US Warns Banks as It Sanctions More Chinese Officials Stifling Hong Kong’s Democracy

Attendees from various forces march next to a banner supporting the new national security law at the end of a flag-raising ceremony to mark the 23rd anniversary of Hong Kong's handover from Britain in Hong Kong on July 1, 2020. Anthony Wallace/AFP via Getty Images

Washington named five already-sanctioned Chinese officials for reducing Hong Kong’s autonomy in a report and warned that foreign financial institutions doing business with them would be punished too.

The Dec. 20 report identified the five as Chen Dong, He Jing, Lu Xinning, Tan Tienui, and Yin Zonghua, all deputy directors at China’s Hong Kong liaison office. The mainland agency is set to orchestrate Beijing’s policies in the former British colony.

The five individuals previously blacklisted by the U.S. Treasury Department “are materially contributing to, have materially contributed to, or attempt to materially contribute to the failure of the PRC to meet its obligations under the Joint Declaration or the Basic Law,” the report reads.

The naming brought to 39 the number of officials that meet the criteria under the U.S. Hong Kong Autonomy Act (HKAA), which former President Donald Trump signed into law in July last year, two weeks after Beijing imposed a national security law over the city.

“Foreign financial institutions that knowingly conduct significant transactions with the individuals listed in today’s report are subject to sanctions,” State Department Spokesperson Ned Price said on Dec. 20.

Financial institutions found in violation of the act could be subject to so-called secondary sanctions, including restrictions on U.S. loans, foreign exchange, property transactions, exports, and transfers, in addition to measures against executives.

Under the terms of the act, the Treasury is required to identify any such institution between 30 and 60 days of the submission of the report to Congress.

The United States has thus far not sanctioned any foreign financial institution for doing business with those on the list.

The latest six-monthly report to Congress, which is required under the HKAA, is an update to the October 2020 and March 2021 reports.

The State Department said on the same day it was deeply concerned about Beijing’s “clear efforts” to stifle Hong Kong’s democratic voices amid Dec. 19 legislative elections, in which only “patriots” can run and voters’ choices are restricted under Beijing-amended election laws, according to a press statement.

The five individuals named this week were among seven Chinese officials sanctioned in July over China’s crackdown on democracy in Hong Kong.

Reuters contributed to this report.