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Following is a question by the Hon Howard Young and a written reply by the Secretary for Commerce, Industry and Technology, Mr John Tsang, in the Legislative Council today (January 11):
Question:
The Hong Kong Export Credit Insurance Corporation ("ECIC") launched its "Travel Agent Services Policy" in October last year to provide professional risk management services and cover for bad debts to support local service providers. In this connection, will the Government inform this Council:
(a) of the number of insurance applications received by ECIC since the launch of "Travel Agent Services Policy" and the amount of insurance cover involved, and how the authorities promote such insurance services to the industry;
(b) whether it will consider streamlining the application procedures concerned and shortening the time for approving applications; and
(c) how the authorities will help the industry reduce credit risks besides the protection provided by ECIC against such risks?
Reply:
Madam President,
My reply to the three parts of the question is set out below:
(a) The Hong Kong Export Credit Insurance Corporation (ECIC) launched a Travel Agent Services Policy (TASP) in October 2005 to provide professional risk management services and cover for bad debts for local service providers. The ECIC has received three applications for the TASP since its launch. Two of them were approved, and the remaining one was subsequently withdrawn by the applicant. The total value of credit limits approved for the two applications amounted to HK$6.3 million.
In order to develop a tailor-made TASP, the ECIC consulted the Travel Industry Council of Hong Kong (TIC) on the needs of the industry in 2005. The ECIC also organised two seminars for the TIC on export credit insurance services including the TASP. Information on the TASP was provided through the TIC to service providers with the ECIC actively following up the enquiries of the latter. The ECIC has also been publicising the TASP by way of press release, advertisements and promotional leaflets.
(b) The application procedures of TASP are very simple. An applicant has to submit only a proposal for the policy, credit limit application for its clients and basic information regarding its operation. The ECIC will assess the credit risks, decide on the amount of credit limit and issue a quotation for the applicant¡¯s consideration.
The ECIC has made a performance pledge that, upon receipt of adequate information, it will approve the credit limit applications within five working days and issue a quotation within two working days.
The ECIC will continue to monitor the needs of the travel industry and consider streamlining the application procedures of TASP if and when necessary.
(c) As a trade self-regulatory body, the TIC has all along been concerned about the risk management of the trade. The TIC issued a directive to all member travel agents in September 2003, requiring inbound travel agents to specify clearly the terms of and deadline for payment of reception fees or deposit in the contract signed with overseas tour operators with respect to inbound tour groups; and inbound travel agents may give prior notice and terminate the transaction if the overseas tour operators fail to settle the payment according to the terms of the contract. Should the inbound travel agents choose to allow or give consent to the overseas tour operators to settle payment after the tour group has arrived in Hong Kong, they must receive the group according to the contract terms until the completion of all items and activities on the itinerary, irrespective of whether they have received the relevant payment or not. Under the above arrangements, the interests of both the consumers and the travel agents are protected.
Apart from insuring bad debt risks, the ECIC provides professional credit management services to travel agents in Hong Kong. With its international credit information network, the ECIC assesses the credit risks of the clients of the travel agents and monitors their buyer and country risks. This service provides an additional option for travel agents to enhance management of their credit risks.
Ends/Wednesday, January 11, 2006
Issued at HKT 11:35
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