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The Guangdong Narcotics Control Commission hosted the second Guangdong, Hong Kong and Macau Tripartite Conference on Policy to Tackle Drug Abuse and Trafficking in Zhongshan in February. The conference was attended by more than 120 anti-drug officials and professionals who had useful exchanges on the latest drug abuse and trafficking trends, and on strategies to tackle the problem.

On the anti-money laundering front, Hong Kong is a member of the Financial Action Task Force on Money Laundering (FATF) as well as a founding member of the Asia/Pacific Group on Money Laundering (APG). Over the years, Hong Kong has put in place effective legal and financial systems to tackle money laundering, and has implemented most of the FATF's 1996 Forty Recommendations the international standards and practices in combating money laundering designed for universal application either by legislation or through guidelines issued by the financial regulators. Apart from being its president in 2001-02, Hong Kong also served from 2000 to 2003 as a member of FATF's Steering Group, an advisory body which sets the direction and priority of the work of the Task Force.

Hong Kong contributes to all the important activities of the FATF. It participated in the work of the Working Group on the Review of the Forty Recommendations which culminated in the adoption of the revised set of Forty Recommendations by the FATF at its Berlin Plenary in June. The revised set forms the new international benchmark against which efforts by jurisdictions world-wide in the areas of anti- money laundering and countering financing of terrorism are assessed. Preparatory work has begun on implementing the revised Forty Recommendations in Hong Kong. Hong Kong took part in the work of the FATF's Working Group on Terrorist Financing (WGTF) and the Working Group on International Financial Institutions (WGIFI). The work of the WGTF led to the issue in 2003 of various Interpretative Notes and Best Practice Papers on Special Recommendations concerning freezing and confiscating terrorist assets, alternative remittance, and wire transfer. Besides this, Hong Kong, through active involvement in the work of the WGIFI, assisted in the development of a new common assessment methodology for anti-money laundering and countering financing of terrorism for use by the FATF and the International Monetary Fund/World Bank.

In the context of the Non-Cooperative Countries and Territories (NCCT) exercises, Hong Kong has acted as the principal contact in the NCCT review exercise of Indonesia since 2000, and was part of the FATF delegation to the Philippines in March 2003. In both cases, the FATF succeeded in convincing the two jurisdictions to enhance their anti-money laundering regimes.

In September, Hong Kong was selected as a member of the APG's newly formed Steering Group, and it took part in the APG's mutual evaluation of the Philippines in November. Mutual evaluations are the primary means by which the APG monitors the progress made by members in implementing the FATF Forty Recommendations. The mutual evaluation process is designed to give due recognition where standard benchmarks are met, and to identify weaknesses and make appropriate

recommendations.

Hong Kong has also joined the newly formed APG Typologies Working Group. The Working Group is to undertake a series of coordinated and intensive examinations of measures to counter money laundering and terrorist financing methods or trends. It will also develop and support a network of APG experts on key typological issues and