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Background
1.
It is HMG's policy to try to trace the proceeds of drug trafficking, to seek to confiscate them, and so make such activity unprofitable and so deter traffickers. The 1986 Drug Trafficking Offences Act (DTOA) has created wide-ranging powers to trace, feeze and confiscate the proceeds of drug trafficking. Under Section 26, the Act also makes these powers available to other, specifically designated, countries. A country would be so designated when it enters into an agreement to reciprocate these powers with the UK.
2. Negotiations for an agreement are well advanced with the US. We are in contact with a number of other countries where we think drug monies are being laundered, including many where legislation (to trace, freeze and confiscate assets) has not yet been introduced. Once such country is Malaysia: we understand the Singaporeans are closely following the progress of a draft Bill through the Malaysian Parliament which includes provisions on asset seizure and outlawing money laundering. We have instructed our High Commission in Kuala Lumpur to press the Malaysians to include a provision to enable the Government of Malaysia to enter into reciprocal agreements.
3.
So far, the Government of Singapore have been lukewarm about our suggestion for an agreement. We understand they are worried that an agreement could adversely affect investment by threatening banking secrecy. We therefore need to point out that there is evidence that such an agreement would, on the contrary, inspire greater confidence in Singapore as a financial centre for legitimate business.
4. There are two financial centres whose example we should bring to the attention of the Government of Singapore:
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(i) Switzerland The Swiss Government had entered into a mutual
legal assistance treaty (MLAT) with US. Since the treaty has been in operation, drug proceeds have been frozen and confiscated without prejudicing the strict banking secrecy for legitimate money.
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