US: Treasury - a nuke with no fall out

FARC are bad people. It's difficult to see how they have any redeeming qualities. They took over the drugs trade, and now defend it against all comers, criminals and government alike, and they spread their activities into bombing cities. They kidnap for ransom or for political pressure and hold victims for years, without regard to their circumstances. Even the French government recently gave up an attempt to free a French national held for an extended period.

And they make HUGE amounts of money from drugs, grown in an area they effectively rule to the exclusion of the government.

The USA is fighting a losing battle against the amount of cocaine entering the country from may directions but mostly sourced from Colombia.

But the USA is trying. It no longer sees military action, of the sort that removed the Cartels and created the vacuum that FARC filled, as viable. And putting men on the ground for guerilla action won't work due to the tight hold that FARC has over its territories. Firebombing the coca fields is also not politically acceptable within Colombia - and its neighbours don't want to allow fly-over rights to US military aircraft en route to such actions.

So that leaves the USA to try to disrupt the money flow. Of course, drug deals in the US are done in US dollars, so that at least leaves the door open for action against cash smuggling and assets including bank accounts.

It is commonplace for the US to give more attention to trying to freeze assets: they think of the US Treasury as a kind of nuke with no fall-out. Mostly, that's reasonably accurate. But in the case of FARC it's had a slow burning fuse.

On 29 May, 2003, President George W. Bush identified FARC as a significant foreign narcotics trafficker pursuant to the Foreign Narcotics Kingpin Designation Act. In November 2001, FARC was designated as a Specially Designated Global Terrorist pursuant to Executive Order 13224. In October 1997, the FARC was designated as a Foreign Terrorist Organisation by the Secretary of State.

On 22 April 2008, OFAC made new designations that focus on a FARC financial network that involves two Colombian money exchange business. FARC used these Colombian money exchange businesses, or "profesionales del cambio" as they are commonly known in Colombia, to launder narcotics proceeds.

Also named are several drug traffickers.

The Action is under Foreign Narcotics Kingpin Designation Act 1999, the so called "Kingpin Act"

The US has a stern warning: "Today's designation action freezes any assets the six designated persons may have under U.S. jurisdiction and prohibits U.S. persons from conducting financial or commercial transactions with these individuals and entities. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,075,000 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5,000,000. Criminal fines for corporations may reach $10,000,000. Other individuals face up to 10 years in prison for criminal violations of the Kingpin Act and fines pursuant to Title 18 of the United States Code."

Full listing and associated due diligence and risk management information can be found in World Money Laundering Report Resources.