US warns companies about doing business in Hong Kong

WASHINGTON: The Biden administration issued a blanket warning Friday to US firms about the risks of doing business in Hong Kong as China continues to clamp down on political and economic freedoms in the territory.

Four Cabinet agencies -- the departments of State, Treasury, Commerce and Homeland Security -- released the nine-page advisory that alerts companies about the shifting legal landscape in Hong Kong and the possibility that engaging with Hong Kong business could incur reputational and legal damages.

At the same time, Treasury announced sanctions against seven Chinese officials for violating the terms of the 2020 Hong Kong Autonomy Act, which calls for asset freezes and other penalties against those who participate in the crackdown.

President Joe Biden had previewed the new advisory on Thursday, telling reporters at the White House that the business environment in Hong Kong is “deteriorating” and could worsen.

"Businesses, individuals, and other persons, including academic institutions, research service providers, and investors that operate in Hong Kong, or have exposure to sanctioned individuals or entities, should be aware of changes to Hong Kong's laws and regulations," said the notice, which is titled "Risks and Considerations for Businesses?Operating in Hong Kong."

"This new legal landscape...could adversely affect businesses and individuals operating in Hong Kong. As a result of these changes, they should be aware of potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations," it said.

The United States under both the Trump and Biden administrations has determined that since the passage of a new national security law last year, Hong Kong no longer enjoys the significant autonomy from mainland China that Beijing had pledged to respect for 50 years when it assumed control of the former British colony in 1997.

As such, Hong Kong no longer enjoys preferential US trade and commercial privileges and certain officials in Hong Kong have been hit with US sanctions for their actions in cracking down on democracy.

China is one of the rare areas in which the Biden administration has largely hewed to Trump's policies.

Friday's warning came on the heels of a similar advisory issued earlier this week reminding American companies about potential sanctions liability if they engage in business with Chinese entities that operate in the western Xinjiang region, where China is accused of widespread repression of Uyghur Muslims and other minorities.

The seven officials targeted for sanctions are Chen Dong, He Jing, Lu Xinning, Qiu Hong, Tan Tieniu, Yang Jianping and Yin Zonghua.