“No consent” letters issued by regulators in Hong Kong create concerns and risks for banks in this jurisdiction. A recent Hong Kong High Court decision sheds light on the effect of such letters.

Pursuant to section 25A of the Organized and Serious Crimes Ordinance (Cap 455) (“OSCO”), a bank is required to advise the Hong Kong Joint Financial Intelligence Unit (“JFIU”) if it has knowledge or suspicion that funds in its customers’ account(s) may be connected with an indictable offence. Upon receiving the disclosure report, the JFIU will investigate the matter and may issue a “no consent” letter if it believes that the funds are crime proceeds. Once a “no consent” letter is issued, the bank should not deal with the property any further, otherwise it may potentially be in breach of section 25 of OSCO which creates an offence for dealing with crime proceeds.  In this article, we will discuss the recent Hong Kong judgment in Interush Ltd & anor v Commissioner of Police & ors[2012] HKEC 1589 (“Interush”) and the implications of “no consent” letters for banks, customers and innocent third parties.

The Interush Decision

A police investigation had revealed that Interush Limited and Interush (Singapore) Pte Limited (“Applicants”) were involved in a pyramid scheme contravening the Pyramid Schemes Prohibition Ordinance, Cap 617.  Hang Seng Bank (“Hang Seng”), which held the Applicants’ bank account, became aware of the investigation and suspected that the Applicants might be involved in money-laundering activities. Hang Seng thus filed a Suspicious Transaction Report with the JFIU to report its suspicion over the account. Subsequently, the JFIU issued a “no consent” letter to Hang Seng indicating that it did not consent to the bank handling the suspicious proceeds any further. Based on the “no consent” letter, Hang Seng suspended the account.

The Applicants claimed that the suspension of the account caused a substantial loss to them. They applied for a judicial review on the constitutionality of sections 25 and 25A of the OSCO; particularly the propriety of the process under section 25A(2)(a) in respect of issuing “no consent” letters. The Applicants argued that these provisions of OSCO contravene Articles 6 and 105 of Hong Kong’s Basic Law which provide that the right of private ownership of property shall be protected. Furthermore, the Applicants sought to argue that under the current regime, the JFIU could extend the “no consent” letter indefinitely, which would further prejudice the interest of bank account holder.

The Decision

Having considered the relevant statutes and evidence, the Honorable Justice Li held that the statutory provisions in question were not unconstitutional, for the following reasons:

  1. It was implied in Hang Seng’s mandate that the bank may refuse instructions and suspend accounts if it becomes aware of suspicious and unusual activities in the account. Thus, a “no consent” letter is not a prerequisite for the bank to exercise such right;
  2. Furthermore, the “no consent” letter issued under section 25A(2)(a) did not operate to freeze suspicious property; its aim was to ensure that the ongoing investigation would not be prejudiced. Although under section 25 it is an offence to deal with crime proceeds, the bank remains the final decision maker as to whether to honor its customers’ instructions or not. The provision is not concerned with intervention, confiscation or deprivation of any property. As such, section 25A does not raise issues under Articles 6 and 105 of the Basic Law at all;
  3. Though of no legal effect, the JFIU has published internal guidelines regarding the issuing of “no consent” letters. For example, the Superintendent of the investigation unit reviews the “no consent” letters on a monthly basis and if the aggregate extension exceeds 3 months, the JFIU Formation Commander is responsible to review the situation to ensure that the “no consent” letter has been properly extended. The Court was satisfied in Interush that such guidelines were a sufficient safeguard to ensure that the “no consent” regime operates fairly;
  4. If any party is directly affected by the “no consent” letter or the suspension of a bank account, he/she can sue the bank for appropriate relief under section 29 of OSCO or under the common law;
  5. The “no consent” regime is amenable to judicial review.


Interush is an important decision as it clarifies the purpose and effect of “no consent” letters. Contrary to the understanding of many, a “no consent” letter does not operate as an order to suspend customers’ assets or bank accounts. It simply acknowledges the report of suspicion and indicates the JFIU’s  disapproval regarding further dealing with the relevant assets.

What are the implications of Interush for banks, customers and innocent third parties?


The judgment makes it clear that a bank may rely on the implied terms in its own bank mandate to suspend an account if any suspicious activities are detected. Indeed, banks are required by law to monitor the activities in their customers’ accounts.

To play on the side of caution, banks may consider incorporating clear terms in their client mandates that allow them to suspend accounts whenever the bank considers it appropriate according to OSCO. With express or implied terms in a mandate, a bank is unlikely to be liable for suspending bank accounts or refusing to execute the instructions from customers in view of a “no consent” letter.

Customers (account holders)

The Interush judgment has established that a bank may suspend an account based on the implied or express terms in the mandate. The suspension of an account will cease if the bank is satisfied that the proceeds in the account are “clean”. Usually this will happen subsequent to the withdrawal of a “no consent” letter. Under normal circumstances, a “no consent” letter will not be extended for more than 6 months.

If an account holder is aggrieved by the issuance of the “no consent” letter, he/she may apply for a judicial review regarding the JFIU’s decision and the Court will examine whether the circumstances warrant a “no consent” letter. It is clear from the Interush judgment that the “no consent” regime is amenable to judicial review. The account holder may also elect to sue the bank or the police for compensation under section 29(4) of OSCO if he/she suffers losses due to serious default by those concerned in the investigation or prosecution process.

Third parties

There are many cases in Hong Kong where a victim of a fraud mistakenly transfers funds to a fraudster’s account. When the JFIU receives reports regarding such criminal activities, it may issue a “no consent” letter to the relevant bank to stop further dealing with the assets within the account.

To the third party victim, a “no consent” letter from the JFIU provides short term comfort, at best,  as it does not operate as a binding restraint order. The bank may choose to honor its clients’ instructions despite the apparent risk of fraud. To stop the dissipation or loss of funds stolen by fraud, innocent parties should not rely on the “no consent” regime. Rather, as soon as the fraud is discovered, the victim should report the matter to the police who may apply for a criminal restraint order against the assets. The victim should also apply for an ex parte civil injunction, with a Court action to recover the proceeds therein.