Hong Kong Special Status Suspended by Commerce Dept.

Hong Kong Special Status

Commerce Department regulations that gave Hong Kong Special Status have been suspended.  U.S. Secretary of Commerce Wilbur Ross made this announcement on June 29, 2020.  This change will effect the export of sensitive U.S. technologies to Hong Kong.  It will also effect the availability for export license exceptions. Mr. Ross also mentioned that further actions to eliminate the differential treatment for Hong Kong are under considerations and urged the Chinese government to “fulfill the promises it has made to the people of Hong Kong and the world”.

Action a Response to Chinese Security Measures

The Chinese Communist Party has imposed severe security measures of late.  These actions are seen to undermine the autonomous status of Hong Kong.  As such, it will make it impossible to ensure that exports are not diverted to China’s People’s Liberation Army or Ministry of State Security.

Hong Kong has been a major international financial hub, but many experts see China’s recent actions endangering its future.   A new national security law imposed by China on June 28th will severely crack down on crimes of secession, subversion, terrorism, and collusion.  The law will allow for the creation of a national security agency in the city to take actions beyond existing Hong Kong law.

Hong Kong’s Special Status and the International Business Community

Members of the international business community have trusted Hong Kong as a major conduit for global finance and trade.  This was largely due to its autonomy from China’s authoritarian legal and economic systems.  With that firewall now effectively destroyed the future of Hong Kong’s trade legacy is in question.  The European Union (EU) has already stated its concerns about the conformity of the new law with Hong Kong’s Basic Law and with China’s international commitments.  The European Union considers it essential that the existing rights and freedoms of Hong Kong residents are fully protected.  How the rest of the world reacts to this crisis will very likely change the dynamics of trade in the region.  It will be important therefore, to continue monitoring this situation.

CVG Strategy Export Compliance Expertise

Export compliance is an extremely dynamic area of late.  Because of this, keeping up with changing laws and regulations can be challenging for businesses of all sizes.  CVG Strategy export compliance consultants can help.  We have extensive experience in Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR).  Our experts can help establish programs for compliance, conduct audits, and provide training.  We also provide quick on line answers for your ITAR questionsContact Us today to see how we can help.

Kevin Gholston

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