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The US has warned that Hong Kong risked becoming a haven for Russian oligarchs after the Chinese territory said it would not enforce western sanctions on a superyacht owned by billionaire Alexei Mordashov that has docked in the city’s waters.
The US state department also said Hong Kong’s business outlook could be further clouded by its government’s inaction as the former British colony’s “reputation as a financial centre depends on adherence to international laws and standards”.
The saga unfolded as the 142-metre Nord, one of the world’s most luxurious superyachts built by German company Lürssen, entered Hong Kong waters on Wednesday . The $500mn vessel has been moored west of the city’s Victoria Harbour.
The yacht, which sails under the Russian flag, left Vladivostok last week, according to Marine Traffic, a tracking website. Nord was described by the studio that designed it as “a warship wearing a tuxedo” as it boasts two helipads, a pool and a fleet of tenders.
Mordashov, one of Russia’s richest men, made his fortune through the steel group Severstal. Following Russia’s invasion of Ukraine, the US, EU and UK imposed sanctions on Mordashov and other oligarchs.
“Certain countries may impose unilateral sanctions against certain places on the basis of their own considerations,” a spokesperson for the city’s marine department said on Friday.
“The Hong Kong [government] does not implement, nor do we have the legal authority to take action on, unilateral sanctions imposed by other jurisdictions.”
The US said the statement by the Hong Kong department might encourage oligarchs who are subject to sanctions to live in the city. “The possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment,” a US state department spokesperson told the Financial Times.
Lodestone, a Hong Kong-based yacht brokerage that provides support services to superyachts, is listed as the agent for the Nord in Hong Kong. An employee confirmed the listing.
Ryan Mitchell, an assistant professor at the Chinese University of Hong Kong with a focus on international law, said it would “raise risks considerably if Hong Kong became widely seen as a popular destination for the assets of sanctioned Russian corporations or individuals”.
“Hong Kong-based corporations or individuals should be aware that they could later face secondary sanctions if they enter into business transactions or relationships with Russian sanction targets,” he added.
Maintenance, insurance and other financial services provided to the yacht could involve institutions that operate in more than one state. This could “give the option to the sanctioning states to intervene with these transactions not directly in Hong Kong but along the chain of payments”, said Michael Tsimplis, a law professor from the City University of Hong Kong.
A visiting pleasure yacht is not allowed to stay in Hong Kong waters for more than 182 consecutive days unless it is properly licensed with local authorities, according to the marine department.
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Yacht owned by sanctioned Russian tycoon docks in Hong Kong
In this image taken from a video footage run by TVB, the megayacht Nord, worth over $500 million, is seen off Hong Kong Island outside Victoria Harbour on Friday, Oct. 7, 2022. The superyacht connected to Russian tycoon Alexey Mordashov has anchored in Hong Kong this week amid moves by Western governments to seize yachts connected to sanctioned Russian businessmen. (TVB via AP)
In this image taken from a video footage run by TVB, the megayacht Nord, center, worth over $500 million, is seen off Hong Kong Island outside Victoria Harbour on Friday, Oct. 7, 2022. The superyacht connected to Russian tycoon Alexey Mordashov has anchored in Hong Kong this week amid moves by Western governments to seize yachts connected to sanctioned Russian businessmen. (TVB via AP)
In this image taken from video footage run by TVB, the megayacht Nord, left, worth over $500 million, is seen off Hong Kong Island outside Victoria Harbour on Friday, Oct. 7, 2022. The superyacht connected to Russian tycoon Alexey Mordashov has anchored in Hong Kong this week amid moves by Western governments to seize yachts connected to sanctioned Russian businessmen. (TVB via AP)
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HONG KONG (AP) — A superyacht connected to sanctioned Russian tycoon Alexey Mordashov has anchored in Hong Kong as Western governments move to seize yachts connected to Russian businessmen.
The megayacht Nord, worth over $500 million, arrived in Hong Kong on Wednesday afternoon after traveling for over a week from Vladivostok, Russia, its last port of call.
Mordashov has estimated wealth of over $18 billion, according to a Bloomberg estimate. He is the main shareholder and chairman of Severstal, Russia’s largest steel and mining company.
He was sanctioned by the U.S., the United Kingdom and the European Union in February after Russia invaded Ukraine. Mordashov has since attempted to challenge the sanctions against him in European courts.
A Marine Department spokesperson was quoted in the South China Morning Post as saying Hong Kong is not obliged to enforce unilateral sanctions imposed by other jurisdictions.
U.S. and European authorities have seized over a dozen yachts belonging to sanctioned Russian tycoons to prevent them from sailing to other ports that are not affected by the sanctions. Russian oligarchs have begun docking their yachts at ports in places like Turkey , which has maintained diplomatic ties with Russia since the war began.
The Nord, which measures 141.6 meters (464.6 feet), has two helipads, a swimming pool and 20 cabins. The yacht is currently sailing under a Russian flag.
Hong Kong dismisses U.S. sanctions on Russian-owned superyacht
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Hong Kong leader John Lee said Tuesday that he will implement only United Nations sanctions, not U.S. ones, after a superyacht allegedly connected to a Russian tycoon docked in the city.
Lee’s statement came days after the U.S. warned that Hong Kong’s status as a financial center could be affected if it acts as a haven for sanctioned individuals.
The yacht’s alleged owner, Alexey Mordashov, is believed to have close ties to Russian President Vladimir Putin and was sanctioned by the U.S. , Britain and the European Union in February after Russia’s invasion of Ukraine. Hong Kong authorities have said that they do not implement sanctions imposed by other governments.
“We cannot do anything that has no legal basis,” Lee told reporters. “We will comply with United Nations sanctions — that is our system, that is our rule of law.”
A U.S. State Department spokesperson said in a statement Monday that “the possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment.”
The spokesperson also said that the city’s reputation as a financial center “depends on its adherence to international laws and standards” and that U.S. companies “increasingly view Hong Kong’s business environment with wariness” because of an erosion of the city’s once-high degree of autonomy and freedoms .
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The $500-million superyacht Nord moored in Hong Kong’s harbor 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 more than a dozen yachts belonging to sanctioned Russian tycoons to prevent them from sailing to ports where the sanctions are not recognized or enforced. Russian oligarchs have begun docking their yachts at ports in countries such as Turkey, which has maintained diplomatic ties with Russia since the war began.
The Nord measures 465 feet and has two helipads, a swimming pool and 20 cabins. It is operating under a Russian flag.
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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 city’s status as an international business hub and financial center has suffered in recent years, particularly after Beijing imposed a tough national security law on the city, aimed primarily at stamping out dissent following months of anti-government protests in 2019
Following passage of the law in 2020, the U.S. 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.
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He was asked whether he is paid in cash as Hong Kong’s leader, as was the case for Lam, since the U.S. sanctions limit their ability to transfer funds across national boundaries or convert them into different currencies.
“It is a very barbaric act,” Lee said, referring to the sanctions. “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.”
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A $500 million superyacht anchored near Hong Kong reveals the world’s unwillingness to enforce the U.S.’s ‘heavy-handed’ sanctions against Russia
Hong Kong is captivated by a 466-foot-long superyacht anchored one-and-a-half miles off the city’s shoreline. The $500 million yacht named Nord , reportedly owned by sanctioned Russian billionaire Alexei Mordashov, floats in plain view in the city’s harbor.
The superyacht—the length of one-and-a-half football and featuring a helicopter hangar and swimming pool—has become the latest flashpoint in Hong Kong’s relations with Western governments. The U.S. is warning that the Chinese city’s tolerance of the Nord threatens its status as a financial center, while Hong Kong’s (U.S.-sanctioned) leader is saying officials will “ laugh off ” Western threats.
But the Nord ’s presence in Hong Kong shows a weak spot in the sanctions the West has levied against Russian individuals and companies—namely, that much of the world is still able, if not willing, to let Russians in.
“The West’s impressive unity on the sanctions front has so far not been met with similar enthusiasm among most non-Western states, particularly in Asia and Africa,” including many governments that have condemned Russia in the United Nations General Assembly, says Ryan Mitchell, a professor of international law at the Chinese University of Hong Kong .
Many non-Western countries have pre-existing economic ties with Russia, which means sanctions present a “relatively greater cost,” Mitchell says. Countries throughout the world continue to rely on Russian commodities and goods or hope to attract spending and investment from Russian individuals and companies. That means many non-Western countries, including many that sympathize with Ukraine’s plight, are unwilling to accept economic pain to support the U.S. position on sanctions.
Sitting off the coast
The Nord first arrived in Hong Kong last week, when eagle-eyed observers noticed that the yacht had anchored on the western end of Hong Kong’s Victoria Harbor.
At first, Hong Kong authorities gave a muted response to the yacht’s presence in the city. The local marine department said it would not , and in fact could not, enforce “unilateral sanctions imposed by other jurisdictions” like the U.S., while stating that the city would cooperate with sanctions imposed by the United Nations Security Council.
The city’s rhetoric has hardened since then, as the yacht became another source of tensions between the U.S and Hong Kong (and, by extension, mainland China).
The U.S. accused Hong Kong of acting as a “safe haven” for those trying to flee sanctions, which “further calls into question the transparency of the business environment.”
In response, China’s foreign ministry called the U.S. comments “ misleading .” A spokesperson said that “Hong Kong’s reputation and status as an international financial center are globally recognized and brook no vilification.”
On Tuesday, Hong Kong Chief Executive John Lee said the city would not enforce Western sanctions on the Nord yacht. Lee, whom the U.S. government sanctioned over his role in the city’s crackdown on social unrest in 2019, said officials would “laugh off the so-called sanctions,” and called other U.S. measures towards Hong Kong officials a “barbaric act.”
In Mitchell’s view, Hong Kong has little choice but to openly refuse U.S. requests to enforce sanctions. The city “acknowledging the legitimacy of unilateral sanctions (i.e., those by one or more states acting outside of UN mechanisms) would contradict a key pillar of China’s views on international law and its enforcement,” Mitchell says. Beijing argues that Western sanctions against Moscow are illegal and counterproductive and has said it would continue to engage in “ normal trade cooperation ” with Russia.
That stance toward Western sanctions may encourage Russian individuals and companies to regard Hong Kong as a safe spot to park assets and raise capital. Russian companies are already inquiring about the possibility of basing operations in Hong Kong, including changing their registration or listing on the city’s stock exchange, reports Bloomberg .
Yet banks in Hong Kong may be wary of engaging with Russian organizations, despite the city’s official refusal to enforce U.S. sanctions. The U.S. could impose secondary sanctions on companies or individuals that, in its view, help blacklisted entities evade sanctions, effectively barring banks from the U.S. dollar-based financial system.
Even Beijing is concerned about the threat of secondary sanctions, with state-owned companies scaling back their presence in Russia for fear of U.S. regulatory scrutiny.
Not just Hong Kong
While other countries may be less overt than Hong Kong in declining to enforce sanctions, “various other jurisdictions” have adopted the same position, says Mitchell.
Russians have flocked to the United Arab Emirates, and specifically its financial hub of Dubai, to escape the scrutiny they face in places like Europe. Two Russian yachts popped up in Emirati ports in June this year. Russians snapped up property , and trading firms dealing in Russian commodities opened offices in Dubai to avoid European sanctions sanctions.
Officials in U.S. President Joe Biden’s administration have, at times, shown frustration with the UAE’s defiance of sanctions on Russia. “I am not happy at all with [the UAE’s] record at this point,” said Barbara Leaf, Biden’s top Middle East diplomat, in a June congressional hearing, adding that the White House plans to “drive a better alignment, shall we say, of effort.”
Yet the UAE appears to be quite comfortable with its neutral status. On Tuesday, Russian President Vladimir Putin praised the country after talks with UAE president Sheikh Mohamed Bin Zayed Al Nahyan. Putin said the UAE’s neutral position “allows us to use your influence for moving toward resolving the situation” in Ukraine.
Other countries throughout Asia have hesitated to isolate Russia entirely. India continues to purchase Russian energy and weapons, with Indian foreign minister Subrahmanyam Jaishankar blaming the West’s refusal to sell arms to India as the reason for New Delhi’s “long standing relationship with Russia.”
Western allies are still engaging with Russia, too. Turkey, a member of NATO, has refused to join the West’s sanctions against Russia.
And even Japan, which sanctioned Russian banks and froze the country’s foreign reserves alongside Western nations, has wavered on abandoning Russia completely. Japanese companies have maintained a presence on Russian energy projects, like the Sakhalin-1 and 2 gas refineries in the country’s far east. Japanese carmaker Nissan only left the Russian market on Tuesday, seven months after the Ukraine invasion began.
Global resistance to completely isolate Russia is a stumbling block for Ukraine’s allies as they try to maintain economic pressure on Moscow and end the invasion. New sanctions would mean persuading more countries, already skeptical of sanctions, to do even more.
“Many view U.S. sanctions practices in general as overly heavy-handed,” Mitchell said.
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Hong Kong leader says "no legal basis" to act on Russian superyacht
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Superyacht struggle: Is Hong Kong now safe harbor for sanctioned Russians?
HONG KONG — A superyacht linked to a Russian oligarch has produced the latest ripple of tensions between the U.S. and China after it moored in Hong Kong’s harbor.
Nord, a $500 million vessel connected to sanctioned tycoon Alexey Mordashov , has been docked in the city since last Wednesday after it made the weeklong journey from the Russian city of Vladivostok.
Measuring 464.6 feet, it has two helipads, a swimming pool and 20 cabins, as well as a gym, a sauna and a cinema.
Hong Kong said Tuesday it would not seize the superyacht, defying Washington and raising fears that the global financial hub could become a haven for people sanctioned over the war in Ukraine .
Mordashov, one of Russia’s richest men, was sanctioned by the U.S., the United Kingdom and the European Union in February, days after Russia invaded Ukraine. His company, Severstal, did not immediately respond to a request for comment about the Nord.
Hong Kong’s leader, John Lee, said Tuesday that the city had no legal basis to act on a Russian oligarch’s superyacht in the city.
“We will comply with United Nations sanctions,” Lee said at a news conference. “We cannot do and we will not do anything that has no legal basis.”
Russia, a permanent member of the United Nations Security Council , has vetoed all attempts to take action on Ukraine, which could include sanctions against people like Mordashov.
The State Department said in a statement Monday that it would “strongly encourage all jurisdictions to take actions under their domestic authorities to help implement sanctions imposed by the United States and more than 30 other countries.”
It added that “Hong Kong’s reputation as a financial center depends on adherence to international laws and standards” and that “the possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment.”
U.S. and European authorities have seized over a dozen yachts belonging to sanctioned Russian tycoons to prevent them from sailing to other ports that are not affected 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 began.
However, some experts predict that China will not stop Russians sanctioned by the West from registering in Hong Kong as the once strong financial hub struggles to compete in the global market, leading to fears that it will become a safe haven for Russian oligarchs trying to evade Western sanctions.
“China is trying to restore and rebuild investors’ interest in Hong Kong,” Yun Sun, the director of the China program at the Stimson Center, a nonpartisan think tank in Washington, said by email Tuesday.
The most important consideration for Hong Kong’s authorities will be whether the city’s banks will be denied access to the U.S. financial market as a result, she said.
“Secondary sanction is more a practical matter rather than a legal or moral matter, as Hong Kong banks handling Russian transactions could be sanctioned,” Sun added. “That is the most important consideration for Hong Kong.”
China’s Foreign Affairs office in Hong Kong accused the State Department in a statement Monday of “smearing” the city's business environment. It also referred to a statement its Marine Department issued Sunday, which said that Hong Kong’s “reputation and status as an international financial center are globally recognized” and that the city maintained a “free, open and law-based business climate.”
Lee laughed off U.S. sanctions Tuesday, calling them “barbaric.” He was himself sanctioned by the U.S. in 2020 for his role in implementing a national security law that has been criticized by the U.N. -appointed human rights committee and rights organizations.
Chinese and Hong Kong officials have repeatedly said the law was vital to restore stability after the city was rocked for months by sometimes violent anti-government and anti-China protest s in 2019.
It is unclear how much Russian money has flocked to Hong Kong because of Western sanctions. The Hong Kong Marine Department did not respond to a request for comment on the number of Russian yachts in its harbors.
China has not backed global sanctions against Russia, and President Xi Jinping has said little about the conflict in recent months. However, officials have repeatedly urged “all parties” involved in the war to engage in diplomatic negotiations .
“We will have to see how much money eventually flocks to Hong Kong and how they are being handled in order to assess the impact on U.S.-China relations,” Sun said.
Hong Kong leader says ‘no legal basis’ to seize Russian megayacht
John Lee says financial hub will only enforce UN sanctions after yacht linked to Russian tycoon anchors in city.
Hong Kong’s leader has said the financial hub will not uphold sanctions with “no legal basis” after a superyacht linked to a sanctioned Russian oligarch was allowed to anchor in the city.
Hong Kong Chief Executive John Lee said on Tuesday that Hong Kong would comply with United Nations sanctions but would not act on measures imposed by individual countries.
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“That is our system, that is our rule of law,” Lee said during a regular press conference. “We cannot do and will not do anything that has no legal basis.”
Lee, who is himself under United States sanctions over his role in cracking down on dissent in Hong Kong, made the remark after the US State Department warned that harbouring the Nord, a megayacht believed to be owned by Russian tycoon Alexey Mordashov, could harm the city’s reputation as an international financial centre.
Mordashov, a billionaire steel magnate, is among several wealthy Russians sanctioned by the US, the United Kingdom and the European Union over their alleged links to the Kremlin following Russia’s invasion of Ukraine.
Mordashov, the chairman of Russia’s largest steel company Severstal, has challenged the sanctions in European courts and insisted he has nothing to do with “the current geopolitical tensions”.
As permanent members of the UN Security Council, both China and Russia have a veto over international sanctions.
The Nord, which has two helipads and a swimming pool and is worth an estimated $500m, has been in the semi-autonomous Chinese territory since Wednesday following visits to the Maldives, Seychelles and Vladivostok.
Officials in the Chinese territory earlier said they would not enforce sanctions imposed by individual countries or blocs following the megayacht’s arrival in the city.
While US and European authorities have seized more than a dozen yachts believed to be owned by sanctioned Russian tycoons, some luxury yachts have travelled to jurisdictions with friendlier ties with Russia to avoid seizure, including Turkey.
China has declined to condemn Russia’s war in Ukraine and has criticised Western-led sanctions against the country as an example of “long-arm jurisdiction that have no basis in international law”.
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What is Hong Kong role in Russia's sanction evasion?
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Chinese yuan. Public domain image from Flickr user @ mussikatz
Hong Kong’s tie with Russia has caught international media attention after a superyacht owned by Alexei Mordashov, a Russian oligarch and ally of Russian President Vladimir Putin, was spotted in the city in early October 2022.
And the latest expose indicated that Russian-affiliated corporations in Hong Kong had evaded western sanctions by exporting chips and even military drones to Russia.
“No obligation to sanction Russia”
While Alexei Mordashov was sanctioned by the US, European Union, and the UK in response to Russia's invasion of Ukraine , the Hong Kong government said that it does not have the legal obligation to follow the “unilateral sanctions.”
A local research group later found out that between February to October 2022, 35 companies that do business with Russia had been newly registered in Hong Kong. This figure is more than double compared with the 13 newly registered entities during the same period in 2021.
The trend raises questions about how Russian firms are circumventing western sanctions via Hong Kong.
In fact, just a few months ago, in July, Nord Axis, a new trading firm that was registered in Hong Kong nine days before Russia invaded Ukraine, completed the acquisition of global commodities trader Trafigura’s 10 percent stake in Russia’s major Vostok Oil project in Siberia. Due to western sanctions, Trafigura started cutting ties with its Russian business in April 2022.
As the Russian yacht saga continued to grow amid the US government's warning of sanction enforcement, major banks in Hong Kong, in particular, Hongkong and Shanghai Banking Corporation (HSBC), informed its Russian clients in the city that their investment banking service would be suspended, although personal banking remained unaffected.
The yacht eventually left Hong Kong on October 20 after harboring for about two weeks. But the tie between Hong Kong and Russia remains in question.
In recent days, a scandal emerged — a joint investigation conducted by Reuters and London-based security and defense think tank Royal United Services Institute (RUSI) indicated that Russia managed to import semiconductor chips that can be used in both electronics and weapons via global trading centers, including Hong Kong, Turkey, and Estonia.
Soon after Russia invaded Ukraine on February 24, 2022, the US government imposed a ban forbidding US companies from providing chips to Russia. Yet, until October 31, Russia had imported USD 2.6 billion in electronics, and approximately one-third of these came from western manufacturers. Among these imports, chips produced by America’s Intel Corp, Advanced Micro Devices Inc (AMD), Texas Instruments Inc and Analog Devices Inc., and Germany’s Infineon AG had been appropriated for military use.
Reportedly, one of the most important suppliers to Russia’s drone program is a Hong Kong-based exporter, Asia Pacific Links Ltd, which is owned by a Russian expatriate with mainland Chinese business ties.
After the expose, China reportedly banned the export of its homebrew military grade loongson chips to Russia and other countries.
Hong Kong’s role in the China-Russia alliance
An unintended consequence of Russia's invasion of Ukraine is that China and Russia have strengthened their strategic partnership. China did not join other western countries in condemning Russia’s aggressive military operation in Ukraine; instead, amid western sanctions on Russia, China declared a no-limit friendship with Russia with “no forbidden zone.”
As a result of the SWIFT ban, a sanction imposed by members of the European Union and NATO that restricts Russian access to the world’s largest financial transaction network of more than 11,000 banks, Russia shifted to China’s Cross-Border Interbank Payment System (CIPS) to settle the business payments with business partners in China and other ASEAN countries.
In 2022, Sino-Russian trade had increased by 33 percent and reached a historically high trading volume of USD 153.9 billion in the first ten months. In particular, Russian gas supplies to China had increased by 173 percent in the first ten months of 2022, according to RT, Russia's state-controlled TV network.
RMB has thus become Russia's reserve currency, with a volume of up to USD 70 billion . The Russian central bank also set up an open-ended fund for investing in a dozen Chinese equities listed on the Hong Kong stock exchange using RMB and Hong Kong dollars.
With the rollout of digital yuan (eCNY) by China’s central bank, China expects more international transactions would settle the payment in RMB through CIPS and bypass the US-dominated payment network. Concurrently, Russia sets to legalize the use of cryptocurrencies for cross-border payments.
As a key platform for China’s Belt and Road Initiatives, Hong Kong is the world’s largest offshore RMB trading center , where overseas corporations can settle their payment with their mainland Chinese business partners in HK using RMB. In July, Hong Kong's Currency Swap Agreement with China’s central bank was enhanced as a permanent set up and Hong Kong Monetary Authority's RMB reserve was expanded from 500 to 800 billion yuan.
For countries, including India, Brazil, and Turkey, which have not joined western sanctions against Russia, Hong Kong would be one of the most convenient trading centers for settling business payments using RMB as an alternative to US dollars. India traders, for example, have picked up RMB and Hong Kong dollars in settling their business payments with Russian counterparts.
Some local think tanks, such as Chan Man Hung, director of One Belt One Road Research Center at Chu Hai College of Higher Education in Hong Kong, saw the economic opportunities amid Russia-Ukraine Crisis and urged the government to attract more Russian-affiliated corporations to expand their market via Hong Kong.
The Hong Kong authorities do seem to keep Russian capital flowing into the city. The fact that the London Metal Exchange (LME), a subsidiary of the Hong Kong Stock Exchange, refuses to ban Russian metal from trading and storing in its system has attracted some scrutiny.
The latest exposure of Hong Kong-based corporations’ involvement in exporting semiconductor chips to Russia may also be related to the city’s business strategy. Hong Kong exiled activist spotted the trend back in October:
Regardless of intl outcry, Hong Kong Trade Development Council had a now-deleted post encouraging businesses to import computer keyboards into Russia. No wonder Hong Kong has become a shelter for some sanctioned Russian Oligarchs. These behaviors should be exposed and shamed. pic.twitter.com/NxxzgAwBuf — Nathan Law 羅冠聰 (@nathanlawkc) October 29, 2022
Even western sanctions do provide opportunities for strengthening Sino-Russia economic ties and RMB’s status as a global currency; as an international financial center where the banking infrastructure is highly dependent on the SWIFT system, the risk for Russian-affiliated trading in Hong Kong is huge. And overseas Hong Kong activist groups are watching closely:
CE John Lee says #HongKong gov't won't recognize US sanctions against Russia, raising the possibility HK could become a haven for sanctions evasion. HK gov’t says global finance leaders at the summit are strong supporters. Do they also support refusal to recognize US sanctions? — Hong Kong Democracy Council (@hkdc_us) October 17, 2022
Yet, in the long run, with the internationalization of RMB and the development of eCNY, it will be interesting to see if China CIPS can become an alternative finance transaction network that undermines the EU and NATO’s sanctions against authoritative regimes.
This post is part of RuNet Echo, a Global Voices project to interpret the Russian language internet. All Posts · Read more »
- Eastern & Central Europe
- North America
- Western Europe
- Hong Kong (China)
- China's authoritarian tipping point
- Russia invades Ukraine
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