Customs Commissioner delivers opening address at IPR Conference (English Only)

22 Mar 2007

Following is the opening address (English only) delivered by Commissioner of Customs and Excise, Mr Timothy Tong, this morning (March 22) at the "Conference on Intellectual Property in Hong Kong and Mainland China, Best Practices and International Impact", which was co-hosted by the European Commission and Hong Kong Science and Technology Parks Corporation:

Distinguished Guests and Delegates, Ladies and Gentlemen,

I am thoroughly thankful to the joint organizers - to you, Thomas, and of course to the Hong Kong Science and Technology Parks Corporation - for inviting me to this Conference. I am honoured to be able to join so many learned delegates and guests.

I would recall that the WCO promotes a specific theme at the beginning of every year, and the theme they promote this year is simply "No to Piracy and Counterfeiting".

On the occasion of Hong Kong celebration of the theme last January, we invited, among others, a special guest - a Hong Kong movie director, actor, entertainer and humorist, Michael Hui. He quipped on IPR protection. Apparently, Michael Hui lives in a Spanish Villa not too far away from the Science Park. He has a next-door neighbour, an old lady keeping chickens in her backyard. Michael Hui was telling us that he would compare the great financial loss he sustained because of pirated copies made of his many movies to a simple act of theft - that somebody had stolen the egg-laying chickens that belonged to the old lady next door. The problem was - country folks around did not simply understand that Michael's loss was just as big - if not bigger - than that of the old lady's.

But an informed audience like you and I, of course, know that better. We know that certain intellectual property rights might be food for the mind; we know that chickens are eatable; and we know both ought to be equally protected by law. Here and now in Hong Kong the legislation on intellectual property rights is fully TRIPS-coherent, providing both civil and criminal remedies. Criminal sanctions are integral parts of our laws, and I would add something for your information - eight days from now, we will be hosting a seminar with our Mainland friends, including both the judiciary from Beijing and also legal administrators and academics. We will be comparing the Hong Kong laws in IPR protection with the Mainland provisions. We appeal to learning from each other. Greater understanding on the Mainland provisions would certainly help my colleagues to know better the legal provisions of neighboring jurisdictions. This will help us enforce our law better. We attach great importance to the seminar. We will be sending invitations to you. It would be useful if you could attend or send representatives.

On the enforcement side, Hong Kong Customs officers do possess and do exercise comprehensive powers to search individuals, premises, vehicles suspected of being associated with IP offences. We seize and forfeit pirated and counterfeit goods not only at the borders, but practically anywhere in the territory. Heavy penalties are given to offenders. Even for first-time wrongdoers, they might receive imprisonment term of up to 6 months and in fact, they do. Invocation of the Organized and Serious Crimes Ordinance (OSCO) would give our officers greater power to investigate and power to apply to the court to freeze and to forfeit criminal proceeds from crime. Until two to three years ago, there is a possibility; now, it is a reality and it is a high probability. Since 2004, we have invoked the OSCO on 6 occasions, freezing up to $97 million worth of assets suspected to be proceeds of crime. Currently we are working on the 7th case, and we continue.

Hong Kong Customs adopts a strong-arm strategy in combating retail blackspots. There was a rather imaginative colleague of ours who came up with the term "focused and repeated raids", by which he suggested that up to 3 or 4 raids in a single day, on a round-the-clock basis, should be conducted on the same outlet, time and again. He happened to have the rather robust leader as the leader of the Hong Kong Customs Task Force dedicated to fight IP offences. And the Task Force adopted that strategy. As they say, the rest is history. My colleague later on will tell you more of our enforcement results at the street level.

So long as the public mindset is not in unison against IP offences, there will still be demand, there will still be a market, and there will still be troubles.

It is therefore that Hong Kong Customs cooperate with our colleagues in the Hong Kong Government, and we do in collaboration with our stakeholders in the IP industry and the Intellectual Property Department, have been organizing various publicity campaigns targeting at the different sectors of the Community, including parent and student groups, tour operators, and more recently, we are targeting young people in Hong Kong.

Some of you might have heard of the programme we lately introduced - the "Youth Ambassador Against Internet Piracy Scheme". For those who have not heard of the Scheme, this is an arrangement whereby we have co-opted some 200,000 young people from 11 'uniformed youth groups' in Hong Kong, boy scouts and girl guides, etc. We brought them together and we impressed upon them the right message about IP protection and we do that while they are at a very very tender age. To those who have already heard of the Youth Ambassador Scheme, you may like to know that as of last week, we have already received 900 reports from Youth Ambassadors who have been tasked to watch out for us on the Internet for suspected infringing BT seeds. They have been effective and they have given us hundreds of reports. We have worked on them successfully, following up on 72 per cent of these reports, eliminating over 650 infringing seeds from the Internet.

We are pretty happy with the Youth Ambassador Scheme; and here and now, I wish to put to you a message - we will be pleased to share with you the experiences we gained from the operation of this scheme, and we would even recommend that your enforcement agencies responsible for IP protection may contemplate doing the same. If there is sufficient interest, we will be happy to organize a workshop exploring what has been done in Hong Kong, and most important, what more can be done.

In this connection, we will be launching a new IP device to help take the Ambassador Scheme a bit further, by this I mean, we'll be launching what we call the Lineament Scheme, an electronic device which will help us monitor on the infringing seeds on a 24-hour basis. We'll do that in about two weeks' time.

We cannot over-emphasize the importance of cross-boundary co-operation in ensuring effective IP protection. Tom, you have been very kind in acknowledging the effectiveness of the Hong Kong Customs in detecting cross-boundary cargo movements which involve IP infringing goods. Hong Kong is a logistics hub for cargo from all parts of the world. We handle about 280 million tonnes of goods in about 63 million consignments entering and leaving our territory each year. We process up to 23 million standard container boxes. Some of them do contain infringing items - pirated goods and counterfeit goods. In 2005 and 2006, we detected 223 and 185 cases of IPR-infringing goods respectively from cargoes routing through Hong Kong. We have been able to do that because of intelligence sharing.

In the last two years, we received reports from agencies from the other side of the boundary. We received reports from agencies overseas. I ought to say that some of the reports are flimsy in that they might indicate that certain suspicious items might be crossing your territory at a specific time from one destination to another destination. But rarely will they give you the specific container number. We have to apply a particular device, we call it the risk management device. We have to work to construct the pieces of information together in order to be able to target at the right box. Obviously, you cannot normally attempt to open each and every one of the containers which falls within that group. But I think we have been effective. And perhaps, Tom, that explains why Hong Kong does have seizure, and the three per cent you mentioned in terms of items actually seized, got something to do with effective detection. But we need more information, and we are working on it.

We promote intelligence exchange programmes. Shortly, within a month or so, we'll have a campaign with certain agencies close to us. We'll be doing two things. First, we'll be launching joint actions at the boundary, targeting transshipment cargoes, and we will look at how intelligence can be more effectively filtered, to identify the relevant from the general information that may lead to effective seizures.

Distinguished delegates, Hong Kong Customs is committed to serving the community whilst striving for excellence. A clearly stipulated mission of ours is the protection of intellectual property rights. English political philosopher John Locke observed 3 centuries ago: "The reason why men enter into society is the preservation of their property". Like the celebrated entertainer Michael Hui, Locke realized that "property" covers not just material goods, but also "a wide range of human interests and aspirations", and that ought to include intellectual property rights. It is incumbent upon the law enforcement agencies to ensure effective protection of private property, be it chickens, or be it intellectual property rights. Only that in the case of chickens, you ought to ring up the Hong Kong Police. When it comes to IPR, you know where we are. And as you have heard, we'll get the job done.

Ladies and Gentlemen, I wish you every success in your deliberations at this conference.

Thank you.

Ends/Thursday, March 22, 2007

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