Customs balances law enforcement and trade facilitation

19 Jan 2006

The Hong Kong Customs and Excise Department (C&ED) has maintained stringent law enforcement while facilitating trade, the Commissioner of Customs and Excise, Mr Timothy Tong, said today (January 19).

At a press conference to review the work of the department in 2005, Commissioner Tong highlighted various achievements, including an increase in revenue collected and a decline in the number of blackspots. Compared to 2004, the number of cargo containers, cross-boundary passengers and vehicles cleared by C&ED in 2005 also rose.

On revenue protection, the total amount of duty on dutiable commodities collected by the department in 2005 was $6.618 billion, an increase of 1.16% over 2004. The rise in duties collected from tobacco, alcoholic liquor, and methyl alcohol and other alcohol products was 4.19%, 6.74% and 30.89% respectively.

In addition, the department cracked a total of 70,687 cases leading to the arrest of 10,057 people. This is an increase of 0.9% in the number of cases and 2.2% in the number of arrests compared with 2004.

As a result of stringent Customs enforcement action, there was a drop in the number of illicit-activity blackspots. The number of pirated optical disc shops further decreased from about 70 in 2004 to about 50 at the end of 2005. The number of stalls engaged in the sale of fake goods at the blackspots in Mong Kok, Yau Ma Tei and Tsim Sha Tsui also dropped considerably. The number of such street stalls, which stood at 25 in mid-2005, has been slashed to fewer than 10.

Illicit cigarettes and illicit fuel activities have been put under firm control. The number of blackspots for selling illicit cigarettes has dropped from about 21 in 2004 to 16 in 2005, and blackspots for illicit fuel have fallen from 27 to 23.

In 2005, the department cracked 51,696 cases relating to illicit cigarettes with a seizure of 100.58 million sticks of cigarettes with a total value of $154 million. The duty potential involved was $81 million and 5,895 people were arrested. Overall, the number of cases cracked was 2.2% higher than in 2004 and the number of people arrested was 9.1% higher.

The department cracked 1,515 cases concerning illicit fuel and seized 1.173 million litres of fuel with a total value of $11.6 million and duty potential of $5.14 million; 950 people were arrested. On the whole, the number of cases in 2005 increased by 6.8%.

On the anti-narcotics front, the department cracked 649 drug-related cases seizing 16.3kg of heroin, 242.1kg of ketamine, 1,808 "ecstasy" tablets, 102.4kg of cannabis, 19kg of "ice", 4.2kg of cocaine and 27,718 tablets of other psychotropic substances. Four drug manufacturing/processing centres and 13 drug storage/distribution centres were raided. Of the 624 drug offenders arrested, 121 were charged with drug trafficking offences.

The department detected 9,794 copyright cases and arrested 955 people in its fight against piracy in 2005. About 3.79 million pirated optical discs together with other infringing items worth $137 million were seized.

During the year, the department cracked 1,119 cases relating to the Trade Descriptions Ordinance and arrested 725 law-breakers. Altogether 8.12 million counterfeit items with a total value of $305 million were seized.

Apart from highlighting the cost-effective monitoring system to stamp out smuggling of marked oil by sea, and the strategy to combat cross-boundary drugs trafficking, Commissioner Tong announced that the department would roll out an initiative to expand channels for monitoring Internet piracy and reduce the flow of BitTorrent (BT) seeds on the Internet.

Mr Tong also spoke about the effectiveness of the "Voluntary Control Scheme on the Selling of Marked High Sulphur Diesel for Marine Use".

"Through the implementation of the voluntary control scheme, Hong Kong Customs has established an effective monitoring system to trace the end-users of marked oil intended for marine uses," he said. "The enhanced monitoring of the chain of supply and end-users has enabled Customs officers to deter re-landing of marked oil into the local market as illicit fuel." Customs maintains the archives of all 126 oil barges that procure marked oil from local oil depots, and Customs officers carefully analyse the daily marked oil transactions of the barges. Since the implementation of the voluntary control scheme, Customs has processed about 12,000 marked oil transactions from the oil barges and made 4,800 telephone or on-the-spot verifications.

"With the implementation of the voluntary control scheme, the total monthly sale of marked oil for marine use at four oil depots in the second half of 2005 plunged by 37% compared with the same period in 2004. We believe it is more difficult for smugglers to camouflage their activities under our effective monitoring system," he added.

Noting that drug trafficking activities were transnational, Commissioner Tong said Hong Kong Customs would continue to enhance its partnership with international law enforcement agencies to combat the drug problem at source.

In 2005, Hong Kong Customs cracked 649 drug-related cases, representing a drop of 8.6% compared with the previous year. The drop reflects the fact that the drug situation is more firmly under control. Conversely, the quantities of heroin, cannabis, methamphetamine and, in particular, ketamine seizures rose, demonstrating the effectiveness of Customs enforcement efforts.

Commissioner Tong said that the department was planning to launch an initiative entitled "Youth League For Monitoring Internet Piracy" to enlist the support of young people in protecting intellectual property rights. The department has approached 11 local youth organisations (with about 200,000 members altogether) and solicited their support in forming a united front in fighting illegal file-sharing of copyrighted movies and music by using BT software on the Internet. The scheme will be launched early this year.

To maintain Hong Kong as an important trading, transportation and logistics hub in Asia by ensuring the smooth flow of people and cargo at various control points, the department cleared about 22.4 million twenty-foot equivalent unit (TEU) cargo containers, 14.88 million cross-boundary vehicles and 191 million passengers at all control points in Hong Kong in 2005, reflecting respective increases of 2%, 3% and 5% over 2004.

Looking ahead, Commissioner Tong said that 2006 would see the completion of new boundary control points and customs clearance facilities to cater for the increase in cargo and passenger flow, including:

Mr Tong said the department would face numerous challenges arising from its work and manpower planning. "In 2006/07 alone, additional staff will be required to cope with the increasing workload generated by the control points that will come into operation. At the same time, there is the need to make up for the natural wastage and to enhance the cargo clearance service at Hong Kong International Airport. It is envisaged that there will be some 600 vacancies in the Customs Service in 2006/07. Discussions with relevant authorities are under way to confirm the number of additional staff to be recruited," he said.

Ends/Thursday, January 19, 2006

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