Hong Kong's SFC Privately Clears Way for Compliance with U.S. Sanctions
Hong Kong’s SFC has privately told institutions that they can comply with U.S. sanctions without facing automatic reprisals under the jurisdiction's national security law.
Hong Kong’s Securities and Futures Commission has privately told financial institutions that they can comply with U.S. sanctions without facing automatic reprisals under the jurisdiction’s new national security law, the Financial Times reported.
The counsel comes in response to legal concerns that a clause in the security law would trigger harsh penalties against companies that “collude” with a foreign government’s sanctions on Hong Kong, the newspaper said. In response to the implementation of the controversial law in June, the United States blacklisted Chinese and Hong Kong officials, including the city’s leader, Carrie Lam.
The events, attorneys warned at the time, appeared to place financial institutions in the quandary of having to obey opposing laws.
The securities regulator has since quietly assured global banks that they are unlikely to run into legal trouble by complying with U.S. sanctions, according to the FT, which cited two individuals with direct knowledge of the matter. SFC officials suggested that the clause in question was intended to target those who proactively sought sanctions against the city rather than entities that passively complied with U.S. blacklists.
The officials cautioned that the SFC did not have jurisdiction over the law’s enforcement, however.
“[Banks] are not too worried any longer about a conflict with the [security law],” one of the individuals told the FT.
Yet financial institutions operating in Hong Kong remain uneasy about how future guidance on the security law could impact their legal and compliance departments, according to the report.
“I don’t think the Hong Kong government knows [what to publish], probably because consent from Beijing is missing,” a businessperson involved in industry discussions told the newspaper.
The counsel comes in response to legal concerns that a clause in the security law would trigger harsh penalties against companies that “collude” with a foreign government’s sanctions on Hong Kong, the newspaper said. In response to the implementation of the controversial law in June, the United States blacklisted Chinese and Hong Kong officials, including the city’s leader, Carrie Lam.
The events, attorneys warned at the time, appeared to place financial institutions in the quandary of having to obey opposing laws.
The securities regulator has since quietly assured global banks that they are unlikely to run into legal trouble by complying with U.S. sanctions, according to the FT, which cited two individuals with direct knowledge of the matter. SFC officials suggested that the clause in question was intended to target those who proactively sought sanctions against the city rather than entities that passively complied with U.S. blacklists.
The officials cautioned that the SFC did not have jurisdiction over the law’s enforcement, however.
“[Banks] are not too worried any longer about a conflict with the [security law],” one of the individuals told the FT.
Yet financial institutions operating in Hong Kong remain uneasy about how future guidance on the security law could impact their legal and compliance departments, according to the report.
“I don’t think the Hong Kong government knows [what to publish], probably because consent from Beijing is missing,” a businessperson involved in industry discussions told the newspaper.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
