HONG KONG Law and Practice Contributed by: Gareth Hughes, Emily Lam, Philip Rohlik and Tiffany Wu, Debevoise & Plimpton LLP
uncommon for regulators such as the HKMA and the SFC to require regulated entities to appoint an external advisor to assess and enhance the effectiveness of its internal control system as part of the remedial actions imposed in discipli - nary proceedings.
• for the chief executive to solicit or accept any advantage without the general or special permission of a statutory independent com - mittee; and • for any person to offer any advantage to the chief executive, without lawful authority or reasonable excuse, where the person has any dealings with the government. 9.2 Likely Changes to the Applicable Legislation of the Enforcement Body Following the IRC’s submission of its report in May 2012, efforts made to implement the sug - gested changes have failed to gain traction. Although the government confirmed in 2019 that “[it] [had] been actively following up on the IRC’s recommendations, with a view to enhancing the robustness of the system concerned to effec - tively prevent and properly deal with potential conflicts of interests involving public officials”, the comment made in 2020 by Mrs Carrie, Lam, then chief executive of Hong Kong, that imple - menting the suggested changes might violate the constitutional position of the chief execu - tive has cast doubt over the prospect of such changes being made. In 2021, Mrs Carrie, Lam commented that she would not seek to extend the application of Sections 3 and 8 of POBO as soon as possible to cover the chief execu - tive because it would hamper her ability to be accountable to the PRC government, and it would be against the constitutional position to subject the chief executive to POBO, which is supposed to be applied to other public offic - ers. Since that time, no further update has been provided by the Hong Kong government on the proposed extension of the application of sec - tions 3 and 8 of POBO.
9. Assessment 9.1 Assessment of the Applicable Enforced Legislation
In February 2012, the Independent Review Committee for the Prevention and Handling of Potential Conflicts of Interests (IRC) was set up to conduct a review of the regulatory framework for the prevention and handling of potential con - flicts of interests concerning the chief executive of Hong Kong, members of the executive council and politically appointed officials, and to make recommendations including appropriate chang - es to the regulatory regime. In its report submitted to the Hong Kong gov - ernment in May 2012, the IRC identified a major loophole in POBO in that the chief executive of Hong Kong was not subject to Section 3 (which criminalises the solicitation and acceptance of advantages by “prescribed officers” with the chief executive’s permission) and Section 8 (which criminalises the offering of advantages to public servants while having dealings with the government department or the public body in which the public servant is employed) of POBO. The IRC, therefore, recommended that legisla - tion be enacted to render it a criminal offence:
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