Anti-sanctions law hasn’t gone away

Asia Nikkei reports that Beijing might introduce an anti-sanctions law in Hong Kong…

…years after the idea was shelved amid concerns that it would damage the city’s reputation.

In February, China’s State Council issued a white paper titled “Hong Kong: Safeguarding China’s National Security Under the Framework of One Country, Two Systems.” The paper called for strengthening “systems and mechanisms for countering foreign sanctions,” placing greater attention on security in areas such as finance, shipping, trade and the protection of overseas interests.

…[China’s] Anti-Foreign Sanctions Law … implemented in 2021, allows Beijing to take countermeasures against individuals and organizations that comply with foreign sanctions, including asset freezes, visa bans and transaction restrictions.

There was a proposal in 2021 to extend the law to Hong Kong, but this was delayed. The white paper is understood to be the first time in five years that a public Beijing document has mentioned the issue directly.

“In 2021, foreign businesses successfully pushed back against the PRC imposing the [AFSL] on Hong Kong, arguing that it would hurt its standing as an international legal and financial center,” said Sam Goodman, senior policy director of the China Strategic Risks Institute (CSRI)…

“Today, the PRC signals in its white paper that it will likely push ahead with imposing the law in Hong Kong,” he told Nikkei Asia. “This will create significant risks for foreign businesses.”

Eric Lai, a senior fellow with the Georgetown Center for Asian Law, said that Beijing would consider introducing the AFSL in Hong Kong partly due to the controversy surrounding two Panama Canal ports previously operated by Hong Kong-based CK Hutchison, after the ports were taken over by the Panamanian government following pressure from Washington.

…a private analysis by the CSRI shared with Group of Seven foreign ministries and seen by Nikkei Asia warned that foreign investors would likely be spooked if a Hong Kong AFSL brings the city closer to mainland-style restrictions.

…”If the law is applied to Hong Kong, it will hurt Hong Kong’s attractiveness as a location of corporate headquarters,” [Johns Hopkins University’s professor Hung Ho-fung] said. “It will also hurt Chinese companies, particularly financial companies, as they lose a space from where they can do business in both U.S. and China.”

Such a law could put local, Mainland and international companies in Hong Kong in an impossible position, as they would face penalties from one side or the other whatever they do.

AFP report via HKFP from August 2021…

On Tuesday, Hong Kong’s chief executive Carrie Lam confirmed Beijing had consulted her on adding the law to the city’s mini-constitution, known as the Basic Law.

“The purpose of the Anti-Sanctions Law is to defend our country’s sovereignty, security and development interests,” she told reporters.

Lam said her advice had been for Hong Kong to pass its own legislation.

But she said Beijing could also impose the measures directly like it did with a sweeping national security law last year that snuffed out dissent.

“Some foreign forces, foreign governments and western media will definitely stir up this issue, hoping to weaken our status as a financial centre or the outside world’s confidence in Hong Kong,” she said.

Beijing is introducing new regulations allowing it to retaliate against (mainly US) extra-territorial measures affecting Chinese companies and individuals.

Eric Lai piece on the white paper in Jamestown Foundation’s China Brief…

The [CK Hutchison Panama ports] episode underscores Beijing’s growing sensitivity to the overseas commercial activities of Hong Kong-based enterprises. It suggests that the conduct of Hong Kong businesses abroad is increasingly viewed not merely as a commercial matter, but as an extension of Beijing’s broader national security governance framework. 

Lai covers the white paper more broadly, saying it…

…links the 2003 [Article 23] setback to later protest movements, including the 2012 campaign against national education, the 2014 Umbrella Movement, the 2016 “Fish Ball” unrest, and the 2019 anti-extradition bill protests.

The inclusion of this narrative signals that mainland authorities now retrospectively characterize the 2003 mass mobilization—when more than 500,000 people protested the proposed Article 23 legislation—as a threat to national security. This reinterpretation stands in tension with the fact that the protests were widely regarded at the time as a lawful exercise of freedoms of expression and political participation protected under the Basic Law.

By framing the 2003 protests as security risks, the white paper recasts Hong Kong’s long-standing democratization efforts and defense of civil liberties as destabilizing forces. Through this revisionist account of post-handover social movements, the document provides ideological justification for Beijing’s hardline turn, which culminated in the imposition of the National Security Law in 2020.