(Bloomberg) — Hong Kong has become a center for financial crime as Beijing tightened its grip on the city, US lawmakers said, highlighting the worsening ties between the former British colony and Washington.
Most Read from Bloomberg
Since Beijing imposed a national security law on Hong Kong in mid-2020, the city “has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis” of China, Iran, Russia and North Korea, the heads of the House China Select Committee said in a letter to Treasury Secretary Janet Yellen.
The letter was signed by the committee chairman, Representative John Moolenaar of Michigan, and the panel’s top Democrat, Raja Krishnamoorthi of Illinois. They added that the shift raised questions over “whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate.”
Hong Kong’s government didn’t immediately respond to a request for comment on Tuesday.
The relationship between Hong Kong and the US has deteriorated over a crackdown on dissent that American officials say has eroded the rule of law and democratic rights.
US lawmakers have stepped up efforts to penalize the city, though it remains unclear if those efforts will bear fruit. In September, the House passed a bill that could see the closure of the city’s economic and trade offices in the US. The measure still needs to be approved by the Senate and signed by the president to become law.
President-elect Donald Trump’s pick for secretary of state, Marco Rubio, has said the offices are mouthpieces for the ruling Communist Party. Hong Kong officials have strongly condemned the bill’s passage, with Chief Executive John Lee saying American businesses will suffer if it is passed.
In their letter, Moolenaar and Krishnamoorthi said Hong Kong had become a “global leader” in illicit practices such as:
-
Giving Russia access to prohibited Western technology
-
Forming front companies for buying banned Iranian oil
-
Helping with the trade of gold from Russia
-
Running ships that conduct illegal trade with North Korea
The letter also cited research that it said showed that some 40% of goods shipped to Russia from Hong Kong last year were on a “common high priority” list of items that the US and European Union use to focus sanctions enforcement.