As a result of the dedication and concerted efforts of all members of the Customs and Excise Department, the Department has attained remarkable results in revenue protection, crackdowns on customs-related offences and trade facilitation in 2003 and 2004.

Intelligence Inspires Investigations
On the law enforcement side, our Intelligence and Investigation Branch, through enhancing its abilities in intelligence collection and analysis, focused its attention on combating the activities of criminal syndicates. We worked hand in hand with the international law enforcement organisations and various sectors to jointly implement new law enforcement actions and control measures. The move has generated positive synergistic effect in containing illicit cigarettes, copyright piracy and cross-border drug trafficking activities.

Amidst the cases registered during the period under review, three acts stood out:

"Project Sea Hawk" Aided by Government Flying Service (GFS), the HKSAR and Shenzhen Customs administrations have joined hands since June 2004 to provide a robust solution to the problem of incessant smuggling off our Eastern coasts. Air reconnaissance by GFS has been helping Customs high speed pursuit crafts from both sides to intercept the notorious "tai feis" couriering untaxed gasoline and other contrabands across the sea boundary.

"Operation Spur" Months of diligent investigations led to the neutralisation in July 2004 of the biggest pirated optical disc syndicate ever. This landmark case changed the intellectual property rights piracy landscape, with a precedent set for invoking the Organized and Serious Crimes Ordinance to freeze offenders' assets.

"Operation Snapshot" A night's work at Lok Ma Chau in August 2004 saw the seizure of four lorry loads of textile consignments circumventing the Outward Processing Arrangement. The investigations into over 10 unscrupulous companies paid tribute to the tens of thousands of legitimate traders dutifully observing our textile trade rules.

Crackdowns Contain Crimes
The Department also achieved notable results in its law enforcement action to curb the illegal use of duty-not-paid diesel oil in 2003 and 2004. Since our implementation of the "Marked Ultra-low Sulphur Diesel Verification Scheme on End-users" and the "Self-regulatory Scheme on Bulk Sales of Duty-Paid Light Diesel Oil" in June 2003, the supply of detreated marked ultra-low sulphur diesel in the black market had dropped sharply. The Department has also kept the illicit cigarette activities in Hong Kong under control by the adoption of intelligence-led strategy.

On anti-narcotics side, our Department's enforcement capability was enhanced through various measures such as strengthening of intelligence-based risk management, flexible utilisation of resources, introduction of advanced equipment and enhancement of international cooperation. We have also taken pre-emptive measures by establishing a global network with overseas customs administrations and enforcement agencies on combating international drug trafficking activities.

On the anti-piracy front, the room for piracy activities continues to shrink under the Department's vigorous enforcement action. On the retail front, pirates could only adopt stealthy modus operandi such as through "self-service" at unmanned stalls and "pre-order sale" by displaying disc inlaid card folders inside the shop to sell a small amount of discs. Apart from rooting out piracy activities at the retail level, the Department also extended its intelligence-led enforcement operations and took proactive actions against production sources and storage areas of pirated discs.

In cracking down trademark counterfeiting, the Department continued to focus on raiding the known black spots for selling counterfeit goods and mounting stringent enforcement actions against the source of such goods and syndicate activities through exchanging intelligence with the industry. With the increase in the number of visitors coming to Hong Kong under the "Individual Visit" scheme, we will further step up intellectual property rights protection to promote Hong Kong as a "Shopping Paradise for Genuine Goods".

Facilities Enable Fast Clearance
On trade facilitation, our Department has constantly introduced new measures, acquired equipment and streamlined procedures in a bid to enhance clearance efficiency so as to speed up the cross-boundary passenger and cargo flow, and to facilitate the trading sectors as well. These measures and equipment included the use of Green Customs Seal, Unified Road Import/Export Cargo Manifest, One-stop Clearance Services and Electronic Data Interchange-Manifest system, Advance Cargo Information Project, LED display boards at Customs kiosks, additional Customs kiosks at Control Point and more Mobile X-ray Vehicle Scanning System.

Customs Committed to Facing Challenges
Looking forward, the Department will face numerous challenges arising from its work and manpower planning in the year ahead. But we will continue to fulfil our obligations by adopting the "more, fast, saving and accurate" working philosophy. The Department will strive to maintain its high level of efficiency and continue to upgrade the quality of its service while maintaining a suitable balance between effective law enforcement and facilitation of trade and commerce for the benefits of Hong Kong.

Timothy TONG Hin-ming
Commissioner of Customs & Excise