Hong Kong leader John Lee said Tuesday he would only implement United Nations sanctions after the U.S. warned the territory’s status as a financial centre could be affected if it acts as a haven for sanctioned individuals.
Lee’s statement Tuesday came days after a luxury yacht connected to Russian tycoon Alexey Mordashov docked in the city.
Mordashov, believed to have close ties to Russian President Vladimir Putin, was sanctioned by the U.S., U.K. and the European Union in February after Russia invaded Ukraine. Hong Kong authorities have said they do not implement unilateral sanctions other governments impose.
“We cannot do anything without legal basis,” Lee told reporters. “We will comply with United Nations sanctions; that is our system, our rule of law,” he said.
A U.S. State Department spokesperson said in a statement Monday that “the possible use of Hong Kong as a haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment.”
The State Department spokesperson also said the city’s reputation as a financial centre “depends on its adherence to international laws and standards” and that U.S. companies “increasingly view Hong Kong’s business environment with wariness” due to an erosion of Hong Kong’s once high degree of autonomy and its freedoms.
The $500-million superyacht Nord, allegedly owned by Mordashov, moored in Hong Kong’s harbour on Wednesday following a weeklong journey from the Russian city of Vladivostok.
Mordashov is one of Russia’s richest men, with an estimated wealth of about $18 billion. He also is the main shareholder and chairman of Severstal, Russia’s largest steel and mining company. Mordashov has tried to challenge the sanctions against him in European courts.
U.S. and European authorities have seized over a dozen yachts belonging to sanctioned Russian tycoons to prevent them from sailing to other ports unaffected by the sanctions. So Russian oligarchs have begun docking their yachts at ports in places like Turkey, which has maintained diplomatic ties with Russia since the war started.
The Nord measures 141.6 meters (464.6 feet), and has two helipads, a swimming pool and 20 cabins. It is operating under a Russian flag.
Beijing sets foreign policy for Hong Kong and has demurred from participating in sanctions against Russia for its attack on Ukraine.
Britain handed control over its colony Hong Kong to China in 1997, promising to respect its semi-autonomous status as a separate economic and customs territory. The semi-autonomous city’s status as an international business hub and the financial centre has suffered in recent years after Beijing imposed a strict national security law on the town, aimed primarily at stamping out dissent following months of antigovernment protests in 2019.
Critics say the security law, which sometimes allows suspects to be transferred to mainland China for trial in its opaque legal system, could threaten Hong Kong’s rule of law.
Following the law’s passage in 2020, the United States sanctioned Lee, then Hong Kong Chief Executive Carrie Lam and other Hong Kong and mainland Chinese government officials, for “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly.”
Lee blasted the ban on personal and official travel to the U.S. and access to the American financial system.
He was responding to a question of whether he is paid in cash, as was the case for Lam, who was also placed under U.S. sanctions that limit the ability of those designated for such penalties to transfer funds across national boundaries or convert them into different currencies.
“The second thing about the so-called sanction imposed on people in Hong Kong without justification, it is a very barbaric act, and I’m not going to comment on the effect of such barbaric act, because officials in Hong Kong do what is right to protect the interests of the country, and the interests of Hong Kong, so we will just laugh off the so-called sanctions,” Lee said.
