A major mission of the department is to prevent and detect the smuggling of contraband and prohibited articles, the import and export of which are controlled under the laws of Hong Kong, for the purpose of protecting the community and environment, maintaining public health and fulfilling international obligations. Items being smuggled include dutiable commodities, narcotics, firearms, strategic goods, infringing copies, goods bearing forged trademarks and goods with false origin labels. In the fight against smuggling activities, the department has strived to maintain a proper balance between control and trade facilitation to ensure speedy flow of legitimate cargoes at the entry and exit points.

2. In the past two years, the department continued to make achievements in anti-smuggling work without compromising the objectives of trade facilitation. Details of the anti-smuggling achievements are provided in the following paragraphs.

Smuggling between HKSAR and the Mainland

3. In 2003, the department detected 282 smuggling cases, 117 at sea and 165 on land. A total of 355 persons were arrested and the seizures amounted to a total value of over $524.60 million. In 2004, 352 smuggling cases were detected, one by air, 170 at sea and 181 on land, with 442 arrestees and $215.82 million worth seizure.

4. The rise in the number of cases coupled with the drop in seizure value, as compared the figures between 2003 and 2004, indicated that smugglers had adopted an "Ant Moving Home" strategy by reducing the volume and value of goods smuggled each time but exploiting frequent cross-boundary movements with a view to minimizing the loss and retribution upon interception. Smuggling between Hong Kong and the Mainland remained a concern.

5. The duty gradient between Hong Kong and the Mainland is probably the main reason that spurs smuggling activities. Electrical appliances, computers and related accessories, mobile phones, vehicles and vehicle parts, marked oil, edible oil and optical discs are hot items which smugglers favour sneaking into the huge market on the Mainland side. On the other hand, cigarettes, illicit fuel, pirated optical discs, counterfeit goods and chilled or frozen meat are popular items in the black market in Hong Kong. The very busy boundary crossing points and ports provide an opportune environment that has been taken advantage of by smugglers. They invariably use cross-boundary container trucks, lorries, river trade vessels and fishing boats to sneak contraband or prohibited goods across the well renowned busy boundary.

6. The common concealment methods were by false compartments in lorries and altered compartments in containers or mixing the smuggled goods with legitimate imports and exports. However, Customs detection remained effective which was attributable to expertise, advanced detection equipment and accurate intelligence analysis.

Dutiable Commodities

7. In 2003, smuggling of cigarettes into Hong Kong was rampant. Among the total seizures of 152.59 million sticks of cigarettes, 66.47 million (43.6 per cent) came from the Mainland. Criminal syndicates continued to make use of cross-boundary vehicles and river trade vessels to smuggle cigarettes from the Mainland by co-loading the cigarettes with general cargo as camouflage. In 2004, the use of cross boundary vehicles to smuggle cigarettes into Hong Kong continued. Amid the total seizure of 167.6 million sticks of cigarette, 63.1 million (37.7 per cent) came from the Mainland.

8. To further target cigarette smugglers who exploited Hong Kong as a transit point for transporting cigarettes to other countries, and to take sustained and vigorous enforcement actions against illicit transshipment, the department bolstered up intelligence exchange and co-operation with overseas enforcement agencies. Only one significant case was detected in 2003, showing that the illicit cigarette transshipment problem was contained at the same level as in 2002.

9. In June 2004, representatives of 16 Customs Administrations in the Asia Pacific Region endorsed an action plan, entitled "Project Crocodile" to fight against transnational cigarette smuggling activities, particularly carouselling. Through the implementation of the Action Plan, participating Customs Administrations would monitor the movement of all suspicious cigarette shipments upon their being imported into, re-exported out or transshipped across different Customs territories. In 2004, two significant cases were detected showing that this holistic enforcement approach had almost wiped out illicit cigarette transshipment. Intelligence revealed that smugglers had circumvented Hong Kong to reduce the risk of detection.

10. Smuggling syndicates tended to employ mix-loading and false declaration as the common modus operandi to smuggle illicit cigarettes in large quantity. On 26 March 2003, officers of Man Kam To Control Point made a record seizure of the year at the land-boundary control points from a 40-foot incoming container truck, declaring to carry 1 030 pieces of plastic toys. In a bid to evade Customs inspection, smugglers made use of the plastic baskets as a coverload to hide the 5.72 million undeclared cigarettes. The total seizure value was $8.58 million and duty potential amounted to $4.59 million.

11. On 23 February 2004, officers of Lok Ma Chau Control Point also detected a smuggling case with the largest quantity of cigarette seized in the year, from an incoming 40-foot container, which was declared to carry "Metal Racks". A total of 5.5 million cigarettes valued at approximately $8.3 million with duty potential amounting to $4.43 million were seized.

12. The department also stepped up operations at the very busy land boundary to target passengers who sneaked in cigarettes in their baggage. Reinforced enforcement actions had produced fruitful results. In 2003, at various Control Points, a total of 1 239 passengers were intercepted and dealt with by way of compounding, another 237 persons were prosecuted with relevant offences, and a total of 12.6 million sticks of cigarettes were seized. In 2004, a total of 2 286 passengers were intercepted and dealt with by way of compounding and another 504 persons were prosecuted with relevant offences, and a total of 12.9 million sticks of cigarettes were seized.

13. The strategies of pre-emptive measure to stem the flow of illicit cigarettes from their source, make interception at the three land-boundary control points and strengthen intelligence collection have been proven effective with encouraging enforcement results.

14. Smuggling of illicit fuel from the Mainland by cross-boundary vehicles and by river trade vessels persisted in the past two years. Through increased checks against suspicious cross-boundary vehicles and river trade vessels, 62 cases were effected in 2003 with a total seizure of 455 855 litres of illicit fuel. In 2004, 59 cases were effected with 500 517 litres of illicit fuel seized.

15. On 17 January 2003, officers of Sha Tau Kok Control Point uncovered the largest illicit fuel smuggling case of the year at land-boundary control   points.  A   total  of 36 400 litres of illicit fuel were found inside the cargo compartment of an incoming container truck, which were declared to carry 896 drums of "paint solvent". The total seizure value was $560 000 and duty potential amounted to $220 000. Besides, customs officers of Man Kam To Control Point seized 38 800 litres of motor spirits from a 20-foot container truck arriving from the Mainland on 19 April 2004. The seizure, being the largest haul of illegal fuel valued at $0.46 million, was declared as 432 drums of "thinner".

16. To combat passengers' abuses of duty-free concessions, Customs officers at control points have since February 2003 been using the computer workstations, which are linked to the computer system of the Immigration Department, and the identity card scanning device to verify whether an incoming passenger travelling on a Hong Kong identity card has spent 24 hours or longer outside Hong Kong for ascertaining their eligibility for duty-free concessions. The use of the system and device has proved to be very effective, resulting in the detection of a total of 12 361 cases of abuses of duty-free concessions, involving a total of 2.78 million sticks of cigarettes in 2003 and 2004. Under the Compounding Scheme, total fines of $2.7 million were paid in respect of 645 cases involving over 350 000 sticks of cigarettes. The Department is planning to install additional computer workstations and identity card scanning devices in 2004-05 to provide more efficient verification services.

17. In 2003 and 2004, there were respectively 106 and 248 passengers arrested and dealt with by way of compounding while 30 and 19 were prosecuted for bringing into Hong Kong dutiable commodities in excess of their duty-free concessions at the Hong Kong International Airport. The total amount so compounded was $746 991 in 2003 and 1 744 905 in 2004.

18. In 2003, a total of 324 cases with significant quantities of contrabands, valued at $458 million, were effected through ports and maritime enforcement. The seized items included garments and household goods bearing forged trade marks or false origin labels, unlicensed chilled pork, endangered species, hazardous wastes, hydrocarbon oils and illicit cigarettes. For 2004, a total of 257 cases with significant quantities of contrabands, valued at $236 million, were effected through ports and maritime enforcement. The seized items included garments and household goods bearing forged trademarks or fraud origin labels, unlicensed frozen meat, mobile phone accessories, hydrocarbon oils, illicit cigarettes, electronic goods etc.

Dangerous Drugs

19. Drug syndicates have also taken advantage of the very heavy passenger and vehicular traffic at the various entry and exit points to smuggle drugs into Hong Kong. Small quantity of dangerous drugs is smuggled in at a time to reduce the chance of detection and minimize loss upon interception. In 2003, the department detected two cases of internal drug concealment at Lo Wu Control Point involving 151 grams of heroin. Body packing, a conventional way of smuggling drugs, remained popular.

20. Heroin, ketamine, herbal cannabis, cocaine, MDMA (‘ecstasy’) methylamphetamine (‘ice’) and estazolam are the major types of dangerous drugs smuggled into Hong Kong. In 2003, the department detected a total of 708 drugs cases. Among these cases, one was detected in January 2003 at the Hong Kong International Airport with the arrest of two Hong Kong men who were about to depart for Japan. A total of 22 542 tablets of MDMA, valued at $7 million, were seized. The drugs were wrapped around the abdomens of the arrestees.

21. In 2004, the department detected a total of 710 dangerous drugs cases. Of these cases, one was detected in May at the Hong Kong International Airport with the arrest of one Singaporean man who was about to depart for New Zealand with another Malaysian man. A total of 15 200 tablets of MDMA, valued at $4.56 million, were seized. The drugs were concealed inside the false compartments of the Singaporean man’s check-in luggage.

22. At the Hong Kong International Airport, cannabis resin, cocaine, heroin and MDMA ("ecstasy") were the main types of dangerous drugs seized by customs officers in 2003, with 36 cases detected and 29 persons arrested in total. The total seizure value was $34.3 million. Major seizures included 8.241 kilograms of cannabis resin, 5.743 kilograms of cocaine, 3.17 kilograms of heroin and 49 104 tablets of MDMA ("ecstasy"). Among these cases, five involved internal concealment.

23. In 2004, the main types of dangerous drugs seized by officers at the Hong Kong International Airport were cannabis resin, cannabis buds, cocaine, herbal cannabis, MDMA ("ecstasy"), ketamine and heroin. There were 87 cases detected with the arrest of 48 persons. The total seizure value was $48.8 million. Major seizures included 18.65 kilograms of cannabis resin, 11.17 kilograms of cannabis buds, 12.48 kilograms of cocaine, 9.22 kilograms of herbal cannabis, 79 113 tablets of MDMA ("ecstasy"), 503 grams of ketamine and 3 047 grams of heroin. Among these cases, three involved internal concealment.

24. Of particular interest was the first detection of cannabis buds at the Hong Kong International Airport in 2004. Cannabis bud carries a higher tetrahydrocannabinol (THC) content than herbal cannabis and gives stronger hallucinogenic effect that attracts drug abusers. It also has a comparatively higher market price.

25. Besides, at control points, 196 dangerous drugs cases were detected by customs officers in 2003, while 184 dangerous drugs cases were detected in 2004. Noticeably, the drug couriers changed the modus operandi to smuggle smaller quantity of dangerous drugs in each trip and make more frequent attempts in order to minimize the loss upon interception by Customs. The common modus operandi includes camouflaging as itinerary travelers with the dangerous drugs body-packed or mix-loaded with personal belongings.

26. Apart from heroin, ketamine and methylamphetamine ("Ice"), the majority of the dangerous drugs cases detected at the control points fall in the category of Benzodiazepines such as Estazolam, Midazolam and Triazolam.

27. Officers at Lo Wu Control Point on 19 March 2003 successfully detected a significant dangerous drugs case from a Pakistani male drug courier camouflaging as normal daily tripper among the crowds. A total of 3.5 kilograms of cannabis resin, valued at $0.7 million, were found inside a wine box and a cigarette carton box contained in a plastic bag carried by the drug courier. Besides, in a joint operation mounted with the Hong Kong Police Force on 26 February 2003, officers of Man Kam To Control Point seized 2.8 kilograms of No. 4 heroin from an incoming goods vehicle. The seizure, with market value of $1.12 million, was found inside a concealed compartment in the driving compartment of the subject vehicle.

28. Besides, two significant dangerous drug cases were detected within eight minutes at Lo Wu Control Point on 6 Febuary 2004. As a result, a total of 3.16 kilograms of Ketamine, valued at $1.3 million, were found bodily packed by adhesive tape around the defendants.

29. On 4 October 2004, Customs officers at HK-Macau Ferry Terminal also successfully detected a significant dangerous drug case from an outgoing passenger who concealed 40 grams of cannabis buds inside his underwear. As a result, the arrested person was charged with trafficking in dangerous drug.

Arms and Weapons

30. To prevent the flow of arms and weapons into the territory, the department has been enhancing customs control duties at the entry and exit points. In 2003, quite a number of weapons were seized. These included six spring-load knives, three magazines, four assault rifles, 15 revolvers, 16 stunned guns, 493 gun accessories and 218 batons with the arrest of three persons at the airport and various land boundary control points.

31. In 2004, tough enforcement action has been continuously taken against the illegal importation of arms and weapons. There were 94 knives, 24 stunned guns, 33 gun accessories, 1 707 batons, two sets of pepper spray, 57 imitation firearms and 17 air guns were seized and two persons were arrested at control points.

32. In 2003 and 2004 there were 19 and 24 cases detected with the arrest of four and nine persons respectively at the Hong Kong International Airport. Seizures in 2003 included pistols, crossbows, various kinds of baton, assorted knives, assault rifles, carbine guns, archery products, bullets, etc. The total seizure value amounted to $231 088. In 2004, seizures were pistols, crossbows, various kinds of baton, assorted knives, assault rifles, carbine guns, archery products, bullets, etc. The total seizure value amounted to $229 998.

33. At various land-boundary control points, Customs officers arrested 14 incoming passengers and one cross-boundary coach driver for illegal possession of firearms and weapons during the year of 2003. In connection with these cases, 14 stun guns, two spring-loaded knives, three gravity-operated steel batons and 503 accessories for stun guns were seized. In 2004 customs officers arrested 25 incoming passengers for illegal possession of firearms and weapons at various land-boundary control points. In these cases, seven air pistols, three stun guns, four batons, 11 knives and swords were seized.

Establishment of Explosive Detector Dog Teams

34. To enhance the department's capability in detecting explosives, two teams of Explosive Detector Dogs have been established since September 2003 to provide service at the Ports and Maritime Command and various control points.

Counterfeit and Pirated Articles

35. The department continues to accord high priority to the protection of intellectual property rights, and Customs officers at various entry and exit points always guard against the smuggling of counterfeit and pirated goods.

36. In 2003, a total of 19.2 million pieces of counterfeit goods and some 150 000 infringing optical discs were seized at the airport and the land boundary control points; 2.2 million pieces of goods bearing either forged trade marks or false origin labels were seized on board arriving river trade vessels. In 2004, 2.2 million pieces of counterfeit goods and 7.8 million pieces of infringing optical discs were seized at the airport and land boundary control points in total; some 8.8 million pieces of goods bearing either forged trademarks or false origin labels were seized on board incoming river trading vessels. The seized commodities included mobile phones accessories, garment, leather products, electric appliances and beddings.

37. At the Hong Kong International Airport, 34 cases were effected in 2003 with the arrest of 17 persons. Seizures such as infringing DVDs, mobile phone accessories, handbags and watches fetched a total value of $9 194 900. In 2004, 91 cases were effected with the arrest of 29 persons, and the seizures included infringing DVDs, mobile phone accessories, handbags and watches fetched a total value of $9 231 755.

38. At various land control points, a total of 147 cases with seizures valued at $63.5 million were effected in 2003 under the Trade Descriptions Ordinance including seizures of garments, handbags, shoes, mobile phones and accessories, leather products, clocks, watches, video game sets and accessories, toys, foodstuffs, cosmetics and household goods bearing forged trade marks or false origin labels. A total of 160 cases with seizures valued at $51.4 million were effected at various land control points in 2004 under the Trade Descriptions Ordinance. Seizures included garments, handbags, shoes, mobile phones and accessories, leather products, watches, etc. bearing forged trade marks or false origin labels.

39. The department is much concerned about the exploitation of the heavy traffic flow by the smugglers for smuggling of pirated optical discs at Lo Wu Control Point. To counteract this smuggling trend, officers of Control Points Command regularly conduct joint operations with other Formations. Throughout the year of 2003, officers of Lo Wu Control Point made 84 arrests with 109 453 pirated optical discs seized. On 28 April 2003, officers of Lo Wu Control Point seized a total of 5 213 pirated optical discs, valued $130 325, from a carton box carried by an incoming passenger.

40. On 7 August 2004, officers of Man Kam To Control Point seized from an incoming lorry 14 857 infringing optical discs, with a market value of $0.36 million. The smugglers mixed the optical discs with other items, such as mobile phones accessories, watches, calculators and T-shirts, all bearing forged trademarks. These items valued at $1.04 million, and the total seizure value amounted to $1.4 million.

Electrical Appliances and Computer Accessories

41. Smuggling of electrical appliances, computers and related accessories was prevalent in 2003. The situation improved a bit in 2004.

42. The total number of cases effected in 2003 was 98 and that in 2004 was 92, showing a decrease of 6 percent. In 2003, $99.65 million and $69.86 million worth of electrical appliances, and computers with accessories were seized respectively. Against $21.56 million and $22.81 million worth of corresponding seizures in 2004, a remarkable drop of 78.3 percent and 67.3 percent is seen.

43. It is worth noting that there first appeared the use of a cross-boundary passenger coach as a smuggling conveyance of computers and accessories in 2004. Seizures were found concealed inside the air conditioning ventilation compartment and luggage compartment of the coach.

44. On 3 April 2004, officers at Man Kam To Control Point detected a computer part smuggling case with seizure of over $1 million. In that case, 1 808 computer hard disks were seized from a lorry departing for the Mainland. The seizures, valued at $1.18 million were concealed in a false compartment constructed underneath the floor of the cargo compartment.

45. The smuggling of high value electrical appliances and consumer products remained rampant in 2003. A total of 29 sea smuggling cases with seizures valued at $267 million were detected through ports and maritime enforcement. In 2004, 46 sea smuggling cases valued at $49 million were detected through ports and maritime enforcement.

The seizures were found stashed behind camouflaging material - piles of soap - to evade Customs’ detection.
		The seizures were found stashed behind camouflaging material - piles of cloth - to evade Customs’ detection.

Telecommunication Equipment

46. Given the rapid economic growth on the Mainland, which catalysed the take-up rate of mobile phones in big cities, the smuggling of mobile phones between Hong Kong and the Mainland continued. In 2003, a total of 51 715 mobile phones and accessories, worth over $2.70 million were seized at the entry and exit points. Whilst in 2004, 17 377 sets of mobile phones and accessories were seized. The total seizure value amounted to $6.04 million.

47. Smuggling of mobile phones by outgoing passengers via the rail and ferry terminals was put under control after the launch of a series of customs operations. In this connection, officers at various land control points seized 919 sets of mobile phones and 444 accessories with a total value of $1.14 million from nine outgoing passengers in nine cases during the year of 2003.

48. Besides, customs officers also detected a case with record seizure in 2003 regarding the smuggling of mobile phones at the HK-Macau Ferry Terminal on 19 November 2003. 200 sets of mobile phones, with value of $128 000, were found from a traveling bag of an outgoing passenger.

49. During the year of 2004, officers of the Control Points Command detected 23 mobile phone smuggling cases. A total of 3 805 sets of mobile phones and 86 727 accessories valued at about $6.42 million were seized. In particular, officers of Lok Ma Chau Division detected a case of smuggling mobile phones to the Mainland and made a record seizure of mobile phones of the year from an outgoing private car on 4 June 2004. In this case, 999 sets of mobile phones, with value of $0.69 million, were seized.

Vehicle and Vehicle Parts

50. Smuggling of vehicles and vehicle parts to the Mainland was rampant in 2003. There were 35 smuggling cases with $1.11 million and $5.45 million worth vehicles and vehicle parts seized in the year.

51. The persistent smuggling of vehicles and vehicle parts to the Mainland extended to 2004. 54 cases were detected with the seizure of $1.25 million worth of vehicles and 1.29 million worth of vehicle parts. With an accelerated growth of automobile demand in the Mainland, smuggling activities are expected to continue.

Optical Discs

52. In 2003, a total of 18 smuggling cases of optical discs to the Mainland were detected and over eight million unmanifested VCDs and DVDs were seized. Majority of the cases were made at sea and the seizures were largely olden movies without copyright infringement. In 2004, both the number of cases and seizure dropped. Only seven cases with seizure of one million discs were recorded.

Meat and Poultry

53. Owing to the differential market price between Hong Kong and the Mainland, smuggling of meat and poultry into Hong Kong in large consignments conveyed by cross-boundary vehicles remained active in 2003 and 2004. Besides, the sneaking in of small quantity of meat by local residents when they returned from the Mainland via the Lo Wu Control Point for self-consumption or re-sale was not uncommon.

54. To safeguard public health, joint operations were regularly mounted by the department and the Food and Environmental Hygiene Department at various control points. In 2003, 79 826 kilograms of frozen and chilled meat were seized, with a total value of $1.56 million. In 2004, a total of 125 953 kilograms of fresh and frozen meat worth $2.47 million were seized, representing an increase of 58 percent when compared with the total seizure quantity or value in 2003.

55. The outbreak of Avian-flu in early 2004 and the subsequent temporary suspension on the importation of live birds and poultry meat from the Mainland led to the increase of meat and poultry smuggling from the Mainland.

56. The enforcement result at land boundary revealed that smuggling syndicates used to smuggle illegal meat by cross-boundary vehicles via Man Kam To Control Point and Shek Chung Au Check Post at Sha Tau Kok. As a result of strengthening of intelligence collection and surveillance work as well as a series of joint operations launched with the Food and Environmental Hygiene Department, a total of 21 and 33 meat smuggling cases were detected with seizure of 107 043 kilograms and 83 434 kilograms of illegal meat respectively in 2003 and 2004.

57. In 2004, customs officers at various control points continued to detect smuggling cases of illegal meat. On 14 September 2004, 25 506 kilograms of frozen poultry, with an estimated market value of $0.34 million, were seized from an inbound refrigerated goods vehicle arriving from the Mainland at the Man Kam To Control Point. On 4 December 2004, officers of Sha Tau Kok Division and Control Point Investigation Division mounted a joint operation at Shek Chung Au Check Post to curb the smuggling of meat from the Mainland via Sha Tau Kok village to other areas of Hong Kong. As a result, a lorry driver was arrested and 1 500 kilograms of fresh meat valued at about $ 48 000 was found inside the cargo compartment of a box-typed lorry.

Endangered Species

58. In 2003, the department detected a total of 148 cases of smuggling endangered species of plants and animals at the entry and exit points. The items involved included American ginseng, crocodile specimen, crocodile meat, tiger bone medicines, ivory, stony coral, orchid, and other endangered birds and plants.

59. It is worth-mentioning that in July 2003, a case under the Animals and Plants (Protection of Endangered Species) Ordinance was effected through ports and maritime enforcement with 10 277 pieces of Testudinidae Specie True Tortoise and Cuora Amboinensis Malayan Box Turtles seized from a container importing from Malaysia. The shipment was declared as "Water Melon" and was intended for export to Guangdong, the Mainland. The total seizure value was $1.37 million. This significant seizure well reflected the department's commitment in the protection of endangered species.

Marked Oil

63. The price difference in diesel oil between Hong Kong and the Mainland is a major factor attributing to the persistent smuggling of marked oil into the Mainland. In 2003, a total of 30 cases with seizure of 392 801 litres of marked oil were detected. The seizure value amounted to $1.63 million. In 2004, 25 cases were detected. The seizure of 413 040 litres of marked oil was up to $2.02 million.

Edible Oil

64. Being a commodity subject to quota control, import authorization and payment of customs tariff on the Mainland, edible oil is one of the popular smuggling items. A total of nine smuggling cases were detected in 2003, resulting in the seizure of 55 500 litres of edible oil, worth about $153 210.

65. In 2004, the number of cases rose more than one-fold to 22. A total of 172 420 litres of palm oil and vegetable oil worth approximately $500 000 were seized. The rise was likely due to the strong demand of high quality edible oil in the fast growing food industry and health consciousness of consumers on the Mainland.

Anti-smuggling Operation at Sea

66. In view of the diversified modus operandi in sea smuggling, the department is keen on mounting various operations with a view to detecting and deterring these illicit activities. Some major operations against sea smuggling include:

(a) Operation ‘Stinger’ - Observations are mounted at the very early moment when smuggled goods are taken out from godown for containerization, and then to shipyards and finally for shipping.

(b) Operation ‘Super Delta’ – It targets smuggling activities in the western part of the territorial waters with focus on the contrabands originated from the Pearl River Delta. In 2004, a total of 68 cases with significant quantities of contraband, valued at $153 million, were detected in this operation. The seized items mainly included garments and household goods bearing forged trademarks or false origin labels.