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LCQ7: Enforcement operations against parallel trading
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     Following is a written reply by the Secretary for Security, Mr Lai Tung-kwok, to a question by Hon Chung Kwok-pan in the Legislative Council today (July 2):

Question:

     Some members of the public have relayed to me that parallel trading activities have caused nuisance to the daily lives of Hong Kong residents, with the situation being the most acute in the North District. In this connection, will the Government inform this Council:

(1) whether it has compiled statistics, for each of the past 24 months, on (i) the number of Mainland people, who were suspected to be engaged in parallel trading activities, subjected to immigration examination by the authorities, (ii) the number of Mainland people, who were suspected to be engaged in parallel trading activities, refused entry by the authorities, and (iii) the number of people, among the suspected parallel traders who were refused entry, trying to enter Hong Kong on the one-year multiple-entry Individual Visit Scheme Endorsements (i.e. multiple-entry permits);

(2) of the major types of goods involved in parallel trading activities; and

(3) whether the authorities have reviewed the effectiveness of various measures taken since 2012 to combat parallel trading activities, and whether they will further step up efforts to combat parallel trading activities; if they will, of the details; if not, the reasons for that?

Reply:

President,

     The HKSAR Government is very concerned about the nuisance of parallel trading activities caused to the daily lives of residents.  Since September 2012, the law enforcement agencies (LEAs) have implemented a series of measures to improve order at railway stations and boundary control points, so as to uphold the daily lives of our residents.

(1) The Immigration Department (ImmD) has established a "watch list of suspected parallel traders" which contains information of persons suspected to be involved in parallel trading activities collected through various means, including information of arrested and convicted persons, intelligence and analysis of immigration data.  The ImmD will target and examine visitors on the "watch list of suspected parallel traders", and, if their purposes of visits are in doubt, will consider refusing their entry and repatriating them immediately.  As at end May 2014, the ImmD has included information of more than 9 800 suspected parallel traders in the watch list and refused some 16 000 entries.  The monthly number of refused entries for suspected involvement in parallel trading activities is at Annex.  The ImmD does not maintain statistics on the number of examinations conducted on the persons concerned.

     Information indicates that Mainland residents arrested in enforcement operations against parallel trading held various types of endorsements, including single-entry and multiple-entry endorsements, and also endorsements for visiting relatives, business and individual visits.

(2) The largest quantity of goods confiscated in operations since September 2012 are milk powder, diapers, health food products, cosmetics, medicine and red wine, etc.

(3) The ImmD, the Hong Kong Police Force (HKPF) and the Customs and Excise Department (C&ED) have mounted a number of large-scale operations since September 2012. As at end May 2014, 1 485 Mainland residents suspected of being involved in parallel trading activities were arrested.

     The LEAs have been refining their enforcement strategies in response to the mode of operation of parallel traders to combat parallel trading activities more effectively. For instance, since some parallel traders have recently distributed goods in a small volume by trolleys at various streets instead of at rented warehouses to avoid law enforcement actions, the LEAs have modified their mode of enforcement. The ImmD together with the Police Tactical Unit of the HKPF set up large-scale cordons and successfully arrested Mainland visitors suspected of involving in parallel trading activities.

     In addition, to crack down on the supply chain of parallel goods, the LEAs have strengthened intelligence exchange. After collecting and analysing information on the parallel trading network, the C&ED pinpoints suspected parallel goods storage and packing establishments, and passes intelligence to the ImmD and the HKPF to conduct enforcement actions. Through a hotline, the C&ED also maintains close liaison with the Shenzhen boundary control points to allow for immediate notification and interception of suspected parallel traders.

     After a series of enforcement actions, parallel trading activities have subsided. The HKSAR Government will continue to take targeted measures against parallel trading activities, including intelligence collection and exchange, joint operations, immigration control, etc., as well as enhancing co-operation and conducting joint operations with relevant Mainland authorities.

Ends/Wednesday, July 2, 2014
Issued at HKT 17:11

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