The Customs and Excise Department is responsible for enforcing various trade control systems, including the certification of origin system, the textiles import and export control system, the strategic commodities control system and the import and export declaration system. These systems aim to protect and facilitate legitimate trade, which is vital to the economy of Hong Kong.

The department works closely with the Trade and Industry Department to combat false declarations of origin and values of goods, illegal transhipment of textiles, and illicit trade in strategic commodities. This is done through factory and consignment inspection, investigation and prosecution. In 2000, the department carried out 59 833 factory and consignment inspections and 3 116 investigations. It successfully prosecuted 1 410 offenders, resulting in the imposition of fines amounting to $21.6 million.

To strengthen enforcement measures against illegal transhipment of textiles, the department, in addition to factory audit checks and consignment factory inspections, has stepped up blitz check operations on textile consignments at various import and export control points. It has also increased the monetary reward under a special scheme to elicit information on textile origin frauds.

The department monitors the stock of rice in Hong Kong to ensure that there is always an adequate supply of this essential foodstuff in the HKSAR at a reasonably stable price.

The branch also enforces consumer protection legislation relating to the safety of toys, children's products and consumer goods, the integrity of weights and measures, and the marking of precious metals. The branch carries out spot checks and investigations to ensure that the toys, children's products and consumer goods supplied in Hong Kong are safe. It also has responsibilities in protecting consumers from fraudulent or unfair trading practices related to quantities of goods and the fineness of gold and platinum articles. In 2000, it carried out 3 582 spot checks and 1 093 investigations. It also launched programmes to promote traders' and consumers' awareness of product safety.

To prevent Hong Kong from being used as a conduit for illicit trade in strategic commodities and to ensure Hong Kong's continued free access to hi-tech equipment and state-of-the-art technologies, the department works closely with the Trade and Industry Department and other agencies to monitor the import, export and re-export of strategic commodities and to detect services provided for the development and production of weapons of mass destruction. In 2000, the department investigated 231 cases of unlicensed import and export of strategic commodities and prosecuted 103 offenders, resulting in fines amounting to $2.3 million. Goods valued at $6.3 million were seized and confiscated.

The department, with the assistance of the Business and Services Promotion Unit under the Commerce and Industry Bureau, initiated a consultancy study on Customs cargo clearance requirements covering air, sea, land and intermodal transhipment in January. The objective of the study was to ensure that the Customs cargo clearance requirements and services were effective and efficient for control and enforcement purposes, whilst maintaining an open and business-friendly environment for traders. The consultancy study was completed in August and six Implementation Groups have been formed in the department to follow up the recommendations.

In April, the lodgment of import and export declarations entered a new era when the department closed all manual receiving counters and all submissions are done electronically thereafter.

A project on application for and approval of Dutiable Commodities Permits through Electronic Data Interchange (EDI) services is now under way. The new system, scheduled for completion in mid-2001, will assist traders in trading dutiable commodities electronically.

An EDI Manifest project is also in the pipeline. This system will enable traders to make their submission of manifest to the Government electronically. The system is scheduled for completion in 2001-02.

The department is responsible for enforcing legislation for the protection of copyright and trademarks. It investigates complaints and takes action against the manufacture, distribution, sale, import and export of pirated or counterfeit goods.

In January, copyright piracy and trade mark counterfeiting offences were included under the Organised and Serious Crimes Ordinance, whereby Customs officers can make use of enhanced investigative and enforcement powers to combat such offences, particularly where criminal syndicates are involved. The Intellectual Property (Miscellaneous Amendments) Ordinance 2000 was enacted on July 6. Apart from making unauthorised possession of video recording equipment in cinemas, theatres or concert halls an offence, this ordinance clarified the Copyright Ordinance to put it beyond doubt that anyone who knowingly possesses an infringing copy of a copyright work for the purpose of, in the course of, or in connection with trade or business commits a criminal offence. This new legislation will come into effect on April 1, 2001.

After the commencement of the Prevention of Copyright Piracy Ordinance in August 1998, optical disc factories are required to apply for a licence from the Commissioner of Customs and Excise. The department maintains stringent control on all optical disc factories to prevent them from engaging in copyright piracy activities. As at the end of 2000, 83 licensed optical disc factories and 500 optical disc production lines were registered by the department.

A Special Task Force, comprising 185 Customs officers, was established in June 1999 to take action against illicit manufacturing and retailing of optical discs. Large-scale operations were carried out at 'black-spot' retail outlets and at licensed optical disc factories involved in piracy. Vigorous enforcement actions were also taken to eradicate underground factories.

During the year, seven unlicensed optical disc production lines worth $18.5 million and 8.39 million copies of pirated discs worth $156 million were seized, and 2 736 persons were arrested. In addition, counterfeit and falsely labelled goods valued at $42 million were seized and 493 persons were arrested.

An Anti-Internet Piracy Team, comprising seven officers, was formed in the department to tackle the Internet piracy problem. Commencing operation in 2000, the team detected six Internet piracy cases within the year resulting in total seizure of pirated goods and equipment valued at $170,900 and the arrest of 14 persons.

The World Customs Organisation (WCO) aims at enhancing the effectiveness and efficiency of Customs administrations and facilitating trade by achieving harmony and uniformity in customs procedures world-wide.

The Customs and Excise Department has been actively taking part in the work of the WCO. In July 2000, under the name of 'Hong Kong, China', the department was elected as a Vice-Chairman of the WCO representing the Asia Pacific Region for a term of one year.

As a Vice-Chairman of the WCO, the department works closely with the Chairman and members of its Policy Commission in formulating policies and strategies to achieve the missions of the organisation. The department also assumes responsibility for co-ordinating regional efforts in areas such as compliance and facilitation, customs co-operation, reform and modernisation, training and integrity development and communication. In collaboration with the WCO's member administrations in the region, the department has devised a Regional Strategic Plan (RSP) that steers customs activities in the Asia-Pacific region. The RSP will continue to be in force until June 2002.

Since March 1993, the Customs and Excise Department has been participating in the Committee on Trade and Investment (CTI) and the Subcommittee on Customs Procedures (SCCP). The CTI co-ordinates the work of APEC in liberalising and facilitating trade and investment, and the SCCP works towards achieving harmonisation and simplification of customs procedures in the Asia-Pacific region. In February and September 2000, the department attended two rounds of CTI and SCCP meetings held in Brunei.

To achieve its objectives, SCCP member economies are working on a Collective Action Plan (CAP) by taking fully into consideration the FACTS Guiding Principles — Facilitation, Accountability, Consistency, Transparency and Simplification. Among the 13 CAP items, Singapore and Hong Kong are the co-ordinators of the item on 'Transparency of Customs Procedures, including Information on Customs Laws, Regulations, Administrative Guidelines, Procedures and Rulings'. Hong Kong also partners Australia in leading a CAP item on 'Integrity'.

Since January 1999, the Customs and Excise Department has seconded an officer to the Regional Intelligence Liaison Office (RILO) in Tokyo to assist in its operation. The officer is mainly responsible for analysis of regional drug trends and for training officers of other customs administrations. The secondment represents the HKSAR's continued support for customs co-operation in the Asia-Pacific region.