Wealth managers will have to add five Chinese officials to screening lists after the latest round of U.S. sanctions.

The U.S. Department of the Treasury imposed individual sanctions on five Chinese officials after Hong Kong's controversial Legislative Council elections on Sunday, according to a public update on 20 December 2021.

Chen Dong, He Jing, Lu Xinning, Tan Tieniu and Yin Zonghua were added to the list of so-called Specially Designated Nationals (SDNs) under the pretext of the Hong Kong Autonomy Act of 2020.

The SDN list is regularly updated by the Office of Foreign Asset Control (OFAC) and individuals placed on it will have American assets blocked or frozen while U.S. citizens are also generally not permitted to have business dealings with them.

More Screening

For wealth managers and private banks, the names will likely be added to screening lists as a first step to assess whether they or any parties or entities closely related to them are clients or not.

According to an article in the South China Morning Post (pay wall), all the individuals added to the SDN list were deputy directors in the Beijing Liaison Office in Hong Kong. 

The current round of sanctions follows similar ones imposed earlier this year on other deputy directors in the same office as well as those levied last year on city chief executive Carrie Lam and other city officials.

Controversial Elections

The Legislative Council elections on Sunday were deemed controversial due to the record low voter turnout and as they were the first to be undertaken since the imposition of the National Security Law in 2020 following an extended period of pro-democratic protests.

Foreign ministers of the G7 and the European Union representative for foreign affairs Josep Borell issued a joint statement following the election to express their «grave concern over the erosion of democratic elements of the Special Administrative Region’s electoral system», reiterating calls for China to act «in accordance with the Sino-British Joint Declaration» and fulfill other legal obligations related to rights and freedoms in Hong Kong.

China foreign ministry spokesperson Zhao Lijian broadly refuted the claims of the joint statement at a regularly scheduled press conference held yesterday.