Washington DC, US

Hong Kong has become a hub for financial crimes, including money laundering, sanctions evasion, and the reported transfer of banned technology to Russia, the US lawmakers warned and called for a re-evaluation of America's close business ties with Hong Kong. 

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The bipartisan leaders of the House Select Committee on China on Monday, in a letter to US Treasury Secretary Janet Yellen, demanded greater scrutiny from Washington of Hong Kong's much-prized financial sector.

It further said that Hong Kong had become a "global leader" in illicit practices, including in the export of controlled Western technology to Russia, creating front companies to buy Iranian oil, and managing "ghost ships" that engage in illegal trade with North Korea. 

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It further cited "recent research" estimating that "nearly 40 per cent of goods shipped from Hong Kong to Russia in 2023" were on US and EU lists of banned goods. These goods included semiconductors and other technology Russia needed for its war in Ukraine. 

The lawmakers asked the Treasury Department officials to brief the committee on “the current status of American banking relationships with Hong Kong banks, how our policies have shifted to account for the changes in Hong Kong’s status and posture, and the measures the Treasury plans to implement to address these risks.”

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They noted that since China imposed a national security law on the city in 2020, "Hong Kong has shifted from a trusted global financial centre to a critical player in the deepening authoritarian axis of the People’s Republic of China, Iran, Russia, and North Korea." 

“We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” they added. 

Earlier in September, the US State Department warned about "new and heightened risks" for businesses operating in Hong Kong because of Article 23. 

(With inputs from agencies)