US embassy cable - 04BOGOTA4636

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, Demobilization 
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." 
 
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Summary 
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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. 
 
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Colombian Asset Forfeiture and Seizure Laws 
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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. 
 
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Ad Hoc Seizure Strategy 
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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. 
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Interagency Process 
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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. 
 
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Demobilization Process 
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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