The Commissioner of Customs and Excise, Ms Louise Ho, chaired the 2022 year-end press conference held at the Customs Headquarters Building today (March 1) to give a review of the department's law enforcement results and sustainability in the provision of trade facilitation during the year. She also outlined the department's determination to strengthen Hong Kong as a connecting platform between the Mainland and the world in order to capitalise on Hong Kong's unique advantages of enjoying strong support of the motherland and being closely connected to the world, to proactively integrate into the overall development of the country, and to join hands in building a safe and efficient economic and trade environment.
Overall enforcement situation
In 2022, a total of 7 148 cases were detected, 8 per cent fewer than in 2021. About 48 per cent of the cases are related to illicit cigarettes, followed by cases related to dangerous drugs and intellectual property rights infringement.
In 2022, 931 drug cases were detected, which was a 3 per cent increase from the 2021 figure. A total seizure of about 6.9 tonnes of drugs was made, representing a surge of 70 per cent from 2021.
Major seizures in quantity order were methamphetamine ("Ice") (3 127.2 kilograms, a 1.5-fold increase), cocaine (1 016.3kg, an increase of 17 per cent), cannabis (807.8kg, an increase of 4 per cent), ketamine (638.5kg, an increase of 6 per cent) and ecstasy (367 966 tablets, an increase of 48 per cent), while the total heroin seizure fell 49 per cent to 91.6kg compared to 2021's figure.
The pandemic has changed the trend and mode of drug trafficking. As transnational drug cartels are highly organised and collude among themselves, drug trafficking activities have become more internationalised and cartelised. As a result, there is a significant increase in the number of major cases by sea or by air detected in recent years, with "Ice" and cocaine being the dominant ones. Hong Kong is not alone in this regard as the entire Asia-Pacific region is facing the same challenge. Regional law enforcement co-operation is particularly important to effectively combat drug trafficking activities.
A total of 226 smuggling cases were detected last year, representing a decrease of 3 per cent from 2021. The total seizure value dropped 44 per cent to $1.319 billion.
Mainland-Hong Kong cases accounted for around 86 per cent of the total number, a drop of 11 per cent from 2021. The total value of the goods seized also dropped 52 per cent from 2.234 billion in 2021 to $1.064 billion in 2022. Among the items smuggled from Hong Kong to the Mainland, electrical and electronic products (including mobile phones, computers and accessories) were the most popular seizure, followed by food and then meat.
The trend of smuggling between the Mainland and Hong Kong continued to change during the epidemic, from the use of high-powered speedboats for smuggling in 2020 to fishing boats and barges in 2021. Under the stringent enforcement actions by law enforcement agencies, smuggling syndicates switched to use river trade vessels in 2022. After Customs has consecutively detected river trade vessel smuggling cases, the smuggling syndicates changed the smuggling route again and smuggled goods to Macao and then to the Mainland by parallel traders. At the end of last year, Customs found that the smuggling syndicates used ocean-going vessels at a higher cost to smuggle goods to more distant Mainland ports such as Shanghai and Tianjin, and then transhipped the goods to Guangdong. Guangdong, Hong Kong and Macao Customs have been adopting a real-time notification mechanism to strengthen communication and share case information, thereby enabling customs officers of the three places to keep abreast of the ever-changing smuggling trends and then adjust their combat strategies more effectively.
On the anti-illicit cigarette operation front, the number of detected cases in 2022 dropped 14 per cent to 3 436 cases from 2021, with 732 million cigarettes seized, representing a 71 per cent significant surge as compared to 2021's figure. The amount of seizure in 2022 has reached a record high of the annual seizure amounts.
Due to the epidemic, the tightened global supply chain has led to delays in transportation and increases in costs. Therefore, illicit cigarette syndicates tended to smuggle a large number of illicit cigarettes into Hong Kong by sea each time and increase the stock of illicit cigarettes to stabilise the supply. Customs' law enforcement strategy of strengthening intelligence analysis and tackling at source has proved to be effective. Customs has repeatedly intercepted smuggling syndicates when they replenished their supply, resulting in a record high in the number of illicit cigarettes seized last year. Twenty-eight in-bound mega cases (those involving 500 000 cigarettes or above) were detected last year, which was an increase by 1.3 times compared to 2021, resulting in the seizure of about 585 million cigarettes.
Intellectual property rights
Customs detected 523 intellectual property rights infringement cases last year, representing annual decreases of 27 per cent. The number of infringing items seized increased by 9 per cent to 640 000 while the seizure value was around $180 million as compared to 2021's figure.
As for Internet infringement, 80 cases were detected (constituting 15 per cent of the total infringing cases), representing a decrease of 26 per cent from 2021. The seizure value of the infringing items dropped by 22 per cent to about $5.08 million (9 060 items). The cases mainly involved sale of counterfeit goods via online community marketplace (74 per cent) or social media platforms (20 per cent).
Customs last year received 6 075 complaints regarding suspected cases of violating the Trade Descriptions Ordinance (TDO), representing a decrease of 13 per cent from 2021. Among them, 5 547 complaints were handled:
(i) With regard to 2 298 complaints, a total of 107 investigation cases were made after consolidation, mainly involving allegations of false trade description, wrongly accepting payment and misleading omission;
(ii) The remaining 3 249 complaints have been closed since they were not in contravention of the TDO, or have been referred to other relevant law enforcement agencies (such as the Police) or agencies for follow-up actions.
In the past, Customs received many complaints about prepaid consumption in fitness centres and beauty parlours, especially those involving aggressive commercial practices. As Customs continues to strengthen law enforcement and the courts impose corresponding penalties on serious cases, the number of complaints received by Customs last year involving aggressive commercial practices in fitness and beauty services has dropped significantly, from 140 complaints in 2021 to 82 complaints last year, resulting in a drop of about 41 per cent.
As for tourism industry, with the relaxation of the inbound and outbound epidemic prevention control measures in Hong Kong and overseas in the second half of 2022, outbound travel activities by the public have increased. The number of reports received by Customs last year on travel services also increased from 173 in 2021 to 232 last year, representing an increase of about 34 per cent. The reports mainly involved travel agency services such as travel club membership and hotel and air ticket reservations. As the tourism industry gradually returns to normal, Customs will closely monitor complaints about travel services, review the trend of unfair trade practices and formulate appropriate measures to protect the rights of consumers.
Apart from taking necessary and timely enforcement actions, Customs is also committed to driving publicity to enhance consumer awareness of the TDO. In addition, Customs took precautions by taking the initiative to carry out publicity in newly completed public housing estates by distributing leaflets to remind members of the public to pay attention to the common unfair trade practices in the renovation industry as well as traders to comply with the requirements of the TDO.
Smart Customs achieved good progress last year. Customs has introduced more advanced equipment with auto-detection function to improve the efficiency and accuracy of detection of contraband on one hand, and to speed up customs clearance of passengers and goods at boundary control points on the other hand. Customs also developed an interactive Q&As system last year, including the provision of virtual Customs Service Ambassadors at various control points, and the introduction of an online chatbot to the Customs website, so as to provide instant, accurate and consistent answers to public enquiries. Customs has also completed the study on the Smart Evidence Management System to further streamline the control and security of seized items during deposit, storage and retrieval.
The National 14th Five-Year Plan clearly supports Hong Kong to enhance its role as an international maritime centre and international aviation hub. The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) also clearly states Hong Kong's key role in the GBA logistics chain.
(1) Hong Kong Customs actively co-operates with the Government to develop intermodal operation. Regarding the setting up of the Hong Kong International Airport Logistics Park by the Airport Authority Hong Kong in Dongguan, export cargo from the Mainland can go through procedures, including customs clearance, security screening, palletisation and cargo acceptance, in advance in the logistics park, and then be transported by sea to the cargo pier on the airside of Hong Kong International Airport for direct transhipment to overseas destinations. Hong Kong Customs has been providing facilitation measures for customs clearance and a set of tailor-made new customs clearance procedures for relevant plans, which allow reduced inspection under an effective risk control, so as to save cost and promote logistics collaboration between Hong Kong and the Mainland;
(2) The Hong Kong Authorized Economic Operator (AEO) Programme launched by Hong Kong Customs, which was aimed to enhance cargo security and provide clearance facilitation to the accredited operators, has also made good progress in the past year.
A memorandum of understanding between Hong Kong Customs and the Mainland Customs was signed last year to enhance AEO co-operation in the GBA and optimise the recommendation and processing of AEO applications, publicity and personnel training by Hong Kong and the Mainland Customs. Also, Hong Kong and Indonesia Customs signed an AEO Mutual Recognition Arrangement (MRA) last year, bringing the total number of MRA signed between Hong Kong and other Customs administrations to 13, further expanding the coverage of the Hong Kong MRA network. It helps to support the Government's efforts to encourage enterprises to seize new opportunities brought about by the Belt and Road Initiative and the GBA development.
(3) The Trade Single Window allows traders involved in cross-border trade and logistics to submit documents to the Government through a single entrance, improving the efficiency of customs clearance of goods. Phase 1 is now fully operational and well received by the industry. Phase 2 will cover some 28 additional types of trade documents. It is planned to roll out in phases starting from mid-2023. The preparatory work for the IT system of Phase 3 has also commenced.
In regard to recruitment, about 75 Customs Inspectors were recruited through open recruitment and in-service appointment last year. The first batch of newly recruited Inspectors have started their induction training in February 2023. Moreover, 85 Customs Officers were recruited through the all-year-round recruitment exercise. In order to fill up the retirement vacancies and provide manpower for other services to meet the department's work and development needs, about 90 Customs Inspectors and 170 Customs Officers will be recruited in 2023. A new recruitment round for Customs Inspectors will be opened for application in the second quarter of 2023.
In order to deepen the understanding of newly recruited Inspectors about the operation and latest development of the Mainland Customs, national security and national affairs, the department will arrange the first batch of Inspectors, who are receiving induction training, to attend a study and exchange programme at the Shanghai Customs College at the end of this month. The relevant arrangements will become a regular part of the Inspector Induction Course.
Hong Kong Customs actively dovetails with the Government to fully leverage the unique advantages of enjoying strong support of the motherland and being closely connected to the world under "one country, two systems".
(1) Hong Kong became a member of the World Customs Organization (WCO) in 1987 and has been participating in the WCO activities and regional events. Hong Kong Customs will be more proactive in the future and will strive to play a more important role in the WCO to perform its enhanced roles as "promoter" and "facilitator" in full scale. The department will also spare no effort in raising the voice of the country and Hong Kong in the WCO, telling good stories of the country and Hong Kong, safeguarding multilateralism, promoting international co-operation, and enhancing effectiveness in regional law enforcement.
(2) Hong Kong Customs will sign a Memorandum of Understanding with the WCO this year to set up a Regional Dog Training Centre in Hong Kong. The department will organise different types of training courses, workshops and seminars related to detector dogs for members in the Asia-Pacific region of the WCO. Through strengthening co-operation and experience-sharing with members in the region, Hong Kong Customs will be able to further enhance the department's professionalism in detector dog handling training and to establish the department's international recognition in the field of detector dogs.
(3) Hong Kong Customs implements the essence of the 20th National Congress of the Communist Party of China and insists on promoting high-level opening up. The department fully promotes mutual recognition of AEOs with an emphasis on jointly building the Belt and Road countries and regions, making the co-operation between AEOs become a solid network of co-operative bond. This will help Hong Kong enterprises "go global" to explore international markets, raise the level of facilitation of foreign trade, and contribute in enhancing Hong Kong's status as an international trade centre.
(4) Hong Kong Customs also plans to reinforce the intermodal operations with a view to fully utilising the infrastructure and transport network of Hong Kong International Airport and the Hong Kong-Zhuhai-Macao Bridge and to leveraging Hong Kong's strengths in handling high-value goods to promote the development of high-end and high value-added logistics services, such as the processing of cold chain goods, fresh food and pharmaceuticals. The department is in high gear to explore a pilot scheme for developing a dedicated express route for air-land fresh and live products and will initiate a study and discussion with the Mainland Customs.
(5) Since the General Administration of Customs of the People's Republic of China (GACC) has launched the Smart Customs, Smart Borders and Smart Connectivity (3S) Initiative, with smart construction as core of the initiative, Hong Kong Customs has shown full support and put forward the Smart Customs Blueprint to bring it in line with the 3S Initiative. The department has invested substantially in developing technology such as artificial intelligence, blockchain, cloud computing and big data analytics to achieve integrated smart customs through innovation and technology. The department hopes to put more focus on promoting cross-border collaboration between the Mainland and Hong Kong Customs to help enhance the connectivity.
Hong Kong Customs will sign agreements with the GACC this year to commence co-operation in the 3S Initiative. The initiative carries great significance and plays an important role for the Mainland and Hong Kong Customs to commence practical co-operation with smart construction as the basis and to achieve the unity of "supervision and service" and "safety and facilitation". It is also a major key for Hong Kong Customs to contribute to the development of the Guangdong-Hong Kong-Macao Greater Bay Area.
Copyright (Amendment) Ordinance 2022 preparatory work
The Government published in the Gazette that the Copyright (Amendment) Ordinance 2022 will come into operation on May 1. The Amendment Ordinance aims to update Hong Kong's copyright regime to strengthen copyright protection in the digital environment.
To effectively combat unauthorised communication of copyright works, Hong Kong Customs has started the related preparatory works, including commissioning local universities to research on illicit streaming activities, developing evidence-gathering and analysis systems for illicit streaming and strengthening Customs officers' capabilities in conducting online investigation and processing digital evidence. Hong Kong Customs will work closely with the Commerce and Economic Development Bureau and the Intellectual Property Department to launch a series of preparatory work, including publicity, education and training, to enhance public awareness of the new provisions after the amendment. The department will also strengthen in-house training to prepare for enforcement work in the future.
Dealers in Precious Metals and Stones Registration Regime
The Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022, which reinforces Hong Kong's status as an international financial centre by enhancing Hong Kong's regulatory regime for combating money laundering and terrorist financing, has been passed on December 7 last year. The Dealers in Precious Metals and Stones Registration Regime will come into force on April 1 this year. Any person who is seeking to carry on a business of dealing in precious metals and stones in Hong Kong and engage in transactions at or above HK$120,000 (cash or non-cash) is required to register with the Commissioner of Customs and Excise. As such, Hong Kong Customs has set up the Dealers in Precious Metals and Stones Supervision Bureau and developed a registration system of dealers in precious metals and stones to provide online registration. In addition to a faster registration process, the system also has management, verification and analysis functions. Customs will launch the publicity work in full swing to ensure a better understanding of the Ordinance by related dealers and persons as well as a smooth operation of the registration regime.
Concluding her briefing, Ms Ho said that 2023 will be a special and extraordinary year for Hong Kong Customs. She pledged that the department would maintain its unity with the goal of enhancing connectivity towards security and prosperity. Customs will continue to proactively maintain extensive ties with different countries and international enforcement agencies, strive to guard the frontline of customs clearance, improve the effectiveness of law enforcement, and maintain national security.
Ends/Wednesday, March 1, 2023