Customs and Excise Department (Hong Kong)

The Customs and Excise Department (C&ED) is a government agency responsible for the protection of the Hong Kong Special Administrative Region against smuggling; the protection and collection of revenue on dutiable goods on behalf of the Hong Kong Government; the detection and deterrence of drug trafficking and abuse of controlled drugs; the protection of intellectual property rights; the protection of consumer interests; and the protection and facilitation of legitimate trade and upholding Hong Kong's trading integrity .
History.
"Hong Kong Customs", originally known as the "Preventive Service", was founded in 1909. Initially it was responsible to collect the newly imposed duties on liquor. As commodities became subject to duties, the scope of the Preventive Service broadened to include tobacco and hydrocarbon oil, as well as duties related to the government opium monopoly. During times of war, the service prevented the export of precious metals and other commodities to the enemies of the United Kingdom and its allies. In 1963, with the passage of the Preventive Service Ordinance, the service gained the legal status to make regulations on its discipline, functions, powers and terms of service. In 1977, it was renamed the "Hong Kong Customs and Excise Service". On 1 August 1982, "The Hong Kong Customs and Excise Department" became independent from the Trade and Industry Department.
The C&ED is an active member of the World Customs Organization (WCO) and the Asia Pacific Economic Cooperation (APEC). It exchanges intelligence and works closely with overseas Customs administrations and law enforcement agencies.
In 2000, to tackle cybercrime, the Computer Forensic Laboratory, the Computer Analysis & Response Team, and the Anti-Internet Piracy Investigation Team were established.
These specialised establishments prominently enhanced Customs' enforcement capability and the credibility of digital evidence presented to the courts. The Customs Computer Forensic Laboratory offers professional assistance in collecting, preserving, analyzing, and presenting digital evidence to law court in customs related cases.
The digital forensic analysts from the laboratory are qualified to testify as expert witnesses in court of law. The forensic laboratory has been awarded ISO 9001 on quality management and ISO 27001 (BS 7799) on information security since 2006. The Hong Kong Customs Computer Forensic Laboratory is the first government unit of HKSAR (Hong Kong Special Administrative Region) to implement ISO 27001. In 2013, the Electronic Crime Investigation Centre was set up within the department.
Departmental structure and organisation.
The department is headed by the Commissioner of Customs and Excise. As at 1 April 2020, the department has an establishment of 7,317 posts, of which nine are directorate officers, 6,142 are members of the Customs and Excise Service, 493 are Trade Controls Officers and 673 are staff of the General and Common Grades.
There are five branches:
Administration and Human Resource Development Branch.
The Administration and Human Resource Development Branch is responsible for matters concerning the overall staff management of the Customs and Excise Service; departmental administration; financial management; staff training; and the housekeeping of the Office of Service Administration, the Office of Departmental Administration, the Office of Financial Administration, the Office of Prosecution and Management Support, the Office of Training and Development and the Complaints Investigation Group.
Boundary and Ports Branch.
The Boundary and Ports Branch is responsible for matters relating to import and export controls under the purview of the Security Bureau and the housekeeping of the Airport Command, the Cross-boundary Bridge Command, the Land Boundary Command, the Rail and Ferry Command, and the Ports and Maritime Command.
Excise and Strategic Support Branch.
The Excise and Strategic Support Branch is responsible for matters relating to dutiable commodities under the purview of the Financial Services and the Treasury Bureau; taking forward the Hong Kong Authorized Economic Operator Programme and implementation of Mutual Recognition Arrangements with partner customs administrations; international customs liaison and cooperation; project planning and equipment procurement; information technology development; operation of the Trade Single Window and the housekeeping of the Office of Dutiable Commodities Administration, the Office of Supply Chain Security Management, the Office of Customs Affairs and Co-operation, the Office of Project Planning and Development, the Office of Information Technology, the Office of Trade Single Window Operation and the Information Unit.
Intelligence and Investigation Branch.
The Intelligence and Investigation Branch is responsible for matters relating to narcotic drugs and anti- smuggling enforcement under the schedule of the Security Bureau and issues relating to intellectual property under the purview of the Commerce and Economic Development Bureau; the formulation of policies and strategies regarding the application of intelligence and risk management in Customs operations; and the housekeeping of the Customs Drug Investigation Bureau, the Intellectual Property Investigation Bureau, the Intelligence Bureau, the Revenue Crimes Investigation Bureau and the Syndicate Crimes Investigation Bureau.
Trade Controls Branch.
The Trade Controls Branch is responsible for trade controls and consumer protection matters under the schedule of the Commerce and Economic Development Bureau and supervision of MSOs under the schedule of the Financial Services and the Treasury Bureau. It comprises the CEPA and Trade Inspection Bureau, the Consumer Protection Bureau, the Trade Descriptions Investigation Bureau, the Trade Declaration and Systems Bureau, the Trade Investigation Bureau and the Money Service Supervision Bureau.
Office of Quality Management and Internal Audit Division.
Under the direct charge of the Deputy Commissioner are the Office of Quality Management and the Internal Audit Division. The Office of Quality Management and the Internal Audit Division are responsible for conducting management reviews and money-related examinations respectively, with a view to enhancing the system integrity, efficiency and effectiveness, service quality and performance standard of the department. 
Ranks.
As with all of the HK Disciplined Services, British-pattern ranks and insignia continue to be utilised, the only change being the exchange of the St. Edward's Crown for the Bauhinia flower crest post-1997.
Crest.
The current crest of the force was adopted in 1997 to replace most of the colonial symbols:
Source: Customs and Excise Department [Hong Kong]
Weapons.
The C&E officers are trained in the use of, and issued when required, revolvers as sidearms for lethal protection and an ASP expendable baton and Sabre Red pepper spray for less-than-lethal options on the field as same as the other disciplinary force members. Semi-automatic pistols are issued to the section tasked with providing witness protection. Members are also trained in the use of shotguns and sub-machine guns, however such long arms are rarely used.
Officers are required to go to the range at least twice a year after their graduation. While most members of the HK CED are not routinely armed, the personnel that do routinely carry sidearms are those staff responsible for dealing with serious crimes, anti-narcotics and armed escort stationed at the various ports, along with the members of the Special Task Force.
Protection of revenue.
There are no tariffs on goods entering Hong Kong, but excise duties are charged on four groups of commodities: hydrocarbon oil, liquor, methyl alcohol and tobacco. The duties apply equally to imported commodities and those manufactured locally for domestic consumption.
In 2003, the C&ED collected $6,484 million excise duty. Under the Dutiable Commodities Ordinance, the C&ED controls breweries, distilleries, tobacco factories, oil installations, ship and aircraft duty-free stores, and industrial and commercial establishments dealing with dutiable commodities; and supervises licensed, general bonded and public bonded warehouses.
Licences are issued to those who import, export, manufacture or store dutiable commodities. The C&ED also assesses the First Registration Tax of vehicles under the Motor Vehicle (First Registration Tax) Ordinance. The Anti-illicit Cigarette Investigation Division is specially tasked to detect syndicated smuggling, distribution and peddling of dutiable cigarettes. The Diesel Oil Enforcement Division focuses its efforts on detecting the smuggling and misuse of illicit fuels.
Prevention and detection of smuggling.
The C&ED prevents and detects smuggling activities under the Import and Export Ordinance and enforces the licensing controls on prohibited articles by inspecting cargoes imported and exported by air, sea and land; processing passengers and their baggage at entry /exit points; and searching aircraft, vessels and vehicles entering and leaving Hong Kong. The Joint Police/Customs Anti-Smuggling Task Force is dedicated to combating smuggling activities by sea. The Control Points Investigation Division is tasked to strengthen the intelligence collection capability at the land boundary and suppress the cross-boundary smuggling activities.
The smuggling of frozen meat to mainland China, using barges and powerful speedboats off the west coast of Hong Kong, remains a serious problem, with an estimated 600 tonnes being transshipped every day. Despite frequent operations, the department is able to intercept only a fraction - a total of 1,050 tonnes in 2019.
Airport.
The Hong Kong International Airport is one of the busiest airports in the world with a daily arrival of about 257 scheduled flights, bringing into Hong Kong a daily average of 25,989 passengers and 2,838 tonnes of imported cargo. In 2003, the throughput of air passengers was 19 million whereas the throughput of air cargoes was about 2.64 million tonnes.
Harbour.
Hong Kong is one of the busiest container ports in the world, handling 20.4 million TEUs (20-foot equivalent units) in 2003. Of these, 12.1 million TEUs were handled at the Kwai Chung Container Terminal. In 2003, 70,910 ocean-going ships and 365,190 coastal vessels entered and left Hong Kong.
Ships and vessels are subject to customs check. Cargoes are either examined on board sea freighters or after off-loading.
In 2003, a total of 8.6 million passengers arrived in Hong Kong from the Mainland and Macau by sea and by helicopters. They were processed at the China Ferry Terminal in Tsim Sha Tsui and the Hong Kong-Macau Ferry Terminal in Central. In addition, a daily average of 49 helicopter flights between Hong Kong and Macau are operated at the Hong Kong-Macau Ferry Terminal. Four Customs launches conduct maritime patrol in the territorial waters round the clock whereas four high-speed pursuit crafts and two shallow water patrol launches are employed to carry out interception at sea.
Land boundary.
On average, 156,339 passengers arrive from the Mainland by land daily and they are processed at Man Kam To, Sha Tau Kok, Lok Ma Chau and Lo Wu control points. Additionally, 2,991 passengers enter Hong Kong by through-trains and are processed at Hung Hom Railway Station. Goods imported by road are checked at Man Kam To, Sha Tau Kok and Lok Ma Chau. In 2003, over 20 million tonnes of cargoes were imported through the land boundary control points.
Anti-drug operations.
The C&ED and the Hong Kong Police Force (HKPF) are responsible for anti-drug law enforcement. Seizures of illicit drugs in 2003 included 52.87 kilograms of heroin, 562.15 kilograms of herbal cannabis, 24.46 kilograms of cannabis resin, 8.33 kilograms of cocaine, 41.1 kilograms and 1,272 tablets of methylamphetamine, 35.56 kilograms and 141,038 tablets of ecstasy-type tablets (MDMA, etc.), 51.3 kilograms and 238 tablets of ketamine, and substantial quantities of various narcotics, analgesics and tranquillisers.
A total of 8,652 persons were arrested for drug offences, including 2,827 for major offences such as drug trafficking and manufacturing, with the remaining 5,825 for minor offences such as possession of illicit drugs.
As well as intercepting smuggled drugs at entry/exit control points, the department launches proactive investigations and surveillance operations on syndicated drug trafficking activities throughout Hong Kong. The department can deploy drug detector dogs and advanced technologies, such as mobile x-ray vehicle scanning and inspection systems, to assist anti-drug work.
In addition, the department closely monitors trends in illicit drug use, in particular the growing popularity of psychotropic substances among the young and cross boundary drug crimes. The C&ED also investigates laundering of drug proceeds and initiates applications for freezing and confiscating assets derived from drug trafficking. Suspected drug-related assets worth $1.18 million were frozen, awaiting confiscation proceedings.
The department enforces a licensing system to control the import, export and dealing of 25 specific precursor chemicals which can be used for the manufacture of dangerous drugs. It exchanges intelligence and co-operates closely with the HKPF and various drug enforcement agencies on the Mainland and overseas in the fight against drug traffickers both locally and at international level.
Trade controls and consumer protection.
The C&ED safeguards the certification and licensing systems which are of vital importance to Hong Kong's trading integrity. The department deters and investigates offences of origin fraud, circumvention of textiles licensing and quota control. It also investigates offences of import and export of strateg commodities and other prohibited articles not under and in accordance with a licence.
The department carries out cargo examination at control points, factory inspections, factory audit checks and consignment checks. It is also the department's enforcement strategy to administer a monetary reward scheme to encourage the supply of information on textile origin fraud.
The department is a member of the Hong Kong Compliance Office set up to assist the Central People's Government in implementing the Chemical Weapons Convention in Hong Kong. The department enforces licensing control on rice and consumer protection legislation relating to weights and measures, markings on fineness of precious metals, and safety of toys, children's products and consumer goods. The department also verifies import and export declarations to ensure accurate trade statistics and assesses and collects declaration charges and the clothing industry training levy.
In 2002/03, the department collected $848 million in declaration charges and $19.9 million in clothing industry training levies.
Intellectual property rights protection.
The C&ED has the mission to defend the interests of intellectual property rights owners and legitimate traders through staunch enforcement of the Copyright Ordinance, the Trade Descriptions Ordinance and the Prevention of Copyright Piracy Ordinance.
The department investigates and prosecutes copyright offences relating to literary, dramatic, musical and artistic works, sound recordings, cinematographic films, broadcasts and other published works under the Copyright Ordinance. It also takes enforcement action against commercial goods with forged trademark or false label under the Trade Descriptions Ordinance.
At the manufacture level, the Prevention of Copyright Piracy Ordinance requires local optical disc and stamper manufacturers to obtain licences from the department and mark on all their products specific identification codes. The Import and Export Ordinance imposes licensing controls on the import and export of optical disc mastering and replication equipment. A 147-strong Special Task Force has also been playing an important role in combating copyright piracy, and serves as a mobile brigade to reinforce the suppression of other customs-related crimes.
Customs co-operation.
The C&ED is an active member of the World Customs Organization (WCO) and Asia Pacific Economic Cooperation (APEC). It exchanges intelligence and works closely with overseas customs administrations and law enforcement agencies. The department has also entered bilateral Cooperative Arrangements with other customs authorities on administrative assistance. At the working level, the department and the Mainland customs have each established designated liaison officers to facilitate the exchange of intelligence through direct telephone hotlines.
Seizures and prosecutions.
In 2003, the C&ED seized a total of $1,244 million worth of goods. They included illicit drugs valued at $45 million; infringing goods worth $229 million; counterfeit goods worth $120 million; smuggled merchandises worth $541 million; dutiable commodities worth $284 million.
During the year, the C&ED prosecuted 7,184 persons and firms under various laws enforced by the department.
Fines amounted to $31.83 million and 4,351 custodial sentences, aggregated to 1,671 years and 11 months, were imposed on convicted persons. Among the prosecutions, 803 were cases relating to unlawful commercial malpractices such as violation of licensing controls of strategic commodities, supplying false information in applications for certificate of origin, textile licensing frauds and contravention of consumer protection legislation.