US Drops Names From ‘Kingpin’ List, Accused of ‘Lacking Rigor’

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The United States has dropped almost two dozen Latin American entities from its notorious drug “kingpin” list, exemplifying how difficult it can be at times to distinguish between licit and illicit businesses in the region. 

The Treasury department announced on February 23 that over 20 Colombian, Guatemalan and Mexican businesses and individuals had been removed from the Specially Designated Nationals (SDN) list, often referred to as the “kingpin” list. 

Among the 16 Colombian entities mentioned is the Colombiana De Biocombustibles S.A. biofuel company. In 2014, Treasury called the company’s partial owner “a political operative and money launderer for La Oficina [de Envigado]” — an infamous criminal organization based in the city of Medellín.

US officials now say the company has presented the institution with “sufficient evidence to prove that they have ended their relationship” with the compromising businesses or people that led to their designation.

However, the founder of Colombiana De Biocombustibles, Carlos Palacio, denies his company ever had criminal ties to begin with, and claims that the “partial owner” had only contributed land to the business.

“The US government lacked rigor…They did us a lot of harm. They ruined our public image,” Palacio told El Espectador.

InSight Crime Analysis

The kingpin act can be a useful tool for US authorities to bring down criminal organizations and their business associates. The Treasury’s designations have often served to pressure foreign countries into taking action against criminals long seen as “untouchable” figures. This has been the case in Honduras, where several traffickers — including businessman and politician José Miguel “Chepe” Handal Pérez — began to fall after the US Treasury forced them into the spotlight.

But as this case demonstrates, it can also be a crippling handicap to businesses that may have been erroneously targeted. And given how much drug money makes its way into the formal economy, it can be tricky determining which businesses do and do not meet the Treasury’s threshold for inappropriate links to criminal networks. 

SEE ALSO: Coverage of Money Laundering

The lack of due process involved in the Treasury’s “naming and shaming” strategy further risks hurting the wrong people. US nationals are generally prohibited from doing dealings with those on the SDN list, whose reputations can be irretrievably tarnished by the designation. Businesses can go into ruin and scores of people can lose their jobs as a result, despite accusations that the United States does not always offer local authorities evidence to justify the sanctions. 

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