A number one Hong Kong official has mentioned senior members of the town’s authorities are discovering it more and more tough to financial institution with international establishments as tensions mount between China and the US over the territory’s future.
Bernard Chan, convener of the Govt Council, the de facto cupboard that advises Carrie Lam, Hong Kong’s chief govt, mentioned a US financial institution not too long ago knowledgeable him it was closing his account and refunding his cash. He declined to call the financial institution however mentioned different senior officers had been dealing with an identical difficulty.
“I’ve a greater probability right now to go to an area financial institution to open an account. If I am going to a US financial institution, they don’t need something to do with a politically uncovered particular person . . . even HSBC gained’t need something to do with me,” he advised the Monetary Occasions.
Mr Chan’s feedback comply with rising acrimony between the US and China after Beijing imposed a nationwide safety legislation on Hong Kong that punishes crimes corresponding to subversion with as much as life imprisonment.
The US has retaliated with the Hong Kong Autonomy Act, below which Washington is anticipated to slap sanctions on mainland Chinese language and Hong Kong officers who had been concerned within the implementation of the safety legislation. Banks doing enterprise with sanctioned officers threat being locked out of the US monetary system.
The FT reported this month that US and European banks in Hong Kong have carried out emergency audits of their shoppers to establish Chinese language and Hong Kong officers and corporates that would face US sanctions.
Mr Chan, who can also be president of insurance coverage firm Asia Monetary, mentioned that whereas his account with the US financial institution was closed “not too long ago”, simply earlier than the nationwide safety legislation was introduced, the issue was changing into extra frequent.
Banks have lengthy had strict insurance policies to take care of politically uncovered shoppers however the US legislation would make them even “extra cautious” of their dealings with native officers, Mr Chan mentioned.
“They despatched me the letter and despatched me again the cash, saying thanks very a lot, we don’t wish to do enterprise, easy as that,” he mentioned. “I’m so positive it’s not simply me, I even talked to . . . authorities civil servants, [banks] don’t need a few of them, too.”
Banks working within the territory wanted to keep away from violating each the US laws and the town’s nationwide safety legislation, which made it unlawful to co-operate with international sanctions regimes, attorneys mentioned.
Mr Chan mentioned after talks with bankers he was not stunned they’d be combing their buyer lists not just for officers but in addition for pro-democracy activists. “It’s an excessive amount of problem for them,” he mentioned.
Hong Kong pro-democracy activist Joshua Wong mentioned HSBC not too long ago questioned him about royalty earnings from the gross sales of a e-book that he was receiving in a private account held with the financial institution. The account was nonetheless open, he mentioned.
HSBC declined to remark. The financial institution mentioned a earlier choice to shut an account that was used for fundraising for anti-government protests was as a consequence of compliance with anti-money laundering laws.
International banks and funds working in Hong Kong have been urgent regulators for readability on whether or not closing an official’s checking account to adjust to US sanctions would represent a violation of the safety legislation.
Whereas Mr Chan mentioned he may think about why banks had been “freaking out”, they need to not anticipate “black and white” solutions from the federal government on easy methods to adjust to each legal guidelines. That was a matter for the justice division and the courts.
“Closing a checking account isn’t endangering nationwide safety . . . except there’s proof that the US authorities is instructing the banks and telling the banks that this fashion goes to place stress on the Hong Kong authorities,” he mentioned.
Commonplace Chartered and HSBC publicly supported the nationwide safety legislation earlier than its particulars had been launched.
StanChart, which has retail operations within the metropolis, didn’t reply to a request for remark. Citibank, which additionally has retail branches in Hong Kong, declined to remark.