UK/Us Demarche
US MONEY LAUNDERING CONTROL ACT
1.
The UK Government welcomes the US Government's initiative for the combat of drug trafficking and abuse, and in general applauds the powers given to the US authorities by the Money Laundering Control Act to tackle drug-related offences. The UK Government shares the objectives of the US Government: it looks forward to discussions in the near future on an agreement for the confiscation of the proceeds of drug trafficking offences and in the longer term to discussions on a mutual legal assistance treaty.
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2. The UK Government is however concerned by the extraterritorial implications of the Money Laundering Control Act, which it believes raise important matters of principle. It hopes that the US authorities will take account of this concern in framing the detailed regulations for the administration of the Act and, where necessary, in subsequent interpretation and implementation. the UK Government's view it would be a pity if US legislation which the UK welcomes and supports were to lead to friction because of attempts at extraterritorial enforcement, particularly at a time when the US and UK Governments are about to discuss co- operative arrangements for tackling international drug trafficking.
3. The UK Government's concerns are as follows:
(i) 1956 C(4): The definition of "financial transaction" is drawn very wide. This creates a risk that a transaction which involves the US only in the most peripheral way will be judged as coming within US jurisdiction. The US authorities should note the potential extraterritorial problems here and the consequent risk of friction with the UK, particularly in the light of the comments on 1956 (c) (7) and 1956 (f) below.
(ii) 1956 C(7):
The definition of "specified unlawful activity" is drawn very wide.
It includes not only drugs related offences but also the criminal provisions of a number of US statutes with extra- territorial application. The extraterritorial legislation includes the Export Administration Act, the International Emergency Economic Powers Act and the Trading with the Enemy Act. The inclusion of these extraterritorial provisions as leading to an offence under the Money Laundering Control Act makes the Act itself extraterritorial and is objectionable in principle. The US authorities should be aware that actions relying on those provisions would be likely to lead to friction with the UK Government: see also the comments on 1956 C(4) above and 1956 (f) below.
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