tim's experiment

Well I’m glad I was not the only one who thought that the imposition of ten-year jail sentences on small potatoes convicted of participating in money laundering was Draconian and excessive.
In Sunday’s Post a senior criminal lawyer ventured the polite comment that the present law makes it easy to prosecute people and hard to defend them. The problem is that the Organised and Serious Crimes Ordinance makes it an offence to deal in property “knowing or having reasonable grounds to believe” that it is the proceeds of an indictable offence. Prosecutors have been having an easy time persuading courts that money with no known antecedents should have been regarded by the accused (in one case a 61-year-old housewife and in another a 22-year-old middle school drop-out) as providing  reasonable grounds to believe it was the proceeds of a serious crime merely because it was being laundered. The prosecution does not have to prove that a crime has taken place, or that the money was the proceeds of it.
In response we had Mr Kevin Zervos, the Director of Public Prosecutions, whose minions no doubt take a pride in the forensic excellence that allows them to send elderly ladies to prison for 10 years. Mr Zervos illustrated the interesting legal skill of missing the point when it is not helpful to your side of the argument. The law was justified because “we are dealing with proceeds of serious crime”, he said. But that is exactly what the prosecution does not have to prove. Actually there are a number of reasons not involving serious crimes which might lead people to launder money in Hong Kong, perhaps the most obvious possibility being to get round regulations in some other places which forbid people from taking their money out of the country, whether it is the product of serious crime, honest toil or luck.
There are a number of other problems with using this part of the Organised and Serious Crimes Ordinance against nobodies who move money for other people. One is that there have been a number of high-profile cases internationally in which big banks admitted money-laundering on an epic scale. Yet somehow no banker winds up behind bars on these occasions.
Another problem is that while the old lady in the street can get 10 years for money laundering through the use — or abuse — of a law intended for major criminals, the bank or money changer caught providing this service will probably be prosecuted under the Anti-Money Laundering and Counter-Terrorism Financing (Financial Institutions) Ordinance. The maximum penalty under this ordinance is jail for seven years.
A further problem, from the point of view of the non-lawyer surveying this scene, is that some very large loopholes remain unplugged. People can still buy flats, no questions asked, with suitcases full of cash. There is some reason for supposing that the willingness of buyers to pay stupid prices for Hong Kong flats is due to the SAR’s willingness to accommodate money which might otherwise be trapped in the mainland. Similarly, cash betting at Jockey Club facilities is subject to no checks and large wagers are welcome.
Or of course you can go to Macau…

Naturally we are all against serious crime. But most people do not regard moving shy money as a serious crime in itself. The prosecutorial authorities might usefully spend more time on the pursuit of serious criminals. Failure to ask where money came from should be regarded as an infringement of procedure, like putting a false address on your company registration form. I notice not one of the well-publicised examples of this offence has been prosecuted yet. Department of Justice too busy beating up old ladies, no doubt.