On behalf of the Committee, the Chairman welcomed representatives from the Law Society of Hong Kong (LSHK) and Hong Kong Society of Accountants (HKSA) and invited their comments on the Bill.

The comments of LSHK

Mr Melville BOASE of LSHK drew members attention to the following comments of LSHK which were detailed in its submission to the Panel dated 15 May 1997 [LegCo Paper No.CB(2)2313/96-97 (01)]-

"investigation" as one of the definitions of criminal matter in clause 2(1) should be re-drafted as "an investigation being conducted by a judicial body";
the reference that "a criminal matter has commenced in a place outside Hong Kong" as in clause 15(1) was vague. It should be re-drafted to confine the actual scope which the clause would cover;
in rendering assistance to overseas jurisdictions, provisions should be included in the Bill to allow local citizens to have recourse to the local judicial system for any remedies;
the period of 12 months as stipulated in the definition of "serious offence" in clause 2(1) was too low a threshold;
taxation offences, the definitions of which varied widely between different jurisdictions, should be exempted from the Bill;
the reference "whether the proceedings which gave rise to the order are criminal and civil in nature" in the definition of external confiscation order in clause 2(1) might cause confusion. Consideration should be given to amend it as "civil proceedings brought by a foreign state consequent upon or ancillary to criminal proceedings in that state";
the definition of "external law immunity certificate" in clause 2(1) should be interpreted in the context of "duality" i.e., persons could only be required to answer a question or produce a certificate if they were required to do so by the Hong Kong authorities in local proceedings brought within Hong Kong;
the word "foreign" in clause 17(2) should preferably be replaced by "external";
the phrase "essential interests of Hong Kong" should preferably be amended as "essential public interests of Hong Kong";
clauses 5(1)(a) and 34(2) should be repealed after the change in sovereignty;
clause 8(2)(e) should be made clear that the individual concerned would be supplied with such information which he would be entitled to in the case of an external serious offence as if that offence had been committed in Hong Kong;
a definition of appropriate authority to reflect the appropriate level of authority to make and receive mutual legal assistance (MLA) requests was preferred;
where production of things and transmission of these things to foreign countries were concerned (clause 10), provisions should be drafted to the effect that copies of these things as certified by a local court would be adequate. In case the requesting jurisdiction had a strong reason for the originals to be sent overseas, it should provide an undertaking to the Attorney General (AG) for their safe return in due course. When things seized or materials produced in accordance with clause 12(9) and clause 15 were documents, provisions should also be included to ensure that a copy of the documents concerned should be provided to the person from whom the documents were seized or produced;
when persons were transferred to Hong Kong in accordance with clause 16(3), specific provisions should be included to the effect that habeas corpus would apply to such persons;
in respect of orders made by a court as specified in clause 30(1)(e), the word proceeding in clause 30(1)(a) and the relevance of clause 30(1)(d) should be clarified; and
the scope of application and the calculation of interest in respect of judgment debt in clause 4 of Schedule 1 should be clarified.

The comments of HKSA

Mr Alvin WONG of HKSA briefed members on HKSAs comments on the Bill which were detailed in its submission to the Panel dated 16 May 1997 [LegCo Paper No.CB(2)2313/96-97 (01)]-

by including "investigation" in the definition of criminal matter in clause 2(1), the scope of the Bill was too broad and covered situations in which there were no grounds to believe an offence had taken place or was likely to take place. It should be deleted or properly circumscribed;
the definitions of "external confiscation order" and "Hong Kong confiscation order" in clause 2(1) should exclude reference to civil proceedings which required a lower standard of proof;
the definition of "external offence" and "Hong Kong offence" in clause 2(1) should include a maximum threshold of more than two years to exclude the more trivial offences;
tax matters should be exempted from the ambit of the Bill, at least to the extent as agreed in the Evidence (Amendment) [E(A)] Bill 1996;
the definition of "serious external offence " and "Hong Kong serious offence" in clause 2(1) should include a maximum threshold of more than three years;
clause 2(7) should be re-drafted to the effect that nothing in the Bill authorized private prosecutions either inside or outside of Hong Kong;
clause 4(1) should be re-drafted to ensure that no substantial modifications to the provisions of the Bill could be specified in an order made by the Governor in Council in relation to a MLA agreement between Hong Kong and a foreign jurisdiction;
clause 5 should be re-drafted to provide for the courts power to review a decision of AG and clause 5(1)(d) should be expanded to cover all forms of discrimination which were considered unacceptable in a civilized society;
clause 8 should include a provision to ensure that the maximum penalty for the external offence in question was not death penalty and the final part of the clause should be re-drafted to indicate that failure to comply with the requirements to provide a reasonable level of information under clause 8 should be a ground for rejecting a request;
the appropriate authority referred to in the Bill should be properly defined. If investigation was excluded from the definition of criminal matter as proposed, appropriate authority should then be confined to courts or tribunals;
provisions should be provided for the protection of innocent third parties from arbitrary dispossession of their property. Subject to lawful ownership of a thing in clause 10 and materials in clause 12, the owners consent should be obtained before the thing or material in question was sent to an overseas jurisdiction;
clauses 10(8) and 17(4) appeared to have the effect of allowing a bilateral MLA agreement to set aside legal protections extended to individuals under domestic laws without sufficient justifications and were therefore not supported;
clauses 15(9)(b) and (c) overrode specific secrecy provisions in other legislation and should be deleted or suitably qualified after a proper examination of the likely effect and implications upon other legislation;
clause 23 should deal only with prisoners and any undertakings, and qualifications to them, provided by the requesting jurisdiction must be made known to the prisoners concerned prior to obtaining his consent;
the phrase "in accordance with the law of the place outside Hong Kong concerned" under clause 28(1)(b) should be deleted and that something to the effect that "that person was not required to appear in person in order to oppose the order" should be added as a safeguard; and
clauses 12 to 15 would have to be repealed when the Bankruptcy (Amendment) Ordinance 1996 came into effect.

Ms Winnie CHEUNG of HKSA supplemented that collection of tax was not a problem in Hong Kong. In the interests of Hong Kong people, MLA involving taxation matters should be dealt with in the form of special tax treaties and separated from a general MLA agreement. She reiterated that the scope of the Bill was too wide and pointed out that many of the provisions in the Bill were not found in the UN model agreement.

The Administrations response

The Chairman asked the Administration to respond in writing to the points raised by LSHK and HKSA as soon as practicable. Deputy Principal Crown Counsel (International Law) (DPCC(IL)) undertook to prepare appropriate Committee stage amendments (CSAs) and drew the attention of members and representatives of LSHK and HKSA to the following points-

most civil law countries allowed the taking of evidence at the investigation stage of a criminal matter. In accordance with the Commonwealth scheme relating to MLA in Criminal Matters which was approved by Commonwealth Law Ministers in 1986, Commonwealth countries were encouraged to render assistance to each other in the absence of agreements. Commonwealth countries such as United Kingdom, Australia and Canada had enacted relevant MLA laws to allow the taking of evidence at the investigation stage of criminal matters in foreign countries;
CSAs to the effect that the provisions of the Bill could not operate to prejudice the generality of section 4 of the Inland Revenue Ordinance (Cap 112) would be drafted. Wherever applicable and appropriate, the amendments agreed at the meetings of the Bills Committee on E(A) Bill 1996 would be incorporated in these CSAs;
the definition of appropriate authority would be included in the Bill;
provisions would be added to prevent fishing expedition by foreign jurisdictions;
CSAs would be added to provide that production and transmission of originals of things or materials to overseas countries would need to be justified and special undertakings on the return of these originals would be made;
clauses 27 and 28 were modeled after relevant provisions in Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405);
modifications in the orders implementing bilateral agreements were necessary as MLA practices and laws varied from jurisdiction to jurisdiction; and
the definition of external and Hong Kong serious offence would be extended to apply to offences carrying a maximum punishment of not less than 24 months imprisonment.

The incorporation of the proposed CSAs to E(A) Bill 1996

Miss Margaret NG reiterated the Committees earlier request for a comparison of the E(A) Bill 1996 with the MLA Bill for the purpose of ensuring that the agreed amendments to the E(A) Bill 1996 were provisioned in the MLA Bill. She asked whether representatives of LSHK and HKSA could assist the Administration in compiling a summary of comparison. Ms CHEUNG of HKSA said the proposed CSAs to the E(A) Bill 1996 were not adequate in the context of MLA Bill as there were Articles in the MLA agreement with US which overrode the effect of the agreed amendments relating to taxation matters. Mr BOASE of LSHK responded that it would be more efficient to read the Administrations draft of proposed CSAs to cross check whether the agreed amendments to E(A) Bill 1996 had been incorporated. In response, Senior Assistant Law Draftsman (SALD) undertook to deliver a full set of CSAs to members and the two Societies by 21 May 1997.

MLA in taxation matters

Mr Ronald ARCULLI expressed reservations about providing legal assistance to foreign jurisdictions in their investigation of tax offences. He was worried that overseas countries might make use of the provisions of the Bill to facilitate tax collection. He pointed out that the US tax system was very much different from Hong Kong and tax evasion and avoidance were regarded as serious offences. Furthermore, there were considerable differencies between different jurisdictions as far as criminality was concerned. One typical example was racketeering which was regarded as a criminal offence in US but was not regarded as an offence in Hong Kong.

In response, DPCC(IL) stated that the US authorities were adamant that a list of criminal offences including racketeering were essential for inclusion in its MLA agreements with other countries. In fact US had entered into many MLA agreements with foreign jurisdictions without regard to the dual criminality requirement. He explained that racketeering was in many cases an element in serious organized crimes and any provisions in MLA agreement to exclude tax offences of this nature would certainly be rejected by US. The Chairman agreed that tax evasion and racketeering were two most common offences leading to successful prosecution and conviction of triad gang leaders. He therefore requested the Administration to introduce appropriate CSAs which could assist tax advisers in upholding their professional code of conduct as well as assist foreign jurisdictions in their fight against serious international crimes.

The compellability of giving evidence at the investigation stage

Given that the Criminal Justice (International Cooperation) Act [CJ(IC)A] 1990 which provided that evidence might be taken for a country or territory outside the United Kingdom (UK) for the purpose of criminal proceedings that had been instituted or a criminal investigation that was being carried out in that country or territory, Miss NG asked whether the prosecuting authorities in UK could compel persons to give evidence for a criminal investigation. DPCC(IL) undertook to confirm whether this was allowed in UK. He also agreed to provide members with a copy of section 4 of the CJ(IC)A 1990. Regarding the assurance that such evidence must not be used for other purposes except that which was written in the MLA request, SALD responded that a CSA to this effect would be prepared for members consideration.

The overriding power of the Bill to other legislation on the disclosure of information

Members were concerned about the impact of clause 15(9)(b) which overrode any obligation as to secrecy or other restriction upon the disclosure of information imposed by statute or otherwise. Both LSHK and HKSA had raised concern about the implications of the clause. In response, DPCC (IL) agreed that the clause would be suitably amended to limit the scope of power conferred.

The meeting ended at 12:35 pm.

Date of Next Meeting

The next meeting would be held at 2:45 pm on 22 May 1997 in Chamber of the Legislative Council Building.

Provisional Legislative Council Secretariat
18 September 1997

Last Updated on 16 October 1997

Minutes of the Fourth Meeting of the Bills Committee on the Mutual Legal Assistance in Criminal Matters Bill

held on Monday, 19 May 1997 at 10:30 am in Conference Room A of the Legislative Council Building

I. Meeting with professional bodies