Hong Kong nixes US sanctions on Russian-owned superyacht

HONG KONG (AP) – Hong Kong leader John Lee said on Tuesday he would implement United Nations sanctions only after the US warned that the territory’s status as a financial center could be affected if it acts as a safe haven for sanctioned individuals.

Lee’s statement on Tuesday came days after a luxury yacht linked to Russian tycoon Alexey Mordashov docked in the city.

Mordashov, who is said to have close ties to Russian President Vladimir Putin, was sanctioned by the US, Britain and the European Union in February following Russia’s invasion of Ukraine. Hong Kong authorities have said they will not enforce unilateral sanctions imposed by other governments.

“We can’t do anything that has no legal basis,” Lee told reporters. “We will comply with United Nations sanctions, this is our system, this is our rule of law,” he said.

A US State Department spokesman said in a statement Monday that “the potential use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment.”

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The State Department spokesman also said that the city’s reputation as a financial hub “depends on compliance with international laws and standards” and that due to an erosion of Hong Kong’s once high level of autonomy, US companies are “looking increasingly cautiously at Hong Kong’s business environment”. and its freedoms.

The $500 million superyacht Nord, said to be owned by Mordashov, moored in Hong Kong harbor on Wednesday after a week-long trip from the Russian city of Vladivostok.

With an estimated fortune of around $18 billion, Mordashov is one of the richest men in Russia. He is also the main shareholder and CEO of Severstal, Russia’s largest steel and mining company. Mordashov has tried to challenge the sanctions imposed on him in European courts.

US and European authorities have seized over a dozen yachts Property of sanctioned Russian tycoons to prevent them from calling at other ports not affected by the sanctions. So Russian oligarchs have started docking their yachts in ports in places like Turkeywhich has maintained diplomatic relations with Russia since the beginning of the war.

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The Nord measures 141.6 meters (464.6 feet), has two helipads, a swimming pool and 20 cabins. It operates under the Russian flag.

Beijing sets foreign policy for Hong Kong and has backed away from participating in sanctions against Russia over its attack on Ukraine.

Britain ceded control of its Hong Kong colony to China in 1997, pledging to respect its semi-autonomous status as a separate economic and customs territory. The semi-autonomous city’s status as an international economic and financial center has suffered in recent years after Beijing imposed a tough national security law on the city aimed primarily at stamping out dissent after months of anti-government protests in 2019.

Critics say the security law, which in certain cases allows suspects in its opaque legal system to be transferred to mainland China for trial, could threaten Hong Kong’s rule of law.

After the law was passed in 2020, the United States imposed sanctions on Lee, then Hong Kong chief executive Carrie Lam, and other Hong Kong and mainland China government officials for “undermining Hong Kong’s autonomy and restricting freedom of expression and assembly.”

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Lee has blasted the ban on personal and official travel to the US and access to the American financial system.

He was responding to a question about whether he would be paid in cash, as was the case with Lam, who was also subject to U.S. sanctions that limit the ability of those subject to such penalties to transfer funds across national borders or use them exchange into other currencies.

“The second thing about the so-called sanction imposed on people in Hong Kong without justification is a very barbaric act and I will not comment on the impact of such a barbaric act because Hong Kong officials are doing what is right, the interests of the country and protect Hong Kong’s interests, so we’ll just laugh at the so-called sanctions,” Lee said.


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