THE QUEEN v. CHENG NGAN CHEE

1988, No. 293

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H E A D N O T E

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Breach of export licence - proper fine.

IN THE SUPREME COURT OF THE HONG KONG

(Appellate Jurisdiction)

Magistracy Criminal Appeal No. 293 of 1988

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J U D G M E N T

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1. The appellant pleaded guilty before Miss Lo, in South Kowloon Magistrates Court to exporting textiles to the United State of America otherwise than in accordance with the terms of the export licence which authorised a maximum value of US$250.

2. The application for the licence gave particulars of the goods and stated that their value was HK$1,635 or US$209. The consignment was inspected on arrival in USA and investigation revealed that additional garments had been included in the shipment, bringing the total value to US$536 or HK$4,200. The appellant held no quota. The profit was admitted to be HK$1,000.

3. The appellant's company was established in 1982 with a capital of $40,000. In mitigation the appellant told the magistrate that this was her first venture in USA. She did not realise there was a quota restriction.

4. The magistrate fined the appellant $4,000. She considered the offence to be more serious than the usual export offences. She rejected the appellant's claim not to be aware of the quota system.

5. In Attorney General v. Marvel's Clothing Ltd. and another⁽¹⁾, which the magistrate cited in her Reasons for Sentence, the Court of Appeal laid down guidelines to the effect that :-

(a)    Account should be taken of the effect of such offences in terms of damage  to the external relations of Hong Kong, which damage is more accurately reflected in the size of the transaction than in the profit.

(b)    An appropriate guideline for a fine is 40% of the value of the goods. A fine, however, should not be fixed at a level permitting a person to emerge from a prosecution still having a profit on the transaction.

(c)    As well as the removal of profit there should bean added penalty.

(d)    Each case must be dealt with on its merits.

6. These guidelines have been affirmed by the Court of Appeal in R v. Chan Kin-yam⁽²⁾.

7. 40% of the value of the goods in the present appeal is $1,600. The facts of the case and the size of the operation to my mind do not warrant a higher penalty. Such a fine still leaves the appellant with a loss on the transaction.

8. The appeal is allowed and the fine is reduced to $1,600.

(1) Application for Review No. 7 of 1984

(2) [1986] H.K.L.R. 115