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LCQ16: Cracking down on parallel trading activities
     Following is a written reply by the Secretary for Security, Mr Lai Tung-kwok, to a question by Hon Alvin Yeung in the Legislative Council today (November 23):


     To combat parallel trading activities, the Immigration Department (ImmD) has drawn up a "watch list of suspected parallel traders" (the watch list) to step up the interception of suspected parallel traders and refuse their entry. In addition, the Mainland authorities announced on April 13 last year the tightening of the policy on Shenzhen permanent residents visiting Hong Kong, under which the issuance of one-year multiple-entry Individual Visit Endorsements was stopped with immediate effect, and was replaced by the issuance of one trip per week Individual Visit Endorsements only (i.e. the "one trip per week" policy). On the other hand, a political party has suggested that in order to raise the cost of parallel trading activities, the Government should levy a same-day land departure tax on visitors who depart by land within the past 24 hours after entry by land (the departure tax), and where the number of departures made by a visitor exceeds a certain number within a certain period of time (e.g. six months in the past), the relevant tax payable will increase progressively with the number of such departures. In this connection, will the Government inform this Council:

(1) of the following information per month from April 2014 to March this year (i.e. from one year before to one year after the implementation of the "one trip per week" policy):
(i) the number of Shenzhen permanent residents who departed on the same day of their entry,
(ii) the number of cases of such persons being found by the Customs and Excise Department to have violated the restriction on powdered formula (i.e. each person aged 16 or above may carry, on his/her departure from Hong Kong within a 24-hour period, powdered formula for infants and young children under the age of 36 months of a total net weight no more than 1.8 kilograms), and
(iii) the number of times for which ImmD refused entry of such persons in accordance with the watch list, and set out such figures in a table;

(2) whether it has regularly revised the watch list; if it has, of the criteria for such revisions; and

(3) given that the Government mentioned in the 1999-2000 Budget that it would consider levying a land and sea departure tax, and it introduced in 2003 the Boundary Facilities Improvement Tax Bill to this Council (but eventually did not take forward the enactment of the Bill because of the divergent views on the Bill within the Council and the community at that time), whether the Government has examined (i) if it is reasonable in principle to levy a departure tax on parallel traders, (ii) if it is technically feasible to levy a departure tax, and (iii) the methods other than departure tax that can raise the cost of parallel trading activities; if it has examined, of the details; if not, the reasons for that?



     In consultation with the relevant policy bureaux and departments, our consolidated reply to the question is as follows:

(1) With effect from April 13, 2015, the Mainland authorities put in place the "one trip per week" Individual Visit Endorsements (IVEs) to replace the "multiple-entry" IVEs for Shenzhen permanent residents. The Immigration Department (ImmD) does not maintain any statistical breakdown on the number of Shenzhen permanent residents who departed Hong Kong on the same day of their arrival.

     As regards the number of cases involving Mainland residents who attempted to export unlicensed powdered formula detected by the Customs and Excise Department and the number of entries of Mainland residents being refused due to suspected involvement in parallel trading activities from April 2014 to March 2016, a breakdown by month is tabulated at Annex.

(2) 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.  ImmD will examine these people when they enter Hong Kong again, and, if their purposes of visits are in doubt, will refuse their entry and repatriate them immediately.

(3) During 2002 and 2003, the Government planned to impose a boundary facilities improvement tax on passengers departing Hong Kong via land or sea departure points as a measure to raise revenue, so as to help finance the improvement of boundary facilities. Nonetheless, after taking into account various views of the society, the Government considered that it was not an opportune time to introduce the boundary facilities improvement tax given the then economic conditions. As a result, the plan was shelved.

     Since September 2012, the law enforcement agencies have been mounting large scale joint operations to suppress parallel trading activities, improve order at railway stations and boundary control points and uphold the daily lives of our residents. They have also refined their enforcement strategies in response to the mode of operation of parallel traders. Since the implementation of the "one trip per week" measure with effect from April 13, 2015, the Mainland arrivals, in particular the number of same-day visitors, have shown a downward trend. It shows that the measure has taken effect. At present, the Government has no plan to impose tax or other fees on same-day round-trip visitors travelling by land. Relevant departments will continue to closely monitor the situation and take various existing measures to crack down on parallel trading activities.
Ends/Wednesday, November 23, 2016
Issued at HKT 16:15
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