GRS 500
CONFIDENTIAL
FM WASHINGTON
TO PRIORITY FCO
Confidential
HKD 333 RECEIVED IN REGI
TELNO 825
OF 132222Z APRIL 87
INFO PRIORITY HONG KONG, HKGO NEW YORK INDEX
14 APR TOP COPY
A DIST ?
DESK OFFICER
Act. ken
тек
22/4
YOUR TELNO 983 TO HONG KONG, NEW US DRUGS LEGISLATION
1. WE HAVE NOW BEEN ABLE TO CONSIDER THE HONG KONG GOVERNMENT'S BRIEF, TOGETHER WITH THE STATE DEPARTMENT'S 1987 INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT.
2. THE STATE DEPARTMENT (BOTH THE EAST ASIA AND INTERNATIONAL NARCOTICS BUREAUX) ARE WELL AWARE OF THE HONG KONG GOVERNMENT'S CONCERN ON THE BASIS OF REPORTING FROM THE US CONSUL GENERAL IN HONG KONG. WE HAVE TAKEN OPPORTUNITIES INFORMALLY TO REINFORCE THE POINT WITH THEM.
3. WE WOULD ADVISE AGAINST A MORE FORMAL DEMARCHE TO THE STATE DEPARTMENT. WE DO NOT BELIEVE ON THE BASIS OF HONG KONG'S BRIEF THAT WE WOULD BE ABLE TO DISPUTE THE FACTUAL MATERIAL IN THE 1987 INTERNATIONAL NARCOTICS REPORT. THE US STATISTICS INDICATE THAT NINE METRIC TONS OF HEROIN WERE CONSUMED IN HONG KONG IN 1986 (THE LEGISLATION DEFINES A SIGNIFICANT CONSUMER AS A COUNTRY CONSUMING OVER FIVE METRIC TONS A YEAR). THE REPORT ALSO NOTES THAT QUOTE STRICT BANK SECRECY LAWS AND THE ABSENCE OF CURRENCY CONTROLS MAKES THE TERRITORY A CONVENIENT PLACE TO BANK FOR NARCOTICS TRAFFICKERS UNQUOTE AND SUGGESTS THAT HONG KONG BASED TRIADS ARE INVOLVED IN DRUG TRAFFICKING OUTSIDE HONG KONG. AS THE DEPARTMENT OF JUSTICE TOLD THE HONG KONG ATTORNEY GENERAL HERE IN MARCH, THEY CONSIDER HONG KONG TO BE THE SECOND LARGEST MONEY-LAUNDERING CENTRE IN THE WORLD.
4. AS WE MADE CLEAR IN OUR TELNO 446, THE MAIN POINT IN THE 1986 US DRUGS LEGISLATION IS THAT IT CREATES NEW AUTHORITY FOR THE ADMINISTRATION TO MOVE AGAINST UNCOOPERATIVE DRUG PRODUCING OR DRUG TRANSIT COUNTRIES. IN THIS IMPORTANT RESPECT, THE STATE DEPARTMENT'S 1987 REPORT IS FAVOURABLE TO HONG KONG: QUOTE THE HONG KONG GOVERNMENT IS COOPERATIVE AND MOVES EXPEDITIOUSLY TO FACILITATE EXTRADITION REQUESTS UNQUOTE. AGAINST THIS BACKGROUND WE CONTINUE TO BELIEVE THAT IT WOULD BE A MISTAKE FOR HONG KONG TO STIR THINGS UP BY LOBBYING ON THE HILL, FOR THE REASONS SET OUT IN OUR TELNO 446. STAFFERS ON THE HOUSE SELECT COMMITTEE ON NARCOTICS ABUSE AND CONTROL TELL US INFORMALLY THAT THERE ARE IN ANY CASE NO PLANS FOR REVIEWING THE LIST AND ADMINISTRATION CONTACTS ADD THAT IN THEIR VIEW THERE WOULD BE NO CHANCE OF PERSUADING CONGRESS TO DELETE HONG KONG FROM THE LIST. SINCE IT IS CONGRESS AND NOT THE ADMINISTRATION WHO CALL THE SHOTS ON THIS ISSUE, WE SEE LITTLE
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