A New York court’s conviction of Patrick Ho for bribing African public officials to obtain business has highlighted the limitations of Hong Kong’s own statute, the Prevention of Bribery Ordinance.

The POBO prohibits demand and supply side bribery in the public and private sectors in Hong Kong. However, there is no specific prohibition of bribery committed overseas. In contrast, the US Foreign Corrupt Practices Act used to prosecute Patrick Ho is directed specifically at the bribery of foreign public officials. It has been used by the US over the past 40 years to prosecute foreign bribery schemes even where there is only a limited nexus to the US.

This week, Kenneth Leung, a Hong Kong opposition lawmaker, suggested that the government should enact similar legislation. This may not gain traction as the POBO has been interpreted to cover the bribery of foreign public officials through its agency provisions. However, B v Commissioner of the ICAC [2010] concerned the bribing of a foreign public official whilst he was in Hong Kong and so the necessary elements of the crime took place onshore. As such, the POBO falls short of international standards and Hong Kong’s framework is lacking compared to other jurisdictions.

Background to the case

On 5 December 2018, Patrick Ho, Hong Kong's former home affairs secretary, was convicted by a US court of seven counts of violating the FCPA. The charges stem from a multimillion-dollar bribery scheme based in Africa carried out by Ho on behalf of a Chinese energy conglomerate. Ho and an associate were found to have offered a bribe of US$2 million to the president of Chad to obtain oil rights, and to have paid a bribe of US$500,000 to an account controlled by the minister of foreign affairs of Uganda. Mr Ho also provided Uganda’s president and foreign minister with gifts and promises of future benefits, including a share in the profits of a potential joint venture. Ho also laundered bribes directed to government officials in Uganda and Chad in order to support projects of the Chinese conglomerate.

It is understood that, through witnesses and court documents, authorities have discovered that parts of the bribes were transferred from a bank in Hong Kong to the US. Various transactions and negotiations also partially took place in Hong Kong. Individuals in Hong Kong may also have assisted or encouraged Mr Ho in bribing African officials. However, Hong Kong authorities are at a disadvantage in establishing a case under the current framework.

Conclusion

This is not the only call for a revision of the POBO. Dennis Kwok, another opposition lawmaker, has tabled an amendment to bring Hong Kong's Chief Executive within the purview of the POBO following the conviction of former Chief Executive, Donald Tsang, in 2017 of the common law offence of misconduct in public office.

Reform of the POBO is perhaps unlikely given the effectiveness of the ICAC and its high conviction rate. However, the Patrick Ho case highlights the POBO's limits. It also demonstrates the issues that those operating in high risk markets face from overseas prosecutors. Firms and individuals with Chinese links have been punished before for violations of the FCPA, but this is the highest-profile case involving a Hong Kong figure to date.