More Tools Needed to Counter Hong Kong's Sanctions Evasion, House Panel Hears
To crack down on Hong Kong’s significant role in sanctions evasion, the U.S. should increase funding for the Bureau of Industry and Security’s budget, pass pending anti-money laundering legislation and sanction banks involved in the Chinese territory’s illicit trade, a Hong Kong expert said Sept. 18.
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Samuel Bickett, a human rights lawyer and convenor of the U.S.-Hong Kong Policy Roundtable, told the House Select Committee on China that BIS is “starved of resources” and needs more money to hire additional investigators and replace its antiquated technology. “A handful of investigators working with outdated tools are chasing sprawling networks across continents,” he testified.
BIS has asked lawmakers for a 59% budget increase in FY 2026 compared to the FY 2025 enacted level. The House Appropriations Committee has backed the full increase while its Senate counterpart has endorsed a fraction of it (see 2507170053).
Bickett also urged passage of the Stop Corrupt Communist Party Money Laundering Act, or Stop CCP Money Laundering Act, which would require the Treasury Department to determine whether Hong Kong is a jurisdiction of primary money laundering concern (see 2504080060) and 2505090022). “This designation would unlock powerful tools, such as requiring U.S. banks to gather detailed information on dollar transactions touching Hong Kong,” he said.
Bickett also called for sanctioning banks that finance illicit trade through Hong Kong. “We urge members of Congress to add their voice publicly to this call,” he said. “Financing is absolutely essential for cross-border trading. Without credit, it is very difficult for these businesses to operate.”
More than three years after Russia invaded Ukraine, Hong Kong remains a major source of Chinese and Western technology for Russia’s war machine, Bickett said. "Well-connected Hong Kong firms helping Russia, Iran and others arm themselves against the West with little fear of consequences," he testified.
Kimberly Donovan, director of the Atlantic Council’s Economic Statecraft Initiative, told the China Select Committee that while the primary money laundering concern designation suggested by Bickett should be considered, it should be made only after the U.S. has done a “comprehensive economic impact assessment to ensure that we are prepared to mitigate any unintended consequences of such an action.” Hong Kong "continues to play in the global economy and the national financial system," as it is the "third-largest financial center in the world" and a "vital gateway between the east and the west," she testified.
While supporting more sanctions against Hong Kong, Donovan noted that some Hong Kong entities have already been designated, including as recently as Sept. 16 (see 2509160009).