Law that jailed cash mule is still an ass, whenever it was passed

PUBLISHED : Sunday, 24 March, 2013, 12:00am
UPDATED : Sunday, 24 March, 2013, 4:49am

Van der Kamp is wrong when he says that the [money laundering] offence was only passed last year. The legislation passed last year concerns the obligation for customer due diligence and record keeping.

Kevin P. Zervos, Director of Public Prosecutions
Letters to the Editor, March 21

He's right. I got it wrong. It was already a crime in 1995, even before the handover, to be suspected of having committed a crime. I now have another count of maladministration to hold against former governor Chris Patten. In excuse of my own fault, I can only say that a Jack of all trades is a master of none, and a financial columnist is certainly a Jack of all trades.

One day it's mobile phone licence renewal conditions, the next day the MTR's fare-setting mechanism, the following day our mortgage delinquency rates and then a money-laundering law that we borrowed from the Spanish Inquisition.

Along the way I got my dates wrong. Mea culpa.

And now let's deal with the excuses that Mr Zervos has dished out to us for a rank miscarriage of justice in sending a little old lady to jail for 10 years on a grossly misconceived charge of money laundering.

The trouble with most lawyers is that once they stick their heads into a courtroom they never seem to take them out again. It means that they rarely make better than fourth-rate politicians. They do worse, much worse in understanding anything of commerce.

What you must bear in mind, Mr Zervos, is that across the border we have a government that wishes to keep a tight control over economic affairs and thus forbids anyone from moving money in or out except with its explicit permission.

This actually isn't very good for the economy and thus, in order to keep the wheels of the economy greased, Beijing not only looks the other way when its princes take their money across the border but also allows us to scrub clean HK$3.5 trillion a year of trade proceeds by calling them re-exports.

Along the way it isn't hugely disturbed if the Shenzen underground banking system shuffles cash back and forth with Hong Kong for day-to-day business needs. The Closer Economic Partnership Arrangement (Cepa) has failed. This takes its place.

But, of course, Beijing can never officially admit this or be confronted with the evidence that it condones a breach of its own rules. The underground system therefore employs cash couriers. These people continually go back and forth across the border, carrying small amounts of cash for deposit in Hong Kong, where it is massed into larger payment sums.

It is what the little old lady in question here was probably doing. It's not the way drug lords, terrorists and tax evaders launder money but we cannot be sure quite what she was doing as Mr Zervos' prosecutors adduced no evidence of any underlying crime.

They don't have to. Our money-laundering law makes it a crime to be suspected of a crime, and this second crime need not be identified. It is good enough that any right-thinking member of the community can reasonably believe from the way the money was handled that it constituted the proceeds of a crime, whether it did or not.

In practice in a courtroom, "right-thinking member of the community" means what a lawyer thinks, and lawyers, unfortunately, do not think very well in matters of commerce.

So let's say it again. If this little old lady was simply a cash shuffler for the Shenzhen underground banking system then she did nothing wrong here. Yet she was sent to jail for 10 years, which is a gross miscarriage of justice.

What makes it worse is that this case leaves Mr Zervos and his department open to suspicion of pandering to a rather sinister and unregulated European police authority, the Financial Action Task Force.

FATF threatens to make international payments difficult for our banks if we do not meet its expectations of high prosecution and conviction rates and long prison sentences for money laundering.

It's simple, Mr Zervos. Your money-laundering law is a mockery of justice, this conviction is unsafe and this woman ought to be sprung out of jail immediately.