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The Hong Kong Special Administrative Region (HKSAR) implements a comprehensive and stringent control over the import and export of strategic commodities to prevent HKSAR from being used as a conduit for the proliferation of weapons of mass destruction, while at the same time to ensure the free flow of advanced technology for legitimate commercial, industrial and research use.
The Customs and Excise Department is the sole enforcement agency for strategic trade controls. It is mainly responsible for:
- physical examination of imported and exported cargoes;
- checking of import and export licences to verify the authenticity of information provided therein;
- collection and collation of information and intelligence; and
- investigation and prosecution of contravention of controls.
Types
Strategic commodities are specified in the Schedules 1, 2 and 3 to the Import and Export (Strategic Commodities) Regulations, Chapter 60G,Laws of Hong Kong.
Licensing Control
As stipulated in the Import and Export Ordinance, Chapter 60, Laws of Hong Kong, a licence issued by the Director-General of Trade and Industry is required for the import / export / re-export / transshipment of every shipment of strategic commodities.
Sensitive strategic commodities such as nuclear-related articles and munitions specified in Schedule 2 to the Import and Export (Strategic Commodities) Regulations are also subject to licensing control when transiting through HKSAR.
Penalty
As stipulated in the Import and Export Ordinance, Chapter 60, Laws of Hong Kong, any person who imports or exports any strategic commodities not under and in accordance with an import or export licence commits an offence and is liable:
- on summary conviction, to a fine of $500,000 and to imprisonment for 2 years;
- on conviction on indictment, to an unlimited fine and to imprisonment for 7 years; and
- to mandatory forfeiture of all offending strategic commodities seized.
Enforcement Results on Strategic Commodities
In 2011, the Department:
- examined 80,296 packages of imported / exported cargo;
- checked 6,554 import / export licences;
- completed 268 investigation cases; and
- prosecuted 38 persons / companies in 32 cases with a total fine of $1,100,000.
Major types of commodities involved in the prosecution cases:
| | Category * |
| Systems, Equipment and Components |
1A005 |
| Carbon Fiber |
1C010 |
| Test, Inspection and Production Equipment |
2B008 |
| Software for Electronic Devices |
2D002 |
| Integrated Circuit |
3A001 |
| Systems / Equipment / Integrated Circuits for Information Security |
5A002 |
* Under the Strategic Commodities Control List of HKSAR.
Recent Cases Highlight
- On 9 January 2012, a local company was fined HK$300,000 for importing from Malaysia 11,250 pieces of chipset [Cat. 5A002] and re-exporting the same to the Mainland China not under and in accordance with a licence.
- On 21 November 2011, two local companies were fined a total of HK$180,000 for importing from Singapore 46,300 pieces of field programmable logic devices [Cat. 3A001] and 1 piece of transceiver [Cat. 5A002] as well as exporting to Mainland China 51,400 pieces of field programmable logic devices [Cat. 3A001] and 1,000 pieces of transceiver [Cat. 5A002] not under and in accordance with a licence.
- On 18 July 2011, a local trader was fined HK$140,000 for exporting to Mainland China 34,944 pieces of Flash Memories [Cat 3A001] not under and in accordance with a licence.
- On 16 March 2011, a local exporter was fined HK$20,000 for attempting to export 14,000 pieces of integrated circuits [Cat. 5A002] to Taiwan not under and in accordance with a licence. The goods were forfeited to the HKSAR Government.
- On 9 February 2011, a local trader was fined HK$300,000 for importing from Mainland China 286 pieces of communication servers [Cat. 5A002] and re-exporting the same to the United Kingdom not under and in accordance with a licence.
- On 24 November 2010, four local companies were fined a total of HK$121,000 for importing from Japan 16,070 pieces of field programmable logic devices [Cat. 3A001] and re-exporting the same to the Mainland China not under and in accordance with a licence.
- On 18 November 2010, a local company was fined HK$15,000 for importing from Taiwan 1,000 pieces of WiFi Modules [Cat. 5A002] and re-exporting the same to South Korea not under and in accordance with a licence.
- On 24 September 2010, a local company was fined HK$150,000 for exporting to Mainland China 79,290 pieces of complex programmable logic devices [ Cat. 3A001] not under and in accordance with a licence.
- On 5 August 2010, two local traders were fined a total of HK$130,000 for exporting 4,080 kg. of Fluorinert Electronic Liquid [1C006] to Mainland China not under and in accordance with a licence.
- On 29 April 2010, a local company was fined HK$150,000 for exporting to Mainland China 9,254 pieces of field programmable logic devices [Cat. 3A001] not under and in accordance with a licence.
- On 21 April 2010, a local trader was fined HK$128,000 for exporting to Mainland China 5,500 pieces of integrated circuits for information security [Cat. 5A002] not under and in accordance with a licence.
- On 10 March 2010, a local trader was fined a total of HK$367,000 for importing from Malaysia 3,240 pieces of field programmable logic devices [Cat. 3A001] and exporting 9,180 pieces of field programmable logic devices [Cat.3A001] to Mainland China not under and in accordance with a licence.
Controls on Strategic Commodities
