"Hong Kong has become a hub for financial crimes," U.S. lawmakers urge sanctions against the banking sector.

Hong Kong is assisting Russia in circumventing American sanctions, including those against Russia, stated U.S. Congress members. They urged the Treasury Department to review the close banking relationships between Hong Kong and the United States.

Hong Kong has transformed into a major hub for exporting prohibited Western technologies to Russia, registering shell companies for purchasing Iranian oil, managing "ghost ships" servicing North Korea, and other violations of U.S. export control measures.

This was mentioned in a letter from the special committee of the House of Representatives on China to Treasury Secretary Janet Yellen, as reported by The Wall Street Journal.

The authors of the letter, committee chair Republican John Moolenaar and Democrat Raja Krishnamoorthi, note:

“Hong Kong has shifted from a reliable global financial center to a key player in the authoritarian axis of China, Iran, Russia, and North Korea. Therefore, we must question whether it is appropriate to continue the longstanding U.S. policy toward Hong Kong, particularly regarding its financial and banking sector.”

Congress members specifically referenced an investigation indicating that nearly 40% of goods shipped from Hong Kong to Russia in 2023 fell under U.S. export restrictions. This includes semiconductors that Russia could use for weapon production.

Previously, the Japanese publication Nikkei Asia reported in April 2023 that chip supplies to Russia via Hong Kong and China surged 11-fold from the onset of Russia's invasion to the end of 2022, totaling $570 million.

In July 2024, The New York Times published the results of its analysis. Since the beginning of the invasion, over 6,000 firms have facilitated the supply of prohibited chips to Russia amounting to nearly $4 billion. Hong Kong played a significant role in this. A vast network of shell companies was established to facilitate these purchases. For instance, several firms were registered at a Hong Kong office center located at Bonham Strand, 135; through them, chips worth tens of millions of dollars were processed.

Moolenaar and Krishnamoorthi, whose committee focuses on competition with China, requested the Treasury to provide information on how it intends to combat money laundering through Hong Kong's financial system.

Hong Kong is one of the largest financial centers in the world, housing the vast majority of the largest banks, including American ones. It has close ties to the U.S. banking sector. However, its role has diminished following the enactment of the security law initiated by Beijing, which significantly restricted the region's democratic freedoms. As a result, Donald Trump imposed sanctions against Hong Kong leaders in 2020 while he was still president.