Fact Sheet: Overview of the Foreign Narcotics Kingpin Designation Act

Introduction

The Administration has released the names of five individuals and one entity against whom the President decided to impose sanctions pursuant to the Foreign Narcotics Kingpin Designation Act (21 U.S.C. 1901-1908). The Foreign Narcotics Kingpin Designation Act (the "Kingpin Act") targets, on a worldwide basis, significant foreign narcotics traffickers, their organizations, and operatives.

Background

The purpose of the Kingpin Act is to deny significant foreign narcotics traffickers, their related businesses, and their operatives access to the U.S. financial system and all trade and transactions involving U.S. companies and individuals. The Kingpin Act authorizes the President to take these actions when he determines that a foreign narcotics trafficker presents a threat to the national security, foreign policy, or economy of the United States. Congress modeled the Kingpin Act after the effective sanctions program that the Department of the Treasury's Office of Foreign Assets Control ("OFAC") administers against the Colombian drug cartels pursuant to Executive Order 12978 issued in October 1995 ("Executive Order 12978") under authority of the International Emergency Economic Powers Act ("IEEPA").

Implementation

The Kingpin Act requires that the Departments of Treasury, Justice, State, and Defense; and Director of National Intelligence, coordinate on the identification of proposed kingpins for designation by the President. Although not required by statute, the Department of Homeland Security is also included in the process. By June 1 of each year, the Act calls for the President to report to specified congressional committees those "foreign persons [he] determines are appropriate for sanctions" and stating his intent to impose sanctions upon those foreign persons pursuant to the Act. While this is a recurring annual requirement, the President may designate significant foreign narcotics traffickers at any time.

Under the Kingpin Act, the President may designate foreign entities as well as foreign individuals as "kingpins." A foreign person is defined as "any citizen or national of a foreign state or any entity not organized under the laws of the United States, but does not include a foreign state." The President is not required to designate Colombian persons exclusively under Executive Order 12978, and may designate a Colombian individual or entity under the Kingpin Act, which is intended to be global in scope.

The long-term effectiveness of the Kingpin Act is enhanced by the Department of the Treasury's authority (in consultation with appropriate government agencies and departments) to make derivative designations of foreign individuals and entities providing specified types of support or assistance to designated traffickers. This authority broadens the scope of application of the economic sanctions against designated kingpins to include their businesses and operatives.

Including this year's action, the President has named a total of 68 Kingpins (59 individuals and 9 entities) since June 1, 2000. The Department of the Treasury's OFAC has designated over 300 entities and individuals as derivative designations pursuant to section 805(b) of the Kingpin Act; these entities and individuals are subject to the same sanctions that apply to Kingpins. In addition, 14 companies and individuals are "blocked pending investigation" by OFAC because of their ties to designated Kingpins. Designated individuals and immediate family members who have knowingly benefited from the Kingpins' illicit activity are denied visas to the United States under 8 U.S.C. section 1182(a)(2)(C).

The Kingpin Act provides for criminal penalties of up to 10 years imprisonment for individuals and up to a $10 million fine for entities for violations, as well as a maximum of 30 years imprisonment and/or a $5 million fine for officers, directors or agents of entities who knowingly participate in violations. The Kingpin Act also provides for civil penalties of up to $1.075 million.

Designations

The foreign persons that the President has designated as appropriate for sanctions pursuant to the Kingpin Act are:

Victor Emilio Cazarez Salazar (Mexico)

Gulf Cartel (Mexico)

Jorge Mario Paredes Cordova (Guatemala)

Hají Azizullah Alizai (Afghanistan)

Shahbaz Khan (Pakistan)

Frederik Heinz Barth (Germany)

These names are being added to the designations first announced in June 2000 and announced every year since then. A complete list of individuals and entities designated can be found at www.treasury.gov/ofac.