US lawmakers call for reevaluation of financial ties with Hong Kong

US lawmakers are calling for a reevaluation of America's longstanding financial ties with Hong Kong, expressing concerns over the city's role in money laundering, sanctions evasion, and illicit trade. 

In a letter to US Treasury Secretary Janet Yellen on Monday, bipartisan leaders of the House Select Committee on China called for Washington to scrutinize Hong Kong’s vital financial sector more closely. The sector, which hosts major US banks, accounts for over one-fifth of Hong Kong's GDP, Caliber.Az reports via foreign media.

The committee described Hong Kong as a “global leader” in illicit activities, including facilitating the export of restricted Western technology to Russia, setting up front companies to purchase Iranian oil, and managing “ghost ships” involved in illegal trade with North Korea.

Since Beijing implemented a national security law in 2020, "Hong Kong has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis of the People’s Republic of China, Iran, Russia, and North Korea," the lawmakers stated.

“We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” they added.

The committee’s letter referenced research published earlier this year, revealing that nearly 40 per cent of goods shipped from Hong Kong to Russia between August and December 2023 were high-priority items likely contributing to Moscow’s production of military equipment, including missiles and aircraft.

The lawmakers requested Treasury Department officials to brief the committee on "the current status of American banking relationships with Hong Kong banks, how our policies have shifted to account for the changes in Hong Kong’s status and posture, and the measures the Treasury plans to implement to address these risks."

A spokesperson for the US Treasury confirmed that the department had received the letter and "will respond through the appropriate channels."

In response, the Hong Kong government expressed its "strong disapproval of and firm rejection of malicious slander of Hong Kong’s reputation as an international financial center" contained in the letter.

A spokesperson stated that while the Hong Kong government enforces sanctions imposed by the United Nations Security Council, it does not implement "unilateral sanctions imposed by other countries that constitute a flagrant violation of the international order."

"Maintaining the integrity and robustness of our financial systems is a top priority for the Hong Kong Government. Our banks and other financial institutions adhere to international standards and best practices, including those related to anti-money laundering and counter-financing of terrorism," the spokesperson added in a statement.

By Naila Huseynova