Asset Recovery the Law Enforcer’s Viewpoint

Gavin Shiu

Head of Asset Recovery

Senior Assistant DPP

Attitude

Repay victims Organised and Serious Crimes

Ordinance, Cap 455 (OSCO) Drug Trafficking (Recovery of

Proceeds) Ordinance, Cap (DTROP) Restraint and Confiscation

Crime should not Pay

“The heart of an effective anti money laundering regime is the ability to :

seize restrain confiscate

proceeds and instrumentalities of money laundering and other predicate offencesin order to remove them from the financial system”.

APG-2005

3

Purpose of Crime Asset Recovery

Deny fruits of crime

Disincentive if family unsupported Disincentive if on release there are no

assets to enjoy Prevents use of property by organised

crime to further objectives of crime groups

Proceeds of Crime

Only money or property that directly or indirectly represents proceeds

NO See s 2(6) OSCO Proceeds is not the ordinary man’s

understanding of the term It has a special meaning under OSCO

Proceeds of Crime

Property includes payments or other awards received at any time in connection with an offence (s2(6)(a)(i))

a payment before the commission of the offence

Award has a broad meaning

Proceeds of an offence

Pecuniary advantage connected to an offence (s2(6(a)(iii))

Wide and flexible meaning May include being able to use a

position to make a gain, even if gain itself is not illegal if there is the connection to the offence

Proceeds of Crime

Examples: A fraud facilitates a transaction and

professional fees are generated relating to the transaction not the fraud

Money is utilised to facilitate a fraud

What can be restrained?

Tracing of defrauded or stolen or laundered money/assets – Why?

Money / assets is it the proceeds of a crime or the benefit (proceeds) gained by a defendant?

Section 8(4) OSCO

Confiscation: the actual proceeds of crime? No

Court shall determine whether the person has benefited from the specified offence

And if he has whether his proceeds of that offence total at least $100,000

Section 8(6) OSCO

If court determines he has benefited to an amount of at least $100,000

THEN in accordance with Section 11, the court shall determine the amount to be recovered and

A confiscation order shall then be made for that amount

Section 11 OSCO

The amount to be recovered by the confiscation order

Shall be what the court assesses to be the value of the defendant’s proceeds of the specified offence(s) of which he was convicted

Value Based

Therefore, the confiscation order is for the value of what the court assesses is the benefit (proceeds) derived by a convicted person from his specified offence

The order is not asset based and not based on actual stolen or defrauded monies

White money or Black money?

This is why for criminal asset recovery there is no difference in white or black

The confiscation order should be looked on as a determination by the court of what a criminal owes Hong Kong – he is obliged to pay us from whatever sources

Examples of realisable property

Property acquired through inheritance Property acquired through a legitimate

business Property acquired through savings

from earlier legitimate employment Property acquired through share

trading or other market investments

Change the mind set

In every case of specified offences is there a benefit? Should we not deny him of it?

Tracing of Black money some value Prove offence and if easily confiscated

should be a target of restraint and confiscation

Joint Enterprises

If 2 or more benefited should the benefit be split? (divided between Ds)

Not necessarily, depends on evidence Can be joint and several (ie one

accused owes all of a joint benefit) Can be split if reasonable evidence of

a division

Questions to ask in every case

What is his benefit from the crime? (not what was stolen or defrauded or laundered, necessarily)

How large is it? That is, what would be the value?

What assets does he have? Which are the easiest to restrain and

confiscate?

More questions to ask

Have other defendants benefited that may not be obvious at first glance?

Should restraint of assets be done before the case goes overt or simultaneously? Risk of dissipation.

Are there assets overseas? Are there victims?

Why do this?

Emphasise denying the fruits of crime It is not a revenue raising exercise It is part of the penalty (purpose of

appeal deemed to be part of a sentence, Section 8(8A))

It is punishment, deterrence and prevention of serious crime

Powerful Tool

OSCO and DTROP are powerful Underused, but why? Mind set, includes training to

prosecute core offences Troublesome- bank docs, account recs Hard work Need to increase awareness and use