Corruption confusion hits HK

Coordinating fight against graft difficult amid differing systems

"Corruption knows no boundaries." That is how a center for anti-corruption study jointly published by Hong Kong's judicial organs and the Independent Commission Against Corruption (ICAC) describes the importance of anti-graft cooperation between the Chinese mainland and Hong Kong.

Hong Kong has long been known for its clean governance since the ICAC was established 40 years ago. However, media reports have recently highlighted how Hong Kong remains a "harbor" for corrupt mainland officials to escape punishment.

The Hong Kong-based South China Morning Post cited a Hong Kong university scholar in February, as saying that Hong Kong exports about HK$30 billion in corruption each year to developed countries as well as the mainland, as its law does not strongly discourage bribing non-local officials.

Storm reaches Hong Kong

In a recent example of how corruption between the two regions intertwines, Song Lin, former chairman of State-owned China Resources (Holdings) Co., Ltd, was dismissed from office for suspected violations of discipline and law. China Resources is listed in Hong Kong, and the whistle-blower, Wang Zhiyuan, a journalist, filed a report with the ICAC before Song was detained.

After Song was targeted, Hong Kong media outlets, such as Ta Kung Pao, reported that mainland discipline watchdogs had carried out thorough investigations into many Hong Kong branches of State-owned enterprises (SOEs). Media were then quick to announce that the storm over the mainland anti-corruption campaign had blown into Hong Kong.

"There may be a grey zone in the supervision over staff in State-owned enterprises' Hong Kong branches, as some high-ranking staff in the SOEs are businessmen but are also officials," said Tsao King Kwun, an associate professor in Chinese public administration and policy with the Chinese University of Hong Kong.

To rich businessmen it may seem acceptable to exchange some gifts from other business partners to develop their business, but it can also be identified as bribery or power abuse, Tsao explained. In these cases it is hard for mainland authorities and those in Hong Kong to identify whether their behavior damaged the State's interests, he added.

Xu Minjie, the former executive director at China Cosco Holdings, a listed company that is owned by the country's largest shipping and logistics group, was under investigation in November. Caixin magazine reported that the evidence relating to his case was transferred to the mainland discipline watchdog by the ICAC after receiving reports from Hong Kong residents.

Tradition of cooperation

Hong Kong and the mainland have been involved in anti-graft cooperation since the 1990s, even before the region's return to China in 1997.

From April 2000, the Supreme People's Procuratorate directly participated in a Mutual Cases Assistance Scheme, which was set up between the Guangdong provincial procuratorate and the ICAC in 1990, to handle requests from the ICAC for cases outside Guangdong province.

The system is designed to enable mutual assistance in order to interview witnesses in each other's jurisdiction.

The cooperation is based on four principles, including respect for the different laws and regulations on both sides, no cross-boundary law enforcement, reciprocity of assistance and adherence to the principle of parity, Ryan Wong, deputy commissioner and head of operations of the ICAC, told the Global Times .

"The cooperation is conducted under an administrative agreement rather than a legislative framework. We also hold annual meetings to review the working processes for each side," Wong said.

According to the ICAC, the ICAC and the Guangzhou procuratorate engaged in instances of mutual assistance more than 100 times between 2011 and 2013.

According to public information, as of 2009, the ICAC and the Guangzhou procuratorate had questioned more than 1,700 witnesses via this cooperation system.

A report on clean governance released by the German-based anti-corruption institute Transparency International in December said Hong Kong's corruption rating had dropped by one position compared to 2012.

Many Hong Kong media speculated whether the drop indicated that mainland corruption had made Hong Kong less clean than before.

Meanwhile, the mainland's clean governance rating has been increasing over the past three years, according to the report, as President Xi Jinping's anti-corruption campaign has started to bite.

"The anti-graft drive in the mainland will be good for Hong Kong. It can prevent some Hong Kong businessmen or officials from accepting bribery in the mainland as they might think the mainland has more loose supervision than Hong Kong," Tsao told the Global Times.

Differing systems

With the increasing strength of the mainland anti-corruption campaign, the cooperation between Hong Kong and the mainland has become more frequent, Wong said.

"There is no obstacle in our cooperation as we've built up trust and understanding during previous practice," Wong said, adding that enforcement and judicial organs on both sides fully acknowledge the borders of their authority.

Although Hong Kong and the mainland have cooperation in investigating individual cases, there is still a gap in criminal transfers, Tony Kwok, the former deputy commissioner with the ICAC, told the Global Times.

"The biggest obstacle is that mainland's Criminal Law has a capital penalty for corruption while Hong Kong has already abolished it," Kwok said.

According to international practice in repatriating fugitives, which applies to Hong Kong but not the mainland, criminals who face the death penalty should not be extradited.

In these cases, if corrupt mainland officials escape to Hong Kong, it is difficult for Hong Kong authorities to send them back, Kwok said, adding that corrupt officials may also run to other countries via Hong Kong.

However, as Hong Kong belongs to China and such practice normally applies to transfers between two countries, it has been discussed for a long time that whether the practice should be applied to Hong Kong and the mainland.

A source from a local procuratorate in Jiangsu Province, who declined to be identified, told the Global Times that it is hard to solve this issue in a short period of time as the understanding on the international practice from both sides are different.

As the mainland needs to respect the independent jurisdiction of Hong Kong, it was not proper to detain any suspects in Hong Kong and the ICAC should also follow that principle.

Tsao said that improving enforcement cooperation should be the next step after the investigation cooperation has been underway for a long time.

"It will require mainland judicial authorities to ensure the credibility of their evidence against those suspects as Hong Kong authorities can only make judgments with solid evidence rather than just some orders or speculation," Tsao said.