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Ref. : TRA CR 1015/35
2 May 2002
Strategic Trade Controls Circular No. 4/02
Control on the Import and Export of Strategic Commodities
The Department issues from time to time various circulars to brief traders of the licensing control requirements for the import and export of strategic commodities into/from Hong Kong. As a significant portion of strategic commodities imported into and exported from Hong Kong cover goods of US-origin, this circular highlights for traders' reference the controls maintained by the Department for such commodities.
Control on the Import and Export of Strategic Commodities in Hong Kong
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The legal basis for strategic trade control in Hong Kong is the Import and Export Ordinance, Chapter 60 of the Laws of Hong Kong ("Ordinance"). The Ordinance requires strategic commodities to be covered by import/export licences issued by the Trade and Industry Department before they are imported into/exported from Hong Kong. Under the Ordinance, no person shall import or export any article specified in the four Schedules to the Import and Export (Strategic Commodities) Regulations of the Ordinance unless there is a valid licence issued by the Director-General of Trade and Industry. The control on the import and export of strategic commodities applies to shipment from/to all places outside Hong Kong.
Licensing Policy
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In implementing the licensing control system, one important principle is that it should work to complement the export control arrangements of our major trading partners, from which the majority of the strategic commodities to Hong Kong originate. We have put in place a system which prevents imported strategic goods from going to places for use by entities which the originating countries do not permit under their own export control policies. This is essential to maintaining the confidence of our trading partners in the integrity of Hong Kong's control system, which in turn helps ensure our continued access to high technology goods necessary for the economic development of Hong Kong.
Important Note for Traders Engaging in the Import and Export of Strategic Goods of US-Origin
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As a significant portion of the strategic commodities imported into Hong Kong/exported from Hong Kong originate from the US, traders are advised to closely observe US export control policy and arrangements when importing, exporting, transferring or disposing such goods. Traders should note in particular the following :
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Under US export control regulations, the Mainland of China and Hong Kong are regarded as separate destinations. In some cases, goods authorised to be exported to Hong Kong under US licence exception are subject to US individual licences when exported to the Mainland of China. In some other cases, goods authorised to be exported to Hong Kong under US individual licences are not permitted to be re-exported to the Mainland of China. Such arrangements apply even in cases where the goods are intended for use by the Mainland subsidiaries/operations/associated companies of Hong Kong companies.
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Before arranging for the re-export of strategic goods which are originally authorised by the US authorities for export to Hong Kong for local consumption or use only, traders should ensure that there is an applicable licence exception or they should seek re-export authorisation from the relevant US authorities. For export of strategic commodities of US-origin to a place which is subject to individual licence requirement under US export control regulations, the Department will require the production of export authorisation by the US authorities when considering the relevant export licence applications.
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For goods which are authorised by the US authorities for export to Hong Kong for specific enduser(s) and enduse(s), the Hong Kong importers and endusers concerned should ensure that proper authorisation from the US authorities is obtained before arranging for further transfer of the goods to other parties, whether in Hong Kong or elsewhere. Accordingly, when approving a licence covering import or export of such goods, the Department will make reference to the relevant US export control regulations and US export licence, and will impose as appropriate licensing conditions governing the use, transfer or disposal of the goods by the importers and endusers concerned. The importers should ensure that the conditions pertaining to the US and Hong Kong licences are properly conveyed to the enduser(s). The endusers should observe such licensing conditions in the use of the goods. It is a breach of licence conditions if the goods are found to have been transferred to an unauthorized party, even though it is located in Hong Kong, and the parties concerned will be liable to prosecution/administrative actions. For the avoidance of doubt, transfer of the goods to subsidiaries or branches of the Hong Kong importers/endusers outside Hong Kong are regarded as export and is required to be covered by export licences. In case the importers wish to alter the enduse for or enduser of the goods after an import licence has been approved or wish to export the goods to places outside Hong Kong, application to the Department for alteration of enduse/enduser or for export licences respectively should be made. In determining whether such applications should be favourably considered, the Department will take account of, as appropriate, US export control regulations, the conditions pertaining to the relevant US licences, and/or the availability of US re-export authorisation.
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A person who imports or exports strategic commodities without or not in accordance with a licence issued by the Director-General of Trade and Industry under the Import and Export Ordinance will be subject to prosecution action and penalty. Besides, breaching US export control regulations may adversely affect the acquisition of US-origin goods by the person/company concerned in future.
US Export Control Information
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Traders are advised to refer to the relevant US export control regulations for updated information on the persons/companies/countries subject to denial/restriction/ sanction of US-origin goods. The following provides a quick reference for traders who want to know more about the US export control information :
US Department of Commerce, Bureau of Industry and Commerce (BIS)
- Embargoes and Other Special Controls in Part 746 of the US Export Administration Regulations (EAR)
- US Denied Persons List
- US Entity List
- US Unverified List
- Transshipment Country Export Control Initiative (TECI)
US Office of the Treasury, Office of Foreign Assets Control (OFAC)
- Economic and Trade Sanctions in force
- List of Specially Designated Nationals and Blocked Persons
US Department of State, Directorate of Defence Trade Controls (DDTC)
- US Arms Embargoes in force
- Debarred List
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Traders may also check the relevant information through the Department's Strategic Commodities Control System Website (http://www.stc.tid.gov.hk) which provides hyperlinks to the relevant websites of the US Administration. However, traders are advised to contact their overseas exporters, manufacturers or the overseas licensing authorities direct for the detailed export control information in respect of individual cases.
Controls on Specific Products
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For certain common types of strategic commodities, traders may refer to the following circulars issued by the Department for more information on the US export control arrangements and the corresponding requirements in Hong Kong's licensing control system:
On US-origin computers - Strategic Trade Controls Circular No. 7/01 - Annexes I (pdf format) and J (pdf format)
On US-origin encryption products - Strategic Trade Controls Circular No. 7/02 - paragraph 11 and 12 .
Enquiries
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For more information on the controls of strategic commodities in Hong Kong, traders may visit the Strategic Commodities Control Website of the Department, or contact the Strategic Trade Controls Branch of the Department by phone (tel. 2398 5575), email (stc@tid.gov.hk) or in person (Room 516B, 5/F, Trade and Industry Department Tower, 700 Nathan Road, Mongkok).
Yours faithfully,
(Miss Angela Liu)
for Director-General of Trade and Industry |
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