Letters from leaders of Hong Kong's political parties and government departments.
A letter to the International business community in Hong Kong
Hong Kong has been caught in the crossfire between China and the US since the beginning of this year. This is a trade war and a war for techno supremacy – and many believe, this is also a war of ideology.
How such a conflict is characterised is not important as Hong Kong has been caught in between a rock and a hard wall in geopolitical manoeuvring in the past. We experienced that in the last century during the Korean war and the Sino-British negotiation on the future of Hong Kong.
Hong Kong is always regarded by the international business community as a safe and reliable place to conduct business with and through which enterprises can control and operate their business in the region. Such trust and reliability inevitably tie in with the smooth and unbiased functioning of the “one country two systems” under the Basic Law.
The erosion of freedom of speech, freedom of press and the civil right to stand for election accentuated by the recent incidents have casted a great doubt on whether this city is still the freest economy in the world and a unique place to conduct business in China. I would urge the government of Hong Kong and the central government to adhere to the letters and spirit of the “one country two system” and not to do anything which would, in the perception of the international business community, harm the freedom and uniqueness of this city.
Business community always needs a level playing field, free flow of information and good business ethics to conducts business. There are policies and measures which Hong Kong can definitely push forward to win back more confidence, respect and business.
The Patrick Ho case has greatly tarnished the clean business ethics and integrity of most Hong Kong people. Ho as an ex-minister of the cabinet of our former chief executive, has been charged and found guilty, on amongst other things, offering bribes to foreign officials. Hong Kong’s Prevention of Bribery Ordinance, unlike the US Foreign Corrupt Practices Act, does not have any extra territorial effect. If we could extend the effect of the law to cover acts prevented by the Ordinance, including the taking or the offering of bribery from or to Hong Kong resident in a territory outside Hong Kong, that would at least give a dire warning to any Hong Kong resident before doing anything reckless in a foreign jurisdiction.
Using shelf companies to conduct illegal business and or launder money is another great concern of the international business community. Our anti-money laundering regime is up-to-date and meets the basic requirements of the EU and the Organisation for Economic Co-operation and Development.
An area which needs overhaul lies in the identification of the ultimate beneficial owners of a company incorporated in Hong Kong. The recently enacted law requires certain Hong Kong companies to maintain a register of ultimate beneficial owners which meet a certain ownership threshold. Such a register is subject to the inspection of a list of regulators in Hong Kong. Compliance is difficult to monitor as this arrangement needs the vigilant inspection by the Companies Registry. I see no reason why such register should not be kept at the Companies Registry. In the long run, we also need to consider whether the register should be open for inspection to a member of the public after such person has been registered as a user of such a service with the Companies Registry. Yet consideration for personal data privacy is a major concern if we were to open the register to the public.
Hong Kong has been implementing United Nations Security Council sanctions resolutions via incorporating such decisions into its local law. This is an international obligation which Hong Kong cannot shirk. Our law is up-to-date and currently there are 14 countries and organisations including North Korea, Iran, ISIS and Al Qaeda under such sanction list. Having the law is one thing, but many of our trading partners are concerned with how the law has been implemented. The Government needs to be more transparent and forthcoming in providing us with the details of the resources that has been provided to help with enforcement, the number of cases investigated and the reasons why no prosecution has been made.
2018 is a year of conflict and economic turmoil. Soon we will be stepping into 2019. May this city be blessed with freedom, joy and peace in the new year.