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

Hong Kong has become a center for money laundering and sanctions evasion under the tightening grip of Beijing, US lawmakers have warned, calling for a re-evaluation of America’s close business relationship with the Asian financial hub.

Hong Kong has become a center for money laundering and sanctions evasion under the tightening grip of Beijing, US lawmakers have warned, calling for a re-evaluation of America’s close business relationship with the Asian financial hub. In a letter to US Treasury Secretary Janet Yellen Monday, bipartisan leaders of the House Select Committee on China demanded greater scrutiny from Washington of Hong Kong’s much prized financial sector, a pillar of the economy that’s home to many big US banks and accounts for more than one-fifth of the Chinese territory’s gross domestic product. Hong Kong has become a “global leader” in illicit practices, it said, including in the export of controlled Western technology to Russia, the creation of front companies to buy Iranian oil and the managing of “ghost ships” that engage in illegal trade with North Korea. Since Beijing imposed a national security law on the city in 2020, “Hong Kong has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis of the People’s Republic of China, Iran, Russia, and North Korea,” the lawmakers said. “We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” they added. The committee’s letter cited research published this year that shows nearly 40% of goods shipped from Hong Kong to Russia between August and December 2023 were high-priority items that are likely fueling Moscow’s production of military goods such as missiles and aircraft.