RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/125
28 September 1998
(98-3736)
Council for Trade in Goods Original:  English
TRADE FACILITATION
National Experience Paper - Import and Export Procedures and Requirements
Communication by Hong Kong, China
This note provides a brief description of the import and export procedures and requirements
of Hong Kong, China and the measures taken by the Government to facilitate trade in the last few
years.
1. Import and Export Procedures and Requirements
(a) Import and Export Requirements
Hong Kong, China is a free port with no tariff on the importation or exportation of goods.
Licensing is imposed only to fulfill our obligations under international agreements, or to protect
public health, safety, security, the environment and intellectual property rights.  Licenses are requiredfor the import and/or export of products including strategic commodities (e.g. high speed digital
computers; chemical or biological weapons prec ursors; and certain arms and ammunition), reserved
commodities (e.g. rice, frozen meat and frozen poultry), pharmaceutical products and medicines,
pesticides, radioactive substances and irradiating apparatus, optical disc mastering and replication
equipment, ozone-depleting substances, endangered species of animals and plants, waste, and textiles
and clothing.
There is no tariff quota, surcharge, value added tax or general services tax.  Excise duties are
levied on four types of goods, namely, liquors, tobacco, hydrocarbon oil and methyl alcohol, and
apply equally to imported and locally produced goods.  Imported goods of different origins are treated
the same.  Only imports of rice and ozone depleting substances for local consumption require quotas.
The purpose of the rice quota is not to restrict imports, but to ensure a stable and adequate supply ofrice, a staple food for the community, and to provide a reserve stock for emergency and cushioning
purposes.  The quota in respect of ozone depleting substances is imposed in connection with the
implementation of the Montreal Protocol.
Restrictions on exports are few.  Apart from a tight regulatory framework in the textiles and
clothing sector arising from the quantitative restrictions on textile products maintained by Canada,
European Union, Norway and the United States under the WTO Agreement on Textiles and Clothing,
other export controls are mainly in respect of st rategic commodities or to implement our obligations
under international agreements.
(b) Customs Procedures
All import and export cargoes are subject to an import and export manifest containing
detailed information on description of goods, packages, the consignor, the consignee and the carrier.
Customs control on goods is done through inspection of documents such as manifests and licences ifG/C/W/125
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applicable, and where necessary, physical examination of the goods.  Physical examination is done on
a selective basis for detecting contraband.  There are no laws, regulations or administrative procedures
governing product valuation for customs valuation purpose.  Except in the case where a consignment
is selected for physical examination, cargoes are allowed immediate delivery upon fulfilling licensing
requirement, if any.
In general, trade declarations (TDEC) mu st be lodged with the Customs and Excise
Department within 14 days after the goods have been imported or exported.  However, certain articles
are exempted from the lodgement of trade declarations, such as goods under Carnets, transit cargoes,
personal baggage, samples and gifts.  In particular, articles imported under ATA Carnets are granted
temporary admission without payment of duty a nd without having to lodge an import or export
declaration to the Customs and Excise Department.  TDEC can be lodged by using either prescribedpaper forms or the Electronic Data Interchange (EDI) service.
Where import and/or export licences are required, traders may apply for the licences from the
issuing authorities before the importation or exportation of the goods.  Details of the application
procedures and any fees payable are made available to the general public by the relevant authoritiesthrough publications, hotline services, Internet Homepages or other means.
2. Facilitation Measures
It is the aim of Hong Kong, China to implement measures to facilitate trade whenever
opportunities arise.  Some of the measures taken recently are set out below.
(a) Improved Quality of Services to Traders
Under the Serving the Community Scheme, performance pledges are made by Government
departments to promulgate the service standards to the general public.  The pledges are also reviewed
regularly with a view to improving the standards as far as possible.  The Trade Department, which
provides import and export licensing service to the trade, was among the first group of departments to
announce their performance pledges. A Customer Liaison Group was also set up in 1994 for exchange
of views between the trade and the Trade Department on issues such as services provided by the
Trade Department and its policies on trade matters.
The Customs and Excise Department pledges to provide an efficient, courteous and
professional service to legitimate trade.  Its pledges and targets are also made public and reviewedregularly for the purpose of  improving customs services. To enhance communication with the
business sector, the Customs and Excise Department has also set up three customer liaison groups.
(b) Simplified Licensing Procedures and Requirements
Hong Kong, China has taken many measures to simplify textiles licensing procedures and
requirements, but without compromising the integrity of the control system.  In this regard, two major
trade facilitation measures have been put in place in recent years.  In 1993, a Textile Trader
Registration Scheme was introduced to exempt exports of textile products to non-restrained markets
and imports of such products from the licensing requirement provided that a set of conditions could be
met.  Traders registered under the Scheme can cover their imports and exports with notifications.
The second measure, implemented in August 1998, was to lift the requirement for certificate
of origin to support textiles exports to the US. The measure could help textiles traders save  costs and
efforts in making applications for certificate of origin to cover textiles exports to the US.G/C/W/125
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Apart from the above two major measures, we have kept our textiles licensing procedures and
requirements under constant review.  Trade facilitation measures, however minor, are implemented
from time to time to provide a more efficient and cost effective service to textiles traders.  For
example, as a result of a review of procedures in 1997/98, applicants for textiles export licences and
for advance use of textiles quotas are no longer required to attach supporting documents at the time ofapplication.  Instead, the documents need to be submitted only on request.  This has simplified the
documentation requirements.
(c) Increased Transparency in Licensing Procedures
Apart from a variety of publications on licensing procedures and requirements available to the
public, the Trade Department has introduced an Interactive Voice Response System to handle general
public enquiries through telephone any time of the day.   Moreover, the Trade Department has createda Homepage for public access to information and activities of the Department.  Information including
recent events, new services provided and answers to frequently asked questions are available on the
Homepage.
In late 1997/early 1998, two Customer Service Centres were opened in the Trade Department
to provide better and more comprehensive services to the trade.  The Centres are staffed by trained
officers.  The purpose is to provide assistance to traders who have queries on or difficulties in matters
related to textiles licensing requirements and procedures.
(d) Increased Transparency in Customs Procedures and Requirements
The customs laws and regulations of Hong Kong, China and most of the customs
administrative guidelines and procedures are easily accessible by the public, in paper form and on the
Internet.  The latter, in particular, greatly enhances the transparency of our customs procedures and
requirements as the Homepage is accessible by overseas traders round-the-clock.  Moreover, the
customs guidelines and procedures are reviewed regularly for improvement.
(e) Introduction of the EDI Service for Government Trade Documents
Recognising the international trend and benefits in electronic commerce, Hong Kong, China
is committed to promoting the application of electronic commerce through the use of EDI in trade
documents.  The introduction of the EDI service is a remarkable improvement in cost-and
time-efficiency in the trade documentation process for traders in Hong Kong, China.  The service will
greatly facilitate trade and bring increasingly si gnificant benefits to the trading community, as its
scope expands.
Reasons for introducing EDI
In the 1980’s, the use of EDI to replace paperw ork involved in trading procedures began to
gain momentum in Hong Kong. Leading internati onal trading centres started using EDI to improve
efficiency and reduce cost. It was clear that to remain competitive, Hong Kong could not afford to
continue to rely on paper-based methods of doing bus iness. In order to promote the widespread use of
EDI in Hong Kong, the Government has co-opted ma jor players having a role in the flow of trade
information as partners in the implementation of the Community Electronic Trading Service (CETS).In 1992, the Tradelink Electronic Commerce Limite d (formerly Tradelink Electronic Document
Services Limited, Tradelink in short) was set up jointly by the Government, as its largest shareholder,
and key private sector organisations to implement CETS.
Coverage of the EDI ServiceG/C/W/125
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The initial scope of the CETS covers statutory documents, namely restrained textiles export
licences (RTEL) for the export of textiles products to restrained markets (i.e. where import quotas are
imposed by our trading partners); trade declarations required for imports, exports and re-exports;
certificates of origin; and cargo manifest. Our intention is to extend the CETS to other trade and
commercial documents over time in order that traders can benefit fully from the use of EDI.
Schedule of implementation and progress
EDI service for RTEL was introduced in January 1997, and that for TDEC in April 1997.  A
phased migration programme was launched in January 1998 for traders to gradually migrate to the use
of EDI service. About 60% of RTEL are currently applied through the CETS. Full migration to EDI
submission, whereby receipt counters for paper submission will be closed, is scheduled forimplementation by January 1999. For TDEC, about 30% are at present lodged through CETS and full
migration to EDI submission is scheduled for completion by April 2000.  To cater for those
companies that may not be able to start using EDI and for those traders who only need to submit the
documents occasionally, Tradelink provides service centres for converting paper submissions into
electronic ones.
EDI service for certificates of origin and cargo manifest is scheduled for implementation in
the third quarter of 1999 and early 2000 respectively. Intensive development work are currently in
progress for their implementation.
Feedback from traders
Traders recognise the benefits of electronic commerce. When compared to the paper system,
the processing time of an RTEL application using EDI has been much reduced.  In the paper system,
traders will be notified of whether the licence application can be approved in two clear working dayswhereas under the EDI system, traders will be notified of the errors in application within 15 minutes
of their submission, and of whether the application can be approved on the following day of
submission. Moreover, the improved service is reinforced by the streamlining and standardisation of
processing procedures and arrangements.  In addition, using EDI to submit and process TDEC is very
efficient and helps save manpower of both the Customs and Excise Department and the traders.
Traders generally support the CETS as an infrastructure which can facilitate their business
operation. During the initial stage of implementation, they need time to build up confidence in and to
adapt to the new mechanism. Over time, traders call  for extension of the CETS to, e.g. sending the
export licence visa information electronically to our trading partners and other services.
3. Conclusion
Hong Kong, China adopts a free trade policy and applies no tariff.  Import and export
licensing is kept to a minimum.  In addition to having an open and free trade regime, we have
implemented in the past few years a number of measures to facilitate trade, such as simplified
licensing procedures and requirements, increased transparency in licensing and customs procedures,
and the introduction of the EDI services for Government trade documents.  We will continue to lookfor opportunities to further facilitate trade.
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