Speeches and Presentations



LCQ7: Selling of parallel imported products as products imported through official dealers

Following is a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, to a question by the Hon Mrs Sophie Leung in the Legislative Council today (July 13):

Question:

It has been learnt that some merchants sell parallel-imported products (commonly known as "parallel imports") as products imported through official dealers (commonly known as "authorised products"), and such practice is often found in the sale of electronic products. Some shops claimed that the products they sell are "authorised products", but when consumers find that the products are actually "parallel imports", the shopkeepers will use an excuse that the products are "authorised products for Japan" or "authorised products for China" instead of "authorised products for Hong Kong" as an explanation; some merchants also repack "parallel imports" with the packing of "authorised products for Hong Kong", or put a label of "original authorised products for Hong Kong" onto the package of "parallel imports", or mark on the price tags that such products are "authorised products". Apart from the price differences, there are also differences in after-sales services and specifications, etc. between "parallel imports" and "authorised products", but quite a number of consumers and tourists have been cheated as they are not able to distinguish between "parallel imports" and "authorised products". In this connection, will the Government inform this Council:

(a) whether in Hong Kong the interpretation of "authorised product" is stipulated in law; whether it has assessed if it is illegal for shops to indicate on the invoices, packages or price tags of "parallel imports" that the products are "authorised products", or to repack "parallel imports" with the packing of "authorised products" for sale; how the authorities prevent merchants from indiscriminately claiming their products as "authorised products" and stop shops from using the packing of "authorised products" as disguise; as it is difficult for consumers to tell from the product packing whether it is an "authorised product" or to call the dealer to make enquiries each time they make a purchase, what measures the authorities have in place to protect consumers from such frauds;

(b) whether it has assessed if it is illegal to sell "parallel imports" as "authorised products"; if the assessment result is in the affirmative, of the relevant penalties; whether apart from making refunds, the persons-in-charge of the shops have to bear other legal liabilities; whether the shops which are uncovered to have sold "parallel imports" as "authorised products" may continue to operate; in the past three years, of the respective numbers of complaints received and prosecutions instituted in respect of such sales practice, the number of inspections carried out to check whether there is such sales practice in the market, as well as the number of shops which have repeatedly been complained for selling "parallel imports" as "authorised products" or of which the persons-in-charge have repeatedly been prosecuted for such sales practice;

(c) of the measures the authorities have put in place to protect tourists and consumers by which they can claim their losses easily and quickly after being cheated by shops selling "parallel imports" as "authorised products"; and by what means tourists who have left Hong Kong can make claims and take follow-up actions;

(d) given that some shops have made use of online platforms, discussion forums, and social networking sites, etc. to claim that their products are "authorised products" and list the prices to attract consumers, whether the persons-in-charge of such online platforms have to bear the relevant legal liabilities; if so, of the details; and

(e) whether the Government will formulate a list of "unscrupulous shops" which sell "parallel imports" as "authorised products" for the reference of consumers and tourists and disclose the information of shops which have repeatedly been complained or of which the persons-in-charge have been convicted as a result of such sales practice?

Reply:

President,

(a) and (b) At present, our legislation does not define "authorised products" or "parallel imports". However, any person commits the offence of false trade descriptions under the Trade Descriptions Ordinance (TDO) (Cap. 362) if he falsely represents that the goods he supplies are imported through official dealers and provided with after-sale and maintenance services provided by them (i.e. "authorised products") while in fact the goods are not (commonly known as "parallel imports"). Offenders are liable to a maximum fine of $500,000 and imprisonment for five years.

The Customs and Excise Department (the Customs) adopts a risk-profiling approach and conducts targeted inspections on high-risk shops so as to clamp down on false trade descriptions (including the sale of "parallel imports" as "authorised products"). The total number of inspections conducted by the Customs between March 2009 and June 2011 is set out in Table 1 of the Annex.

In the above period, the number of complaints involving suspected sale of "parallel imports" as "authorised products" received by the Customs, and the enforcement action taken, are set out in Table 2 of the Annex.

The Customs will continue to conduct regular inspections against false trade descriptions. It has established channels for aggrieved consumers to report suspected cases. The Customs also attaches importance to the promotion, publicity and education on consumer protection legislation and makes use of various channels including brochures, seminars for the trade, and Announcements of Public Interests to remind the trade of the legal requirements and encourage compliance. The Consumer Council (the CC) also conducts various consumer education programmes to raise consumer awareness. In addition, consumers should always be circumspect and, if necessary, enquire with official dealers whether particular goods are authorised products.

(c) On the protection of tourists and consumers, the Customs set up quick response teams in March 2009. On duty around the clock, and ready to arrive at case scenes quickly, they attend to consumer complaints (including those of short-haul visitors) immediately. Visitors who have departed from Hong Kong may also lodge complaints to the Customs by email from their homes. The Customs will follow up and conduct investigation.

The CC assists in resolving consumer disputes by mediating between consumers and traders, and provides advice on consumer matters. Consumers who wish to seek redress in cases involving less than $50,000 may also lodge a claim in the Small Claims Tribunal. Financial and legal assistance under the Consumer Legal Action Fund (of which the CC is the trustee) is also available to consumers in cases involving significant consumer interests.

(d) As regards promotional claims by traders on online platforms, social networking sites and discussion forums that goods for sale are "authorised products", we reiterate that the TDO prohibits any person from applying false trade descriptions to goods in the course of trade irrespective of whether it is conducted online or offline.

(e) At present, the CC has in place a name-and-shame mechanism under which the names and addresses of traders which have engaged frequently in unfair trade practices or have committed offences under the TDO are disclosed through press releases and on the CC's website for public information. The mechanism seeks to enable consumers (including visitors) to become more vigilant.

Wednesday, July 13, 2011

Annex PDF