PLC Paper No.CB(2) 625
(These minutes have been seen by the Administration and cleared with the Chairman)
Ref: CB2/BC/13/96

Minutes of the Seventh Meeting of the Bills Committee
on the Mutual Legal Assistance in Criminal Matters Bill

held on Wednesday, 4 June 1997 from 12:30 pm to 2:30 pm
in Conference Room A of the Legislative Council Building

Members present :

    Hon James TO Kun-sun (Chairman)
    Hon Eric LI Ka-cheung, OBE, JP
    Hon Margaret NG

Members absent :

    Hon Ronald ARCULLI, OBE, JP
    Hon Emily LAU Wai-hing
    Hon Andrew CHENG Kar-foo
    Hon IP Kwok-him
    Hon Bruce LIU Sing-lee

Public Officers attending :

Mr Alan CHU
Principal Assistant Secretary of Security
Mr John HUNTER
Deputy Principal Crown Counsel (International Law)
Mr Geoffrey FOX
Senior Assistant Law Draftsman
Ms Eva YAM
Assistant Secretary for Security

Attendance by invitation :

Hong Kong Society of Accountants
Mr Alvin WONG
Chairman, Legal Committee
Ms Winnie CHEUNG
Director of Professional Practices
Mr Roderick W HOUNG-LEE
Member, Taxation Committee

Clerk in attendance :

Mrs Mary TANG
Chief Assistant Secretary(2)4
(Acting)

Staff in attendance :

Mr Jonathan DAW
Consultant (Legal Services)
Mr Stanley MA
Senior Assistant Secretary(2)9


Discussion with the Administration

LegCo Paper No. CB(2)2565/96-97 (01)

The Chairman thanked representatives of the Hong Kong Society of Accountants (HKSA) for their attendance.

2. Members agreed to consider the revised provisions as proposed and underlined in the combined Committee stage amendments (CSAs) dated 3 June 1997.

Clause 2(1) - definition of "appropriate authority"

3. Members were of the view that the revised definition could be made more specific. Senior Assistant Law Draftsman (SALD) proposed and members agreed to reword the definition as -

" , in relation to a place outside Hong Kong, means a person whom the Attorney General (AG) is satisfied is a person who for the time being may under the law of that place -

  1. in the case of a request by Hong Kong to that place for assistance in a criminal matter, receive such a request; or

  2. in the case of a request by that place to Hong Kong for assistance in a criminal matter, make such a request".

Clause 4 - Governor in Council may apply Ordinance

4. Pursuant to the discussion at the last meeting, the Administration proposed and members accepted the following amendments -

  1. To substitute the phase "The Governor in Council may" in subclause 4(1) by "Subject to subsections (2) and (3), the Governor in Council may, with the approval of the Legislative Council," to provide that any modifications made by the Governor in Council by way of an order would be subject to positive vetting procedures; and

  2. As a result of the positive vetting requirement, subclauses 4(2) to 4(7) of the Bill were deleted and new subclauses 4(2) and 4(3) were proposed to ensure that an order made under subclause 4(1) should be substantially in conformity with the provisions of the Bill and the modifications should be summarized in a Schedule to the order.

Clause 5 - Refusal of assistance

5. In response to the comments of representatives of HKSA, the Administration proposed to add a subclause 5(1A) as follows -

"Where the criminal matter to which a request by a place outside Hong Kong for assistance under this Ordinance relates is an investigation into an external offence relating to taxation, then the request shall be refused -

  1. if the place is not a prescribed place; or

  2. unless the Attorney General is supplied with information that satisfies him that the primary purpose of the request is the prosecution or punishment of a person for that offence and not the assessment or collection of tax."

6. Ms Winnie CHEUNG of HKSA opined that it was often difficult to distinguish between requests made in relation to "the prosecution or punishment of a person" and "the assessment or collection of tax". Mr Roderick W HOUNG-LEE of HKSA supplemented that, depending on the tax laws of the countries concerned, an act might have been constituted an offence if consequent upon that act an under-collection of tax had resulted. He pointed out that many developed countries did enter into Double Tax Treaties with developing countries to avoid disputes on taxation matters which might arise as a result of different systems of laws in the countries concerned. Members agreed that it would be extremely difficult to draw a line between requests which were directed towards investigations on tax offences and requests towards assessments or collections of tax.

7. The Chairman and Miss Margaret NG expressed reservations about the Administration's proposal to provide exemptions for tax advisers and relevant auditors from giving evidence and supplying information relating to tax documents for the purposes of overseas investigation into tax offences. Mr Eric LI pointed out that similar exemptions were provided to special categories of professional documents under existing Ordinances such as the Securities and Futures Commission Ordinance (Cap 24). He added that the granting of such protection to prescribed tax documents could prevent fishing expeditions which overseas jurisdictions would initiate under mutual legal assistance ( MLA) agreements for the purposes of tax collection.

8. The Chairman was of the view that a MLA request for the production of tax information or document which was relevant to the investigation of a crime involving international syndicate should not be refused. Mr Eric LI responded that overseas countries such as US which had signed a MLA agreement with Hong Kong could well make use of such provision to obtain tax information for tax collection purposes. In reply to Miss NG’s enquiry on safeguards against the taking of evidence for tax collection purposes, the Administration replied that subclause 8(2) had specified that only questions which were relevant to the criminal investigation into the overseas criminal offence should be raised and sub-clause 10(3) had stipulated the right of a person to assign legal representatives to appear at the proceeding before the magistrate. Mr HOUNG-LEE pointed out that US had signed a number of special tax treaties with developing countries and tabled a list of such treaties and exchange-of-information agreements on a range of taxation matters.

Clause 8 - Requests for assistance to Hong Kong

9. Members accepted the insertion of the phrase "in particular, details of the external offence to which the criminal matter relates" after the word "matter" in subclause 8(2)(b). Deputy Principal Crown Counsel (International Law) (DPCC(IL)) clarified that the addition was made in response to HKSA’s comment that the requesting jurisdiction should supply specific details of the offence in respect of which legal assistance was required.

Clause 10 - Requests to Hong Kong for taking of evidence, etc.

10. Members suggested and the Administration agreed to redraft new subclauses 10(2A)(c), 10(2A)(d) and 10(2A)(e) to the effect that when the proceedings under subclause 10(2) was related to an investigation into a criminal matter outside Hong Kong, the proceedings could be held in camera if the magistrate had been satisfied that there were reasonable grounds to believe that -

  1. it was in the interest of the person required to give evidence or produce a thing; or

  2. that criminal matter would be substantially prejudiced if proceedings were held in open court.

11. Members accepted the substitution of the word "foreign" by "external" in subclause 10(7).

12. Referring to members’ comments at the last meeting, DPCC(IL) stated that subclause 10(9)(a) had been redrafted to the effect that a person who was required to give evidence for the purpose of an external criminal matter was not compellable to give evidence or produce a thing which the person could not be compelled to do so at a trial for a Hong Kong offence or proceedings to determine whether the person should be tried for such an offence. The protection against being compelled to give self-incriminating evidence was redrafted as in subclause 10(9)(b). SALD added that the safeguard against self-incrimination had been extended to disqualify all provisions in other Ordinances which might require a person to give evidence or produce a thing disregarding the fact that to do so might tend to incriminate himself. Members and the Consultant (Legal Service) (CONS) had accepted the revised subclause 10(9).

13. Responding to members’ concern about the transmission of the original of a thing to an overseas country, the Administration proposed a new subclause 10(12) which specified that AG should not authorize the transmission of the original of a thing to a place outside Hong Kong unless the appropriate authority of that place had, within one month after the thing was produced, given a written notice to AG setting out the grounds and purposes for such requirement. In particular, provision was also added to enable AG to determine, after considering all circumstances, the return of the original to Hong Kong and in such case the appropriate authority of that place should give an unqualified undertaking to AG for the return of the original after the conclusion of the proceedings relating to that criminal matter. As regards compensation to the lawful owner in case that the original could not be returned, members agreed that the two jurisdictions under the MLA agreement should negotiate and determine the best remedial action on a case-by-case basis.

Clause 12 - Requests to Hong Kong for search and seizure

14. Members accepted the proposed new subclause 12(10A) which stipulated similar requirements on the transmission of things seized to a place outside Hong Kong and its return to Hong Kong as in subclause 10(12) in paragraph 13.

Clause 15 - Requests to Hong Kong for production, etc of material

15. Members accepted the proposed new subclause 15(5)(c) which stipulated similar requirements on the transmission of material produced to the requesting country and its return to Hong Kong as in subclause 10(12) in paragraph 13.

16. The Administration proposed amendments to subclause 15(9) to the effect that a court order issued under subclause 15(2) for the production of material should not operate to prejudice the generality of section 4 of the Inland Revenue Ordinance (Cap 112). It could contravene secrecy provisions of other Ordinances subject to the condition that AG had been satisfied that it was in the public interest of Hong Kong that it had such effect. Mr Eric LI opined that the amendments were not adequate to protect the interests of tax advisers and their clients.

The right of silence

17. Reiterating her concerns on the right of silence enjoyed by persons at the investigation stage of a criminal matter, Miss NG quoted a recent local court judgment which affirmed that the right of silence was an established right under common law and it should not be removed by legislation for any legal purposes. With the Administration’s agreement to redraft the proposed new subclause 10(11), she summed up the safeguards incorporated in the Bill for protection of a person giving evidence at the investigation stage of an overseas criminal matter -

  1. the person could not be compelled to answer questions which he/she was not compellable to answer, as the case may be, for the criminal matter in the overseas country concerned as in subclause 10(6);

  2. the person could not be compelled to give evidence that he/she could not be compelled to give, as the case may be, in Hong Kong if that matter was a trial of him/her for a Hong Kong offence or proceedings to determine whether he/she should be tried for such an offence as in the proposed new subclause 10(9) which also specified the protection against giving self-incriminating evidence;

  3. the person, or through his/her legal representation, had the right to refuse to answer questions which were irrelevant to the criminal matter under investigation as provided under the proposed new subclause 8(2) and subclause 10(3); and

  4. the evidence taken should not be admissible in evidence, or otherwise used, for the purposes of any criminal matter, civil proceedings, disciplinary proceedings, or other proceedings, in Hong Kong except any prosecution of the person who gave that evidence for the offence of perjury, or contempt of court, in respect of that evidence (proposed new subclause 10(11)).

Given the above safeguards, Miss NG pointed out that a person’s right of silence at the investigation stage of a criminal matter was in essence still deprived under the Bill. She added that she agreed to the provisions of the Bill on the ground that there appeared at present no better alternative arrangement in this regard.

Date of next meeting

18. Members and CONS concurred that the provisions of the Bill had been thoroughly discussed. The remaining issue to be resolved was HKSA’s concern on the protection of tax document against fishing expeditions. In this connection, Mr LI proposed and members agreed to hold one more meeting at 9:00 am on 11 June 1997 to examine an updated set of combined CSAs which would incorporate further proposals to address the concerns of HKSA. Mr LI also agreed to provide SALD with some reference materials for his drafting of the proposals for members’ deliberations at the next meeting.

19. The meeting ended at 2:30 pm.

Provisional Legislative Council Secretariat
24 November 1997

Last Updated on 30 November 1998