Hong Kong has recently come under scrutiny by US lawmakers for its role as a center for money laundering and sanctions evasion. The lawmakers have raised concerns about the city's financial sector, which is a significant part of its economy and home to many major US banks. They highlighted various illicit practices taking place in Hong Kong, such as exporting controlled Western technology to Russia, creating front companies to buy Iranian oil, and managing 'ghost ships' engaged in illegal trade with North Korea.
Since the imposition of a national security law by Beijing in 2020, Hong Kong has been viewed as shifting from a trusted global financial center to a key player in an authoritarian axis involving China, Iran, Russia, and North Korea. This shift has prompted US lawmakers to question the appropriateness of the longstanding US policy towards Hong Kong, particularly in relation to its financial and banking sector.
In response to Beijing's actions, former President Donald Trump revoked the special treatment that Hong Kong had enjoyed under US law, effectively ending the city's separate customs treatment from mainland China. Subsequently, numerous Hong Kong-based companies have faced US sanctions for evading measures imposed on Russia, including the supply of critical dual-use goods.
The lawmakers' letter also referenced research showing that a significant portion of goods shipped from Hong Kong to Russia were high-priority items likely contributing to Moscow's military production. They have called for briefings from the US Treasury Department on the current status of American banking relationships with Hong Kong banks and the measures being taken to address the risks associated with Hong Kong's changing status.
This development underscores the escalating great power rivalry between the US and China, with a focus on Hong Kong. The return of former President Trump to the White House, along with the appointment of China hawks to key positions, including a proposed bill to strip certification from Hong Kong's economic and trade offices in the US, further highlights the growing scrutiny on Hong Kong in the context of US-China relations.
