US warns companies against doing business in Hong Kong

Joe Biden’s government issued a warning to US companies about the risks of doing business in Hong Kong on Friday, as China continues to impose restrictions on political and economic freedoms in the territory.

The Departments of Foreign Affairs, Treasury, Commerce and Homeland Security issued a nine-page notice warning companies about changes in Hong Kong’s legal landscape and the potential for doing business in the territory to cause legal damage to reputation.

At the same time, the Treasury announced sanctions against seven Chinese officials for violating the terms of the 2020 Hong Kong Autonomy Law, which provides for asset freezes and other penalties against those involved in the campaign.

President Joe Biden announced the warning Thursday, telling reporters at the White House that the business environment in Hong Kong was “deteriorating” and could get worse.

“Companies, individuals and others, including academic institutions, study services and investors who operate in Hong Kong or are subject to sanctioned individuals or entities, should be aware of changes in laws and regulations in Hong Kong,” the notice said. Entitled “Risks and Considerations for Companies Operating in Hong Kong”.

“This is a new legal landscape… that could negatively impact businesses and individuals operating in Hong Kong. As a result of these changes, they should be aware of the potential reputation, regulatory, financial, and, in some cases, legal risks associated with operations in Hong Kong” , he says.

Secretary of State Anthony Blinken highlighted the notice in a statement marking the anniversary of China’s new security law, which he said has had a profound negative impact on Hong Kong.

Blinken said risks to the business include “the potential for cyber espionage, lack of data privacy, reduced access to information, and potential retaliation against companies for complying with US sanctions.”