Case Summary and Outcome

The Hong Kong Court of Final Appeal held that when prosecuting offenses under Schedule 5 Section 3(3)(b) of the Implementation Rules of the National Security Law, the prosecution must prove that the organization was actually a “foreign agent” as defined in law, not merely that the Commissioner of Police had reasonable grounds to believe so. The case involved three appellants – Tang Ngok Kwan, Tsui Hon Kwong, and Chow Hang Tung – who were committee members and vice-chairperson of the Hong Kong Alliance in Support of Patriotic Democratic Movements of China, who had refused to comply with police notices demanding extensive organizational information dating back to 1989. The Court determined that the appellants were entitled to challenge the validity of the notices as part of their criminal defense, rejecting lower courts’ view that such challenges could only be made through judicial review. While not decisive to the case’s outcome, the Court also found that notices could validly require production of information predating the National Security Law’s enactment, provided the Commissioner reasonably believed such information was necessary for national security purposes.

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Facts

The appellants, Tang Ngok Kwan, Tsui Hon Kwong, and Chow Hang Tung, were respectively committee members and the vice-chairperson of an organization called The Hong Kong Alliance in Support of Patriotic Democratic Movements of China (HKA), which was incorporated in Hong Kong in 1989. On August 25th, 2021, all three appellants received formal notices from the Commissioner of Police. The Commissioner served these notices under Section 3(1) of Schedule 5 of the Implementation Rules enacted pursuant to Article 43 of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (NSA). The notices stated that the Commissioner had ‘reasonable grounds to believe’ that HKA functioned as a ‘foreign agent’ and required the recipients to furnish extensive information within 14 days, including details about HKA’s membership, activities involving specific organizations and individuals, meeting minutes, financial records, assets, revenue sources, expenditures, and an explanation for a particular $3,000 payment received by Chow Hang Tung from the “Asia Democracy Network” earlier that year.

The three appellants declined to comply with the notice requirements and instead submitted an open letter to the Commissioner challenging the notices’ legality. In their letter, they explicitly denied being foreign agents of any organization, announced their intention to contest various aspects of the notices, and invoked their rights against self-incrimination and to a fair trial, freedom of association, and privacy protection. On September 8, 2021, authorities charged all three under Schedule 5 Section 3(3)(b) with failing to comply with the notices. The prosecution’s case rested on three assertions: that the Commissioner had reasonable grounds to believe HKA was a foreign agent; that the Commissioner reasonably believed the requested information was necessary for preventing and investigating national security offenses; and that the three individuals, as office-bearers or managers of HKA who had been served with the notices, failed to fulfill their legal obligations. The Principal Magistrate Peter Law convicted the appellants, and Justice Anna Lai subsequently dismissed their appeal.

The Appeal Committee granted leave to appeal before the Hong Kong Court of Final Appeal.

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Decision Overview

Chief Justice Cheung, Justice Ribeiro PJ, Justice Fok PJ, Justice Lam PJ, and Justice Chan NPJ of the Hong Kong Court of Final Appeal unanimously allowed the appeals and quashed the convictions and sentences. The primary issues before the Court was to determine whether the prosecution needed to prove that HKA was actually a “foreign agent” as defined by law (rather than merely proving the Commissioner’s reasonable belief); whether the appellants could challenge the validity of the notices as part of their defense; and whether the notices could legally demand information that came into existence before the promulgation of the National Security Law and its Implementation Rules.

On the element of the Offence, the Court noted that the prosecution must prove that the HKA was in fact a “foreign agent” as defined by Schedule 5 section 1, rather than merely showing that the Commissioner of Police had reasonable grounds to believe it was such. The Court carefully analyzed the text of the relevant provisions, noting that they consistently referred to the person or organization served as an actual “foreign agent” and not as someone reasonably believed to be one. The Court emphasized that although Schedule 5 section 3(1) mentioned the Commissioner of Police’s reasonable belief, this pertained only to the necessity of issuing the requirement for national security purposes, not to the target’s status as a foreign agent. The Court also noted that the deliberate adoption of ‘reasonable belief’ qualifications in Schedule 7 contrasted with their absence in Schedule 5, indicating intentional legislative differentiation. [paras. 19-21]

The Court supported its textual interpretation with a purposive analysis comparing Schedules 5 and 7. It explained that these schedules provided alternative routes for obtaining information: Schedule 5 applies when the CP can prove actual foreign agent status, allowing direct notice without judicial supervision, while Schedule 7 requires Court approval based on reasonable grounds when such status cannot be established. The Court determined that this difference in judicial oversight explained the higher threshold under Schedule 5, which required proof of actual foreign agent status rather than mere reasonable belief. The Court also highlighted that Schedule 7 contained additional safeguards absent from Schedule 5, including protections for legal professional privilege and restrictions on self-incrimination, further indicating the distinct purposes of the two schedules. [paras. 22-24]

The Court rejected the lower Courts’ decisions, finding that both the Magistrate and Justice Anna Lai had erred in their interpretations. The Court specifically criticized the Magistrate’s premise that Schedule 5 was ‘deliberately silent’ on criteria for identifying foreign agents, pointing out that Schedule 5 section 1 clearly defined “foreign agent” as a person who carries on activities in Hong Kong while being directed, supervised, controlled, employed, subsidized or funded by a foreign government or political organization, and who conducts activities for their benefit. The Court noted that Schedule 5 of Section 3 explicitly applied this definition to both individuals and organizations. Since the Commissioner chose to proceed under Schedule 5 rather than Schedule 7, he needed to prove HKA’s actual status as a foreign agent, which he failed to do. The Court concluded that on the true construction of the relevant Schedule 5 provisions, the actual status of the person or organization as a foreign agent within the meaning of Schedule 5 section 1 was a requirement for valid service and an element of the offense created by Schedule 5 section 3(3). [paras. 25-38]

On challenging the validity of the Notice, the Court held that the appellants were entitled to challenge the validity of the Notice as part of their defense in criminal proceedings. The Court rejected Anna Lai J’s judgment that the “same person” exception discussed in HKSAR v Chow Hang Tung No 1 precluded the appellants from challenging the Notice’s legality, which she had held could only be challenged through judicial review. The Court found her conclusion that “the legality of the Notices is not an element of the offence that is open to challenge by way of a defence” was incorrect. The Court strongly disagreed with this position, stating that it was “a very strong thing to deprive a defendant of the right to contend that such an essential element of the offence has not been established.” The Court emphasized that the right to be presumed innocent and to require the prosecution to prove all elements of an offense was fundamental, guaranteed by Article 87 of the Basic Law and recognized by Article 5 of the NSL. [paras. 39-47]

Drawing from Chow Hang Tung No 1, the Court reiterated that while collateral challenges to administrative acts might sometimes be excluded by statutory construction, there exists a strong presumption favoring such challenges when the validity constitutes an essential element of the offense. [paras. 47-48] The Court explained that Chow Hang Tung No 1 actually supported the appellants’ position rather than undermining it. In Chow Hang Tung No 1, the majority had held that a collateral challenge was permissible, with no discernible ground of statutory construction for holding otherwise. The Court clarified that while there was a “same person” exception to the general rule allowing collateral challenges, this exception only applied where it was “compellingly clear” that the legislative intention required departure from the strong presumption favoring such challenges. The Court identified certain circumstances where the exception might apply, such as cases where a statute provided a specialized mechanism for appeal or review that was ignored by the defendant, but emphasized that even claims about criminal courts being “unsuitable forums” for administrative challenges should be treated with “great circumspection.” [s. 48-55]

In the present case, the Court found no basis for displacing the strong presumption in favor of allowing the appellants to challenge the Notice’s validity. The Implementation Rules provided no independent procedure for challenging the Notice, merely stipulating that non-compliance would constitute an offense. The appellants had promptly denied the Notice’s validity in their open letter to the police, arguing that the Hong Kong Alliance was not a “foreign agent” and that proceeding on the basis of “reasonable grounds to believe” was legally incorrect. The Court held that this challenge did not raise any special difficulties that would prevent its adjudication by a criminal court. The Court noted that the appellants were “entitled to question the validity of the Notice which was an essential element of the offence” and that Justice Lai was “plainly wrong to shut them out from making that argument” by holding that it was sufficient for the Notice to appear valid on its face without being quashed by judicial review.  [paras. 56-61]

On the production of documents pre-existing to the NSL, the Court held that the issue of whether a Notice could validly require production of information which came into existence before the promulgation of the NSL or the making of Implementation Rules (IR) Schedule 5 did not substantively arise due to the invalidity of service in the present case, they nonetheless provided their analysis since the issue had been fully argued by the parties. The Court noted that the Notices in question required disclosure of information dating back as far as 1989 concerning Hong Kong Alliance’s directors, committee members, and full-time staff since its establishment, with other requested information dating back to 2014 including activities held in Hong Kong, meeting minutes, and details about assets, revenue, sources of revenue, and expenditure.

The appellants had contended that such demands were not legitimate and constituted a form of illicit retrospectivity. They contended they could not be convicted for failing to comply with Notices concerning information predating the NSL’s implementation on June 30, 2020. This argument formed the basis of their claim that such requests fell outside the scope of Schedule 5 section 3(3). The Court directly confronted this retrospectivity argument and found it unconvincing in the context of the relevant statutory provisions. The Court rejected the appellants’ argument by analyzing NSL Article 39, which provides: “This Law shall apply to acts committed after its entry into force for the purpose of conviction and imposition of punishment.” The Court determined that this prosecution would not violate that Article since the “act committed” to which the NSL applies was the act (or omission) of failing to comply with the Notices served on August 25, 2021, which occurred after the NSL’s promulgation. This distinction between the timing of the requested information and the timing of the actual offense was critical to the Court’s reasoning on this question.

The Court then examined Schedule 5 Section 3(1), noting that it specifies three broad categories of information that may be required if the Commissioner of Police “reasonably believes that it is necessary to issue the requirement for the prevention and investigation of an offence endangering national security.” The Court held that if this test is satisfied, there is no reason to restrict the information capable of being required to only the period after June 30, 2020. This interpretation effectively permitted notices to require production of pre-existing documents and information when the reasonable belief test was met. The Court characterized the appellants’ objections as essentially challenges to the relevance of the information sought, particularly questioning how information dating back to 2014 or even 1989 could be relevant to the legislative purposes of Schedule 5 and to their possible liability under Schedule 5 section 3(3). This reframing of the issue shifted the focus from questions of retrospectivity to questions of relevance and necessity in the context of national security investigations.

In the Court’s view, such questions of relevance should be addressed in the context of the “reasonable belief” test. If challenged, the Commissioner of Police would be expected to indicate why he reasonably believes the required disclosures are necessary for preventing and investigating an offence endangering national security. The Court concluded that if it is satisfied that the Commissioner has reasonable grounds for this belief, the information must be provided regardless of when it came into existence. This established a clear standard whereby historical information could be demanded through such notices, subject only to the requirement that the Commissioner reasonably believes it is necessary for national security purposes. [paras. 62-68, 102(d)]

On the non-disclosure of evidence under Public Interest Immunity and its impact on the right to a fair trial, the Court emphasized that when PII claims conflict with fair trial rights, the latter must prevail. As stated in HKSAR v Nayab Amin and endorsed by the Court: “The right to a fair trial, developed at common law and entrenched now as a constitutional right, can never be outweighed in importance by other considerations and cannot be sacrificed no matter how important the material is that is not being disclosed.”

The Court thus reaffirmed the primacy of fair trial rights, stressing that if upholding a PII claim would deny a defendant access to information that could prove innocence or raise reasonable doubt, such non-disclosure would amount to a denial of a fair trial. In such circumstances, the prosecution must either disclose the information or discontinue the proceedings. [para. 89]

In the present case, the Court noted that the only materials produced by the prosecution to support the charge were heavily redacted copies of an Investigation Report on the Hong Kong Alliance (HKA) and an Application to the Commissioner of Police (CP) to require Foreign/Taiwan Agents to provide information. These two exhibits included “pages often completely covered in black ink,” with “a very large part of each document… redacted.” The redactions concealed information critical to the core issues of the case—namely, the identities of the alleged foreign entities, the nature of their alleged interactions with HKA, the basis for classifying HKA as a “foreign agent,” and the grounds on which the appellants were deemed office-bearers or managers of such an agent. [paras. 94–97]

The Court held that these redactions effectively deprived the appellants of any meaningful understanding of the prosecution’s case regarding the “foreign agent” element of the offense, which was central to their defense. It therefore concluded that the extensive non-disclosure was self-defeating to the prosecution’s case and constituted a barrier to the appellants’ right to a fair trial, resulting in substantial and grave injustice. [paras. 98 and 102(e)].

In conclusion, the Court unanimously allowed the appeals and quashed the convictions, finding that the prosecution failed to prove HKA was a “foreign agent” as statutorily required, and that appellants were entitled to challenge the validity of the notices as part of their defense in criminal proceedings.

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