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US urged to crack down on Hong Kong banks US lawmakers demand crack down on Hong Kong banks
(about 20 hours later)
The Chinese region is helping Russia and Iran evade sanctions, Congress has claimed A congressional committee has accused the self-governing Chinese region of aiding Russia and Iran in evading sanctions
A committee of the US Congress has called for a crackdown on Hong Kong’s financial sector, accusing it of becoming a hub for money laundering and sanctions evasion. In a letter to Treasury Secretary Janet Yellen, members of the House Select Committee on the Chinese Communist Party claimed that the self-governing region of China is facilitating illegal transactions for Russia and Iran.
Hong Kong, which retains a privileged economic relationship with the US despite its 1997 handover to China, has allegedly become a key player in circumventing sanctions. The letter from committee chair John Moolenaar, a Michigan Republican, and ranking Democrat Raja Krishnamoorthi of Illinois, highlights evidence that front companies based in the region have been involved in buying Iranian oil and selling Western semiconductors to Moscow.
Research cited by the lawmakers claims that nearly 40% of goods shipped from Hong Kong to Russia in 2023 were items the US considers critical for military use in the Ukraine conflict. Moolenaar and Krishnamoorthi have accused Hong Kong of enabling the so-called “authoritarian axis” of Russia, China, Iran, and North Korea.
Hong Kong has become a hub for money laundering and sanctions evasion, a committee of the US Congress claimed in a letter to Treasury Secretary Janet Yellen, urging her to do something about it. Washington has imposed sanctions on Iran since 2018, after exiting the nuclear deal, and on Russia since 2014, initially over its reunification with Crimea. China, however, has dismissed these embargoes, labeling them as illegitimate, and has vowed to protect its trade interests.
The self-governing region of China, which was a UK colony until 1997, continues to enjoy a privileged economic status with the US. With the current Congress’ mandate ending in early January, both Moolenaar and Krishnamoorthi secured re-election, indicating they will continue pushing for action against Hong Kong’s role in so-called sanctions evasion. Yellen is set to depart from Treasury later that month, ahead of President-elect Donald Trump’s inauguration. Scott Bessent has been nominated to succeed her.
“We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” said a letter to Yellen from the House Select Committee on the Chinese Communist Party, according to Reuters.
Hong Kong front companies have allegedly engaged in buying Iranian oil and selling Western semiconductors to Russia, according to the letter signed by committee chair John Moolenaar, a Michigan Republican, and the ranking Democrat, Raja Krishnamoorthi of Illinois.
They cited research according to which nearly 40% of goods shipped from the territory to Russia in 2023 were items the US considered high-priority for military use in the conflict with Ukraine. Moolenaar and Krishnamoorthi have accused Hong Kong of becoming a major player in the “authoritarian axis” of Russia, China, Iran, and North Korea.
Washington sanctioned Tehran in 2018, after unilaterally pulling out of the Iran nuclear deal. The US and its allies have also repeatedly sanctioned Russia since 2022, over the conflict in Ukraine. China has rejected both sets of sanctions as unilateral and illegitimate, vowing to defend its property rights and trade interests.
The current Congress will see its mandate end in early January, but both Krishnamoorthi and Moolenaar won their respective re-election races, so they are likely to continue their work in the next session. Yellen is due to depart from Treasury later that month, after the inauguration of President-elect Donald Trump, who has already nominated Scott Bessent as her successor.