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Following is a question by the Hon Yeung Yiu-chung and a written reply by the Secretary for Security, Mrs Regina Ip, in the Legislative Council today (October 31):
Question:
With regard to curbing the sources of finance of international terrorists and their organizations, will the Government inform this Council:
(a) of the number of court orders made in each of the past five years to freeze or confiscate the local assets of people or organizations involved in serious crimes, and the amount of money concerned; and whether, among these cases, there were cases involving terrorists or their organizations; if so, of the number of such cases;
(b) whether there is legislation to allow the confiscation of the local assets of terrorists or their organizations; if so, of the details; if not, the reasons for that; and
(c) of the measures it has taken and those it will take further for staunching the sources of finance of terrorists and their organizations?
Reply:
Madam President,
(a) In the past five years, the number of cases relating to freezing and confiscation of proceeds of serious crime by the Hong Kong Special Administrative Region Government (HKSARG) and the amount involved are as follows:-
Year Assets FrozenUntil now, there has not been any evidence showing that the above cases were related to terrorism.---- -------------
No. of cases Amount (HK$)
------------ ------------
1997 22 104 722 871
1998 13 58 181 485
1999 12 44 390 074
2000 12 168 525 743
2001 10 41 934 000
(Jan.-Sep.)
-- -----------
69 417 754 173
Year Assets Confiscated
---- ------------------
No. of cases Amount (HK$)
------------ ------------
1997 6 2 788 623
1998 6 23 602 639
1999 13 89 389 662
2000 12 64 134 461
2001 5 27 331 538
(Jan.-Sep.)
-- ------------
42 207 246 923
(b) The existing Mutual Legal Assistance in Criminal Matters Ordinance (Cap. 525) provides for the enforcement of restraint orders and confiscation orders for assets made in foreign courts in respect of serious external offences, i.e. offences entailing imprisonment of two years or more on conviction. Under the Organized and Serious Crimes Ordinance (OSCO) (Cap. 455), terrorist type activities, such as murder, kidnapping, etc., are specified offences. The powers of tracing, restraint and confiscation of assets available under OSCO are therefore applicable to those offences. OSCO and the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap. 405) also stipulate that money laundering is a serious offence.
Apart from the above provisions on restraint and confiscation of assets, the current legislation of the HKSARG also provides for the freezing of terrorists' assets in Hong Kong. In June 2000, under the instruction of the Ministry of Foreign Affairs of the People's Republic of China (PRC), we made the United Nations Sanctions (Afghanistan) Regulation which gives effect to the United Nations Security Council Resolution (UNSCR) No. 1267 in pursuance of the United Nations Sanctions Ordinance (Cap. 537). The Regulation provides, amongst others, for the freezing of funds and other financial resources owned or controlled by the Taliban or any enterprises held by the Taliban. In addition, we made the United Nations Sanctions (Afghanistan) (Arms Embargoes) Regulation pursuant to Chapter 537 on the instruction of the Ministry of Foreign Affairs on October 12, 2001. The Regulation gives effect to UNSCR No. 1333 and provides, amongst others, for the prohibition of making funds or financial resources available to Usama bin Laden or his associates.
(c) The HKSARG is now actively making preparations for the implementation of the latest UNSCR No. 1373 and will propose amendments to the relevant legislation. This wide-ranging resolution stipulates that all nations should prevent and suppress financing terrorism, and should criminalize wilful provision or collection of funds, directly or indirectly, for such acts. We plan to report on the steps the HKSARG is taking to implement Resolution No. 1373 to the United Nations via the PRC before late December 2001. In addition, we are working towards strengthening the provisions on money laundering, reporting suspicious money laundering activities, freezing and confiscation of assets, etc., as stipulated in Chapters 405 and 455, thereby enhancing their effectiveness. The relevant recommendations have been incorporated into the Drug Trafficking and Organized Crimes (Amendment) Bill 2000 which is currently under the scrutiny of the Legislative Council.
At the same time, we are actively considering further measures against terrorist financing. The items under consideration include the adequacy of the existing legislation in combating terrorist financing, ways to improve the existing reporting system of suspicious transactions, the need to enhance Mutual Legal Assistance by way of enforcement of restraint orders and confiscation orders, as well as ways to further enhance the exchange of financial intelligence with overseas institutions.
Apart from legislation, we have liaised with the financial regulators, including the Hong Kong Monetary Authority, the Securities and Futures Commission and the Office of the Commissioner of Insurance. These regulators have already written to their respective authorized institutions/regulatees reminding them of the need to abide by the above-mentioned United Nations Sanctions (Afghanistan) Regulation and the United Nations Sanctions (Afghanistan) (Arms Embargoes) Regulation, to pay attention to the US Executive Order regarding freezing the financial assets of the terrorists, watching out for suspicious transactions, and reporting such transactions to the Joint Financial Intelligence Unit (JFIU) jointly operated by the Police and the Customs and Excise Department. We will continue to keep in view developments and co-ordinate with the regulators in the provision of guidelines to the authorized institutions/regulatees.
Since the terrorist attacks on September 11, the JFIU has again looked into every suspicious transaction which may be related to terrorists or terrorist activities. It has also stepped up its detection of large amount transactions relating to accounts in the Middle East and enhanced exchange of intelligence with the US authorities.
As the president of the Financial Action Task Force on Money Laundering (FATF) for 2001/2002, we have scheduled a special FATF Plenary Meeting on October 29-30, 2001 in Washington D.C. to consider specific measures against financing international terrorist groups. These include proposed special measures to combat terrorists financing, the issuance of guidelines to financial institutions on the flow of terrorists' funds, characteristics of suspicious transactions and methods of investigation. The FATF will publish a statement on the work plan in this respect after the meeting.
End/Wednesday, October 31, 2001
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