Cablegate: Colombia Looks at Developing Illicit Finance

VZCZCXYZ0000
PP RUEHWEB

DE RUEHBO #2831 2142048
ZNR UUUUU ZZH
P 012048Z AUG 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 4025
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
INFO RUEHBR/AMEMBASSY BRASILIA 8299
RUEHCV/AMEMBASSY CARACAS 0780
RUEHLP/AMEMBASSY LA PAZ AUG LIMA 6418
RUEHZP/AMEMBASSY PANAMA 2096
RUEHQT/AMEMBASSY QUITO 7112

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

© Scoop Media