World Customs Organization (WCO)

1. During 2003 and 2004, the department actively participated in the WCO's meetings including the Council Sessions, the Permanent Technical Committee, the Enforcement Committee, and the Supply Chain Security Task Force, and rendered full support to other activities, seminars and campaigns relating to the promotion of customs integrity, trade facilitation and counter-terrorism measures.

2. As a member of the WCO Asia Pacific region, the department also contributed actively to regional activities, especially voluntarily taking up the role of regional strategic plan coordinator to promote enforcement on security, commercial fraud and smuggling, customs-business partnership, and integrity.

Regional Intelligence Liaison Office

3. In 2003, the department continued its close liaison with the WCO Regional Intelligence Liaison Office for the Asia and the Pacific (RILO-AP) in Tokyo, and provided full support to the regional intelligence network by channelling timely intelligence and acceding to the requests of regional members for investigative assistance through the RILO-AP. During 2003, four cases were concluded as a result of intelligence exchange through the RILO-AP, leading to the seizure of 574 handbags and 3 320 wallets bearing forged trademarks, 5.7 million counterfeit cigarettes, and 21.4 kg of herbal cannabis.

4. On 1 January 2004, the base of the RILO-AP was relocated to Beijing. Hong Kong Customs continued to render support to the RILO-AP in Beijing and deployed an officer to work as an intelligence analyst at the RILO-AP office since its relocation.

5. The department has maintained close liaison with the RILO-AP office in Beijing. In 2004, Hong Kong Customs passed intelligence to Japan Customs via the RILO-AP on two occasions, resulting in the timely interception of 4.91 kg of methamphetamine, and the arrest of two drug couriers from Hong Kong at Narita International Airport.

Co-operation with other Customs Administrations

6. Through regular bilateral meetings, the department has enhanced mutual co-operation with the Mainland and other Customs administrations by establishing strong exchange networks for combating transnational crimes. Between 8-12 November 2004, Commissioner Tong Hin Ming led a five-member delegation to attend two bilateral conference in Sydney, Australia and Auckland and New Zealand with the Australian Customs Service an New Zealand Customs Service.

7. In regard to Mainland Customs, the department held Annual Review Meetings in 2003 and 2004 with the General Administration of Customs of PRC and its Guangdong Sub-Administration, respectively. Liaison officers of the two sides also met regularly during these two years to exchange information and experience on anti-smuggling work, collaborative measures, and ways to strengthen Customs co-operation.

8. On training co-operation, the Mainland and Hong Kong Customs organised two seminars on law enforcement and Customs procedures in 2003 and 2004. The Shanghai Customs College in turn organised two China Customs Courses for officers of the department, and the Guangdong Sub-Administration organised the China Customs Basic Course in Guangdong Province, in 2003 and 2004 respectively. Besides, the department and the Mainland Customs have also organised various training programmes and seminars for each other, covering such topics as human resource management, protection of intellectual property rights, intelligence analysis and risk management, valuation techniques, anti-smuggling and narcotics control.

9. Recognizing the importance of international co-operation with other Customs administrations and law enforcement agencies in combating transnational crimes, the department continued to build up closer working relationships with Macau Customs Service, Customs attaches and representatives of other law enforcement agencies stationed in Hong Kong.

10. The department engaged actively in the exchange of information and intelligence on illegal activities involving smuggling, drug trafficking, excise duty evasion, intellectual property right infringement, and other Customs fraud. In 2003 and 2004, the department encountered 842 and 797 incidents respectively for information exchange with overseas Customs and law enforcement agencies in more than 20 countries.

Asia Pacific Economic Cooperation (APEC)

11. The department participated actively in the various meetings of the APEC, in particular, those related to the Sub-Committee on Customs Procedures (SCCP). In 2003, Hong Kong Customs sent two experts to the workshops on Customized Advisory Mission on Express Consignments Clearance, which were organised in the Philippines and Vietnam for experience sharing with other APEC SCCP members.

12. As the lead co-ordinator for the Collective Action Plan (CAP) on Customs-Business Partnership, the department helped compile a handbook entitled "Showcases of Customs-Business Partnership Programmes" in February 2004, highlighting the partnership programmes that had been successfully implemented by APEC members. On the other hand, the department also revised and updated in August 2004 the compendium on "Best Practices on Customs-Business Partnership", which was later renamed as "Customs-Business Partnership Programmes". The compendium serves as a practical guide for APEC SCCP members to develop and enhance their own partnership programmes.

Container Security Initiative

13. In the aftermath of the September 11 Incident that occurred in the USA, the US Customs introduced the Container Security Initiative (CSI) to address the risks of terrorist attacks through containers destined for the USA.

14. As Hong Kong is a leading logistics hub, the department fully recognises the importance of enhancing the security of the world's maritime trade through strengthened Customs co-operation at seaports. On 23 September 2002, Hong Kong Customs and the US Customs signed a Declaration of Principles (DoP). Under the DoP, the two administrations are committed to exchanging information and working closely together to facilitate the identification, screening and sealing of high-risk containers destined for the USA.

15. After the signing of the DoP, the department has maintained close liaison with the stakeholders of the shipping industry to understand their concerns and to update them on the latest development of the CSI programme. The department has also discussed with the US Customs on the practical arrangements of the CSI Pilot Scheme, such as the mode of exchanging intelligence as well as the stationing of US Customs officials in Hong Kong.

16. On 12 May 2003, the CSI pilot scheme commenced operations in Hong Kong. Under the CSI, a group of US Customs officers has been stationing in the Kwai Chung Customhouse. They undertake anti-terrorist risk analysis of containers destined for the US on the basis of their own intelligence. Meanwhile, Hong Kong Customs has established the CSI (Selectivity) Unit to process and pre-screen the US-bound cargo data voluntarily submitted by the local shipping companies and forwarding agents. The team is also responsible for the collaboration with the US Customs concerning information exchange and selection of containers for examination. Hong Kong Customs officers will scan or inspect the identified containers before they are loaded on board the vessels, whilst US Customs officers are permitted to observe the examination process.

17. In the course of selection of high-risk containers under the CSI, 34 000 pieces of counterfeit leather goods worth about $8.65 million were seized in June 2003. They were found inside three transshipment containers originated from Mainland China for re-export to New York via Hong Kong. In November 2003, an unmanifested used motorcycle was found in a transshipment container arriving from Kenya for export to the USA. No weapon of mass destruction has been detected since the commencement of the CSI.

18. Since the CSI has been recognised as a global effort to safeguard the international maritime trading system from terrorism, it is expected that the CSI pilot scheme will be extended on a long-term basis in Hong Kong.

Preparation for the Accession to the Revised Kyoto Convention

19. A working group was specially set up in December 1999 to study the position of HKSAR regarding the accession to the revised International Convention on the Simplification and Harmonization of Customs Procedures (the Revised Kyoto Convention), which provides the blueprint for Customs procedures and practices for the 21st Century. The working group examined the legal text of the Revised Kyoto Convention article by article, and completed the final report in August 2003. The department accepted the report and recommendations of the working group, and submitted the final report to the relevant departments and policy bureaux in October 2003 for policy support and legal advice. As at December 2004, a number of departments and policy bureaux as well as the Department of Justice had already indicated no objection in principle to HKSAR's accession to the Convention. Additionally, acting on the comments of the Financial Services and the Treasury Bureau, the department has commenced a more focused evaluation on certain areas in the final report with a view to ascertaining whether there would be any impact on some specific Customs procedures under the Revised Kyoto Convention.

Visits by Counterparts

20. Customs officers in the Hong Kong International Airport maintained close relationship and co-operation with local and overseas counterparts through the organisation of numerous receptions of courtesy visits in 2003 and 2004. Respectively in 2003 and 2004, a total of 23 and 22 courtesy visits were arranged. Of these visits, there were 11 visits for overseas officials, 9 for Mainland officials 3 for local agencies in 2003. For the year 2004, 7 of the visits were for overseas counterparts, 7 for Mainland officials, and 8 for local agencies.

21. On 16 June 2004, three senior officials of the Security Bureau led by the Permanent Secretary for Security Mr YING Yiu-hong, visited the Airport Command and were briefed on the achievement of Customs officers at the Airport, the challenges ahead and the strategy to meet the increasing demand for quality clearance services.

22. At the end of the visit, Mr YING said that the visit helped him gain a better understanding of Customs work and he was impressed by Customs officers’ professionalism, dedication, high standard of clearance services and the effective use of resources.

Cooperation with Other Government Departments

23. The department has always promoted cooperation with other Government Departments. In February 2003, the department assisted the Food and Environmental Hygiene Department in the detection of illicit importation of meat at a value of $0.33 million from a Mainland cargo vessel.

24. Since the commissioning of the four high speed pursuit crafts, the department has further enhanced cooperation with the Marine Police in the anti-smuggling frontline. In a joint operation with the Marine Police in December 2003, 13 000 VCDs and 32 VCD stampers were seized together with the arrest of two smugglers. The value of the seizures was $0.356 million.

25. In 2003, the department successfully intercepted and handed over to the Agriculture, Fisheries and Conservation Department (AFCD) two consignments respectively containing turtles and ivory, the import and export of which were controlled under the Animals and Plants (Protection of Endangered Species) Ordinance. Subsequently, AFCD successfully prosecuted an importer and confiscated all the controlled items.

26. The department has also been cooperating with the Environmental Protection Department (EFD) to combat the illegal import of hazardous wastes. In 2003, the department referred five consignments of suspected hazardous wastes to EPD for follow-up action. After investigation, EPD prosecuted four importers of those consignments.