On November 27, 2019, President Trump signed two bills into law that increase US sanctions and export control restrictions as they relate to China. The bills, approved in response to recent political protests in Hong Kong, had near unanimous support from the US Congress. President Trump previously expressed concerns about the legislation while in the midst of negotiating a trade deal with China but ultimately signed both bills in the hopes that the “Leaders and Representatives of China and Hong Kong will be able to amicably settle their differences leading to long term peace and prosperity for all.”
S. 1838, the Hong Kong Human Rights and Democracy Act of 2019
S. 1838, the “Hong Kong Human Rights and Democracy Act” requires the President to impose sanctions on non-US persons determined to be responsible for committing acts that violate internationally recognized human rights in Hong Kong or the extrajudicial rendition, arbitrary detention, or torture of any person in Hong Kong. The sanctions required to be imposed on such persons include asset blocking (or designation on the List of Specially Designated Nationals and Blocked Persons (“SDN List”)) and restrictions on admissibility into the United States.
S. 1838 provides that the civil and criminal penalties authorized under the International Emergency Economic Powers Act (“IEEPA”) shall apply to violations of S. 1838. See our blog post on the current maximum civil monetary penalties under IEEPA and other US sanctions authorities here.
S. 1838 also requires the submission of annual reports to Congress by the Commerce, State, and Treasury Departments on violations of US export controls and sanctions laws taking place in Hong Kong, including:
- Identification of items reexported from Hong Kong in violation of US export controls and sanctions laws;
- Assessment of whether certain sensitive dual-use items subject to US export controls laws are being transshipped through Hong Kong and being used to develop certain surveillance technologies;
- Assessment of whether China is using Hong Kong’s status as a separate customs territory to import items into China in violation of US export controls, which will inform whether Hong Kong’s Most Favored Nation status protecting the city from tariffs imposed on China should be renewed;
- Assessment of whether UN sanctions are being adequately enforced in Hong Kong; and
- A description of the types of goods and services transshipped or reexported through Hong Kong in violation of UN sanctions targeting North Korea and Iran or relating to international terrorism, narcotics trafficking, or the proliferation of weapons of mass destruction or that otherwise present a threat to the national security, foreign policy, or economy of the United States.
Finally, the bill includes a “sense of Congress” provision, which while not binding on the Administration, suggests the US Department of Commerce should consider “appropriate adjustments” to US export controls with respect to Hong Kong to “prevent the supply of crowd control and surveillance equipment that could be used inappropriately in Hong Kong.”
S. 2710, To Prohibit the Commercial Export of Covered Munitions Items to the Hong Kong Police Force
Separately, S. 2710 prohibits the issuance of licenses to export certain covered munitions items to the Hong Kong Police. The covered munitions items include: tear gas, pepper spray, rubber bullets, foam rounds, bean bag rounds, pepper balls, water cannons, handcuffs, shackles, stun guns, and tasers.