The bank manager, an employee (agent) of the bank (the principal) and without the permission of the bank, accepted advantage from the client as a reward for helping the latter to perform suspicious transactions through the bank (an act in relation to bank’s business). The bank manager might contravene Section 9(1) of the Prevention of Bribery Ordinance (POBO) for accepting bribes, while the client might contravene Section 9(2) of the same Ordinance for offering bribes.

The bank manager might breach the Organized and Serious Crimes Ordinance or the Drug Trafficking (Recovery of Proceeds) Ordinance as well as the Anti-Money Laundering and Counter-Terrorist Financing Ordinance if he, knowing or having reasonable grounds to believe that any property which, in whole or in part, directly or indirectly represents any person’s proceeds of drug trafficking or indictable offence, deals with that property.

Money laundering is a serious crime.  Banks should make all staff members aware that the bank must comply with the laws and would constantly monitor fund transfers and audit the related control/processes, so as to provide a deterrent.

In this case study, the project manager, an employee (agent) of the bank (the principal), accepted an advantage from the Mainland contractor, as a reward for making a recommendation to the bank’s head office in Hong Kong to accept the contractor's substandard works and employ the same contractor to renovate other branches (an act in relation to the bank’s business and took place in Hong Kong), might contravene Section 9(1) of the Prevention of Bribery Ordinance (POBO). The Mainland contractor might also contravene Section 9(2) of the POBO for offering bribes. If any part of the act of bribery (including offering, soliciting or accepting a bribe) takes place in Hong Kong, it may still be pursued by the ICAC under the POBO.

Procurement of goods and services is one of the most corruption-prone business processes, in particular those involving high values or specialist knowledge and specialised products or services, e.g. renovation and maintenance works.

It is common for banks to send staff members to work in the Mainland office. The staff members are exposed to significant risk of temptation due to their perceived remoteness from the main office in Hong Kong and the absence of supervisory control measures. Relying on a single staff member, who is a specialist, without effective checks and balances and segregation of duties, also increases the corruption risk.

Banks should lay down guidelines for key procurement stages.  They should also assign supervisors to conduct site inspections to ensure compliance with the laid down guidelines and to detect malpractice, such as connivance of substandard performance of contractors. It is also important to circulate the staff code of conduct regularly to remind staff members to refrain from accepting frequent/lavish entertainment from contractors/suppliers which may otherwise affect one’s objective commercial judgment.  In addition, it is also advisable to communicate to suppliers/contractors, in particular non-local ones, on the bank’s policy regarding anti-bribery, acceptance of advantages/entertainment, zero tolerance to corruption and channel(s) for feedback/enquiry.

Jack was facing an ethical dilemma that might put his personal values such as honesty, responsibility and compassion to challenge. In handling situation like this, Jack should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

1. Any violation to his professional, industry specific, or company code of conduct?
2. Is it against the Law?
3. Does it correspond with his self-values such as responsibility, honesty, compassion, etc.?
4. Can he disclose his decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for him in solving his ethical dilemma.

Sam might breach his bank's internal policy on credit control by abusing his authority to make a favourable recommendation disregarding the real state of George's business. Sam should not allow his personal relationship with George to affect his professional judgement. Rather, he should declare their relationship to the senior management before making a recommendation. To safeguard his own interests, he should keep the management well informed of the matter and abide by their subsequent decisions.

Laura might violate the Code of Conduct[1] of the bank by taking up a directorship outside the bank without her employer's prior permission. On this issue, her directorship in Ricky's company gave rise to a conflict of interest with her official duties, so she might have breached the bank’s Code of Conduct for approving facilities to the company in which she is interested. Moreover, she might commit an offence of conspiracy to defraud if she was aware of the fraud committed by Ricky and assisted him in the approval process.

[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (AI) (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “no member of staff should take up any directorship, employment or part-time commercial duties, whether paid or unpaid, outside the AI except with prior written approval as required by the Code of Conduct.” The Code should also require that “no member of staff should grant credit to himself, his relatives or companies in which he or his relatives have a personal interest.”

Edwin might breach Section 9 of the Prevention of Bribery Ordinance (POBO) if he, as an employee of his bank, without the approval of his employer (i.e. the bank), accepted an advantage (i.e. special commission from the sales representative) for buying an obsolete printer model from the sales representative. The sales representative might also breach the same provision of the POBO for offering the bribe as an inducement to Edwin for abusing his authority at work. 

Edwin was facing an ethical dilemma that might put his personal values such as honesty and responsibility to challenge. In handling situation like this, Edwin should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

1. Any violation to his professional, industry specific, or company code of conduct?
2. Is it against the Law?
3. Does it correspond with his self-values such as loyalty, honesty and responsibility?
4. Can he disclose his decision to others openly and honestly without misgivings?

To uphold his professional ethics and avoid breaking the law, Edwin should say no to the sales representative’s offer and report the matter to the bank or the ICAC.  He could also refer to the ETHICS PLUS ethical decision making model for solving his ethical dilemma and choosing the best course of action.

Peter might breach the Organized and Serious Crimes Ordinance or the Drug Trafficking (Recovery of Proceeds) Ordinance as well as the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. 

Peter also commits a corruption offence under Section 9 of the Prevention of Bribery Ordinance (POBO) for soliciting from Joe an advantage as a reward for leaking confidential information from his bank. He may also violate the Code of Conduct^[1] of his bank as he fails to preserve the confidentiality of the bank's internal information.

^[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (AI) (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “no member of staff should, during or after termination of his employment with the AI, except in proper course of his duties or with the written consent of the AI, divulge or make use of any secrets or of any correspondence, accounts, connections or dealings of the AI or its customers or of any knowledge gained in relation thereto during his employment.”

Bank employees are required to treat their customers' banking affairs as private and confidential.Cindy might violate the Code of Conduct^[1] of her bank for releasing customers’ information of her bank to a third party without their consent. Such a disclosure is also strictly prohibited in accordance with the Personal Data (Privacy) Ordinance (PDPO).

Cindy breached Section 9 of the Prevention of Bribery Ordinance by accepting an advantage, i.e. $1,000 for each set of data released to Fred. Fred in turn committed an offence of offering a bribe.

^[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “no member of staff should release customer information to a third party without written consent from the relevant customer, unless the release complies with the PDPO or he is required or permitted to do so by law.”

Terry breached Section 9 of the Prevention of Bribery Ordinance (POBO) as he abused his official position as a bank manager by expeditiously approving an application of overdraft facilities and solicited and accepted an advantage in return without permission from his employer. Likewise, Mark breached the POBO by offering an unlawful advantage to Terry. In this case, Terry also violated Section 124 of the Banking Ordinance.

Although the "under-the-table" deal had not been completed, Terry and Mark still committed an offence. Under the POBO, a person will be found guilty even though the purpose of bribery has not been achieved. Terry might also violate the Code of Conduct^[1] of the bank by soliciting and accepting personal benefits from a customer.

^[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “no member of staff should solicit, accept and retain personal benefits from any customer of the authorized institute (bank) or any individual or organisation doing or seeking to do business with it.”

Nelson and Leo breached Section 9 of the Prevention of Bribery Ordinance (POBO) as Nelson accepted advantages from Leo in the form of commission and free travel for providing assistance in approving Leo's L/C applications without the permission of the bank. It is also a violation of Section 124 of the Banking Ordinance for Nelson to accept the advantages. Nelson commits a corruption offence despite that Leo deposited the commissions into the account of Nelson's wife. Under the POBO, a person is considered to have accepted an advantage, even though another person acting on his behalf receives the advantage.

Nelson also could not excuse himself by explaining that the acceptance of the Chinese New Year trip is a customary practice as custom is not a defence according to the POBO. Nelson might further contravene the Code of Conduct^[1] of his bank for accepting personal benefits from a customer doing business with the bank.

Nelson’s acceptance of entertainment and free accommodation without doing anything at the early stage might not contravene Section 9 of the POBO at the outset. Nevertheless, Nelson should avoid accepting excessive levels of entertainment or advantages as it might affect his objectivity in dealing with Leo.

^[1] According to HKMA’s Supervisory Policy Manual CG-3, each authorized institute (bank) should develop its own Code of Conduct containing certain minimum conduct requirements which include “no member of staff should solicit, accept and retain personal benefits from any customer of the authorized institute (bank) or any individual or organisation doing or seeking to do business with it.”