Introduction

Sentencing is the process by which a court determines the appropriate punishment for an individual who has been found guilty of a criminal offence.  Criminal sentencing is a crucial aspect of the criminal justice system, serving as a means of punishment, rehabilitation, and deterrence. It is a complex and multifaceted process that takes into account various factors, including the seriousness of the crime, the nature of the offence, and the offender’s personal circumstances.

Factors for consideration

The sentencing decision is made by a judge, who must consider the principles of proportionality, fairness, and justice in determining the appropriate sentence. In this article, we will explore the various aspects of criminal sentencing, including the factors that affect the sentencing decision and the factors that affect the sentencing decision in pertaining to offence of dealing with the proceeds from an indictable – (commonly referred to as ‘money laundering’).

In determining the appropriate sentence for money laundering, courts often consider the guidelines established in previous precedent cases.  In particular, the Court of Appeal in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536 held that there are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence but the following factors would be taken into account when determining sentence:

1. It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.
2. The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.
3. The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence pre se when determining the sentence of the dealing offence.
4. If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.
5. The length of time the offence lasted.

The Court of Appeal in that case also considered the sentenced handed down in the following 12 cases:

Further in HKSAR v Wan Kwok Leung [2010] 5 HKLRD 536,  the Court of Appeal considered that the sentence for “money laundering” offence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most “money laundering” cases, there may not be evidence to show from what indictable offence the “black money” are in fact derived.  

Moreover, if there is information to prove that the “black money” is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant’s benefit is huge, then the sentence should be adjusted upward.

In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. The sentencing starting point is 3 years or so where the “black money” involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.   

Recent decision

On 1 June 2023 in 香港特別行政區 v 溫少玲 (DCCC496/2022), where the defendant pleaded guilty to conspiracy to deal with property known or believed to represent proceeds of indictable offence, contrary to sections 25(1) and 25(3) of Organized and Serious Crimes Ordinance (Cap. 455), and sections 159A and 159C of Crimes Ordinance (Cap. 200).  The defendant committed the offence over a period of seven months.  In that case, the defendant used betting account at Hong Kong Jockey Club to help another person laundered sums totalling HK$2,242,120.  The defendant had no knowledge of predicate offence, and no international element was involved.  The Court held that having considered the fact that the defendant had already refused to lend her account to another person and her level of involvement, the appropriate sentencing point is 3 years. 

Takeaways

“Money laundering” is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. Continue awareness of the latest requirements in, identifying risks, enhancing its internal controls, methods in carrying out customers due diligence, reporting suspicious activities, and enhancing internal controls, is of paramount importance. 

If you are facing investigations by the relevant regulatory authorities, or would like to review and enhance existing internal compliance procedures, please contact us.

  Alfred Leung, Partner    (E: alfredleung@hkytl.com; T: 852 3468 7202)

YTL LLP is a law firm headquartered in Hong Kong, China.  This article is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind.