Hong Kong Autonomy Act

I 116TH CONGRESS 2D SESSION H. R. 7083 To impose sanctions with respect to foreign persons involved in the erosion of certain obligations of China with respect to Hong Kong, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 1, 2020 Mr. SHERMAN (for himself, Mr. YOHO, Mrs. CAROLYN B. MALONEY of New York, Mr. CURTIS, Mr. CONNOLLY, Mr. BARR, Mr. SUOZZI, Mr. RESCHENTHALER, and Ms. SPANBERGER) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on the Judiciary, Financial Services, Ways and Means, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the juris- diction of the committee concerned A BILL To impose sanctions with respect to foreign persons involved in the erosion of certain obligations of China with respect to Hong Kong, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Hong Kong Autonomy Act’’. 5 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7083 IH (b) TABLE OF CONTENTS.—The table of contents for 1 this Act is as follows: 2 Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. Findings. Sec. 4. Sense of Congress regarding Hong Kong. Sec. 5. Identification of foreign persons involved in the erosion of the obliga- tions of China under the Joint Declaration or the Basic Law and foreign financial institutions that conduct significant transactions with those persons. Sec. 6. Sanctions with respect to foreign persons that contravene the obliga- tions of China under the Joint Declaration or the Basic Law. Sec. 7. Sanctions with respect to foreign financial institutions that do business with foreign persons that contravene the obligations of China under the Joint Declaration or the Basic Law. Sec. 8. Waiver, termination, and congressional review process. Sec. 9. Rule of construction. SEC. 2. DEFINITIONS. 3 In this Act: 4 (1) ALIEN; NATIONAL; NATIONAL OF THE 5 UNITED STATES.—The terms ‘‘alien’’, ‘‘national’’, 6 and ‘‘national of the United States’’ have the mean- 7 ings given those terms in section 101 of the Immi- 8 gration and Nationality Act (8 U.S.C. 1101). 9 (2) APPROPRIATE CONGRESSIONAL COMMIT- 10 TEES AND LEADERSHIP.—The term ‘‘appropriate 11 congressional committees and leadership’’ means— 12 (A) the Committee on Armed Services, the 13 Committee on Banking, Housing, and Urban 14 Affairs, the Committee on Foreign Relations, 15 the Committee on Homeland Security and Gov- 16 ernmental Affairs, the Committee on the Judi- 17 ciary, the Select Committee on Intelligence, and 18 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7083 IH the majority leader and the minority leader of 1 the Senate; and 2 (B) the Committee on Armed Services, the 3 Committee on Financial Services, the Com- 4 mittee on Foreign Affairs, the Committee on 5 Homeland Security, the Committee on the Judi- 6 ciary, the Permanent Select Committee on In- 7 telligence, and the Speaker and the minority 8 leader of the House of Representatives. 9 (3) BASIC LAW.—The term ‘‘Basic Law’’ means 10 the Basic Law of the Hong Kong Special Adminis- 11 trative Region of the People’s Republic of China. 12 (4) CHINA.—The term ‘‘China’’ means the Peo- 13 ple’s Republic of China. 14 (5) ENTITY.—The term ‘‘entity’’ means a part- 15 nership, joint venture, association, corporation, orga- 16 nization, network, group, or subgroup, or any other 17 form of business collaboration. 18 (6) FINANCIAL INSTITUTION.—The term ‘‘fi- 19 nancial institution’’ means a financial institution 20 specified in section 5312(a)(2) of title 31, United 21 States Code. 22 (7) FOREIGN FINANCIAL INSTITUTION.— 23 (A) IN GENERAL.—Except as provided in 24 subparagraph (B), the term ‘‘foreign financial 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7083 IH institution’’ means any foreign entity that is en- 1 gaged in the business of accepting deposits, 2 making, granting, transferring, holding, or 3 brokering loans or credits, or purchasing or 4 selling foreign exchange, securities, commodity 5 futures or options, or procuring purchasers and 6 sellers thereof, as principal or agent, includ- 7 ing— 8 (i) a depository institution; 9 (ii) a bank; 10 (iii) a savings bank; 11 (iv) a money service business; 12 (v) a trust company; 13 (vi) a securities broker or dealer; 14 (vii) a commodity futures and options 15 broker or dealer; 16 (viii) a forward contract or foreign ex- 17 change merchant; 18 (ix) a securities or commodities ex- 19 change; 20 (x) a clearing corporation; 21 (xi) an investment company; 22 (xii) an employee benefit plan; 23 (xiii) a dealer in precious metals, 24 stones, or jewels; and 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7083 IH (xiv) any holding company, affiliate, 1 or subsidiary of an entity specified in any 2 of clauses (i) through (xiii). 3 (B) EXCEPTIONS.—The term ‘‘foreign fi- 4 nancial institution’’ does not include— 5 (i) an international financial institu- 6 tion, as defined in section 1701(c) of the 7 International Financial Institutions Act 8 (22 U.S.C. 262r(c)); 9 (ii) the International Fund for Agri- 10 cultural Development; 11 (iii) the North American Development 12 Bank; or 13 (iv) any other international financial 14 institution specified by the Office of For- 15 eign Assets Control of the Department of 16 the Treasury. 17 (8) FOREIGN PERSON.—The term ‘‘foreign per- 18 son’’— 19 (A) means— 20 (i) any citizen or national of a foreign 21 country; or 22 (ii) any entity not organized under the 23 laws of the United States or a jurisdiction 24 within the United States; and 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7083 IH (B) does not include the government of a 1 foreign country. 2 (9) HONG KONG.—The term ‘‘Hong Kong’’ 3 means the Hong Kong Special Administrative Re- 4 gion of the People’s Republic of China. 5 (10) JOINT DECLARATION.—The term ‘‘Joint 6 Declaration’’ means the Joint Declaration of the 7 Government of the United Kingdom of Great Britain 8 and Northern Ireland and the Government of the 9 People’s Republic of China on the Question of Hong 10 Kong, done at Beijing on December 19, 1984. 11 (11) KNOWINGLY.—The term ‘‘knowingly’’, 12 with respect to conduct, a circumstance, or a result, 13 means that a person has actual knowledge, or should 14 have known, of the conduct, the circumstance, or the 15 result. 16 (12) PERSON.—The term ‘‘person’’ means an 17 individual or entity. 18 (13) SIGNIFICANT TRANSACTION.—The term 19 ‘‘significant transaction’’ means a transaction deter- 20 mined by the Secretary of the Treasury to be signifi- 21 cant on the basis of the following factors— 22 (A) the size, number, and frequency of the 23 transaction; 24 (B) the nature of the transaction; 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7083 IH (C) whether the transaction is part of a 1 pattern of conduct; 2 (D) the nexus between the transaction and 3 a person subject to sanctions under this Act; 4 and 5 (E) the impact of the transaction on the 6 objectives of this Act. 7 (14) UNITED STATES PERSON.—The term 8 ‘‘United States person’’ means— 9 (A) any citizen or national of the United 10 States; 11 (B) any alien lawfully admitted for perma- 12 nent residence in the United States; 13 (C) any entity organized under the laws of 14 the United States or any jurisdiction within the 15 United States (including a foreign branch of 16 such an entity); or 17 (D) any person located in the United 18 States. 19 SEC. 3. FINDINGS. 20 Congress makes the following findings: 21 (1) The Joint Declaration and the Basic Law 22 clarify certain obligations and promises that the 23 Government of China has made with respect to the 24 future of Hong Kong. 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7083 IH (2) The obligations of the Government of China 1 under the Joint Declaration were codified in a le- 2 gally binding treaty, signed by the Government of 3 the United Kingdom of Great Britain and Northern 4 Ireland and registered with the United Nations. 5 (3) The obligations of the Government of China 6 under the Basic Law originate from the Joint Dec- 7 laration, were passed into the domestic law of China 8 by the National People’s Congress, and are widely 9 considered by citizens of Hong Kong as part of the 10 de facto legal constitution of Hong Kong. 11 (4) Foremost among the obligations of the Gov- 12 ernment of China to Hong Kong is the promise that, 13 pursuant to Paragraph 3b of the Joint Declaration, 14 ‘‘the Hong Kong Special Administrative Region will 15 enjoy a high degree of autonomy, except in foreign 16 and defence affairs which are the responsibilities of 17 the Central People’s Government’’. 18 (5) The obligation specified in Paragraph 3b of 19 the Joint Declaration is referenced, reinforced, and 20 extrapolated on in several portions of the Basic Law, 21 including Articles 2, 12, 13, 14, and 22. 22 (6) Article 22 of the Basic Law establishes that 23 ‘‘No department of the Central People’s Government 24 and no province, autonomous region, or municipality 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 7083 IH directly under the Central Government may interfere 1 in the affairs which the Hong Kong Special Admin- 2 istrative Region administers on its own in accord- 3 ance with this Law.’’. 4 (7) The Joint Declaration and the Basic Law 5 make clear that additional obligations shall be un- 6 dertaken by China to ensure the ‘‘high degree of au- 7 tonomy’’ of Hong Kong. 8 (8) Paragraph 3c of the Joint Declaration 9 states, as reinforced by Articles 2, 16, 17, 18, 19, 10 and 22 of the Basic Law, that Hong Kong ‘‘will be 11 vested with executive, legislative and independent ju- 12 dicial power, including that of final adjudication’’. 13 (9) On multiple occasions, the Government of 14 China has undertaken actions that have contravened 15 the letter or intent of the obligation described in 16 paragraph (8) of this section, including the fol- 17 lowing: 18 (A) In 1999, the Standing Committee of 19 the National People’s Congress overruled a de- 20 cision by the Hong Kong Court of Final Appeal 21 on the right of abode. 22 (B) On multiple occasions, the Government 23 of Hong Kong, at the advice of the Government 24 of China, is suspected to have not allowed per- 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 7083 IH sons entry into Hong Kong allegedly because of 1 their support for democracy and human rights 2 in Hong Kong and China. 3 (C) The Liaison Office of China in Hong 4 Kong has, despite restrictions on interference in 5 the affairs of Hong Kong as detailed in Article 6 22 of the Basic Law— 7 (i) openly expressed support for can- 8 didates in Hong Kong for Chief Executive 9 and Legislative Council; 10 (ii) expressed views on various policies 11 for the Government of Hong Kong and 12 other internal matters relating to Hong 13 Kong; and 14 (iii) on April 17, 2020, asserted that 15 both the Liaison Office of China in Hong 16 Kong and the Hong Kong and Macau Af- 17 fairs Office of the State Council ‘‘have the 18 right to exercise supervision . . . on affairs 19 regarding Hong Kong and the mainland, 20 in order to ensure correct implementation 21 of the Basic Law’’. 22 (D) The National People’s Congress has 23 passed laws requiring Hong Kong to pass laws 24 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 7083 IH banning disrespectful treatment of the national 1 flag and national anthem of China. 2 (E) The State Council of China released a 3 white paper on June 10, 2014, that stressed 4 the ‘‘comprehensive jurisdiction’’ of the Govern- 5 ment of China over Hong Kong and indicated 6 that Hong Kong must be governed by ‘‘patri- 7 ots’’. 8 (F) The Government of China has directed 9 operatives to kidnap and bring to the mainland, 10 or is otherwise responsible for the kidnapping 11 of, residents of Hong Kong, including business- 12 man Xiao Jianhua and bookseller Gui Minhai. 13 (G) The Government of Hong Kong, acting 14 with the support of the Government of China, 15 introduced an extradition bill that would have 16 permitted the Government of China to request 17 and enforce extradition requests for any indi- 18 vidual present in Hong Kong, regardless of the 19 legality of the request or the degree to which it 20 compromised the judicial independence of Hong 21 Kong. 22 (H) The spokesman for the Standing Com- 23 mittee of the National People’s Congress said, 24 ‘‘Whether Hong Kong’s laws are consistent 25 VerDate Sep 11 2014 04:09 Jun 24, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7083.IH H7083 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 7083 IH with the Basic Law can only be judged and de- 1 cided by the National People’s Congress Stand- 2 ing Committee. No other authority has the 3 right to make judgments and decisions.’’. 4 (10) Paragraph 3e of the Joint Declaration 5 states, as reinforced by Article 5 of the Basic Law, 6 that the ‘‘current social and economic systems in 7 Hong Kong will remain unchanged, as so will the 8 life-style.’’. 9 (11) On multiple occasions, the Government of 10 China has undertaken actions that have contravened 11 the letter or intent of the obligation described in 12 paragraph (10) of this section, including the fol- 13 lowing: 14 (A) In 2002, the Government of China 15 pressured the Government of Hong Kong to in- 16 troduce ‘‘patriotic’’ curriculum in primary and 17 secondary schools. 18 (B) The governments of China and Hong 19 Kong proposed t [Text truncated for display. Full text available on Congress.gov.]