Banks rush to adapt to US sanctionsBusiness | Avery Chen and Bloomberg 12 Aug 2020
Major banks in Hong Kong, including HSBC (0005), BOC Hong Kong (2388), Standard Chartered (2888) and Citigroup, which also runs businesses in the United States, have started scrutinize some local clients after the US levied sanctions on 11 top officials, according to people familiar with the matter.
US-based Citigroup is already taking steps to suspend accounts linked to some of the 11 targeted individuals, Bloomberg reported yesterday citing sources.
Standard Chartered, which is based in London, is reviewing whether it has relationships with any of the officials and will monitor their transactions, and has suspended new account openings for those on the list, the report said.
Sources told The Standard that both HSBC and BOC Hong Kong, the SAR's two note-issuing banks, had adopted similar measures as of last Friday.
"We regularly review client accounts around the world," said a Citigroup spokesman, who declined to comment further.
A Standard Chartered spokeswoman declined to comment, while HSBC and BOC Hong Kong did not reply to The Standard's requests for comment before publication.
Bankers and their lawyers from Hong Kong to Washington have been poring over the fine-print to reconcile how they can dodge major consequences from being squeezed between the two laws.
Running afoul of the legislations put companies at risk of fines or losing their license to do business.
Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets, expects more officials, and even companies, to be included in the sanction list, taking a further toll on banks.
A worst-case scenario could see the currency peg system between the US and Hong Kong affected, he said.