(Bloomberg) — Hong Kong has become a hub for financial crime, U.S. lawmakers say, underscoring the deterioration in relations between the former British colony and the United States as Beijing tightens its grip on the city.
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Since the Chinese government imposed national security laws on Hong Kong in mid-2020, the city has “transitioned from a trusted global financial center to a key role in a deepening axis of authoritarianism.” Leaders of nations China, Iran, Russia, and North Korea. The House China Select Committee said in a letter to Treasury Secretary Janet Yellen.
The letter was signed by the committee’s chairman, Rep. John Moolener of Michigan, and the committee’s top Democrat, Raja Krishnamoorthi of Illinois. He added that the change raises questions about “whether long-standing U.S. policy toward Hong Kong, particularly toward the financial and banking sector, is appropriate.”
The Hong Kong government did not respond to requests for comment on Tuesday.
Relations between Hong Kong and the United States have deteriorated over a crackdown on dissent that American officials say is eroding the rule of law and democratic rights.
U.S. lawmakers are stepping up efforts to punish the city, but it remains unclear whether their efforts will bear fruit. In September, the House of Representatives passed a bill that would close city economic and trade offices in the United States. The bill must be approved by the Senate and signed by the President to become law.
Marco Rubio, President-elect Donald Trump’s nominee for secretary of state, said these offices have become mouthpieces for the ruling Communist Party. Hong Kong authorities have strongly criticized the bill’s passage, and Chief Executive John Lee has said that American businesses would be hurt if it passes.
Moolenar and Krishnamoorthi said in their letter that Hong Kong has become a “world leader” in illegal activities such as:
Give Russia access to prohibited Western technology
Setting up front company to buy banned Iranian oil
Supporting gold trade from Russia
Operating vessels engaged in illegal trade with North Korea
The letter also showed that about 40% of goods shipped from Hong Kong to Russia last year were on a “common high-priority” list of items used by the U.S. and European Union to focus sanctions enforcement. It also mentions the survey results.
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