Businesses operating in Hong Kong could fall afoul of national security legislation and face heightened legal and regulatory risks, including contravening US sanctions, an alert issued on Friday by the White House said.
The advisory said the additional danger was posed by China’s March implementation of the Article 23 security legislation in Hong Kong, which the US has warned could further erode human rights protections and be used to prosecute routine business activities.
“The vaguely defined nature of the law and previous government statements and actions raise questions about risks associated with routine activities,” it said of the new Article 23 law.
Photo: Reuters
US authorities are concerned that lobbying, market analysis relying on government data, publishing media analysis or commentary, or engaging with reporters, think tanks or nongovernmental organizations could be classified as threats to national security, the bulletin said.
“Businesses should be aware that the risks they face in the People’s Republic of China are now increasingly present in Hong Kong,” US Department of State spokesman Matthew Miller wrote in a social media post.
More than 300 people have been arrested under an initial 2020 security law in Hong Kong, including a US citizen, the State Department said.
The advisory also said that Russia was increasingly using Hong Kong as a midway point to evade sanctions and export controls imposed because of its invasion of Ukraine, and that the territory also served as a hub for chemical and pharmaceutical companies helping to supply precursor chemicals for the production of fentanyl.
Moreover, Hong Kong is a primary pathway to circumvent export controls related to Chinese semiconductor manufacturing, the US said.
As a result, US firms should take special care to avoid doing business with individuals or entities that could be subject to sanctions, the bulletin said.
The advisory updated a warning the State Department first issued in 2021, shortly after Beijing imposed the National Security Law on Hong Kong, and was altered in part to account for changes passed by the territory’s Safeguarding National Security ordinance in March.
Hong Kong authorities have downplayed the significance of the provisions, saying they are similar to security laws in other countries.
Hong Kong Chief Secretary for Administration Eric Chan (陳國基) yesterday said the US advisory was an attempt to suppress China’s rise and that national security cases are treated fairly in court.
“The National Security Law has been enacted for a long time and we can all see that we have never groundlessly arrested any business people,” Chan told reporters.
The US advisory “involves an element of intimidation, to scare away business people hoping to invest in Hong Kong. I don’t think this ploy will succeed,” he said.
Additional reporting by AFP
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