Strategic Trade Controls, Tuesday, October 5, 1999

In response to press enquiries concerning the existing scope of controls over import and export of strategic commodities, a Government spokesman said today (Tuesday) that the Government follow international standards incontrolling the import and export of strategic commodities, including computers and microprocessors.

"Such controls are essential for the purpose of maintaining the confidence of supplying countries of these products in our system, thereby enabling our businesses to continue to have access to high-tech products and cutting-edge technologies which originate from these countries and which are necessary for Hong Kong's economic development.

"The Hong Kong Special Administrative Region's existing import and export licensing controls over Central Processing Unit (CPU) follows exactly the same standard of controls adopted by the Wassenaar Arrangement, the concerned international non-proliferation regimes looking after the control of dual-use strategic goods. The Wassenaar Arrangement has maintained that CPU with 260 million theoretical operations per seconds (Mtops) or above should be controlled.

"In line with our policy to follow the international standard of controls, CPU with 260 Mtops or above, therefore, continue to remain on the Government's control list. However, we understand that there will be discussions at the Wassenaar Arrangement on the control thresholds of CPU and we would be prepared to follow should the Wassenaar Arrangement decide to relax the existing controls on CPU.

"Separately, we note that the Wassenaar Arrangement has relaxed the controls on digital computer from 710 Mtops to 2000 Mtops. We have proposed legislative amendments to incorporate such revisions as well as other changes into our own control list by amending the schedules to the Import and Export (Strategic Commodities) Regulations. Subject to the approval of the Legislative Council, the new control threshold would come into effect on 22 October 1999. "

Recognising the need to facilitate trade in lower end computer related products, Trade Department has recently taken steps to speed up the licence processing time. A simplified arrangement has been put in place for licence applications covering CPUs which are commonly available in the market and are not very sensitive in nature.

The Department provides pre-licence classification in advance and gives expeditious approval of subsequent licence applications. This has significantly shortened the time required to process such licence applications. During the past three months, 80% of the issued CPU licences were processed within our pledged time of three working days.

"With effect from 1 March 1999, the Department has also extended the validity of export licence from 28 days to 3 months. We believe that this has provided additional flexibility to exporters in arranging the export of their goods." he said.