Hong Kong customs in talks with e-commerce firms such as Pinduoduo to control sales

In wide-ranging interview, customs chief Chan Tsz-tat says protecting consumer and intellectual property rights is among his main priorities

Hong Kong customs has launched talks with major cross-border e-commerce firms, including Pinduoduo and Taobao, in a bid to block contraband from being sold to buyers in the city, the head of the disciplined service has revealed.

Commissioner of Customs and Excise Chan Tsz-tat told the Post in an exclusive interview that his agency had a robust communication mechanism with e-commerce platforms and had asked Pinduoduo to take down relevant products after a teenage boy was found to have bought smoke grenades online last month.

"We hope to discuss how they can help block Hong Kong-banned contraband from being shipped to the city," Chan said, adding that the goal was to reach an agreement with major e-commerce platforms.

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A 13-year-old boy was arrested on July 18 on suspicion of possessing explosives after he allegedly set off three smoke grenades and left them in the corridor outside his home, prompting the evacuation of about 300 residents from the building.

Sources said the boy had bought the three suspected smoke grenades for HK$92 (US$12) on mainland e-commerce platform Pinduoduo and collected them at a pickup point in the city.

Chan said smoke grenades were considered illegal contraband in Hong Kong and warned consumers that ignorance of this fact would not absolve them of legal responsibilities, adding that any unlicensed imports would be treated as smuggling and dealt with accordingly by the department.

But the customs chief also noted that one discovery of the contraband did not imply that there were systemic loopholes.

"I can confidently say that we have a robust import and export control system, this covers our legal system, risk management system, the quality of our personnel, and corruption-free government departments."

Chan said that he hoped e-commerce giants such as Pinduoduo and Taobao would be able to remove banned items from their listings for Hong Kong customers, or add a criterion in the platforms' search engines to filter out goods that were prohibited.

"This is complex, as some goods [banned in Hong Kong] don't violate mainland regulations," Chan said.

The commissioner added that the Customs and Excise Department would ask these platforms to take down any detected fakes or goods that infringed upon trademarks, and contact them upon detecting potentially dangerous goods such as toys with safety hazards.

"Our preliminary contact has been positive. We will discuss with each of them in the future on how to bolster compliance," Chan said.

Taobao is operated by Alibaba, which also owns the South China Morning Post.

But the commissioner cautioned that intercepting contraband passing through e-commerce shipments to the city could be tricky, as there were multiple parties involved in the process.

Chan said his department had discovered cases in which Hongkongers first ordered raw meat for delivery to an address in Shenzhen, before smuggling it into the city via a consolidated shipment.

"These cases would have to be busted by our staff at the ports - e-commerce platforms can't help us there," Chan said.

Last month, the consumer watchdogs of Hong Kong, Macau and Guangdong province issued a joint statement to help shoppers understand laws and regulations, and protect their rights when engaging in cross-border e-commerce.

A licence and health certificate are required to import food items such as raw meat, poultry and eggs to Hong Kong. Offenders face a maximum penalty of two years in prison and a HK$500,000 fine.

As head of customs, Chan said, protecting intellectual property (IP) and consumers' rights was also among his main priorities, and he looked forward to legal proposals concerning prepaid service packages next year.

Major cases such as the abrupt closure of the Physical gym chain last year left thousands of customers reeling from uncertain compensation arrangements after two changes in ownership.

Earlier this year, more than 100 couples were left scrambling for last-minute wedding decorations after the unexpected closure of Ps Wedding and Event Decoration.

Chan conceded that the Trade Descriptions Ordinance, which forms the basis of his department's enforcement work on consumer rights, was "not the most appropriate" legislation to use against firms that failed to fulfill prepaid service packages.

The owners of the Physical gym chain and the owner of Ps Wedding and Event Decoration were arrested by customs under this law for allegedly accepting payments illegally.

"To prosecute a company on this charge, we need to prove that when selling the prepaid service package, they intended not to supply the product or supply a different product. That's difficult," Chan said.

"The offence is not the most appropriate for handling the issue of prepaid service packages arising from sudden closures."

The customs chief said he had reflected on law enforcement challenges in such cases, as well as on the department's opinion on a mandatory cooling-down period, and shared his thoughts with the Commerce and Economic Development Bureau.

Responding to an earlier exclusive Post report on the department's inability to crack down on fake Labubu and Chiikawa dolls - both original IP products that have gained huge popularity worldwide - Chan said his department would reach out to brands to start the recordation process needed for customs to take enforcement action, but companies also had to do their part.

During recordation, the trademark owner needs to prove that a third-party product has infringed upon its copyright or that its trademark is already registered with the government's Intellectual Property Department.

"If a company's sales in Hong Kong are scant [with counterfeits] not posing great harm to their profits, and they are unwilling to finish the recordation process with us, we can't force them to," Chan said.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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