Global banks are reportedly addressing Washington's newly issued sanctions and boosting compliance measures amid rapidly worsening U.S.-China relations.
Citi and Standard Chartered are amongst the players that have responded to the latest sanctions, according to a «Bloomberg» report citing unnamed sources.
The former has suspended accounts with some of the sanctioned individuals, said one source, while the latter is monitoring transactions from accounts owned by the individuals and suspended new account-opening for them.
The report adds that banks will include additional screening in preparation of more sanctions on politically exposed persons (PEPs), though it did not detail which bank nor the criteria.
All Bad Choices
Although many banks were reportedly already prepared in anticipation of at least initial U.S. sanctions, simply complying with Washington’s rules will not be sufficient to maintain stability as it could violate Beijing's national security law which prohibits the application of sanctions or hostile actions against the city and mainland China.
«The most likely result – if China is serious about enforcing their own provision of the national security law prohibiting compliance with foreign sanctions – is that the banks will have to pick the US or Hong Kong,” according to Julian Ku, a professor of constitutional and international law at New York-based Hofstra University, in an «AFP» report. «But not both.»
Yesterday, the U.S. Department of Treasury released its first list of sanctions against individuals perceived to have undermined freedom and autonomy in Hong Kong. The list includes Hong Kong chief executive Carrie Lam alongside some of her cabinet members and top Beijing-appointed officials overseeing the city.
