LCQ18: Combating the buying and selling of duty-not-paid and counterfeit cigarettes
30.11.2022

Following is a question by the Hon Shiu Ka-fai and a written reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (November 30): Question: As at early November this year, the quantity of smuggled duty-not-paid cigarettes (illicit cigarettes) seized by the Customs and Excise Department (C&ED) increased by more than 30 per cent as compared to that of the whole of last year. It has been reported that some illicit cigarette syndicates have coaxed small traders running newspaper stalls, stores, etc. into selling illicit cigarettes which have been packaged as cigarettes of new foreign brands, and counterfeit cigarettes (i.e. cigarettes falsely labelled and of unknown composition). They have also distributed flyers for ordering illicit cigarettes, commonly known as "dim sum sheets", in various public housing estates located in Hong Kong and Kowloon to solicit business, as well as made use of the World Cup Qatar taking place to promote the sale of illicit cigarettes. In this connection, will the Government inform this Council: (1) of the respective quantities of illicit cigarettes and counterfeit cigarettes seized by C&ED in each of the past five years; (2) of the respective numbers of prosecutions and convicted cases relating to illegal cigarettes in each of the past five years, with a breakdown by the nature of such cases; the lowest and highest penalties imposed on the convicted persons; and (3) of the new measures in place to combat the aforesaid activities of buying and selling illicit cigarettes and counterfeit cigarettes, including those measures for preventing small traders running newspaper stalls, stores, etc. from being coaxed into engaging in such unlawful activities? Reply: President, Having consulted the Commerce and Economic Development Bureau, our consolidated reply to the question raised by Hon Shiu Ka-fai is set out below: (1) and (2) The quantity of illicit cigarettes seized by the Customs and Excise Department (C&ED), and the relevant prosecution and conviction figures of illicit cigarette cases detected by C&ED in the past five years are as follows: 2018 2019 2020 2021 2022 (as at November 21) Quantity (million sticks) 53 55 205 427 640 No. of prosecuted case#^ 1 732 1 794 682 865 538 - Smuggling 1 003 1 131 303 236 104 - Storage and Distribution 212 158 106 176 95 - Peddling 517 505 273 453 339 No. of convicted case*^ 1 751 1 751 695 858 557 - Smuggling 1 026 1 109 307 249 111 - Storage and Distribution 212 154 103 159 107 - Peddling 513 488 285 450 339 Maximum penalty Imprisonment of 12 months Imprisonment of 15 months Imprisonment of 16 months Imprisonment of 23 months Imprisonment of 17 months Minimum penalty Fine at $200 Fine at $200 Fine at $300 Fine at $200 Fine at $300 #Cases with prosecution instituted during the year *Cases with trial concluded during the year ^The number of cases was affected by the relevant COVID-19 measures (e.g. border control and adjournment of court hearings) No counterfeit cigarettes were seized by C&ED during the aforementioned period. If C&ED suspects that any cigarettes seized or sold in the market are counterfeits, it will invite the relevant trademark owners to verify and take immediate enforcement action if C&ED identifies any acts in breach of law. (3) C&ED has all along been adopting intelligence-based enforcement strategies and taking comprehensive enforcement actions to combat illicit cigarette activities on different fronts, namely intercepting cross-boundary smuggling in upper stream, smashing storage and distribution activities in mid-stream, and raiding peddling activities in lower stream. C&ED also conducts surveillance operations from time to time against illicit cigarette activities across the territory in order to strengthen intelligence gathering and monitor illicit cigarettes activities. C&ED will continue to strengthen its risk assessment and intelligence analysis, and enhance intelligence exchanges with the Mainland and overseas law enforcement agencies in order to combat illicit cigarette activities at source. Besides, C&ED will step up publicity and promotion activities with regard to newsstands and small-sized retail outlet operators with a view to preventing them from contravening the law inadvertently.