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Meeting with French Customs in Paris, France

12 July 2000


Ladies and Gentlemen,


It is always a delight for me to be in Paris. My only regret is that I do not have more time on this occasion to soak up the sights and sounds of your beautiful city. I will have to make another trip soon without any official obligation.

The Hong Kong Customs and the French Customs have a long history of cooperation culminating in the signing of a cooperative arrangement in July 1996. The cooperative arrangement aims at improving enforcement capability through the exchange of information for the prevention, detection, investigation and repression of Customs offences. As a result of cooperation, notable achievements were made in the seizure of fake French brand named goods and counterfeit cigarettes. We aim to build on our successes so far and take full advantage of our detente.

Today I would like to share with you some of the recent developments in Hong Kong. In particular, I think you would be interested to hear about the state of our economy, how we are doing in protecting intellectual property rights, especially your prestigious brands, as well as what we have done to clamp down on the smuggling of illegal immigrants.

The Economy

First, the economy. I am pleased to inform you that, after a difficult period of economic adjustment, the recovery in Asia is gradually gathering momentum. Hong Kong will be amongst the first batch to benefit from the rebound, and the stage has been set for stunning economic gains in the year 2000. In the first quarter, Hong Kong registered a spectacular GDP growth of 14.3% and an overall growth rate of 6% is projected for the full year. As a result of this economic optimism, bilateral trade between France and Hong Kong in the first quarter of 2000 also saw a rise of 7.5 % over the same period last year. This has reversed the trend which marked a decrease in trade at an annual average rate of 5% between 1995 and 1999.


The quick recovery of Hong Kong has much to do with the solid fundamentals of our economy. We have totally free trade in a textbook market setting, level playing field for all, a low and simple tax regime, and unfettered flow of information. We also have an accountable, clean and business-friendly civil service, buttressed by the rule of law and an independent judiciary.

The pains of the economic malady are now history. The Hong Kong business sector is now busily diversifying into the new economy as demonstrated by the massive rush recently of dot coms setting up in Hong Kong. One of the most significant developments in reshaping our economy in the new century would be the power of innovation and technology, and high profile projects, such as the Cyberport, will certainly add fuel to our future economic growth.

We are also expecting a boom of business opportunities with China's imminent accession to the World Trade Organization. The likely expansion of China's trade links and investment relations with the rest of the world would no doubt bring substantial economic gains to Hong Kong. All these recent developments suggest clearly that our economy is getting ready to take the next quantum jump.

Intellectual Property Rights Protection

Moving onto the next subject, intellectual property infringement has once attracted considerable international attention, and this is perceived to be an important domestic issue and a constant irritant with our major trading partners. As the leading law enforcement agency in Hong Kong in intellectual property rights protection, we have since dedicated a large amount of resources to the fight against counterfeiting.

With the help of the trademark industry, we have been successful in our fight against counterfeiters. In the first half of this year, we have seized over 350,000 pieces of counterfeit items worth tens of millions of dollars, and we have arrested over 200 persons. Of these cases, we have seized a total of 25,000 pieces of counterfeits of popular French brand named products worth over millions of dollars.


For the protection of trademark, our law provides for criminal sanctions against counterfeiting activities. Possession of counterfeiting products for business purpose incurs a maximum penalty of a fine of HK$500,000 and imprisonment for five years.

You will be pleased to learn that the Court of Appeal in Hong Kong has recently handed down an immediate custodial sentence of six months for a merchant of counterfeit goods, replacing the original punishment of a suspended sentence. This is the first time the Court of Appeal has imposed such a heavy jail sentence on a counterfeiting offence. Customs is encouraged by the Court's decision, and hopes that this case will set a strong precedent and powerful deterrence against prospective offenders. We welcome penalties which are relevant to and in line with the damages done to the trademark industry, as well as the reputation of Hong Kong.

We are very serious about our obligation, and our success against copyright piracy in the past year speaks clearly of our whole-hearted commitment. A year ago, there were over 1,000 retail outlets of pirated compact discs (CDs), each carrying an average of 5,000 CDs and operating over 12 hours a day. This translates into a market circulation of some five million CDs at the retail level at any one time. With our vigorous enforcement, the retail piracy market is now reduced to fewer than 100 shop outlets, each carrying fewer than 1,000 CDs and operating fewer than three hours each day. The total market circulation has reduced drastically to some 100,000 pirated CDs. The reduction rate is a stunning 98%. The extent of piracy in Hong Kong is now well under control, and our effort has been recognized by prominent intellectual property related trade associations, such as the MPA, the IFPI and the BSA.

Smuggling of Illegal Immigrants

As we enter into the new millennium, we face also a new problem of smuggling of illegal immigrants, a problem which has featured in bold headlines in the past month. This is a large international issue, and for our part, we have always taken vigorous actions to prevent Hong Kong from being used by human smugglers as a staging point for transit to other countries.


Given the geographic location and heavy marine traffic in the Hong Kong waters, vigilant enforcement action to combat the smuggling of illegal immigrants has always been a priority for us. We have adopted an inter-departmental approach to deal with the problem.

The Hong Kong Customs exercises a sound mechanism in checking cargoes to prevent smuggling. We use a risk assessment approach in selecting cargoes for examination, and the system has proved to be effective. Together with the Marine Police, we patrol the Hong Kong waters to intercept vessels suspected to be involved in smuggling operations. The Hong Kong Police Force also has a special team under the Organized Crime and Triad Bureau to collect intelligence and investigate suspect organizers of human smuggling. In addition, our Immigration Department maintains a Ship Search Unit to conduct searches on ships inside the Hong Kong harbour.

Apart from these enforcement actions, the Hong Kong law enforcement departments enjoy excellent cooperation with our overseas counterparts. We regularly exchange intelligence on these activities through designated local liaison officers and established channels. In fact, the detection of the illegal immigrants in Seattle and Vancouver in early January this year was the result of tip-offs from the Hong Kong Customs.

In response to recent discovery early this year of illegal immigrants travelling by containers and to curb the smugglers from using Hong Kong as a transit base for their human cargoes, we sought enhanced cooperation from our trade, including major shipping companies and agents, container terminal operators and the major trade associations.

The trade recognized immediately the gravity of the issue, and we were able to reach very quickly with them a consensus to adopt a battery of measures, including shipping companies to report to Customs prior to export intended shipments of soft-top and refrigerated containers; shipping companies and container terminal operators to strengthen their security measures and to explore the employment of modern technology to detect illegal immigrants hiding in their containers; shipping companies and container terminal operators to report to Customs through a special hotline any suspicious outbound shipments; shipping companies to check new clients' business particulars before accepting business; and more.

On our part, we have enhanced our examination of outgoing soft-top and refrigerated containers, and we are using carbon dioxide detectors to assist in our container examination. So far, the results are encouraging. We have not received any further report of human smuggling on vessels departing from Hong Kong. In the first five months of this year, we have arrested 106 would-be-illegal immigrants in our routine searches and foiled possibly many more in our enhanced enforcement. We will keep up our efforts by maintaining close cooperation with relevant local and overseas law enforcement authorities as well as the trade to ensure that Hong Kong will not be used as a transit base for human smuggling. Hopefully, our contribution will help to eradicate this obnoxious and immoral business worldwide.

Conclusion

Ladies and Gentlemen, I hope I have given you an informative snap shot of some of the relevant issues that we are facing. I hope you will agree that Hong Kong is a vibrant modern city that is on the leading edge of business, that is confronting difficult problems heads on and that is building a platform of innovation to launch into the new millennium. And I hope you will come join us on this platform of opportunity in scaling new economic heights in Hong Kong.

Thank you.

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