TNAG-1430-FCO40-1913-Hong-Kong-Independent-Commission-Against-Corruption-(ICAC)-1985 — Page 8

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.

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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