China wants to extend its anti-sanctions law to Hong Kong and Macau.
Companies and experts are concerned: is the free status of the economic metropolis in danger?
Hong Kong officials appease
Beijing / Hong Kong / Munich - China wants to bind Hong Kong and Macau ever more closely to Beijing's rules in economic policy as well. The government now wants to extend the anti-sanctions law passed in June to the two special administrative areas. The law in mainland China prohibits companies and individuals from enforcing foreign sanctions against Chinese companies. Instead, they must cooperate with the Chinese counter-defense against these punitive measures. This also applies to foreign companies and expatriates from all over the world who live in China - and soon apparently also in Hong Kong or Macau. Companies that do not follow the relevant instructions face penalties under the law - such as the freezing of accounts and assets. Foreigners could lose their visas and be expelled.
The Standing Committee of the National People's Congress is deliberating behind closed doors for several days this week in Beijing.
It is also a matter of adding a corresponding appendix to the basic laws of Hong Kong and Macao.
A decision is expected for tomorrow, Friday, as Hong Kong media reported.
The local parliaments would then have to pour the law into local law.
China: Companies between the sanction fronts - now also in Kong Kong
Experts see the law primarily as a deterrent tool - to prevent the USA or Europe from imposing further sanctions against China. Steve Tsang, director of the China Institute at the University of London's School of Oriental and African Studies, believes the law will be applied when Hong Kong faces new foreign sanctions. It was actually a political gesture against the United States and other countries, he told the Hong Kong newspaper
South China Morning Post
. So far there are no concrete cases in China.
However, international companies and financial institutions in Hong Kong fear that they will get caught between the political fronts in the current disputes between China and the USA and Europe. The dilemma already discussed among managers in China in June is that some companies cannot help but violate laws and sanction rules either in China or abroad. They have to choose one - or rearrange their businesses accordingly so that they are legal everywhere. That makes doing business even more complicated than it is in China anyway.
In Hong Kong, the financial sector could be particularly affected, as many foreign banks are based there.
As a rule, US banks have to implement Washington's sanctions directly - whether against Iran or the Hong Kong Prime Minister Carrie Lam.
Due to US sanctions, she can no longer have a bank account with international banks and complained of having “stacks of cash” lying around at home.
The new law could force foreign banks in Hong Kong to allow Lam to open accounts again - in violation of US law.
Hong Kong: Implementation of anti-sanctions law still open
But so far it is unclear how strictly the law will be implemented in Hong Kong - and from when. Local authorities are trying to calm the nerves and have indicated that parliament will no longer tackle the transposition into local law during this legislative period. The Hong Kong version of the law will also allow a certain "ambiguity" about the penalties, wrote the
South China Morning Post
, citing unnamed government insiders.
In general, however, there is concern that Hong Kong's special status as a free Asian economic and financial metropolis could be further undermined.
The city's image is already suffering from the strict security law passed in June 2020, on the basis of which dozens of government opponents were arrested.
The electoral system was also changed at Beijing's behest.
which makes it difficult for the opposition to enter the Legislative Council, the local parliament.
China with USA and EU in sanctions dispute over Hong Kong and Xinjiang
US sanctions have been in place against politicians in Hong Kong since the Security Act was passed, including Prime Minister Carrie Lam, Beijing Liaison Office Director Luo Huining, as well as several ministers and former police chiefs. In the spring, the EU and the USA also imposed sanctions on ways of dealing with the Muslim Uyghur minority in Xinjiang in northwest China. Beijing responded immediately with counter-sanctions. In the tense geopolitical situation, it cannot be ruled out that the sanctions dispute will widen.
The US government warned multinational companies of new dangers in Hong Kong back in July.
There was talk of "operational, financial, legal and reputational risks" from the Security Act and other legislative changes.
China's leadership and the loyal Hong Kong government "are undermining the legal and regulatory environment necessary for individuals and businesses to operate freely and with legal certainty in Hong Kong."
(ck with dpa)
.