EXPERTS’ PAPERS

NEW AND EMERGING FORMS OF CORRUPTION AND THE
EFFECTIVE COUNTERMEASURES
Andrew Cheung *I. INTRODUCTION
This paper will discuss the new and emerging forms of corruption and the effective
countermeasures from the perspective of a practitioner with the Operations Department of the
Independent Commission Against Corruption (ICAC) of the Hong Kong Special
Administrative Region of the People’s Republic of China (PRC). For a better understanding of
the approach taken by the ICAC, this paper will set out the brief history of the ICAC, the anticorruption strategy adopted by it to stem out the then widespread corruption, the transformationof the corruption scene in Hong Kong in recent decades, and finally outline the corresponding
countermeasures in response to the new and emerging forms of corruption.
II. BRIEF HISTORY OF THE ICAC
In Hong Kong in the late 1960s and early 1970s, corruption was rampant and was a way oflife. Public services, such as nursing care at hospital, were provided on condition that the patient
was willing to pay the bribe. Corruption seriously undermined the legitimacy of the public
administration, and, therefore, distrust grew substantially between the public and the thenadministration. The administration sensed the alarming distrust and pressed for theestablishment of a new watchdog – the ICAC.
In late 1970 when moving the second reading of the Prevention of Bribery Bill – the very
weapon with which the ICAC was equipped to crack down on corruption – the then Attorney
General made a remark that succinctly outlined the acute situation in Hong Kong as follows:
Sir, it is impossible to assess with any accuracy the extent to which society in Hong
Kong is affected by corruption… But… corruption does exist here to an extent which
not only justifies, but demands, that the utmost efforts be made to eradicate it from our
public and business affairs…
It was against such backdrop that the ICAC was established. In March 1974, the ICAC
became the new organization charged specifically with the responsibility to combat corruption.
It was given extensive special investigative powers that changed the way corruption had beentackled in the past. Most importantly, to underscore its independence, the control of the ICAC
was shifted from the Attorney General to the Commissioner who was appointed by andaccountable to the then Governor. In fact, after the resumption of the exercise of sovereignty
over Hong Kong by the PRC, the accountability system remained, save that the Commissioner
is now held accountable to the Chief Executive. Its independence is further entrenched into
Article 57 of the Basic Law, which provides:
Principal Investigator, Operations Department, Independent Commission Against Corruption, Hong Kong
Special Administrative Region, People’s Republic of China.

*

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A Commission Against Corruption shall be established in the Hong Kong Special
Administrative Region. It shall function independently and be accountable to the Chief
Executive.
Independence aside, the accountability of the ICAC is seen in the set-up of the Operations
Review Committee (ORC) which, comprising 13 non-official members, monitors all ICAC
investigations. The ORC, appointed by the Chief Executive, meets regularly to receive status
reports on all cases and monitors investigations, people on bail and court cases. The ORC
directs follow up investigations and referrals of cases which can include advice for internal
disciplinary actions or administrative reform. Its purpose, among others, is to ensure that there
are no cover-ups and failures of the ICAC to pursue matters that should be investigated. It isa bold innovation in terms of the check and balance regime that can rarely be seen in otherforeign counterparts to allow such substantial involvement of civilians in the daily operational
matters of an anti-corruption watchdog. The set-up of the ORC by itself underlines the valueof independent oversight and review of the operational aspects of the ICAC’s work.
III. THREE-PRONGED APPROACH
It should be noted that at the outset the ICAC was intended not only to combat corruption
by means of enforcement, but also in a holistic manner by prevention and education. Suchapproach was codified in section 12 of the Independent Commission Against Corruption
Ordinance, Cap. 204, Laws of Hong Kong which provides:
It shall be the duty of the Commissioner, on behalf of the Chief Executive, to –(a) receive and consider complaints alleging corrupt practices and investigate
such of those complaints as he considers practicable;(b) investigate –(i) any alleged or suspected offence under this Ordinance;(ii) any alleged or suspected offence under the Prevention of Bribery
Ordinance (Cap. 201);(iii) any alleged or suspected offence under the Elections (Corrupt and Illegal
Conduct) Ordinance (Cap. 554);(iv) any alleged or suspected offence of blackmail committed by prescribed
officer by or through the misuse of his office;(v) any alleged or suspected conspiracy to commit an offence under thePrevention of Bribery Ordinance (Cap. 201);(vi) any alleged or suspected conspiracy to commit an offence under theElections (Corrupt and Illegal Conduct) Ordinance (Cap. 554);(vii) any alleged or suspected conspiracy (by 2 or more persons including aprescribed officer) to commit an offence of blackmail by or through themisuse of the office of that prescribed officer;(c) investigate any conduct of a prescribed officer which, in the opinion of theCommissioner, is connected with or conducive to corrupt practices and toreport thereon to the Chief Executive;(d) examine the practices and procedures of Government departments and publicbodies, in order to facilitate the discovery of corrupt practices and to secure
the revision of methods of work or procedures which, in the opinion of theCommissioner, may be conducive to corrupt practices;(e) instruct, advise and assist any person, on the latter’s request, on ways in which
corrupt practices may be eliminated by such person;- 22 - 22 -

EXPERTS’ PAPERS(f)advise heads of Government departments or of public bodies of changes inpractices or procedures compatible with the effective discharge of the duties
of such departments or public bodies which the Commissioner thinks
necessary to reduce the likelihood of the occurrence of corrupt practices;(g) educate the public against the evils of corruption; and(h) enlist and foster public support in combatting corruption.
Organizationally, the ICAC comprises the Operations Department, the Corruption
Prevention Department, the Community Relations Department as well as the International
Cooperation and Corporate Services Department. The former three departments were charged
with the respective responsibilities as per the ICAC Ordinance detailed above. 1 This in a way
reflected the three-pronged approach the ICAC has been employing since its establishment.
Looking back, it was quite a novel approach especially in comparison with the then foreigncounterparts who largely intended their anti-corruption watchdog to be an investigatory body
only. The rationale for such a broad and novel approach to the problem of corruption was
explained by the then Colonial Secretary on the occasion of the second reading of the ICACBill:
It is the intention of the Commission to concentrate much of its energies on theprevention of corruption. In the past our efforts in dealing with the problem havetended to be concentrated mainly on the punishment of it and I believe honourable
Members will support the organisation of the Commission into three complementary
departments for if the problem of corruption is to be tackled successfully, our efforts
must not only be directed at the detection and punishment of offenders but also at thesocial causes and administrative sources of corruption.
Shortly after the establishment of the ICAC, corruption in Hong Kong was substantiallycut down. Not only were the corrupt criminals brought to justice but the seeds of anticorruption were sowed in the public administration and the civic society, much thanks to theexcellent work by the prevention and education arms of the ICAC.
In fact, the three-pronged approach is also in line with requirements of the United Nations
Convention Against Corruption (UNCAC), which urges the States parties to tackle corruption
using a comprehensive approach comprising enforcement, prevention and education measures.
IV. CHANGES IN THE CORRUPTION SCENE
From 1974 till now, the ICAC has been actively enforcing the anti-corruption laws andwitnessing the shift of the corruption scene in terms of, inter alia, the case figures in the public
and private sectors, as well as the case typologies in recent years. The following table outlines
the figures of corruption complaints in the public and private sectors:

Points (a), (b) and (c) correspond to the works of the Operations Department; (d), (e) and (f) to the Corruption
Prevention Department; and (g) and (h) to Community Relations Department.

1

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Figures of Corruption Complaints

Note: A corruption report may contain multiple complaints against different government departments / publicbodies / industries. Commencing 2010, corruption statistics have been compiled on the basis of complaints
instead of reports

Corruption complaints against the public sector took the largest share in the first few years
following the establishment of the ICAC. This trend should be read in the context that thecreation of the ICAC was a direct response by the then administration to dismantle the deeply
rooted corruption syndicates in the then civil service in Hong Kong, and, therefore, the generalpublic would be eager to come forward to the ICAC to lodge corruption complaints against thecivil service.
1977 was a watershed year for the ICAC. The huge success in cracking down on thecorruption syndicates in the first few years had been won at huge cost to the police. Police
morale was low and there was building resentment over the way that the ICAC usedaccomplices as prosecution witnesses in its investigation. The prevalent use of accomplices
turned colleague against colleague and created an atmosphere of suspicion and mistrust
between police officers. Given the sentiments, coupled with an operation in late 1977 resulting
in the mass arrest of over 140 police officers for alleged involvement in syndicated corruption,a group of police officers marched to and raided the office of the ICAC with a view to protesting
against the latter’s rigorous enforcement. The crisis did not end with the demonstration – itescalated further because the police demanded an outright response by the then administration
to abort the corruption investigation against the police. Since the matter had been elevated toa security issue threatening a breakdown of law and order, the then administration promulgateda partial amnesty that was subsequently inserted into the ICAC Ordinance as section 18A.
It is against the above backdrop that Hong Kong saw corruption complaints against the
public sector plummet in 1977. After a decade’s time of vigilant enforcement against public
sector corruption, the pleasing result was seen in the year of 1988 when the number of private
sector corruption complaints outnumbered that of the public sector for the very first time since
the establishment of the ICAC. And such a bifurcated trend remains as of today.

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A. Case Typologies
In terms of case typologies, those in the public sector and private sector are different innature, complexity and modus operandi. Before illustrating their respective trends in recent
decades, it is helpful to first set out their legal principles.
The workhorses of the ICAC in prosecuting corruption in the public and private sectors are
sections 4 and 9 2 of the Prevention of Bribery Ordinance (POBO), Cap. 201, Laws of Hong
Kong, respectively.
In regard to public sector corruption, section 4 of the POBO provides:(1) Any person who, whether in Hong Kong or elsewhere, without lawful authority
or reasonable excuse, offers any advantage to a public servant as an inducement
to or reward for or otherwise on account of that public servant’s –(a) Performing or abstaining from performing, or having performed or
abstained from performing, any act in his capacity as a public servant;(b) Expediting, delaying, hindering or preventing, or having expedited,
delayed, hindered or prevented, the performance of an act, whether bythat public servant or by any other public servant in his or that otherpublic servant’s capacity as a public servant; or(c) Assisting, favouring, hindering or delaying, or having assisted,favoured, hindered or delayed, any person in the transaction of any
business with a public body,shall be guilty of an offence.
(2)

Any public servant who, whether in Hong Kong or elsewhere, without lawfulauthority or reasonable excuse, solicits or accepts any advantage as an
inducement to or reward for or otherwise on account of his –(a) Performing or abstaining from performing, or having performed or
abstained from performing, any act in his capacity as a public servant;(b) Expediting, delaying, hindering or preventing, or having expedited,
delayed, hindered, or prevented, the performance of an act, whether byhimself or by any other public servant in his or that other public
servant’s capacity as a public servant; or(c) Assisting, favouring, hindering or delaying, or having assisted,favoured, hindered or delayed, any person in the transaction of any
business with a public body,shall be guilty of an offence.
In regard to private sector corruption, section 9 of the POBO provides:(1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts
an advantage as an inducement to or reward for or otherwise on account of his–
Sections 3 (Soliciting or accepting an advantage), 5 (Bribery for giving assistance, etc. in regard to contracts),
6 (Bribery for procuring withdrawal of tenders), 7 (Bribery in relation to auctions) and 8 (Bribery of public
servants by persons having dealings with public bodies) of POBO are also other offences used to prosecute
bribery. For illustration purpose, the present discussion would focus on sections 4 and 9 of POBO.

2

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SIXTEENTH REGIONAL SEMINAR ON GOOD GOVERNANCE(a) Doing or forbearing to do, or having done or forborne to do, any act
in relation to his principal’s affairs or business; or(b) Showing or forbearing to show, or having shown or forborne to show,
favour or disfavour to any person in relation to his principal’s affairs
or businesses,
shall be guilty of an offence.
(2) Any person who, without lawful authority or reasonable excuse, offers any
advantage to any agent as an inducement to or reward for or otherwise on
account of the agent’s –(a) Doing or forbearing to do, or having done or forborne to do, any act
in relation to his principal’s affairs or business; or(b) Showing or forbearing to show, or having shown or forborne to show,
favour or disfavour to any person in relation to his principal’s affairs
or businesses,
shall be guilty of an offence.
A person can be guilty of the above offence if he offers an advantage to an agent, or being
an agent, he solicits or accepts an advantage. However, there is no mention of the word
“corruption”, or variants of it, in these offences. Proof of corruption comes from establishingthat the advantage was offered, solicited or accepted “as an inducement to, reward for orotherwise on account of” the agent doing an act in his capacity as a public servant (section 4);
or an act in relation to his principal’s affairs (section 9).
Notwithstanding the slight variances in the words employed by sections 4 and 9, the corerequirement of the need to establish the purpose, be it “as an inducement to, reward for orotherwise on account of”, of the advantage being offered, accepted or solicited stands the same.
Such purpose is an element of the offence which makes the conduct of the offering, solicitingor acceptance of the advantage corrupt, and hence it is essential that it be proved.
One can imagine the proving of such linkage would rely on the utterance of at least one
party to the crime to tell the investigators how the corruption scheme is orchestrated. Whenthe ICAC was established, the initial scepticism of the public towards its effectiveness soonturned to unswerving support because of both the positive case results and complete
convictions exhibited by the investigators. Therefore, quite a number of offerors, especiallythose who had succumbed to the undue requests by the corrupt public servants, were willing tocome forward and lodge complaints with the ICAC to testify against the corrupt public servants.
As a result, the ICAC yielded a number of successful prosecutions concerning public sector
corruption, and dismantled the deeply-rooted corrupt syndicates in a very quick and effective
manner.
B. The Prevalent Use of the Common Law Offence “Misconduct in Public Office” toProsecute
After almost two decade’s rigorous enforcement, the corruption situation in the public
sector stabilized. But it does not mean that corruption was completely rooted out; instead, there
were cases where public servants abused their position and powers for the benefit of themselves
or others, used their discretionary power improperly, showed favours to a particular contractor
for personal interest, and wilfully neglected to perform their duties. All such behaviours
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EXPERTS’ PAPERS
involve the solicitation or acceptance of advantages, and hence escaping from the reach ofsections 4 and 9 of the POBO.
This became a problem, namely that there was no statutory crime targeting the
aforementioned misbehaviour. So, attention inevitably turned to the common law offence inthe hope that it might complement the existing bribery laws by filling a gap left by an ordinancethat otherwise exhaustively dealt with all possible permutations of bribery by and of public
officials.
C. Private Sector Corruption
As compared to public sector corruption against which the legislature had created several
offences 3 to combat, section 9 is the only offence in the POBO dedicated solely to corruption
in the private sector, but it is limited in its scope by the requirement that there exists a
principal/agent relationship and that the principal’s interests are prejudiced or at risk of being
prejudiced by the secret actions either of his corrupt agent or by a person with whom he ishaving dealings who seeks to corrupt his agent. This is the traditional narrow view ofcorruption which is typically found in anti-corruption legislation and is even reflected in Article
21 of the UNCAC, which proscribes the offering, solicitation or acceptance of undue
advantages to or by the employees of private sector entities “in order that he or she, in breachof his or her duties, act or refrain from acting”. Thus, the focus of UNCAC and other similar
offences is on conduct which undermines the integrity of the agent in his relationship with his
principal. But a caveat must be added here that not all acts that undermines the integrity of theagent in his relationship with his principal are subjected to criminal sanctions. The very act
that section 9 is intended to address is one of “secret commissions”. Thus, in order that theoffence can be established, the principal must be unaware of what is taking place, or otherwise
a defence of the principal’s consent, be it express or implied, would be pleaded by the corrupt
agent.
Those who make their living by earning agency commissions on sales or other transactions,which account for a large portion in the commercial world nowadays, are under the radar ofsection 9. Given the rapid economic development in Hong Kong over the last half century, theprosperous economic activities naturally brought about a higher number of cases of corruption
in the private sector.
Although the corruption-complaint figures in the private sector remained steady over the
past two decades, there is an uprising trend of prosecution of s.9 offences in conjunction withother common dishonest offences, such as fraud, deception and theft (both in their substantive
and inchoate forms), as well as serious and organized crimes, such as money-laundering, thetrafficking of dangerous drugs, illegal gambling and smuggling. In many instances, corruption
is a predicate offence that facilitates the commission of the underlying substantive crime.
Therefore, in the majority of corruption investigations nowadays, the scope of the investigation
very often goes beyond corruption to include crimes that are connected with or facilitated bycorruption.
Rapid change in technology plays a highly influential role in driving how corruption
investigation, especially in the private sector, is undertaken. The continuing advances inscience and technology undoubtedly have a far-reaching impact in all areas of humanendeavour. Insofar as corruption is concerned, when nowadays communication goes largely
3

Please refer to note 2 for the list of provisions dealing with public sector corruption.

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virtual, the chance of collecting direct evidence to prove the corrupt negotiation of the parties
becomes slimmer than that in the past, not to mention the fact that most instant messaging
platforms are now designed with message self-destruction function. The situation was
aggravated by the outbreak of Covid-19. The daily life of people has been changed and manyof them worked from home, and avoided or were prevented from meeting with others due tosocial distancing measures and travel restrictions. Investigators are to exhaust all conceivablemeans to collect more and more circumstantial evidence than ever in the past to prove to thecourt of law that the accused is beyond reasonable doubt guilty of corruption offences.
The increasing trend of globalization requires investigators to look beyond the traditional
concepts of physical locations and territories. In this day and age, businessmen handle
multinational projects and need to deal with cross-border transactions. And many are engaged
in transactions in cyberspace with no physical boundaries. This global development meansthat law enforcement agencies, including corruption investigators, are required to tackle crossborder criminal activities. Under the current complicated geopolitical climate, investigators
would come to a standstill on occasions when the investigation in question involves anadversarial foreign jurisdiction, rendering informal law enforcement cooperation and mutual
legal assistance unfeasible and inviable. This in a way makes cross-border investigation
counterproductive.
V. MEETING THE NEW CHALLENGE
To meet the aforementioned challenges, first and foremost we must ensure that there is andcontinues to be a solid and effective infrastructure that consists of a sound legal framework, aneffective enforcement agency, an independent judiciary to uphold the rule of law, and equallyimportant, a supportive community. These have been covered in the previous paper submitted
by a participant from the ICAC, 4 and thus are not intended to be repeated here.
In the fight against corruption, an anti-corruption watchdog can never afford to becomplacent regardless of how much remarkable progress has been made to reduce andminimize the risk of corruption. Every era gives rise to fresh challenges, and thus investigatorsneed to be alert to new trends and new types of corruption-related activities, and must adapt
and update their skills and knowledge in combating corruption. In addition, investigators alsoneed to respond to changing circumstances promptly and appropriately, and have to anticipatechanges and devise strategy to cope with the problems.
Over the years, the ICAC has been sparing no efforts in sharpening investigative
capabilities. During the past decade, in order to improve work efficiency and streamline work
procedures, the ICAC implemented the new Operations Department Information System(OPSIS), which serves as the one-stop-hub to digitalize the corruption investigation process.
OPSIS also acts as a centralized database that stores the information on the parties involved in
the case. This lays one core pillar of the infrastructure supporting the efficient conducting ofcorruption investigation in the ICAC because it allows investigators to identify the otherwise
undetectable linkage between the relevant corrupt parties.
To further strengthen investigative capabilities, the ICAC invented the Records
Digitalization System (RDS) that consolidates and analyses the usually voluminous case data

4

https://www.unafei.or.jp/publications/pdf/RS_No105/No105_16_IP_HongKong.pdf- 28 - 28 -

EXPERTS’ PAPERS
such as bank transactions, greatly facilitating the corruption investigation and unearthing the
intricate relationships of the corrupt and their associates.
As mentioned before, the scope of corruption investigation extends to many other offencesthat intermingle with the underlying corruption. Their effective crack-down needs a contextspecific understanding of a wide variety of issues, for example the product knowledge of
relevant industries and the legal principles emanating from recent judicial decisions that dictate
the way investigators collect admissible evidence. A thorough understanding of such issues isthus of paramount importance to successful corruption investigation. However, learning takes
time, so a systematic self-help repository substantially promotes efficiency. To close the gap,
the ICAC rolled out the Information and Knowledge Management System (IKMS) – a platform
which identifies, captures and retains valuable information, knowledge and experience related
to the work of the investigators. It turns disparate information, knowledge and experience intoa structured system to train, inform and assist investigators to better discharge daily
investigative duties. Now, investigators no longer need to spend time on figuring out who totalk with and learn from; they look up in IKMS and locate the answers to their questions
conveniently.
There are many other technological tools and systems in place in the ICAC to facilitate thedaily work of the investigators. But law enforcement agencies, especially those who are
predominantly involved in combating white-collar crimes like the ICAC, shall stay vigilant
about the technological know-how to make sure that they are always one step ahead of thecriminals.
Further, as Hong Kong is an international financial centre, ICAC’s expertise in tacklingcorruption in the financial market must be continuously developed given the rapidly evolving
nature of the financial system. To this end, in 2019 and 2021, respectively, the ICAC enteredinto Memorandums of Understanding (MoUs) with the Securities and Futures Commission andthe Financial Reporting Council to formalize and strengthen cooperation in fighting against
corruption, illicit activities and malpractice in the financial market. The MoUs cover a rangeof matters including referral of cases, joint investigations, exchange and use of information,
mutual provision of investigative assistance, as well as capacity-building.
VI. THE WAY FORWARD
In the era of big data, a corruption watchdog shall make good use of the massive historicaland ongoing data generated from corruption investigation to assess the corruption scene, makeinformed decisions and allocate resources based on predictive analysis to maximize theenforcement effect while minimizing the resources needed.
Firstly, artificial intelligence should be promoted to increase both efficiency andeffectiveness at work. For example, investigators quite often come across voluminous video
and image analysis and need to examine them to elicit information regarding people, objects
and actions to support criminal investigations. The examination exercise is labour intensive,
and there are existing analytical tools to crop the relevant part of video and image byinvestigators to further the corruption investigation. Artificial intelligence should be
proactively and widely used in other areas of the investigative work.
Secondly, undertaking crime forecasting by suitably tapping on the historical and ongoingcase data can help the anti-corruption watchdog allocate resources more accurately. As

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explained, the corruption landscape changes from time to time. Those managing the anticorruption watchdog need to engage themselves in predictive analysis, which utilizes large
volumes of data to forecast and formulate potential outcomes, and predict and reveal people orestablishments at risk from such enterprises. When suitable, the anti-corruption watchdog can
deploy resources and intervene early to frustrate corrupt criminal enterprises so that the spillover damages to society can be kept to the minimum. In contrast with the traditional approach,which relies substantially on the expertise and experience of the human analyst, such predictive
analysis operated by artificial intelligence hugely improves efficiency and accuracy, thereby
assisting management in optimizing resources in a more precise manner.
Last but not least, the trend of cross-border corruption is on the rise, and as a resulttransnational anti-corruption enforcement is urgently needed more than ever before to preventthe corrupt from abusing the high accessibility to the global financial systems to advance theircorrupt schemes and hide corrupt proceeds. But nowadays the tension and friction ininternational relations render the multilateral law enforcement cooperation and mutual legal
assistance regime counterproductive. Cooperation and multilateralism must be restored todrive forward development and ensure that some of the world’s most pressing issues, including
corruption, can be more effectively tackled and their ill-effects reversed.
VII.

CONCLUSION

Corruption is a complex challenge that continues to persist in many countries across theworld. It has a direct impact on the three dimensions of sustainable development – social,economic and environmental – and affects each of the five pillars of the United Nations 2030
Agenda: people, planet, prosperity, peace and partnerships. The 2030 Agenda has establishedanti-corruption as a global imperative on which hinges the achievement of all sustainable
development goals. Goal 16 is rooted in human rights and highlights the importance ofstrengthening institutions and governance in our pledge to leave no one behind. It is hopedthat by a discussion from multiple perspectives the readers of this paper will be informed of
the new and emerging forms of corruption and the effective countermeasures, in order thatpractitioners in the anti-corruption community are equipped with the necessary know-how todevise strategies, appropriate and consistent with their domestic legal systems, to call a halt tothe evil phenomenon of corruption.

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