Hong Kong quarantine relaxed for directors of HKEx listed companies and HKEx listing applicants, certain lawyers, accountants and professionals

The Compulsory Quarantine of Certain Persons Arriving at Hong Kong Regulation (Cap. 599C) (the “Regulations”) was introduced by the HKSAR Government on 08 February 2020. The Regulations applied to persons arriving at Hong Kong from a place in China other than Hong Kong. Pursuant to the Regulations and subject to any exceptions, any person or persons arriving at Hong Kong from a place in China other than Hong Kong must be placed in quarantine for a period of 14 days from the date of their arrival (the “Compulsory Quarantine Arrangements”). On 29 April 2020, the HKSAR Government introduced the Compulsory Quarantine of Certain Persons Arriving at Hong Kong (Amendment) (No.2) Regulation which amended the Regulations (the “Amended Quarantine Regulations”).

1. Hong Kong quarantine exemption for certain Hong Kong legal practitioners, arbitrators and mediators.

   Pursuant to section 4(1) of the Amended Quarantine Regulations, the HKSAR Government has recently introduced a mechanism for arbitrators, mediators and legal practitioners acting as counsel for a party in an arbitration, mediation or other categories of legal proceedings or for legal practitioners advising on certain large scale transactions to apply for exemption from the Compulsory Quarantine Arrangements.

   Section 4(1) of the Amended Quarantine Regulations sets out that the Chief Secretary for Administration (the “Chief Secretary”) may designate any person or category of persons for exemption from the Compulsory Quarantine Arrangements if the Chief Secretary is satisfied that the person’s or persons’ entry into Hong Kong is necessary for the purposes relating to manufacturing operations, business activities or the provision of professional services in the interest of Hong Kong’s economic development.

   1. Hong Kong legal professionals working on large-scale transactions

      Pursuant to section 4(1) of the Amended Quarantine Regulations, the Chief Secretary with effect from 15 June 2020 has identified certain legal practitioners who are eligible for exemption from the Compulsory Quarantine Arrangements. Legal practitioners who are working on an important large-scale commercial transaction, being transactions for listing on the Stock Exchange of Hong Kong Limited (the “HKEx”) or notifiable transactions of listed companies under the applicable listing rules of the HKEx (the “Transaction”) are eligible for exemption from the Compulsory Quarantine Arrangements. The following category of legal practitioners are eligible for exemption from the Compulsory Quarantine Arrangements:

      1. a qualified legal practitioner acting for a party in a Transaction who either:

         1. travels from Mainland China, Macao or Taiwan to Hong Kong to provide necessary legal services that require on-site physical presence in relation to the Transaction; or

         2. returns to Hong Kong from Mainland China, Macao or Taiwan after provision of necessary legal services that require on-site physical presence in relation to the Transaction.

      Generally only a limited number of persons who are working on the same Transaction will be approved and exempt from the Compulsory Quarantine Arrangements.

      Chapter 14 of the HKEx Listing Rules sets out detailed requirements in respect of certain transactions, principally acquisitions and disposals by a listed issuer of which the HKEx must be notified. Broadly, it is any transaction which falls within this Chapter 14 of the Listing Rules which is considered to be a notifiable transaction.

      The application procedure for legal practitioners is summarised in (iii) below.

   2. Hong Kong quarantine exemption for Hong Kong arbitrators and mediators

      In addition to the above, the Chief Secretary pursuant to section 4(1) of the Amended Quarantine Regulations, has also identified the below mentioned category of arbitrators, mediators or legal practitioners as being eligible for exemption from the Compulsory Quarantine Arrangements:

      1. an arbitrator, mediator, or qualified legal practitioner acting as counsel for a party in arbitration proceedings administered by one of the relevant bodies, or acting as counsel in litigation proceedings in court (the “Eligible Proceedings”) who either:

         1. returns from Mainland China, Macao or Taiwan to Hong Kong after provision of the necessary professional services in relation to the Eligible Proceedings; or

         2. travels to Hong Kong from Mainland China, Macao or Taiwan to provide the necessary professional services in relation to the Eligible Proceedings.

      The application procedure applicable to arbitrators, mediators and legal practitioners is summarised under (iii) below.

   3. Application procedures for Hong Kong quarantine exemption and supporting documents

      An applicant wishing to rely on one of the aforementioned exemptions must make an application to the Department of Justice (the “DOJ”). Applicants are advised that applications should be submitted to the DOJ at least two weeks in advance of the travel, unless there are exceptional circumstances. 

      Relevant arbitrators, mediators and legal practitioners should submit the application form to the DOJ setting out the personal particulars and the justifications for travelling to Hong Kong, Macao, Taiwan or Mainland China. Additionally, the application must contain the following supporting documents:

      1. a copy of the individual’s Hong Kong Identity Card or Passport or other applicable travel document;

      2. a copy of the individual’s professional qualification certificate;

      3. a copy of the appointment document in the arbitration, mediation or litigation proceedings of the individual;

      4. copy of the letter from the company involved in the Transaction being represented by the legal practitioner, confirming the necessity for the legal services requiring on-site physical presence in relation to the Transaction;

      5. each individual must declare that he/she is travelling to Hong Kong, Macao, Taiwan or Mainland China to provide the necessary professional legal or dispute resolution services in the Eligible Proceedings, or to provide the necessary legal services which require physical presence in relation to the Transaction as the case may be;

      6. each individual must declare that he/she will only travel to and stay in the city where the necessary services are to be rendered; and

      7. each individual must take the necessary precautionary measures to ensure personal hygiene and must avoid any unnecessary social contact whilst in the particular city.

2. Additional categories of persons eligible for exemption from Hong Kong Compulsory Quarantine Arrangements

   In addition, the Chief Secretary has pursuant to section 4(1) of the Amended Quarantine Regulations identified other categories of persons as eligible for exemption from the Compulsory Quarantine Arrangements. A complete list of the categories of persons eligible for exemption from the Compulsory Quarantine Arrangements can be found here.

   Directors of HKEx listed companies or HKEx listing applicants

   Categories of directors are eligible for exemption from the Compulsory Quarantine Arrangements:

   1. Directors of companies listed on the HKEx;

   2. Directors of companies applying for listing on the HKEx (the “Eligible Directors”);

   who are traveling to Hong Kong from Mainland China, or returning from Mainland China to Hong Kong from duty travel. The purpose of such travel has been recognised by the HKEx as essential to the operation of the listed companies or listing applicants which specific duties include:

   1. Travelling to Hong Kong from Mainland China to attend shareholders’ meetings of listed companies which are held in Hong Kong (including Annual General Meetings, Extraordinary General Meetings and Special General Meetings);

   2. Travelling to Hong Kong from Mainland China to attend hearings which are held by the HKEx including listing hearings, disciplinary hearings and review hearings; and

   3. Returning to Hong Kong from Mainland China for attending shareholders’ meetings of Hong Kong listed companies.

   Each listed company or listing applicant is subject to a quota of two Eligible Directors during any specified time period. A specified time period for Eligible Directors in relation to any one or more of the circumstances listed above (i) – (iii) will be calculated with reference to when the Eligible Directors’ duties commence and are completed.

   The HKEx circular has a detailed guide on the specified time periods and the application procedures in relation to Eligible Directors. 

   Directors and executives of HKEx listed companies included on certain indices

   Directors or executives of HKEx listed companies and who are included in one of the certain stock indices are eligible for the exemption from the Compulsory Quarantine Arrangements if they travel from Mainland China to Hong Kong or who return to Hong Kong from Mainland China for essential business services.

   The directors and executives of HKEx listed companies which are included on one of the following indices may qualify:

   1. Hang Seng Index;

   2. Hang Seng China Enterprises Index; or

   3. the Hang Seng Composite LargeCap, MidCap or SmallCap Index (“Eligible Company”).

   The eligibility for directors is quota-based and applications will be considered on a task-specific and scheme-specified basis.

   Each Eligible Company can only nominate a maximum of two persons which persons must be either a director and/or executive (the “Nominated Persons”). Once approval has been given, the Eligible Company may not amend the Nominated Persons regardless of whether or not the Nominated Persons make the travel. In addition, each of the Nominated Persons of an Eligible Company may only apply for the exemption once per calendar month. Multiple applications in the same calendar month by the same Nominated Persons will not be entertained.

   For a detailed guide on the application procedures for Nominated Persons of Eligible Companies, please see the HKEx circular.

   Time periods of travel for Eligible and Nominated Directors

   Both Eligible and Nominated Directors are expected to keep their travel to a minimum. Broadly, Eligible and Nominated Directors arriving at Hong Kong should arrive no earlier than the day immediately preceding the Eligible or Nominated Directors’ duties. For Eligible and Nominated Directors returning to Hong Kong, they should return no later than the day immediately after completion of their duties in Mainland China.

   Hong Kong quarantine exemption for Hong Kong accounting professionals

   Certified practicing public accountants, partners, directors or employees of practice units registered with the Hong Kong Institute of Certified Public Accountants under the Professional Accountants Ordinance (Cap. 50) (“Accounting Professionals”).

   Accounting Professionals are eligible from exemption from the Compulsory Quarantine Arrangements if they are required to travel to Mainland China to conduct audit work for companies listed on a recognised stock exchange (defined in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571)). Accounting Professionals will be eligible for exemption if such listed companies have operations in Mainland China and where the Accounting Professionals are required to assist such companies to fulfill their obligations under any relevant Ordinances or other regulatory instruments that govern the operation of those companies or their businesses.

   Hong Kong quarantine exemption for Hong Kong research and development enterprises or institutions

   There are two categories of enterprises or institutions which fall into the research and development (“R&D”) category. These enterprises or institutions are:

   1. A public R&D institution in Hong Kong which includes:

      1. the Hong Kong Applied Science and Technology Institute;

      2. the Automotive Platforms and Application Systems Research and Development Centre;

      3. the Hong Kong Research Institute of Textiles and Apparel;

      4. the Logistics and Supply Chain MultiTech Research and Development Centre; and

      5. the Nano and Advanced Materials Institute.

   2. A tenant, incubatee, grantee, or occupant of the Hong Kong Science and Technology Parks Corporation or Cyberport which conducts technological R&D work.

   (collectively the “Eligible Enterprise(s)”).

   The categories and number of persons from Eligible Enterprise(s) who are eligible for exemption from the Compulsory Quarantine Arrangements are the following:

   1. a maximum of two persons who are either the owner and/or full-time employees of the Eligible Enterprise(s) and such persons are required to travel to Mainland China, Macao or Taiwan for conducting one of the following R&D related activities:

      1. on-the-ground R&D work which requires collaboration between the Eligible Enterprise(s) and an enterprise or institution in Mainland China, Macao or Taiwan;

      2. sourcing essential materials or equipment which are needed to sustain the technological R&D that is carried out in Hong Kong by the Eligible Enterprise(s); or

      3. overseeing the operations of the Eligible Enterprise(s) research facility or facilities in Mainland China, Macao or Taiwan.

Below is a complete list as of 22 June 2020 of the categories of persons eligible for exemption from the Compulsory Quarantine Arrangements.

1. Cross-border goods vehicle drivers and necessary accompanying personnel;
2. Cross-border coach or shuttle drivers and crew members;
3. Crew members of aircraft who need to commute to and from Mainland China, Macao and Taiwan for the performance of certain duties;
4. Government officials carrying out government duties;
5. Government agents and contractors supporting the operation of cross-boundary functions;
6. Crew members of goods vessels;
7. Crew members of fishing vessels and fish collectors (including Mainland China deckhands);
8. Personnel of organisations commissioned by the Director of Social Welfare to provide welfare support for Hong Kong residents living in Mainland China;
9. Construction personnel tasked to carry out off-site duties in Mainland China that are essential and cannot be replaced by other means to ensure the quality, integrity and statutory compliance of services or components to be used in government projects, public housing projects and Airport Authority projects in Hong Kong;
10. Experts, personnel of the academic sectors or of international authorities who are engaged in research and/or provide advice in combating the COVID-19 infection to the HKSAR Government;
11. Staff of Sheung Shui Slaughterhouse and livestock importers residing in Mainland China;
12. Staff and personnel of public bodies and their partners for the supply of wristbands and related materials for home quarantine;
13. Personnel of public bodies and their partners, agencies, companies or organisations for the supply to Hong Kong of personal protective equipment (“PPE”) or materials and/or equipment for the production of PPE;
14. The category of persons verified to be Hong Kong residents living in the Mainland side of Sha Tau Kok;
15. Staff of security companies who are responsible for transporting physical currency and bearer negotiable instruments (CBNIs) to and from Macao;
16. Certain categories of personnel companies engaged in certain manufacturing goods for supply to Hong Kong for its normal operation or for the daily needs of the people of Hong Kong;
17. Certain personnel of Hong Kong enterprises with manufacturing operations in Mainland China;
18. Up to 50 persons employed and so authorised by The University of Hong Kong – Shenzhen Hospital;
19. Veterinary surgeon, veterinary academics & relevant experts who may work with the Government on prevention and control of animal and zoonotic disease;
20. Either the owner or up to two employees of a Hong Kong enterprise with a valid Service Supplier Certificate in relation to services in Mainland China under CEPA;
21. Certain construction personnel for the provision of professional services in Mainland China;
22. Owner or up to two employees of certain logistics, port and/or shipping businesses with activities in Mainland China;
23. Up to two personal who are either the owner and/or employees of certain vegetable farm, or hydroponic farm, or flower farm or plant nursery, or livestock farm, or fish farm which is engaged in the production of agricultural and fisheries products for supply to Hong Kong, and that such persons have to travel to Mainland China or Taiwan;
24. Up to two personal who are either the owner and/or employees of certain fishing vessel / fish collector vessel which is engaged in operation in Mainland China waters for supply of fisheries products to Hong Kong and such persons have to travel to Mainland China;
25. Up to two personal of each local agricultural and fisheries trade association who have to attend meetings convened by government bodies of Mainland China to support industry exchanges or development in the Guangdong-Hong Kong-Macau Greater Bay Area;
26. Hong Kong residents who reside in Mainland China and have been enrolled at Secondary 3 to Secondary 5 levels in schools registered under the Education Ordinance (Cap. 279) in Hong Kong, and who have to enter Hong Kong from Mainland China for the purpose of receiving secondary education; and
27. Crew members of vessels operating transit services for SkyPier at the Hong Kong International Airport.