Van Hollen, Toomey Request Briefing from Treasury on Efforts to Sanction Banks Facilitating China’s Crackdown on Hong Kong

Today, U.S. Senators Chris Van Hollen (D-Md.) and Pat Toomey (R-Pa.) sent a letter to Treasury Secretary Janet Yellen requesting an immediate briefing on the Department’s efforts to implement the Hong Kong Autonomy Act (HKAA) and sanction foreign financial institutions supporting the Government of China’s crackdown on democracy in Hong Kong. The Senators’ legislation, signed into law in July 2020, required mandatory sanctions on malign persons and entities that directly undermine Hong Kong’s autonomy and secondary sanctions on banks that do business with those entities and persons. While the Administration punished 24 individuals under the HKAA in March, it did not identify any foreign financial institutions in its report last month. Senator Van Hollen is a member of the Senate Committee on Banking, Housing, and Urban Affairs and Senator Toomey serves as the Ranking Member of the Committee.

The text of the letter is available here and below.

Dear Secretary Yellen:

We write regarding the Treasury Department’s report to Congress submitted on May 18, 2021 pursuant to Section 5(b) of the Hong Kong Autonomy Act (HKAA). Enacted into law in July 2020 with unanimous bipartisan support, the HKAA is an essential tool in holding individuals and foreign banks accountable when they assist the Government of China in violating China’s obligations to Hong Kong under the Joint Declaration and Basic Law.

We applaud the administration’s March 16, 2021 identification of 24 previously sanctioned officials undermining Hong Kong’s freedoms pursuant to Section 5(a) of the HKAA. At the same time, we note that the recent Section 5(b) report failed to identify any foreign financial institutions (FFIs) that are doing business with persons identified under Section 5(a). As you know, the law requires the imposition of sanctions on any FFI that is knowingly conducting significant transactions with sanctioned individuals. We request an immediate briefing on the steps that the Treasury Department is taking to track down any such FFIs and to develop evidentiary sanctions packages that can withstand scrutiny if challenged in U.S court.

We appreciate your attention and look forward to your reply.

Sincerely,