Bill targeting banks over China's Hong Kong law passes US Senate
Beijing vows countermeasures over US Act; banks seek details, discuss potential fallout
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Hong Kongers raising sheets of white paper devoid of slogans banned under the national security law as they supported an arrested protester outside a court in the city yesterday. The law punishes crimes of secession, subversion, terrorism and collusion with foreign forces with up to life in prison.
PHOTO: REUTERS
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WASHINGTON • The US Senate has approved legislation to penalise banks doing business with Chinese officials who implement Beijing's new national security law on Hong Kong, sending it to the White House for President Donald Trump's signature.
China promised on Thursday to take "strong countermeasures" if the US pressed ahead with the Hong Kong Autonomy Act that targets banks over infringements on Hong Kong's autonomy.
Mr Trump still needs to sign off on the Act, and has not yet said if he will do so. It targets Chinese officials and the Hong Kong police, making US sanctions against them mandatory if they are identified in two consecutive government reports as working to impede Hong Kong's freedoms.
Crucially, the Act would punish banks - including blocking loans from US institutions - if they conduct "significant transactions" with individuals identified as infringing on the city's autonomy. But it does not lay out which individuals might be included, nor what they would be forbidden from doing.
Earlier on Thursday, even before the Senate voted on the new measures, Beijing said it "deplores and firmly opposes" the US Bill.
"We urge the US to grasp the reality of the situation, stop interfering in Hong Kong affairs and implementing the negative Bill, otherwise we will take strong countermeasures," said Foreign Ministry spokesman Zhao Lijian.
International banks, meanwhile, are seeking details of the scope of the US legislation.
Banks including Citigroup and Bank of America were among those holding calls yesterday with US colleagues to discuss the potential fallout from the legislation, but few conclusions could be drawn at this stage, sources said.
Separately, HSBC Holdings has pledged to boost investments in China to capture more wealth and retail clients even as political tension escalates after Beijing launched the security law, which punishes crimes of secession, subversion, terrorism and collusion with foreign forces with up to life in prison.
The bank, which has come under fire over its support for the legislation, yesterday announced it was starting a new service to provide customers in mainland China with digital wealth and insurance planning services.
Senior British and US politicians criticised HSBC and Standard Chartered last month after the banks backed the new law.
The US Senate on Thursday unanimously passed the Bill, a day after it was passed by the House of Representatives, a rare example of overwhelming bipartisan support reflecting concern over the erosion of the autonomy that had allowed Hong Kong to thrive as China's freest city and an international financial centre.
"This is an urgent moment. Our timing could not be more critical," said Democratic Senator Chris Van Hollen, a lead sponsor of the Hong Kong Autonomy Act, in a Senate speech on Thursday.
Ms Elizabeth Rosenberg, a sanctions expert at the Centre for a New American Security, called the Bill "a very strong step", adding: "They're really upping their game and trying out some very powerful new economic tools."
US lawmakers are also considering a proposed Bill offering sanctuary to Hong Kong residents that has received widespread bipartisan support too.
The United States has already begun eliminating Hong Kong's special status, halting defence exports and restricting the territory's access to high-technology products.
The US and China have been at loggerheads for months over the handling of the coronavirus pandemic and Beijing's harsh response to protests in Hong Kong.
Washington has also sought to put more pressure on China over its mistreatment of Muslim Uighurs in the Xinjiang region.
Hong Kong returned to Chinese rule in 1997 under a "one country, two systems" formula that protects certain freedoms for the city, including freedom of speech and an independent judiciary, for 50 years.
REUTERS, BLOOMBERG, AGENCE FRANCE-PRESSE
