Following the enactment of the Hong Kong Autonomy Act (HKAA), the issuance of Executive Order 13936, which implemented sanctions authorities under the HKAA and other statutes, and other recent U.S. sanctions designations and enforcement actions, many multinational entities based or operating in Hong Kong are concerned with how to navigate the new landscape. Financial institutions subject to regulation by the Hong Kong Monetary Authority (HKMA) are in a particularly difficult position given the recent circular guidance from the HKMA reminding regulated institutions that “unilateral sanctions imposed by foreign governments are not part of the international targeted financial sanctions regime and have no legal status in Hong Kong” and that their policies should be “informed by a thorough assessment of any legal, business and commercial risks involved and based on a balanced approach. In assessing whether to continue to provide banking services to an individual or entity designated under a unilateral sanction which does not create an obligation under Hong Kong law, boards and senior management of [regulated institutions] should have particular regard to the treat customers fairly principles.”
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