How HK can help trace corrupt Chinese money stashed overseas

Across the mainland, corrupt party officials being convicted and put behind bars have become the norm.
The latest “victim” of President Xi Jinping's anti-graft campaign was Dai Haibo, former deputy secretary general of the Shanghai municipal government, who was convicted of corruption.
However, unlike other corrupt officials who had been caught, Dai was convicted of a rare charge: failure to declare his offshore bank deposit, stock trading accounts and fund accounts.
Dai's conviction should sound the alarm for tens of thousands of other mainland officials who or whose families have undeclared offshore bank assets.
A law requiring officials to declare any offshore bank account of 300,000 yuan (US$44,140) or more has been in force since 1997 but only a few who have failed to comply have been convicted so far, not least because of the difficulty in collecting evidence overseas.
In Shanghai, it has been almost 10 years since an official was convicted of the same offense.
In 2007, Zhang Weimin, a district official, was found guilty of failing to declare a HK$3.44 million (US$443,510) bank account in Hong Kong.
The criminal investigation into Zhang and his eventual conviction would not have been possible without the help of law enforcement agencies in Hong Kong.
Offshore accounts owned by corrupt mainland officials in Hong Kong are relatively traceable since we are part of China and authorities in Hong Kong are always cooperative when it comes to turning over evidence to their mainland counterparts.
However, as more and more corrupt mainland officials have moved their money to “safer” places such as the US, Canada, Australia or even safe havens like Panama, it has become increasingly difficult for mainland authorities to trace the money.
The problem is compounded by the fact that China often does not have any extradition agreement with these countries.
According to the Panama Papers that was leaked in April, family members of at least eight former or incumbent members of the Politburo standing committee are hiding money in offshore accounts.
To nail corrupt officials who have moved their money offshore, Chinese authorities have recently employed a new tactic -- incentives for foreign governments to cooperate and share information about these accounts by agreeing to split the money with them once it is confiscated.
Perhaps the Chinese authorities should also consider including Hong Kong in the "profit sharing" scheme.
This article appeared in the Hong Kong Economic Journal on Nov. 4
Translation by Alan Lee
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