COLOMBIA LOOKS AT DEVELOPING ILLICIT FINANCE

UNCLAS BOGOTA 002831 SIPDIS SENSITIVE EEB/ESC/TFS FOR JJALLORINA; TREASURY FOR OFAC ASZUBIN, JSMITH, BMCBRIEN, MSWANSON E.O. 12958: N/A TAGS: PTER SNAR KCRM PGOV ECON EFIN ETTC CO SUBJECT: COLOMBIA LOOKS AT DEVELOPING ILLICIT FINANCE SANCTIONS LIST ¶1. (SBU) In a July 25 speech to the VIII Panamerican Congress on the Prevention of Money Laundering and Terrorism Finance, Colombian Vice President Francisco Santos announced the GOC's intention to create an Office of Foreign Assets Control (OFAC)-type sanctions list of Colombian nationals involved illicit and terrorist activities. On July 31, Vice President Santos invited OFAC Attache and Econoff to a meeting with the legal counsel's office and banking industry representatives to discuss how the GOC might proceed with developing such a list. ¶2. (SBU) Santos opened the meeting by stating that the sanctions list idea had the full support and interest of President Uribe and that the GOC was looking for a mechanism to target Colombian nationals and companies involved in laundering narcotics money and supporting Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN) terrorist activities. He acknowledged that the first step would focus on identifying what constitutional and statutory law issues might arise in establishing a sanctions list similar to the so-called "Clinton List" maintained by OFAC. (NOTE: In Colombia the term "Clinton List" refers to Executive Order 12978 to Block Assets and Prohibit Transactions with Significant Narcotics Traffickers, issued by President Clinton on October 24, 1995. END NOTE). ¶3. (SBU) Colombian Banking Association (Asobancaria) Executive Vice President Ketty Valbuena expressed general support for the concept but underscored that the GOC must identify all legal hurdles first. She also pointed out that mechanisms for transparent, but secure, information exchange between the financial industry and Colombian law enforcement were needed to make a sanctions list, or even a uniform watch list, feasible. ¶4. (SBU) OFAC Attache reviewed the legal basis and general system utilized to develop USG sanctions lists and highlighted that such lists were focused primarily on foreign individuals and entities. He also emphasized that OFAC designations are based on extensive administrative case development. ¶5. (SBU) Vice President Santos acknowledged that legal and informational exchange aspects posed a challenge, but requested his legal counsel prepare an analysis of the legal and regulatory bases necessary to create a sanctions list and report back to him by September 1. He also requested that Asobancaria pass the legal counsel's office its suggestions of how to develop appropriate and effective informational exchange mechanisms to support evidentiary-based designations. ¶6. (SBU) Vice President Santos expressed hope that the GOC could develop a sanctions list that would have the same immediate impact as OFAC designations and that the GOC's list might be linkable to the OFAC lists. Santos said such cooperation with the USG would serve as an excellent example of bilateral collaboration in preventing money laundering and terrorism finance. OFAC Attache informed Vice President Santos that OFAC and other USG agency experts stand ready to assist Colombia in examining how it could go about developing a sanctions or watch list once the GOC had identified a legal framework. ¶7. (SBU) COMMENT: The GOC's interest is laudable and worthy of support. However, the focus on Colombian nationals and companies is likely to create significant legal and regulatory hurdles. The GOC may have to introduce new legislation, which could require a lengthy review and approval process. Post will continue to monitor the discussions and maintain Department informed of developments. END COMMENT. BROWNFIELD