US lawmakers demand crack down on Hong Kong banks
A committee of the US Congress has called for a crackdown on Hong Kong’s financial sector, accusing it of becoming a hub for money laundering and sanctions evasion. In a letter to Treasury Secretary Janet Yellen, members of the House Select Committee on the Chinese Communist Party claimed that the self-governing region of China is facilitating illegal transactions for Russia and Iran.
Hong Kong, which retains a privileged economic relationship with the US despite its 1997 handover to China, has allegedly become a key player in circumventing sanctions. The letter from committee chair John Moolenaar, a Michigan Republican, and ranking Democrat Raja Krishnamoorthi of Illinois, highlights evidence that front companies based in the region have been involved in buying Iranian oil and selling Western semiconductors to Moscow.
Research cited by the lawmakers claims that nearly 40% of goods shipped from Hong Kong to Russia in 2023 were items the US considers critical for military use in the Ukraine conflict. Moolenaar and Krishnamoorthi have accused Hong Kong of enabling the so-called “authoritarian axis” of Russia, China, Iran, and North Korea.
Washington has imposed sanctions on Iran since 2018, after exiting the nuclear deal, and on Russia since 2014, initially over its reunification with Crimea. China, however, has dismissed these embargoes, labeling them as illegitimate, and has vowed to protect its trade interests.
With the current Congress’ mandate ending in early January, both Moolenaar and Krishnamoorthi secured re-election, indicating they will continue pushing for action against Hong Kong’s role in so-called sanctions evasion. Yellen is set to depart from Treasury later that month, ahead of President-elect Donald Trump’s inauguration. Scott Bessent has been nominated to succeed her.
