Mexico Concerned about U.S. Law to Impose Economic Sanctions against Drug Traffickers

SourceMex Economic News & Analysis on Mexico, February 16, 2000 | Go to article overview

Mexico Concerned about U.S. Law to Impose Economic Sanctions against Drug Traffickers


A law passed by the US Congress last year is raising strong concerns in Mexico in the weeks leading to the annual drug-certification process. The initiative, the Drug Kingpin Act of 1999, was signed by US President Bill Clinton last December. Since the law was only approved at the end of 1999, this is the first year in which its provisions will be tested.

The legislation aims to cripple the financial operations of international drug cartels by freezing their US assets. It requires the US Treasury Department to issue an annual report on the world's most prominent drug traffickers, similar to the certification exercise submitted for Mexico, Colombia, and dozens of other countries each year.

The report will be compiled with assistance from the Attorney General's Office, the Central Intelligence Agency (CIA), the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the State Department, and the Department of Defense.

The Treasury list is to be submitted to the White House by June 1 each year. The president would then have the authority to designate people on the list as "threats to the national security," which would trigger restrictions such as freezing their assets and denying them entry to the US. The law authorizes sanctions against associates, family members, and US businesses related to the drug traffickers on the list.

Sens. Paul Coverdell (R-GA) and Dianne Feinstein (D-CA), the principal sponsors of the legislation, say the initiative is an alternate to the annual certification of countries. The senators said the law's ultimate goal is to move toward the "decertification" and punishment of drug lords' business empires, rather than sanctioning their native countries.

Questions arise about effect on innocent parties But the initiative has created an uproar among Mexican officials and business leaders, who worry that innocent parties might be harmed by extending the restrictions to business associates.

In an interview with The Miami Herald, Attorney General Jorge Madrazo Cuellar raised concerns that the lists would be prepared from reports by anti-drug or law-enforcement agencies, which at times have made mistakes or acted on weak evidence. "There are fears that [the US] will impose sanctions on companies based on rumors," said Madrazo.

Madrazo and other members of President Ernesto Zedillo's Cabinet brought up the concerns about the new law during a meeting with US counterparts in Washington earlier this year.

The attorney general said the law could force the Zedillo administration to defend Mexican companies unfairly placed on the list, which could damage US-Mexican relations.

"If the Arellano Felix family [known drug lords] is on the list, that's no problem," Madrazo told The Miami Herald.

"But what happens if reputable Mexican companies are on the list? It could be used as a disguised US protectionist measure against Mexican exporters."

Madrazo told US officials he was simply relaying concerns brought to the Zedillo administration by business organizations like the Consejo Mexicano de Comercio Exterior (COMCE) and the Asociacion Nacional de Importadores y Exportadores de la Republica Mexicana (ANIERM), who are worried about unfair US actions against them.

In a recent interview with the daily business newspaper El Economista, COMCE and ANIERM representatives compared the Drug Kingpin Act of 1999 to the 1996 Helms-Burton Act, which authorizes sanctions against foreign companies doing business in Cuba (see NotiSur - Latin American Political Affairs, 1996- 03-15).

The strongest protests about the new law have been raised by the Asociacion de Banqueros de Mexico (ABM), which said the law could potentially violate Mexico's sovereignty.

Luis Manuel Mejan, director of legal affairs at Banamex, said the law leaves the banking industry particularly vulnerable, since many Mexican banks have affiliates or representative offices in some major US cities. …

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