S'pore to only extradite Indonesians if defence deal

SINGAPORE, May 21 (Reuters) An extradition treaty between Singapore and Indonesia will only come into effect once problems over a defence pact between the two countries are resolved, a Singapore official told parliament today.

Zainul Abidin Rasheed, senior minister of state in Singapore's Foreign Affairs Ministry, said the two deals would be implemented simultaneously because they were signed as a package.

The Singapore Defence Ministry said on Friday agreement over some details of the defence pact had been delayed due to ''unexpected difficulties''.

''The two signed agreements contain a carefully negotiated balance of benefits,'' Rasheed said, referring to the extradition and defence agreements. ''As they are a package, we have agreed that they should come into force together.'' Defence Minister Teo Chee Hean said in parliament today that the defence agreement was delayed because Indonesia has asked for ''variations'', but gave no further details.

Under the defence pact, Singapore's air force and navy will be able to train in Indonesia.

The two neighbours signed the defence and extradition treaty last month, ending several years of talks on an extradition deal Jakarta hopes will help it prosecute fugitive business executives.

The Indonesian government believes some Indonesians who owed money to the authorities following the 1997-98 financial crisis have taken refuge in Singapore.

Rasheed said that while an extradition treaty had removed ''a bone of contention'' in Singapore's ties with Indonesia, other problems related to the necessary legal procedures and judicial processes could arise.

A large number of wealthy Indonesians live in Singapore and are key clients for luxury property developers and private banks.

One third of Singapore's high net worth individuals -- those with net financial assets of more than 1 million dollar -- are of Indonesian origin, Merrill Lynch and Capgemini said in a report last year. These 18,000 Indonesians have total assets worth billion, the report said.

Singapore, which wants to attract wealthy individuals to boost its banking sector, said it has strict money laundering laws to curb such economic crimes.

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