No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

A Safe Haven From Which to Plan Foreign Bribes: The Lack of Extra-Territoriality of Hong Kong’s Anti-Bribery Laws

by Wendy Wysong
August 27, 2014
in Compliance
A Safe Haven From Which to Plan Foreign Bribes: The Lack of Extra-Territoriality of Hong Kong’s Anti-Bribery Laws

with contributing author Richard Sharpe

The Hong Kong Court of Final Appeal (CFA) has confirmed that Hong Kong’s much feted anti-graft laws do not apply to conspiracies made in Hong Kong to offer bribes abroad, whether to foreign public officials or private corporations, even if the bribes result in a benefit to a Hong Kong company.

In its August 6, 2014 decision,1 the CFA upheld a lower court’s decision to set aside the convictions of two executives for conspiracy to offer bribes to a government official in violation of Section 9(2) of the Prevention of Bribery Ordinance (POBO).  Because the parties conspired in Hong Kong but the bribes were offered by an agent in Macao, the CFA agreed that Hong Kong did not have jurisdiction over the crime.

Background

Lionel Krieger and James Tan were the former President and a Director respectively of Companhia de Sistemas de Residuos Limitada (CSR), a waste services company that was set up as a joint venture held 80 percent by a Hong Kong company and 20 percent by a Macau-based company. The two were convicted in February 2012 of entering into a conspiracy in Hong Kong with Federico Nolasco, a Macau businessman and owner/operator of Nolasco Ltd, to offer advantages (bribes) to the former Macau Secretary for Transport and Public Works, Ao Man Long (Ao), in order to ensure the continuing award of public waste contracts to CSR. Ao was sentenced to 29 years imprisonment in Macau for his receipt of these bribes. Nolasco gave evidence at trial against Krieger and Tan under an immunity agreement.

Krieger and Tan appealed their respective convictions to the Court of Appeal.

Of particular importance on appeal was the fact that while Krieger, Tan and Nolasco all conspired with one another within Hong Kong to offer bribes to Ao, the offers of bribes themselves were made to Ao by Nolasco outside Hong Kong’s jurisdiction, in Macau.

Krieger and Tan had been indicted for a conspiracy to commit an offence under Section 9(2) of the POBO.2 The prosecution argued that the offer of a bribe to Ao was complete as soon as the conspiracy was made (notwithstanding that the offer had not yet been communicated to Ao). Accordingly, the prosecution argued, as the conspiracy was made in Hong Kong, this was sufficient for jurisdiction, even if Hong Kong did not have jurisdiction over the actual bribery, in Macau. The District Court agreed, and it was on this basis that Krieger and Tan were convicted.

The Court of Appeal (whose judgment was subsequently approved by the CFA) rejected this analysis. It ruled that even if a conspiracy to offer bribes abroad was made within Hong Kong, such a conspiracy was not within the jurisdiction of Hong Kong, as the conspiracy itself did not constitute the offering of a bribe. Accordingly, as the criminality agreed to be embarked upon (i.e., the offering of bribes) would take place outside Hong Kong’s jurisdictional reach, the courts of Hong Kong had no jurisdiction over the conspiracy. The Court of Appeal set aside the convictions of Krieger and Tan.

Analysis

This has created a weakness in Hong Kong’s anti-corruption laws, whereby employees of a Hong Kong company are free to plan within Hong Kong the offering of bribes to a foreign public official or private individual, in return for favorable treatment towards the Hong Kong Company, as long as the bribes are offered offshore.

To be clear, Hong Kong law does prohibit the bribery of Hong Kong public officials, wherever that takes place,3 as well as any conspiracy to commit a bribery offence within Hong Kong, wherever that conspiracy is made. The concern however is that the Krieger ruling will send a message to companies and individuals in Hong Kong that they are safe to continue planning and sourcing foreign bribes from Hong Kong, relying on the lack of effective enforcement by foreign states and the impossibility of enforcement domestically.

This limitation in Hong Kong’s anti-bribery laws is in stark contrast to the position under the U.S. Foreign Corrupt Practices Act and the UK Bribery Act (UKBA), which criminalize the bribery of foreign public officials regardless of where it takes place. Furthermore, the UKBA also criminalizes the bribery of private individuals wherever it takes place. It is also inconsistent with the anti-corruption laws of most other Asia-Pacific countries such as the PRC, Japan, Singapore, Australia, Malaysia, Taiwan, the Philippines and Indonesia.

Since the creation of the Independent Commission Against Corruption (ICAC) in 1974, Hong Kong’s reputation regarding corruption has radically improved, from being one of the most corrupt places on Earth to being one of the cleanest. Hong Kong is now rated 15th out of 177 countries by Transparency International, on its influential and widely consulted Corruption Perceptions Index.4 However, as revealed by the Krieger ruling, the city’s legal framework does not prevent the export of corruption to foreign jurisdictions. It is estimated that Hong Kong exports around HK$30 billion (US$3.9 billion) per year in corruption to developing countries by way of bribes to foreign public officials.5

The CFA’s ruling means that legislation explicitly prohibiting the offshore bribery of foreign public officials or private individuals is now the only way that this loophole can be closed. It remains to be seen whether Hong Kong will do so and affirm its commitment to fighting corruption.

1 HKSAR v. Lionel John Krieger [2014] HKEC 1323

2 Under § 159A Crimes Ordinance (“CO“)

3 § 4 POBO

4 www.transparency.org – 2014

5 Source: Bloomberg.com


Previous Post

Conselium Completes Search on Behalf of Alcon

Next Post

Third Parties and the Red Flags You Don’t See

Wendy Wysong

Wendy Wysong

Wendy L. Wysong is a partner at Steptoe & Johnson. She served previously as a litigation partner with Clifford Chance, offering clients advice and representation on compliance and enforcement under the Foreign Corrupt Practices Act, the Arms Export Control Act, International Traffic in Arms Regulations, Export Administration Regulations, and OFAC Economic Sanctions. She was appointed by the State Department as the ITAR Special Compliance Official for Xe Services (formerly Blackwater) in 2010. Wendy combines her experience as a former federal prosecutor with the United States Attorney for the District of Columbia for 16 years with her regulatory background as the former Deputy Assistant Secretary for Export Enforcement at the Bureau of Industry and Security, U.S. Department of Commerce. She managed its enforcement program and was involved in the development and implementation of foreign policy through export controls across the administration, including the Departments of Justice, State, Treasury and Homeland Security, as well as the intelligence community. Wendy received her law degree in 1984 from the University of Virginia School of Law, where she was a member of the University of Virginia Law Review.

Related Posts

launch visual lease esg steward

Visual Lease Launches ESG Tool for Asset Portfolios

by Corporate Compliance Insights
March 31, 2023

Lease software provider Visual Lease announced it has launched a new product, VL ESG Steward,  designed to help organizations track...

PW FCPA Enforcement and Anticorruption 2022 Review_f

FCPA Enforcement & Anti-Corruption Developments

by Corporate Compliance Insights
March 30, 2023

The year that was in FCPA & anti-corruption efforts 2022: A Year in Review FCPA Enforcement & Anti-Corruption Developments What’s...

JTC ESG and Impact Investing_f

The Evolution of ESG & Impact Investing: Are You Ready?

by Corporate Compliance Insights
March 30, 2023

Making money *and* doing the right thing Survey Report The Evolution of ESG & Impact Investing: Are You Ready? What’s...

Regology 2023 State of Regulatory Compliance_f

2023 State of Regulatory Compliance

by Corporate Compliance Insights
March 30, 2023

Understanding the impact of regulatory challenges Survey Report 2023 State of Regulatory Compliance What’s in this report from Regology:As the...

Next Post
Third Parties and the Red Flags You Don’t See

Third Parties and the Red Flags You Don’t See

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT