US Warns Businesses About Increased Risks in Hong Kong Amid Security Laws

The US government has advised American firms of growing risks to their operations in Hong Kong, equating them to those faced in China. The updated advisory highlights legal, financial, and reputational threats due to new security laws in the city-state.

The US government has issued an advisory, cautioning American companies about the rising risks to their operations in Hong Kong, comparable to those in China. The advisory, released on Friday, highlights concerns stemming from the new national security law implemented earlier this year in the city-state.

According to the advisory, these laws undermine fundamental freedoms and human rights protections in Hong Kong. The risks are largely attributed to the enforcement of the Law of the People's Republic of China on Safeguarding National Security in Hong Kong, and the upcoming March 2024 Safeguarding National Security Ordinance.

The business advisory, initially issued in 2021, warns that the national security laws and actions by China may negatively impact companies' staff, finances, legal compliance, reputation, and operations. The advisory urges businesses to assess potential legal, regulatory, and reputational risks and emphasizes the importance of complying with US sanctions to avoid civil and criminal penalties.

Despite Hong Kong's separate legal and regulatory systems for commercial disputes and arbitration, the autonomy has been significantly undermined by China's national security laws. This has resulted in major structural changes that reduce Hong Kong's independence and threaten fundamental freedoms.

US companies operating in Hong Kong may face retaliations or countermeasures from China for adhering to international sanctions. While Hong Kong recognizes UN sanctions, it does not officially acknowledge US sanctions, complicating the compliance landscape for businesses.

(With inputs from agencies.)