SCMP reviews money laundering (14 December 2020)

Today, the South China Morning Post published an article reviewing the money laundering legislation in Hong Kong. In particular, highlighting the use of money laundering legislation to regularly charge individuals with a criminal offence.

Jonathan Midgley contributed to the article by pointing out that the money laundering legislation had been in place long before the politics in Hong Kong had gripped the city. He also highlighted the fact that the legislation in Hong Kong did not impose a time limit for the executive (the police and the Department of Justice) to require a court order sanctioning the freezing of the assets.

Money laundering is dealt with under the Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405 or under the Organised and Serious Crimes Offences, Cap 455. Jonathan Midgley has spoken at conferences on a number of occasions over the years criticising the Hong Kong money laundering legislation.

The first criticism is that, unlike in many other jurisdictions, the prosecution are not obliged to prove that the contested proceeds come from a predicate offence. The second criticism is that, again unlike in other jurisdictions, bank accounts can be “frozen” by the police and the Department of Justice without judicial oversight for an unspecified period of time. A consequence of the law as it currently stands is that it is extremely difficult for a person whose accounts have been frozen to bring the issue before the courts.

The suggestion put forward by Jonathan Midgley is that the legislation in Hong Kong should be varied to require frozen assets to be the subject of a court order within a specific and specified period of time. This would bring the Hong Kong legislation into line with international money laundering legislation.

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