Trump Administration Set to Sanction Foreign Financial Institutions Over Hong Kong

July 17, 2020 | BY

Vincent Chow

Global banks are increasingly being forced to pick a side amidst U.S.-China hostilities

The Trump administration will sanction foreign financial institutions that conduct "significant transactions" with individuals and entities accused of eroding Hong Kong's autonomy. Lawyers say that the recent flurry of legislation and executive action in the U.S. over Hong Kong could force multinational banks to choose a side amidst worsening U.S.-China hostilities.

On July 14, President Donald Trump signed the Hong Kong Autonomy Act (HKAA) into law. The HKAA broadens the scope of foreign individuals and entities potentially subject to U.S. sanctions. The law targets those "materially contributing" to the alleged erosion of Hong Kong's autonomy – a broadly defined criterion. Significantly, it requires secondary sanctions on foreign financial institutions that conduct "significant transactions" with those individuals.

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