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Following is a question by the Hon Ip Kwok-him and a written reply by the Secretary for Home Affairs, Mr Lau Kong-wah, in the Legislative Council today (April 13):
Question:
It has been reported that the Hong Kong Indigenous has neither been registered nor exempted from registration under the Societies Ordinance (Cap 151). It has also not been registered as a body corporate under the Companies Ordinance (Cap 622). However, it has earlier raised more than $1 million through online open appeals for donations. In addition, the Scholarism announced last month that it would cease operation and would transfer some of the donations solicited from the public to a newly established organisation. Regarding issues relating to the regulation of activities for soliciting donations from the public and the use of such donations, will the Government inform this Council:
(1) of the existing legislation that regulates the activities for soliciting donations from the public held in public places or on the Internet or through other means by natural persons in their own names and by organisations which have not been registered pursuant to the legislation as a society or a body corporate in Hong Kong; according to the existing legislation, whether prior approvals from the Social Welfare Department (SWD) or other relevant government departments are required to be obtained for activities for soliciting donations from the public held in Hong Kong (including online activities for soliciting donations);
(2) regarding the donations solicited from the public by non-charitable bodies which have not been classified by the Inland Revenue Department as a charitable institution or trust that is exempt from tax under section 88 of the Inland Revenue Ordinance (Cap 112), whether any legislation is currently in place to regulate the uses and the movement of such donations; whether it has conducted any assessment to ascertain if the use of such donations for purposes other than the purpose originally intended or the transfer of such donations to another organisation by these bodies has contravened any existing legislation; if it has conducted such an assessment, of the outcome; the channels through which donors may monitor the ultimate uses and the movement of their donations;
(3) of the number of complaints received by SWD and other relevant government departments in the past three years about solicitation of donations from the public (including soliciting donations on the Internet) without approval; and among such complaints, the number of cases in respect of which legal or other follow-up actions have been taken by SWD and other relevant government departments; and
(4) as the Law Reform Commission proposed in its report entitled "Charities" published in 2013 that legislation should be enacted to subject all charitable organisations to the requirement of registration, and the list of registered charitable organisations should be available for public inspection, whether the Government will accept such proposals; if it will, of the work progress in implementing such proposals; if not, the reasons for that?
Reply:
President,
Upon consultation with relevant bureaux and departments, our consolidated reply to the questions is as follows:
(1) The Director of Social Welfare and the Secretary for Home Affairs may issue permits under Section 4(17) of the Summary Offences Ordinance (Cap 228) for collection of money or sale of badges, tokens or similar articles in public places for charitable and any other purposes respectively. Regarding charitable fund-raising activities, an applying organisation must possess a valid registration in the Hong Kong Special Administrative Region under the Companies Ordinance (Cap 622) or the Societies Ordinance (Cap 151), or is a charitable institution or trust of a public character exempt from tax under Section 88 of the Inland Revenue Ordinance (Cap 112) (referred to as a charitable institution or trust of a public character below). Any application made by an individual will not be considered. For fund-raising activities for other purposes, the applicant must be an organisation registered under the laws of Hong Kong, or an individual aged 21 or above and is either a permanent resident of Hong Kong or have been ordinarily resident in Hong Kong for a minimum of seven years.
If an organisation raises funds in public places through the sale of commodities, it must apply for a Temporary Hawker Licence from the Director of Food and Environmental Hygiene (DFEH) in accordance with the Public Health and Municipal Services Ordinance (Cap 132) and the Hawker Regulation (Cap 132AI). Also, the Office of the Licensing Authority (OLA) of the Home Affairs Department (HAD) may issue Lottery Licences under the Gambling Ordinance (Cap 148) to a club, association or body registered in Hong Kong for promotion and conduct of lottery.
Under the existing laws, activities for soliciting donations other than the fund-raising activities mentioned above are not subject to the regulatory regime.
(2) For fund-raising activities in public places as approved by the Home Affairs Bureau (HAB) for purposes other than charity, regardless of whether the organisation is a charitable institution or trust of a public character, the permittee must, within 90 days after the conclusion of the fund-raising activity, cause the money received from the public, less any reasonable expenses incurred, to be applied for the purpose for which the permission is given; and submit a copy of the audited accounts produced by a certified public accountant for the funds collected to HAB. The audited accounts will also be made available to members of the public for inspection upon demand.
Separately, for lottery events approved by OLA, the licensee shall, within 90 days from the date of draw of the lottery, submit to OLA a statement of income and expenditure for the event and a written report made by a certified public accountant. These two documents will be kept at OLA for a period of one year upon receipt from the organiser for public inspection. If the lottery event is to raise funds for a charitable institution or trust of a public character, the licensee must also submit copies of receipt of donations from the beneficiaries. Also, if proceeds of the lottery event is for meeting the operating expenses of the organiser, the licensee must submit a copy of the audited annual financial statement of the organisation to OLA to show that the net proceeds has been used in meeting the approved purpose(s) of the lottery event.
As regards Temporary Hawker Licences, organisations issued with more than 12 licences within 12 months shall, for each and every of the licences subsequently issued, prepare an income and expenditure account, including all the monies received from public subscription and a detailed breakdown of every disbursement item related to the fund-raising activities covered by the licence for audit by a certified public accountant or registered accounting firm or corporate practice; and forward the original auditor's report to DFEH within 90 days from the last day of the licence period. DFEH may publicise the auditor's report in any form or manner for public inspection.
(3) If the Social Welfare Department (SWD), HAD and HAB receives complaints on suspected unauthorised fund-raising activities held in public places or unauthorised lottery events, the cases will be referred to the Police for further investigation.
In the past three years, HAD and HAB received four complaints related to fund-raising activities and two were referred to the Police for follow up; OLA received one complaint on unauthorised lottery event and referred the case to the Police for follow up. Separately, the Police directly received five complaints against unauthorised fund-raising activities over the same period. FEHD does not keep record of complaints received on fund-raising through the sale of commodities.
Separately, the number of enquiries/complaints in respect of fund-raising activities received by SWD in the past three years and cases referred to the Police for follow-up actions are as follows ¡ª
Year
2013-14 2014-15 2015-16
------- ------- -------
Number of 228 172 148
enquiries/
complaints
received
Number of 5 2 2
cases referred
to the Police
(4) The Law Reform Commission of Hong Kong proposed a series of recommendations in its Report on Charities. The recommendations are relevant to the purview of various Government bureaux and departments. Given that the recommendations will have significant implications on the operation of the charities in Hong Kong, the Government needs to study in detail and carefully consider the recommendations. HAB is coordinating comments from relevant bureaux and departments for consideration of the way forward.
Ends/Wednesday, April 13, 2016
Issued at HKT 15:05
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