National Crime Agency v Jiangbo Hao & Ors

A disclosure order under the Proceeds of Crime Act 2002 may be set aside only after the court has reviewed the statutory conditions afresh and exercised its own discretion. The reasonable-suspicion threshold is subjective and objective, but low. Information supplied by a foreign law-enforcement agency is not incapable of supporting reasonable suspicion merely because the agency’s state has a poor human-rights record; the evidence must be assessed for political motivation and reliability in the circumstances. Alleged non-disclosure justifies discharge only where it is sufficiently material and grave, viewed individually and cumulatively. The public interest in continuing an otherwise properly made order carries substantial weight. Applications may ordinarily be made without notice where advance notice risks frustrating the investigation.

The National Crime Agency obtained a disclosure order under section 357 of the Proceeds of Crime Act 2002 against Jiangbo Hao, Wenjun Tian and associated companies. The order was made without notice after Johnson J concluded that the statutory requirements were satisfied. Hao and Tian applied to set it aside, alleging insufficient grounds for suspicion, failures of full and frank disclosure, inadequate justification for a without-notice hearing, and that the court should exercise its discretion to discharge the order.

The application required a fresh review of the statutory conditions, including the reliability of information supplied by Chinese authorities, the alleged political context, the NCA’s presentation of the evidence, and the public interest in continuing the investigation.

1. Application dismissed. The disclosure order was continued.
2. The court was required to review the matter afresh under sections 357 and 358 of the Proceeds of Crime Act 2002 and to exercise its own discretion, while having regard to the reasons given by Johnson J and to the respondents’ Convention rights.
3. The test of reasonable grounds to suspect was both subjective and objective. The suspicion had to be based on what was actually in the relevant official’s mind and had to be objectively reasonable. The threshold was low and concerned the existence and reasonableness of grounds for believing that unlawful conduct had occurred.
4. The fact that the information originated from China did not prevent it from establishing reasonable suspicion. The court had to adopt a cautious approach and consider whether there was evidence of political motivation or another reason to doubt the information. There was no sufficient evidence that the allegations against the respondents were politically motivated. The prima facie evidence, its consistency with public material, the frozen-funds investigation and the absence of an apparent motive to provide false information were sufficient to meet the threshold.
5. There had been no material non-disclosure requiring discharge. Some matters could have been presented more fully, and one error concerning an SEC filing and one earlier inaccurate statement about an international letter of request were accepted. They were not material or sufficiently grave. The evidence concerning inconsistent explanations for funds, Dolfin, tax information and the alleged conflict arising from the Asset Recovery Incentivisation Scheme did not justify discharge. The same conclusion followed cumulatively.
6. Applications for disclosure orders may be made without notice where that is necessary to prevent the purpose of the application being frustrated, particularly by dissipation of assets. A later judge should give appropriate deference to the original evaluation and exercise caution when assessing it with hindsight. The private-hearing issue was not decisive.
7. The order remained proportionate and in the public interest. If the assets were proceeds of unlawful conduct, civil recovery would serve the public interest; if they were lawfully obtained, the investigation could establish that fact.

First-instance application to set aside a disclosure order made by Johnson J on 27 June 2023. The application was dismissed and the disclosure order continued.