The Government has shown 'a troubling lack of commitment' to the rule of law despite the mainland's hands-off approach, according to a Washington-based democracy watchdog.
In its latest report, the National Democratic Institute highlighted post-handover developments it said had sent 'unfortunate signals'.
The 18-page document cited the recent decisions by the Department of Justice against prosecuting Xinhua for an alleged breach of privacy laws and newspaper boss Sally Aw Sian for alleged involvement in a conspiracy to defraud advertisers.
It described the decisions as 'selective non-prosecution'.
Other incidents included the handling of Taiwanese flags on October 10 last year and the recent adaptation of laws to exempt state organs from some Hong Kong laws.
Noting the Basic Law provision requiring all central government offices to abide by SAR laws, the report said: 'The new law seemingly violates this constitutional provision.' It said the SAR Government could have chosen to simply replace 'the Crown' with 'the Hong Kong Special Administrative Region' rather than 'the state'.