Hong Kong Leader Backs Local Version of China Sanctions Law

(Bloomberg) -- Hong Kong’s leader said she supports adding Beijing’s anti-sanctions law to the city’s constitution, a move that could impose compliance hurdles on multinationals operating in the Asian financial center.

Chief Executive Carrie Lam said Tuesday that she backed local legislation to add the new national law to Hong Kong’s Basic Law. Her comments follow reports last month that China’s top legislative body, the National People’s Congress Standing Committee, was preparing to formally declare that the anti-sanctions law applied to Hong Kong.

“The anti-foreign sanctions law passed by the NPC aims to safeguard the country’s sovereignty, security and developmental interests,” Lam told reporters at a briefing on Tuesday. “Hong Kong is an inseparable part of China has a constitutional responsibility to uphold the country’s sovereignty, security and developmental interests.”

The move to implement the national legislation in Hong Kong comes after the NPC’s passage in June of China’s anti-sanctions law, which gives it broad powers to seize assets from and deny visas to those who formulate or implement sanctions against the country. It also empowers individuals and companies to sue “individuals and organizations” to seek compensation for discriminatory practices in Chinese courts.

Beijing implemented the law as part of a running feud with Washington, in which the U.S. side has sanctioned various Chinese and Hong Kong officials for “serious human rights abuses” in the Xinjiang region as well as “undermining Hong Kong’s autonomy” and restricting key freedoms. Lam was among those sanctioned.

The U.S. cited the anti-sanctions law in a warning of mounting legal risks for firms operating in the city following the imposition of a national security law on Hong Kong last year. That law was added to Annex 3 of the city’s Basic Law without local legislative action.

Lam said she supports adding the anti-sanctions law through a local legislative process “because I am sure some foreign forces, foreign governments or Western media will make a big deal out of this, and weaken Hong Kong’s position as a financial center and confidence toward Hong Kong.”

Separately, the U.S. State Department dismissed as inaccurate a report in Chinese media Tuesday saying that American diplomats in Hong Kong had urged their country’s companies to withdraw from the city. The Global Times, a Communist Party newspaper, said that the U.S. side had pressured firms to leave in a meeting, citing a person it didn’t identify.

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