Hong Kong, GIDWANI

Report
4th IAACA Seminar, Dalian
Asset Recovery Hong Kong Perspective
Asset Recovery Workshop
Sudhir GIDWANI
Chief Investigator
Independent Commission Against Corruption
Hong Kong Special Administrative Region, China
International financial and
banking system
+
Technological advances
=
Quick transfer of funds
Strategy
• Tracing of Assets
• Restraint
• Seizure
• Confiscation
Problems in Tracing Assets
• Gatekeepers (bankers, corporate
service providers, trust companies,
lawyers, accountants)
• Shell corporations
• Off-shore companies
• Identification of beneficial ownership
ICAC, Hong Kong
• Committed and qualified investigators
• Forensic Accounting Group
• Computer Forensic Group
• Proceeds of Crime Section
Restraint and Confiscation
Proceedings in Hong Kong
• Prevention of Bribery Ordinance
(POBO)
• Organized and Serious Crime
Ordinance (OSCO)
• Drug Trafficking (Recovery of Proceeds)
Ordinance
POBO
• Provides for restraint
• No provision for confiscation except for
Chief Executive or prescribed officer
being in control of pecuniary resources
or property disproportionate to official
emoluments
• Restitution Orders (civil in nature)
OSCO
• Restraint and Confiscation of proceeds
of crime
• Organized and serious crimes
• Specified offences (Schedule 1 &
Schedule 2)
• Corruption Offences are specified in
Schedule 2
Restraint Order
• Facilitates future confiscation of
proceeds of crime
• Purpose

Preserves and prevents dissipation of
assets
Victim
• Government does not compete with the
victim of crime
• Ascertain stance of the victim
• Restraint order not made for
facilitating civil claim of a victim
Conditions to be Fulfilled
• Proceedings have been instituted
• Proceedings have not been concluded
• Defendants benefited from the crime
• Proceeds of crime ≥ HK$100,000
Property that can be Restrained
• Property held by the defendant
• Property held by a person as a gift from
the defendant
• Property subject to the effective control
of the defendant
Disclosure Order
• Disclosure on oath
• Income and assets
• Held in Hong Kong or elsewhere
• Held in his name or on his behalf by
some other person
• Information can’t be used for
investigation or criminal proceedings
Confiscation Order
• Upon conviction of the defendant
• Before sentence
• Can also be made if the defendant has
absconded or died
• Fixes period for defendant to pay
• States term of imprisonment if any
amount not paid
Case Study 1
Loan
(HK$2.7 billion)
‘D1’ & ‘D2”
(Bank Executives)
‘Offeror’
(Corporate Client)
HK$3.3 million
‘D1’
‘Offeror’
watch (HK$33,000)
HK$2.5 million
‘Offeror’
5 bottles of wine (HK$14,500)
‘D2’
Case Study 2
• Fraudulent trading in derivative warrants
• Dummy a/c’s set up to trade
• Profit generated from fraudulent trading
distributed in cash amongst syndicate
members
• Proceeds of crime HK$145.7 million
Case Study 2 (cont’d)
• Cash deposits in bank accounts, safe deposit
boxes, real estate and shares
• HK$127 million assets restrained
• HK$110.4 million ordered to be confiscated
• Enforcement pending due to appeal
proceedings
Conclusion
• Ill gotten gains must be returned to the
rightful owner
• Deterrent effect
• States must co-operate and provide assistance
to each other
• Message: No safe haven to park proceeds of
crime
Thank You
www.icac.org.hk

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