When to suspect the proceeds of a crime: Hong Kong’s Court of Final Appeal clarifies the offence of money laundering
The Hong Kong Court of Final Appeal (CFA) has upheld the conviction of tycoon Carson Yeung for money laundering. In doing so, it has provided important clarification as to what it means to have “reasonable grounds” to believe that property represents the proceeds of crime under the Organized and Serious Crimes Ordinance (OSCO).
In particular, the decision in HKSAR v Yeung Ka Sing Carson  HKEC 1506 (Yeung Case) reinforces that “reasonable grounds” should take into account the personal beliefs, perceptions and prejudices of the person involved. However, it also sets clear limits and clarifies that where a defendant’s avowed beliefs are so “far-fetched and bizarre” they are not believed by the court, then the court can come to its own decision based on the weight of the evidence.
The Yeung Case is pivotal not only for wealthy individuals, but also financial institutions and other persons who process payments or engage in other types of transactions. Actual knowledge is not required for money laundering – making it essential to know when to be suspicious.
In our in-depth article, available here, we describe the key facts and takeaways from the Yeung Case, together with our comments on some open questions – particularly for financial institutions and other large corporates – that continue to make identifying suspicion a challenging topic.