobilization, and the GOC has
no plans to do so.



10. (U) The proposed "Law of Justice and Reparations" now
before the Colombian Congress would require individuals to
"donate" assets for victims' compensation as a sign of good
faith. GOC officials have told us they assume these
donations would come from legal funds, since illicitly
obtained assets should be forfeited. Moreover, illicit
assets placed in a victims' compensation fund would still be
susceptible, in theory, to forfeiture, since the donor would
have had no legal right to transfer them.



11. (SBU) Even when assets are immediately and freely
transferable, potential recipients often fear retribution
from narco-terrorists and are unwilling to receive them.
Given such anxieties, and considering the complicated
interagency requirements in place for seizures and the
minimal liquid assets available from them, the current asset
forfeiture system would have to undergo significant changes
in order to finance demobilization. The Embassy is
encouraging the GOC to identify assets -- forfeited or
otherwise government-owned -- that it could quickly
liquidate. At the same time, we are looking at how the GOC
could modify current laws or draft new ones to enable quick
liquidation of assets in the future.



12. (U) ACTION REQUEST: Embassy requests Washington's
assistance to help the GOC develop an effective legal
mechanism to liquidate seized assets, both legally and
illegally acquired by narco-terrorists, and redistribute them
to victims of violence. The recommendations should take into
account that the proposed legal mechanism would operate in
the context of an offer to illegal armed groups to enter into
a peace process and demobilize. End Action Request.
WOOD