FIGHT AGAINST TRANSNATIONAL CORRUPTION AND
INTERNATIONAL CO-OPERATION
Jeremy Lo Kwok-chung*I. INTRODUCTION
Last year, Hong Kong celebrated the tenth anniversary of its reunification with the mainland. Like
Macao, now in its ninth year, both Special Administrative Regions can proudly pronounce to the world thatthe “one country, two systems” philosophy is working successfully.
One example of this success is the way in which the mainland has led us in the implementation of theUnited Nations Convention against Corruption (UNCAC) and the United Nations Convention against
Transnational Organized Crime (UNTOC).
Today, these two international instruments assist in creating a framework of laws that enable the law
enforcement fraternities to work more closely as partners in the fight against transnational corruption andcrime, both of which have become defining issues of the 21st century.
In the past 20 years, technological advancement and globalization have opened up vast opportunities forthe perpetration of transnational corruption and crime, particularly in the form of money laundering.
Nowadays, law enforcement is facing a more complex and sophisticated challenge from criminals who haveextended their activities across jurisdictional boundaries. These criminals are taking advantage of increased
business activities, rapid movements of money, telecommunications and computer links. This reality isreflected in the UNTOC, and was emphasized by the former United Nations Secretary General, Mr. Kofi
Annan, who said at Palermo on the occasion of the Convention being opened for signing, that “If crime
crosses all borders, so must law enforcement.”
Organized crime has become more and more difficult to detect as its activities operate across sovereign
borders, involving multiple jurisdictions and different judicial systems. This is especially true whenobtaining the evidence necessary for the prosecution of offenders. The problem is that no one single
jurisdiction can act and defend alone against organized crime. There is, therefore, an urgent need to put inplace international agreements between the various jurisdictions that would enable the exchange of crime
information, the obtaining of evidence, the restraint and confiscation of crime proceeds, and the return offugitives.

II. INTERNATIONAL CO-OPERATIONInternational law enforcement co-operation is the key to ensuring that perpetrators of transnational
crimes have zero opportunity to shun investigation and escape justice. The ICAC in Hong Kong are no
strangers to such kinds of co-operation. When the ICAC was set up in 1974, many corrupt police officers,
government officials and organized crime figures fled Hong Kong, taking with them much of their criminal
proceeds. The case which led to the setting up of the ICAC concerned a Chief Superintendent of Police who,
whilst under investigation for corruption, fled the jurisdiction to return to England. The corrupt officer was
subsequently extradited back to Hong Kong to face prosecution, only after the ICAC receiving valuableassistance from the Royal Canadian Mounted Police and Interpol in gathering the necessary evidence.
However, not all the ICAC efforts were successful, as in this case. Some of its attempts have not been
* Assistant Director of Operations Department, Independent Commission Against Corruption (ICAC), Hong Kong Special

Administrative Region.

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fruitful, and a number of our corrupt fugitives remain at large today. The limited mutual legal assistancearrangements available in the old days hindered our investigations. Rendition of fugitives from abroad waseven more difficult. At that time, formal legal co-operation between jurisdictions was not common. The
concept of mutual legal assistance was very much an idea in some jurisdictions whose time had yet to come.
In spite of such difficulties and constraints, the ICAC has, since 1974, successfully extradited back to
Hong Kong 35 fugitives. In the past 20 years, the ICAC had made over 164 requests to Interpol forassistance from overseas agencies.

III. UNCAC AND UNTOC
Let me turn to the two important Conventions. The UNCAC and the UNTOC were both ratified by theCentral People’s Government of China, and were extended to the Hong Kong Special Administrative Region
last year. They are powerful instruments and are fundamental to the future development of an international
mechanism for tackling transnational corruption and crime. Much of what we seek under the relevant
provisions can be achieved by reviewing our own criminal justice systems, and, where necessary, reforming
them to enable compliance.
When you read the two Conventions, you will find that they were given much thought when they weredrafted. They each contain a roadmap for countries who wish to put in place a legal framework for combatingtransnational corruption and crime. Once implemented, these laws will improve the effectiveness of agovernment’s enforcement efforts within its own borders and outside. The key areas on which the two
Conventions made provisions are:
•
•
•
•
•
•
•
•

Law enforcement co-operation
Joint investigations
Special investigation techniques
Special provisions for witnesses
Anti-money laundering measures
Mutual legal assistance
Extradition
Training and capacity building.

In this paper, I will focus on these eight key areas and share with you the experience of the Hong Kong
ICAC.

A. Law Enforcement Co-operation
Apart from the formal setting of Mutual Legal Assistance, a vital part of the spirit of law enforcement cooperation relies on inter-agency liaison, involving, as a first step, the sharing of crime information andintelligence. This level of co-operation can be extended to assisting each other in investigations, including
establishing the identity, whereabouts and activities of persons suspected to be or who have been involved incriminal activities, tracking the movement of crime proceeds, and locating the final destination and disposalof illicit monies.
In Hong Kong, the ICAC, through investigations, has come by information and intelligence concerning
the activities of criminal groups operating locally as well as overseas. The International Liaison Section,
whose main responsibility is to maintain close contact with our counterparts in other jurisdictions, may passon crime information and intelligence on a confidential basis, as part of our international co-operation
initiatives.

B. Joint Investigation
An important aspect of law enforcement co-operation is joint investigation. This is where two or morejurisdictions join hands to effectively investigate cross-border crime.
Let me cite an example. In 2000, the ICAC commenced an investigation into the conduct of a Hong Kongbased emigration consultant who was suspected to have formed a corrupt relationship with a member of theAustralian Immigration and Multicultural Affairs Department to facilitate emigration of unqualified Hong

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Kong citizens to Australia. Upon assistance from an Australian authority, the ICAC identified offences linked
to the consultant and others in Hong Kong. When we were set to lay charges against the consultant, he left
Hong Kong illegally to escape prosecution. Eventually, he was located and arrested in the United States ofAmerica on an international arrest warrant. Following discussions and negotiations amongst the agencies
from the three jurisdictions, the consultant was extradited to Australia, instead of Hong Kong, to faceprosecution for similar offences he had committed there. The offences involve corruption and offences under
Australian immigration law. You will see that the assistance roles were reversed. At the beginning of theinvestigation, Australia rendered assistance to Hong Kong. Towards the end of the investigation, Hong Kongfound itself rendering assistance to Australia. At the end of the day, it matters not who prosecuted theconsultant, so long as justice was done. It is all the more important that through co-operation, investigations
into transnational crime can be vigorously pursued.

C. Special Investigation Techniques
As law enforcement co-operation leads to joint investigations, the natural development would be theemployment, where necessary and justified, of special investigation techniques. This may include the use ofundercover agents drawn from law enforcement agencies of different jurisdictions who, under special
arrangements, are allowed to operate in the jurisdictions as part of a joint investigative effort. The UNCAC
specifically provides for the investigation of corruption offences through the use of special techniques suchas controlled deliveries, electronic surveillance and undercover operations. Article 20 of the UNTOC
contains a similar provision and requires parties to the Convention to enter into agreements to allow for theuse of such techniques.
Special investigation techniques are crucial to effective detection of syndicated corruption and organizedcrime. One of the successful ICAC cases in recent times was an investigation into a syndicate involved in
the sale of diplomatic passports and corruption-facilitated money laundering. The key to its success hinged
on the assistance of a Russian speaking agent from the United States of America. He was invited to Hong
Kong, posing as a member of the Russian mafia who was interested in purchasing genuine diplomatic
passports from corrupt immigration officials and seeking the assistance of organized crime figures in Hong
Kong to assist in his money laundering business. The undercover operation, aided by covert surveillance
and monitoring, was extremely rewarding in infiltrating the syndicate and getting the evidence required forprosecution. After a number of legal battles at court, the ICAC was able to secure the conviction of six
syndicated members for offences of conspiracy, corruption, immigration fraud, and money laundering. They
included three serving officers from Hong Kong’s disciplined services, an immigration official from an
African country who came to Hong Kong specifically to sell his country’s diplomatic passports, and twoorganized crime figures. All of them were sentenced to lengthy terms of imprisonment. I have to emphasize
here that the syndicate had been operating for a long period of time and very little could be done by any law
enforcement agencies, simply because the syndicate refused to do business with local people. It was only
through the introduction of the US undercover agent that the ICAC was able to put the major syndicate
players behind bars.

D. Special Provisions for Witnesses
Both the UNCAC and UNTOC have placed much emphasis on the need for jurisdictions to provide
special measures for the protection of informants and witnesses. In bringing criminals to justice, it isnecessary to encourage people to report crime, and this may require an assurance to the informant that hisor her identity will not be revealed. When informants become witnesses, there should be regimes in place tocater for such witnesses, where appropriate, to testify anonymously. In the more serious and organizedcorruption and crime cases, there is a frequent reliance on accomplice witnesses to testify in a court of law.
Any such testimony may place an accomplice witness at risk, and there is a need, for the purpose of a
successful prosecution, to offer the witness sufficient protection against any threats to his or her health andwell-being. A witness protection programme, appropriately staffed, funded and supported by legislation,
would ensure the safety of witnesses and increase the chances of a conviction against the criminals. In Hong
Kong the Witness Protection Ordinance has proven to be effective legislation in inspiring the confidence ofthe public and enlisting witnesses to come forward to testify for the prosecution.
E. Anti-Money Laundering Measures
Money laundering is acknowledged as a worldwide problem. It is linked to underlying criminal activities
that generate the assets laundered, and enables criminal activities to continue. Against this background, the13

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UNCAC and the UNTOC require governments to put in place offence provisions to combat money
laundering, and measures for the restraint and confiscation of the proceeds of crime. Bribery is consideredan effective means to facilitate money laundering, and its significance cannot be overstated. Not surprisingly,
both Conventions have placed heavy emphasis on the importance of having anti-money laundering
legislation to ensure that effective measures are put in place to tackle the growing problem. In this context,
investigative experience tells us that it is often the connections made through financial transaction records
that allow hidden assets to be located, and that establish the identity of the criminals and the criminal
syndicate responsible.
A starting point for any country is the 40+9 Recommendations of the Financial Action Task Force which
are designed to raise awareness of money laundering within the banking and financial systems and otherareas of commercial life, and to require the reporting of suspicious transactions by such institutions.
There must also be laws to provide the means within a jurisdiction for such a jurisdiction to freeze andconfiscate proceeds flowing not only from crimes committed within its own borders, but also thosecommitted in other jurisdictions. In this regard, each jurisdiction will need to consider its policy on the
sharing and return of such confiscated proceeds.

F. Mutual Legal Assistance
Mutual legal assistance concerns the use of the legal process to gather evidence in another jurisdiction.
Particularly relevant are the obtaining of depositions from witnesses and the production of documentary
records, including data that may be stored on computers. Information that is confidential in nature or issubject to any form of legal protection requires the compulsive nature of the mutual legal assistance process
to gain access to it. The obvious type of information that falls into this category and which is crucial toserious organized crime, money laundering, and corruption investigations, are the records of banks andfinancial institutions. I can tell you that in the ICAC, an enormous part of the investigators’ time is spent on
tracing the money trail.
In a recent mutual legal assistance case undertaken by the ICAC at the request of the Malaysian
government, a search warrant was executed on the office of a certified public accountant in Hong Kong. The
search had helped in identifying a convoluted process by which corrupt proceeds were laundered throughMalaysia, Hong Kong and Japan en route to Switzerland. The case has illustrated that mutual legal
assistance is an important mechanism through which jurisdictions can work together to effectively suppress
transnational crime.
To date, Hong Kong has an active and on-going bilateral negotiation programme for the surrender offugitive offenders and for mutual legal assistance. The Hong Kong SAR Government has signed 21 bilateralagreements on mutual legal assistance, and 16 agreements on the surrender of fugitive offenders. From theASEAN region, these countries include Malaysia, the Philippines, and Singapore.

G. Extradition
In relation to extradition, Article 44(5) of the UNCAC and Article 16(4) of the UNTOC allow theConventions to be the legal basis for extradition of offenders for offences identified within the Conventions
where States Parties have not signed formal extradition treaties. That said, extradition could still be a very
complicated issue. Some jurisdictions may need to be able to rationalize matters concerning dual criminality;
others may be bound by their domestic laws not to extradite their own nationals. However, countries orjurisdictions must be cautious that they do not allow considerations such as these to become obstacles totheir co-operative efforts in dealing with transnational criminals.
As mentioned earlier, transnational crime is a fact of life and a growing industry. While there are practicaland legal difficulties, I believe that under the two Conventions, governments can ably work together towards
the setting up of an effective cross border law enforcement net, which leaves no opportunities and loopholes
for criminals to operate and for crime to flourish between jurisdictions.

H. Training and Capacity Building
Effective law enforcement requires highly skilled and professional investigators of good integrity.
Training and capacity building is a vital process towards the making of such professional people. Law
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enforcement officials from different jurisdictions who have the benefit of being trained together develop anunderstanding of each other’s jurisdictions, legal constraints, enforcement problems, and at the same timeexchange ideas and experiences with a view to identifying solutions to take matters forward. Such training
will further foster closer working ties. The ICAC has all along been promoting such a practice and culture,and has opened up its training and command courses to law enforcement personnel from overseas. In the
opposite direction, the ICAC sends its officers overseas for training and development.
The success of a cross-jurisdictional investigation is often determined by a good and usually respectedinter-agency relationship. For that purpose, the ICAC regularly organizes seminars and conferences with ouroverseas counterparts that can be traced back to the early nineties. More recently, Hong Kong joined theAnti-Corruption Action Plan for Asia-Pacific promulgated by the Asian Development Bank and theOrganization for Economic Co-operation and Development. The ICAC also represents the Hong Kong SAR
Government at the Anti-Corruption and Transparency Task Force of the Asia-Pacific Economic Cooperation, better known as ‘APEC’.

IV. INTERNATIONAL AND MAINLAND LIAISONIn 1997, a section known as J4 was established in the ICAC. The J4 section deals with all operational
liaison matters between the ICAC, mainland China and Macau on the one hand, and most other overseas law
enforcement agencies on the other.

A. The Mutual Case Assistance Scheme
As early as 1988, mutual agreement was reached between the ICAC and the mainland GDPP for the
purpose of regulating the process by which the two agencies assist each other in operational matters,
including making cross-border enquiries. In 1996, a formal agreement on a Mutual Case Assistance Scheme
was signed which enables both agencies to interview witnesses, collect evidence and exchange intelligencein each other’s jurisdiction. This agreement was subsequently endorsed by the Supreme People’s
Procuratorate, which has become a party to it. The effectiveness of this scheme is best illustrated by thefollowing example:
1. The “Shum Yip” Case – A Fine Example of the Scheme
In 1998, a general manager of a mainland-funded cross-border transportation company was prosecuted forsoliciting and accepting more than $11 million in bribes from Hong Kong vehicle owners for awarding
mainland vehicle licenses. During court hearings, the defendant suddenly raised a line of defence which
required rebuttal evidence to be obtained from a mainland company immediately. Within 24 hours, the ICAC
was able to liaise with the GDPP who cleared the way for ICAC officers to collect the required evidence inGuangzhou to rebut the defence. The trial was then concluded swiftly resulting in the conviction of the
defendant who was sentenced to 3 and a half years’ imprisonment.

B. International Liaison
On the international front, J4 is normally the first point of contact for overseas law enforcement agencies
who seek ICAC’s assistance. Regular liaison meetings are held with the Hong Kong representatives of theUnited States Federal Bureau of Investigation, the Royal Canadian Mounted Police and the AustralianFederal Police.
C. Visits and Conferences
The J4 section deals with most of the official visits to the ICAC by members of overseas agencies,
including design of visit programmes and other logistical arrangements. It also serves as the secretariat forregional seminars and international conferences hosted by the ICAC.
D. ICAC Anti-Corruption NewsletterJ4 is also responsible for liaison with prominent members of overseas law enforcement agencies whofrom time to time contribute articles to the ICAC Anti-Corruption Newsletters, which are published online
at quarterly intervals. So far, nine quarterly issues have been published and apart form the major lawenforcement agencies, the following have also contributed to the ICAC Newsletter:

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Countries

Agencies

Botswana

The Office of Directorate on Corruption & Economic Crime

Brunei

Anti-Corruption Bureau

India

Central Vigilance Commission

Kenya

Kenya Anti-Corruption Authority

Malawi

Anti-Corruption Bureau

Malaysia

Anti-Corruption Agency

Nigeria

Nigerian Code of Conduct Bureau

Pakistan

National Accountability Bureau

South Africa

National Anti-Corruption Unit, South African Police

Swaziland

Anti-Corruption Commission

Tanzania

Prevention of Corruption Bureau

V. THREE DECADES OF EXPERIENCE IN INTERNATIONAL CO-OPERATION
In 1974, the ICAC was set up as a direct result of the escape from Hong Kong of Chief Police
Superintendent Peter Godber. His eventual extradition back to Hong Kong to stand trial for corruption was
the first major task of the ICAC and marked the beginning of our nearly three decades of international cooperation with overseas jurisdictions. Such international co-operation never ceases to expand in its scopeand complexity.
I would like to share with you some examples of our cross-boundary investigations in which you will see
the expanding scope and complexity of international co-operation at play.

A. Cases where the Initial Information/Complaint came from Overseas Agencies
1. Australian Immigration Case
In November 2000, the ICAC received a complaint from the Department of Immigration and Multicultural Affairs (DIMA) of the Australian Government that a Hong Kong Migration Consultant had offeredadvantages to a DIMA officer for approving migration applications handled by the former. In July 2001, theDepartment of Justice agreed to lay charges against the Migration Consultant and a warrant for his arrest
was obtained.
2. US Human Smuggling CaseIn mid-1998, the Immigration & Naturalization Service (INS) of the US Government passed information
to the ICAC concerning a Hong Kong citizen whom they suspected to be the head of a syndicate which hadcorruptly arranged for illegal immigrants from the mainland to be smuggled into the US through Hong Kong.
In early 2000, following intensive enquiries which involved the co-operation of the INS and FBI, thesyndicate, consisting of two US passport holders and six Hong Kong citizens, were convicted of forgery andconspiracy to defraud. They were sentenced to substantial terms of imprisonment.

B. Cases where Overseas Agencies have rendered Assistance in ICAC Investigations
1. Fake US Bond Case
In March 2001, the ICAC arrested a US businessman and a German lawyer for corruptly obtaining credit
facilities from banks by using fake US Treasury bonds and other valuable securities. The US Treasury
assisted the ICAC by carrying out forensic examinations on certain valuable securities seized from thesuspects. These examinations verified that they were false instruments. They eventually pleaded guilty toconspiracy to defraud and other charges.
2. Sierra Leone Immigration CaseIn late 1997, a Sierra Leone immigration officer travelled to Hong Kong and solicited advantages fromindividuals in return for providing passports and visa facilities. He was arrested during an ICAC undercover16

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operation when he handed the sum of $40,000 to an undercover officer. The Sierra Leone Government fully
supported the ICAC; in particular, they verified that the passports that were to be sold by the suspect would
have been considered genuine. The suspect was eventually convicted of corruption charges and sentenced
to seven years’ imprisonment.

C. Cases concerning Mutual Assistance in Undercover Operations
1. Customs & Excise CaseIn late 1997, the ICAC was conducting an investigation of an international money laundering andsmuggling syndicate which had offered protection money to a Customs & Excise officer. The core membersof this syndicate and the corrupt C&E officer were extremely surveillance conscious and alert to infiltration
by outsiders. The ICAC approached the FBI who provided an American Russian officer to act as anundercover agent. The agent successfully carried out several illicit business dealings with the syndicate andthe C&E officer. In late 1998, the two syndicate heads and the C&E officer were convicted and sentenced to
imprisonment terms ranging from four to five years. In the course of this investigation, the undercoveragent also obtained evidence against two Hong Kong immigration officers, both of whom were convicted at
separate trials and sentenced to four and ten years’ imprisonment respectively.
2. Computer Products Smuggling CaseIn early 1998, the FBI in turn sought the assistance of the ICAC to deploy undercover agents to obtainevidence in Hong Kong against a corrupt US Customs Officer who was involved in smuggling US computer
products from Hong Kong to Los Angeles. The operation was successfully concluded and the two former US
Customs officers were sentenced to 30 months’ imprisonment by a Los Angeles court. A US lawyer
received three years’ probation and, at the time of writing, three other members of the smuggling syndicate
are still awaiting sentencing.

D. Cases of Simultaneous Joint Operations
1. Korean Credit Card CaseIn April 2001, an international syndicate involved in the manufacturing and uttering of counterfeit credit
cards, through bribery of insiders in banks and retail shops, was smashed in a joint operation by the ICAC
and the Korean Police. The operation was triggered by intelligence obtained by the ICAC in Hong Kong.
This operation involved the simultaneous arrests of six syndicate members in Hong Kong and Korea. Threesuspects were convicted in Korea. The Hong Kong suspect went on trial and received 30 months’
imprisonment.
2. UK Credit Card Case
In September 1998, the ICAC and the UK police carried out a simultaneous arrest operation. The
suspects were believed to be members of an international counterfeit credit card syndicate. One suspect wasconvicted in a Hong Kong court and two others were convicted in a UK court for offences in connection withcounterfeit credit cards. The ICAC Chief Investigator in charge of this case was subsequently awarded thetitle “Law Enforcement Officer of the Year 1999” by the International Association of Financial Crimes
Investigators.

E. Extradition Proceedings and Letter of Request
1. The Carrian Case
This is a landmark case which first went overt in 1985. Subsequent proceedings involving extradition of
defendants (from the UK and France) and the gathering of evidence from various jurisdictions (the UK, theUS, Switzerland, France, Singapore and Malaysia) lasted for 15 years. This major case could not havesucceeded were it not for the co-operation and assistance rendered by all countries concerned.
2. Wanted Person in Australia
In 1993, a senior engineer of a construction consultant company absconded from Hong Kong after an
ICAC investigation into suspected bribery in relation to several construction projects. Through assistance byInterpol and the Australian police, he was arrested in April 1999 in Sydney. In July 2001, he was finallyconvicted in Hong Kong and received five years’ imprisonment.

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3. Wanted Person in Canada
In 1995, a manager of an IT company who had migrated to Canada was wanted by the ICAC for suspected
corrupt activities with several software suppliers. With the assistance of the Royal Canadian Mounted Police
the person was eventually arrested in Canada in 2001. He was extradited back to Hong Kong, pleaded guilty
and was sentenced to three years’ imprisonment.

VI. CONCLUSION
Corruption knows no boundaries. The increasing globalization of crime we are presently witnessing characterized by ease of international travel, advances in information technology and the availability ofmanifold options for secretly “relocating” dishonestly-acquired wealth – highlights, more than ever before,
the importance of co-operation between law enforcement in different jurisdictions.
In conducting cross-boundary investigations, the main hurdles faced by the ICAC and other law
enforcement agencies are the differences between jurisdictions insofar as legal, social and economic
environments are concerned.
To overcome these hurdles, the co-operation that comes from a genuine understanding of the needs ofeach of our jurisdictions and a genuine desire to mutually assist each other in our common aims are mostimportant. Parochial attitudes in this rapidly developing world are outdated and counter-productive.
Jurisdictions must now actively seek out a partnership approach to cross-boundary, regional andinternational crime.
I believe this seminar provides an excellent opportunity for us to share our experience. I am grateful forthe invitation to speak to you, and, through international co-operation, I look forward to seeing you again in
the near future, and working with you in partnership to fight corruption, and making our world a cleaner
place to live in.

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