Introduction

Hong Kong implements a comprehensive and stringent control over the import and export of strategic commodities to prevent Hong Kong 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 which is essential for maintaining Hong Kong's status as a regional finance, banking, telecommunications and trade centre. The Customs and Excise Department is the sole enforcement agency for strategic trade controls which comprise also an import and export licensing system administered by the Trade and Industry Department.

Legal Framework

The legal basis for strategic trade controls in Hong Kong is the Import and Export Ordinance, Chapter 60, Laws of Hong Kong. The Ordinance lists strategic commodities as one of a few categories of goods the import or export of which is prohibited unless licensed by the Director-General of Trade and Industry. Re-export and transhipment of such commodities are treated as import and export and therefore are subject to the licensing requirement. Strategic commodities subject to licensing control are specified in the Schedules to the Import and Export (Strategic Commodities) Regulations, a subsidiary legislation made under the Import and Export Ordinance. 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 shipping in-transit through Hong Kong. Any person who imports or exports any article specified in the Schedules to the Import and Export (Strategic Commodities) Regulations not under and in accordance with an import or export licence issued by the Director-General of Trade and Industry 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 Actions and Results

In 2009, the Customs and Excise Department examined 118 598 packages of imported and exported cargo, checked 4 427 import and export licences and completed 233 investigation cases. Strategic commodities worth $14.7 million including integrated circuits, information security equipment and Tantalite were seized in the operations. In 41 cases, a total of 53 companies/persons were prosecuted resulting in total fine of $2.22 million. Strategic commodities involved in these cases included the following items:

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