Hong Kong Customs tackles case of suspected unfair trade practices under civil compliance-based mechanism

29 Mar 2017

The Customs and Excise Department (C&ED), after seeking a consent from the Secretary for Justice, has accepted a written undertaking made under the civil compliance-based mechanism of the Trade Descriptions Ordinance (TDO) by an online company suspected of failing to deliver goods at an agreed time after accepting payment from consumers.

A C&ED spokesman said today (March 29) that the C&ED received complaints in December 2015 against an online company suspected of failing to deliver electrical and sportswear products at an agreed time after accepting payment from consumers. The online company's operator was suspected of engaging in conduct that constituted wrongly accepting payment under Section 13I of the TDO.

The C&ED launched an investigation into the complaint. The operator was co-operative in the course of investigation and proposed to undertake in writing not to continue or repeat the conduct concerned. He also agreed to take remedial actions. After making a full assessment of the proposal, the C&ED accepted the undertakings for a period of two years under the TDO upon obtaining consent from the Secretary for Justice. The undertakings have been uploaded to Customs' homepage (www.customs.gov.hk/en/customs-announcement/undertaking/index.html).

The C&ED spokesman stressed that if the trader breaches any terms of the undertaking, the C&ED might withdraw the acceptance of the undertaking pursuant to the TDO, to be followed by investigation and legal proceedings.

Under Section 13I of the TDO, a trader who engages in relation to a consumer in a commercial practice that constitutes wrongly accepting payment for a product commits an offence. In this regard, a trader is prohibited from accepting payment, if at the time of accepting payment the trader intends not to supply the product or intends to supply a materially different product, or there are no reasonable grounds for believing that the trader would be able to supply the goods or services. The maximum penalty upon conviction is a fine of $500,000 and imprisonment for five years.

Under Section 30L of the TDO, a civil compliance-based mechanism has been put in place to encourage compliance by traders and to settle matters concerned expeditiously. Based on the consideration of the nature, actual circumstances and relevant factors, the C&ED may accept an undertaking from the traders involved after obtaining written consent from the Secretary for Justice.

Members of the public may report any suspected violations of the TDO to the Customs 24-hour hotline 2545 6182.

Ends/Wednesday, March 29, 2017

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