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Background and Argument

3.

Given its position as an international centre, it is

important that Hong Kong should be able to cooperate

effectively with foreign countries to combat drug trafficking. In July 1989, Hong Kong enacted the Drug

Trafficking (Recovery of Proceeds) Ordinance 1989 which is

based on the UK Drug Trafficking Offences Act 1986. It

provides for the confiscation of the proceeds of drug

trafficking and for the designation of foreign countries so

that their restraint and confiscation orders can be enforced

in Hong Kong.

4. Hong Kong now requires arrangements to ensure reciprocal treatment. The best way to achieve this, and Hong Kong's preference, is for Hong Kong to enter into agreements, which would form a basis for mutual designation under one

another's legislation. It would be possible to extend to Hong Kong existing UK agreements with other countries. Hong Kong's needs will not always coincide with ours. And

this would not help our efforts to enhance Hong Kong's

autonomy in as many fields as possible in the run-up to

1997.

But

5. I therefore recommend that Hong Kong be authorised to

enter into its own bilateral agreements. The draft

entrustment is framed in such a way that it enables Hong

Kong to conclude not only the agreement with Canada but also

similar agreements with other countries (Hong Kong has

already held a first round of talks with the US and has

received an informal approach from Australia).

Chinese Dimension

6. These drugs agreements will create new international

rights and obligations for Hong Kong. If they were to

continue after 1997, we should need to consult the Chinese.

However, Hong Kong's plan is for the drugs agreements to be

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