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Many banks had reportedly already taken precautions to review clients termed «politically exposed persons» (PEP). Local politician Bernard Chan said in late July that banks were already turning him away and closing his account, citing similar experiences from other civil servants.

«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.»

L&C Fine Combing

Closing accounts and ending relationships with PEPs is the first step for banks wishing to comply with the new U.S. rules. Compliance units at U.S. entities will also need to fine comb any assets held or controlled where the sanctioned individuals have at least 50 percent of direct or indirect ownership which will require reporting to the Office of Foreign Assets Control (OFAC).

Although non-U.S. entities do not face any restrictions while dealing with sanctioned individuals, they could be named a violator if concurrently dealing with a U.S. entity or the U.S. financial system.

«The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person or the receipt of any contribution or provision of funds, goods or services from any such person,» the statement added.

Hong Kong Government: «Shameless and Despicable»

The Hong Kong government called the sanctions «shameless and despicable» in a strongly worded statement that accused the U.S. Congress and White House for taking political advantage of the unrest in Hong Kong since June last year «under the pretext of human rights, democracy and autonomy».

«The U.S. Government's claim that the imposition of the so-called 'sanctions' was in response to the enactment of the National Security Law in Hong Kong is a lame excuse that could hardly stand up to challenge,» the spokesperson said in the official statement, citing senior Beijing official Yang Jiechi’s call for Washington to focus on the «fundamental interests of the Chinese and American people and the whole world».

«It should be obvious to and resented by many people, locally and around the world, that the U.S. acts are displaying double standards and hypocrisy, let alone blatantly breaching international laws and basic norms governing international relations,» the statement added.