Hong Kong is becoming hub for financial crime, WSJ reports

Lawmakers in the U.S. House of Representatives have asked Treasury Secretary Janet Yellen to rethink ties with Hong Kong's banking sector, the Wall Street Journal reported on Monday.

Hong Kong has turned into a hub for many violations of U.S. trade controls, including export of controlled western technology to Russia and the creation of front companies to buy Iranian oil, the bipartisan leaders of the House Select Committee on the Chinese Communist Party said in a letter to Yellen, reviewed by the Journal.

The letter, which is scheduled to be publicly released on Monday, said that Hong Kong has shifted from being a trusted global financial center to a critical player in the deepening authoritarian axis of China, Iran, Russia and North Korea.

"We must now question whether longstanding U.S. policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate," it said, according to the Journal.

The letter, signed by John Moolenaar, a Michigan Republican who chairs the committee, and Raja Krishnamoorthi, an Illinois Democrat who is the committee's ranking member, cited research that shows nearly 40% of goods shipped from Hong Kong to Russia in 2023 were high-priority items such as semiconductors that Russia could use to prosecute its war in Ukraine, WSJ said.

The U.S. Treasury department and the House Select Committee did not immediately respond to Reuters' requests for comments. Hong Kong's trade office in New York could not be immediately reached for comment.