China Sanctions Bill On Hong Kong Law Approved by Senate

The Senate Thursday approved a bipartisan measure that would penalize banks doing business with Chinese officials involved in the national security law the country is seeking to impose on Hong Kong.

The measure sponsored by Democrat Chris Van Hollen of Maryland and Republican Pat Toomey of Pennsylvania was approved by voice vote. Companion legislation has been introduced in the House with bipartisan support; it would need to pass that chamber before it reaches President Donald Trump’s desk.

“The mandatory sanctions established in this bill will punish those in China who seek to undermine Hong Kong’s autonomy or erode the basic freedoms promised to Hongkongers,” Toomey said in a statement.

Congress has been increasingly assertive in trying to pressure China as tensions escalate between the world’s two largest economies. Earlier this month, Trump signed legislation aimed at punishing Chinese officials for oppression of Uighurs and members of other Muslim minority groups.

Van Hollen and Toomey combined their legislation with a symbolic resolution sponsored by Republican Senator Josh Hawley of Missouri that condemns the Chinese government for breaking its obligations under the 1984 Sino-British Joint Declaration and the Hong Kong Basic Law. They are planning to also file it as an amendment to the 2021 National Defense Authorization Act, which is a must-pass piece of legislation for Congress every year and gives the legislation a stronger chance of making it into law.

In making the case for his bill, Van Hollen took a swipe at Hawley’s resolution and said the sanctions legislation would have actual consequences for the Chinese Communist Party.

“From the perspective of the government of China, passing a resolution as the consequence to their action is hardly going to be taken seriously in Beijing,” Van Hollen said.

The bill would require the State Department to report to Congress every year about officials who seek to undermine the “one country, two systems” model that applies to Hong Kong. It gives the president the power to seize the assets of and block entry to the U.S. for those individuals.

In that respect, it is similar to the Hong Kong Human Rights and Democracy Act passed by Congress last year and signed into law by Trump. But it goes a step further, applying those same sanctions to financial institutions that work with Chinese officials found to be interfering in Hong Kong affairs.

The Trump administration sought changes to the original language before the bill could advance in the Senate, Van Hollen said.

The amended legislation would apply sanctions against financial institutions only if a bank knowingly does business with an official who has already been sanctioned. The changes are intended to keep the penalties from capturing a broad swath of U.S. companies, according to an administration official familiar with the discussions. It gives banks a chance to know what entities are on the sanctions list before penalties are imposed, the person said.

The bill includes a provision that allows Congress to overrule the president should the administration decide to unilaterally lift sanctions on someone.

Toomey thanked Treasury Department officials “with whom we worked extensively to get to the point where they are in agreement with this legislation.”

Some senators at a recent hearing asked whether unilateral U.S. sanctions would have any effect on the situation in the city, and suggested such an approach might actually backfire.