Chairperson John Moolenaar and Ranking Member Raja Krishnamoorthi of the United States House Select Committee on Chinese Communist Party (CCP) have highlighted serious concerns regarding Hong Kong’s increasing involvement in illicit financial activities, including money laundering and sanctions evasion, an official statement said.
In a letter addressed to US Treasury Secretary Janet Yellen, they highlighted the city’s growing role as a financial hub for the China (PRC), Iran, Russia, and North Korea nations under heavy international sanctions.
The lawmakers argued that the introduction of the National Security Law in 2020, which subjected Hong Kong to Chinese Communist Party (CCP) control, marked a shift in the city’s status from a trusted global financial center to a critical player in the PRC’s expanding authoritarian axis. This law, along with the recent passage of the controversial Article 23, has led to a deterioration of Hong Kong’s autonomy, prompting the US government to reassess its long-standing policies toward the city, as per the statement.
The US has traditionally treated Hong Kong separately from Mainland China under the Hong Kong Policy Act, offering preferential trade status. However, the lawmakers pointed out that the erosion of Hong Kong’s autonomy in recent years has led both the current and former US administrations to declare that Hong Kong no longer merits this special treatment, the statement said.
The letter further emphasized the risks posed by Hong Kong’s financial sector, noting the city’s increasing involvement in activities such as re-exporting banned technology to Russia, facilitating illegal oil trade with Iran, and managing “ghost ships” engaged in trade with North Korea. Recent reports revealed that nearly 40 per cent of goods shipped from Hong Kong to Russia in 2023 were on the US and EU sanctions lists, particularly semiconductors and other high-tech items needed for Russia’s war in Ukraine.
US authorities have already taken action against certain entities in Hong Kong, but the lawmakers called for increased scrutiny and stronger measures to combat money laundering and sanctions evasion.
They requested a briefing from the US Treasury Department on the current state of US banking relationships with Hong Kong banks, the adjustments made to US policies in response to Hong Kong’s changing status, and the measures planned to mitigate financial risks.
“We are deeply concerned about the role Hong Kong is playing in facilitating illicit financial activity,” the lawmakers wrote. “Your leadership in this matter is crucial to ensuring the integrity of international financial systems and upholding US national security interests.”
As Hong Kong continues to face international scrutiny, the US Treasury Department is under increasing pressure to implement stronger safeguards against the growing threat of financial misconduct from the city. The outcome of these efforts could have far-reaching implications for global banking practices and US-Hong Kong relations moving forward.
(with inputs from ANI)
