28 Jul 2020
Senior members of Hong Kong’s government are facing account terminations at foreign banks following the passage of a US sanctions law aimed at officials in the city and mainland China, the Financial Times reported Monday.
Bernard Chan, the non-official convener of Hong Kong’s Executive Council, told the newspaper that a US bank had recently closed his account and refunded his money shortly before China’s new national security law was announced. The Executive Council serves as the de facto cabinet for Hong Kong Chief Executive Carrie Lam.
“I have a better chance today to go to a local bank to open an account. If I go to a US bank, they don’t want anything to do with a politically exposed person . . . even HSBC won’t want anything to do with me,” Chan told the FT. “They sent me the letter and sent me back the money, saying thank you very much, we don’t want to do business, simple as that.”
Chan, who also serves as the president of the insurance company Asia Financial, said that he had separately spoken to government civil servants with similar experiences. He declined to name the US bank that had terminated his account, according to the report.
The FT reported earlier this month that US and European lenders in Hong Kong had conducted emergency audits of their clients to identify the Chinese and Hong Kong officials and corporate customers that could pose sanctions compliance risks under the newly enacted Hong Kong Autonomy Act.
The US law is expected to result in targeted sanctions against government officials deemed to have undermined Hong Kong’s de facto constitution or the Sino-British Joint Declaration of 1984.
The US measure comes in response to China’s enactment in June of a national security law criminalizing secession, subversion of state power, terrorism and collusion with foreign entities within Hong Kong. The security law is widely seen as granting China broad new authorities to shape life in the Special Administrative Region.
Under the national security law, it is illegal for banks and other firms to cooperate with foreign sanctions regimes, the FT said.
Multinational banks and funds within Hong Kong have consequently pressed regulators for clarity on whether closing the accounts of local officials in response to US sanctions would violate the security law, the FT said.
Read the full story here
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet