Tag Archives: China

     A Vietnamese illegal worker holding a recognisance form was jailed by Shatin Magistrates’ Courts yesterday (February 23).

     During operation “Twilight” conducted on February 17, Immigration Department (ImmD) investigators raided a commercial building in Sheung Wan. A Vietnamese woman, aged 38, was arrested while working as a cleaning worker. Upon identity checking, she produced for inspection a recognisance form issued by the ImmD, which prohibits her from taking employment. Further investigation revealed that she was a non-refoulement claimant.

     The illegal worker was charged at Shatin Magistrates’ Courts yesterday with taking employment after landing in Hong Kong unlawfully and remaining in Hong Kong without the authority of the Director of Immigration or while being a person in respect of whom a removal order or deportation order was in force. She pleaded guilty to the charge and was sentenced to 15 months’ imprisonment. Meanwhile, she was also charged with one count of using a forged Hong Kong identity card and one count of being in possession of a forged Hong Kong identity card. She was sentenced to 15 months’ and 12 months’ imprisonment respectively. All sentences are to run concurrently, making a total of 15 months’ imprisonment.
 
     The ImmD spokesman warned that, as stipulated in section 38AA of the Immigration Ordinance, illegal immigrants or people who are the subject of a removal order or a deportation order are prohibited from taking any employment, whether paid or unpaid, or establishing or joining in any business. Offenders are liable upon conviction to a maximum fine of $50,000 and up to three years’ imprisonment. The Court of Appeal has issued a guideline ruling that a sentence of 15 months’ imprisonment should be applied in such cases. Under the prevailing laws, it is an offence to use or possess a forged Hong Kong identity card or a Hong Kong identity card related to another person. Offenders are liable to prosecution and a maximum penalty of a $100,000 fine and up to 10 years’ imprisonment.

     The spokesman reiterated that it is a serious offence to employ people who are not lawfully employable. The maximum penalty is imprisonment for three years and a fine of $350,000. The High Court has laid down sentencing guidelines that the employer of an illegal worker should be given an immediate custodial sentence. According to the court sentencing, employers must take all practicable steps to determine whether a person is lawfully employable prior to employment. Apart from inspecting a prospective employee’s identity card, the employer has the explicit duty to make enquiries regarding the person and ensure that the answers would not cast any reasonable doubt concerning the lawful employability of the person. The court will not accept failure to do so as a defence in proceedings. It is also an offence if an employer fails to inspect the job seeker’s valid travel document if the job seeker does not have a Hong Kong permanent identity card. The maximum penalty for failing to inspect such a document is imprisonment for one year and a fine of $150,000.

     Under the existing mechanism, the ImmD will, as a standard procedure, conduct initial screening on vulnerable persons, including illegal workers, illegal immigrants, sex workers and foreign domestic helpers who are arrested during any operation, with a view to ascertaining whether they are trafficking in persons (TIP) victims. When any TIP indicator is revealed in the initial screening, the officers will conduct a full debriefing and identification by using a standardised checklist to ascertain the presence of TIP elements, such as threats and coercion in the recruitment phase and the nature of exploitation. Identified TIP victims will be provided with various forms of support and assistance, including urgent intervention, medical services, counselling, shelter, temporary accommodation and other supporting services. The ImmD calls on TIP victims to report crimes to the relevant departments. read more

Public Finance Deficit Budget 164. As an open economy with a relatively narrow tax base, Hong Kong’s government revenue is susceptible to changes in the economic environment.  The ageing population also poses pressure on public expendi… read more

Quality Living 148. Apart from large-scale infrastructure projects, I also care about developing a quality city for our citizens, including enhancing the facilities in our highly popular country parks, hiking trails, recreational facilities and harb… read more

     Following is a question by the Hon Chung Kwok-pan and a written reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (February 24):
 
Question:
 
     In the early days of the outbreak of the Coronavirus Disease 2019 epidemic at the beginning of last year, there was a shortage of face masks (masks) across the globe. The Government Logistics Department (GLD) sourced masks globally, and awarded direct procurement contracts without going through the tendering procedure. It has been reported that the GLD procured a total of 1.12 billion masks last year; quite a number of the delivered masks had quality problems, and a significant quantity of masks have not been delivered although the deadlines have expired. In this connection, will the Government inform this Council:
 
(1) in respect of those masks which have not been delivered although the deadlines have expired, of (i) their quantity, (ii) the originally scheduled and latest anticipated delivery dates, and (iii) the reasons for their not being delivered although the deadlines have expired (set out in a table by procurement contract number and name of supplier); the average unit price of such masks, the total amount of deposits involved, and the total amount of remaining payments; whether the GLD has requested the suppliers concerned to return the deposits or make compensation; and
 
(2) of the quantity of masks with quality problems, with a breakdown by place of origin, name of manufacturer and type of quality problems (e.g. bearing false trade descriptions, and bacteria counts exceeding limits); how the GLD uncovered that such masks had quality problems; the quantity of such masks that had been distributed to various government departments before quality problems were uncovered, the disposal methods for the undistributed masks, and the follow-up actions taken by the GLD against the suppliers concerned?
 
Reply:
 
President,
 
     Our reply to the Hon Chung Kwok-pan’s question is as follows:
 
(1) Amongst the masks procured by the Government Logistics Department (GLD) in 2020, excluding those rescinded contracts, there are 400 000 masks of overdue delivery concerning two local suppliers as listed in the following table. The relevant contracts are for the supply of 2.6 million small-sized masks with an average unit price of about $0.65, of which 2.2 million masks have already been delivered to the GLD. For the remaining 400 000 masks, the suppliers indicated that the delivery of these masks had to be postponed due to export restrictions at the place of manufacture. Details are set out in the following table. The Government is not required to pay any deposit or advance payment under the contracts. The GLD will closely monitor the delivery of the masks concerned.
 

Contract number	Name of supplier	No. of masks of overdue delivery  (pieces)	Delivery date
L/M (538) to GLDPA/1-90	China International Import & Export Company Limited	300 000	Original: October 2020   Latest estimation: March 2021
L/M (581) to GLDPA/1-90	China Resources Textiles Company Limited	100 000	Original: November 2020   Latest estimation: March 2021

 
(2) As at end December 2020, the GLD has identified that around 83.7 million masks might be problematic. Details are as follows:
 

	Quality Problems	Not All Originated From the Purported Place of Manufacture	Suspected False Trade Description
How the problems arose	Through random inspections and laboratory tests arranged by the GLD	The GLD learnt from a newspaper report that the supplier concerned had allegedly re-packaged masks from another place of manufacture as masks produced in the place specified in the contract. After enquiries with the supplier concerned, the GLD suspected that the place of origin of the masks delivered by the supplier was not the same as the one specified in the contract and reported the case to the Customs and Excise Department (C&ED)	Noting the C&ED’s investigation, the GLD suspected that the supplier concerned had submitted false documents and referred the matter to the Police for follow-up
Quantity involved (pieces)	Around 45 million	Around 32 million	Around 6.7 million
Place of origin	Mainland, Japan, India, Russia, Turkey, Kazakhstan, Malaysia, Indonesia, Sri Lanka, the United States of America, Ireland, Dubai and Germany	Japan (purported by the supplier)	Mainland
Number of masks distributed to Government departments	Around 3.27 million	Not distributed	Around 3.12 million
Number of masks used by Government departments	Around 3.21 million	Not used	Around 820 000
Disposal means for the unused masks	The GLD had informed relevant departments to cease using the masks and return the remaining stock to the GLD for follow-up	The masks are temporarily kept by the GLD pending action by the relevant law enforcement department	The GLD had informed relevant departments to cease using the masks, and had passed the undistributed masks and the unused masks from relevant departments to the C&ED for action
Follow-up action taken by the GLD against the suppliers	The GLD is following up with the suppliers to request replacement/ refund for the whole batch of masks	The GLD has referred the cases to relevant law enforcement agents and will render full cooperation on their evidence collection and investigation work. The GLD has rescinded the procurement contracts concerned and is seeking to recover all losses and compensation from the suppliers concerned

     To avoid compromising negotiations or law enforcement work and causing implications to any possible litigations, the GLD is not in a position to disclose the details of individual contracts and information about the suppliers concerned. read more

     Following is a question by the Hon Christopher Cheung and a written reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (February 24):
 
Question:
 
     State Street Global Advisors Asia Limited (SSGA), the manager of the Tracker Fund of Hong Kong (TraHK), issued a notice on the 11th of last month to the unitholders of TraHK stating that, as affected by the executive order signed by the President of the United States, TraHK would not make any new investments in those constituent companies of the Hang Seng Index which were sanctioned entities (the companies concerned) with immediate effect (the decision). Two days later, SSGA issued another notice stating that TraHK would resume investments in the companies concerned on the next day. Some investors consider that by contradicting itself within a short period of time and acting recklessly, SSGA has made people lose confidence in its capability to manage TraHK. In this connection, will the Government inform this Council:
 
(1) as the Government stated in response to the incident that the decision “did not bring any material impact on the investors of TraHK”, of the justifications for such a statement;
 
(2) whether it has reviewed if SSGA’s making the decision constitutes an act of misconduct and has violated the relevant codes/professional conduct; if it has reviewed and the outcome is in the affirmative, whether it will request the Supervisory Committee of TraHK to replace the manager, so as to ensure that TraHK is managed effectively; if the review outcome is in the negative, of the justifications for that; and
 
(3) as the Government indicated early this month that the Hong Kong Monetary Authority was closely following up the incident with the Supervisory Committee of TraHK and SSGA, of the progress of the follow-up work?
 
Reply:
 
President,
 
     State Street Global Advisors Asia Limited (SSGA) announced on January 11, 2021 that the Tracker Fund of Hong Kong (TraHK) would, with effect from the same date, not make any new investments in the Hang Seng Index constituent stocks that were sanctioned by the United States (US) and that TraHK would no longer be suitable for US person to invest. Subsequently, the company announced on January 13, 2021 that TraHK would resume investment in the sanctioned Hang Seng Index constituent stocks.
 
     Such announcements have given rise to unnecessary market chaos. The Government has earlier expressed deep concern over the situation and immediately requested the Hong Kong Monetary Authority (HKMA) and the Supervisory Committee of TraHK to seriously follow up on the incident. Having consulted the Securities and Futures Commission (SFC), the HKMA and the Mandatory Provident Fund Schemes Authority (MPFA), the Government’s reply to the three parts of the question is as follows:
 
(1) According to the prospectus of TraHK, “TraHK’s investment objective is to provide investment results that closely correspond to the performance of the Hang Seng Index (Index) … The Manager seeks to achieve TraHK’s investment objectives by investing all, or substantially all, of TraHK’s assets in shares in the constituent companies of the Index in substantially the same weightings as they appear in the Index …”. If there is any significant deviation between TraHK’s portfolio and the composition and weighting of the Index, the manager will, having considered the transaction costs and the impact, if any, on the market, adjust the TraHK’s portfolio when it considers appropriate. Under the “risk disclosure” part of the prospectus, it is also suggested that TraHK’s return may deviate from that of the Index due to the tracking strategy adopted by the Manager.
 
     TraHK is an exchange-traded fund which currently invests in 52 constituent stocks of the Hang Seng Index. According to the information provided by the regulators, the sanctioned entities which SSGA has earlier announced that it would not make further investments in accounted for around 2.6 per cent of the Hang Seng Index. The tracking error recorded during January 11 to January 13, 2021 was around one basis point each day.
 
     Investors who participate in the trading of TraHK generally expect that the fund can closely resemble the performance of the Hang Seng Index. The Government considers that the hasty announcement by SSGA about its investment decision, and that such decision was then altered within a short period of time have inevitably caused confusion to the public. The Government considers the situation highly unsatisfactory and would take follow-up actions seriously.

(2) and (3) The SFC and the HKMA have, as soon as they were informed of such investment decision, contacted the manager to understand the justifications and specific arrangements of its decision. Since SSGA is a licensed corporation regulated by the SFC, it has to comply with the Fund Manager Code of Conduct (the Code). The Code has prescribed certain restrictions and requirements for fund managers in relation to investment management, including making adequate disclosure of information (as well as any material changes to the information) on the fund which is necessary to enable investors to make informed decisions about their investment in the fund.
 
     The SFC has maintained regulatory communication with SSGA, and has urged the company to comply with the Code and make all decisions in an honest, fair and diligent manner taking into account investor protection and market integrity. The enquiry about the incident by the SFC is still ongoing. The SFC will continue to closely monitor the situation to ensure that the market would operate in an orderly manner and that investors would be adequately protected.
 
     Separately, once the HKMA and the Supervisory Committee of TraHK were informed of the decision of the manager, they have immediately got in touch with the company and requested it to explain the reasons of the decision, adopt measures to mitigate the impact to investors, and review its decision. Since SSGA announced resumption of relevant investment on January 13, 2021, the HKMA has continued to closely follow up with the Supervisory Committee of TraHK and that company. The follow-up work by the Supervisory Committee of TraHK is still ongoing.
 
     As for the Mandatory Provident Fund (MPF) schemes, there are currently three index-tracking constituent funds (constituted respectively under three MPF schemes) which appoint SSGA as investment manager and invest wholly in TraHK. The total net asset value of these three funds amounts to HK$3.6 billion or 0.32 per cent of the total MPF scheme assets. The MPFA has requested relevant trustees to review whether SSGA, as their MPF investment manager, has continued to perform its functions and invested in accordance with the fund’s original investment objectives. If the relevant trustees consider that SSGA is no longer suitable to act as an investment manager, they should make necessary arrangements and adopt risk management measures to protect the interests of MPF scheme members. The MPFA will continue to monitor the situation and maintain close communication with trustees. read more