Intelligence Support

Enforcement results achieved in 2003 and 2004 vindicated the department's decision in mid 2002 on establishing the Intelligence Bureau (IB), which pools all intelligence resources under one formation for coordinating intelligence activities within the department. All operational fronts received good intelligence support rendered by the bureau. Based on the strategic intelligence generated, the department mounted a total of 28 and 55 territory-wide, large-scale operations against criminal syndicates involved in dutiable cigarettes and illicit fuel activities in 2003 and 2004 respectively. During the operations in 2003, Customs officers seized 15.8 million sticks of dutiable cigarettes, 351 000 litres of illicit fuel valued at $26.8 million. Whilst in 2004, 26.3 million sticks of dutiable cigarettes, 240 840 litres of illicit fuel in the amount of $42.1 million were seized.

2. In 2003 and 2004, 43 and 61 pieces of tactical intelligence were released respectively to keep frontline officers informed of the prevailing crime trends and modus operandi employed by culprits. There were also over 16 000 pieces of operational intelligence issued in 2003 for Customs officers to take timely enforcement actions on 2 588 cases with 2 288 persons arrested. The operational intelligence issued in 2004 were 13 000 pieces relating to 2 581 cases with 2 113 persons arrested. The enforcement figures in 2003 indicated a marked improvement when compared with 1 758 cases and 1 532 arrested persons registered in 2002. The enforcement figures in 2004, to a certain extent, showed a steady performance.

3. The department maintains close cooperation with various local and foreign law enforcement agencies such as Agriculture, Fisheries and Conservation Department, Food and Environmental Hygiene Department, Immigration Department, Hong Kong Police Force, and Police and Customs attaches in Hong Kong, on exchange of intelligence. In the past two years, through intelligence exchanges with these agencies, useful intelligence was generated to enhance the department's enforcement capability and anti-terrorism alertness.

4. Underpinning the department's intelligence-led mode of operations, IB makes every effort in improving the hardware and software for intelligence analysis and dissemination, and risk management. Since 2003, the following intelligence and risk management projects have been brought to fruition.

Feasibility Study and Phase-1 Implementation of an IT-based Intelligence System

5. Storing, processing and analyzing voluminous data for intelligence use would be difficult for intelligence analysts and investigators without the support of a dedicated IT based intelligence system. Hence the department commissioned a consultant in June 2003 to conduct a study of the feasibility of employing such a system. In supporting the study, a small scale pilot system was developed and it served as a useful site for testing major intelligence functions envisaged for the intelligence system. The bureau, as one of the users of the planned system, also provided useful information to the consultant for mapping out the operating environment and user requirements.

6. In July 2004, funding was approved for Phase-1 implementation of the intelligence system. The implementation was kicked-off in August 2004 and will be completed in August 2005. By then, the Phase-1 intelligence system will provide a website for dissemination of risk management information, data-mining tools for intelligence analysis and risk assessment, and interface links for delivery of risk indicators and profiles to support the risk assessment engine in the "Electronic Data Interchange System for Cargo Manifest". This will further enhance the department's risk management capability in cargo clearance, thereby facilitating legitimate trade and underpinning the enforcement effectiveness.

Intranet Website - RM.net

7. To fully utilise the resources made available by the feasibility study, IB developed the pilot intelligence system into an intranet website - RM.net. This intranet website which was rolled out in January 2004 provides various kinds of risk management information and application tools to facilitate frontline Customs officers in cargo clearance, investigation, as well as intelligence analysis and research on smugglers' modus operandi and crime trends. The application tools include validation of freight container numbers, and enquiry of terrorist list, controlled items, business registration numbers, risk profiles and flight itineraries. Several hundred frontline officers and investigators of various ranks were authorised to use this website.

Single Trader Database

8. In March 2003, the Single Trader Database (STD) was successfully rolled out. The STD was developed from the Cargo Data Module in Customs Control System. This database keeps processed data drawn from 10 departmental trader databases and some other government databases, as well as trader data gathered from verification and visits. It provides an updated and concise bilingual trader summary, including trader background, shipment frequency, mostly traded commodities, and import and export markets. In December 2004, the STD contained over 190 000 trader records, around threefold the volume registered in July 2002. It is an effective tool for frontline officers to identify and select high-risk cargo consignments for examination.

New Trader Verification Concept

9. In late 2003, IB devised a new trader risk assessment concept. In devising the concept, reference was made to the "audit-based trader risk assessment" concept as promoted by the World Customs Organization. The following key elements of a trader would be appraised:

a) company profiles;
b) divisions of work within the company;
c) supply chain of goods;
d) documentary control of goods;
e) movement control of goods;
f) storage facilities for cargo; and
g) specific security measures adopted.

10. The new concept was implemented in 2004. The trader risk assessment enables a more reliable selection of high-risk cargo consignments through the presentation of a more comprehensive picture of the situation.