1. Fraudsters hacked into e-mails concerning a contract to supply fertilizer. The contract required buyer to pay seller 5% of the contract price as deposit (“Money”). However, the fraudsters tricked the buyer into paying the Money instead to a bank account held by the Appellant’s company. The Appellant made withdrawals of the Money in Hong Kong and was arrested on one occasion of doing so. 2. The Appellant was charged with the offence of conspiracy to deal with money having reasonable grounds to believe that it was “tainted” (“Conspiracy Offence”) contrary to s159A of the Crimes Ordinance, Cap 200 (“s159A”) and s25(1) of the Organized and Serious Crimes Ordinance, Cap 455 (“Money Laundering Offence”). 3. At trial, the Appellant gave evidence that he was a businessman who held the honest belief that the person who asked him to handle the Money was a bona fide middleman in a genuine transaction and the Money represented funds from that transaction. 4. The Judge found that the Appellant turned a blind eye to the facts and had reasonable grounds to believe that the Money was tainted. Such level of culpability sufficed to find him guilty of the Conspiracy Offence. 5. The Court of Appeal (“CA”) held that a genuinely held belief that the Money was not tainted would secure an acquittal even if it were unreasonable. However, the CA confirmed the Appellant’s conviction on the basis that the Judge had found the Appellant’s asserted belief to be both unreasonable and untrue. 6. On appeal before the Court of Final Appeal, the Appellant argued that a substantial and grave injustice had been done because the CA wrongly held that the Judge had disbelieved the Appellant’s asserted belief when no such finding had been made. 7. The Court raised several questions of law for determination: - What is the meaning of a defendant “having reasonable grounds to believe” that money is tainted for the purposes of proving the Money Laundering Offence, and in particular what is the relevance of the defendant’s subjective belief that the money is not tainted? (“Issue 1”) - To what extent is a defendant’s “wilful blindness” to the likelihood that the money is tainted relevant to proving the Money Laundering Offence? (“Issue 2”) - Can a defendant be guilty of the Conspiracy Offence only “having reasonable grounds to believe” that the money is tainted given that: (i) s159A(2) requires that even if an offence can be committed without the defendant’s knowledge of “any particular fact or circumstance necessary for the commission of the offence”, the defendant charged for conspiracy to commit that offence must nevertheless “intend or know” the future existence of that particular fact or circumstance at the time the conspiratorial agreement is to be carried out (Issue 3); and/or (ii) s159A(1) defines conspiracy as an agreement between two or more persons to do an act or acts which, if the agreement is carried out in accordance with their intentions by any one of them, “will necessarily” involve the commission of an offence or would do so but for the existence of facts which make it impossible (Issue 4). Issue 1 8. The Court affirmed the correctness of the test propounded in previous authorities to determine whether a defendant had reasonable grounds to believe that the money in question was tainted for the purposes of the Money Laundering Offence. 9. In the interests of clarity, the test was reformulated as follows: (i) What facts or circumstances, including those personal to the defendant, were known to him that may have affected his belief as to whether the money was tainted? (ii) Would any reasonable person who shared the defendant’s knowledge be bound to believe that the money was tainted? (iii) If the answer to (ii) is “yes”, the defendant is guilty. If “no”, the defendant is not guilty. 10. Where a defendant believed or may have believed that the money was clean, it is the facts and circumstances that the defendant asserts led him to that belief that are significant, rather than that belief itself. If a reasonable person who shared the defendant’s knowledge of the relevant facts and circumstances would be bound to believe that the money was tainted, the offence is still made out even though the defendant subjectively believed or may have believed otherwise. However, his subjective belief may well be a mitigating factor when he is sentenced. Issue 2 11. The Court explained “wilful blindness” as a concept which treats a defendant as having the required knowledge if he suspects the likely truth but deliberately avoids making the enquiries that would have given him knowledge of the truth. In principle, the concept can be used to infer that the defendant actually knew that the money was tainted in a money laundering case where the prosecution alleges that the money was tainted and the defendant knew about it. However, in practice, since “having reasonable grounds to believe” is the statutory alternative to having knowledge for the Money Laundering Offence, it will normally not be necessary or helpful to apply the concept to prove the offence. Issue 3 12. S159A(2) requires a defendant charged for conspiracy to commit an offence to “intend or know” the future existence of any particular “fact or circumstance necessary for the commission of” that offence. The Court held that the subsection is not engaged in the Conspiracy Offence because the tainted character of the money is not required to be proved as a “fact or circumstance necessary for” committing the Money Laundering Offence. Issue 4 13. The Court held that a defendant is guilty of the Conspiracy Offence where he agrees and intends with another to deal with money in the future, “having reasonable grounds to believe” at the time of the conspiratorial agreement that the money is and would remain tainted. He is guilty because such an agreement, if carried out in accordance with the conspirators’ intentions, “will necessarily” involve the commission of the Money Laundering Offence, even if it does not actually materialise in the end. Substantial and Grave Injustice 14. The Court held that no substantial and grave injustice had been done. First, the Judge had evidently rejected the Appellant’s asserted belief that the Money was not tainted. Secondly, even if his asserted belief had been accepted, he would still have been found guilty because any reasonable person who shared his knowledge of the relevant facts and circumstances would be bound to believe that the Money was tainted. DISPOSITION: 15. The Court unanimously dismissed the appeal.