Lending Bank Accounts to Others? Think Twice Before You Act!
Introduction Section 25 of the
Ordinance To establish the
offence, the prosecution does not need to prove that the property did in fact
represent the proceeds of an indictable offence. It is also not
necessary for the prosecution to specify the underlying offence. In the context of
money laundering through bank accounts, the prosecution only needs to prove
that (1) the defendant had dealt with the monies in their accounts and (2)
the defendant knew, or had reasonable grounds to believe, that the monies in
the accounts were proceeds of an indictable offence. The
“reasonable grounds to believe” limb is intended to ensure that liability
cannot be escaped by turning a blind eye. Lending one’s bank
account to others may already be considered as “dealing” since the major, if
not sole, function of a bank account is for deposit and withdrawal of
money. When the court determines whether a defendant has the “reasonable
grounds to believe”, it has to take into account two factors, one objective
and one subjective. Firstly, the objective factor is whether a
reasonable person with common sense and in his right thinking (a reasonable
man) would think that the circumstances suffice to cause him to believe that
the money is the proceeds of an indictable offence. Secondly, the
subjective factor is whether the defendant knew the existence of those circumstances. Case Illustration At trial, the judge
dismissed the explanations given by the Defendants. The judge also took
into account the facts that the Defendants did not inquire with the bank
after their accounts were closed down as a result of abnormal transactions
and did not report the matter to the police. The judge adopted
the proposition stated in the case of HKSAR v Wong Chor Wo CACC
314/2006: “In the normal
course of events, if a man allows another person to use his bank accounts, to
deposit and withdraw funds, in the absence of evidence to the contrary, the
inevitable inference will arise that the holder of the bank account has
reasonable grounds to believe that the funds passing through the account
represent the proceeds of an indictable offence.” As a result, the
judge proceeded to draw the aforesaid inevitable inference and convicted the
Defendants. Conclusion Perhaps the
reasoning behind the inference is that a reasonable person would not
naturally lend his account, which is a valuable personal property, to another
for handling without proper knowledge of what it will be used for. In view of the
above, it is best to avoid lending our bank accounts to anyone for whatever
reason. In society, one might be asked by relatives or close friends to
lend bank accounts. Whilst the temptation stands to succumb easily due
to trust, it is important to remember that the simple act of lending a bank
account may already amount to an offence and lead to conviction. |
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IMPORTANT: |
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For enquiries, please contact our Litigation & Dispute
Resolution Department: |
E: criminal@onc.hk |
T: (852) 2810 1212 |