The Biden administration issued a Business Alert Friday (July 16) warning U.S. companies of the risks posed to their business operations in Hong Kong as a result of China’s national security laws that began to be implemented in Hong Kong last year.
The alert, “Risks and Considerations for Businesses Operating in Hong Kong,” issued jointly by the U.S. Departments of State, Treasury, Commerce and Homeland Security, warns U.S. companies still operating in Hong Kong that they are subject to Hong Kong laws, including the Hong Kong version of the National Security Act. National Security Law. One U.S. citizen has already been arrested on charges of violating the National Security Law.
The alert also reminds U.S. companies operating in Hong Kong that they also face the risk of electronic surveillance without a court subpoena, and even the risk of having to submit company and customer data to the Hong Kong government.
At the same time that the four U.S. departments announced the Hong Kong Business Alert, the U.S. Department of the Treasury announced that seven deputy directors of the Hong Kong Liaison Office were added to the Office of Foreign Assets Control sanctions list. The seven deputy directors of the Hong Kong Liaison Office are Chen Dong, He Jing, Lu Xinning, Qiu Hong, Tan Tieniu, Yang Jianping and Wan Zonghua. The U.S. government holds these seven individuals responsible for the erosion of the rule of law in Hong Kong.
The business alert, issued jointly by the Departments of State, Treasury, Commerce and Homeland Security, also said that individuals and companies operating in Hong Kong should also be aware of the potential consequences of their dealings with sanctioned individuals and entities, and warned them that they could face retaliation from China for following U.S. or other international sanctions.
More than a year ago, President Trump ordered an end to Hong Kong’s special status under U.S. law in order to punish China for what he called “oppressive behavior” in Hong Kong.
A business alert issued by the Biden administration cautioned U.S. companies in Hong Kong to consider the potential “reputational, economic and legal risks” of maintaining a presence or employees in Hong Kong and to exercise due diligence in doing so.
Citing an unnamed senior U.S. government official, Reuters reported that “developments in Hong Kong over the past year have clearly demonstrated the operational, legal and reputational risks to multinational companies.”
The senior U.S. official also told Reuters, “The policies implemented by the Chinese government and the Hong Kong government have undermined the legal and regulatory environment that is critical for individuals and companies operating in Hong Kong in a free and legally certain manner.”
The U.S. Departments of State, Treasury, Commerce, Homeland Security, Trade Representative, and Labor also jointly issued a new Business Alert this Tuesday, July 13, alerting U.S. businesses and individuals to the reputational, economic, and legal risks of having supply chain dealings with entities involved in forced labor and other abuses in China’s Xinjiang region.
Last week, the Biden administration added 14 Chinese companies and other organizations to a list of entities it has refused to deal with, citing alleged human rights abuses or intrusive high-tech surveillance in Xinjiang.
But Beijing’s foreign ministry insists that Hong Kong’s affairs are purely a matter of Chinese internal affairs and that no foreign country has the right to speak out or interfere. The Chinese government opposes U.S. interference in Hong Kong affairs and will respond “resolutely and forcefully” depending on the U.S. measures.