SFC ISSUES "SAMPLE CODE OF CONDUCT"
The SFC has issued a circular on 13 February reminding licensed corporations of their obligation (under paragraph 2.4 of the SFC's main code of conduct) to be familiar with the Prevention of Bribery Ordinance and to follow guidance issued by the ICAC. The circular also states that the ICAC has issued a "Sample Code of Conduct" which a licensed corporation may adopt when implementing its internal anti-bribery policy. This is not available online but may be requested from the ICAC's Advisory Services Group, which provides advice to private sector organisations on corruption prevention controls.
HONG KONG’S TOP COURT CLARIFIES MENTAL ELEMENT IN MONEY LAUNDERING OFFENCE
Section 25(1) of the Organized and Serious Crimes Ordinance (Cap 455) (the “OSCO”) makes it an offence for anyone to deal with any property while “knowing or having reasonable grounds to believe” that such property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence. In the recent case of HKSAR v Pang Hung Fai (FACC 8/2013), the Court of Final Appeal (the “CFA”) offered, for the first time, authoritative guidance on the mental element of “having reasonable grounds to believe”. In doing so, the CFA in effect overturned previous Court of Appeal (the “CA”) jurisprudence and offered much-welcomed clarity on the subject.
The decision by the CFA clarifies two important issues:
- When deciding whether a defendant has “grounds” to believe (that any property represents the proceeds of an indictable offence), “grounds” should not be limited to facts alone but can also include the beliefs, perceptions or prejudices of the defendant. The judge or jury can give such weight to an accused’s beliefs, perceptions or prejudices as he or she believes to be appropriate. i.e. are the defendant’s grounds “reasonable”?
- In determining whether the defendant’s grounds of belief are reasonable, the test to be applied is whether any reasonable person “would believe” that the property represents the proceeds of an indictable offence rather than the weaker test of “could believe”.
There have only been a limited number of CFA cases dealing with money laundering and this is the first time that the CFA has considered the mental element of the offence under s 25(1) of the OSCO. As a result of the decision, the CFA has raised the standard for conviction to an appropriate level, taking into account both the seriousness of the offence and the statutory maximum. Our full briefing can be found here.