Tuesday, March 31, 2015

Benny Tai Interview on BBC Hardtalk (30 March 2015)

Credit: Johannes Eisele/AFP/Getty Images
BBC Hardtalk
30 March 2015
Hong Kong's self-styled umbrella revolution blew itself out before it could deliver any long-term change in the former colony's political weather. Hardtalk speaks to one of the pro-democracy movement leaders, Benny Tai. Months of street protests failed to pressure Beijing into concessions on the election of Hong Kong's next chief executive - so where does the campaign for political reform go now?  Click here to listen to the interview.

Lee Mason on Protecting Consumers from Unfair Terms in Standard Form Contracts

"Protecting consumers from unfair terms in standard form contracts: the UK approach" 
European Business Law Review
Vol. 26 (2015), Issue 2, pp 335-45
Abstract: This article examines the current UK consumer protection regime specifically relevant to unfair terms in standard form consumer contracts, as provided for by the Unfair Terms in Consumer Contracts Regulations 1999 (pursuant to the European Union's Council Directive 93/13/EEC) and the solid body of case law that has grown around it. In particular, the article takes a closer look at the decision in Office of Fair Trading v. Ashbourne Management Services Ltd [2011] EWHC 1237 (Ch) and its impact on protecting UK consumers who enter into standard form gym club contracts.

Sunday, March 29, 2015

New Issue: SSRN Legal Studies Research Paper Series (HKU)

Vol. 5, No. 2: 25 March 2015

1. Federalism and Democratic Reform in China with Lessons from India 
Michael C. Davis, The University of Hong Kong - Faculty of Law 

2. Basel III and Its New Capital Requirements, as Distinguished from Basel II 
Emily Lee, The University of Hong Kong - Faculty of Law 

3. The Institutional Fragmentation of International Intellectual Property Law in Pacific Rim: Authority and Legitimacy, Regime Interaction and Future Institutional Development in a 'World Society' 
Anlei Zuo, The University of Hong Kong, Faculty of Law, Students 

4. Securities & Futures Commission v China Metal Recycling (Holdings) Limited: Regional Conflict of Laws, Judicial Recognition and Hong Kong-China Cross-Border Insolvencies 
Emily Lee, The University of Hong Kong - Faculty of Law 

5. The New Hong Kong Competition Law: Anomalies and Challenges 
Kelvin H. Kwok, The University of Hong Kong - Faculty of Law 

6. A Theory of Financial Services Competition, Compliance and Regulation 
Bryane Michael, University of Hong Kong Faculty of Law, University of Oxford 
Joseph Falzon, Department of Banking & Finance - University of Malta 
Ajay Shamdasani, Thomson Reuters

Thursday, March 26, 2015

Susan Finder on China's Court Reform Plan Outline

"China's Master Plan for Remaking Its Courts"
Susan Finder (Visiting Fellow, Centre for Chinese Law)
The Diplomat, 26 March 2015
The Supreme People’s Court (SPC) Court Reform Plan Outline has left most of the world confused about what it means, surprisingly including Chinese judges, some of whom have been burning up the Chinese blogosphere. Stanley Lubman, commentator on Chinese legal affairs, wrote:
What remains unclear is whether Chinese leaders intend to make meaningful changes within that framework to raise the quality of Chinese justice or are merely paying lip-service to justice as they continue the old patterns of authoritarian control.
This article provides another perspective on the significance of the Court Reform Plan Outline.
     The Court Reform Plan Outline needs to be recognized for what it is — part of President Xi Jinping’s comprehensive reforms of the current political system, and, in particular, part of his comprehensive reforms of the justice system. The aim is to raise the quality of Chinese justice (under Party leadership). As the head of the office of the Central Judicial Reform Leading Group (the Communist Party group in charge of judicial reform) said, “an unjust judiciary would have lethal damage effects on social justice [and, by implication, social stability].”... Click here to read the full article.

Haochen Sun on Anti-dilution Protection of Luxury Brands

"Anti-dilution protection of luxury brands in the global economy"
Haochen Sun
in Daniel J. Gervais (ed), International Intellectual Property: A Handbook of Contemporary Research (Edward Elgar, March 2015) 407-432
Extract: In June 2008, the Paris Commercial Court held eBay secondarily liable for offering online venues to sell counterfeit Louis Vuitton products. In particular, the court ruled that eBay had harmed the reputation of Louis Vuitton’s trademarks. On the other side of the Atlantic, eBay was sued in the United States (US) by another luxury company, Tiffany, for facilitating the sale of counterfeit Tiffany products on the eBay website. In this case, the Southern District Court of New York ruled in favor of eBay, holding that eBay did not harm the reputation of the Tiffany trademark. Why did these two factually similar trademark dilution cases yield judicial decisions that were at odds with each other? This chapter aims to explore the policy responsible for this rift. It reveals that the rift is actually the tip of the iceberg in the global anti-dilution protection of luxury brands. In fact, luxury companies face two major challenges in securing adequate anti-dilution protection. At the international level, the major intellectual property treaties do not afford clear-cut minimum standards for anti-dilution protection of well-known trademarks. At the domestic level, divergences in anti-dilution protections in the world’s three main luxury markets – the European Union (EU), the US, and China – have rendered it more difficult for luxury companies to prevent dilution of their brands...  Click here to download Dr Sun's paper published in the Georgetown Journal of International Law.

Tuesday, March 24, 2015

Fu Hualing Interviewed on Lee Kuan Yew's Influence on China's Legal System

Chun Han Wong and Josh Chin
The Wall Street Journal
24 March 2015
Chinese state media on Monday gave prominent coverage to the death of Singapore’s founding prime minister Lee Kuan Yew, whose brand of paternalistic one-party rule has long been a model for Beijing.
     “Mr. Lee Kuan Yew was an old friend of the Chinese people,” Chinese President Xi Jinping wrote to Singapore President Tony Tan in a condolence letter Monday, according to a statement from China’s foreign ministry. “Mr. Lee Kuan Yew and the older generation of Chinese leaders jointly set the course for the development of China-Singapore ties.”... 
     More recently, Singapore’s influence on China has been particularly visible in Beijing’s recent legal reform push, scholars say.
      The reforms, outlined by the Communist Party in an ambitious blueprint released last fall, aim to make the country’s courts more independent and credible while ensuring that they continue to cleave to the party’s core interests.
     Fu Hualing, a professor of law at the University of Hong Kong, says the likely end-goal is a legal system that is efficient and consistent in settling commercial and personal disputes while bending to Beijing’s whims in politically sensitive cases, such as those dealing with dissidents, corruption or terrorism.
     “They might not mention Singapore by name, but in many respects we’re moving in that direction. You’ll have a decent judicial system that’s ultimately under political control,Mr. Fu says...  Click here to read the full article.

Susan Finder on HK-China Cross-Border Advisory Committee

"Hong Kong needs an advisory committee to examine complex cross-border legal issues"
Susan Finder (Visiting Fellow, Centre for Chinese Law)
South China Morning Post
17 March 2015
To solve the many specific cross-border legal issues affecting the people of Hong Kong and the rule of law in the special administrative region, an independent and non-partisan advisory committee on cross-boundary legal issues should be established.
     The committee, which ideally would draw its membership from current or retired senior members of the legal profession, would provide policy guidance to a working group drawn from the legal community. The idea would be to draw together people familiar with the Hong Kong and mainland legal systems. They would work together to propose options for practical solutions to problems involving complex legal issues.
     These problems could be issues in the news, such as parallel trading, and other serious problems not in the news such as cross-boundary pollution, criminal justice or domestic violence. The members of the working group must be able to reach out to those with the right expertise or background, regardless of political views... Click here to read the article.

Ernest Lim on Attribution and the Fraud Exception

"Attribution and the Fraud Exception"
Ernest Lim
Lloyd's Maritime and Commercial Law Quarterly
[2015], pp. 14-18
Should the fraud of the company’s management be attributed to the insolvent company so as to deny the latter’s application for refund of the excess tax paid out by the company to the Inland Revenue authority? That was in short the central issue which the Court of Final Appeal in Hong Kong in Moulin Global Eyecare Trading Ltd (in liq) v Commissioner of Inland Revenue had to address. Lord Walker of Gestingthorpe, sitting as a non-permanent judge, gave the leading judgment for the court and answered the question in the affirmative. The facts can be briefly stated. The fraudulent directors of the company deliberately inflated the company’s profits and, as a result, it paid excess tax amounting to, according to the liquidator, almost HK$89m (approximately £7m) to the Commissioner of the Inland Revenue. The liquidators submitted an application, which was rejected by the Commissioner, for a refund of the excess tax under the Inland Revenue Ordinance Cap 112 (“IRO”) on the ground that the excess tax was paid because of an error in the tax return. Whether there was an error depends on whether the fraud of the company’s management should be attributed to the company. That in turn depends on whether the fraud exception (sometimes referred to as the Hampshire Land principle)—where the agent commits a fraud or breach of duty, the knowledge of the agent should not be attributed to the principal—is applicable. After a detailed and extensive survey of the cases, Lord Walker emphatically concluded: “The fraud exception must be limited to its proper, limited role, that is of barring an unmeritorious defence in claims by corporate employers against dishonest directors or employees, or accomplices who have conspired with them.” In a remarkable and unequivocal admission, Lord Walker said: “I should state clearly that I now see that I was wrong, in para.145 [of Stone & Rolls Ltd (in liquidation) v Moore Stephens (a firm)], to regard the fraud exception as being of general application, regardless of the nature of the proceedings… .”  In other words, the fraud exception applies only to a “redress” situation whereby a company sues its directors, employees or their accomplices for wrongdoing committed against it but not to a “liability” situation under which a company is liable to a third party for the dishonest conduct of a director or employee...  Click here to download the paper.

Monday, March 23, 2015

National Space Law in China (New Book)

National Space Law in China: An Overview of the Current Situation and Outlook for the Future
Author: Yun Zhao
Brill, 316 pp.
January 2015
Description: China has made rapid developments in space technologies and space activities in the last few years, however, it still lags behind in the legal arena. In order to provide guidelines for and promote further development of space activities, China should speed up its national space legislation process. In National Space Law in China, Yun Zhao offers a comprehensive study of national space laws, regulations and policies in China. It contains rich information and materials of China’s space law and practice. As the first English monograph on national legislation on space law in China, this book shall contribute to the understanding of China’s current legal regime for space activities and future national space legislation.

Sunday, March 22, 2015

Being Social: Ontology, Law, Politics (New Book)

Being Social: Ontology, Law, Politics
Editors: Daniel Matthews and Tara Mulqueen
February 2015
Description: Being Social brings together leading and emerging scholars on the question of sociality in poststructuralist thought. The essays collected in this volume examine a sense of the social which resists final determination and closure, embracing an anxiety and undecidability of sociality, rather than effacing it. Through issues including queer politics, migration, and Guantanamo, recent events such as the occupation of Gezi Park in Istanbul, and theoretical explorations of themes such as writing, law, and democracy, contributors assess how a reconfigured sociality affects thinking and practice in the legal and political realms. With a particular emphasis on Jean-Luc Nancy, whose work brings questions of community to the fore, these essays explore how the consistent ‘unworking’ of sociality informs the tenor and form of political debate and engagement. Table of Contents: Introduction (Tara Mulqueen & Daniel Matthews) Part I: Grounds of the Social 1. The Ground of Being Social (Ian James) 2. Being Social in ‘Law and Society’ (Peter Fitzpatrick) 3. The Meaning of Sense (Pieter Meurs and Ignaas Devisch) Part II: Acts of the Social 4. Being Social Democratically with Jean-Luc Nancy at the Gezi Park Protests (Marie-Eve Morin) 5. The Queer Experience of Singular Finitude (Tara Mulqueen) 6. Labour and Migration in the ‘Suspended Step’ (Anastasia Tataryn) 7. Survival’s Witness: Poetry, Sociality, Community (Patrick Hanafin) 8. On the Law of Originary Sociability or Writing the Law (Daniel Matthews).

Friday, March 20, 2015

CL Lim on Geopolitics in International Trade

Malaymail Online
Mayuri Mei Lin
20 March 2015
KUALA LUMPUR, March 20 ― Geopolitics often muddle already complex trade agreements like the Trans-Pacific Partnership Agreement (TPPA) but proper rules in place at a global level could see Asean grow economically and socially, financial analysts said today.
     In a debate titled “Regional Integration & Global Integration: Is there a conflict?”, analysts agreed that the politicking between nations often makes trade, be it regionally or globally, more difficult.
     “Today what hobbles the WTO is not the fact that we're discussing free trade agreements, it's geopolitics,” University of Hong Kong Lim Chin Leng said today, referring to the World Trade Organisation by its acronym WTO.
    Lim added however, that free trade agreements could help nudge nations to address geopolitical issues and to open their doors to more trade... Click here to read the full article.  

Thursday, March 19, 2015

Cable TV Interview with Albert Chen (19 March 2015)

In a television interview with Cable TV, Chan Professor of Constitutional Law, Albert Chen, discusses his new ideas of conducting a credible public opinion survey chaired by a former judge such as the former Chief Justice to assess whether Hong Kong people would like legislators to accept or veto the government's universal suffrage reform proposal (which has yet to be officially announced).  He also proposes holding a televised debate between representatives from the government and the pan-democrat camp like the debate held in June 2010 between Chief Executive Donald Tsang and Civic Party leader, Ms Audrey Eu.  These new proposals come after it has become apparent that neither the government nor the legislators supported Professor Chan's earlier proposal to include a 'none of the above' option for voters to reject all candidates.  Click here to view the interview (in Cantonese).

Tuesday, March 17, 2015

The Rule of Law in Chinese Tax Legislation

Some Remarkable Changes under the Revised Legislation Law
Before the revised Legislation Law was approved by the National People’s Congress (NPC) on 15 March 2015, the principle of "taxation by legislation" was spelled out in Article 8(8) of the Legislation Law (2000), but only in a vague way. According to that provision, “tax issues” shall be provided for by the National People’s Congress (NPC) under the law. The reality, however, has turned out to have substantially deviated from the (vague) letter of the law due to the extensive delegation of tax legislative powers. Since the early 1980s, the administrative bodies, typically represented by the Ministry of Finance (MoF) and the State Administration of Taxation (SAT), have enjoyed a near monopoly status in drafting and implementing tax legislation (via, in effect, administrative rules). Among 18 types of taxes in effect, only three of them are provided for under the law. Extensive tax administrative rules - with questionable legal status – constitute the predominant body of the tax legal regime. When taxation without legislation becomes the norm, frequent and non-transparent changes of tax rules without sufficient checks are inevitable. This puts taxpayers in a vulnerable position as they typically lack effective remedies to challenge the legality of such rules. 
     An indicative story, in this respect, is the recent rise in fuel-consumption tax. As the world oil price plummeted in 2014, the MoF and the SAT raised the fuel-consumption tax rate three times between November 2014 and January 2015. In spite of the justification given by the governmental agencies (e.g., to curb air pollution and carbon emissions), these tax increases have met widespread skepticism due to their arbitrariness and the weak link to doing good for the environment. 
     This “law vacuum” has, however, encountered less and less tolerance in recent years. In March 2013, during the 12th Meeting of the NPC, a motion submitted by a delegate, Ms. Zhao Fuling, drew much attention, nation-wide. This motion asked for the power of tax legislation, currently retained by the State Council, to be returned to the NPC and its Standing Committee (SCNPC). In November 2013, the principle of “taxation by legislation” appeared, for the first time, in the report of the Third Plenum of the 18th Congress of the China’s Communist Party (CCP). The will of the people and the mission of the top leadership, on its face, appeared to converge. 
     The revision of the Legislation Law is a critical test-point as to how this “agreed principle” is going to be put into practice. In the revised Legislation Law approved by the NPC on 15 March 2015, it is provided under Article 8(6) that “institution of tax, tax rate, tax administration and other fundamental tax affairs” shall be governed by the law only. The explicit listing of the three core elements in taxation, compared with the vague wording in the old Law (i.e., tax issues), adds more clarity as to those areas where any entities - other than the legislative body - shall not trespass. In terms of taxation by legislation, this represents a significant change. 
     An episode, during the passage of this Law, is worthy of mention. In a draft submitted to the NPC on March 8th for deliberation, the element of “tax rate” was removed from Article 8(6). This omission, unconvincingly explained by the SCNPC, was considered not acceptable, especially by tax professionals. At the last minute, several prominent tax scholars, together with some NPC delegates, worked together and succeeded in making their voices heard by the legislative body. In the final draft submitted for the reading of the NPC on March 15th, the wording “tax rate” reappeared in Article 8(6). With this new provision, the powers of governmental agencies in making tax policies have been largely constrained - without the authorisation of the legislative body, the administrative agencies cannot change tax rates at random or in a non-transparent way. 
     Under Article 10 of the Revised Tax Legislation, where legislative powers are delegated to administrative bodies, stringent requirements now need to be complied with, also. First of all, each relevant delegation related to the power to tax legislation, shall specify the purpose, scale, items and the term of delegation as well as the principles the delegated entity shall comply with. Furthermore, the term of delegation, in general, shall not exceed five years. Does this provision automatically imply the winding-up of the delegation made by the SCNPC to the State Council in the tax field back in the 1980s? This remains to be seen. But at least, we can be assured that such a sweeping and indefinite delegation in the area of tax legislation won’t happen in the future. 
     One would not want to claim too much for these recent revisions. It is fair to say, however, that they signal a notable positive step towards the increased application of Rule of Law principles to the making of new tax laws in China.

Monday, March 16, 2015

Jolene Lin on Climate Change Litigation in Asia Pacific

"Climate Change Litigation in Asia and the Pacific"
Jolene Lin (pp. 578-602)
in Geert Van Calster, Wim Vandenberghe & Leonie Reins (eds),
Edward Elgar, March 2015
Abstract: The vast majority of climate change litigation has taken place in the European Union (EU) and the United States (US). In the Asia Pacific region, there has been no climate change litigation, with the notable exception of Australia and to a lesser extent, New Zealand. This chapter will review selected case law from Australia and New Zealand. Further, commentators have argued that the conditions are ripe in certain jurisdictions like India and the Philippines for the use of climate change litigation as part of a broader advocacy strategy to press for governmental action to address climate change. Even though it is most likely that these cases will focus on climate change adaptation, rather than mitigation, this chapter will discuss the India and the Philippines case studies to shed light on broader questions of why mitigation-centric climate change litigation may not take off the way it has in the US and EU.

CL Lim to Debate Former Indonesian Finance Minister (20 March 2015)

Regional integration and global integration: is there a conflict?
Date: 20 March 2015
Venue: Plenary Theatre, Level 3, Kuala Lumpur Convention Centre
Introduction: The Association of Southeast Asian Nations is one of the fastest growing and most dynamic economic regions in the world and, with an expanding population of over 600m, is becoming a progressively more important force in the global economy. Against a backdrop of economic, cultural and political multiplicities, ASEAN today is heralded as a successful model for regionalism. By the end of 2015, the 10 member countries plan to realise the ASEAN Economic Community, an ambitious initiative with the potential to become one of the largest single markets in the world.
     With Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, delivering the welcome address, the KL Debate will begin with the audience registering a pre-debate vote on whether regional integration comes at the expense of global integration. Speakers from both sides of the debate will then present their case, with the audience subsequently casting their final vote for comparison against the first.
     The speakers of the KL Debate are: 
  • Dr Muhamad Chatib Basri, former Minister of Finance of Indonesia 
  • Dr Ben Knapen, Permanent Representative in Brussels, European Investment Bank, and former State Secretary for Foreign Affairs of the Netherlands 
  • Professor Chin Leng Lim, Professor of Law, The University of Hong Kong 
  • Professor Michael G. Plummer, Director, SAIS Europe, and Eni Professor of International Economics, Johns Hopkins University 
The KL Debate will focus on the following themes: 
  • Regional integration and whether this is contradictory to the WTO agenda 
  • The growing role of regional cooperation initiatives and whether this weakens global effort 
  • Whether growth will be driven by regional rather than global initiatives 
  • The effect of different integration efforts 
  • The rise of China and India as economic powers 
  • Will sub-regional blocs lead to a fragmented Asia? 
Organiser: Bank Negara Malaysia , Persatuan Ekonomi Malaysia (Malaysian Economic Association)
For more information, please click here.  The talk is complimentary and please register your interest to attend the KL Debate with: mgt@pem.org.my or +603 7956 0075 / +603 7967 3647 (Attention: Ms. Normala or Ms. Nancee)

Sunday, March 15, 2015

Guide to Basic Law Article 23: Hong Kong's Unresolved National Security Issue

HKU Press 2005
The year 2015 has seen the re-emergence of Hong Kong's Article 23 issue. It has been almost 12 years since the Hong Kong government withdrew its national security bill after a massive protest.  Those events in 2003 were a defining moment in Hong Kong's post-1997 history and have contributed in significant ways to who and what we are now as a special administrative region of China.
     The February 2009 passage of Macau's Article 23 legislation under very different conditions has added to the pressure on Hong Kong to re-introduce proposals. National security concerns were explicitly mentioned in the restrictive political reform decision of 31 August 2014 by the Standing Committee of the National People's Congress. In January 2015, a Hong Kong deputy to the National People's Congress, Mr Stanley Ng, advocated the application of China's national security law to Hong Kong pending the enactment of local legislation.  Despite the obvious constitutional difficulties with such a proposal, it reflected a growing frustration in some quarters over the issue, especially after the Occupy Central protests in 2014.  Rumours circulated that the next Chief Executive elected in 2017, whether by universal suffrage or not, will have the unenviable job of implementation.  
     The terms of Article 23 provide as follows (numbers added only to highlight the seven requirements):
The general view in government is that Article 23 is a political hot potato that gets many people angry and can destroy ministerial careers.  Many in the public see the issue as a serious threat to civil liberties imposed by the Chinese Communist Party and should be avoided as long as possible if not forever.  In this article, to mark the 10th anniversary our edited collection on Article 23 published by HKU Press, I present a different view, that implementing Article 23 is an opportunity for legislators (especially pan-democrat ones) and the Hong Kong and central governments to rebuild mutual trust that has been badly damaged as a result of the universal suffrage reform debate.  People forget how close we were to passing the legislation in 2003 after the government made its major concessions at the final hour.  Those concessions removed the most objectionable aspects of the proposals.  The passage of time has also demonstrated the absence of need for some of the proposals, such as the proscription mechanism against local organisations.  In the review below, I reconsider each of the Government's proposals for the seven requirements of Article 23, discuss their criticisms, and identify constructive steps forward.  (Note: references are to pages in the HKU Press book.)

1. Treason
a. What law exists now?
Reflecting its English law origins, Part I of the Crimes Ordinance (Cap. 200) criminalises the offence of treason (s. 2) and other related offences, including treasonable offences (s. 3) and offences against the person of the sovereign (s. 5).  There are also common law offences of misprision of treason and compounding treason.
b. What was proposed in 2003?
The Government proposed to repeal all treasonable offences (s. 3), abolish the two common law offences, and replace the existing s. 2 treason offences with the following new provision shown below.  It was notable that the new offence would only apply to Chinese nationals, but secondary parties to the offence could be non-Chinese nationals. 
c. What did commentators think of the proposals?
The proposal was mostly well received, for it significantly narrowed the net of criminal liability from that cast by the existing offences, and it phrased the offence in modern language appropriate to the 'one country, two systems' constitutional framework.  References: Chen, pp 97-9; Roach, pp. 124-5; Choy & Cullen, pp. 166-77.
d. Where do we go from here?
Probably not much more needs to be done.  The reform should be welcomed as it is rights-friendly and does away with archaic legislative language and offence definitions that were potentially very broad.  For example, under the current law, one commits a treasonable offence by publishing writing that manifests an intention to depose the Central People's Government, an offence punishable by life imprisonment (s. 3(1)(a)).  Such act of publication alone would not be an offence under the proposed offence, which requires proof of actual membership in foreign armed forces at war with China, instigation of an invasion by such forces, or assistance to a public enemy at war with China.

2. Subversion
a. What law exists now?
There is no offence under Hong Kong law known as subversion.  Much of what would be expected from the Chinese law notion of subversion as a criminal offence is probably covered by the existing treason offences.
b. What was proposed in 2003?
The Government proposed the following new offence:
HKU Conference - Nov 2002
c. What did commentators think of the proposals?
There were three main criticisms of the proposal.  The external elements of the offence ("disestablishing the basic system of the PRC", "overthrowing the CPG", and "intimidating the CPG") were too vague and uncertain.  What precise acts or circumstances would constitute overthrowing the CPG? Who's to say when the CPG has been "intimidated"?  The second criticism was directed at the broad definition of "serious criminal means", which included in sub-paragraphs (iv) and (v) non-violent means.  After 2014's Occupy Central protests, people will be very concerned if peaceful civil disobedience falls afoul serious national security laws rather than only minor public order offences.  The third criticism was directed at the vague notion of the criminal means "seriously endangering the stability of the PRC".  What form of stability, e.g. economic, political, social, etc.?  And at what point would there be "serious endangerment" of such stability?  References: Fu, p. 90; Chen, pp 98-102; Roach, pp. 132, 135-9; Choy & Cullen, pp. 178-85; Weisenhaus, pp. 287-8.
d. Where do we go from here?
Government needs to go back to the drawing board.  A clearer description of the prohibited de-stabilising circumstances needs to be provided.  Macau's National Security Law (Art. 3(1)) does not have the "disestablish" limb but has the "overthrow" limb and another limb ("prevent or restrict its functions") that is potentially problematic.  Two approaches are possible to addressing the "serious criminal means" problem.  One is to drop sub-paragraphs (iv) and (v) or restrict them only to circumstances involving violence or threats to the safety of a person.  The other approach, as advocated by Kent Roach, is to provide an exception for acts done "in the course of any advocacy, protest, dissent or industrial action" (see the exception in the definition of terrorist act in the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 575), s. 2(1)).  References: Roach, pp. 138-9.
3. Secession
a. What law exists now?
There is no offence under Hong Kong law known as secession.
b. What was proposed in 2003?
The Government proposed the following new offence:
c. What did commentators think of the proposals?
The problems with "serious criminal means" and "seriously endangers" seen with the subversion offence are also present in this proposal.  The critical element of withdrawing a part of the PRC from its sovereignty is also vague.  One withdraws money from a bank account or withdraws oneself from a particular place but it is more difficult to imagine what it takes to withdraw a part of a country from its sovereignty.  Another problem was with the meaning of the external element of "using force" as an alternative to "serious criminal means" - the full expression is "using force that seriously endangers the territorial integrity of the PRC".  After Occupy, one will ask whether protesters barricading a main road preventing vehicle passage and inhibiting police enforcement action over several months will satisfy this element.  Surely the purpose of the conduct will be determinative, yet the proposal is silent as whether the mens rea is one of intention to secede or mere recklessness as to the prohibited acts/consequences.  References: Chen, pp. 98-102; Roach, pp. 129-131; Loper, pp. 205, 209-212, 216; Weisenhaus, p. 288.
d. Where do we go from here?
As with subversion, this is another proposal that needs further thought, clarification and perhaps elaboration.  If "serious criminal means" is restricted to violence related activities or subject to an advocacy or protest exception then question whether it is still necessary to have the "using force" alternative.  Given the potential punishment of life imprisonment, the offence needs to include the greater moral culpability requirement of 'intention to secede' from the PRC.  The withdrawal element should be defined more clearly - perhaps by reference to conduct that precludes or frustrates the ability of the government to exercise its complete authority over a part of its territory.  Reference can be made to Macau's National Security Law (Art. 2(1)) which refers to "acts to try to separate territory from the state or subject it to the sovereignty of another state".

4.  Sedition
a. What law exists now?
Part II of the Crimes Ordinance (Cap. 200) provides for offences, procedures and police powers in relation to sedition.  Section 9(1) provides a broad definition of "seditious intention"; s. 10 provides for offences based on acts done with a seditious intention including uttering seditious words and publishing seditious publications; s. 14 confers warrantless police powers to remove seditious publications; ss. 15 to 17 provides for offences in relation to unlawful oaths.
b. What was proposed in 2003?
Existing offences were to be replaced with more narrowly defined sedition offences and offences of handling seditious publications.  Mere possession of seditious publications would not be an offence. The police power to remove seditious publications, the statutory definition of seditious intention, and the three provisions related to unlawful oaths were to be repealed.  
     The sedition offence would take two possible forms (s. 9A(1) - see below).  The first was as an offence of inciting treason, subversion or secession, punishable up to life imprisonment.  It would replace the common law offence of incitement in relation to those three crimes (s. 2D).  It would be narrower than the common law offence because of the "likely to be induced" nexus requirement proposed in s. 9A(1A), reflecting principle six of the Johannesburg Principles on National Security, Freedom of Expression and Access to Information (1996).  The double inchoate offence of inciting sedition could not be charged (s. 9B).  The second form was inciting others to engage in "violet public disorder that would seriously endanger the stability" of the PRC.  The same "likely to be induced" nexus requirement applied.  This offence was punishable up to seven years imprisonment.
The offences of handling seditious publications proposed in s. 9C (see below) were narrower than the existing offences because of the "likely to induce" nexus requirement and the express "intent to incite" mental element. However, the maximum punishment was to increase from three to seven years imprisonment and the limitation period for prosecution was extended from six months to two years.
Proposed s. 9D (see below) provided defences to the new sedition offences (ss. 9A & 9C) for legitimate expression providing constructive criticism of government practices and laws. These defences already exist under the current law (s. 9(2)).

c. What did commentators think of the proposals?
The repeal of the old law was welcome, but there were still concerns with the new proposals.  The late concession to include the "likely to be induced" requirement was able to address some concerns. However, the second form of the sedition offence suffered from the problem seen earlier with the vague expression "seriously endanger the stability" of the PRC.  People will wonder if the protests and clashes seen during the 2014 Occupy events constitute "violent public disorder"?  Even if so, most would say that it was not violent public disorder "that would seriously endanger the stability" of the PRC.  But at point would it so endanger?  Questions come back to this vague expression.  Many also wanted to see the proposal for the seditious publication offences withdrawn, for fear that it could chill the publication and dissemination of legitimate political expression.  References: Petersen, p. 45; Chen, pp. 104-6; Roach, pp. 127-9, 140-4; Loper, pp. 214-5; Fu, pp. 243-9; Weisenhaus, pp. 284-7.
d. Where do we go from here?
While the first proposed form of sedition is fine, serious consideration needs to be given to whether the second form of sedition is necessary.  Incitement is a common law offence that can be charged in relation to most other violence related offence, so the ordinary criminal law will still be available.  If it is kept, the element of "seriously endanger the stability" will need to be clarified. The Macau National Security Law (Art. 4(1)) does not have the second form; it has the added requirement that a person must "publicly and directly incite" treason, subversion or secession - this is a safeguard worth considering.
     With seditious publications, existing offences and police powers are wide and fortunately have not been used to impact press freedom. With the narrower proposed offence that has safeguards in the express mental element of "intent to incite others" and the defences in s. 9D, the proposal on balance is probably justifiable. But note that the Macau National Security Law did not include an offence related to seditious publications.

5. Theft of State Secrets
a. What law exists now?
The Official Secrets Ordinance (Cap. 521) currently provides for several offences in relation to espionage (Part I) and protects a wide range of government information from unlawful disclosure (Part II).
b. What was proposed in 2003?
It was felt that there were two gaps in the existing legislative framework that needed to be filled.  The first was the potential disclosure of information related to Hong Kong affairs within the responsibility of the Central Authorities (s. 16A - see below).
The second perceived gap was in relation to disclosing protected information obtained by specified illegal access, e.g. computer hacking, theft, bribery, burglary and bribery (s. 18 - see below).  In the Post-Snowden era, close attention needs to be paid to the terms of this proposal.
In July 2003, a late concession was made to provide for a "public interest" defence to only the illegal access offence provision (s. 18(5B)).
HKU Conference - June 2003
c. What did commentators think of the proposals?
Criticisms were directed at a number of points.  In relation to the proposed s. 16A offence, the scope of "affairs concerning the HKSAR which are, under the Basic Law, within the responsibility of the Central Authorities" was unclear.  Did it refer only to matters of defence and foreign affairs or all matters relating to the Central Authorities under the Basic Law?  It was said that "national security" was unclear in referring to "safeguarding the independence" of the PRC.  The mental element was also problematic because a person could be convicted even if he genuinely did not know that he was making a damaging disclosure of protected information.  Constitutional review of the reverse onus provision in s. 16A(3) would likely read it down to an evidential burden.
     As for the s. 18 offence based on illegal access, there was a similar concern with basing liability on "having reasonable cause to believe" as it was still possible to convict someone who did not genuinely believe.  Was it an anomaly that the new public interest defence was only to apply to the s. 18 offence and to none of the other offences of damaging disclosure?  There were also criticisms of the narrow scope of the public interest defence.  For example, it probably would not cover Edward Snowden's disclosures about the PRISM surveillance programme. Finally a prior publication defence was advocated.  References: Petersen, p. 39; Chen, pp. 109-111; Roach, pp. 132-4; Loper, pp. 212-4; Chan, pp. 258-276; Weisenhaus, pp. 290-7.
d. Where do we go from here?
A enumerated list of the affairs within the responsibility of the Central Authorities should be provided.  Consider also limiting the category of information to items that should be kept confidential (see s. 16(5)).  The Macau National Security Law defines state secrets as information "that must be kept secret and are classified as such" (Art. 5(5)).  The definition of "damaging disclosure" in s. 16A needs more thought.  Reference to the more concrete ways in which this expression is defined in other sections may provide guidance (e.g. "disclosure causes damage to the work of...the security or intelligence services" (s. 14(2)(a)), "disclosure damages the capability of, or any part of, the armed forces to carry out their tasks" (s. 15(2)(a)), "endangers the safety of British nationals or Hong Kong permanent residents elsewhere" (s. 16(2)(a))).  While "endangering the territorial integrity of the PRC" is probably fine but something more tangible than "endangering the independence of the PRC" is needed in drafting a workable concept of "national security".  Attention needs to be paid to the fault element in both offences and whether having a subjective standard of recklessness (in place of the objective standards) will be sufficient, and without reversing the burden of proof.  Finally, thorough consideration needs to be given to the scope and broader applicability of the public interest defence.

6.  Prohibiting Foreign Political Organizations or Bodies from Conducting Political Activities in the Region &
7. Prohibiting Political Organizations or Bodies of the Region from Establishing Ties with Foreign Political Organizations or Bodies
a. What law exists now?
The Government conceded that the Societies Ordinance (Cap. 151), especially after its amendments in 1997, had already implemented the last two Article 23 requirements against foreign political organizations conducting political activities in Hong Kong and establishing ties with local political organizations (see ss. 5, 5A, 5D, 8; Consultation Document, p. 44).
b. What was proposed in 2003?
But, given the potential seriousness of national security risks, the Government felt it was necessary to have additional measures to deal with organizations that pose a risk to national security. It proposed a new executive proscription mechanism to blacklist certain local organizations (s. 8A).  There were to be basic procedural requirements for proscription (s. 8B) and a right of appeal to the Court of First Instance (s. 8D).  Originally, it was proposed that a local organization could be proscribed on three grounds: (1) it has an objective of engaging in treason, subversion, secession, sedition or spying; (2) it has committed or is attempting to commit treason, subversion, secession, sedition or spying; (3) it is subordinate to a mainland organization which has been prohibited on security grounds by the PRC.  As a late concession, the third ground for proscription was withdrawn.  What remained of the proposed proscription power is shown below:
There were to be new offences for participating in or aiding a proscribed organization (s. 8C) and existing offences relating to unlawful societies (ss. 21, 22, 23) were to be extended to proscribed organizations.  The defences seen in s. 8C(1A) were included as a late concession.
c. What did commentators think of the proposals?
The greatest concern was with the third ground for proscription as it was seen as a "connecting door" (p 309) allowing mainland authorities to silence undesirable groups and individuals in Hong Kong.  Even with the withdrawal of this controversial ground, there were still concerns with the potential criminal liability of persons involved or engaging with proscribed organisations.  The defences in s. 8C(2) & (3) reversed the burden of proof on the defendant and thus were constitutionally liable to be read down as evidential burdens.  They also required defendants to meet objective standards of ignorance and prevention.  There were also concerns with ensuring fairness in the proscription appeal mechanism.  References: Petersen, p. 26; Chen, pp. 111-115; Harris, Ma & Fung, pp. 305-330; Feng, pp. 331-61.
d. Where do we go from here?
With the withdrawal of the third ground for proscription, it must seriously be considered whether the proscription mechanism is still needed and should be proposed.  There are a number of reasons now for not adopting this controversial mechanism that impinges upon freedoms of association, expression and commerce.  First, it is not required for implementation of Article 23.  Second, the Macau National Security Law did not include it, which Godinho said was the "most positive aspect" of the Macau bill (p. 18).  Third, the idea only arose because it was used in anti-terrorism legislation which had been enacted in 2002 in response to UN Security Council requirements after 11 September 2001 (from work done by the same policy team). Experience has now shown that blacklisting terrorists and terrorist groups has many difficulties, e.g. problematic legal issues, interference with individual rights, and detrimental impact on peace-building (see 2015 report by the International State Crime Initiative, Queen Mary School of Law).  Fourth, the blacklisting mechanism available under the United Nations (Anti-Terrorism Measures) Ordinance (Cap. 525) will likely to be able to cover most if not all of the cases for which resort to the proposed proscription mechanism would be needed.  Fifth, no groups have appeared or formed that would lead the public to call for their proscription on national security grounds. 

In this review I assume that in any future Article 23 exercise the government would not seek to advance anything more controversial than their final set of proposals in 2003.  Looking only at the substance of those proposals, the disagreement was not great.  The proposals on treason and sedition were already near consensus.  They are the least controversial, and bearing in mind the existing laws that stand to be repealed, the proposals should generally be welcomed.  Dropping the seditious publication offence proposal (consistent with the Macau law) would surely leverage more support from the press and media community.  If Government can forgo the proscription mechanism, then this will settle (more or less) four of the seven Article 23 requirements.  It leaves subversion, secession and state secrets.  The difficulties here are more to do with legislative drafting than with differences in policy or principle.  Building on the work done so far, a working group of relevant legal and policy experts should be able to construct a set of carefully balanced proposals (informed by comparative law and international standards, such as the Johannesburg Principles) that are likely to be acceptable by all parties.  
     I draw the conclusion that a consensus on the details of implementing Article 23 is possible if the stakeholders are prepared to put politics aside.  Indeed reaching such a consensus would be a sign of a new plateau of trust from which further progress could be made, such as on matters of political reform. Rather than fearing and loathing the Article 23 issue, Hong Kong legislators should see it as an opportunity for rebuilding trust with the Hong Kong and mainland governments.   Written by Simon NM Young.

Further Reading
Buddle, Cliff, "Hong Kong's Article 23 obligations are already in our legal armoury", South China Morning Post, 29 January 2015.

Cheung, Alvin YH, A Spectre Resurfaces: Chinese National Security Legislation and Hong Kong, Int’l J. Const. L. Blog, 11 February 2015.

Chung, Francis HC, "Navigation between Autonomy and Authority: Some Suggestions on the Future Legislation under Article 23" (2013) 7 Hong Kong Journal of Legal Studies 1.

Fu Hualing, Carole J Petersen and Simon NM Young (eds), National Security and Fundamental Freedoms: Hong Kong's Article 23 Under Scrutiny (HKU Press 2005).

Fu Hualing & Richard Cullen, "National Security" in J Chan & CL Lim (eds), Law of the Hong Kong Constitution (Sweet & Maxwell 2011) ch 6.

Hu, Bob, "The Future of Article 23" (2011) 41 Hong Kong Law Journal 431.

Kellogg, Tom, "Legislating Rights: Basic Law Article 23, National Security, and Human Rights in Hong Kong" (2004) 17 Columbia Journal of Asian Law 307.

Lo, PY, The Hong Kong Basic Law (LexisNexis 2011) ch II.

Young, Simon NM, "Security Laws for Hong Kong" in VV Ramraj, M Hor, K Roach & G Williams (eds), Global Anti-Terrorism Law and Policy, 2nd ed (Cambridge University Press, 2012) ch 15.

Saturday, March 14, 2015

Michael Davis on the East China Sea Conflicts

Vol. 43, Winter 2015, p. 119-
Introduction: Former Chinese leader Deng Xiaoping once famously urged that resolution of disputes with China's neighbors over uninhabited islands be put off to a later generation, stating: "Our generation is not wise enough to find common language on this question. The next generation will certainly be wiser." 1 Such sage advice seemed practical at the time, freeing China and its neighbors to focus on more pressing trade and economic development efforts. The wisdom of continuing deferral of the disputes over uninhabited islands is now in doubt, at least when peaceful alternatives may be considered. Beyond the rapid economic development and the consequent explosion of resource demands that has occurred since Deng uttered these words, technological development has made these deep seabed resources more readily accessible. 2 Added to this has been China's rapid economic development and associated military rise, encouraging China's expanded attention to territorial sovereignty and resource claims in its periphery. 3 Increased military confrontations over disputed islands have added to the urgency of this matter, and an impasse has prevailed. 4 
     This article focuses on comparable disputes over two groups of uninhabited islands - the Dokdo (Takeshima in Japanese) Islands and the Diaoyu (Senkaku in Japanese) Islands - that may be pivotal to unraveling a series of volatile maritime disputes between Japan and South Korea, on the one hand, and Japan and China, on the other. The Dokdo/Takeshima and Senkaku/Diaoyu Islands are located respectively in the Sea of Japan (known as the East ...

Ji Lian Yap on Commercial and Company Law Reform

"Considering Commercial and Company Law Reform"
Ji Lian Yap
Statute Law Review
March 2015 (Advance Access)
Abstract: This article considers the factors that contribute to effective commercial and company law reform. First, the factors contributing to the success of the recent company law reforms in Hong Kong will be considered. Next, suggestions will be made as to how future law reform processes may be improved. These will be a focus on personal property security law, which involves aspects of both commercial and company law. Suggestions include the importance of considering insolvency implications, the formation of a Personal Property Security Law Working Group in Hong Kong, and the need to allow sufficient time for the law reform process.

Thursday, March 12, 2015

Hong Kong Court of Final Appeal's New Website

Congratulations to the Court of Final Appeal (CFA) and the Judiciary Administration on the launch of its new website yesterday. The CFA-related content on the Judiciary's main website remains for now, but probably only until that site is revamped.  There is a new CFA logo, which shows an attempt at branding. The new website is attractive and provides improved public access to a significant amount of information about the Court, its judges, its procedures, its operation and work.  While much of the information can already be found in the main website, there are a number of new features worth mentioning.  First the biggest improvement is in the information on forthcoming cases to be heard.  We are given the calendar until June 2015, so three months in advance, showing the basic details of the case including the panel of judges that will hear the appeal.  It would have been better if the website provided more details of the points to be argued such as the certified questions of law upon which leave was granted.  Hopefully someday there will be access to the submissions filed by the litigants (see update below).  Another improvement is the greater transparency given to Rule 7 cases which disposes of a large number of leave applications without a hearing.  The Who's Who section humanises the Court and provides useful information on present and past judges and registrars.  The section on judicial assistants is effective in serving to elevate the profile of these positions to continue to attract talented young lawyers.  Another useful section is the list of speeches and articles by the Chief Justice and other judges, both past and recent. Judgments were always readily available on the main website but now there is a link to the HKLII website, a project of HKU's Law & Technology Centre.  As with all new websites, the moment after it is launched, one is already thinking about the next version.  Increasingly final court websites around the world provide more video content (not to mention broadcasts of appeal hearings), they use social media to interact more with the public, and they allow users to sign up for alerts or RSS feeds to keep up with the latest decisions and news.  Hopefully these and other innovations will find a place in the current or future versions of the website. UPDATE: The Printed Cases of the parties have in fact been uploaded for all recent judgments in decided cases.  This is a valuable legal resource not previously available.  Written by Simon NM Young (co-editor of Hong Kong's Court of Final Appeal (Cambridge University Press 2014)).

Tuesday, March 10, 2015

New Writing from Bryane Michael (AIIFL Fellow)

Bryane Michael
South China Morning Post
10 March 2015
Should Hong Kong's law firms have the right to sell shares on the stock market? A debate is raging among scholars, lawmakers and lawyers themselves. Countries such as Australia have allowed a few law firms to list. Britain and the United States have debated for years ways of opening up their legal professions to competition and innovation. Why shouldn't retail investors have the right to share in lawyers' good fortune (and high fees)? In our recent paper in the Law Society journal, Hong Kong Lawyer, Ajay Shamdasani and I looked at the potential benefits of allowing law firms to list. We calculate that the top 25 firms in the city would have a combined market capitalisation of more than US$8 billion. Such a capitalisation would add depth to Hong Kong Exchanges and Clearing and encourage openness... Click here to read the full article.
Dr Bryane Michael is a Fellow of the Asian Institute of International Financial Law (AIIFL) and specialises in the use of economic analysis in legal drafting (Twitter: @BryaneBryane).  Some of his recent publications include the following:

"Making Hong Kong companies liable for foreign corruption"
Journal of Financial Crime
Vol. 22, Issue 1, pp 126-150
Abstract:  The purpose of this article is to assess the extent to which Hong Kong’s laws deter its companies from engaging in corruption and bribery abroad. A mix of economics, public administration, management and legal analysis was used to assess weaknesses in Hong Kong’s laws governing the prohibition of bribe payments abroad. Hong Kong does not explicitly criminalise corporate bribery abroad. Companies – as legal persons – can not be found guilty of corruption. It is argued that Hong Kong’s Legislative Council should amend various laws to modernise Hong Kong’s approach to tackling corruption committed by its companies abroad. The various approaches lawmakers can take towards assigning responsibility for corruption to companies are presented. The approaches that prosecutors at the Department of Justice can take to adopt prosecutorial methods like those used in other upper-income jurisdictions and the ways that Independent Commission Against Corruption (ICAC) can assist in this work are also described. This research has practical findings for Hong Kong’s policymakers, law firms and companies which operate in Hong Kong. For policymakers, we describe legal changes Hong Kong’s legislators will likely make in the years ahead and the preferred ways of engaging in such change. For law firms, we describe the legal changes coming to Hong Kong which legal advisors will need to advise their clients on. For companies, we describe changes that companies operating in Hong Kong will likely need to comply with in the future. This paper shows that when Hong Kong adopts best practice in the field of corporate criminalisation, Hong Kong’s role in “exporting” corruption will likely fall. This article describes a set of legal changes which will change the way Hong Kong treats corruption. The literature tends to glamorise Hong Kong’s anti-corruption work. It is shown that its law falls far behind other jurisdictions, as well as how “treating companies like people” in the case of Hong Kong will likely change the way Hong Kong’s prosecutors think about crime and criminal perpetrators.

"A Law and Economics Analysis of the Incentives Driving Malaysian Banks’ Compliance with the Malaysian Competition Act"
World Competition
Vol. 38 (2015), pp. 133-169
Abstract: Judging by only economic incentives, Malaysian financial institutions (particularly banks) should carefully consider the incentives driving the Competition Act. The data show that Malaysian banks remain vulnerable to incentives leading to anticompetitive behaviour. The Malaysian Competition Commission will likely lack the resources to investigate and sanction anticompetitive behaviour in Malaysia's banking industry. Maximum fines of MYR 10 million and revenue-tied penalties of only 10% of worldwide revenue mean that banks still have strong incentives to engage in anticompetitive behaviour and to pay any low fine that might be levied. By staying the course, Malaysian banks can continue to earn about MYR 15 billion (approximately USD 4.6 billion in anticompetitive rents).

North Carolina Journal of International Law & Commercial Regulation
Vol. 40, Issue 2, Winter 2015, pp. 355-441
Introduction: Business measures against corruption represent the bulwark against bribery and other corruption offences in most upper- income jurisdictions. Businesses take these measures in response to the incentives legislation, executive regulations, and other rulemaking provides to them. As early as 1980, scholars documented the effect that anti-corruption law—and specifically the Foreign Corrupt Practices Act—has had on encouraging businesses to adopt changes to their accounting and compliance programs. Anti-corruption laws have had an impact on the measures businesses take to prevent, detect, and curb corruption committed by their agents and partners. These measures—in turn—significantly affect the extent of corruption committed by companies’ principals, agents, and partners. Yet, Hong Kong companies do not implement many of the common measures used to prevent and/or detect. As shown in this paper, Hong Kong’s companies rank among the worst in terms of implementing anti- corruption measures. Most of the blame falls on Hong Kong’s legislative framework (and the lack of incentives this framework provides)...

Centre for Comparative and Public Law, Occasional Paper No. 27
December 2014
Abstract: The prosecution of high profile multi-national corporations (MNCs) over the past decade for bribery of public officials acting in their official capacity has raised the need for drafting ethics-related administrative law. So, how should countries draft ethics-related administrative law? Should such law be driven purely by normative ethics based on how one ought to act? Or, should we take into account empirical data in drafting ethics-related administrative law? A related question is who should oversee these ethics-related laws? This paper discusses the role of empirical data in deciding which provisions to include in ethics-related law and when deciding on the division of competencies between agency directors, ethics officers, human resource directors, internal auditors and others. We describe how to draft subsidiary legislation (mainly executive agency regulations) based on explicit or implied competencies given by national legislation. We then discuss how to conduct the organisational, legal, economic and audit analysis needed to allocate ethics related rights and obligations across-government and within the Agency. This paper serves as a lone counter-weight to the principles-based approaches flooding the literature. We illustrate our discussion largely using examples from Romania and Hungary.