On February 27, 2003, the UK Government published its 12th 6-monthly report on Hong Kong, which focuses on many issues relating to human rights and civil liberties, particularly the vehemently opposed Article 23 legislation. Referring to the Hong Kong government's widely doubted statement to uphold basic rights and freedoms in enacting the law, the UK Foreign Secretary Jack Straw stated, "It is vital for the future prosperity of Hong Kong that its people and the international community perceive this to be the case."

The report states, "Many commentators were particularly troubled by the proposal to ban organizations affiliated with Mainland organizations which had been proscribed on the Mainland on national security grounds. Many were concerned that this would allow direct mainland interference in the Hong Kong judicial system. The Bar Association, for example, described the proposal as 'a very dangerous hole drilled in the wall that separates the two systems'."

The report concludes, "The reaction to the SAR government's proposals for Article 23 legislation shows that the people of Hong Kong and international opinion have strong concerns about matters which might impact upon this system. We will continue to follow developments concerning Article 23 closely: this issue will have a major influence on how people perceive "One Country, Two Systems" to be working."

Concerning the widely criticized prosecution of 16 Falun Gong practitioners for peacefully appealing in front of the Chinese Liaison Office in Hong Kong, the UK Government's report states that "it is crucial that the SAR Government continues to uphold Hong Kong's longstanding adherence to the rule of law, and maintains its respect for the freedoms of assembly and speech if Hong Kong is to retain its image as a free and open society. Equality before the law is an essential tenet of the rule of law."

The Report also records that "In August the Leisure and Cultural Services Department banned a catalogue featuring the work of Zhang Cuiying, a Falun Gong artist, who was staging an exhibition at the City Hall, which contained information about her experiences as a Falun Gong member. When questioned about this matter in LegCo in October 2002, Secretary for Home Affairs Patrick Ho said that the artwork had deviated from the theme of the exhibition. Zhang was also refused entry to Hong Kong to take part in the exhibition."

Commenting on the incident, the UK Government states, "Hong Kong's international status and economic strength are intrinsically linked with the SAR Government's commitment to free flow of information and free movement of people. It is vitally important that these principles are not undermined if Hong Kong is to continue to enjoy success."