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Jake's View
PUBLISHED : Tuesday, 02 October, 2012, 12:00am
UPDATED : Wednesday, 03 October, 2012, 9:31am

Making fools of ourselves with 'Jackie Chan law'

With parallel imports legislation we effectively are using our taxes to allow foreign copyright holders to charge more than we should pay

BIO

Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.
 

Immigration officers extended their joint operation with police against parallel importers …
SCMP, September 29

 

No, wrong. Let's clear up this confusion. These are parallel exporters, not parallel importers, and the reason we don't like them is that they make a nuisance of themselves at the border, not that they engage in unofficial trade.

Parallel imports is another matter entirely, a self-imposed twist of law whereby we needlessly inflict high consumer goods prices on ourselves for the benefit of foreign brand-name owners. Let's not confuse this with soap runners at the border.

Parallel import restrictions, otherwise known as the "Jackie Chan law", came about when Hong Kong film producers, faced with universal piracy of their productions across the border, decided they might be able to make at least a little money by licensing mainland distribution at very low cost.

They then found that these made-for-the-mainland recordings were coming straight back to Hong Kong and undercutting prices of their local offerings. They appealed to the customs bureau to stop them at the border, but customs said it did not have the authority. The recordings were legitimate, copyrighted products.

But, protested the producers, we didn't authorise them for distribution back in Hong Kong.

That's between you and your distributors, then, customs said. Take them to court if you want. It's none of our business.

The result was demonstrations by celebrities, most obviously Jackie Chan, who said he would move out of Hong Kong if the law wasn't changed. The government caved in and enacted legislation that banned distribution in Hong Kong without the approval of the copyright owner. Chan moved to Los Angeles anyway, but that's another story.

The restrictions have been softened since that time, but they still prohibit imports of copyrighted material for commercial distribution within 18 months of the original publication. They have also been invoked by producers of other trademarked products, notably soft drinks, to keep prices high in Hong Kong.

It's a ridiculous situation for precisely the reason that customs first cited. An agreement between a copyright owner and his distributor is a matter for civil action in case of a dispute between them. There is no good reason for imposing criminal sanctions.

This is particularly pernicious, because the whole point of parallel import restrictions is to make consumers pay more than they would if the market were an open one. What we are doing is using our tax money to help foreign copyright owners overcharge us. We make fools of ourselves with this silly law.

Other countries have long dropped their restrictions on parallel imports. In the United States, for instance, the Supreme Court has ruled that if a product is lawfully made and sold anywhere in the world, it may be imported and sold in the US without violating any of the copyright owner's rights.

Why then do we allow US producers to do to us what their government does not allow them to do at home?

There are other reasons why it is bad law. In the first place, the market has changed dramatically in recent years. People mostly buy from the internet now, and this is entirely legal as there is no ban on parallel imports for personal use.

But it is much easier to obtain pirated products on the internet than it is from commercial outlets. By discouraging commercial outlets, the law only encourages internet piracy, a wonderfully ironic example of unintended consequences.

It's also bad law because Hong Kong lives on entrepreneurial drive. The more open our economy, the more it thrives, and our future, if New York or London offer any lead, probably holds a greater emphasis on cultural activities.

Proponents of copyright restrictions argue that they encourage artistic effort by rewarding the originators of it. The originators rarely get more than pennies. It is invariably the entertainment industry that makes all the money. Cultural expression always does best in an unrestrained environment. We endanger the future of the Hong Kong economy with parallel import restrictions.

But most of all they are simply offensive. They are a self-inflicted insult that our government has imposed on us at the behest of foreign interests that seek only to squeeze us for every cent they can get.

Let's not get this mixed up with our problem at the border.

jake.vanderkamp@scmp.com

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This article is now closed to comments

threeputt
Mr Van der Kamp is, of course, entirely correct.
In fact, he has been making his cogent argument on the issue of "parallel import" restrictions for several years, all apparently without anyone in government having the political will to repeal this particular piece of obvious nonsense.
It has always struck me as bizarre that Hong Kong - which rejoices under the epithet of "the world's free-est commercial city", or somesuch similar Forbes headline nonsense - is ridden with commercial cartels, viz., banking, property, supermarkets etc.
The bizarre rules/regulations as to parallel imports of entirely genuine goods - nb. no question of any infringing or less than authentic goods here - is one more example of past legislative stupidity (there is some lineage to this particular category) and, as Mr Van der Kamp points out, simply serves unjustifiably to line the pockets of established distributors in Hong Kong, and hence create/maintain artificial price levels for certain categories of goods.
So much for our much-vaunted/heralded commercial freedom.
When will the government of Hong Kong recognise the inherent absurdity of this situation, and begin to create a truly free market??
The logic of the case is undoubted, and cannot be circumscribed, but somehow I don't think we should be holding our breath...
spyeatte
I buy most of my camera equipment from a well known parallel importer in New York rather than when I visit Hong Kong because it is cheaper to buy the equipment in the U.S., especially when considering U.S. customs duties. Though the manufacturers don't like the practice, it is perfectly legal in the U.S. to buy parallel imports. However, it is not legal to import goods by hand carrying them through customs unless they obtain special permits. There are licensed air courier services that are allowed to carry documents, samples, etc. I happened to be behind someone trying to import a suitcase full of watches from Hong Kong through U.S. Customs in San Francisco. It didn't go well for him. They need to go through proper channels. If they are going to import goods into Hong Kong, then they need to go through a customs broker like everyone else instead of clogging up the border crossings.
John Adams
Once again Jake gets it dead right
HK Govt : heads up and fly right ( but in the meantime impose strict restrictions on what can be carried on the KCR size-wise )
rpasea
One point Jake didn't mention is the draconian laws against software piracy. Was this a deal between Microsoft and govt to get Microsoft to move to Cyberia - I mean Cyberport? HK govt will legislate criminal offenses for pirated software in exchange for a long term lease in a building people can't get to?
 
 
 
 
 

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