Hong Kong’s police credit union is moving its estimated HK$11 billion (US$1.4 billion) in assets from foreign banks to Chinese-based ones amid concerns over sanctions imposed by the United States over the national security law, the Post has learned.
The union on Monday informed its 45,000 members, which include current and retired police officers, that it had been moving the assets to mainland banks in the city since May, as they fear their assets could be compromised.
The revelation came as the Donald Trump administration last week imposed economic sanctions on 11 local and mainland Chinese officials, including Hong Kong leader Carrie Lam Cheng Yuet-ngor, as part of a series of measures designed to punish Beijing for the sweeping security law it imposed on the city this summer.
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Among those targeted were retired police commissioner Stephen Lo Wai-chung and his successor, Chris Tang Ping-keung.
Enacted in June, the national security law criminalises a broad range of behaviours under the four categories of secession, terrorism, subversion and collusion with a foreign power.
Under the sanctions brought by the US Treasury Department’s Office of Foreign Assets Control (OFAC), the US-based assets of individuals or entities are blocked and Americans and businesses are generally prohibited from dealing with them.
We have been gradually withdrawing or relocating most of our assets and investments from foreign banks to multiple Chinese-based banks. Such work is still ongoing
Hong Kong Police Credit Union note to members
In a letter to membership obtained by the Post, the Hong Kong Police Credit Union said its members had expressed concerns over the union’s assets as the US government “has been taking a series of measures against the city’s administration”.
“Since late May, the union has arranged preparation work for the above-mentioned situation. We have been gradually withdrawing or relocating most of our assets and investments from foreign banks to multiple Chinese-based banks. Such work is still ongoing,” read the letter.
The credit union was established in 1982 to promote financial management among the force’s members, allowing them to save money on a regular basis and earn dividends in return. It also offers officers a variety of loan schemes at relatively low interest rates.
National security law: Hong Kong’s financial institutions gripped by anxiety over United States sanctions
As of December 2019, the union held HK$10.59 billion of shareholder capital, with total assets valued at HK$11.56 billion.
The union added in Monday’s letter that the city’s economy was expected to be “extremely frustrating” due to months of violent social unrest, the pandemic and ongoing political tension between the US and China.
The union’s website has been offline since Tuesday, citing maintenance.
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After Trump signed the Hong Kong Autonomy Act into law last month, paving the way for sanctions, HSBC said it was inclined to comply, fearing secondary penalties for non-US institutions “determined to have conducted a significant transaction for any individual or entity subject to primary sanctions”.
Last month, the top adviser to Hong Kong’s leader confirmed his account at a US bank had been closed earlier this year. Bernard Chan, convenor of Lam’s Executive Council, said he believed it was because he was deemed to be a “politically exposed person”.
The Post has approached Bank of China, the largest Chinese bank in Hong Kong, for comment.
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More from South China Morning Post:
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