WASHINGTON—The Biden administration is warning American businesses about the increasing risks of operating in Hong Kong as China’s tightening grip on the city causes business conditions to deteriorate.
In an advisory issued Friday, the Biden administration cautions businesses and individuals working for them that they are subject to a restrictive national-security law that Beijing imposed on Hong Kong a year ago. The advisory cites the risks of electronic surveillance without warrants and of being compelled to surrender corporate and customer data to the government.
“This new legal landscape…could adversely affect businesses and individuals operating in Hong Kong,” said the advisory, jointly issued by the Treasury, State, Commerce and Homeland Security departments. “As a result of these changes, they should be aware of potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations.”
In addition to the advisory, the Treasury Department added seven Chinese officials working in China’s main government office in Hong Kong to a sanctions list that already includes many leading officials in the territory. The move blocks any assets in the U.S. financial system and puts U.S. citizens on notice not to deal with them.
Beijing deployed the national-security law to stamp out an antigovernment protest movement that rocked Hong Kong. The law gives broad authority to the security apparatus. Authorities have arrested democracy activists, journalists and government critics, chilling free speech and, according to rights and legal groups, eroding the Western-style rule of law that bolstered Hong Kong as an international hub for business and finance.