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  • Aug 23, 2014
  • Updated: 3:08pm
Jake's View
PUBLISHED : Thursday, 20 March, 2014, 12:50am
UPDATED : Thursday, 20 March, 2014, 12:50am

Hong Kong dances to the money laundering tune

Draconian laws allow our authorities to convict supposed launderers without evidence of a crime – and all to please a European agency

The [Financial Action] Task Force recognised Hong Kong's efforts and agreed unanimously among members in October 2012 to remove Hong Kong from its "follow-up process" in its regular mutual evaluation.

Successful conviction of recent cases shows our determination and efficacy among law enforcement agencies and financial regulators in combating money laundering.

Jackie Liu,
principal assistant secretary for financial services,
Letters to the editor, March 19

Let us set this in proper perspective as what we have here is actually a story of rank injustice inflicted on innocent members of the public by craven bureaucrats pandering to a European watchdog of capital flows.

That watchdog, the Paris-based FATF, an intergovernmental agency set up in 1989 to police money laundering, baldly confesses on its own website to setting itself above its masters - "The FATF … works to generate the necessary political will to bring about national legislative and regulatory reform …"

In other words, "No, you national governments, even you mere voting members of the general public, shall not tell us what to do. We shall tell you. Shut up and listen."

But this arrogant body does swing a club. By declaring any jurisdiction non-compliant with its edicts it has so far been able to hinder bank transfers between Europe and that jurisdiction. European bank regulators run scared of FATF.

Looking guilty of a crime is enough to be sent to prison if it involves any money transfers

This means that we in Hong Kong have to watch our step or find our standing as a financial centre impaired. In its 2008 review, FATF did indeed say we were not quite up to the mark - "the number of confiscations is relatively low". FATF's measuring stick is convictions, however achieved.

Fortunately we have at hand the perfect tool to bring ourselves up to this dubious standard and by vigorous use of it we "aligned" ourselves in the 2012 review.

This tool is a law that says the prosecutor does not have to prove any underlying crime to prove money laundering. All he need do is show that the accused handled money in a way that might make a reasonable person think he was laundering it.

Bizarre, yes. Looking guilty of a crime is enough to be sent to prison if it involves any transfers of money. No actual crime need be proven. Our colonial lawmakers wrote a fundamental premise of civil rights right out of the law books.

That word "reasonable", since you asked, for all effective purposes means reasonable to barristers, people who have little familiarity with commerce.

Now shift the scene. Some years back our government signed a border opening agreement with Beijing, the Closer Economic Partnership Arrangement.

It has been a complete flop. Mainland interests have effectively free entry to Hong Kong but the border remains closed to Hong Kong interests in key professions and financial sectors.

However, an underground financial system has evolved to make up for the failure so that commercial relations can continue efficiently across the Pearl River Delta. A substantial part of this system involves cash transfers by unofficial couriers to Hong Kong banks.

The authorities on both sides of the border officially frown on this, and cannot recognise it, essential grease though it is to the wheels of commerce. But, for our purposes, it also has all the appearances of money laundering.

How convenient. A steady string of ordinary working people who have done nothing wrong other than carry cash across the border, which is not a crime in Hong Kong, can be marched off to prison on long sentences because it is now easy to make them look guilty of more heinous crimes.

Bear in mind that none of this has to do with drugs. The police already have a perfectly good law for dealing with proceeds of drug trafficking.

But it does marvels for pushing up our FATF approval rating. FATF likes the way we have penalties that are "appropriately high". Our banks like it too. It makes for trouble-free international fund transfers.

The English poet Alexander Pope said it all long ago:

The hungry judges soon the sentence sign,

And wretches hang that jury-men may dine;

Mr Carson Yeung, will you please appeal against your money laundering conviction right through to the Court of Final Appeal. Justice has a chance there.



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With the ¥50000 limit on currency transactions for Mainalnders, nobody seems to care why or how they amass hundreds of millions of HKD for their investments in Hong Kong when they are not residents of the territory. The banks profit on the couriers by making my life miserable, because each time you want to redeposit your Forex cash in the bank after a trip, if its over USD1000 per day, they take 1%. This if you have USD2300 to deposit, you have to do so over three days in order not to give up 1%. What about all the mainland money laundered through Macau they makes its way to HK and used for property investments....? It's all one big sham.
Well Jake, nice to see you supporting a man who quite clearly was laundering money, unless hairdressers earn billions - I must ask Kim Robinson if perming Legco members hair is profitable? I thought the role of a jounalist is to report independently - in recent years Jake, you have placed yourself as the self appointed spokesman for what you perceive to be wrong with Hong Kong - you are not! Carson Leung is a criminal, I have lived almost opposite him on Barker Road for years, it was apparent from conversations with him that even he was amazed at what he was getting away with. Hong Kong remains a flawed city, but this judgement was correct and serves as a reminder that anyone, including 'in-pocket journalists' , will eventually get caught!
Why? Because Yeung got a bigger pad than you? Nothing personal but this here we're talking about the draconian law being use that prevent people from presuming innocent till proven guilty. That is proven with solid evidence.
Good article, always so convenient for the Financial task force to use this draconian law "dealing with property known or believed to represent proceeds of an indictable offence" doesn't need proof, just reasonable believed is good enough. How can a person be presumed innocent until proven guilty when prove is not required?
what a moronic column
note the word 'billions' that these 22 year olds had passed thru accounts here
so they earned that selling mobile phone accessories from a hole in the wall shop ?
our property prices are inflated beyond reason thanks to these Mainland money launderers
our local shops close to make way for jewellery shops another favourite laundry for the miscreants
jail them for 15 years & spread the word
meanwhile report all property transactions past & present with Mainland names to the Mainland authorities
The Law for years has had provisions placing the onus on the defendant to prove otherwise, such as possession of more than a certain amount of dangerous drugs presumes that the possessor has them for traf**** purposes
The defendants have the chance to prove otherwise - likewise with the 22 year old who passed 13 billion though his multi accounts, housewife from SSPO passing billions & the 22 year old woman who just skipped bail of $30m on charges of laundering $10 billion
Compel lawyers & accountants to reveal which Mainlanders /Colombians / Mexican cartel they are fronting for
You completely missed the point. As mentioned, it's not drug money as that's a different law. These are all commercial transaction, underground banking and money changing. If you run a small or medium enterprise anywhere in the world that requires trading with overseas suppliers or clients it is inevitable that at some point you do need to transfer, exchange foreign currency.
With banks charging hefty fees and very low exchange rate you be drawn to money changer services. They're are fast and convenient with good exchange rates. If you ever do business with Chinese banks in the mainland, god help you if you need to do money transfer overseas frequently.
what a moronic reply
money changer ? WTF
next time just see which police officers are in court for the hearing
you will find it was NB
Much of it is the result of corrupt practices and outright theft and fraud.....who are you kidding?


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