I. Meeting with Professional Institutions

(A) Meeting with the Hong Kong Society of Accountants (HKSA)

The HKSA’s written submission and the Administration’s response to it had been circulated to members vide LegCo Paper No. CB(2) 1349/95-96 and Appendix 1 to LegCo Paper No CB(2) 1620/95-96 respectively.

2. The salient points made by the representatives of the HKSA and their responses to members’ questions are summarised as follows :

(a) In proposed Section(S.) 77DA of the Evidence Ordinance, the meaning of criminal matter to cover an investigation was extremely loose and vague and would lead to any citizen of Hong Kong being subject to potential harassment by overseas investigators. The HKSA held that the definition should be narrowed down to specific offences committed or being committed.

(b) The definition of serious external offence to mean an offence punishable with imprisonment for more than 12 months was too broad. This would cover cases which were not considered as serious offences in Hong Kong, such as reckless driving or common assault.

(c) Although it was intended that assistance to be given to an overseas jurisdiction in obtaining evidence would be provided only where a mutual legal assistance treaty existed, the Bill did not purport to tie this down to the existence of such an agreement. In effect, therefore, the proposed legislation could apply even when there was no such treaty enforced with regard to any country.

(d) The proposed S.77DD(2) in conjunction with proposed S.77DE in respect of privilege of witnesses would undesirably limit a person’s general right to refuse to answer questions as in the case of a local investigation. The proposed S.77DD(2)(e) which provided for the medical examination of any person in Hong Kong was an excessive interference with a person’s privacy. The proposed legislation would therefore give overseas investigators more power than Hong Kong authorities over witnesses in Hong Kong.

(e) The HKSA was particularly concerned that the Bill would endanger Hong Kong’s position as an international financial centre. With a simple and low tax system, the Bill would put the confidentiality of tax information at risk. The likelihood that professional accountants and tax advisors in Hong Kong might be called upon to disclose or to give evidence regarding their clients’ information as a result of a request by an overseas authority would put these people in a difficult position. Since it was held by the Commissioner for Inland Revenue that professional privilege did not extend to accountants in general and the secrecy provisions made under S.4 of the Inland Revenue Ordinance only dealt with the protection of official secrecy for government officers, the threats faced by accountants and tax agents were genuine and needed to be addressed.

(f) Since the way tax matters were confidentially handled were of great concern to foreign investors and business people, the proposed legislation would erode the confidence of these off-shore investors to invest in Hong Kong and hence put Hong Kong in a disadvantaged position vis-à-vis her competitors, like Singapore, which did not have similar provisions.

(g) With regard to tax evasion, many local investigations into tax matters did not end up with the institution of criminal proceedings. A lot of cases were settled between the taxpayers and the Inland Revenue Department by way of the payment of a penalty and ultimately these cases were not regarded as criminal offences. With all these considerations, the HKSA concluded that to protect Hong Kong’s position as an international financial centre, Part VIIIAA should be completely disapplied to tax and revenue matters.

(B) Meeting with the Law Society of Hong Kong (the Society)

3. The written views of the Society and the Administration’s response to it had been circulated to members vide LegCo Paper No. CB(2) 1459/95-96 and Appendix 2 to LegCo Paper No. CB(2) 1620/95-96 respectively.

4. In presenting their views and responding to questions raised by members, the representatives of the Society made the following points:

(a) In general, the Society shared the HKSA’s views on the Bill, and in particular, those related to the unduly broad definition of serious criminal offence, the wide scope of power conferred on the overseas investigators over witnesses in Hong Kong and the provisions not being tied to the existence of a mutual legal assistance agreement with any overseas jurisdiction.

(b) The Society questioned whether there was a genuine urgent need to enact the Bill at this stage, in view of a comprehensive Mutual Legal Assistance in Criminal Matters Bill to address all the relevant issues was in the pipeline.

(c) The proposed S.77DB provided no definition of a criminal matter of a political character. The Society stated that it preferred a clear guidance by law rather than leaving it to the court to determine as to whether the criminal matter was of a political character. The Soceity undertook to conduct a research into existing court cases with a view to providing an explanation for reference.

(d) Existing S.77, indeed, gave far more protection for any person than the proposed S77DE(1) which provided safeguard to any person from being compelled to give evidence by virtue of an order under proposed S.77DD on only one ground, i.e. self-incrimination.

(e) The proposed S.77DE(2) relating to privilege of witness put the onus of proof on the witness who claimed exemption from giving evidence. The claim for exception however would not be allowed unless it was approved by the applicant of the order, i.e. the foreign requesting authority. The Society maintained that this would be a very unsatisfactory way to deal with the exercise of privilege.

(f) The Society felt strongly that there should be a provision in the legislation of an exception clause for legal profession privilege of legal practitioners. The Society held that it would serve as a safeguard which protected local legal practitioners and the lay clients from being compelled, by virtue of a request from an overseas jurisdiction, to give evidence which they would not be compelled to give in Hong Kong.

(C) Meeting with the Hong Kong Bar Association (the Bar)

5. The Bar’s written submission and the Administration’s response to it had been circulated to members vide LegCo Paper Nos. CB(2) 1356/95-96 and 1502/95-96 respectively.

6. The salient points made by the representatives of the Bar and their responses to members’ question are set out below:

(a) The Bar agreed to the views of the Law Society of Hong Kong that legal professional privilege should be safeguarded. It asserted that legal professional privilege was a common law right which would continue to exist unless expressly abrogated by statutory provisions. Since nothing in the Bill abrogated this privilege, legal professionals would not be compelled to answer questions in court.

(b) Subsection (e) on medical examination of any person had to be removed from the proposed S.77DD(2) since it was contrary to Hong Kong Law. A witness who might not be the offender himself could not be compelled to be medically examined, even in criminal matters.

(c) The Bar was mainly concerned with the proposed S.4B of the Bill which dealt with the abolition of the corroboration rule in respect of sexual offences. While the Bar supported the proposed abolition of the requirement for corroboration in sexual cases, it held that there should be a provision making it mandatory for the Judge in a jury trial to give a clear warning to the jurors of the danger of convicting on the complainant’s evidence alone, unless there were good reasons not to do so. The Bar maintained that a warning was necessary because in sexual offence cases, complainants did sometimes make false accusations and therefore innocent people could be wrongly convicted. The jurors should also be alerted to the particular difficulties characteristic of these cases. The Bar therefore proposed that a clause be added which followed the recommendation of the Law Reform Commission of Australia that where a party so requested, the Judge must warn the jury that the evidence might be unreliable, unless there were good reasons not to do so. In fact, the Bar was in favour of a mandatory warning because the consideration of whether there was a good reason not to give the warning placed a very restrictive aspect on the exercise of discretion of the Judge as it was a common law principle that where there was an unreliable witness there should be a corroboration warning to that effect to be given. S.4B in its present form which intended to remove corroboration warning would in practice amount to an abrogation of the rule of law.

II. Meeting with the Administration

7. Mr Ian WINGFIELD invited members to give views in addition to those expressed in the three institutions’ submissions. He said he would give further thought on the issues raised and respond later.

8. Miss Margaret NG and Mr James TO Kun-sun were concerned about the extension of the scope of the existing legislation should the Bill be enacted:

(a) Existing S.77(1) (a) of the Evidence Ordinance which dealt with privilege of witnesses stipulated that a person should not be compelled by virtue of an order under S.76 to give any evidence which he would not be compelled to give in civil proceedings in Hong Kong. However, the corresponding new S.77DE (1) (a) in respect of criminal matters set out that a person should not be compelled by virtue of an order under S.77DD to give evidence which he could not be compelled to give in Hong Kong on the ground that to do so might tend to incriminate him. This new provision which offered protection in only one specific circumstance was an abrogation of existing privileges enjoyed by witnesses and an obvious erosion of the rights of people in Hong Kong.

(b) Existing S.77B(1)(b) which was proposed to be repealed provided that no order under S.76 should make provision otherwise than for the examination of witnesses, or for the production of documents. However, when the ambit of criminal matter was expanded to include an investigation, the new S.77DD(2) provided for other types of evidence that could be obtained in respect of property and medical examination of a person, as listed out in subsections (c), (d) and (e) respectively.

9. Members of the Committee were worried that if the scope of the law was widened in this way, the power of the requesting overseas jurisdictions would in practice be greater than the local authorities and that people of Hong Kong would lose some of the protections presently provided under the Hong Kong Law when the foreign requests were entertained. It was also feared that, in extreme cases, overseas jurisdictions could exercise even greater power than they had in their home countries, when they put their request to Hong Kong.

10. Referring to the outgoing requests from Hong Kong to other foreign jurisdictions for assistance, Mr James TO asked the Administration to provide a qualitative analysis of these requests and their importance to help justify the need for the enactment of the legislation.

Adm

11. Miss Margaret NG expressed that she was particularly concerned with how the Bill purported to change the present law and the effects the changes had on the rights of a local people. On this basis, she asked for a comparison of the existing provisions with the proposals of the Bills, highlighting the important differences and explaining why those changes were necessary and justifiable. In particular, she wished to seek clarification from the Administration on the following:

Adm

(a) the rationale for extending the scope of criminal matter to cover an investigation in the proposed S.77DA;

(b) the reason for substituting “criminal matters” in the proposed S.77DC(b) for “criminal proceedings” in existing S.77B(1)(a);

(c) why proposed S.77DD(3) was different from existing S.76(3);

(d) why existing S.76 (4) was omitted from the proposed S.77DD;

(e) the reason for introducing the provision under the proposed S.77DD(5);

(f) the ground for the proposed S.77DE(1) abrogating a large part of the existing right to privileges of witnesses;

(g) the practice of the European Convention in respect of the exercise of investigatory powers by its members countries in relation to each other; and

(h) how the Bill would possibly affect investigations by the Chinese authorities in Hong Kong

Adm

12. The Chairman asked the Administration to act on the relevant issues after taking the views of members and the submissions of the professional institutions. He remarked that the Committee would adopt the following line of approach in examining the Bill:

(a) whether there was a genuine and urgent need for the enactment of the Bill, in view of the forthcoming comprehensive Mutual Legal Assistance in Criminal Matters Bill;

(b) comparing the Bill with international practices to see if its scope was right, or too wide to cover things that might be unwarranted, for example, the issue concerning tax and revenue matters; and

(c) examining the implications of the Bill on the legal rights and protections of the citizens of Hong Kong.

III. Date of Next Meeting

13. The next meeting would be held on Tuesday, 9 July 1996 at 2:30 p.m. (Post meeting note: The next meeting was re-scheduled for Thursday, 27 June 1996 at 10:45 a.m.)

14. There being no other business, the meeting ended at 4:45 p.m.

LegCo Secretariat
13 August 1996