TNAG-0417-FCO40-463-Review-of-narcotics-problem-in-Hong-Kong-1973 — Page 164

CONFIDENTIAL

Drug syndicates

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The fourth working session was concerned with the penetration of syndicates in Hong Kong, Laos and Thailand, An account was given of the syndicates in Hong Kong. There were five. Each comprised ethnic Chiu Chau (the Chiu Chau is, I understand, an ethnic group originally from a particular area of China). They were involved only in the importation of the raw opium and morphine base and they passed their supplies on to the retail markets. A synlicate was made up of a financier, broker, stock keeper and courier. The financier and the broker did not touch the opium; financier being responsible for putting up the money, the broker,for arrangements for the supply from Thailand. The store keeper received the opium on arrival and ensured that it was passed to the courier for distribution. Syndicates were virtually impossible to penetrate because of the loyalty of the members to one another and because of their structure. There were numerous small syndicates at street level dealing with the distribution and these contained Canton Chinese as well as Chiu Chau. There has been greater success against these

22. A number of suggestions were made for penetrating the syndicates. The Americans suggested wire-tapping, but this was clearly a very sensitive subject and the Hong Kong officials were very cautious about it. Rolph mentioned the idea of setting up a grand jury, or public commission to enquire into the heroin problem at large; this would enable them to get suspects in front of a public enquiry and compel them to answer questions. He thought that this might be effective in bringing social pressure to bear. It did not seem to me very likely that this would be effective, because one of the men who they knew was the head of a major syndicate and was said to be a very respectable citizen had the soubriquet of "White Powder"; from the accounts given he did not seem to be socially ostracised.

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The next alternative discussed was the possibility of using the Inland Revenue to strike at these people for unpaid taxes, a device which had apparently been used very effectively in the United States. The Hong Kong officials said that there was great difficulties in doing this because of their tax system, but there were some differences of opinion among them about the possible effectiveness of the device and they undertook to consider it further. The last suggestion made was that it might be useful to exchange information between the Thailand BNDD and Hong Kong about known Thai traffickers and known Hong Kong syndicates members. This might enable closer check to be kept upon the movement of these people.

Heroin refineries

23. The fifth working session was devoted to the problem of heroin refining in Hong Kong. It was estimated that there was 30-40 refineries in Hong Kong. Many of these wore in the multi storied flats that had sprung up over the colony; there were now about 360 thousand. The police were considering ways of narrowing down the field, but it was like looking for a needle in a haystack. The Americans referred to the possibility of adulterating acetic anhydride, the substance that is required to convert morphine base into heroin, so that while it could be used for its commercial purposes it could not be used for making heroin. I undertook to discuss with scientists in the United Kingdom whether there was any possibility of doing this. personally do not think there is much in this idea, since the substance is very widely used in many branches of industry and it would be virtually impossible to reach international agreement that it should be adulterated simply to prevent heroin being

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