U.S. Warns Businesses of 'Legal Risks' Associated in Dealing With Hong Kong Companies

The Biden administration has warned businesses in the United States about the "legal risks" of working with companies in Hong Kong, which China is leveraging increasing control over, the Associated Press reported. The Cabinet's State, Treasury, Commerce and Homeland Security agencies issued a nine-page advisory on Friday about the potential damages that could occur as a result of working with businesses from the metropolis.

"This new legal landscape…could adversely affect businesses and individuals operating in Hong Kong. As a result of these changes, they should be aware of potential reputational, regulatory, financial, and, in certain instances, legal risks associated with their Hong Kong operations," the advisory said.

The Treasury Department also imposed new sanctions on seven Chinese officials who breached the 2020 Hong Kong Autonomy Act, which suggests penalties like asset freezes be imposed on those attempting to restrain civil rights. After previewing the advisory, President Joe Biden told reporters that Hong Kong's business environment is "deteriorating" and could worsen further.

For more reporting from the Associated Press, see below.

"Businesses, individuals, and other persons, including academic institutions, research service providers, and investors that operate in Hong Kong, or have exposure to sanctioned individuals or entities, should be aware of changes to Hong Kong's laws and regulations," said the notice, which is titled "Risks and Considerations for Businesses Operating in Hong Kong."

The United States under both the Trump and Biden administrations has determined that since the passage of a new national security law last year, Hong Kong does not still have the significant autonomy from mainland China that Beijing had pledged to respect for 50 years when it assumed control of the former British colony in 1997.

As such, Hong Kong no longer enjoys preferential U.S. trade and commercial privileges and certain officials in Hong Kong have been hit with U.S. sanctions for their actions in cracking down on democracy.

China is one of the rare areas in which the Biden administration has largely hewed to President Donald Trump's policies.

The warning on Friday came on the heels of a similar advisory that was issued earlier this week reminding American companies about potential sanctions liability if they engage in business with Chinese entities that operate in the western Xinjiang region, where China is accused of widespread repression of Uyghur Muslims and other minorities.

The seven officials targeted for sanctions are Chen Dong, He Jing, Lu Xinning, Qiu Hong, Tan Tieniu, Yang Jianping and Yin Zonghua.