On October 14, 2020, pursuant to the Hong Kong Autonomy Act (HKAA), the State Department submitted to Congress a report identifying foreign persons “who are materially contributing to, have materially contributed to, or attempt to materially contribute to the failure of the People’s Republic of China (China) to meet its obligations under the Sino-British Joint Declaration or Hong Kong’s Basic Law.” For background, see Update of July 16, 2020. The report identifies 10 Chinese and Hong Kong government officials whose actions under the recently implemented National Security Law have undermined freedoms of assembly, speech, press, or the rule of law, and reduced the autonomy of Hong Kong. The report notes recent disturbing developments in Hong Kong, including the arrest of opposition lawmakers and peaceful protestors, the editing of textbooks to remove references to civil disobedience and separation of powers in Hong Kong, and arrest warrants issued for statements made supporting democracy in Hong Kong. It also cites the denial of visas to those who could be considered critical of the administration, arrests on “spurious” charges to limit international travel, and Chinese state-owned media suggestions that Hong Kong residents meeting with foreign diplomats could be subject to “collusion” charges under the National Security Law.
The report identifies each foreign person and provides an explanation for why each individual was identified and a description of the activity that resulted in their identification. On August 7, 2020, the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed sanctions on these same individuals and placed them on the Specially Designated National (SDN) List. See Update of August 10, 2020. OFAC has further noted that the HKAA requires blocking sanctions on persons identified by the State Department and that the Treasury secretary must (within 30-60 days thereafter) identify – and potentially sanction – any foreign financial institution that knowingly conducts significant transactions with such identified foreign persons.