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On 7 August 2020, the U.S. government announced sanctions against 11 individuals over the national security law, including Hong Kong chief executive Carrie Lam, in a move that could send ripples through the financial sector.

The U.S. Department of the Treasury named 11 individuals on a list that included both Hong Kong and mainland officials over acts that Washington perceived as «undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of the citizens of Hong Kong,» according to a statement.

The list includes some of Hong Kong’s top administration officials alongside top Beijing-appointed officials that oversee the semi-autonomous city’s affairs.

SFC: Monitoring Impact

Hong Kong’s securities regulator noted that it was closely watching «the operation of intermediaries, the interests of investors and financial stability and orderliness of the markets».

«In considering the implications of the sanctions, intermediaries are expected to carefully assess any legal, business and commercial risks that they may be exposed to,» said the Securities and Futures Commission (SFC) in a statement.

«We would expect any response to the sanctions to be necessary, fair, and have regard to the best interests of their clients and the integrity of the market.»

HKMA: No Legal Effect

The Hong Kong Monetary Authority (HKMA) said in a separate statement that the «unilateral sanctions» had no legal status and that banks in the city were not obliged to comply though no additional details were provided on the impact to the broader financial sector.

The HKMA also contrasted Washington’s sanctions with United Nations sanctions which it deemed legally effective.

Precautions Taken