CO129-607-3 Revenue Reward Fund 11-11-1948 - 12-12-1948 — Page 8

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Secretariat file No. 6103/45c.

No. 272.

Sir,

GOVERNMENT HOUSE,

HONG KONG,

11th November, 1948.

9

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I have the honour to address you on the subject of the Revenue Reward Fund, which is referred to in paragraph 78 of the report by the Director of Audit on his audit of the accounts of Hong Kong for the financial period ending on the 31st March, 1947, and which has been the subject of several queries by him.

2.

It is within the recollection of officers who were in the service of this Government before the war that the Revenue Reward Fund has been in existence for many years. To this fund are paid the proceeds of sale of confiscated goods and pecuniary penalties inflicted for revenue offences, and out of it are paid rewards to those informers whose information has led to seizure or conviction. If the balance to credit of the Fund should reach too high an amount, the excess is transferred to revenue, but in some years before the war money had to be voted to keep the balance from falling too low.

3.

There can be little doubt that this Fund had your approval in the past, but in view of the loss of all records during the enemy occupation, no record of such approval is now extant here.

4.

These facts have been brought to the notice of the Director of Audit, who nevertheless feels that even if your approval for this Fund had been given in the past, such approval should now be confirmed. He considers that the present magnitude of the seizures and of the rewards could not have been foreseen in the days before the war.

5.

I have given serious consideration to the question of abolishing the Revenue Reward Fund and providing an additional subhead in the Import and Export Department Estimates for rewards. Such a subhead exists in the Police Department Estimates as Head 22, Subhead 22, "Special Services". But the purpose of this vote is fundamentally different. It is what I might term non-productive expenditure in that it does not necessarily produce revenue. Expenditure by the Imports and Exports Department on rewards is, on the contrary, almost invariably very profitable, the amount of the reward being usually related to the value of the seizure, and in actual fact a total of $1,576,510 has already accrued to revenue during the present financial year from seizures and fines. Rewards must be paid if seizures are to be made; they must be paid at once and with the utmost secrecy so that the informer may escape the vengeance of his former friends. It therefore seems to me that on the whole it is preferable to continue the Revenue Reward Fund if the preventive system is to function at its maximum efficiency.

THE RIGHT HONOURABLE

ARTHUR CREECH-JONES, M.P.

Az.

Page 9′′

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6.

I should add that safeguards against over- expenditure are adequate. The Superintendent of Imports and Exports is authorized to pay out rewards. not exceeding $250, but must obtain the approval of the Financial Secretary where the reward exceeds that amount. The Financial Secretary in fact submits to me personally any case where the reward appears very large.

7.

In the event of your considering that the existing system should be discontinued I should be grateful for a telegraphic reply in view of the fact that the Estimates for the financial year 1949/50 are now in the course of preparation.

I have the honour to be,

Sir,

Your most obedient, humble servant,

Im

GOVERNOR'S DEPUTY.

AGC/jmh.

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age 10

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