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LCQ15: Combating parallel trading activities

     Following is a question by the Hon Tang Ka-piu and a written reply by the Secretary for Security, Mr Lai Tung-kwok, in the Legislative Council today (April 27):


     Some residents in the North District have relayed to me that although the Government has implemented certain measures in recent months to step up its efforts in combating parallel trading activities, such activities are still rampant in the district, causing nuisance to the daily living of residents. In this connection, will the Government inform this Council:

(1) of the details of the immigration control measures implemented by the authorities to combat parallel trading activities in the past three years;

(2) of the respective numbers of Mainland residents arrested and prosecuted by the authorities for suspected engagement in parallel trading activities in each of the past three years, with a breakdown by the type of travel documents they held and by the offence involved;

(3) given that since April last year, Shenzhen permanent residents are no longer issued with one-year multiple-entry Individual Visit Endorsements (commonly known as "multiple-entry endorsements") (those endorsements already issued are not affected and will expire one after another within one year), and only "one trip per week" Individual Visit Endorsements (commonly known as "one trip per week endorsements") may be issued to them, of the respective numbers of Mainland residents who entered the territory with these two types of endorsements, as well as the percentages of such numbers in the total number of Mainland visitors, in the past three months; whether the authorities have assessed the effectiveness of the aforesaid measure in alleviating the problem of parallel trading;

(4) in each month in the past three years, of (i) the number of persons put on the "watch list of suspected parallel traders" drawn up by the Immigration Department, (ii) the number of immigration examinations of persons on the watch list conducted by the authorities, and (iii) the number of persons on the watch list refused entries, with a breakdown by immigration control point;

(5) in the past three years, of the number of black spots for parallel trading activities and their locations each year, as well as the respective numbers of law enforcement actions taken by the departments concerned at such black spots and Fixed Penalty Notices issued in each month; the current average daily number of times, as arranged by the Food and Environmental Hygiene Department, for which cleansing work is carried out on streets near such black spots;

(6) of the respective numbers of Fixed Penalty Notices issued by the Police for road obstructions caused by illegal parking and by loading or unloading of goods in connection with parallel trading activities, in each of the past three years; whether the Police took other law enforcement actions (e.g. impounding the vehicles concerned) to combat parallel trading activities;

(7) in each month in the past three years, of (i) the number of inspections for industrial buildings conducted by the authorities to combat parallel trading activities, and (ii) the number of warning letters issued by the authorities to owners of industrial building units for breaches of permitted uses as well as (iii) the number of cases where such warning letters were registered at the Land Registry (commonly known as "imposing an encumbrance"), with a breakdown by type of such breaches;

(8) whether it knows the progress of preparatory work for the establishment of a proposed boundary shopping mall near Lok Ma Chau Control Point; whether the authorities have provided any assistance for the implementation of the project, and whether they have formulated any plan on how to minimise the impacts of the project on the daily living of residents and the transport in that district; if they have, of the details; and

(9) whether the Government held any inter-departmental meetings on combating parallel trading activities last year; if it did, of the number of such meetings held and the government departments which sent representatives to attend such meetings, as well as the conclusions drawn upon reviews at such meetings of the effectiveness of the various measures for combating parallel trading activities; if no such meeting was held, the reasons for that?



     Regarding Hon Tang's questions, having consulted relevant departments, the Government's reply is as follows.

(1) to (4) and (9) The Hong Kong Special Administrative Region (HKSAR) Government attaches great importance to the long-term and healthy development of Hong Kong's tourism industry. Whilst ensuring the stable and orderly development of the tourism industry, we minimise as far as possible the inconvenience caused by increasing visitor arrivals to local residents, with a view to striking a balance between the impact of the tourism industry on Hong Kong's economy and the livelihood of the community. After we reflected our views to the Central Government regarding Mainland visitors, it replaced "multiple-entry" Individual Visit Endorsements for permanent Shenzhen residents with a "one trip per week" cap. In the first three months of 2016, there were over 10.37 million Mainland visitor arrivals to Hong Kong, including over 440 000 visitor arrivals on "multiple-entry" (4.3 per cent of total Mainland visitor arrivals) and 1.93 million visitor arrivals on "one trip per week" (18.6 per cent of total Mainland visitor arrivals) Individual Visit Endorsements.

     We believe that the measure can effectively deter the activities of Mainland professional parallel traders who come to Hong Kong multiple times within one week or even one day. The "one trip per week" measure has been implemented for around one year. The decline in Mainland visitor arrivals, especially same-day visitors, was expected, and shows that the measure has taken effect. The HKSAR Government will continue to monitor the impact of the "one trip per week" measure, and will maintain close liaison with relevant authorities of the Central Government.

     Since September 2012, the law enforcement agencies 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.

     The Customs and Excise Department (C&ED) has pinpointed suspected parallel goods storage and packing establishments, and passed intelligence to the Immigration Department (ImmD) and the Police to conduct enforcement actions.

     The C&ED has also been exchanging intelligence and planning dedicated operations with the Shenzhen authorities. In the past three years (i.e. 2013 to 2015), the two sides cracked down on 1 017 smuggling cases involving parallel traders, seizing goods with a total value of about $15.80 million. During the same period, the C&ED also detected 13 508 cases of attempting to export unlicensed powdered formula, involving the arrest of 7 790 Mainland visitors, among which 7 309 were prosecuted, and the seizure of 196 000 kilograms of powdered formula.
     Regarding public order, the Police station officers every day at the Lok Ma Chau Spur Line (LMCSL) Control Point and its neighbouring areas to implement crowd management and special traffic arrangements. When necessary, additional manpower will be assigned to ensure that cross-boundary travellers can use the LMCSL Control Point in a safe and orderly fashion and that traffic is smooth. From January to December 2015, 84 persons, including one Mainland visitor, arrested for entering and remaining at the LMCSL Control Point without possessing a valid Closed Area Permit were convicted and sentenced to a fine, imprisonment and imprisonment (suspended sentence). The goods they carried were confiscated by the court.

     The ImmD and the Police conducted 271 joint operations in the past three years, and arrested 2 299 Mainland visitors who were suspected of contravening conditions of stay by being involved in parallel trading activities. Among them, 205 Mainland visitors were prosecuted for breach of conditions of stay, 190 of whom were sentenced to imprisonment for 19 days to three months and 15 were acquitted, the remaining 2 094 were repatriated to the Mainland.

     In addition, ImmD has established a "watch list of suspected parallel traders" to examine suspected parallel traders, and will also conduct special operations to strengthen the interception of suspected parallel traders when entering Hong Kong. If their purposes of visits are in doubt, ImmD will consider refusing their entry and repatriating them immediately. As at the end of March 2016, ImmD has included information of more than 20 200 suspected Mainland parallel traders in the watch list.

     In the past three years, over 47 000 entries were refused due to suspected involvement in parallel trading activities:

Control Point    2013     2014      2015
-------------    ----     ----      ----
Lo Wu           6 068    4 520     6 765
LMCSL           3 981    3 473    10 128
Hung Hom            0        1         0
Lok Ma Chau       160       88       148
Shenzhen Bay    1 201    2 256     4 882
Man Kam To        239    1 000     1 653
Sha Tau Kok       167      108       238
Total          11 816   11 446    23 814

(5) The Police have stepped up enforcement actions against issues including obstruction and nuisance in public places caused by parallel traders and shops and issued a total of 453 summonses in the past three years. Relevant departments will continue to take strict enforcement action at black spots of parallel trading activities to minimise the nuisance caused to residents in public places.

     In order to maintain environmental hygiene and tidiness in North District, the Food and Environmental Hygiene Department (FEHD) will continue to enhance street cleaning services and enforcement actions at parallel trading black spots in the district, including removing discarded items more frequently, issuing Fixed Penalty Notices to persons who have committed public cleanliness offences. To combat obstruction problems caused by parallel trading activities, it also takes part in inter-departmental enforcement actions against shops which violate the laws. In the past three years, the FEHD issued 4 030 notices under the Fixed Penalty (Public Cleanliness Offences) Ordinance (Cap 570) at the relevant black spots. To make sure the neighbourhood is tidy and hygienic, the FEHD arranges no fewer than 3 to 5 rounds of street cleansing every day at black spots of parallel trading in the North District.

(6) Regarding road obstructions caused by illegal parking and loading or unloading of goods in connection with parallel trading, in the past three years, the Police issued over 13 400 Fixed Penalty Notices under the Fixed Penalty (Traffic Contraventions) Ordinance (Cap 237) (applicable to obstruction on roads by motor vehicles) and the Fixed Penalty (Criminal Proceedings) Ordinance (Cap 240) (applicable to offences including loading/unloading goods or picking up/setting down passengers in restricted zone, insecure load, etc.).

     The Police have also targeted illegal conduct involving taxis in the North District. From January to December 2015, the Police have taken out traffic summonses against 62 drivers for carriage of goods on a taxi, soliciting and refusing to accept a hire.

(7) To complement the Government's enforcement action against parallel trading at the source, the District Lands Offices under the Lands Department (LandsD) will accord priority to cases involving parallel trading as appropriate. Industrial units converted and used for retail purposes may have breached the relevant leases. From January to December 2015, the LandsD conducted over 170 inspection operations, targeting multiple units in industrial buildings suspected of being involved in parallel trading activities in the three districts of Tuen Mun, Yuen Long and North District in the New Territories. Grace periods have been shortened to enhance enforcement actions. During this period, warnings had been issued to 45 units suspected of breaching leases. As three of the breaches were not rectified before the deadlines, LandsD re-entered these units in accordance with the Government Rights (Re-entry and Vesting Remedies) Ordinance (Cap 126), under which interests in land and connected rights and obligations become vested in The Financial Secretary Incorporated.

(8) The proposed temporary boundary shopping facility at Lok Ma Chau is a private development project. It is the responsibility of the project proponent to arrange its planning and other operation matters. Application for the above project must follow the established planning, lands and other relevant statutory procedures. The Tourism Commission of the Commerce and Economic Development Bureau has coordinated relevant departments to provide the proponent with information concerning the statutory procedures relevant to its application. On September 18, 2015, the Town Planning Board granted permission on a temporary basis with conditions for a period of three years for the planning application in relation to this project. The proponent needs to fulfill the relevant conditions, and provide proposed arrangements regarding traffic, environment and construction works for approval by relevant departments.

     Relevant departments will continue to closely monitor the situation and take enforcement action as mentioned to crack down on parallel trading activities.

Ends/Wednesday, April 27, 2016
Issued at HKT 18:49


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