Senior officials in Hong Kong have reportedly been asked by various global banks to close their accounts and take their business elsewhere, for fear of U.S. sanctions.
Bernard Chan, non-official convener of Hong Kong's Executive Council and the grandson of the late Chin Sophonpanich – founder of Thailand’s oldest banking family – claimed in a «Financial Times» report (behind paywall) that an unnamed American bank informed him that they were closing his account.
«They sent me the letter and sent me back the money, saying thank you very much, we don’t want to do business, simple as that,» he said. «I am so sure it’s not just me, I even talked to […] government civil servants, [banks] don’t want some of them, too.»
HSBC Too
According to Chan, those who are politically active and caught in the U.S.-China crossfire suffer the risk of limited access to the banking system. Although he did not name the American lender – a separate source in the report underlined that it is not Citi – he noted that similar challenges existed with British lender HSBC.
«I have a better chance today to go to a local bank to open an account,» said Chan, who is also a deputy to the National People’s Congress of China. «If I go to a U.S. bank, they don’t want anything to do with a politically exposed person […] even HSBC won’t want anything to do with me.»
Left, Right and Center
Despite the account closure, Chan expressed sympathy for the bank’s decision, adding that «it’s too much hassle for them» to deal with politically exposed individuals, be it government officials or pro-democracy activists.
Indeed, Credit Suisse, HSBC, Julius Baer and UBS were amongst the banks demonstrating equal risk aversion to dealing with politically active clients that could potentially violate the newly enacted national security law, according to a previous report.
«I think that if even a moderate democrat came through the door wanting to invest, you'd be thinking long and hard after this law,» said an unnamed Hong Kong-based hedge fund manager in the separate report.
It’s Okay to Close Accounts
Not only did Chan express understanding and did not discourage account closures in the report, the grandson of the Bangkok Bank family also gave his opinion on legal implications from the security law.
«Closing a bank account is not endangering national security,» he explained. [U]nless there is proof that the U.S. government is instructing the banks and telling the banks that this way is going to put pressure on the Hong Kong government.»
Chan also expressed understanding as to why banks were «freaking out» and said not to expect precise explanations – «black and white» answers – from the Hong Kong government on legal compliance as this was a matter for the justice department and courts.
