Bitter Trump could punish China and Hong Kong in event of US election defeat, sanctions expert warns
- Elizabeth Rosenberg, former senior adviser to US Treasury Department, says lame-duck administration could lash out
- Aggressive actions could be ‘grenade you throw as you’re walking out the door’
Elizabeth Rosenberg, director of the energy, economics, and security programme at the Centre for a New American Security, made her comments on Thursday, during a webinar held by the University of Hong Kong’s law school.
“[The treasury list] could come, if Biden is elected, in the lame-duck period for President Trump, who might be feeling particularly annoyed and frustrated and has a bone to pick with China or Hong Kong, and create the opportunity for some awfully aggressive actions as the grenade you throw as you’re walking out the door,” Rosenberg said.
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The treasury department has between 30 and 60 days after the state department acts to publish its list, but Trump is not forced to impose sanctions on those listed.
Rosenberg, formerly a senior adviser at the US Treasury Department who helped develop and implement sanctions on countries such as Iran, Libya and Syria, said it was hard to know what the list would look like, given the “awfully unpredictable” nature of the Trump administration.
Lam has said the US sanctions would only be an inconvenience and not intimidate her. She also dismissed the effect of the sanctions, citing her lack of US assets or interest in visiting the country.
Under the executive order, sanctioned individuals or entities would have their US-based assets blocked, and Americans and businesses generally banned from dealing with them.
Benjamin Kostrzewa, a lawyer specialising in international trade law who was also in the webinar, said the real danger came from sanctions on financial institutions unconnected with the US.
“Right now, a lot of banks are considering what that looks like, and the Hong Kong Autonomy Act and the executive order don't define what will be considered a ‘significant transaction’ with those individuals or material support. So everyone needs to assess that,” he said.
A ray of hope, Kostrzewa said, would be that the sanctions allowed for flexible interpretation, and regulators are likely to give banks the space to comply with both sets of laws, or have discretionary enforcement.
However, he warned Hong Kong could also adopt the maximalist approach to enforcement, just as the US could.
“If that’s the case, then it will force banks and other institutions to pick between complying with Chinese and Hong Kong laws, or complying with US sanctions enforcement,” he said.
“And it’s going to put compliance departments and major banks in a very awkward position, having to navigate a very tight tightrope.”
Earlier, Hong Kong’s police chief Chris Tang Ping-keung, who was among the 11 officials sanctioned by Washington, was found to have shifted his mortgage from HSBC to Bank of China (Hong Kong) days before the US enacted its policy.
Hong Kong Police Credit Union – whose 45,000 members included current and retired police officers – had also moved its estimated HK$11 billion (US$1.4 billion) in assets from foreign banks to mainland banks in the city since May.