U.S. senators call on Biden to impose sanctions over Apple Daily’s suspension

Two heavyweight U.S. senators are calling on President Biden to impose sanctions on those who forced Hong Kong’s Apple Daily to cease publication under authority granted by a bill they drafted, suggesting that foreign banks could be implicated as well.

In their letter, Senate Finance Committee senior Republican member Pat Toomey (R-Pa.) and Democratic member Chris Van Hollen (D-Md.) referenced a Reuters report last month. The story said Hong Kong Secretary for Security Lee Ka-chiu sent a letter to Apple Daily founder Lai Chi-ying and branches of HSBC Holdings and Citibank, saying the banks could face up to seven years in prison if they continued to have accounts with Lai Chi-ying.

Reuters reported that Li ordered the bank branches to freeze Lai’s accounts. In the text of the letter Reuters said it obtained, the lawmakers mentioned that “they appear to have complied.”

In their letter to President Biden, the senators said that about 500 police officers raided the Apple Daily’s offices earlier last week and arrested several executives, while Hong Kong’s security services ordered the paper’s bank to freeze its assets, thus “directly causing its closure.”

The two senators said the Hong Kong Self-Government Act they passed last year requires the U.S. secretary of state to identify to Congress foreigners and foreign businesses that substantially contribute to “the inability of the people of Hong Kong to enjoy freedom of assembly, speech, the press, or the independent rule of law.”

The letter said, “The stunning crackdown on Lai Chi-ying and Apple Daily seems likely to involve numerous foreigners to whom Section 5 of the Hong Kong Autonomy Act applies.”

In the letter, they said, “In the wake of the injustice done to Lai Chi-ying and the forced suspension of Apple Daily, we urge the government to immediately and fully enforce the Hong Kong Autonomy Act.”

The senators’ legislation calls for mandatory sanctions against individuals and entities that directly undermine Hong Kong’s autonomy, as well as secondary sanctions against banks that do business with those entities and individuals.

The senators added in their letter that their understanding is that the orders against foreign banks were issued extrajudicially by an official outside the court system, without any criminal charges or subpoenas.

They said, “These orders solidify the impression of many that the rule of law no longer exists in Hong Kong.”

Last month, a Citibank spokesman said in response to a Reuters report that the bank must comply with all laws and regulations of the countries and regions in which it operates. HSBC declined to comment, but its chief executive, Noel Quinn, previously said the bank must comply with police requirements in any country or region of the world.

President Biden issued a statement Thursday on the suspension of the Hong Kong-based Apple Daily, saying “Beijing’s intensified repression has reached such a level.” Biden said, “The United States will stand unwaveringly behind the people of Hong Kong and all those who stand up for the basic freedoms that people deserve.”

President Biden did not mention any plans to impose further sanctions in response to the crackdown.

A State Department report to Congress in October alerted financial institutions that they could be subject to secondary sanctions, including restrictions on U.S. loans, foreign exchange, real estate transactions, exports and transfers, and measures against their executives.

In March, the Biden administration identified 24 Chinese officials previously sanctioned by the Trump administration as being responsible for weakening Hong Kong’s high degree of autonomy.

Foreign financial institutions that knowingly conducted significant transactions with them are now subject to sanctions, the Biden administration said.

However, the Treasury Department did not explicitly mention any foreign financial institutions in its latest report to Congress in May under the bill.