In 2000, the US Congress established the Congressional-Executive Commission on China (CECC). Its mandate is to monitor legal developments and human rights in China, and to submit an annual report. Like moths to a lamp, anti-China politicians flocked to join, and its periodic reports have become synonymous with ill-informed prejudice.
However, the CECC has limited space. Its commissioners are limited to nine senators, nine members of the House of Representatives, and five government officials. Given that China-bashing is now so popular in the US Congress, where it is seen as a means of securing reelection and political advancement, the competition for CECC membership is intense.
However, with Congress having 435 representatives and 100 senators, the CECC can accommodate only a fraction of them. This denies the majority the use of a valuable platform to malign China, which peeves many. Therefore, another forum has had to be created from which they can rant and rave.
In 2023, after the Republican Party took control of Congress, a new committee was created. Called the “House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party” (HSC), it is purportedly focused on issues surrounding the rivalry between the US and China. The committee claims to be committed to building a consensus on the threat posed to the US by the Communist Party of China and to defending the American people, their economy, and their values.
The HSC’s 16 members are appointed by the House speaker, and their ideological credentials are impeccable. Although it is still early days, the HSC is emerging as a toxic propaganda machine, sometimes more extreme even than the CECC, which is saying something.
On Nov 25, the HSC’s chairman, Republican Representative John Moolenaar, and its ranking member, Democrat Representative Raja Krishnamoorthi, wrote to US Treasury Secretary Janet Yellen. Their target was Hong Kong, and they did not spare the poison. They made sweeping assertions about the risks of sanctions evasion and abuse of the financial system, and claimed there was a need for “greater scrutiny and diligence”.
Their comments were based not on objective research but on skewed newspaper reports (a technique favored by the CECC), and they demanded to know what Yellen planned to do “to further combat the facilitation of money laundering and sanctions evasion through Hong Kong’s financial system”.
If there was a scintilla of truth in their allegations, Hong Kong would not have been ranked third globally and first in the Asia-Pacific region in the Global Financial Centres Index 36 Report, issued on Sept 24, 2024. These rankings underscored the city’s standing as a leading global financial center, as Yellen would have known.
She would also have been aware that the Financial Action Task Force (FATF) has not only commended Hong Kong’s efforts in combating money laundering and terrorist financing, but also praised it in 2023 for successfully addressing previously identified weaknesses.
As the US consul general in Hong Kong, Gregory May, will hopefully explain to the HSC, Hong Kong has a robust anti-money laundering regime. It criminalizes activities that disguise funds obtained through illegal activities, including drug trafficking, corruption, tax evasion, and fraud.
If McCarthy were still alive (he died in 1957), he would undoubtedly have hailed Moolenaar and Krishnamoorthi as his successors, worthy of fast-tracking into the CECC. However, they should remember, as he learned the hard way, that hate can take any politician only so far. In any civilized nation, the point invariably comes when decent people draw a line, and the US is hopefully no exception
The Hong Kong Monetary Authority plays a crucial role in supervising authorized institutions’ risk management systems to combat money laundering and terrorism financing. It applies international standards and practices, taking into account the risks to which the banking sector and individual authorized institutions are exposed.
For example, under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615), the Law Society of Hong Kong is the designated regulator of the city’s legal professionals. It imposes strict anti-money laundering regulatory requirements on law firms, which they disregard at their peril (violators face both criminal and disciplinary consequences).
Moreover, Hong Kong has always discharged its international obligations by enforcing punitive measures endorsed by the UN Security Council (UNSC). UN sanctions are usually implemented through regulations under either the UN Sanctions Ordinance (Cap.537) or the UN (Anti-Terrorism Measures) Ordinance (UNATMO, Cap.575), which covers the UNSC Resolution 1373 concerning terrorism. If the UNSC designates someone as a terrorist or terrorist associate or designates property as terrorist property, enforcement is effected by Hong Kong’s chief executive under the UNATMO.
Hong Kong’s domestic anti-money laundering and counterterrorist financing legislation supplements these arrangements. They include the Anti-Money Laundering and Counter-Financing of Terrorism Ordinance (Cap. 615), the Weapons of Mass Destruction (Control of Provision of Services) Ordinance (Cap. 526), the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap. 405), and the Organized and Serious Crimes Ordinance (Cap. 455). Whereas the Commerce and Economic Development Bureau maintains a list of sanctioned individuals and entities (including those subject to travel bans, financial sanctions and arms-related sanctions), the Trade and Industry Department has a list of countries subject to UN sanctions. The Security Bureau also maintains a list of persons designated by the UN Security Council as terrorists or terrorist associates.
However, despite these comprehensive arrangements, Hong Kong, like other places, is under no legal (or moral) duty to enforce unilateral sanctions imposed by particular countries to pursue their own arbitrary political agendas (which may have irked the HSC).
Although it is not immediately apparent why the HSC has tried to harm Hong Kong, it may well be that it resents its resilience. Whereas then-president Donald Trump tried to destroy the city by withdrawing its trade preferences in 2020 and hitting it with sanctions, the current president, Joe Biden, joined in with a business advisory in 2021 that sought to frighten away American companies. It is a fair guess, therefore, that Moolenaar and Krishnamoorthi see their role as picking up where Trump and Biden left off, imagining that undermining Hong Kong is as good a way as any of damaging China.
Indeed, Moolenaar’s hostility toward China verges on the pathological. In his home state of Michigan, he has whipped up concerns over China-based energy companies creating new plants, and in Congress, he has proposed legislation to prohibit companies associated with China from receiving green-energy tax credits. On Nov 14, he even introduced a bill to revoke permanent normal trade relations for China (a measure adopted by Congress when China joined the World Trade Organization in 2001), which would end normal trading relations between the US and China (de-coupling). He is a Cold War throwback of the worst type, and the HSC members are undoubtedly cut from the same cloth.
In the 1950s, then-senator Joseph McCarthy forged a reputation for his “red-baiting and hating” activities as chairman of a Senate committee on “Un-American activities”. He stoked fears of “communist subversion” and claimed that communist spies and sympathizers were everywhere, including in the film industry. Although his country eventually recoiled in horror at the reputational damage and misery he had caused (the Senate voted to “condemn” him by a vote of 67-22 on Dec 2, 1954), it was only after the Washington Post had coined the term “McCarthyism” as a synonym for his demagoguery, defamation, and mudslinging (and, according to his fellow Republican, Representative George Bender, also for his “witch-hunting” and denial of “civil liberties”).
If McCarthy were still alive (he died in 1957), he would undoubtedly have hailed Moolenaar and Krishnamoorthi as his successors, worthy of fast-tracking into the CECC. However, they should remember, as he learned the hard way, that hate can take any politician only so far. In any civilized nation, the point invariably comes when decent people draw a line, and the US is hopefully no exception.
The author is a senior counsel and law professor, and was previously the director of public prosecutions of the Hong Kong Special Administrative Region.
The views do not necessarily reflect those of China Daily.
