China’s government is planning to introduce new laws in Hong Kong and Macau that could bar foreign entities and individuals in the cities from complying with sanctions against China, according to people familiar with the discussions.
The new laws are expected to mirror China’s own “antiforeign sanctions law,” which Beijing rushed through in June in response to sanctions imposed on the country by the U.S. and Europe, the people said.
China’s official Xinhua News Agency reported on Tuesday that the country’s legislature was scheduled to add provisions to the mini-constitutions of Hong Kong and Macau during a four-day session beginning Aug. 17, though it didn’t specify what changes would be made.
The introduction of the law in the two Chinese territories, especially in the financial hub of Hong Kong, could leave many companies and their employees caught in the middle as China and the U.S. clash over the future of the former British colony.
“The real conflict, which is what people are really concerned with, are cases where companies are obliged to follow a sanction and there is a prohibition against complying with it in Hong Kong,” said Nicholas Turner, a lawyer at Steptoe & Johnson LLP who specializes in economic sanctions.