Responding to Hong Kong’s proposed extradition legislation, Congress aims to shut down the territory’s transshipment channels to China and other sanctioned countries.
A bipartisan group of Senate and House lawmakers have reintroduced legislation that promises to intensify U.S. export controls for American goods destined for Hong Kong.
The Hong Kong Human Rights and Democracy Act, which was put forward last week by Rep. Jim McGovern, D-Mass., and Sen. Marco Rubio, R-Fla., responds to Hong Kong’s recent attempt to introduce unpopular extradition legislation.
“If the extradition bill moves forward and Hong Kong’s autonomy and democratic institutions continue to erode due to interference from the Chinese government, the Congress has no choice but to reassess whether Hong Kong can receive preferential economic and trade benefits under U.S. law,” McGovern warned.
The proposed U.S. legislation would require the secretary of state to issue an annual certification of Hong Kong’s autonomy to justify special treatment currently afforded to it under the U.S. Hong Kong Policy Act of 1992.
It also would require the commerce secretary to issue an annual report assessing whether the Hong Kong government is adequately enforcing both U.S. export regulations regarding sensitive dual-use items and U.S. and U.N. sanctions, particularly regarding Iran and North Korea.
According to the legislation, the Commerce Department assessment must highlight any efforts by the Chinese government to use Hong Kong’s status as a separate customs territory to import items into China in violation of U.S. export control regulations.
Other lawmakers to sponsor the Hong Kong Human Rights and Democracy Act include Reps. Chris Smith, R-N.J.; Tom Suozzi, D-N.Y.; Scott Perry, R-Pa.; Brad Sherman, D-Calif.; and Brian Fitzpatrick, R-Pa.; and Sens. Jim Risch, R-Idaho; Bob Menendez, D-N.J.; Ben Cardin, D-Md.; Tom Cotton, R-Ark.; Angus King, I-Maine; Ed Markey, D-Mass.; and Josh Hawley, R-Mo.
The proposed bill follows a Commerce Department export control regulation, which entered into force on April 19, 2017, that requires U.S. companies with licensable exports and re-exports to obtain documented proof of import licenses from their Hong Kong customers before the goods are shipped.
The import licenses are granted to Hong Kong’s importers by the country’s Special Administrative Region. If the shipment doesn’t require an import license, then a statement to that effect from the Hong Kong government still must be obtained by the U.S. exporter.
The intent of this regulation is to help prevent diversions of controlled exports from Hong Kong to those countries where certain entities aren’t eligible to receive them. Hong Kong is considered by the Commerce Department’s Bureau of Industry and Security to be a common destination for the diversion and transshipment of items to China and other U.S.-sanctioned countries, such as Iran.