CONFIDEN TIAL
C
D
of drug-trafficking.
We proposed at an earlier stage that
Hong Kong should see that its proposals closely into line with
the Hodgson Committee's recommendations, and Hong Kong
have revised the relevant subsections along these lines.
However, Hong Kong's proposed amendments still go further
than the Hodgson recommendations, in that they propose that,
to avoid a Court order for confiscation, a third party
should satisfy the Court that he had both
in
(a) acted in good faith as regards the circumstances
which the pecuniary resources or property cam to be
held by him, and
(b) subsequently SO acted in relation to the pecuniary
or property, whether by incurring
resources
expenditure
or obligations or otherwise, that an
order in the circumstances would be unjust.
The Hodgson
Committee
(b)
had recommended that condition
should apply only in cases where the property had been
acquired as a gift rather than purchased for full value.
7.
than in
Hong Kong remain of the view that more stringent
provisions should be applied in cases of corruption
other criminal cases. They point out that in corruption
cases the conviction will have been based on a detailed
examination of the assets in question, and on
the failure of
the convicted party to provide an adequate explanation for
them. Hong Kong add
add that in their view where corruption has
provided finance for the purchase by a third party of property subsequently proved to be in the convicted party's
control, the property should be confiscatable unless other
circumstances make this unjust. On this basis, Hong Kong
wish to proceed with their revised proposals, although they
have indicated
that, if we are unable to agree to this, they
would reluctantly be prepared to amend them to follow
Hodgson's recommendations more exactly.
E
CONFIDEN TIAL
F
G
CONFIDENTIAL
8.
For ease of reference
I attach
-
a copy of sections 10
12 as they now are, and as they will be if amended as
proposed.
9.
There is a risk that Hong Kong's proposals will provoke
criticism in Hong Kong on the basis that individual rights
are under further
encroachment.
the narrow scope of such
convictions of corrupt Crown
But Hong Kong consider that
confiscation orders (based on
servants only),
only), lack of public
,
will
sympathy in the territory with those convicted of such
offences and their associates, and lack of success thus far
in recovering their assets
reduce greatly
the
likelihood of public criticism in Hong Kong. I would add to
this that the public is almost as much concerned about the
prospects of increased corruption after 1997 as it is about
curtailment of civil liberties. Having considered the
amendments carefully with Legal Advisers, and taking in to
account the further general safeguard that Hong Kong propose
to introduce in Subsection 7 to enable a third party
" to
show cause why an order] should not
[
should not be made"
be made", I believe we
should accept Hong Kong's arguments that they should proceed
to include these confiscatory amendments in their draft
bill. I Would not be quite as confident as Hong Kong that
public opinion will not find the proposed measures too
severe, with post 1997 Hong Kong in mind. But I think that
they are defensible, and that if subsequent public pressure
made an amendment necessary,
it would nevertheless be
possible to defend successfully the Government's motives
introducing its proposal. On this basis, I
we
in
recommend that
allow Hong Kong to proceed with their draft bill, and
attach a draft telegram to that effect.
3 December 1985
A C Galsworthy
Hong Kong Department
CONFIDENTIAL