VISITING EXPERTS PAPERSINVESTIGATION OF MONEY LAUNDERING AND CORRUPTION

Tony KWOK Man-wai *I. SHORT HISTORY OF THE ICAC HONG KONG
Let me explain briefly about the Hong Kong ICAC which has a particularly interesting history andstory to tell. It was established in 1974 at the time when corruption was widespread, and Hong Kong, asa British Colony, was probably one of the most corrupt cities in the world. Corruption was a way of life
and there was at that time a particularly close business association between law enforcement agencies
and organized crime syndicates. Nearly all types of organized crimes, vice, gambling and drugs, were
protected. As a taxi-driver, you could even buy a monthly label to stick on your taxi s windscreen and it
would give you immunity from any traffic prosecution. Such was the scale of open corruption in HongKong. When the ICAC was set up at that time, very few people in Hong Kong believed that it would be
successful. They called it Mission Impossible . Within three years, the ICAC smashed all the corruption
syndicates in the Government and prosecuted 247 government officers, including 143 police officers,amongst whom some were labelled Million Dollar Detective Sergeants !
The United Nations research on corruption described Hong Kong as a success model in fighting
corruption. So, what is our secret of success? To me, there are five factors:
First. There is top political will to eradicate corruption, which enables the ICAC to become a truly
independent agency, directly responsible to the very top, i.e. the Chief Executive of Hong Kong.
This ensures that the ICAC is free from any interference in conducting their investigation, and can
get on with its task without fear or prejudice.
Second. The strong political support was translated into financial support. The ICAC is probably
one of the most expensive anti-corruption agencies in the world. Their annual budget amounted to
US $90M, about US $15 per capita. You may wish to multiply this figure with your own country s
population and work out the anti-corruption budget that needs to be given to the equivalent of the
ICAC! However, looking at the budget from another angle - it represents only 0.3% of Hong Kong
Government budget or 0.05% of Hong Kong s Gross Domestic Product (GDP). I think you willagree that such a small premium is a most worthwhile investment for a clean society.
Third. The ICAC enjoys wide investigative power. Not only are they empowered to investigate
corruption offences, both in the Government and private sectors, they can investigate all crimes
which are connected with corruption.
Fourth. The ICAC strives to be highly professional in their investigation. The ICAC was one of thefirst agencies in the world to videotape interviews of all of its suspects; they have a dedicatedsurveillance team with over 120 specially trained agents who took surveillance as their life-long* Honorary Course Director of the University of Hong Kong and Former Head of Operations, Independent Commission Against
Corruption (ICAC), Hong Kong.

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career. The ICAC has a number of other specialized units such as witness protection, computer
forensics and financial investigation.
Finally. The ICAC adopts a comprehensive three-pronged strategy in fighting corruption, i.e.
through deterrence, prevention and education. All three are important but in my view, deterrence isthe most important. That is the reason why in the ICAC s total establishment of over 1,300 staff
members, over 900 of them work in the Operations Department, responsible for investigating
corruption. Nearly all of the major corruption cases I have dealt with were committed by people
with high authority and wealth. For them, they have certainly been educated about the evil ofcorruption and they may also be subject to a certain degree of corruption prevention control. But
what inspired them to commit corruption? The answer is simply greed, for they would weigh thefortune they could get from corruption with the chance of them being discovered. So how can wedeter them from being corrupt? The only way is to make them realize that there is a high risk ofthem being caught, which is the Mission of the ICAC Operations Department ― to make corruption
a high risk crime. To do that, you need a professional investigative force.

II. CORRUPTION AND MONEY LAUNDERING
Corruption rarely exists alone. It is often a tool to facilitate organized crimes. Over the years, The
ICAC has investigated a wide range of organized crimes facilitated by corruption. Police officers havebeen arrested and convicted for corruptly assisting vice and gambling operators; Customs officers havebeen arrested for colluding with drug traffickers and smugglers of various kinds; Immigration Officers forassisting illegal immigrants; hotel and retail staff for perpetuating credit card fraud. In regard to money
laundering, The ICAC has come across incidences where bank staff, finance market operators,
accountants, lawyers, casino managers corruptly assist the organized crime syndicates to launder proceedsfrom crime. In these cases, the ICAC needs to investigate not only corruption, but also some very
sophisticated organized crime syndicates and professionals
A. What is Money Laundering?
Criminals of every kind - from drug traffickers, smugglers, illicit arms dealers to corrupt officials must launder the money flowing from their crimes to conceal such proceeds from being the target ofinvestigation and seizures. They make their ill-gotten wealth look clean by moving it around, andlegitimizing it in the world s financial systems. Attacking criminals where it hurts - in their pockets - bypreventing them from profiting from their crimes is an effective deterrent. Combating money launderingis therefore of paramount importance in suppressing serious and organized crimes.
B. Money Laundering in Hong Kong
Like other international financial centres, Hong Kong is not immune from the risk of being used bycriminals to launder their illicit proceeds. Our open economy makes detection of transfer of illicit funds
even more difficult. Notwithstanding this, Hong Kong has been vigilant in safeguarding the stability andintegrity of our financial sector against such risks. Proactive actions have also been taken against money
laundering, both domestically and on the international front.
In Hong Kong, a person commits a money laundering offence if he deals with any property, knowing
or having reasonable grounds to believe that it represents any person s proceeds of drug trafficking or anindictable offence.

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C. Stages of Money Laundering
There are three stages of money laundering:
1. Placement - disposing of the funds, e.g. using cash carriers or false identities to open bank accounts
for deposits; use of offshore accounts so that the original owners cannot be traced.
2. Layering - distancing the funds from the source, e.g. further transfers of funds amongst layers ofbogus accounts or use of shell companies to create a bogus business transaction.
3. Integration - merging the funds and placing them into the economy, e.g. integrate with legitimate
business through creative accounting such as false invoices, over or undervalue of goods, or in thepretext of a loan payback.
D. Hong Kong s Anti-Money Laundering framework
Over the years, Hong Kong has built up a robust and comprehensive anti-money laundering
framework as described below. The framework has continuously been strengthened by a number ofmeasures and initiatives on the legislative, enforcement and regulatory fronts.
1. Legislation - The Drug Trafficking (Recovery of Proceeds) Ordinance and the Organized andSerious Crimes Ordinance are the two main pieces of legislation to combat money laundering.
2. Law enforcement - Police, Customs and the ICAC.
3. Financial regulators - Hong Kong Monetary Authority, Insurance Authority, Securities and Futures
Commission.
4. International co-operation - Hong Kong being a member of the Financial Action Task Force on
Money Laundering (FATF).
5. Criminal Justice System - the courts.
E. Hong Kong Anti-money Laundering Legislation
Money laundering in Hong Kong is enforced through two pieces of legislation:
1. Drug Trafficking (Recovery of Proceeds) Ordinance, Chapter 405;
2. Organized and Serious Crimes Ordinance, Chapter 455
Which cover the following offences/measures:
・ Dealing with the proceeds of crime - a person commits an offence if he deals with any property,
knowing or having reasonable grounds to believe that the property directly or indirectly represents
any persons proceeds of drug trafficking or an indictable offence. Maximum penalty - 14 years anda fine of HK $5 million.
・ Reporting suspicious transactions - where a person knows or suspects any property represents or isconnected with proceeds of a drug trafficking offence or an indictable offence, he shall as soon as itis reasonable for him to do so, disclose that knowledge or suspicion to an authorized officer.
Maximum penalty - Three months imprisonment and a fine of HK $50,000.
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・ Control of banks, money changers and remittance agents - requiring them to register their businesswith the police, identify customers for transaction over HK $20,000 and keep transaction records
for six years.
・ Enforcement power :(i) Search warrant(ii) Production Order(iii) Restraint Order- permits the making of a restraint order if a person has been arrested for an
organized crime(iv) Confiscation Order
After the events of 11th September, 2001, the United Nations (Anti-terrorism Measures) Ordinance
was enacted in July 2002 to implement, among others, the more pressing elements of the FATF s EightSpecial Recommendations on Terrorist Financing and the mandatory elements of the United Nations
Security Council Resolution 1373 relating to measures for the prevention of terrorist acts.
F. Law Enforcement
Anti-money laundering and countering terrorist financing legislation are principally enforced by the
Police and Customs. The two agencies jointly operate the Joint Financial Intelligence Unit which collects
suspicious transaction reports, analyses and disseminates intelligence for follow up investigations for the
purpose of prosecution of money laundering and terrorist financing offences. So far, over HK $380
million (US $48.7M) have been confiscated since the enactment of the two anti-money laundering laws.
As at 30 April, 2003, a total of HK $1,172 million of proceeds of crime was under restraint orders. In
addition, HK $101 million has been ordered to be confiscated and was pending recovery from thedefendants. To enhance international co-operation, Hong Kong has shared with foreign jurisdictions, onfour occasions, confiscated assets related to drug trafficking, involving the total amount of HK $57
million.
G. International Cooperation
Hong Kong plays an active role in international cooperation in anti-money laundering in the following
areas:
・ Signatories to multilateral treaties such as the 1988 UN Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances (the Vienna Convention), 2000 UN Convention
against Transnational Organized Crimes (the Palermo Convention), etc.
・ Provides mutual legal assistance to other jurisdictions under the Mutual Legal Assistance in
Criminal Matters Ordinance and to surrender fugitive offenders under the Fugitive Offenders
Ordinance in respect of money laundering and terrorist financing offences. At present, Hong Kong
has signed 14 agreements under the Mutual Legal Assistance in Criminal Matters Ordinance and 13
agreements under the Fugitive Offenders Ordinance.
・ Liaison network with the World Bank, International Monetary Fund (IMF), Asia Pacific Economic
Cooperation (APEC), Interpol and World Customs Organization (WCO).
・ As a member of the Financial Action Task Force on Money Laundering (FATF), an intergovernmental body established in 1989 which sets standards, and develops and promotes policies tocombat money laundering and terrorist financing. It also monitors international implementation ofstandards through self-assessment, mutual evaluations and identification of non-cooperative
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countries. It comprises 31 countries and governments, the European Commission and the Gulf
Cooperation Council. Hong Kong is an active member of FATF and in recognition of Hong Kong s
efforts against money laundering, it was selected as the President of the FATF for the period from 1
July 2001 to 30 June 2002. The Commissioner for Narcotics, as the coordinator of Hong Kong s
anti-money laundering efforts, represents Hong Kong in this role.
H. Major Initiatives Launched during Hong Kong s Presidency of FATF
Under the presidency of Hong Kong, the FATF made considerable progress in the fight against money
laundering and terrorist financing, the latter role was taken up after the events of September 11, 2001.
Some of the major accomplishments included a comprehensive review of the FATF Forty
Recommendations against money laundering, formulation of the Eight Special Recommendations on
Terrorist Financing, and a worldwide global programme of engagement, and enhanced collaboration with
the IMF and the World Bank.
I. Asia Pacific Group on Money Laundering
Hong Kong is also a founding member of the Asia Pacific Group on Money Laundering (APG). The
Group was set up in 1997 with the aim to facilitate adoption, implementation and enforcement ofinternationally accepted anti-money laundering standards by jurisdictions in the region. As an active
member contributing to the Group s work, Hong Kong is a co-chair of the APG Working Group on
Alternative Remittance and Underground Banking Systems.

III. DIFFICULTIES IN INVESTIGATING CORRUPTION AND MONEY
LAUNDERING
Both corruption and money laundering are difficult crimes to investigate, due to the fact that they are
by nature secretive crimes and often involve only satisfied parties. The offenders are often highly
educated, professional and high-powered who know how to cover up any trail of their crime and who areoften in a position to make others keep the code of silence to abort any investigation. These days, theoffenders often take advantage of the high technology in communication, the ease and freedom of thetransfer of funds, the banking practice that supports secrecy, the availability of nominee accounts and in
exploiting the loopholes created by cross jurisdictional problems, making investigation even moredifficult.
A. Prerequisites for an Effective Investigation
There are several prerequisites to an effective investigation:
1. Independence - corruption investigation can be politically sensitive and embarrassing to theGovernment. The investigation can only be effective if it is truly independent and free from undue
interference. This depends very much on whether there is a top political will to fight corruption in
the country.
2. Adequate investigative power - Because corruption is so difficult to investigate, you need adequate
investigative power. The HK ICAC enjoys wide investigative power, such as power to check bankaccounts, requiring suspects to declare their assets, requiring witnesses to answer questions underoath, restraining properties suspected to be derived from corruption and holding the suspects
travel documents to prevent them from fleeing the jurisdiction.

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3. Adequate resources - investigating corruption and money laundering can be very time-consuming
and resource intensive, particularly dealing with cross jurisdictional cases.
4. Confidentiality - it is crucial that all investigation should be conducted covertly and confidentially,
before overt action is ready, so as to reduce the opportunities for compromise or interference. On
the other hand, many targets under investigation may prove to be innocent and it is only fair topreserve their reputation until there is clear evidence of their corrupt deeds. Hence in Hong Kong,
we have a law prohibiting anyone from disclosing any details of an ICAC investigation until arrestsand searches have been made. The media once described this as a press gag law but they now
come to accept it as a right balance between press freedom and effective law enforcement.

5. International mutual assistance - many cases are now cross jurisdictional and it is important thatyou can obtain international assistance in the areas such as locating witnesses and suspects; money
trails, surveillance, exchange of intelligence, arrest, search and extradition.
6. Professional - all the investigators must be properly trained and professional in their investigation.
The HK ICAC strives to be one of the most professional law enforcement agencies in the world.
Over the years, the ICAC has developed a comprehensive training programme to enhance theinvestigators skill in the following professional areas :・ General investigation techniques・ Interview techniques, including under video recording
・ Financial Investigation Techniques
・ Search・ Surveillance
・ Undercover operations
B. Public Reporting System
Any success in law enforcement always starts with a comprehensive public reporting system and aims
at encouraging the public to report and assist in investigating crime. A good reporting system should take
into consideration the following criteria:
・ Publicity to encourage public reporting・ Provide customer service to complainants
・ Measures to deter frivolous or malicious complaints
・ Establish policy on anonymous reports
・ Enforce strict confidentiality on the reports
・ Measures to protect whistle-blowers
・ Provide a quick response to the reports
・ Establish a fair procedure for handling the reports, with checks and balances against abuse
・ Establish a system of accountability to the complainants
C. Methods of Investigation
Investigating corruption can broadly be divided into two categories:
a. Investigating past corruption offencesb. Investigating current corruption offences

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D. Investigating Past Offences
The investigation normally commences with a report of corruption and the normal criminal
investigation technique should apply. Much will depend on the information provided by the informant
and from there, the case should be developed to obtain direct, corroborative and circumstantial evidence.
The success of such an investigation relies on the meticulous approach taken by the investigators toensure that no stone is left unturned . Areas of investigation could include detailed checking of therelated bank accounts and company ledgers and obtaining information from various sources tocorroborate any meetings or corrupt transactions etc. When there is a reasonable suspicion to act, thesuspects home and office should be searched for further evidence and all related parties should beproperly interviewed.
E. Investigation of Current Corruption Offences
Such investigation will enable greater scope for ingenuity. Apart from the conventional methods
mentioned above, a proactive strategy should always be preferred, with a view to catch the offenders redhanded. Surveillance and telephone interception should be mounted on the suspects and suspicious
meetings monitored. A cooperative party can be deployed to set up a meeting with a view to trap thesuspects. Undercover operations can also be considered to infiltrate into a crime syndicate. The
prerequisite to all these proactive investigation methods are professional training, adequate operational
support and a comprehensive supervisory system to ensure that they are effective and in compliance withthe rules of evidence.
F. Asset Tracing
One most important investigation technique in corruption and money laundering investigation is asset
tracing. The key to this is a painstaking accounting approach to examine and follow the money trail in thefollowing areas:・ bank accounts of the alleged offenders and their relatives
・ remittance・ companies and nominee companies
・ stocks, shares and funds
・ properties
・ source of expenditures
As soon as there is reasonable suspicion, a period of surveillance on the alleged offender to identify
his lifestyle, followed by a thorough search of his home, office, safe deposit box, car and personal
belongings should be conducted so as to obtain the necessary clues to identify where his assets have been
hidden.
G. Resident Informant
One unique feature of corruption investigations is that the investigators must not be content withobtaining evidence against one single offender. Corruption is always linked and can be syndicated. Everyeffort should be explored to ascertain if the individual offender is prepared to implicate other accomplices
or the mastermind of the corruption. In Hong Kong, there is a judicial directive to allow a reduction of 2/3of the sentence of those corrupt offenders who are prepared to provide full information to the ICAC andto give evidence against the accomplices in court. The ICAC provides special facilities to enable such
resident informants to be detained in ICAC premises for the purpose of de-briefing and protection. This
resident informant system has proved to be very effective in dealing with syndicated or high-level
corruption.

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H. Investigative Support
Apart from the core investigation units, there should be strong operational support units, and thefollowing are essential for the reasons given:・ Intelligence Section
As a central point to collect, collate, analyze and disseminate all intelligence and investigation data,
and the upkeep of indices for ready cross reference.
・ Surveillance Section
Such a section is a very important source of evidence and intelligence. ICAC has a dedicatedsurveillance unit of over 120 surveillance agents and they have made a significant contribution to
the success of a number of major cases.
・ Technical Services Section
This section provides essential technical support to surveillance and operations.
・ Information Technology Section
It is important that all intelligence and investigation data should be managed and analyzed bycomputer as an aid to investigation. In this modern age, most personal and company data are storedon computers and investigators must possess the ability to break into these computers seized during
searches to examine their stored data. Computer forensics are regarded as vital for all law
enforcement agencies worldwide these days.
I. Financial Investigation Section
The corruption investigations these days often involve a sophisticated money trail of proceeds ofcorruption, which go through a web of offshore companies and accounts, funds etc. It is necessary toemploy professionally qualified investigative accountants to assist in such investigation and in presenting
such evidence in court.
・ Witness Protection Section
The ICAC has experienced cases where crucial witnesses were compromised, with one evenmurdered, before giving evidence. There should be a comprehensive system to protect crucial
witnesses, including 24 hours armed protection, safe housing, a new identity and overseas
relocation. Some of these measures require legislative backing.

IV. CASE STUDIES
A. Senior Public Prosecutor Corruption Case
A very senior pubic prosecutor, at the time holding the position as the Acting Deputy Director of
Public Prosecutor, was found to have excessive assets of HK $16 million believed to have been derived
from corruption: including bank balances of NZ $2.43 million; three lots of land in New Zealand and an
orchard farm. Enquiries revealed how he had laundered his corrupt proceeds through the following
countries:
・ TAIWAN: he bought gold in H.K., then sold it in Taiwan and kept the money in a Taiwanese
Lawyer s account. Transferred the money to N.Z. via a bank account of a HK lawyer.

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VISITING EXPERTS PAPERS・ LONDON: he drew money from Taiwan via a Taiwanese lawyer. He transferred the money to an
account in H.K. before transferring it to other overseas accounts.
・ HONG KONG: transferred money to his mother s account in Singapore and his family in N.Z.
Bought gold using money transferred back from Singapore and Taiwan.
・ VANUATU PACIFIC: kept money in two trust funds, one of which was for his children.
・ NEW ZEALAND: money to his family s bank account; invested in orchard business, buying threelots of land in Taurauga.
・ AUSTRALIA: kept money from H.K. in his sister in-law s account.
He was subsequently convicted of corruption offences and sentenced to eight years imprisonment,with HK $12 million of his assets forfeited.
B. Illegal Passport & Money Laundering Syndicate
The ICAC smashed an international illegal passport and money laundering syndicate in recent years.
The syndicate members included a Customs Senior Inspector, two Immigration Officers, a Principal
Immigration officer, who was the head of Immigration of an African Country, a bank manager and acasino operator. This syndicate arranged illegal passports, including diplomatic passports from various
foreign countries for sale to people who wanted to emigrate to the US. The syndicate could also assist inlaundering illegal money. The ICAC succeeded in infiltrating into the syndicate through an ICAC officer
acting undercover. At the critical stage, the ICAC also enlisted the assistance of a Russian speaking
undercover officer from a US law enforcement agency to pose as a member of a Russian organized crimegroup. All the key figures were apprehended and subsequently convicted. This is a classic example ofinternational cooperation, and the mutual assistance that should be developed in undercover operations.
C. Counterfeit Credit Cards (CCC) - HK Joint Operation with Tokyo/Seoul
Counterfeit credit card (CCC) fraud continues to be a lucrative source of revenue for organized crimegroups. In 1992, Hong Kong was responsible for 32% of the world s credit card fraud. Now Hong Kongis only responsible for 2% of the fraud. This type of fraud is often facilitated by corrupt retail staff who
steal the genuine credit card information from customers and pass them to the syndicate for making
counterfeit cards. In 2000, the ICAC assisted the Tokyo Metropolitan Police Department in eradicating acrime syndicate from Hong Kong which uttered CCCs in Japan. Tokyo Police, in appreciation of the
ICAC efforts, presented us with a Certificate of Appreciation. In March 2001, information was received
that four members of a CCC syndicate were organizing a trip to Seoul, South Korea, where they intended
to utter CCCs manufactured with data they captured in Hong Kong and elsewhere. A team of ICAC
officers travelled to Korea to assist the Seoul Metropolitan Police in the identification of the suspects. The
criminals were arrested in Seoul. In Hong Kong, simultaneous actions were taken, resulting in the seizureof credit card data and computer software used in the manufacture of CCCs. The leader of the syndicate
was charged with CCC offences in Hong Kong and sentenced to a term of imprisonment. These two cases
were typical international syndicates with operations stretching through a number of jurisdictions. In
recognition of the ICAC s success in CCCs investigation, an ICAC Chief Investigator was awarded
Law Enforcement Officer of the Year by the International Association of Financial Crime Investigators
in America. This is another example of successful international cooperation.

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D. Cigarette Smuggling Case
The ICAC carried out a protracted investigation which lasted for three years from 1993 to 1996 into acigarette smuggling syndicate. Its members included ex-customs officers, a senior manager of aninternational tobacco company, a number of established cigarette traders and senior triad members of Wo
On Lok Triad Society. The investigation revealed bribe payments of over US $4.2M (HK $33M) paid by
the syndicate to the senior manager of a tobacco factory to ensure an unlimited supply of cigarettes tofacilitate smuggling into China. During the course of the investigation, a key member of the syndicate,
who had earlier agreed to assist ICAC in the investigation, was found brutally murdered and dumped in
the harbour in Singapore. His murder was suspected to be carried out by five members of the Wo On Lok
Society. In the end, three members of the syndicate were convicted of bribery, murder or perverting thecourse of justice charges. Three persons are still wanted on warrant. This is one of the most seriousorganized crime cases investigated by the ICAC.
E. Hong Kong Jockey Club Race Fixing Case
Horse racing is a very popular game in Hong Kong and the total amount of bets placed by punters at
each race meeting is in the tune of tens of million of dollars, one of the highest in the world. Hong Kong
Jockey Club is keen to maintain the integrity of racing. In a joint investigation with the Jockey Club, theICAC succeeded in unearthing a case of race fixing involving a number of jockeys who were bribed by an
off-course betting syndicate with a triad background. The total amount of bribes paid to riders for notletting their mounts run to the best of their ability exceeded US $180,000 (HK $1.4 million) in a single
race. This amount of money is only a drop in the ocean compared to the revenue the syndicate gets inillegal bookmaking. Seven persons were prosecuted and three jockeys and two civilians were
subsequently found guilty of bribery and gambling offences, and sentenced to substantial terms ofimprisonment. Unfortunately, the ICAC was not able to get to the head of the syndicate simply because
there was a missing link with no one prepared to provide the necessary evidence against the head. This is
the difficulty of investigating organized crime groups.
F. Soccer Match Fixing Case
Betting on soccer match results used to be illegal in Hong Kong, although it is now legalised. The
ICAC investigated a case involving an illegal international soccer bookmaking syndicate. The syndicate
was involved in illegal soccer betting on international matches and also fixed the outcome of local
football matches. This was achieved by bribing key players in the team. A corrupt police sergeant wasbribed to assist the illegal operation in Hong Kong. This was a particularly difficult case to investigate.
To begin with, no aggrieved individuals came forward to complain. Secondly, the syndicate s operation istransnational. Bets accepted in Hong Kong were then placed with a major bookmaker in Malaysia
through a middleman in Singapore, and all financial transactions were conducted through anunderground banking system. To add to the complexity of the case, all bets were recorded on a
sophisticated computer programme which was capable of total erasure through a push of a button on the
keyboard. The ICAC carried out a strike operation on the first day of the World Cup Final in 1998 andmanaged to break into the premises so swiftly that the operator was so shocked that he was unable to push
the crucial button on time. Nonetheless, it still took a long process of computer forensics to retrieve theevidence from the computer and have it admissible as evidence in court. This investigation resulted in thearrest and conviction of eight individuals in Hong Kong. Five footballers were sentenced to terms ofimprisonment ranging between 12 and 22 months, the police sergeant was jailed for four years, and thehead of the syndicate and his lieutenant were each sentenced to two years imprisonment. The need to
upgrade ourselves in information technology is obvious if we want to tackle sophisticated organizedcrime.

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V. CONCLUSION AND OBSERVATIONS
It is obvious that corruption and organized crimes are getting more and more difficult to investigate.
The offenders have taken full advantage of high technology and cross jurisdiction loopholes. The
conventional investigation methods and the current legal system may not be adequate to win the battle
against the corrupt. We should adopt a more proactive approach in investigation such as the wider use ofundercover operations and the use of telephone interception.
I would like to give my personal observation on the following areas:
A. A Strong Partnership Approach
15.The ICAC sees great value in a strong partnership approach with other local law enforcement
agencies, including the Police, Customs, and Immigration Department in Hong Kong. In the old days,
when the ICAC arrested a government official, this might not be welcome by his head of department, whoblamed the ICAC for bringing scandal to his department. Don t wash your dirty linen in public is
outdated and can only encourage corruption. If the dark days of corruption teach us anything, it is thatturning a blind eye to corruption simply will not do. The problem will only grow bigger. I am pleased tonote that heads of departments, particularly the law enforcement agencies, today have changed that
attitude and are taking a proactive strategy in order to tackle corruption. Indeed, many of the ICAC s
most successful cases originated from their proactive approach or as a result of joint investigations. To
effectively deal with a sophisticated organized crime group and its money laundering activities, it ishighly recommended that a multi-disciplinary task force approach be adopted, drawing together
investigators from the police, ICAC, Customs, Tax, legal counsel, forensic accountants, asset
management experts and major case management technological support. Such a multi-disciplinary
approach enables adequate power and expertise to be available to deal with the equally professionally
supported organized crime groups.
B. Adequacy of the Criminal Justice System
Corruption is a secret crime and there is a need to break the secrecy if we want to find out the truth.
The present system in Hong Kong which basically follows the old UK one, allows the suspect to exercise
their right of silence when questioned under caution. If they have a lawyer, the first thing the lawyer willadvise them is to maintain his right of silence. When the case comes to court, the offender will haveample time to concoct a story, which does not allow the prosecution sufficient time to verify its
truthfulness. In the end, it defeats the objective of the criminal justice system in enabling full facts to bepresented to the court so as to arrive at a fair verdict. Under the new UK caution system, the suspects are
now warned that any delayed response to questions may prejudice their defence in subsequent legal
proceedings. The new caution reads like this, You do not have to say anything. But it may harm yourdefence if you do not mention when questioned something which you later rely on in court. Anything you
do say may be given in evidence. I believe this new caution strikes a better balance between the humanrights of suspects and the public interest to investigate crime. Alternatively, we should also consider
adopting the Continental system where the suspect can be interviewed by examining magistrate where hecannot exercise any right of silence.
C. Telephone Interception
It is no longer a secret to the criminal world that most law enforcement agencies have access totelephone interception in their investigation. There appears to be two broad ways in dealing with
telephone interception in different countries. In the United States, Canada and Australia, telephoneinterception requires judicial approval and its products can be used as evidence in court. In the UK andHong Kong, telephone interception is approved by the Government but cannot be used as evidence in any
courts. Experience over the world proved that telephone interception is an extremely useful tool in
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investigating high level organized crime and corruption and its production in court often forms the crucial
evidence against the mastermind offenders. To deprive the use of telephone interception evidence in court
is in my view simply to hamper the effective investigation and prosecution of major corrupt offenders.
Consideration should also be given to introducing new legislation to protect whistle-blowers, witness
protection, and allowing a greater degree of entrapment to facilitate successful undercover operations, andthe international mutual assistance in corruption investigation and money laundering.
D. International Mutual Investigative Assistance in Criminal Matters
We all appreciate that organized crimes this day have no boundary and international cooperation isvital. However, at present, we rely heavily on mutual legal assistance which have restrictions on areas ofcooperation and at the same time require strict judicial procedure which is often a time consuming andcomplicated process. We need to act faster than criminals and there should be a more efficient mechanism
amongst law enforcement agencies to call for and obtain assistance at short notice. The United Nation is
now in the process of drafting a U.N. Convention on Fighting Corruption. I hope that it will enable closer
international cooperation amongst anti-corruption agencies. I believe the time has come for aninternational association of anti-corruption agencies to be formed under the U.N. s auspices to enhanceinternational liaison.

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