Hong Kong is becoming hub for financial crime, US lawmakers say

In a letter, US lawmakers have asked Treasury Secretary Janet Yellen to rethink ties with Hong Kong’s banking sector

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US Treasury Secretary Janet Yellen. Photo: Getty Images via AFP

Published: 2:48am, 26 Nov 2024

Lawmakers in the US House of Representatives have asked Treasury Secretary Janet Yellen to rethink ties with Hong Kong’s banking sector, saying the city has become a top location for money laundering and sanctions evasion.

Hong Kong has turned into a hub for many violations of US trade controls, including export of controlled Western technology to Russia and the creation of front companies to buy Iranian oil, the bipartisan leaders of the House of Representatives Select Committee on the Chinese Communist Party said in a letter to Yellen.

The letter, scheduled to be publicly released on Monday, said Hong Kong has shifted from being a trusted global financial centre to a critical player in the deepening authoritarian axis of China, Iran, Russia and North Korea.

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“We must now question whether long-standing US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” a copy of the letter seen by Reuters said.

The letter, signed by Republican John Moolenaar, who chairs the committee, and Raja Krishnamoorthi, the committee’s senior Democrat, cited research that shows nearly 40 per cent of goods shipped from Hong Kong to Russia in 2023 were high-priority items such as semiconductors that Russia could use to prosecute its war in Ukraine.

The US Treasury Department did not immediately respond to Reuters’ requests for comments. Hong Kong’s trade office in New York could not be immediately reached for comment.