On March 16, 2021, the State Department identified 24 additional persons it determined are contributing to “the failure of the People’s Republic of China (PRC) to meet its obligations under the Sino – British Joint Declaration … or Hong Kong’s Basic Law” and, as a result, the Department of the Treasury has sanctioned these persons. These actions were taken pursuant to the Hong Kong Autonomy Act (HKAA), which authorizes and imposes sanctions on foreign persons, entities and financial institutions contributing to China’s actions to remove autonomy from Hong Kong. See Update of July 16, 2020. The HKAA requires the State Department to submit a report to Congress identifying such persons, the first of which was issued on October 14, 2020, and identified 10 Chinese and Hong Kong government officials. See Update of October 15, 2020.
The March 16 notice is an update to the October 14 report, and identifies each foreign person and provides an explanation for why each individual was identified and a description of the activity that resulted in their being sanctioned. In most instances, the identified government officials are members of China’s Standing Committee of the National People’s Congress, which adopted the National Security Law that undermined freedoms of assembly, speech, press and reduced the autonomy granted to Hong Kong.
Concurrently, 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. OFAC has noted that the HKAA requires blocking sanctions on persons identified by the State Department and that the Treasury secretary must thereafter identify – and potentially sanction – any foreign financial institution that knowingly conducts significant transactions with such identified foreign persons.