HONG Kong and Australian police are claiming a major breakthrough in freezing suspicious money nominally sent offshore, supposedly beyond the reach of the law, after securing more than $13 million belonging to a man facing heroin possession charges. The breakthrough came after the Hong Kong branch of the Banque Nationale de Paris (BNP) finally complied with a September 1992 Hong Kong Supreme Court restraint order freezing the assets of Australian businessman Bruce Michael McCauley, charged in Sydneyin relation to the seizure in February 1992 of 21 kilograms of heroin. This was the largest amount of the drug captured on Australian streets and is estimated to be worth $160 million. The proceeds of crime officer with Australia's National Crime Authority, Andrew Throssel, described BNP's compliance, after the bank initially said the money was in its branch in the South Pacific tax haven of Vanuatu, as ''a potential breakthrough in the enforcement of proceeds of crime legislation''. ''If we are able to enforce orders in Hong Kong over funds nominally in tax havens, a criminal's money will no longer be safe in that place,'' he said. Mere transmission to a tax haven would not put money ''out of reach of the law'', Mr Throssel said. The Financial Investigation Group of the Hong Kong Police Narcotics Bureau spent 16 months tracking McCauley's assets. The assets eventually frozen were from the account of Veteran Ltd., said by police to be ''in effective control'' of McCauley. According to Hong Kong police, BNP had claimed since September that, as the money had been ''transferred'' from the territory to an account in its registered office in Port-Vila, Vanuatu, this placed the assets beyond the jurisdiction of any Hong Kong restraint order, in accordance with standard international banking practice. But then in June BNP finally complied and froze McCauley's $13 million. Hong Kong authorities have also hailed the compliance as a precedent in the fight against drugs. Last month police obtained a bank draft for US$1,320,868.05 and deposited it in a special account pending the outcome of the case against McCauley in Sydney. In February last year, more than 14 kilograms of heroin was allegedly found in a sports bag behind the driver's seat of McCauley's Mercedes. Another five kilograms was found when Australian police stopped a van in which Hong Kong residents Chuk Man-yuan, 59, and Choi Chun-chan, 54, and naturalised Vietnamese restaurateur Jonny Tran were travelling. Police allege Chuk, who was sentenced to nine years' imprisonment for heroin possession earlier this year, handed the bag to McCauley in a suburban street before both vehicles departed in different directions. McCauley, whose hearing resumes in October, claims he thought the bag contained money. BNP's group legal adviser in Hong Kong, Christopher Moore, said it was the bank's policy ''to co-operate with drug enforcement agencies to the full extent permitted by law'' and that for ''legal reasons'' it could not comment on any transfer of funds from the Veteran Ltd. account. Mr Moore stressed BNP's ''inability to comment should not be taken by you as acceptance by us of the correctness of any information'' contained in any newspaper article. Financial group Senior Inspector Phillip Wallace said it was not unusual for banks ''to operate accounts in Hong Kong which are technically domiciled abroad''. The Hong Kong Legal Department, which would not comment on this specific case, said it was ''fair to say that as the extent of international co-operation broadens in this area, drug traffickers have turned to increasingly complex and sophisticated money laundering techniques involving a multiplicity of entities in various jurisdictions''. A spokesman said: ''The challenge for governments is to unravel these schemes and to restrain and confiscate such drug monies. This is an objective we have and are actively pursuing in Hong Kong.''
