Cross-Border Asset Tracing for Domestic Criminal Restitution Enforcement
Cross-border criminal restitution requires converting domestic penal orders into foreign civil judgments or leveraging multilateral conventions to freeze offshore funds.
Letters of No Consent
Meaning
Administrative mechanisms in Hong Kong’s anti-money laundering framework allow the police to informally freeze suspicious bank accounts by issuing formal notifications to financial institutions that they do not consent to the movement of funds. Through the issuance of letters of no consent, the authorities leverage the statutory provisions of the Organized and Serious Crimes Ordinance to prevent the dissipation of illicit proceeds while investigations are ongoing. This informal freeze stops applying when the police withdraw the notification, when a formal court-ordered restraint or confiscation order is obtained, or when a court determines that the freeze has been maintained for an unreasonable duration without sufficient progress in the criminal investigation.
Banking Action
Financial institutions that receive these notifications must decide whether to freeze the account to protect themselves from criminal liability for dealing with the proceeds of crime under the ordinance. While the notification itself does not carry the weight of a court order, banks almost always comply because of the significant legal risks of ignoring it. Compliance with letters of no consent allows the bank to maintain its statutory defense against money laundering charges.
Judicial Scrutiny
Legal challenges have been brought against this administrative practice on the grounds that it bypasses the necessary judicial oversight and deprives account holders of their property rights without due process. The High Court has ruled that while the regime is constitutional, the police must use it with caution and must not maintain the freeze indefinitely without seeking a formal court order. This restriction requires the police to actively pursue their investigation to justify the ongoing restrictions.
Litigious Defense
Account holders can challenge the freeze by applying for a judicial review or by seeking a declaration from the court to release the funds for legitimate legal and living expenses. If the police cannot demonstrate that the funds are the proceeds of crime, the court can order the bank to allow transactions to proceed. This defense provides a necessary check against the arbitrary or prolonged use of the administrative freeze.