US Lawmakers Warn of Hong Kong’s Role in Global Financial Crimes

US lawmakers have expressed growing concern about Hong Kong’s evolving role in global financial crime, urging the government to reconsider its banking and trade ties with the city.

Highlighting issues such as money laundering, sanctions evasion, and the alleged transfer of banned technology to Russia, the US Select Committee on the Chinese Communist Party stated that Hong Kong has transitioned from being a “trusted global financial centre to a critical player in the deepening authoritarian axis of the People’s Republic of China (PRC), Iran, Russia, and North Korea.”

In a letter addressed to Treasury Secretary Janet Yellen, the bipartisan committee called for a reassessment of Hong Kong’s unique trade privileges, which currently treat the city as distinct from the rest of China. The lawmakers argued that Beijing’s 2020 national security law has “effectively subjected Hong Kong to PRC control,” undermining the “One Country, Two Systems” framework that was meant to preserve the city’s semi-autonomy and judicial independence until 2047.

The committee’s letter raised alarm over Hong Kong’s role in facilitating global illicit activities, including using front companies to purchase barred Iranian oil, trading Russian-sourced gold, managing “ghost ships” involved in illegal trade with North Korea, and allegedly supplying Russia with banned Western technology. Citing research, the letter noted that “nearly 40 per cent of goods shipped from Hong Kong to Russia in 2023” were on US and EU sanction lists, including critical semiconductors used in Moscow’s war efforts.

Given these developments, the lawmakers concluded, “We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate.” Washington has previously warned that the national security law and subsequent legislation, such as Article 23, have eroded freedoms in Hong Kong, effectively curbing dissent and compromising its position as a global financial hub.

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