XN000022-1980-06-11 — Page 2

WEDNESDAY, JUNE 11, 1980

HONG KONG ACTS ON TEXTILE FRAUDS

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THE LEGISLATIVE COUNCIL WAS TOLD TODAY THAT A PROBABLE INCREASE IN THE MAXIMUM PENALTY FOR TEXTILE FRAUDS FROM $50 000 TO $500 000 AND THE INTRODUCTION OF IMPORT LICENCES WERE TWO MOVES PLANNED BY THE DEPARTMENT OF TRADE, INDUSTRY AND CUSTOMS.

ANSWERING QUESTIONS BY THE HON FRANCIS TIEN, THE DIRECTOR OF TRADE, INDUSTRY AND CUSTOMS, THE HON BILL DORWARD SAID THE PRESENT MAXIMUM PENALTY WAS A FINE OF $50 000 AND ONE YEAR'S IMPRISONMENT.

+I RECENTLY TOOK THE ADVICE OF THE TEXTILES ADVISORY BOARD ON THE ADEQUACY OF THIS PENALTY AND THE VIEW OF THE BOARD, WHICH I FULLY ACCEPT, IS THAT IN PRESENT CIRCUMSTANCES IT PROBABLY IS INADEQUATE. PROPOSE TO SEEK PERMISSION TO INTRODUCE LATER INTO THIS COUNCIL AN AMENDMENT WHICH WOULD HAVE THE EFFECT OF INCREASING THE PENALTIES TO PROBABLY $500 000, WITH PERHAPS AN INCREASE IN THE IMPRISONMENT PENALTY AS WELL.+

MR DORWARD SAID HE HOPED TO INTRODUCE, IN A MATTER OF WEEKS, A SYSTEM OF IMPORT LICENCING FOR ALL TEXTILES INTO HONG KONG.

FOLLOWING THE MEETING OF THE LEGISLATIVE COUNCIL, MR DORWARD STRESSED: +THE IMPORT LICENCES WILL BE ISSUED AUTOMATICALLY AND FREE OF CHARGE. THERE IS NO QUESTION OF THEM BEING USED TO RESTRICT IMPORTS.+

CONTINUING HIS REPLY TO MR TIEN, HE SAID: THIS WILL ENABLE US TO INSTITUTE A SURVEILANCE SYSTEM, AND TO MONITOR THE MOVEMENT OF SUCH TEXTILES AND TO SPOT CHECK THEM WHEN THEY ARE TO BE RE-EXPORTED FROM HONG KONG.+

HE SAID A FURTHER MOVE WAS AN INCREASE IN THE INVESTIGATION STAFF BY SEPTEMBER FROM 200 TO 285 OFFICERS.

+EIGHT COMPANIES HAVE BEEN SUCCESSFULLY PROSECUTED FOR TEXTILE FRAUDS, AND ADMINISTRATIVE ACTION INVOLVING THE SURRENDER OF QUOTA HAS BEEN TAKEN AGAINST 34 COMPANIES. FURTHER CASES ARE PENDING.

+WE ARE KEENLY AWARE THAT DIFFERENT CIRCUMSTANCES DEVELOP WHICH CALL FOR NEW OR INTENSIFIED MEASURES, LAST YEAR THERE WERE SOME WELL PUBLICISED FRAUD CASES WHERE HONG KONG TEXTILES FOUND THE IR WAY INTO THE EEC MARKET UNDER FALSE CERTIFICATES OF ORIGIN ISSUED IN THIRD COUNTRIES. THESE WERE DETECTED BY AN INVESTIGATION CARRIED OUT IN CLOSE CO-OPERATION WITH THE EUROPEAN AGENCIES CONCERNED, NOTABLY THE UNITED KINGDOM CUSTOMS, HE SAID.

MR DORWARD SAID THERE HAD BEEN A RECENT SPATE OF ALLEGATIONS, MOSTLY UNSUBSTANTIATED, CONCERNING EXPORTS OF THIRD COUNTRY PRODUCTS DESCRIBED AS OF HONG KONG ORIGIN.

+OUR OWN INVESTIGATIONS HAVE SHOWN THERE TO BE SOME SUBSTANCE IN THIS PROBLEM, AND A NUMBER OF INVESTIGATIONS ARE IN TRAIN. FOUR PROSECUTIONS HAVE BEEN TAKEN SO FAR THIS YEAR, HE SAID.

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