Speech at Panel on Commerce and Industry

Single E-Lock Scheme and the extension of its applicability in the Guangdong-Hong Kong-Macao Greater Bay Area

Modus operandi of Single E-Lock Scheme

Mr CHAN Chun-ying asked whether C&ED had revealed any irregularities or encountered any incidents since the implementation of SELS in 2012 and if so, he sought further information regarding the number and the major types of irregularities or incidents.

USCED said that SELS had been operating smoothly and did not encounter any significant technical issues or irregularities since its launch on a pilot base in 2012. On the part of the SELS participants, they generally complied with the user conditions under the scheme, and indeed no breach had been found in the past six months. In case of any breach of such conditions, C&ED might issue warning letters to the concerned SELS participants or even deregister them from the scheme, but no participants had been deregistered so far. C&ED would continue to closely monitor the operation of SELS and regularly remind the participants of the conditions and coverage of SELS. AC(BP) added that so far all the SELS participating trucks had followed the designated routes during the journey within the Hong Kong territory and thus there was no need for C&ED to re-inspect the concerned cargoes.

Expansion in the network of clearance points under the Single E-lock Scheme

As the number of clearance points in Guangdong had recently been increased to 52, Mr CHAN Chun-ying enquired whether there was an immediate need to provide C&ED with additional manpower and equipment to cope with the workload arising from the increased number of cross-boundary routes for intermodal transshipment cargoes between Hong Kong and Guangdong. He also asked whether the Administration had evaluated the maximum number of clearance points and cross-boundary routes for intermodal transshipment cargoes C&ED could handle under the existing manpower and equipment.

USCED advised that SELS was part of the day-to-day operation of C&ED. The Administration would continue to regularly review C&ED’s manpower and seek additional resources if the situation warranted. DS(C&I)2 emphasized that SELS was operated under the principle of separate monitoring such that C&ED was only responsible for tracking the movement of SELS participating trucks between the 12 clearance points in Hong Kong and the land boundary control points. The expansion in the network of clearance points under SELS in Guangdong would have limited implications on C&ED’s workload as the monitoring work within the Mainland was under the charge of the Mainland Customs.


Latest development of the Hong Kong Authorized Economic Operator Programme operated by the Customs and Excise Department

Expanding Hong Kong’s network of mutual recognition arrangements

Mr CHAN Chun-ying enquired whether the Administration had encountered any difficulties in expanding the coverage of Hong Kong’s MRA network with a view to complementing the Administration’s efforts of encouraging enterprises to capitalize on the new business opportunities arising from the Belt and Road Initiative and the Greater Bay Area development. The Chairman also enquired whether the Administration had set any target for the number of MRAs signed.

USCED advised that Hong Kong had entered into MRAs with nine economies, and C&ED was expected to sign MRAs with Mexico, Canada and Israel later this year. Hong Kong was now ranked the fifth worldwide in terms of the number of MRAs signed. The Administration was making on-going progress in further expanding the coverage of Hong Kong’s MRA network. In setting its priorities for pursuing MRA discussions, the Administration would take into account Hong Kong’s trade volume with the economies concerned, the need for opening up the relevant markets, and the interest of the economies concerned to enter into a MRA with Hong Kong. The Administration did not set any particular target for the number of MRAs signed, but would continue to make its best efforts to enter into MRAs with more economies.

Accreditation of Hong Kong Authorized Economic Operators

Noting that one of the general accreditation criteria adopted for the Hong Kong AEO Programme was financial soundness, Mr CHAN Chun-ying enquired about the proportion of large enterprises vis-à-vis small and medium enterprises (“SMEs”) among the accredited Hong Kong AEOs, whether the test of the financial soundness of the enterprises concerned was based on their audited financial reports, and whether the indicators for financial soundness would vary according to the macroeconomic environment.

USCED advised that as at May 2019, 54 enterprises had been accredited as Hong Kong AEOs, comprising enterprises of different scales. Large enterprises and SMEs were all welcome to apply for accreditation under the Hong Kong AEO Programme. In considering an AEO application, C&ED would assess whether the enterprise concerned was capable of meeting the accreditation criteria, including track record of customs compliance, internal control of commercial records, and security arrangement for cargoes, conveyance, personnel, premises, business partners and information access. C&ED would visit the operation site of the enterprise to ascertain their capability in complying with the criteria.

DS(C&I)2 added that the accreditation standards and criteria for Hong Kong AEOs were drawn up with reference to the requirements under the SAFE Framework of Standards to Secure and Facilitate Global Trade (“SAFE Framework”) promulgated by the World Customs Organization in 2005. SS(SCS) supplemented that among the 54 enterprises accredited as Hong Kong AEOs, 11 (around 20%) were SMEs. In assessing the financial soundness of an enterprise, C&ED sought to ensure that the enterprises concerned were financially sound enough to uphold supply chain security despite possible external economic fluctuations. C&ED would make its assessment by examining the enterprise’s audited financial reports of the latest past two years.

Publicity of the Hong Kong Authorized Economic Operator Programme

In response to Mr CHAN Chun-ying’s and Mr Martin LIAO’s enquiry about C&ED’s effort in promoting the Hong Kong AEO Programme and the local enterprises’ understanding of the programme, USCED advised that C&ED had been strengthening its promotion through social media, seminars for trade associations and out-reaching visits to enterprises. C&ED had also rolled out a set of online self-learning kit to assist interested local SMEs in assessing their readiness for accreditation and making preparation for application. The number of enterprises accredited as Hong Kong AEOs had been on the rise over the years.

SS(SCS) added that trade associations of different scales were engaged by C&ED in promoting the Hong Kong AEO Programme on a regular basis. C&ED also promoted the Programme in collaboration with the Hong Kong Trade Development Council and the Hong Kong Productivity Council through participating in the events and exhibitions organized by these organizations. To further promote the Hong Kong AEO Programme, C&ED had launched the webpage of “AEO Blogger” which was a platform for Hong Kong AEOs to share their valuable experience on how the Hong Kong AEO Programme had helped their enterprises in upgrading, enhancing and improving their operational management and supply chain security, and in exploring new markets.