Re-visit on Elements of Money Laundering Contravening Section 25(1) of the Organized and Serious Crimes Ordinance
The Soccer Boss Saga has finally come to an end with Carson Yeung Ka-sing’s (“Yeung”) appeal dismissed by a panel of five judges in the Court of Final Appeal.
To recap, the whole Saga began when Yeung was charged with and convicted in the District Court of five charges of “dealing with property believed to represent proceeds of an indictable offence” under section 25(1) of the Organized and Serious Crimes Ordinance (Cap. 455) (“OSCO”) back in early 2014. Yeung’s appeal against his convictions was dismissed by the Court of Appeal on 13 May 2015. This led to the present appeal before the Court of Final Appeal which ruled against Yeung on 11 July 2016 (HKSAR v Yeung Ka-sing, Carson, FACC 5/2015, FACC6/2015).
In our previous newsletter “The Soccer Boss Saga: Carson Yeung and Money-laundering (Part III) – How is the “Reasonable Grounds to Believe Test” Applied?”, we have discussed the Court of Appeal’s analysis and application of the “reasonable grounds to believe test” in dismissing Yeung’s previous appeal. This article will discuss the Court of Final Appeal’s analysis of several key legal issues relating to the offence under section 25 of OSCO.
At the outset, the Court of Final Appeal identified 4 questions of law certified to be of great and general public importance to be dealt with in Yeung’s final appeal, namely:-
- on a charge of dealing with proceeds of crime contrary to section 25(1) of OSCO, whether it is necessary for prosecution to prove that the proceeds being dealt with were in fact proceeds of an indictable offence (“Proceeds Issue”);
- what is the mental element of a money laundering charge under section 25(1) of OSCO (“Mental Element Issue”);
- whether, and if so how, the rule against duplicity applies in the context of a money laundering charge (“Duplicity Issue”); and
- what is the correct formulation in considering whether an accused had reasonable grounds to believe in the context of section 25(1) of OSCO (“Pang Hung Fai Issue”).
This article will only focus on the Proceeds Issue, Mental Element Issue and Pang Hung Fai Issue which have more bearing on the elements of the substantive offence.
Section 25(1) of OSCO provides that “…a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property” (emphasis added). In appealing against his conviction, Yeung sought to persuade the Court to overturn its decision in Oei Hengky Wiryo v HKSAR (No 2) FACC4/2006, in which the Court had held that section 25(1) did not require for proving the property in question represented proceeds of an indictable offence. Instead, Yeung argued that, on a true reading of section 25(1) of OSCO, the words “that property” ought to be understood as the property which in fact represented some persons’ proceeds of an indicatable offence.
Having looked at legislative history of OSCO, the Court rejected Yeung’s arguments. The Court observed that, while the old section 25 did require the property in question to represent the proceeds of an indictable offence in the hands of a specified relevant person, the 1995 amendments to the OSCO had radically changed and expanded the basis of liability so as to abandon the elements under the old section 25. In fact, the current offence is defined as dealing with “any property”, and such a definition strongly indicates that the statutory intention is to avoid imposing any requirement of proof that the property dealt with actually represents the proceeds of indictable crime. Rather, the focus of the current section 25 offence is on the circumstances surrounding the accused’ acts of dealing with the property in question. In light of such observation, the Court upheld its decision in Oei Hengky Wiryo and held that it is not necessary for the prosecution to prove, as an element of the offence, that the proceeds being dealt with were in fact the proceeds of an indictable offence.
Mental Element Issue
The Court relied on its decisions in HKSAR v Pang Hung Fai, FACC8/2013, and other cases to address the Mental Element Issue. In gist, the Court found that section 25(1) of OSCO requires proof that the accused had the requisite reasonable grounds to believe and the Court should look at the grounds which were available to the accused. There was also the additional requirement that the grounds must be reasonable, that is, that everyone looking at those grounds objectively would so believe.
In the case where the Court had rejected the accused’s evidence as to his state of mind, the Court held that there was no requirement that it must make findings as to his “belief, thoughts and intentions at the material time”. Instead, the Court should act according to the state of evidence which remained and ask whether all the elements of the offence had been established beyond reasonable doubt.
In the present case, Yeung had testified and called evidence with a view to providing explanations for the funds flowing through his bank accounts and to negating the existence of reasonable grounds on his part to believe that such funds were the proceeds of crime. He was, however, almost entirely disbelieved by the lower Court. That left the lower Court with the task of deciding whether, on the evidence which it accepted, the section 25(1) offences were made out beyond reasonable doubt, which it held so. The Court found there was no error of law involved in the lower Court reaching that conclusion.
Pang Hung Fai Issue
As to the correct meaning of the words “having reasonable grounds to believe”, the Court rejected the suggestion that the test of the mental elements of section 25 of OSCO could be formulated using the words “knew or ought to have known” referred to in Pang Hung Fai, which seemed to connote the standard of negligence. By looking at the judgment of Pang Hung Fai as a whole, the Court found no basis for thinking that the Court intended, by a single sentence in the judgment, to introduce a wholly different basis for liability based on some purely external standard of negligence. As such, the Court affirmed the test of “having reasonable grounds to believe”, namely that the accused must have grounds for believing and those grounds must be reasonable.
Since Yeung could not establish that any error of law was made by the trial judge or the Court of Appeal, his appeal was accordingly dismissed.
|With the dismissal of his final appeal, Yeung would need to serve the remaining of his 6 years’ sentence in prison. Nevertheless, Yeung’s appeal did bring before the Court several key questions of law in relation to elements of the offence under section 25 of OSCO, the uncertainties have finally been cleared by the Court of Final Appeal. For enquiries, please contact our Litigation & Dispute Resolution Department:|
|E: [email protected] T: (852) 2810 1212 W: www.onc.hk F: (852) 2804 6311|
19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong
|Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.|
|Published by ONC Lawyers © 2016|