TNAG-0409-FCO40-455-Allegations-of-bribery-and-corruption-in-the-Hong-Kong-polic-1973 — Page 137

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now $100,000 and seven years; but the legislature has now fixed the maximum penalty for offences under sections 5 and 6 at $100,000 and ten years. [sections 5 and 6 deal with improper conduct in relation to public contracts.]

129. I agree with the Advisory Committee that one can imagine cases under section 10 which might well be regarded by society, and the courts, as deserving of a higher penalty than for any other offence under Part II of Cap. 201. According to the information supplied to the Commission, it is believed by many people that, during the past few years, certain individuals have made vast sums by corruption-sums far in excess of the figure which the police are in a position to prove (if they ever get the chance) in the case of Godber.

130. I therefore recommend that consideration be given to increasing the maximum penalty which may be imposed upon conviction under section 10 to a level not less than that for offences under sections 5 and 6.

131. The Advisory Committee, in their 6th report, also said this in relation to the penalties for conviction under what is now section 10:-

"It is accepted that Government has a right to recover, through civil proceedings, monies which have been proved to have been gained by corruption. The weakness of this is that where an accused is found to be in possession of, say, one million dollars and is unable to explain satisfactorily how he obtained the whole of this sum, the only amount which can be recovered by civil action is the amount which could be shown positively to be the proceeds of corrupt transactions. We therefore suggest that, if our recommendations. . . are agreed, where an accused is unable to establish satisfactorily that it" (i.e. his wealth and property) “was acquired honestly, he should be liable to be ordered by the court to pay to the Government the amount, or value, of such resources."

132. With these sentiments I am in complete agreement. The principle that a law-breaker should not be permitted to retain the fruits of his ill-gotten gains is not in dispute. The statute laws of England and Hong Kong contain forfeiture provisions; and the tax and customs legislation of most Commonwealth countries enable the courts to order a person who has been convicted of attempting to evade tax or customs duty, to pay several times the amount of such tax or duty in addition to imposing heavy fines and long terms of imprisonment.

133. I therefore recommend that consideration be given to enacting a provision which would enable a court, upon conviction of a person of an offence under section 10, to make an order which would operate as a forfei- ture order or a judgment in favour of the Crown that is to say in respect of such proportion of the pecuniary resources or property, the control of which the accused is unable to explain satisfactorily. In a matter of this kind, speed is essential. My point is that upon the making of such an order, the Crown (acting on behalf of society as a whole) should not be placed in the position of having to institute civil proceedings for the recovery of the unexplained financial resources or property. It should be in a position to issue execution forthwith against financial resources and property located locally and to register the order as a judgment in any foreign country to which the suspect has transferred such assets. Experience has shown that corrupt officers may not keep their ill-gotten gains in banks in Hong Kong, but transfer them abroad.

134. Of course, orders of this nature would, in all probability, prove nugatory in the vast majority of cases unless some procedure is devised whereby the suspect's assets are "frozen" at an early stage of the investigation. Once alerted, a suspect will undoubtedly use every conceivable means of concealing his assets. I fully appreciate that our legislation does not have the force of law abroad; but I see no reason at all why assets located locally should not be "frozen" at an early stage of the investigation.

135. I therefore recommend that consideration be given to the enactment of legislation which would enable the Attorney General to make an order in the nature of an order for attachment which would have the effect of preventing banks and similar institutions from honouring instructions of a client in relation to assets in their possession which have been "frozen" by the attachment order, unless with the consent of the Attorney General.

136. Applying all this to a hypothetical case, with section 10 in the form as recently amended following my first report, a Crown servant who was alleged to be in possession of say $3 million, half a million of which was in banks in Hong Kong, an order for attachment of that half million dollars could be made forthwith, if legisla- tion were enacted to implement my recommendation made above.

137. If bail were refused and the Crown servant remained in custody until his trial, at which he was con- victed, if there were a provision in section 12 (such as I am now recommending) which would enable the court to make an order in respect of such portion of the $3 million, control of which the Crown servant was unable satisfactorily to explain, steps could then be taken immediately to register this judgment in whatever jurisdictions abroad, the Crown servant was known to have assets.

138. Far be it from me to suggest that a person could not be "one jump ahead" of the authorities even if the Ordinance were in the form I now suggest; but, at least, there would be some machinery whereby some attempt could be made to deprive a convicted person of his ill-gotten gains.

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