Sanctions

The U.S. President can direct the U.S. Department of State and/or the U.S. Department of the Treasury to institute sanctions against individuals in Hong Kong. State exercises authority over visa bans, while the Treasury Department typically, though not exclusively, oversees financial sanctions. Congress serves in an oversight function, both because they often legislate sanctions authorities, including mandatory reporting requirements from the executive branch to Congress on sanctions implementation and enforcement.

• The U.S. should take at least four steps to improve its sanctions efforts to address concerning conditions inside of Hong Kong:
• Identify timely and pointed tranches of sanctions to prioritise for State and Treasury. Priority tranches could include: 1) undermining the rule of law in Hong Kong, 2) violations of press freedom, 3) political prisoners, 4) threats to religious freedom, 4) restrictions on access to the internet, among other subjects, and time these sanctions could be timed with key anniversaries, trials, meetings between U.S. and Chinese counterparts, and key geopolitical events like the UN General Assembly, for example.
• Target financial institutions for sanctioning under the Hong Kong Autonomy Act. These sanctions tools have not been used to their fullest extent and are uniquely tailored to address challenges in Hong Kong; the U.S. government should make better use of these authorities.
• Partner with allies like the United Kingdom, the European Union, Canada, Japan, Australia, and others to issue multilateral sanctions. Multilateral sanctions not only have strong financial consequences for individuals and entities in Hong Kong but also send a message of solidarity as the world seeks to oppose China’s undermining of freedom in Hong Kong. Among the first targets should be Hong Kong’s current Chief Executive, John Lee, who is already unilaterally sanctioned by the U.S. government.
• Investigate whether institutions, accounts, or sets of transactions in Hong Kong qualify as Primary Money Laundering Concerns. It is difficult (arguably impossible) to contend that Hong Kong as a jurisdiction qualifies as a PMLC; a broad sweeping designation should be avoided at this time, but a discrete designation may well be merited.