Secretary for Trade and Industry Chau Tak-hay said the Government was open to suggestions to further improve the legislative framework.

Imposing a fixed penalty is one of the three options suggested on consumer liability targeting those caught 'red-handed' for possessing pirated or counterfeit goods at premises raided.

But although those fined would not receive a criminal record, the paper admitted end-users did not have reliable methods of distinguishing pirated or counterfeit goods from genuine items.

The second option suggested is to create a smuggling offence at the border in respect of the export and import of infringing articles.

A third option is to leave the genuine private domestic end-user but catch everyone else. Laws at present target only possession for the purpose of trade or business.

Democrat legislator Albert Ho Chun-yan objected to imposing consumer liability as he said the Government had not exhausted other means such as strengthening enforcement action.

Colleague James To Kun-sun said: 'The suggestion to impose a fixed penalty on consumers caught red-handed in raids is illogical. Does it mean possession in a shop is illegal but at home is legal?' The Asia regional director of the International Federation of the Phonographic Industry, Giouw Jui-chien, said the suggestion could create enforcement problems.

The Software Publishers' Association's legal adviser, Grace Chu Hing-wah, said the Government should do more to increase public awareness of intellectual property rights.

But Hong Kong Kowloon and New Territories Motion Picture Industry Association chief executive Woody Tsung Wan-chi said the body supported imposing criminal liability to strengthen the deterrent effect.

'We'll co-operate to see how to make enforcement easier,' he said.