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The Drug Trafficking (Recovery of Proceeds) Ordinance 1989 came into effect in September 1989. The Ordinance is designed to allow for the confiscation of the proceeds of drug trafficking, and to counter drug money laundering in Hong Kong. Section 28 provides for countries and territories outside Hong Kong to be designated so that their confiscation and related orders can be registered and enforced in Hong Kong and assistance provided to their drug
trafficking investigations. In this respect, Hong
Hong Kong now requires arrangements to ensure reciprocal treatment.
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In consultation with the FCO we
we have concluded that to ensure reciprocity we should first enter into bilateral agreements with countries with which we wish to cooperate in the investigation and prosecution of drug offences, and, on the basis of such agreements, should designate these countries. It should be noted that the Ordinance does not require that agreement s be the basis of designation. Designation without an agreement however would not guarantee reciprocity, and would have the added disadvantage that the circumstances under which assistance may be given will
will be unclear from case to case.
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I
A related issue is the 'Kerry Amendment' to the United States Anti-Drug Abuse Act which requires the US Government negotiate with foreign authorities, including Hong Kong,
arrangement s under which foreign financial institutions would keep records of all transactions in excess of US$10,000 and establish mechanisms under which such records would be made available to US law enforcement officials. In consultation with the
with the FCO, and with its support, we have offered to make provision in our bilateral agreement for the provision of information related to particular drug trafficking investigations. Such provision is a common feature of bilateral agreements related to drug trafficking. The Ordinance presently in effect obliges banks and financial institutions to report transactions believed to involve the proceeds of drug trafficking whether in Hong Kong or elsewhere. It will also permit Hong Kong to provide such information to designated countries.
Proposal
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We therefore propose that Hong Kong should establish bilateral agreements with other jurisdictions having regard to the existing level of cooperation
cooperation and mutual
mutual support, the amount of illicit drug traffic and the similarity of legislation with regard to drug trafficking and the seizure of assets, and that such jurisdictions should be designated under section 28 of the Ordinance so that their confiscation orders in relation to drug trafficking offences may be made effective in Hong Kong.