• Tue
  • Sep 2, 2014
  • Updated: 9:59pm
Jake's View
PUBLISHED : Tuesday, 19 March, 2013, 12:00am
UPDATED : Tuesday, 19 March, 2013, 4:16am

How jailing old ladies on suspicion aids Hong Kong's anti-crime image

You don't have to be guilty of money laundering. If someone can prove they think you're guilty, your jailing boosts the city's anti-crime image

He [the Director of Public Prosecutions, Kevin Zervos] said the onus was still on the prosecution to prove beyond a reasonable doubt that defendants had committed the crime … "We are dealing with the proceeds of serious crime. If countries and states do not have anti-money-laundering regimes and measures in place, they get blacklisted and cannot function as a viable and legitimate financial centre."

SCMP, March 18

 

As Zervos knows, there is an easy way of making this onus of proof less burdensome for the prosecution. All we have to do is make it a crime to be suspected of a crime.

Zervos knows it because it is what our government has done for his prosecutors with its latest money-laundering legislation. This outrageous breach of our civil rights says that 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 does not take much effort to prove beyond a reasonable doubt that something is believed by someone or other. Just spin the right web of suspicions in court, and you no longer have to prove any underlying crime against your victim, or even accuse him of one. It is believed. That is enough.

And don't laugh. This is exactly what Zervos' prosecutors have now repeatedly succeeded in doing.

But I understand the pressures placed on him. He is right about the danger of Hong Kong being blacklisted. The blacklister in this case is an unelected and unregulated Paris-based money laundering watchdog called the Financial Action Task Force. We signed up to it in 1991.

FATF has 40 different recommendations that it wants its members to implement and has embarked on a new round of assessments to see whether they are doing so. If they are not, FATF can list them as non-compliant, which could trip up the cross-border money flows of their banks.

How can you tell whether any country is taking proper action against money laundering? Think about that question and you will see that there is no easy answer. We presume innocence unless guilt is proven. If guilt is rarely proven, it can just as easily mean that there is little money laundering as that there is little action taken against it.

But FATF simply assumes guilt and then measures enforcement action by prosecution and conviction rates. It does not say so directly, but the key passages in its latest directives, issued last month, make it evident.

For instance, it recommends that enforcement agents should look at the "number of investigations and prosecutions for ML (money-laundering) activity; proportion of cases leading to prosecution or brought to court".

They should ask "to what extent are different types of ML cases prosecuted (eg, foreign predicate offence, third-party laundering, stand-alone offence, etc) and offenders convicted?"

To drive the point home, it commends Norway for "a particularly high conviction rate", praises Germany for an "above average conviction success rate", lambasts Greece for a "very low rate of conviction", and says that a 50 per cent conviction rate in Ireland "whilst … not particularly unusual for a common law jurisdiction … could be improved".

So, yes, Zervos is under pressure to get our money laundering conviction rate up to FATF approval levels.

But in his latest success, a 61-year-old public housing tenant was sent to jail for 10 years (10 years!) for having transgressed before the year 2005 a law that was only passed last year.

It was not yet a crime in 2005 to be suspected of a crime. Nonetheless, she now sits in jail for it. What a mockery of justice.

No underlying crime was proven against her in court or even indicated. She transferred a lot of money in small amounts between different bank accounts for four years, which has all the hallmarks of helping ordinary people sneak money in and out of the mainland. This is not a crime here.

But she is certainly doing Hong Kong a signal service right now by sitting behind bars. She has helped improve our money-laundering conviction rate, which could make it easier for HSBC to move billions of dollars around.

Well done, Zervos. Clap yourself on the back for this one.

jake.vanderkamp@scmp.com

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rpasea
Outrageous!
ianson
Think: This lady was doing thousands of transactions, averaging $155m per month for something like seven years. Now, if all that money was the proceeds of crime, how on earth is it that no one is capable of proving that it was? Seriously, what more extensive trail of evidence could you ask for? That in itself is strong reason to doubt that there was criminality (under Hong Kong law) underlying the cash. Another reason the conviction is bad policy. And the judge passing sentence is insane thinking 10 years is appropriate. Only rarely does a drug baron, murder or serial rapist get that.
SpeakFreely
It is impossible for the banks not knowing these illegal transactions but doing nothing in the past years to alert the authority or what not. Why the banks are not guilty of money laundering in the sense of knowing what had happening ? Same as developers, many buyers are using cash notes and o way those are not dirty money. Where is HKMA?
Putting a poor old women making little money to jail to prove Hk is working against money laundering without hitting the big tigers are just showing how corrupting is HK.
 
 
 
 
 

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