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Jake's View
PUBLISHED : Thursday, 14 March, 2013, 12:00am
UPDATED : Thursday, 14 March, 2013, 6:41am

Conviction endangers respect for the law

Money-laundering case is a miscarriage of justice when the mere fact of looking like you are committing a crime is enough to get you put in jail


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

A public housing tenant who laundered more than HK$6.7 billion through nine Hong Kong banks over almost four years was jailed for 10 years yesterday.

SCMP, March 13

Take note of what this ridiculous law actually says. It is a crime to handle money in a way that looks to others as if you are laundering it, whether or not you are actually doing so and whoever these others may be.

The law says you can be sent to jail for 14 years if you deal with money "known or believed to represent the proceeds of an indictable offence". It doesn't require that an indictable offence be proved. It doesn't even require that one be indicated. None was in this latest miscarriage of justice.

The law only requires that reasonable grounds exist to believe that there had been one, whatever it might be and whether anyone in authority even knows what it was. Our courts have accepted that this criterion is met if money is handled in a way that looks surreptitious.

Now I know you may consider this a pretty good reason to think crime involved. Why handle money surreptitiously if you don't need to do so? Why spend your whole working day opening bank accounts and transferring small amounts of money in and out of them unless you have something to hide?

I can think of a very good reason. Across the border we have 1.3 billion people who would like to move their money in and out occasionally for entirely reasonable investments and purchases. Their government allows only a privileged few to do it legally and the rest must sneak their way through.

Breaking up their money flows into thousands of little trickles and combining them again on the other side is how they do it. What indictable offence have they committed?

You may say they have broken Beijing's capital flow restrictions and this is deemed a crime across the border.

Perhaps, but it is not a crime here in Hong Kong. It is our lifeblood. Our HK$3.4 trillion a year re-export trade is really an evasion of Beijing's capital flow restrictions, as are the vast foreign direct investment flows that pass through our financial system.

We congratulate the tycoons who handle these for contributing to the prosperity of Hong Kong, and yet we throw a 61-year-old public housing tenant into jail for 10 years for doing the same thing. What hypocrisy.

Don't tell me that this woman could actually have been handling terrorist finances or the proceeds of drug trafficking.

The terrorist idea is ludicrous. Leave alone that the ethnicity makes it highly unlikely, terrorism does not require much money, and what it does require is mostly funnelled through tribal connections that no government agency will ever see.

As to laundering drug money, I don't know how it is done, but I cannot imagine that this crude way of saying "Here I am, here I am, look at me!" is the preferred technique of the drug lords. I'm sure they have much more sophisticated ways of cleaning up their money.

It also doesn't look right for tax evasion, which is by far the largest reason across the world for money laundering. Tax evasion is done with sleazy lawyers and accountants, not strangers opening small deposit accounts on your behalf in your own jurisdiction.

I say that this woman was doing no more than facilitating mainland capital flows. Prove me wrong, you craven prosecutors who would cite no underlying crime.

And if you cannot do so, then confess an unsafe conviction to our chief justice and tell our legislators to repeal this gross invasion of judicial rights.

It is actually no small matter. Our money-laundering ordinance as it stands poses a serious threat to the rule of law. It undermines your right to be presumed innocent of crime unless proven guilty beyond reasonable doubt and your right to know with what crime you are charged.

I recognise that it is more difficult to prosecute criminals the right way, but since when has the law become a tool for boosting conviction rates? We are going down the road of the Spanish Inquisition here, and we endanger respect for the law, which is a way to encourage crime.



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This article is now closed to comments

Why are you so sensitive about this case Jake?
Have you something to hide?
You are overlooking that we have very strict anti-corruption laws here which require an accused person with wealth from suspicious sources to explain where their loot came from. Failing to account for the money becomes the offence.This law is needed and is supported by the majority of Hong Kong's population. The same is for this money laundering case. The defendant has had every opportunity to explain the reason for these "innocent" transactions.
It's high time some sense was imposed on the draconian laws which were introduced to accommodate an imperial and vengeful not to mention, perhaps paranoid, state who suddenly divided the world into the good and the evil. It's shameful HK is going to boast its enforcement of OSCO with these types of convictions, taking years to prepare and prosecute, yet cant boast a single conviction of the original targets of OSCO. Where are the convictions for money laundering of drug, human and weapons traf****? These were the original targets not dupe facilitators of tax evasion or exchange controls breaches.. As is implied here, shame on HK for pandering and for wasting resources on the like yet has nothing to add as to where the money went after reaching HK. Of course corruption is an indictable offence here, as most places, and if that was the relevant offence will the information be shared with mainland authorities (under existing mutual assistance ordinances) to nail to offenders on the mainland? This is all pretty petty when the historic driver of it all is rarely heard of any more. The abuse of this law is imposing a great cost on the financial system that seems to reach new highs with each 'settlement' reached at the same time the DJIA heads into loony-land.
I don't agree with Mr van der Kamp on this one. Granted, it may seem odd to put the burden of proof on the defendant (ie, she effectively would have had to prove that there was a reasonable explanation and non-criminal purpose for these transactions). But as the judge in this case noted, the scale, pattern, duration and repeated occurrence of the activities were such that it is unimaginable that this was all kosher, and the defendant should have known that.

For what is the alternative? We would then move towards a situation in which it is fine to carry out money laundering activity, as long as one maintains a sliver of plausible deniability. I could tomorrow take out advertising space in the SCMP to offer my 'temporary cash storage & moving' services to any interested party. For a small fee of 5% of the sums involved of course. When the law catches up with me, I will deny any knowledge of the source or ultimate destination of these funds, claim I was only following instructions, and ask them to prove that that cash in that suitcase I happened to find on my doorstep was the same cash that was the proceeds of crime such-and-so, which will be extremely hard to do. Ka-ching for me!

Sure, this woman was not the Dr No of the operation, and you wish that the police had worked with her to infiltrate the network behind this activity instead of nailing her for it. Yet, that doesn't make her any less guilty, nor should we alter the law to make this activity permissible.
Give this woman a banking license!
balance of probabilities? Sorry, but the only acceptable option is proof without a reasonable doubt with criminal cases.
Surprising everybody is talking about the old woman who managed to laundry billions of dollars but no comments about the banks that allowed this to happen. When I applied to open a bank account, I was treated like a likely robber with criminal intentions and subjected to detailed questioning in spite of being a professional. Yet we have this lady with accounts in 6 banks with billions passing tru, no questions asked.
Can somebody tell me what parameters the banks have before they become suspicious?
The offences in this case occurred between 2002 and 2005, and the accounts were shut down by the banks repeatedly, precisely because of suspicious activity. Nevertheless, you are right - we all know and see (large cash deposits etc) how much mainland money goes through the Hong Kong financial system, and the banks do seem to look the other way most of the time. It would be a step forward to make the banks liable for facilitating money laundering cases like this. Hong Kong law and regulation is very lax on this, at least compared to US and UK legislation.
While I agree that there are cases where defendants are "technically" convicted which in any ways do nothing to help to reinforce the purpose of the ordinance to combat corruption, it seems to me that in this case there is a strong inference that the Defendant is hiding his money with fraudulent intention in order to be eligible as a public housing tenant.
A healthy compromise is possible: require proof of the underlying indictable offence on a balance of probabilities (51% likely gets you there).


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