Parallel trading

Milk traders able to skirt checks at border town

New baby formula restrictions impossible to enforce in crossover Sha Tau Kok street because it does not have customs checks

PUBLISHED : Sunday, 03 March, 2013, 12:00am
UPDATED : Sunday, 03 March, 2013, 5:14am

Traders of contraband milk formula are shifting their operations to a historic street in the border town of Sha Tau Kok, which lets them skirt tighter checks on parallel exports that began on Friday.

Law enforcement authorities find their hands are tied because of historical and legal reasons that tolerate no official border checkpoint on the street, part of which belongs to Shenzhen, the security minister says.

As of yesterday, they had arrested at least 25 people - 17 Hongkongers and eight mainlanders - at checkpoints elsewhere for breaching the restriction on taking baby milk formula out of Hong Kong.

A 47-year-old mainland man was the first to be penalised under the new rule after he was found with 11 cans of formula at the Shenzhen Bay control point on Friday. He was fined HK$5,000 and nine cans were confiscated.

In Chung Ying Street, however, people were seen entering the restricted zone carrying cans of milk powder.

Secretary for Security Lai Tung-kwok admitted difficulties in enforcing the rule at the site.

"There is no checkpoint in Chung Ying Street due to historical reasons," he said. "Besides, the law on the mainland does not restrict each person to bringing in only two tins of infant formula on a single day. It works on the principle that the stuff travellers bring is for their personal use."

The street was marked out by British colonial leaders in 1951 after the Communist Party seized power on the mainland.

There is no natural barrier or official checkpoint in the street, one end of which is in Hong Kong and the other in Shenzhen.

To enter the street, Hongkongers must get permits from the police and show them to officers stationed there, while mainlanders coming from a Shenzhen checkpoint also need permits from their own authorities.

Sha Tau Kok district councillor Wan Wo-fai said only 10,000 people who lived in the area or were historically linked to it were eligible for the Hong Kong permits, so Chung Ying Street was unlikely to become a hub for parallel-goods trading.

"The parallel-goods traders operating here are mostly mainlanders who buy infant formula at dispensaries in Chung Ying Street," he said.

But the permit holders could make multiple trips a day, as no official records were taken of their movements, Wan admitted.

Under the new law, people over 16 can take only two cans, or 1.8kg, of milk formula out of Hong Kong, provided it is their first trip out of the city in the past 24 hours.

Lai said people were already taking milk formula to the Chung Ying Street before the new law came into force. Shops at the Hong Kong end had been asked to record sales of infant formula and customs would step up controls, he said.