25 July 2024 (Washington, D.C.) – In their statement to POLITICO, the Government of the Hong Kong Special Administrative Region (HKSARG) says it implements fully and enforces vigorously the sanctions imposed by the United Nations Security Council (UNSC). This is false.
As we have detailed in our report, “Beneath the Harbor: Hong Kong’s Leading Role in Sanctions Evasion,” the Hong Kong government has not enforced UNSC sanctions against North Korea. Our research shows Hong Kong companies have for years facilitated ship-to-ship transfers and used fraudulent ship identities designed to evade international sanctions on North Korea.
It is telling that the Hong Kong government’s response says they enforce U.N. sanctions on North Korea at the direction of the Chinese Ministry of Foreign Affairs pursuant to local legislation, but includes no detail or examples of any actual enforcement. That is because they have nothing to show.
With regard to Russia sanctions, the Hong Kong government has previously said they do not have the “legal authority” to act on sanctions targeting Moscow. That is not true. The Hong Kong government has the ability to pass laws creating that legal authority, just as responsible countries across the world have done. Instead, following Putin’s brutal invasion of Ukraine in 2022, Chief Executive John Lee said Hong Kong would not enforce sanctions against Russia. With his statement, Lee effectively invited sanctions evaders to set up shop in the city.
This marks a shift in Hong Kong’s approach to sanctioned regimes. Prior to the city’s recent crackdown on human rights and precipitous decline in rule of law, Hong Kong government agencies typically advised compliance with multilateral sanctions. If the Hong Kong government’s position is that they have no obligation to cooperate with U.S., E.U., and UNSC sanctions, this raises serious questions about the ongoing close relationship between the Hong Kong financial system and the global economy.
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