**********************************

Following is a speech by the Secretary for Trade & Industry, Mr CHAU Tak Hay, in moving the second reading of the Import and Export (Amendment) Bill 1999 in the Legislative Council today (Wednesday) :

President,

I move that the Import and Export (Amendment) Bill 1999 be read the second time.

The Bill seeks to make statutory provisions for the implementation of the Production Notification (PN) system in order to strengthen the legal status of the system. This will enhance the power of Customs and Excise Department (C&ED) officers in enforcing export controls on textiles and garments and maintain the integrity and effectiveness of our export control system.

In July 1996, the Government revised Hong Kong's origin rules for such garments in the light of the changes to origin rules made by our major trading partners. Under the revised origin rules, it is necessary to conduct real-time checks on the manufacturing process of the cut and sewn garments in order to ascertain the Hong Kong origin status of the final products. According to the current PN system, manufacturers who intend to export cut and sewn garments to the restrained markets are required, by way of their factory registration undertakings, to notify the Trade Department of the production details through the lodging of PN within three working days prior to the commencement of the production. Such requirement enables C&ED officers to conduct real-time checks on the manufacturing process so as to ensure the manufacturers' compliance with the Hong Kong origin rules.

At present, the legal basis for the PN system is derived from the general powers of the Director-General of Trade under the Import and Export Ordinance and its relevant subsidiary legislation. This is not entirely satisfactory from the enforcement angle. Therefore, it is necessary to amend the Import and Export Ordinance and its Import and Export (General) Regulations in order to strengthen the legal basis of the PN system. Such amendments will enhance the enforcement power of C&ED officers and facilitate prosecution.

Another main purpose of the Bill is to allow for the submission of PNs to the Trade Department through Electronic Data Interchange (EDI). To improve the efficiency and competitiveness of our trading community, the Government has entered into an agreement with the Tradelink Electronic Commerce Limited for the latter to provide EDI services for key Government trade-related documents. Such services have already been introduced for Restrained Textiles Export Licences and Import and Export Declarations. In prescribing PN as a statutory document, we also need to extend EDI services to the submission of PNs so as to provide traders with a more convenient way for submitting trade documents.

I hope that Members will support the Import and Export (Amendment) Bill 1999.

Thank you, Madam President.

End/Wednesday, June 16, 1999

NNNN