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LCQ15: Measures to crack down on parallel trade activities
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     Following is a written reply by the Secretary for Security, Mr Lai Tung-kwok, to a question by the Hon Chan Hak-kan in the Legislative Council today (October 17):

Question:

     Parallel trade activities have become increasingly frequent in recent years in the North District, and the situation in Sheung Shui MTR Station and its vicinity is most acute.  Such activities impede residents' access to the MTR station, worsen the environmental hygiene of nearby areas, and jack up commodity prices in the district.  It has been reported that, despite the Government's announcement on September 18 this year of launching a number of combating measures, parallel trade syndicates have simply changed their modus operandi, and their various impacts on the district persist.  In this connection, will the Government inform this Council:

(a) whether it has grasped information on the number of people engaged in parallel trade activities at present; of the proportions of Hong Kong people and Mainlanders among them; the number of people prosecuted and convicted in the past three years for engaging in parallel trade activities, the details of such cases and the types and total values of goods thus confiscated;

(b) of the laws currently invoked by the law enforcement agencies in Hong Kong at present to combat parallel trade activities and the people engaging in such activities; the details of intelligence exchanges between the two places and their joint operations, including whether the Hong Kong Government knows which laws are invoked by the law enforcement agencies on the Mainland to combat such activities and people;

(c) given that some parallel trade activities have recently been shifted to districts such as Fanling and Tai Po, etc., how the law enforcement agencies adjust their strategy in combating such activities; whether they will increase manpower shortly and step up its efforts to combat parallel trade activities; if they will, of the details; if not, the reasons for that and how they deploy manpower;

(d) in the past three years, whether the MTR Corporation Limited (MTRCL) had refused passengers' entry to the paid areas or boarding MTR trains because they were carrying excessive quantity of items or oversised items; if it had, of the relevant figures, broken down by railway line; if not, the reasons for that; how MTRCL ties in with the Government's combating efforts;

(e) given that some parallel trade syndicates have rented and used residential units as warehouses and for distribution of goods, how the law enforcement agencies gather relevant intelligence and combat such activities;

(f) how the inter-departmental working group led by the Chief Secretary for Administration evaluates the effectiveness of the various combating measures so far; and

(g) whether it will consider requesting the mainland authorities to impose restrictions on Mainlanders who make multiple trips between the Mainland and Hong Kong within the same day, so as to reduce their opportunities for engaging in parallel trade activities; if it will, of the details; if not, the reasons for that?

Reply:

President,

     This question involves different policy areas.  After consulting bureaux concerned, our reply to the various parts of the question is as follows:

(a) & (b) Under the Import and Export Ordinance (Cap. 60), it is an offence to import or export any unmanifested cargo.  That said, cargo does not include items carried, and imported or exported by passengers on board a vessel, aircraft or vehicle.  In other words, the Customs and Excise Department (C&ED) will only enforce against prohibited or controlled items a passenger carries.

     However, pursuant to the Immigration Ordinance (Cap. 115), any person who enters Hong Kong as a visitor and contravenes a condition of stay in respect of him, including taking any employment, whether paid or unpaid, or establishing or joining in any business, without approval by the Director of Immigration, shall be guilty of an offence and shall be liable on conviction to a fine at $50,000 and to imprisonment for two years.  The Immigration Ordinance also stipulates that any person who is the employer of an employee who is not lawfully employable commits an offence and is liable to a fine of $350,000 and to imprisonment for three years.  Mainland visitors who contravene conditions of stay by involving in parallel trading activities may be prosecuted and refused future entry by the Immigration Department (ImmD).  If Mainland visitors are prosecuted and convicted of offences in Hong Kong, upon the ImmD's referral, the exit and entry administration offices of the Mainland will cancel their exit endorsements.

     From 2010 to early October 2012, the ImmD and other law enforcement agencies arrested 407 Mainland visitors who were suspected of contravening conditions of stay by involving in parallel trading activities. 48 of them were convicted and sentenced to imprisonment of four weeks to two months. Goods seized in the operations mainly included foods, daily accessories and electronic devices, such as bird's nests, red wines, seafoods, tablets, mobile phones, etc.  The ImmD does not conduct valuation of the goods.

     Moreover, if parallel traders cause any environmental hygiene problems, the Food and Environmental Hygiene Department (FEHD) will issue Fixed Penalty Notices under the Fixed Penalty (Public Cleanliness Offences) Ordinance (Cap. 570) to persons littering and spitting on the street.  FEHD will also issue "Notice to Remove Obstruction" under the Public Health and Municipal Services Ordinance (Cap. 132) in respect of articles obstructing scavenging operations on the street, requiring the owners to remove the articles within a specified period, failing which FEHD may seize the articles without further notice.  From January 2010 to September 2012, FEHD issued 826 Fixed Penalty Notices and 390 "Notices to Remove Obstruction", and seized 1,444 articles in the areas concerned.  FEHD also prosecuted three persons for not removing, within the specified period, articles causing obstruction in public place.

     Depending on the circumstances, police officers will arrest the offender for "Obstruction of Public Places" under the Summary Offences Ordinance (Cap. 228).

     The Government is aware that parallel trading activities have taken place at the industrial and residential buildings in Sheung Shui area.  Inspections have been stepped up.  The Fire Services Department (FSD), primarily by virtue of the Fire Services Ordinance (Chapter 95), will take appropriate law enforcement actions against irregularities such as obstruction to means of escape or fire service installations.  In a joint operation with other relevant government departments to combat parallel-trade activities, FSD issued six Fire Hazard Abatement Notices and three warning letters.  The District Lands Offices of the Lands Department (LandsD) will take enforcement actions against cases that are in breach of lease conditions which include issue of warning notice or even registration of the notice at the Land Registry.

     We believe that parallel traders include Mainland visitors as well as Hong Kong residents.  The ImmD does not have the number of parallel traders who are Hong Kong residents.  Our law enforcement agencies will continue to exchange intelligence with our Mainland counterparts, conduct joint analysis, and launch simultaneous operations as necessary to combat the cross-boundary courier syndicates.

(c) The Government is aware that the modus operandi of parallel trading activities has been changing.  Some of the activities that involve dividing up and distributing goods near the Sheung Shui Station have now taken place at industrial and residential buildings, or even outside Sheung Shui area.  Our law enforcement agencies will work closely to gather and share intelligence, and continue to adopt the strategy of cracking down from the source to conduct intelligence-based enforcement actions from time to time at different locations.  They will also adjust the combat strategy and manpower deployment plan as appropriate in light of changing circumstances.  Enforcement actions of the relevant departments, such as the ImmD and Police, have been extended to areas outside Sheung Shui and Fanling, and to private residential flats where parallel goods are suspected to be stored, packaged and distributed.  LandsD and FSD have stepped up inspections of buildings which are suspected black spots of parallel trading activities.  Immediate actions will be taken against irregularities or any breach of lease conditions.  FEHD will closely monitor the situation and take appropriate actions.  

(d) In accordance with the Conditions of Carriage of Luggage issued by the MTR Corporation Limited (MTRCL), passengers may carry luggage with total dimensions (i.e. length, width and height) not exceeding 170 cm, and the length of any one side not exceeding 130 cm.  If the luggage fails to comply with such limits, station staff will serve verbal warnings, or written warnings if necessary, to the passenger.  Prosecution will be initiated in more serious cases.  MTRCL's past experiences in enforcing the luggage limits show that most passengers were co-operative.  MTRCL does not maintain record on the number of cases in which passengers were refrained from passing through the ticket gates or travelling on the MTR due to carriage of unfitted luggage.

     To maintain order in stations, MTRCL recently implemented a series of new measures at individual East Rail Line stations.  Such measures include the putting up of large banners at Sheung Shui Station to remind passengers of the luggage limits, and that passengers carrying bulky luggage should not use the escalators; the erection of barriers at Entrance C of Sheung Shui Station for passengers who enter the Station using wide ticket gates, so as to maintain more orderly queuing and avoid blocking of other passengers entering the Station, etc.

     As some passengers carry very heavy luggage which presents hazard and nuisance to other passengers, MTRCL launched a three-month trial scheme for imposing a maximum weight limit of 32 kg on passenger luggage starting from October 9, 2012.  Electronic ground scales are installed at Sheung Shui, Fanling, Lo Wu and Lok Ma Chau stations.  MTR staff will proactively check the weight of passenger luggage before passengers enter the stations.

     In addition, MTRCL will strengthen the manpower of its By-laws Inspection Unit (BIU) from the existing 29 members to 39 members.  The number of contract security staff supporting the work of BIU will also increase from 74 to 92.  The BIU will continue to assist in the management of passenger flow and the enforcement of Mass Transit Railway By-laws along the East Rail Line, in particular at the cross-boundary stations.

(e) Please see our response to part (c) of the question.

(f) The Chief Secretary for Administration chaired an interdepartmental meeting on September 18, 2012 and announced that the Government would carry out six measures to crack down on parallel trading activities.  For details, please refer to the related press release (www.info.gov.hk/gia/general/201209/18/P201209180602.htm).@

     Law enforcement agencies have stepped up enforcement actions and have been conducting joint operations.  From September 19 to October 12, 2012, the ImmD and Police mounted several large scale operations named Windsand in Sheung Shui, Fanling and Fo Tan districts to combat against Mainland visitors who were suspected of contravening conditions of stay in Hong Kong by involving in parallel trading activities.  284 Mainland visitors who were suspected of contravening conditions of stay were arrested in the operations.  31 of them were prosecuted, with 18 convicted and sentenced to imprisonment of two months.  Other 246 visitors who had not been prosecuted were repatriated to the Mainland.

     C&ED has already strengthened intelligence collection at various land boundary control points and in the vicinity of the MTR East Rail Line stations.  In addition, C&ED and the relevant Mainland law enforcement agencies will continue to provide each other with on-scene notifications and intelligence exchange through the established mechanism.  FEHD, LandsD, Police and FSD have already stepped up enforcement actions against parallel trading activities.

     With the co-ordination of the Transport and Housing Bureau, MTRCL will commit full support for the Government's law enforcement work.  MTRCL will promptly increase manpower to strictly enforce the legal limit on the size of luggage at the gates.  If the size of luggage exceeds the legal limit, MTRCL will take enforcement action according to the law.

     Law enforcement agencies' joint operations have been effective.  Our efforts will continue, and departments concerned will continue to combat organised parallel trading activities.

(g) Regarding the suggestion of limiting Mainland visitors from entering Hong Kong more than once in a day, we must carefully consider its feasibility, the impact on normal Mainland visitors, overall immigration policy and Hong Kong's image as the Asia's World City, and the effectiveness to combat parallel trading activities.

     The Chief Executive has announced that the SAR Government will establish a consultation mechanism with the Mainland authorities to closely monitor the implementation situation of the individual visit scheme and reflect the Hong Kong's capacity in various aspects, to ensure the healthy development of the Hong Kong tourism industry and minimise the impact of the lives of Hong Kong residents.  We believe that the consultation mechanism will help develop the individual visit scheme in an orderly manner.

Ends/Wednesday, October 17, 2012
Issued at HKT 17:32

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