The recent formulation of “having reasonable grounds to believe”. A positive step for Hong Kong’s anti-money laundering regime?
| Pages | 149-162 |
| Date | 08 May 2018 |
| DOI | https://doi.org/10.1108/JMLC-04-2017-0012 |
| Published date | 08 May 2018 |
| Author | Claire Wilson |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
The recent formulation of “having
reasonable grounds to believe”
A positive step for Hong Kong’s anti-money
laundering regime?
Claire Wilson
Hong Kong Shue Yan University, North Point, Hong Kong
Abstract
Purpose –The purpose of this study is to analyse the challenges in devising a suitable formulation to
determine whether a person had reasonable grounds to believe that property dealt with represented the
proceeds of an indictable crime in the context of money laundering offences. The paper also examines the
Hong Kong Court of Final Appeal’s recent formulation in HKSAR v. Yeung Ka Sing, Carson (decided July
2016) and evaluatesinternational standards.
Design/methodology/approach –The methodology adopted is partly a technical analysis of the
various interpretationsof “having reasonable grounds to believe”alongsidea comparative approach drawing
on internationalstandards of the mens rea threshold and the position in the UK.
Findings –The findings are that the Court of FinalAppeal’s formulation of “having reasonable grounds to
believe”is the best possible outcomegiven the confines of the statutory provisions. The study confirms that
the threshold set by the Court of Final appeal surpasses international standards; however, it argues that
current internationalstandards are in need of review.
Originality/value –This paper offers insight into the latest mens rea threshold of “having reasonable
grounds to believe”in the context of Hong Kong’s anti-money laundering laws and compares international
standards of the mens rea threshold. The discussion is of value to a wideaudience both in Hong Kong and
globally.It aims to provide guidelines to legal practitioners,law enforcement personnel, persons in the private
and public sectors, academicsand members of the public. This paper also seeks to provoke discussion as to
whether internationalstandards on the mens rea threshold should be reviewed with a view to strengthening
internationalcooperation on the prevention of money laundering.
Keywords Hong Kong, Anti-money laundering, Mens rea
Paper type Technical paper
Introduction
How the judge or jury should handle the question of whether the defendanthad “reasonable
grounds to believe”, that propertydealt with represented the proceeds of an indictable crime
pursuant to section 25(1) of Organised and Serious Crimes Ordinance (Cap. 455), has been
the main point of contention in a significant number of money laundering cases heard in
Hong Kong. Providing a solution to this issue has not been simple and has proven a
demanding task for the courts. The high frequency of appeals relating to this issue
illustrates the extent of the problem.For instance, the Court of Final Appeal (CFA) alone has
been called upon to consider no fewer than eight leave applications and appeals regarding
the formulation of “having reasonable grounds to believe”as the relevant provisions were
significantly amendedin 1995[1].
The purpose of this paper is to analysethe challenges encountered in devising a suitable
formulation to determine whethera person had reasonable grounds to believethat property
Anti-money
laundering
regime
149
Journalof Money Laundering
Control
Vol.21 No. 2, 2018
pp. 149-162
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-04-2017-0012
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