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New Legislation Targets Mainland China’s Alleged Use of Hong Kong to Circumvent U.S. Laws

Legislation introduced by Sens. Ted Cruz (Republican-Texas) and Ed Markey (Democrat-Massachusetts) on 12 June would amend the United States-Hong Kong Policy Act of 1992 to require a report on how mainland China is ostensibly using Hong Kong to circumvent U.S. laws. According to a 13 June press release by Sen. Cruz’s office, the Hong Kong Policy Re-evaluation Act of 2019 (S. 1824) addresses the recent developments of mainland China “forcing a controversial extradition bill through the Hong Kong government that would subject Hong Kong residents and foreign nationals to extradition to China.”

Specifically, the Hong Kong Policy Re-evaluation Act of 2019 would require the U.S. State Department, in consultation with the U.S. Department of Homeland Security, the director of national intelligence, the U.S. Department of Commerce and/or the U.S. Treasury Department, as applicable, to submit a report to the Senate Foreign Relations Committee and the House Foreign Affairs Committee within 180 days from the date of enactment of the legislation containing the elements listed below. The legislation does not provide for any specific punitive or enforcement measures, however.

  • an assessment of how the mainland Chinese government:
    • uses formal or informal means to extradite or coercively move foreign nationals, including U.S. citizens, from Hong Kong to mainland China;
    • uses Hong Kong to circumvent U.S. export controls;
    • uses Hong Kong to circumvent duties on merchandise imported into the United States from mainland China;
    • uses Hong Kong to circumvent sanctions imposed by the United States or pursuant to multi-lateral regimes; and
    • uses the Hong Kong Security Bureau and other security agencies in Hong Kong to conduct espionage on foreign nationals (including U.S. citizens), conduct influence operations or violate civil liberties guaranteed under Hong Kong laws.
  • a list of foreign nationals, including U.S. citizens, who have been formally or informally extradited or coercively moved from Hong Kong to mainland China during the reporting period (i.e., the five-year period preceding submission of the report);
  • a list of all significant incidents in which the mainland Chinese government used Hong Kong to circumvent U.S. export controls, U.S. import duties, or sanctions imposed by the United States or pursuant to multi-lateral regimes during the reporting period;
  • a list of all significant incidents involving the previously mentioned espionage, influence operations or violations of civil liberties during the reporting period; and
  • a list of each official of the mainland Chinese government who engaged in any of the aforementioned activities. 

The report would have to be submitted in unclassified form but may include a classified index. The unclassified version would be posted on a publicly available internet website of the State Department.

Sen. Cruz said the United States should re-evaluate its policy toward Hong Kong if the Hong Kong government passes the extradition bill currently under consideration. In arguing for such a re-evaluation, he complained about mainland China’s long-standing exploitation of Hong Kong’s special legal treatment under U.S. law, including to “launder money, evade tariffs, break sanctions, and acquire sensitive intellectual property.”

In the current heat of the protests it is possible the bill will draw some attention, although right now there is little to no legislation moving through Congress. However, the provisions relating to possible circumvention through Hong Kong of mainland Chinese goods may give the bill more momentum as the tariffs are put in place on all of mainland China’s exports to the United States. Regardless of the missing “teeth” of the bill, it is possible that Congress may press U.S. Customs and Border Protection to more closely monitor and review imports from Hong Kong.

Content provided by Picture: HKTDC Research
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