The Critical Role of Hong Kong Customs in IP Border Protection

Hong Kong’s strategic position as a major international trade and logistics hub makes it a critical frontline in the global fight against intellectual property infringement. The Hong Kong Customs and Excise Department (C&ED) serves as the exclusive government agency responsible for taking criminal sanctions against copyright and trademark infringements, operating under a comprehensive legal framework designed to protect the interests of IP rights owners and legitimate traders.

The Department’s enforcement mission spans multiple legislative instruments, including the Copyright Ordinance (Chapter 528), the Trade Descriptions Ordinance (Chapter 362), the Trade Marks Ordinance (Chapter 559), and the Prevention of Copyright Piracy Ordinance (Chapter 544). This multi-faceted approach ensures comprehensive protection across all forms of intellectual property at Hong Kong’s borders.

Strategic Importance of Border Control

Hong Kong is frequently targeted as a strategic hub for the transshipment of counterfeit goods due to its geographical proximity to manufacturing bases on the Chinese mainland and its world-class transportation infrastructure. This reality necessitates vigilant border enforcement to prevent Hong Kong from becoming a conduit for counterfeit goods entering global markets.

The C&ED adopts a multi-pronged enforcement strategy targeting IP infringement activities at three distinct levels:

• Cross-boundary enforcement: Focused on illegal activities at import, export, and transhipment levels
• Local enforcement: Targeting domestic distribution and retail of counterfeit goods
• Online and technology enforcement: Addressing digital piracy and e-commerce infringement

Legal Framework for IP Border Enforcement

Trade Descriptions Ordinance (Cap. 362)

The Trade Descriptions Ordinance (TDO) serves as a critical consumer protection law that directly impacts IP enforcement at the border. Substantially amended in 2013 with provisions coming into force on July 19, 2013, the TDO prohibits false trade descriptions and forged trade marks on goods, as well as five specific types of unfair trade practices.

Key provisions relevant to IP border control include:

• Prohibition of supplying, offering to supply, or possessing for sale any goods bearing false trade descriptions
• Specific offences related to false descriptions pertaining to the place of manufacture
• Criminal sanctions for misleading omissions, aggressive commercial practices, bait advertising, and wrongly accepting payment

Penalties under the TDO:

• On conviction on indictment: Maximum fine of HK$500,000 and imprisonment for 5 years
• On summary conviction: Maximum fine of HK$100,000 and imprisonment for 2 years

Copyright Ordinance (Cap. 528)

The Copyright Ordinance establishes comprehensive protection for copyright works and specifically addresses import and export of infringing copies. The copyright in a work is infringed when a person, without the licence of the copyright owner, imports into Hong Kong or exports from Hong Kong (otherwise than for private and domestic use) a copy of the work which is, and which they know or have reason to believe to be, an infringing copy.

Criminal offences under the Copyright Ordinance include:

• Making infringing copies for sale or hire
• Importing or exporting infringing copies (except for private and domestic use)
• Possessing, selling, distributing or dealing with infringing copies for trade or business purposes
• Distributing infringing copies to an extent that prejudicially affects the copyright owner
• Making infringing copies outside Hong Kong for export to Hong Kong

Penalties for copyright infringement:

• Standard offences: Fine of HK$50,000 per infringing copy and imprisonment for 4 years
• Making infringing copies outside Hong Kong for export: Fine of HK$500,000 and imprisonment for 8 years
• Offences relating to articles designed for making infringing copies: Fine of HK$500,000 and imprisonment for 8 years

Trade Marks Ordinance (Cap. 559)

The Trade Marks Ordinance, which came into force on April 4, 2003, establishes Hong Kong’s modern trademark registration and protection system. This legislation operates entirely separately from the system used in mainland China, pursuant to the “one country, two systems” policy.

A significant development occurred with the Trade Marks (Amendment) Ordinance 2020, gazetted on June 19, 2020, which conferred expanded enforcement powers on the Customs and Excise Department. Prior to this amendment, while the C&ED enforced criminal provisions of trademark infringement under the Trade Descriptions Ordinance, certain offences under the Trade Marks Ordinance itself were the responsibility of the Hong Kong Police. The 2020 amendment consolidated all trademark-related enforcement responsibilities under the C&ED.

Maximum penalty for trademark counterfeiting: Fine of HK$500,000 and imprisonment for 5 years, with potential forfeiture and destruction of infringing goods.

Prevention of Copyright Piracy Ordinance (Cap. 544)

This specialized ordinance addresses specific aspects of copyright piracy, particularly focusing on optical disc manufacturing and video recording in public entertainment venues.

Key provisions include:

• Optical Disc Regulations: Local manufacturers of optical discs and stampers must obtain licences from the C&ED and mark all products with specific identification codes
• Evidentiary Presumption: If a copy of a work stored on an optical disc is not marked with a manufacturer’s code as required, it may be presumed to have been imported into Hong Kong
• Video Recording Restrictions: Regulations prohibiting unauthorized possession of video recording equipment in cinemas, theatres, and concert halls, with mandatory notice requirements

The vigorous enforcement of provisions against pirated optical discs (PODs) has resulted in retail outlets selling PODs being virtually eliminated in Hong Kong in recent years.

The IP Recordation System: Gateway to Border Protection

Hong Kong operates a voluntary IP recordation system that enables rights holders to register their intellectual property with Customs, facilitating more effective border enforcement. While recordation is not mandatory, it significantly enhances the C&ED’s ability to identify and intercept counterfeit goods.

Recordation Requirements and Procedures

The Hong Kong Customs recordation process is notably more rigorous than similar systems in jurisdictions such as mainland China and the European Union. This stringency, while demanding greater effort from applicants, results in more effective enforcement once the recordation is approved.

Application submission: IP owners can apply in person or through an authorized representative to the Intellectual Property Investigation Bureau.

Required documentation includes:

• Evidence of subsistence and ownership of the IP right (e.g., Trade Mark Certificate for registered trademarks or documentation for copyright works)
• Proof of alleged infringement (sample of infringing copy alongside genuine copy for comparison)
• Written authorization if filing through a representative
• Appointment letter designating a competent examiner
• Undertaking to assist Customs in identification of seized goods and testify in court as a prosecution witness

The Competent Examiner: A Critical Requirement

The appointment of a competent examiner represents one of the most distinctive features of Hong Kong’s IP recordation system. The two integral requirements for successful recordation are: (1) the IP owner must designate a competent examiner to examine seizures, and (2) there must be a current case of trademark or copyright infringement occurring in Hong Kong.

Examiner qualifications and assessment:

The nominated examiner must possess the expertise to distinguish between genuine goods, counterfeit goods, and parallel-import products. Upon submission of the recordation application, the C&ED arranges a formal interview to assess the examiner’s competence.

Information required about the examiner includes:

• Job position and duties
• Relevant experience in IP rights enforcement for the trademark owner
• Skills, training, expertise and knowledge in distinguishing genuine from counterfeit products
• Understanding of the IP owner’s product manufacturing, sales and distribution network
• Knowledge of licensing arrangements and brand protection measures
• Any additional information Customs may request based on specific circumstances

Practical considerations: As examiners may be required to conduct examinations at short notice, appointing a Hong Kong-based representative is generally advisable. In limited circumstances, remote examinations may be permitted. Some law firms provide specialized training to clients’ staff and examiners to facilitate effective assistance to Customs.

Benefits of Recordation

Despite the rigorous application process, IP recordation offers significant advantages:

• No official fees: Hong Kong Customs does not charge for recordation services, investigations, or enforcement actions
• No bond requirement: Unlike many other jurisdictions, Hong Kong does not require IP owners to post a bond or guarantee to detain infringing goods
• Proactive detention: Customs can routinely seize and detain suspicious goods at no cost to the IP rights holder
• Criminal prosecution: Once goods are confirmed as infringing, Customs proceeds with criminal prosecution in consultation with the Department of Justice
• Destruction of goods: Following successful conviction, infringing goods are typically destroyed

Border Enforcement Procedures in Practice

Detection and Inspection

The Hong Kong Customs and Excise Department conducts random inspections on imports and exports at all border points, including air cargo terminals, container ports, land boundary control points, and the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port. These inspections target suspicious shipments based on intelligence, risk profiling, and recorded IP information.

Detention and Examination Process

When suspected infringing goods are detected, Customs follows a structured procedure:

1. Initial detention: Suspicious goods are detained pending examination
2. Notification: If the IP has been recorded, the rights holder or their designated examiner is notified
3. Examination: The competent examiner inspects the detained goods to determine authenticity
4. Investigation: Customs conducts its own investigation, often supplemented by intelligence gathering
5. Prosecution decision: If goods are confirmed as infringing, Customs consults with the Department of Justice regarding prosecution
6. Criminal proceedings: Cases are brought before Magistrates’ Courts in the area where the offence was committed
7. Disposal: Following conviction, infringing goods are typically destroyed to prevent re-entry into commerce

International Cooperation

Through established cooperation mechanisms, the C&ED exchanges information and shares enforcement experience with customs authorities in mainland China, Macao, and other overseas jurisdictions. Joint operations are conducted to combat cross-boundary infringing activities, recognizing that IP infringement is often transnational in nature.

The Intellectual Property Database for Guangdong, Hong Kong and Macao facilitates regional cooperation and information sharing among enforcement agencies in the Greater Bay Area.

Recent Enforcement Statistics and Trends

2024 Performance

Hong Kong Customs demonstrated significantly enhanced enforcement effectiveness in 2024:

• Total cases: 31,242 cases handled, representing a 63% increase from 2023
• IP-specific cases: 783 cases involving intellectual property rights infringement
• Seizures: 4 million infringing items seized
• Total value: HK$309 million worth of counterfeit goods intercepted

Notable 2024 operations included:

• August 2024 territory-wide special enforcement operation (August 8-20) targeting counterfeit perfumes, cosmetics, and skincare products, resulting in over 5,000 suspected counterfeit items seized and 8 arrests, with estimated market value of approximately HK$330,000
• October 9-16, 2024 operation at Tuen Mun River Trade Terminal Customs Cargo Examination Compound, seizing approximately 74,700 items of suspected counterfeit goods valued at HK$14.9 million

2023 Comparative Data

The 2023 enforcement results provide context for understanding the 2024 increases:

• Total IP cases: 703 intellectual property infringement cases detected
• Arrests: 329 individuals arrested
• Items seized: Approximately 730,000 infringing items intercepted
• Total value: HK$288 million (60% increase from 2022)
• Cross-boundary cases: 400 cases specifically involving cross-boundary activities, with 620,000 counterfeit items valued at HK$267 million seized

2025 Ongoing Enforcement

Enforcement efforts continue with sustained intensity in 2025. On November 2 and 4, 2025, Hong Kong Customs seized approximately 3,300 suspected counterfeit goods with an estimated market value of HK$2.5 million at the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port.

Commonly Targeted Product Categories

Seizures primarily involve trademark counterfeiting, copyright piracy, and false trade descriptions. The most commonly seized categories include:

• Clothing and accessories
• Footwear
• Watches and luxury goods
• Electronics and electrical appliances
• Perfumes, cosmetics, and skincare products
• Optical discs (though significantly reduced due to enforcement success)

Penalties and Sentencing Practices

Statutory Penalties

Recent Sentencing Patterns

Analysis of recent Trade Descriptions Ordinance cases reveals that courts are imposing substantial sanctions:

• Imprisonment imposed: 77 cases resulted in imprisonment (39 individuals), including 31 immediate custodial sentences and 8 suspended sentences
• Maximum term imposed: 27 months imprisonment (case involving aggressive commercial practices by fitness centre staff, with victim losses exceeding HK$820,000)
• Fines imposed: 154 cases resulted in monetary fines ranging from HK$500 to HK$160,000

Additional Remedies

Beyond fines and imprisonment, courts have the power to:

• Order forfeiture of infringing goods
• Direct destruction and disposal of goods to prevent re-entry into commerce
• Prohibit re-exportation of counterfeit trademark goods in an unaltered state (except in exceptional circumstances)
• Award damages to IP owners in civil proceedings

WTO TRIPS Compliance and International Obligations

TRIPS Agreement Border Measures

In accordance with Hong Kong’s obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the Customs and Excise Department helps rights owners enforce their rights in relation to copyright and trademark goods through border enforcement measures.

The TRIPS Agreement border measures provisions enable holders of IP rights to obtain cooperation from customs administrations to intercept infringing goods at the border and prevent their release into circulation. While these requirements are mandatory only for imports of counterfeit trademark or pirated copyright goods, Hong Kong has implemented a comprehensive system that also addresses exports of infringing goods.

Application Requirements Under TRIPS

Consistent with TRIPS Article 51-60 requirements, rights holders lodging applications with competent authorities must:

• Provide adequate evidence of prima facie infringement of their IP right
• Supply a sufficiently detailed description of goods to make them readily recognizable by customs authorities
• Initiate proceedings leading to a decision on the merits of the case after detention

The competent authorities must inform applicants whether applications have been accepted and, if so, the applicable period and necessary directions to customs officers.

Remedies and Proportionality

In accordance with TRIPS requirements, Hong Kong’s competent authorities have the power to:

• Order destruction or disposal of infringing goods outside channels of commerce
• Ensure disposal avoids harm to the rights holder
• Apply proportionality principles contained in Article 46 on civil remedies
• Prohibit re-exportation of counterfeit trademark goods in unaltered state (except in exceptional circumstances)

Free Trade Agreement Commitments

Hong Kong’s Free Trade Agreement with the European Free Trade Association (EFTA) and other bilateral agreements reaffirm obligations under TRIPS and other applicable international IP agreements. These agreements establish cooperation mechanisms in the IP field and standardize protection levels for individual IP rights.

Practical Guidance for Rights Holders

Steps to Maximize Border Protection

1. Complete IP Recordation: Despite the rigorous requirements, recordation with Hong Kong Customs provides the most effective mechanism for border enforcement. Prepare comprehensive documentation and designate a well-qualified competent examiner.

2. Ensure Trademark Registration in Hong Kong: In practice, Customs generally requires trademarks to be registered in Hong Kong as a pre-requisite for recordation and criminal enforcement actions. Ensure current registration and renewal.

3. Designate Hong Kong-Based Examiners: Given the requirement for potentially short-notice examinations, appointing Hong Kong-based representatives facilitates rapid response.

4. Invest in Examiner Training: Provide comprehensive training to designated examiners covering product authentication, manufacturing processes, distribution networks, and licensing arrangements. Many law firms offer specialized training services.

5. Maintain Updated Records: Keep Customs informed of changes in product lines, packaging, authentication features, and authorized distribution channels.

6. Commit to Cooperation: Be prepared to provide active assistance including participation in raid actions, inspection of seized goods, and testimony in court proceedings.

Reporting Suspected Infringement

If you encounter activities suspected to be in contravention of the Trade Descriptions Ordinance or other IP laws, report them through:

• Customs Hotline (24 hours): 2545 6182
• Online reporting: Hong Kong Customs website notification system
• Written notification: For trademark owners whose IP has been recorded with Customs, providing details of suspected infringement

Comparison: Hong Kong vs. Other Jurisdictions

Emerging Trends and Future Developments

Enhanced Cross-Border Cooperation

The Greater Bay Area integration initiative has strengthened cooperation between Hong Kong, Guangdong, and Macao customs authorities. The Intellectual Property Database for the region facilitates real-time information sharing and coordinated enforcement operations.

Technology-Enhanced Enforcement

Hong Kong Customs is increasingly leveraging technology for IP enforcement, including:

• Advanced risk profiling systems for cargo screening
• Digital databases for recorded IP information
• Online reporting and case management systems
• Enhanced data analytics to identify trafficking patterns

Focus on E-Commerce and Digital Infringement

Recognizing the shift toward online commerce, the C&ED has expanded its online and technology-level enforcement strategy. This includes monitoring e-commerce platforms, investigating online sellers, and coordinating with platform operators to remove infringing listings.

Increased Deterrence Through Penalties

The imposition of significant prison terms in recent cases, including the 27-month maximum sentence in a Trade Descriptions Ordinance case, signals judicial willingness to impose severe penalties for serious IP infringement. This trend is expected to continue as a deterrent against organized counterfeiting operations.