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Confidential

WE SHOULD ALSO BEAR IN MIND THAT HONG KONG HAS JUST EMERCED

FROM A MAJOR REVIEW OF US GSP BENEFITS IN A LARGELY FAVOURABLE

POSITION. THERE IS NO EVIDENCE THAT THOSE RESPONSIBLE HERE FOR DRUG

ENFORCEMENT HAVE EVEN DISCUSSED THE POSSIBLY OF

RELATED TRADE MEASURES WITH THOSE RESPONSIBLE FOR GSP

BENEFITS. WE SHOULD BE VERY CAUTIOUS ABOUT STIRRING UP TOO MUCH

INTEREST IN SUCH A POSSIBILITY.

5. ON THE USE OF HONG KONG FOR LAUNDERING DRUG-RELATED MONEY,

THERE HAVE BEEN OCCASIONAL EXPRESSIONS OF CONCERN BY THE JUSTICE

DEPARTMENT AND DEA, BUT THIS HAS NEVER BEEN A HIGH PRIORITY ISSUE, DOJ ARE MUCH MORE CONCERNED ABOUT CARIBBEAN OFFSHORE

BANKING CENTRES. THERE IS, OF COURSE, AN OUTSTANDING DOJ PROPOSAL

FOR PRELIMINARY DISCUSSIONS ON MUTUAL LEGAL ASSISTANCE (MY

TELNO 46), BUT RECENT CONTACTS WITH RICHARD (DOJ) SUGGEST THAT

HIS VISIT TO HONG KONG MAY NOT NOW TAKE PLACE BEFORE APRIL

(THIS ALSO SUGGESTS THAT DOJ DO NOT REGARD HONG KONG AS AN

URGENT PROBLEM, AND POINTS TOWARDS CAUTION BEFORE MAKING ANY

OFFICIAL REPRESENTATIONS).

ACLAND

YYYY

JR:BAN 9938

LIMITED

HKD

NAD

NCAU

MR GILLMORE

MR SLATER

SIR D. WILSON

ERD (Street) Leg Air (fifort),

D

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Confidential

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