HKSAR v. HONBIA ENTERPRISE LTD AND ANOTHER

DCCC 1165/2022

[2024] HKDC 386

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1165 OF 2022

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REASONS FOR SENTENCE

D1 faces a charge of "Importing unmanifested cargoes" (Charge 1)  and a charge of "Importing specimens of Appendix II species" (Charge 2). D2 faces the same pair of charges (Charges 3 and 4). They both pleaded guilty to the respective charges.

Summary of Facts

2.  On 3 August 2021, CO15216 (PW1)  processed the E-Manifest of a container numbered OOLU1036094 ("the Container").  According to its E-Manifest, the Container departed from Congo; and the goods were declared as "Dried Fishmaw".  The consignee was D1 and the consignor was Hafia.  The shipping company was Orient Overseas Container Line Limited Hong Kong Branch ("OOCL").  PW1 issued detention notices to OOCL for inspection of the Container.

3.  The Container arrived at Hong Kong on 5 August 2021.  On 6 August 2021, CO15108 received a letter from D1 by fax setting out the species of dried shark fins in the Container.

4.  On 12 August 2021, the Container was inspected by SCO7313 and CO13180.  Other than the declared fish maws, they found a total of 5,192.07 kg of unmanifested dried shark fins, which consisted of   3,775.05 kg of dried shark fins (P6); 1,096.57 kg of dried Guitarfish or Wedgefish fins (P1); and 320.45 kg of dried Mako Shark fins, dried Silky Shark fins, dried Hammerhead Shark fins and dried Thresher Shark fins (P2 to P5).  P1 to P6 were seized.

5.  According to a representative of OOCL, D1 was the consignee of the Container; OOCL provided the arrival notice of the Container to D1; D1 settled the shipping formalities of the Container at the office of OOCL; and OOCL provided the release order to D1.

6.  After examination, two experts confirmed that P1 to P5 were Appendix II species under the Protection of Endangered Species of Animals and Plants Ordinance (Cap.586).

7.  Both D1 and D2 did not have a valid import licence for P1 (namely 1,096.57 kg of dried Guitarfish or Wedgefish fins)  or P2 to P5.

8.  In its record of interview taken on 30 September 2021, D1, represented by D2, admitted, inter alia, that D1 had ordered dried shark fins from Hafia. In June 2021, Hafia told D1 that since some shipping companies did not accept shipment of dried shark fins, so Hafia declared the goods as "dried fish maws".  Regarding Charge 2, D1 knew that the goods ordered included Guitarfish, but did not know that Guitarfish was a controlled item.

9.  D2 was arrested on 30 June 2022.  In his record of interview, D2 admitted, inter alia, that he was responsible for the shipment in question.  He purchased the shipment at the request of Hafia in order to maintain a good relationship. D2 knew that the species of the shark fins [contained in the shipment] were Black Tip Shark, Blue Shark and Guitarfish.  He thought those 3 species were not controlled items.  After receiving the bill of lading, D2 was told by Hafia that the goods were declared as dried fish maws since some shipping companies did not accept shipment of dried shark fins.  He reminded the staff of D1 to inform OOCL that shark fins were not declared when handling the shipping formalities.  D2 did not know that Guitarfish was listed as a controlled item in early 2021.

Mitigation

D1

10. D1 is a company founded by D2 and his siblings in 1980. It engages in trading dried seafood and has a clear record. In mitigation, defence counsel Ms. Wong submitted that D1's business has been shrinking since 2019. Owing to the present case, D1 has not purchased new merchandise; the company would be dissolved once all stock in trade have been sold.

D2

11. D2 is 73 and has a clear record. He is single. D2 ranks second amongst his siblings. D2 and his 4 siblings are shareholders of D1. Except D2's third brother, who is a mental patient, they are also directors of D1. The eldest brother's mobility is impaired. Therefore, D1 is jointly run by D2, his 4^th brother and the youngest sister without clearly defining who is responsible for which tasks.

12. In mitigation, Ms. Wong submitted that Hafia is a dried seafood supplier run by local fishermen in Congo. D1 had done about 10 deals with Hafia in about 4 years. Until the present case, D1 had only ordered shark fins of uncontrolled species from Hafia.

13. Ms. Wong has explained how D1 would purchase goods from Hafia. D1 first placed the order. Hafia would then arrange for shipping and send the paperwork to D1 for taking delivery of the goods. There is, however, a unique/peculiar feature involved − Hafia would often ship goods not ordered by D1 or substandard goods not accepted by D1. It was only until after inspection of the goods, D1 would decide what and how much to take. D1 then pays for what it accepts and Hafia would try to find new buyers for the remaining goods. I have little knowledge of the dried seafood trade. In the absence of any disagreement raised by the prosecution, I accept Ms. Wong's submissions in this aspect.

14. Ms. Wong further submitted that in May 2021, Hafia approached D1 (this time was handled by D2)  pleading that due to the pandemic, the global demand for dried seafood had dropped tremendously, and that the fishermen in Congo were seriously suffering. Under such continuous persuasion, D2 decided to place the order in question for the purpose of maintaining a good business relationship with Hafia.

15. Ms. Wong stressed that D2 had only ordered the dried fins of Black Tip Sharks, Blue Sharks and Guitarfish. He did not order the other species mixed in the shipment. He did not know if it was Hafia's mistake by shipping controlled species or Hafia had intentionally included them in the Container hoping to persuade D1 to buy them. Regarding the dried fins of Guitarfish, D2 genuinely was unware that when he placed the order in early May 2021, it had already become a controlled item on 30 April 2021. Ms. Wong further submitted that there was a statutory grace period from 30 April to 29 July 2021. But for a last minute re-routing of the vessel, the Container most probably could have arrived at Hong Kong within the grace period. It turned out that the Container missed the grace period by 7 days.

Sentence

16. I will deal with Charges 2 and 4 first. Upon conviction on indictment, this offence carries a maximum sentence of a fine of $1 million and 7 years' imprisonment. At present, there is no sentencing tariffs for this type of offences.

17. In HKSAR v Xiao Rongqiang [2022] 4 HKLRD 764, the Court of Appeal made these comments: "Human greed has endangered many species and brought severe adverse effect to the global environment and ecosystem. All crimes that threaten the survival of endangered species must be deterred, the purpose of which is not only to comply with the Convention on International Trade in Endangered Species of Wild Fauna and Flora to which Hong Kong has acceded, but also to ensure that endangered species are properly protected from the risk of extinction[2]."

18. All creatures and plants are precious to this planet. Human beings do not own them. They should be able to live and prosper as governed by nature rather than driven to extinction by humans. It is difficult (and perhaps even cruel)  to put a "price tag" on each endangered species commercially or otherwise (including sentencing).

19. A total of 5 Appendix II shark species (weighing 1,417.02 kg)  were found in the present case. Apparently, the prosecution accepts D2's explanation that he had only ordered the dried fins of Guitarfish, but not the other Appendix II shark species found. That is why Charges 2 and 4 are only concerned with P1 (1,096.57 kg of Guitarfish). As a buyer, D1 and D2 had no control over what Hafia would pack in the Container. There is no evidence to contradict D2's account of the events. I accept what he said in his record of interview.

20. In terms of the timing of the events, Charges 2 and 4 are plainly technical breaches of the then newly amended statutes. I need not say any more about these 2 charges.

21. For Charge 4, I consider a starting point of 12 months' imprisonment appropriate and just. With the timely guilty plea, the sentence is reduced to 8 months. Based on D2's personal background (including his age and clear record)  and the offence being a technical breach, there are strong reasons which justify a suspended sentence. I sentence D2 to 8 months' imprisonment, suspended for 15 months, for this charge.

22. For Charge 2, I will impose a fine in the sum of $15,000 on D1, to be paid within 7 days.

23. Regarding Charges 1 and 3[3], although D1 and D2 could not control what Hafia would pack in the Container or what Hafia would put down on the shipping documents, once they have realized that the shipping documents do not properly and completely reflect the contents of the Container, they were duty bound to inform Hong Kong Customs. This was what did they wrong, failing to disclose the true contents of the Container to Hong Kong Customs. Unlike Charges 2 and 4, these 2 offences are not technical breaches; they are substantive.

24. On the other hand, I am aware that this is D1's first offence in 40 odd years; and D2 has been an upstanding citizen all his life. I also accept Ms. Wong's submission that Charges 1 and 3 were not committed to evade import tax or to avoid any hygiene inspection. It was simply D2's oversight or insufficient respect for the customs clearing process.

25. For Charge 3, I adopt a starting point of 6 months' imprisonment. With the timely guilty plea, the sentence is reduced to 4 months. Based on the same reasons I had stated for Charge 4, I sentence D2 to 4 months' imprisonment, suspended for 15 months, for Charge 3. In the unlikely event that the suspended sentences for Charges 3 and 4 need to be activated, both sentences should be served concurrently for the purpose of the present case.

26. For Charge 1, I will impose a fine in the sum of $10,000 on D1, to be paid within 7 days.