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 You are in: Under Secretary for Political Affairs > Bureau of East Asian and Pacific Affairs > Releases > Reports > 2003

U.S.-Hong Kong Policy Act Report

As of April 1, 2003, as required by Section 301 of the United States-Hong Kong Policy Act of 1992
22 U.S.C. 5731 as amended
Released by the Bureau of East Asian and Pacific Affairs
April 11, 2003 

TABLE OF CONTENTS

I. SUMMARY

II. BACKGROUND

III. U. S. INTERESTS IN HONG KONG

IV. DEVELOPMENTS AFFECTING U.S. INTERESTS IN HONG KONG (4/1/02-3/31/03)

A. Terrorism Cooperation
B. Autonomy
C. Political System
D. Civil Liberties
E. Judicial and Legal Developments
F. Bilateral Agreements
G. Suspensions under 201(A), Terminations under Section 202(D), or Determinations under Section 201(B)

V. U.S.-HONG KONG RELATIONS (4/1/02-3/31/03)

A. Eonomic-Commercial
B. Export Controls
C. Law Enforcement Cooperation, Extradition and Mutual Legal Assistance
D. U.S. Military Ship and Aircraft Visits
E. Passport and Visa Regime
F. Cultural, Educational, Scientific, and Academic Exchanges

I. SUMMARY

Hong Kong remains an international city and one of the world’s most open and free economies. There is strong respect for the rule of law and civil liberties. Hong Kong is an independent customs territory and economic entity separate from the rest of China and continues to be an effective and productive voice in a wide range of international organizations. The United States maintains substantial economic and political interests in Hong Kong and promotes Hong Kong's high degree of autonomy under Chinese sovereignty. The United States-Hong Kong Policy Act authorizes the United States government to treat Hong Kong as a non-sovereign entity distinct from China. The United States also supports Hong Kong's autonomy by concluding and implementing bilateral agreements, promoting trade and investment, arranging high-level visits, broadening law enforcement cooperation, bolstering educational, academic, and cultural links, and supporting the large community of resident U.S. citizens and visitors.
 
Hong Kong has provided strong support for the global campaign against terrorism. Hong Kong has agreed to join the Container Security Initiative and remains an important partner in eliminating funding for terrorist networks and combating money laundering. Our broader law enforcement cooperation provides unique opportunities given Hong Kong’s professional police forces and the common perspectives we share with respect to overarching law enforcement objectives.
 
Hong Kong's autonomy as an international economic actor remained intact as it participated as a full member of numerous international economic organizations, independent of China, such as the World Trade Organization, the Asia Pacific Economic Cooperation forum, and the Financial Action Task Force. Hong Kong's export control system remained robust, and the city continued to play an important role as an international finance center. During this reporting period, Hong Kong intensified its efforts to expand economic interaction with China, especially in the Pearl River Delta, but without undermining or interfering with the operation of the “one country, two systems” formula.
 
The rule of law and an independent judiciary remained pillars of Hong Kong's free and open society. The government proposed legislation pursuant to Article 23 of the Basic Law to criminalize treason, secession, sedition, subversion, theft of state secrets and links with foreign political organizations that are harmful to national security. The government’s consultation paper on Article 23 legislation elicited extensive public debate regarding the potential impact of such legislation on civil liberties and fundamental freedoms. Draft legislation is under review by the Legislative Council. The Hong Kong press remained free and continued to comment critically on issues, including the proposed Article 23-related legislation, China and its leaders, and the Hong Kong government, despite critics’ assertions of media self-censorship. There were numerous demonstrations for and against government positions. Mainland Chinese companies in Hong Kong remained subject to the same laws and regulatory supervision as all other enterprises.
 
U.S. military ship and aircraft visits to Hong Kong, with one exception -- the P-3 landing in 2000 -- were approved routinely by China, bolstering Hong Kong’s reputation as an open, cosmopolitan, and internationally connected city.
 
II. BACKGROUND

After 156 years of British colonial rule, Hong Kong became a Special Administrative Region (SAR) of the People's Republic of China on July 1, 1997. Hong Kong's status is defined in two documents: the Joint Declaration signed by Britain and China in 1984, and the Basic Law promulgated by China in 1990. These documents formally establish the concept of "one country, two systems" under which Hong Kong is guaranteed a high degree of autonomy, except in foreign affairs and defense, and state that Hong Kong's social and economic system, lifestyle, and the rights and freedoms enjoyed by the Hong Kong people will remain unchanged for at least 50 years. The United States supports Hong Kong’s autonomy and the United States-Hong Kong Policy Act of 1992, as amended, establishes the authority of the U.S. government to treat Hong Kong as a non-sovereign entity distinct from China for the purposes of U.S. domestic law based on the principles of the 1984 Sino-British Joint Declaration.
 
III. U.S. INTERESTS IN HONG KONG
 
U.S. interests in Hong Kong remain substantial. U.S. trade, investment, and business with Hong Kong, the world's tenth largest trading entity and tenth largest banking center, flourish in a largely open environment. In the first eleven months of 2002, U.S. exports to Hong Kong totaled USD 11.6 billion, making Hong Kong our 14th largest overseas export market. U.S. direct investment in Hong Kong through 2001 amounted to over USD 29.4 billion. Over 1,000 resident American firms operate in Hong Kong, and Hong Kong is home to an estimated 50,000 American citizens. (Included in this total are many dual nationals not counted by Hong Kong authorities as resident Americans.)
 
Cooperation between the Hong Kong government and the U.S. Consulate General remains broad, effective, and mutually beneficial. The United States enjoys strong cultural and educational relations with the people of Hong Kong, including a large flow of tourists and students in both directions. The United States has significant interests in seeking Hong Kong's support in the global fight against terrorism, promoting economic and business relationships, maintaining a cooperative law enforcement relationship, and continuing access to Hong Kong as a port of call for our ships and aircraft.
 
The United States has strong interests in the protection of human rights and the promotion of democratic institutions. Hong Kong residents share many values and interests with Americans and have worked to make Hong Kong a model of what can be achieved in a society based on rule of law and respect for civil liberties. Hong Kong remains an open and largely tolerant society, in which both local and foreign non-governmental organizations continue to operate freely and representatives of the media work with few government-imposed restrictions.
 
The protection of U.S. interests is enhanced by Hong Kong's continued autonomy, stability, and prosperity; the operation of a full-service Consulate General; the protection of civil liberties; and the preservation of Hong Kong's legal system, which permits sustained and effective cooperation on law enforcement issues. The United States works closely with the Hong Kong Special Administrative Region government and communicates our views on Hong Kong to the Hong Kong government, central government authorities in Beijing, and the people of Hong Kong.
 
IV. DEVELOPMENTS AFFECTING U.S. INTERESTS IN HONG KONG: April 1, 2002 to March 31, 2003
 
A. Anti-Terrorism Cooperation
 
During the period of this report, Hong Kong’s most senior government officials continued to make strong public statements supportive of the global anti-terror campaign, and the government actively cooperated with the United States on anti-terrorism matters. The legislature passed a key anti-terrorist law designed to bring Hong Kong into compliance with UNSCR 1373 and the Financial Action Task Force (FATF) special anti-terrorism recommendations. Seven of twelve international anti-terrorism conventions apply in Hong Kong. The Hong Kong government is currently drafting legislation that will bring two of the remaining conventions into force and will move to apply one of the other conventions after PRC accession. (Note: Hong Kong is not a sovereign state and implementation of UN agreements and resolutions formally occurs via China. After China becomes a party to such international instruments, it has the authority to direct Hong Kong to implement them.)
 
In September Hong Kong agreed to join the Container Security Initiative. We are working with Hong Kong to conclude the logistical and administrative arrangements in order to commence this program. The Hong Kong police force made counterterrorism its top priority during the reporting period, and Hong Kong customs and immigration officials were on the lookout for terrorist groups and individuals. Hong Kong and U.S. law enforcement authorities cooperated on a case involving the attempted purchase by three individuals of Stinger missiles allegedly for use for al-Qaeda. Authorities regularly direct financial institutions to conduct searches for terrorist assets using U.S. and UN lists, although these institutions have found no such assets. Hong Kong played an important leadership role in the anti-terrorism finance effort as the President of the FATF and then as a FATF Steering Committee member. The government responded cooperatively to requests for assistance in ensuring the security of Americans and American interests. For the second consecutive year, military representatives from the Pacific Command Explosive Ordnance Disposal community participated in the Hong Kong Police Force bomb disposal officer licensing course.
 
B. Autonomy
 

Hong Kong continued to enjoy a high degree of autonomy, except in defense and foreign affairs, which remain the prerogatives of Beijing. Hong Kong, one of the world's most open and dynamic economies, actively participated as a full member -- and in some cases as a leader -- of international organizations in which membership is not based on statehood. For example, Hong Kong is a separate and autonomous member of 26 multilateral organizations, such as the World Trade Organization, the Asia Development Bank, the Asia Pacific Economic Cooperation forum, the Bank for International Settlements and the World Customs Organization. In 2002, Hong Kong continued to participate actively in all these multilateral fora, working vigorously within the WTO toward liberalization in services for example.
 
Hong Kong's economic autonomy remained intact. Customs and border controls remained in place, and Hong Kong authorities continued to develop, implement, and enforce their own trade laws and regulations. In response to pressure from Hong Kong businesspeople looking to take advantage of China’s economic growth, the government moved forward on a number of measures designed to facilitate greater economic interaction with mainland China. In January, Hong Kong opened one border checkpoint with China to 24-hour screening for both cargo and passenger traffic. Moreover, Chief Executive Tung Chee Hwa successfully lobbied Chinese authorities to relax restrictions on tourism to Hong Kong; as a result, the number of mainland Chinese visiting Hong Kong in 2002 increased by 50%. Negotiations continue on Hong Kong’s proposed free trade agreement with China (known as the Closer Economic Partnership Arrangement or CEPA). Hong Kong is aiming for an agreement by mid-2003. This increased economic interaction has not weakened Hong Kong’s commitment to a strong export control regime. The government has deployed additional staff to handle the expanded hours of operation and a larger flow of cargo across the border.
 
Hong Kong began the process of passing implementing legislation as required under Article 23 of the Basic Law (see Section E below). Legislative Council members, human rights groups, business associations, representatives of the media, foreign governments, and others voiced concern that when enacted these laws could restrict fundamental rights and freedoms. The government repeatedly emphasized that the proposed legislation would not erode Hong Kong’s existing freedoms and liberties. There was some criticism that public comments by Vice-Premier Qian Qichen and other Chinese officials in support of the Hong Kong government’s actions interfered with the Basic Law’s mandate that Hong Kong “shall enact on its own” Article 23 legislation.
 
The People's Liberation Army (PLA) Hong Kong Garrison, whose stated primary role is national defense, remains a largely unseen and symbolic presence in Hong Kong. As provided for in the Basic Law, the Garrison may assist the Hong Kong government in maintaining public order and disaster relief if requested by Hong Kong's Chief Executive and approved by the Central Military Commission. There were no such instances during this reporting period. The Garrison did not engage in public security work or business activities.
 
Hong Kong law enforcement agencies remained independent of their Chinese counterparts. The continued assistance the Hong Kong government has given the U.S. in law enforcement, particularly in the apprehension and extradition of fugitives, is a good example of Hong Kong’s judicial independence.
 
C. Political System
 
Incumbent Chief Executive Tung began his second five-year term on July 1, after his unopposed nomination in February by a Basic Law-defined selection committee (made up of roughly 800 Hong Kong residents), was approved in March by China’s State Council. The number of directly elected seats in the sixty-member Legislative Council elected in September 2000 remained 24; that number will rise to 30 in 2004 in accordance with the timetable laid out in the Basic Law.
 
The Basic Law calls for "gradual and orderly" progress toward the "ultimate aim" of electing the Chief Executive and all members of the legislature by universal suffrage. Hong Kong government officials have committed to extensive public consultation on future constitutional developments, but have not yet initiated steps to prepare for changes in electoral arrangements. Government officials have said that decisions on this front should take into account the experiences of the 2002 Chief Executive selection and the 2004 Legislative Council elections. Major political parties have all stated explicit support in years past for a gradual move toward the elimination of functional constituencies.
 
Hong Kong’s introduction of a new “Principal Officials Accountability System” in July changed the SAR’s government system by adding a layer of eleven political appointees to run the eleven policy bureaus. Three other civil service positions -- the Chief Secretary, Financial Secretary, and Justice Secretary -- were also converted to political appointments, although without a change in personnel. These 14 political appointees are chosen by the Chief Executive and approved by the Chinese government. These political appointees also serve as members of the Chief Executive’s Executive Council, which functions as a cabinet. The restructured Executive Council also includes members of two political parties, a labor leader and two other non-official members. The Chief Executive said the reform was aimed at improved governance, greater political responsibility by heads of government agencies, and greater accountability and sensitivity to local views.
 
D. Civil Liberties

 
Freedoms of speech, press, religion, assembly, association, and other basic human rights remained well respected and defended in Hong Kong. The press remained free and continued to publish a wide variety of news stories and opinions, including on Taiwan, Tibet, Chinese leadership dynamics, Communist Party corruption, and human rights. The media have been especially active in reporting and editorializing on the debate over legislation on Article 23 of the Basic Law. Despite regular coverage of sensitive subjects in print and in the broadcast media, professional journalist groups and NGOs asserted that media self-censorship continued. In August, a government official contacted the broadcasting director of the government owned but editorially independent Radio Television Hong Kong (RTHK) about the station’s plans to conduct a phone interview with the Taiwan Vice-President. The interview did not take place. The government official publicly denied pressuring RTHK and stated that the government respected the editorial independence of all media organizations.
 
The Basic Law provides for freedom of association and assembly. The government respected this right in practice. Over 7000 societies have registered since the 1997 reversion. No applications for registration have been denied. Demonstrations averaged over five per day during the reporting period, above the pre-handover rate. There were numerous demonstrations for and against Article 23-related legislation, including two in December that were among the largest seen since 1997. There was also a large demonstration by thousands of civil servants over a proposed pay cut. Under the law, demonstrators must notify the police for a march involving more than 30 persons and for an assembly of more than 50 persons. The police must give a clear reply within 48 hours if there is any official objection. Out of thousands of applications to hold public rallies or marches submitted since 1997, only a few have been disallowed. In November, three political activists were convicted and put on probation for organizing an unauthorized rally earlier in the year to protest provisions requiring prior notice for assemblies and demonstrations. This was the first such case since 1997 in which protestors were charged for not obtaining advance permission from police for holding a demonstration.
 
Groups continued to be free to demonstrate on issues of sensitivity to China. In May some 1,500 persons marched through central Hong Kong to commemorate the June 4, 1989 massacre in Beijing’s Tiananmen Square, and on June 4, tens of thousands attended the annual candlelight vigil to commemorate the anniversary. Falungong practitioners regularly conducted public protests against PRC policies, holding protests in front of the Hong Kong offices of the Central government. In August, a group of 16 Falungong practitioners were convicted and fined between $40 and $125 per charge for obstruction and minor assault after refusing to comply with repeated police instructions to remain in a designated demonstration zone. This was the first time that Falungong practitioners were convicted of an offense in Hong Kong. In October the government allowed the Falungong the use of two public venues to hold an art exhibit and concerts. In February, the Falungong found an alternative venue for their annual experience-sharing conference in a local venue after a local hotel cancelled at the last minute.
 
Although the Hong Kong government has respected freedom of movement, freedom of immigration, and freedom to enter and leave the territory since the handover, there have been exceptions involving overseas dissidents. Exiled mainland dissident Harry Wu, an American citizen, was refused entry to Hong Kong in April, when he came to discuss setting up a branch office with human rights activist Frank Lu, and in June, when he came to attend a seminar. Also in June, the Hong Kong government denied entry to over 90 foreign Falungong adherents who intended to stage protests during the fifth anniversary of the handover celebration. The government denied entry to some 80 Falungong practitioners from Taiwan who wished to attend an experience-sharing conference in Hong Kong in February. The government said that all of these denials were in accordance with Hong Kong’s immigration law.
 
E. Judicial and Legal Developments
 

Rule of law has continued to prevail in Hong Kong under the common law system dating from colonial days and as prescribed by the Basic Law. By law and tradition, the judiciary is independent and the Basic Law vests Hong Kong's highest court with the power of final adjudication; however, under the Basic Law, the Standing Committee of the PRC's National People's Congress (NPC) has the power of final interpretation of the Basic Law. Judicial appointments are made by a non-partisan commission that seems to operate well, although some have called publicly for the nomination process to be more transparent. Judges are well trained and highly qualified, and the Court of Final Appeal includes distinguished justices from other Commonwealth jurisdictions who take part on a case-by-case basis.
 
A key legal development during this reporting period was the Hong Kong government’s decision to introduce legislation as required by Article 23 of the Basic Law. Article 23 requires that the government enact legislation on its own prohibiting treason, secession, sedition, subversion against the Central People’s Government, or theft of state secrets and links that are harmful to national security with foreign political organizations. In September the government initiated a three-month public consultation process over guiding principles for the legislation, with the intent of having legislation passed before the end of the legislative session in July 2003. The consultation period was marked by spirited public debate over the content and form of the proposals, as well as over the form of legislation and the government’s timetable for implementing the legislation. Critics expressed concern that the legislation would restrict fundamental rights and freedoms. Of particular concern in the original consultation paper, which was subsequently revised, was the proposal for extension of the offenses of treason, sedition, secession, and subversion to permanent residents, without regard to nationality or legal domicile; the proposal to ban organizations affiliated with mainland political organizations that have been banned by the PRC on national security grounds; the proposal for extended emergency powers for the police; uncertainty about the parameters of "unlawful disclosure" of state secrets; and other proposals perceived as potentially limiting freedom of speech and press. There were also strong objections to the government’s decision to provide a consultation document, but not the draft legal text, for public discussion before the bill was taken up in the legislature. Domestic and international groups voiced support for more transparent process, but the authorities chose not to exercise that option. The government maintained that it had proposed a liberal set of principles for the prospective legislation that was fully in accord with the civil rights protections guaranteed under the Basic Law, Hong Kong’s common law legal tradition, and Hong Kong’s obligations under the International Covenant for Civil and Political Rights. In January, the government announced it would modify some of the proposals in response to local and international concerns expressed during the consultation period, to include providing additional safeguards on freedom of the press and the free flow of information; reduced scope for laws on proscribed organizations; not applying the offense of treason to foreigners; and limiting emergency police investigative powers. The government released the text of the draft legislation on February 13 and the legislature began its consideration of the bill on February 26.
 
F. Bilateral Agreements
 
There are more than a dozen U.S.-Hong Kong bilateral agreements currently in force, including a stand-alone Air Services Agreement, and Extradition, Prisoner Transfer, and Mutual Legal Assistance Agreements that entered into force since reversion. These agreements have functioned very well, although Hong Kong legal requirements for "sovereign assent" by the Chinese government with respect to some forms of international cooperation have in a small number of cases in the past hindered timely cooperation.


G. Suspensions under 201(A), Terminations under Section 202(D), or Determinations under Section 201(B)
 
There were no suspensions under section 201(A), terminations under section 202(D), or determinations under section 201(B) of the United States-Hong Kong Policy Act of 1992, as amended, during the period covered by this report (August 1, 2001 to March 31, 2002).

V. U.S.-HONG KONG RELATIONS: April 1, 2002 to March 31, 2003
 
A. Economic-Commercial
 
Hong Kong remains one of the world’s most open economies, and U.S. companies continued to have a favorable view of Hong Kong's business environment, including its autonomous and impartial legal system, free flow of information, low taxes, and well-developed infrastructure. The American Chamber of Commerce's annual business confidence survey of its members, conducted in late 2002, showed that chamber members retained confidence in Hong Kong's future despite difficult economic conditions: 58% believed the business outlook for 2003 was "good" or "satisfactory." This number increased to 86% and 95% for 2003 and 2004, respectively. U.S. and other foreign companies also continue to find Hong Kong attractive as a headquarters location for China and the wider Asia region.
 
The United States and Hong Kong signed a new, significantly liberalized civil aviation agreement in October 2002 that should lead to more and better air services for passengers and shippers and increased employment and investment in Hong Kong. The agreement greatly expands opportunities for U.S. cargo and passenger carriers to offer flights from Hong Kong to third countries. The agreement also permits U.S. and Hong Kong airlines for the first time to engage in cooperative code-sharing relationships.

Hong Kong maintained few non-tariff barriers and investment restrictions and moved steadily to reduce or remove what few restrictions exist. For example, beginning in 1998, Hong Kong has opened the broadcast and telecommunications markets to greater competition. One result of this liberalization was a significant increase in U.S. direct foreign investment (USD 2.5 billion in 1999), including several major telecommunications projects. In January 2002, the government announced plans to open the local wire-based telecommunications market beginning in 2003, thereby removing the last major element of protection from this sector. Hong Kong's strong pro-competition record in telecommunications and broadcast, however, is not matched across the board. The absence of a comprehensive antitrust law and the high cost of local market entry have led to domination of some service sectors by major local companies.
 
Hong Kong has made significant progress over the past several years in fighting optical disc piracy, and the Office of the U.S. Trade Representative now regularly cites Hong Kong as a model for its tough enforcement and sound legislation on intellectual property piracy. The unauthorized copying of computer programs, movies, music, television programs, and music remains illegal, although Legislative Council suspended the criminal provision for unauthorized copying of publications in June 2001. The government prepared bills to refine the “fair use” rules for copyright publications and to create new provisions to crack down on illicit copy shops and to liberalize the parallel import of computer software; both are currently under consideration by Legislative Council. U.S. industry has expressed some concern about the adequacy of new legislation and has continued to push for even stronger enforcement. The United States has encouraged the government at senior levels to crack down on the manufacture, distribution and sale of pirated discs. Hong Kong has responded by conducting more aggressive raids at the retail level and engaging in public education efforts to encourage respect for intellectual property rights. Hong Kong Customs intelligence operations and raids on underground production facilities have shut down most pirate manufacturing, forcing retailers to rely increasingly on smuggled products.
 
Chief Executive C.H. Tung, in his January policy address, emphasized the importance of addressing Hong Kong’s burgeoning fiscal deficit. He indicated that the government would follow a three-pronged approach of reducing the shortfall by cutting expenditures, modestly increasing taxes, and stimulating economic growth. Civil service unions have agreed to a 6% pay cut, phased in over three years, and the government has indicated it intends to raise the corporate profit tax by 1%-2% to 17% or 18%. Chief Executive Tung and other senior officials have reaffirmed the government's commitment to the existing currency regime linking the Hong Kong dollar to the U.S. dollar.
 
The Hong Kong government is deliberating its policy towards biotech foods, and it recently issued an economic assessment of various biotech labeling options. The U.S. government is watching these consultations closely, as the adoption of any mandatory measures could affect U.S. exports to Hong Kong of biotech foods.
 
B. Export Controls
 
Hong Kong continued to maintain an effective, autonomous, and transparent export control regime that the U.S. government encourages others to emulate. Hong Kong cooperates closely with its U.S. counterparts to ensure compliance with relevant export control regimes. Hong Kong responded favorably to an October 2002 invitation from the Department of Commerce to join its Transshipment Country Export Control Initiative and is examining how to participate. The eighth round of formal bilateral interagency export control consultations is scheduled for April 24-25, 2003. The last round took place in March 2002.

U.S. Department of Commerce representatives in Hong Kong continue, on a regular basis, to carry out pre-license checks and post-shipment verifications on companies in Hong Kong as part of the dual-use licensing, vetting, and post-issuance process. Likewise, Department of State and U.S. Customs officers carry out end-use checks on munitions items. In both instances, Hong Kong officials are neither informed of such checks nor involved in conducting the checks. The importance of these checks was underscored by a 1997 General Accounting Office (GAO) report that stated that such checks were a key factor in determining whether Hong Kong continued to maintain an effective export control system. These efforts are supplemented by regular visits by Department of Commerce Safeguards teams, who spend several days at a time in Hong Kong conducting pre-shipment and post-shipment verification checks. The most recent Safeguards visits to Hong Kong were conducted in June 2002 and March 2003.

Hong Kong has an active licensing system for both imports and exports of strategic trade, reflecting all the major multilateral export control lists. Recent enhancements to Hong Kong's export control system include the establishment of an online database of control items and the creation of an industry liaison position. Both of these initiatives aim to improve public outreach and education on Hong Kong's licensing regime. In March 2003, the Hong Kong Trade and Industry Department and the Department of Commerce concluded an agreement to enhance our ability to share licensing and enforcement information. The United States continued to monitor the number of strategic trade cases worked by Hong Kong Customs and urged more active enforcement of Hong Kong’s export control regulations, including enforcement of illegal re-exports of U.S.-origin items. The United States also continued to monitor Hong Kong’s economic integration with Mainland China, including plans for collocation of Customs facilities at border crossings, and to evaluate the impact on Hong Kong’s autonomous export control system.
 
C. Law Enforcement Cooperation, Extradition, and Mutual Legal Assistance
 
Law enforcement cooperation remained a central pillar of U.S.-Hong Kong relations. The Consulate General is home to seven law enforcement agencies: DEA, FBI, INS, Customs, Secret Service, IRS Criminal Investigation Division, and the State Department's Bureau of Diplomatic Security. U.S. and Hong Kong law enforcement agencies cooperated to combat activities such as terrorism, human smuggling, trafficking in persons, narcotics trafficking, commercial fraud, counterfeiting, credit card fraud, money laundering, violations of intellectual property rights, and general organized crime. U.S.-Hong Kong agreements on extradition, prisoner transfer and mutual legal assistance, in effect since 1998, 1999, and 2000, respectively, all continued to function smoothly in most instances. During the period covered by this report, Hong Kong extradited 8 people to the U.S., while the U.S. extradited 3 to Hong Kong.
 
D. U.S. Military Ship and Aircraft Visits
 
Hong Kong is a regular port of call for the U.S. military. During the period of this report, 38 ships, including four aircraft carrier battle groups and the Seventh Fleet flagship with the Commander of the Seventh Fleet embarked, visited Hong Kong. The U.S. Navy continued to provide deck landing qualification support to Government Flying Service helicopters during these visits. Force protection support provided by local authorities has been excellent. In April, Beijing denied a visit request to Hong Kong for the USS Curtis Wilbur. A subsequent visit request for the USS Kitty Hawk battle group later that month was approved. While Beijing has not approved the visit of any U.S. Navy P-3 aircraft to Hong Kong since the April 2001 EP-3 incident, more than two-dozen non-P-3 aircraft missions have been approved.

E. Passport and Visa Regime
 
The HKSAR passport is issued to Chinese nationals holding Hong Kong permanent identity cards. The British National Overseas (BNO) passport is issued by the British government. China, however, recognizes the BNO passport as a travel document only, and not as evidence of citizenship. Most Hong Kong residents are entitled to hold BNO passports and HKSAR passports concurrently. The Hong Kong government continued to seek visa-free access for the HKSAR passport to other countries, with 124 countries currently affording visa-free entry. U.S. citizens visiting Hong Kong for a temporary stay of less than 90 days may enter without a visa. The ability of the United States to reciprocate -- to offer visa-free entry to holders of the HKSAR passport – continues to be governed and limited by the terms of the Visa Waiver Program in section 217 of the Immigration and Nationality Act, 8 U.S.C. Section 1187. The United States currently issues ten-year multiple-entry visitor visas to qualified applicants, the maximum validity period available under U.S. law.
 
F. Cultural, Educational, Scientific, and Academic Exchanges
 
Exchanges between Hong Kong’s seven universities and other educational institutions and their U.S. counterparts range from short-term visits by American faculty and summer programs for students to ambitious multi-year exchanges of faculty and staff. The Fulbright program in Hong Kong supports four U.S. lecturers and two to three U.S. students in Hong Kong each year. The Hong Kong government, through the Research Grants Council, funds post-graduate research in the United States for four Hong Kong academics for up to one academic year. The Hong Kong-America Center, which has been in operation since 1993 with support from five local universities and the Department of State, handles the selection of Hong Kong Fulbrighters doing research in the United States. The Department of State supports the University of Hong Kong's American Studies degree program by providing a Fulbright Scholar to the program each year. The Institute of International Education (IIE) office in Hong Kong provides educational advisory services and conducts outreach programs for schools and thousands of Hong Kong and Macau students who wish to pursue studies in the United States. The Department of State International Visitor Program supports a wide variety of professional exchanges for candidates sponsored by the Consulate General. In 2002-03, over 14 individuals from Hong Kong and Macau, including journalists, politicians, government and law enforcement officials, an arts manager, and a librarian have traveled or will travel to the United States on study tours.

[End]


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