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LCQ2: Combating parallel trading activities

     Following is a question by the Hon Chan Chi-chuen and a reply by the Secretary for Security, Mr Lai Tung-kwok, in the Legislative Council today (March 18):


     It has been reported that parallel trading activities are rather rampant in districts such as Sheung Shui, Tuen Mun and Yuen Long, seriously affecting the daily lives of residents. Apart from causing a gradual deterioration of the environmental hygiene in such districts, parallel trading activities have also pushed up the prices of daily necessities. Furthermore, the use of public transport by parallel traders for conveying goods causes inconvenience to other passengers, and confrontations between them occur frequently. In recent months, the nuisance caused to residents by parallel trading activities has triggered a number of anti-parallel trader protests in the aforesaid districts. In this connection, will the Government inform this Council:

(1) whether the authorities have compiled statistics on the current number of people engaged in parallel trading activities and the proportions of Hong Kong people and Mainland people among them; of the number of people prosecuted last year for engaging in parallel trading activities (including carrying powdered formula for infants and young children in excess of the quota upon departure), the detail of such cases, the age profile of and penalty imposed on the convicted persons, as well as the type and total value of the confiscated goods; of the districts where some industrial buildings or residential buildings have been used for conducting parallel trading-related activities;

(2) whether it knows the manpower deployed by the MTR Corporation Limited (MTRCL) to enforce the regulation on the size of passenger luggage (the regulation); of the number of cases in which passengers in violation of the regulation were disallowed to pass through the ticket gates or refused boarding by MTRCL staff members in the past three months; of the respective numbers of cases in which MTRCL staff members were injured by assaults and requested police assistance when enforcing the regulation in the past three years; of the authorities' specific measures in place at present to support MTRCL staff members in enforcing the regulation; and

(3) whether it will implement new measures to combat parallel trading activities, including requesting the Mainland authorities to review or even abolish the issuing of one-year multiple-entry Individual Visit Endorsements to Shenzhen permanent residents for visiting Hong Kong (commonly known as "multiple entry permits"), refusing the entry of the Mainland people proven to have previously engaged in parallel trading activities and considering the introduction of a land arrival tax for visitors; if it will, of the details; if not, the reasons for that?



     The Hon Chan's question involves the policy purview of multiple bureaux. The Government's consolidated reply is as follows:

(1) The HKSAR Government is very concerned about the nuisance caused by parallel trading activities to the daily lives of residents. The law enforcement agencies (LEAs) have been implementing a series of countermeasures in accordance with law.

     Since September 2012, LEAs have been mounting large scale joint operations to suppress parallel trading activities and to improve order at railway stations and boundary control points. They have also refined their enforcement strategies in response to the mode of operation of parallel traders. Furthermore, the Customs and Excise Department (C&ED) has been actively exchanging intelligence and mounting joint operations at boundary control points where parallel trading activities are frequent with the Shenzhen authorities, and has also stepped up enforcement of the restriction on the export of powdered formula implemented since March 2013.

     From March 2014 to February 2015, C&ED detected a total of 4,986 cases of illegal export of powdered formula, involving the arrest of 5,000 persons, including 1,748 Hong Kong residents, 3,235 Mainland residents and 17 persons of foreign nationality, and the seizure of 61,200 kg of powdered formula. Among the 5,072 cases that the court imposed a sentence during the aforesaid period, 5,094 persons were fined between $250 and $100,000, 157 persons were sentenced to immediate imprisonment for one day to 140 days, 668 persons were sentenced to imprisonment with the sentence suspended.  During the same period, the Immigration Department (ImmD) and the Police conducted a total of 93 joint operations, involving the arrest of 831 Mainland visitors for breaching their conditions of stay by being involved in suspected parallel goods trading and one Hong Kong resident. Among them, 41 Mainland visitors were prosecuted for breach of conditions of stay, 39 of whom were sentenced to imprisonment for eight weeks to three months and two were acquitted. The remaining 790 Mainland visitors were repatriated to the Mainland.  The charge on the Hong Kong resident was withdrawn due to insufficient evidence. The largest quantity of goods confiscated in these operations are powdered formula, diapers, health food products, cosmetics, medicine, red wine, etc.

     In addition, ImmD has established a "watch list of suspected parallel traders" to strengthen the interception of persons when entering Hong Kong, and if their purposes of visits are in doubt, ImmD will consider refusing their entry and repatriating them immediately. As at the end of February 2015, ImmD has included information of more than 13,500 suspected Mainland parallel traders in the watch list and refused over 28,500 entries.

     The Fire Services Department (FSD) has stepped up inspection of buildings which are involved in parallel trading activities in Sheung Shui, Fanling and Tuen Mun. In February this year alone, FSD carried out inspections at more than 240 buildings in the aforementioned districts, issued 19 fire hazard abatement notices and initiated prosecution against three cases.

     The Police frequently patrol black spots of parallel trading activities, and have stepped up enforcement actions against issues including obstruction, nuisance in public places, and road obstructions caused by illegal parking and loading or unloading of goods.  From January to February this year, over 40 summonses and 3,300 fixed penalty notices were issued under the Summary Offences Ordinance (Cap 228), the Fixed Penalty (Traffic Contraventions) Ordinance (Cap 237) and the Fixed Penalty (Criminal Proceedings) Ordinance (Cap 240). Actions have also been taken against a taxi driver for carrying goods in a taxi and against four taxi drivers for soliciting.

     The District Lands Offices in Tuen Mun, Yuen Long and North District under the Lands Department (LandsD) have set up special operation teams to enhance enforcement actions, targeting lease breach cases involving industrial units being converted for suspected parallel trading activities. From early February 2015 till now, the relevant District Lands Offices conducted inspections of over 2,000 units in the three districts. Warnings have been issued to 40 units suspected of using the premises for retail purposes in breach of lease conditions. Two units were subsequently re-entered for breach of lease in accordance with the lease conditions and the Government Rights (Re-entry and Vesting Remedies) Ordinance. LandsD will continue to follow up on the remaining cases.

(2) The MTR Corporation Limited (MTRCL) further tightened the maximum weight limit for passenger luggage to 23 kg since February 2013, and together with the limit for luggage size, i.e. the total sum of length, width and height of passenger luggage should not exceed 170 cm and the length of any one side should not exceed 130 cm, these measures ensure that passengers do not carry oversized or overweight luggage. Passengers who do not comply with the above restrictions in carrying their luggage will be disallowed to enter the paid area of the stations or board the trains. In the past three months (i.e. December 2014 to February 2015), there were 8,450, 15,149 and 8,155 cases respectively at the East Rail Line in which passengers were disallowed to travel on MTR because of violation of the above-mentioned weight or size limit for luggage. MTRCL believes that the relatively high figure of January 2015 is due to the increase in number of cross-border travellers who did shopping in preparation for the Chinese New Year. Hence, there were more passengers carrying bulky luggage.

     Within the railway premises, MTRCL is responsible for the enforcement of the Mass Transit Railway By-laws and the Conditions of Carriage of Luggage. The By-laws Inspection Unit of MTRCL currently has 59 members with experiences of working in disciplinary forces, leading over 90 security guards in performing their duties along the East Rail Line. Besides, station staff will also offer assistance.  MTRCL has arranged additional manpower to maintain station order, and will give warnings to or prosecute passengers in case of violation. Should passengers violate relevant rules and do not take the advice of MTRCL staff, disturb station order, or affect the safety of other passengers or MTRCL staff, MTRCL will seek the assistance of the Police.  From 2012 to 2014, there were 22, 26 and seven cases respectively in which MTRCL staff was injured when enforcing the luggage-related provisions in the Mass Transit Railway By-laws, and 182, 191 and 99 cases respectively in which MTRCL sought assistance of the Police.

(3) As regards the measures to fine-tune and improve the arrangements under the Individual Visit Scheme, as it is an outbound travel policy of Mainland residents which falls within the remit of the Central Government, the HKSAR Government has maintained discussions with the Central Government. The HKSAR Government will continue to relay different views of the Hong Kong community and the latest situation, including the number of Mainland passengers to Hong Kong, the capacity of Hong Kong overall and different districts to receive tourists, etc., to the Central Government comprehensively so as to meet the long-term and overall interests of Hong Kong.

     As regards imposing a land arrival tax, the HKSAR Government considers the proposal not feasible. About 180,000 Hong Kong residents go to the Mainland every day.  If the tax were to be imposed on Mainland visitors, we could not just hope that the Mainland would not impose the same tax on Hong Kong people in return. Besides, the travel trade also largely opposes the proposal and considers that it will adversely affect the tourism, retail and food and beverage sectors, etc.

Ends/Wednesday, March 18, 2015
Issued at HKT 15:56


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