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4 th IAACA Seminar, Dalian. Asset Recovery - Hong Kong Perspective. Asset Recovery Workshop. Sudhir G IDWANI Chief Investigator Independent Commission Against Corruption Hong Kong Special Administrative Region, China. International financial and banking system +

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Asset Recovery - Hong Kong Perspective


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    1. 4thIAACA Seminar, Dalian Asset Recovery - Hong Kong Perspective Asset Recovery Workshop Sudhir GIDWANI Chief Investigator Independent Commission Against Corruption Hong Kong Special Administrative Region, China

    2. International financial and banking system + Technological advances = Quick transfer of funds

    3. Strategy • Tracing of Assets • Restraint • Seizure • Confiscation

    4. Problems in Tracing Assets • Gatekeepers (bankers, corporate service providers, trust companies, lawyers, accountants) • Shell corporations • Off-shore companies • Identification of beneficial ownership

    5. ICAC, Hong Kong • Committed and qualified investigators • Forensic Accounting Group • Computer Forensic Group • Proceeds of Crime Section

    6. Restraint and Confiscation Proceedings in Hong Kong • Prevention of Bribery Ordinance (POBO) • Organized and Serious Crime Ordinance (OSCO) • Drug Trafficking (Recovery of Proceeds) Ordinance

    7. 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)

    8. 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

    9. Restraint Order • Facilitates future confiscation of proceeds of crime • Purpose • Preserves and prevents dissipation of assets

    10. 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

    11. Conditions to be Fulfilled • Proceedings have been instituted • Proceedings have not been concluded • Defendants benefited from the crime • Proceeds of crime ≥ HK$100,000

    12. 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

    13. 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

    14. 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

    15. ‘Offeror’ (Corporate Client) ‘D1’ & ‘D2” (Bank Executives) ‘D2’ ‘D1’ ‘Offeror’ ‘Offeror’ Case Study 1 Loan (HK$2.7 billion) HK$3.3 million watch (HK$33,000) HK$2.5 million 5 bottles of wine (HK$14,500)

    16. 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

    17. 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

    18. 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

    19. Thank You www.icac.org.hk