Threading the Needle - Complying with the Hong Kong-related Sanctions Imposed by the US Government

Cover Story

Threading the Needle: Complying with the Hong Kong-related Sanctions Imposed by the US Government

In response to the People's Republic of China (PRC) announcement of a National Security Law (NSL) for Hong Kong in May 2020, the US Congress introduced and passed the Hong Kong Autonomy Act of 2020 (HKAA), which was signed into law by the US president on 14 July 2020. Taken together, the sanctions provisions in the HKAA and EO 13936 impose compliance obligations not just on "US persons," but also threaten non-US financial institutions with the possibility of secondary sanctions. At the same time, the president issued Executive Order (EO) 13936, which ordered US agencies to take steps to suspend or revoke Hong Kong’s special status under US law and authorised sanctions against individuals and entities responsible for the NSL’s implementation. This article summarises the Hong Kong-related sanctions and how they apply to non-US banks and discusses some of the implications arising from various compliance strategies that banks may decide to adopt.

Special Article

Could China’s Digital Currency Accelerate RMB Internationalisation?

After more than five years of research, China has become the first major economy to conduct a real-world test of a national digital currency. The pilot project, which is being trialled in four major Mainland Chinese cities, is a significant milestone in the development of what could become a central component of the Chinese currency’s use in international commerce.
 

China World 

Cross-border Wealth Management Connect Set to Boost Economic Opportunities for
Hong Kong

The Hong Kong Monetary Authority (HKMA), the People’s Bank of China (PBoC), and the Monetary Authority of Macao (AMCM) jointly announced on June 29, 2020 the launch of the pilot cross-boundary Wealth Management Connect Program (WMCP). The latest Connect initiative, which enables individual residents in the Guangdong-Hong Kong-Macau, Greater Bay Area (GBA) to invest in products sold in each other's markets, is another step in the opening up of the Mainland’s financial sector and creates new opportunities for the financial services sector in Hong Kong.

Fintech 

The Real Challenge to Banks is by Techfin Not Fintech

Fintech is probably one of the few industries that has benefitted from the sub-prime crisis in 2008. The chaos and disruption so caused engendered a lack of trust in existing banks and brought on new regulations and the rise of technologies that would allow new start-ups to reshape consumer finance. The article looks at how banks can adopt to this new environmental change. 

Knowledge Plus

Commercial Banking in Asia Pacific is at a Crossroads: Going Fully Digital is the
Best Way to Win

Few industries have been so impacted by new technologies and competition in the digital revolution as financial services, particularly banking. Banks in Asia Pacific and the rest of the world have put a lot of focus and investment during recent years in revamping their technology, products and services for retail customers, but far less focus has been directed towards SME customers.  With well-funded tech giants and fintech startups alike focusing on providing data-driven, customer-centric services to SMEs, commercial banks need to re-invent themselves for a new digital age by providing the ease of use and attention SMEs want with the trust and reliability the big institutions have.

GRC Corner 

Data Analytics Enhance the Ability to Bring Value to the Compliance Function

Banks are set to spend more than USD300 billion in the next year on compliance. Multiplying regulatory requirements have created additional work, ever more expensive headcount and the need for more comprehensive compliance systems to meet them. Meanwhile regulatory enforcement actions, fines and penalties continue to balloon, as consumer protection and economic justice again become political priorities. The article looks at managing these risks in a time of crisis and economic contraction becomes more difficult when costs are tightly managed and resources become even more scarce.