TNAG-2903-FCO40-4177-Drug-trafficking-agreements-between-Hong-Kong-and-other-coun-1993 — Page 3

CONFIDENTIAL

XCC(93)55

The Case in Question

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The case in question involved a drug trafficker known as LAW Kin-man. The US authorities have asked for a 50% share of the assets confiscated by the Hong Kong Government, referring to the considerable investigative and litigative resources they have devoted to the case. They have also claimed that their efforts have provided the Hong Kong Government with sufficient grounds to seek the restraint orders against the drug trafficker's assets in Hong Kong.

The Policy on Asset Sharing

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The main purpose of our bilateral agreements is to provide mutual assistance to suppress drug trafficking and to combat money laundering; we feel that financial gain should be nothing more than an additional benefit. However, in recognition of the importance of international cooperation in combating the drug problem, it is appropriate to consider requests to share confiscated assets on a case-by-case basis.

Why Hong Kong Should Share Assets with the USA

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Although Hong Kong does not have to entertain the US request, there are several reasons why we should favourably consider the request -

(a) other countries including the UK, Canada and

Switzerland have agreed to do so;

(b)

(c)

(d)

the Americans are sure to attach higher priority to breaking drug rings involving countries which are willing to share confiscated assets with them;

renewal of the HK-US agreement concerning confiscation of drug assets, which expires in January 1994, will be more difficult to negotiate if we do not agree to asset sharing; and

forfeiture procedures brought by the US Attorney's Office in New York led to the confiscation and realization of the drug trafficker's assets in Hong Kong. For these reasons, it is proposed that the US request be entertained.