Immediately after Beijing imposed the “National Security Law of the Hong Kong Special Administrative Region” on Hong Kong, the United States announced sanctions against 11 officials from China and Hong Kong, requiring financial institutions to sever ties with the officials concerned. Financial institutions are worried that if the U.S. sanctions are implemented in Hong Kong, it may violate the “Hong Kong National Security Law” to collude with foreign forces. The British “Financial Times” reported on Monday (9), the Hong Kong Securities and Futures Commission informed financial institutions can implement the U.S. sanctions, will not violate the “national security law of Hong Kong”. But some scholars believe that the SFC is not able to protect banks, the real implementation of sanctions or difficulties from the HKMA.
The British “Financial Times” reported on Monday (9), the Securities and Futures Commission privately informed financial institutions that the implementation of the United States sanctions on mainland China and Hong Kong officials will not violate the National Security Law.
The report said that some international companies complained that the government did not provide relevant guidelines after the implementation of the National Security Law, the report quoted two sources as saying that the SFC privately assured the banking sector that their implementation of U.S. sanctions would not violate the National Security Law, in order to appease these institutions.
The report also said the SFC’s assurances were based on the interpretation of several Hong Kong university law professors that the law was aimed at actively colluding with foreign powers to sanction the Hong Kong government, rather than passively complying with U.S. laws. Still, top SFC executives expressed caution because the agency does not have jurisdiction over national security laws. Some international bank executives have said they are less worried about national security laws with the SEC’s assurances.
The SFC replied to this station’s inquiry on Monday that it would not comment on the incident.
Hong Kong’s former bank regulations department investigation director Lu Junyu said on Monday, even if the SFC informed financial institutions can implement the U.S. sanctions, it can not protect banks.
Lo said: this situation is very bizarre, the SFC can not really protect banks, because the real monitoring of banks in Hong Kong is by the HKMA to monitor, in the end the SFC, these remarks, give me the feeling, seems to be gossip, why there is gossip sent? Secondly, why exactly are banks not complying with what the HKMA says? Now there is a case of slapping oneself in the face.
Regarding the sanctions imposed on the 11 China and Hong Kong officials, Lo believes that the implementation is not satisfactory, and that different sanctioned persons under the same list may not be subject to the same measures and not sanctioned according to the highest specifications, including the severance of all financial accounts. He pointed out that the real difficulties in implementing the sanctions may come from the HKMA.
Mr. Lo said that the implementation of the sanctions would lead to a breach of the National Security Law. The main problem is that the Hong Kong Monetary Authority (HKMA) has become a political organ and once the relevant directive is implemented, will it lead to strong monitoring by the HKMA and even affect the renewal of their bank’s licence and the operation of their bank will be affected by many restrictions?
Mr. Lam Ho-por, former economist of HSBC Global Markets in Hong Kong, who used to work in a number of foreign financial institutions, pointed out that even before the “National Security Law of Hong Kong”, some of the sanctions of the United States have to be implemented in Hong Kong, which is a common practice of Hong Kong’s financial market, whether it violates the “National Security Law of Hong Kong”. “It’s all just branching out. For the SEC’s assurance, can release the financial institutions in violation of the National Security Law concerns, Lin Haopo will think that it is a redundant move.
Lin Haobo said: I think it’s actually more of a move, because the National Security Law has the implementation of the National Security Law, the U.S. regulation has its regulatory approach, it just regulates their own institutions, which happens to involve certain banks may be cross-sectional, I don’t think the two will be in conflict.
Beijing in July this year in Hong Kong officially implemented the “Hong Kong District National Security Law”, the U.S. Treasury Department announced sanctions against 11 Chinese and Hong Kong officials in response, including Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor, the Commissioner of Police Tang Bing-keung. Some members of the legal profession had previously warned that the implementation of the US sanctions might violate the provisions of the “Hong Kong National Security Law”. This provision threatens severe penalties for the crime of “colluding” with foreign governments to impose sanctions on Hong Kong.
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