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Hong Kong is a special administrative region of the People's Republic of China (PRC), guided by the “one country, two systems” principle: unlike the communist PRC, Hong Kong is a free trade capitalist economy and one of the world's finance capitals. The economy is largely service-driven, with low taxation, and the culture was heavily influenced by the more than 150-year period during which the region was a British colony. In all matters except the military and foreign policy, Hong Kong is granted near-total autonomy.

The Customs and Excise Department is tasked with all things related to smuggling, including drug trafficking, in which capacity it works alongside the Hong Kong Police Force. Hong Kong is a popular transit destination for the trade of most drugs, particularly marijuana, heroin, and amphetamines; cocaine, ecstasy, ketamine, prescription painkillers, and tranquilizers are all seized on a regular basis as well. The Customs and Excise Department has a broader jurisdiction than the Customs departments of most countries, extending its authority to consumer protection and intellectual property rights protection, for instance. In the area of narcotics, its authority encompasses the monitoring of drug abuse trends, the confiscation of assets used in drug trafficking and freezing of associated bank accounts, and the investigation of drug-related money laundering. The Customs and Excise Department also enforces Hong Kong's licensing system for the precursor chemicals used in manufacturing illegal narcotics, a list of 25 chemicals in all.

Hong Kong has a long history with the drug trade, having become a British colony as a result of the Opium Wars between Britain and China in 1841. For the next 100 years, drug policy was designed simply to maintain a government monopoly on the sale of opium. International pressures to abolish opium mounted in the early 20th century, but not until 1945 did British Hong Kong reclassify opium as a dangerous drug, ending sale and production of it. But even as opium prohibition began, opium addiction was widespread throughout Hong Kong, and the black market was strong.

Heroin began supplanting opium as the Hong Kong drug of choice in the 1950s, and the Drug Addicts Treatment and Rehabilitation Ordinance of 1960 established and funded voluntary addiction treatment centers to combat the problem. A Narcotics Advisory Committee on drug policy was established in 1959, replaced in 1965 by the Action Committee Against Narcotics (ACAN), which has become the country's major advising body on drug policy, headed by the Commissioner for Narcotics, who is appointed by the Governor. ACAN subcommittees focus on drug education, research, and addiction treatment.

A search of a suspected drug trafficker's boat off Hong Kong, where heroin, cocaine, ecstasy, and other drugs are often seized.

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A separate Drug Liaison Committee meets quarterly, consisting of representatives from each government department and nongovernmental organization, to share information and discuss relevant issues. Since 1972, methadone clinics have been available to treat heroin addicts, operated by the Department of Health. Hong Kong is one of the few Asian countries to accept the validity of methadone in treating heroin addiction.

There is less emphasis on drug use prevention in Hong Kong than in the West or some Asian countries, and drug education programs date only from the late 1980s. Since the 1990s, public service announcements on television have become the public's primary source of drug information, and the Narcotics Division sponsors local and traveling anti-drug campaigns, as well as telephone hotlines.

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