National People's Congress standing committee did not pass a scheduled motion to impose the anti-sanctions law in Hong Kong. Photo: Xinhua

China’s National People’s Congress (NPC) standing committee on Friday did not pass a scheduled motion to impose the Anti-Foreign Sanctions Law in Hong Kong but did not give a reason.

Tam Yiu-chung, the sole Hong Kong representative on the standing committee, said at the start of the four-day meeting in Beijing on Tuesday that the law would be included in Annex III of the Basic Law on Friday while the Hong Kong government would begin the process of local legislation immediately.

A mainland academic said the delay was caused by Beijing’s concerns about the impact of a potential decoupling between the city and the United states. However, a pro-Beijing lawmaker speculated that the delay might be related to easing tensions between the US and China, who had recently opened a dialogue over Afghanistan.

On June 10, the standing committee passed the Anti-Foreign Sanctions Law for the mainland. On July 23, the US sanctioned seven officials from the central government’s Liaison Office. The US government also issued a business advisory to highlight its concerns about the impact on international companies of the National Security Law in Hong Kong.

On July 27, China imposed sanctions on several US individuals and organizations in response to recent US sanctions on Chinese officials in Hong Kong. 

On the same day, Xinhua reported that the NPC standing committee would hold a meeting between August 17 and 20 to discuss and pass a motion that would put more national laws into Annex III of the Basic Law in Hong Kong and Macau. Pro-Beijing newspapers linked these national laws to the anti-sanctions law.

Analysts have warned that foreign banks may have to quit Hong Kong as they won’t be able to comply with US sanctions and China’s anti-sanctions law at the same time.

Ng Leung-sing, the chairman of Bank of China (Hong Kong) Trustees Limited and a former legislator, said that foreign banks would be in a difficult situation if their Hong Kong branches would be punished for implementing the US sanctions in the city. So far, no foreign bank in Hong Kong has commented publicly on the matter.

Chief Executive Carrie Lam said the government planned to complete the local legislation by the end of October . Photo: RTHK

On August 9, Beijing softened its stance, apparently due to the rising concerns from foreign banks. Tam said it would be more suitable to have local legislation in Hong Kong about the law as the procedure would help ease public concerns. But Tam said this was his own opinion.

Chief Executive Carrie Lam said the government planned to complete the local legislation by the end of October although the schedule was tight.

Citing standing committee agenda documents, Tam told Hong Kong media on Tuesday that the committee had consulted the Basic Law Committee and the HKSAR government and would put the anti-sanction law into Annex III of the Basic Law on Friday. He said the documents did not set a deadline for the local legislation in Hong Kong but there was “an urgency and a practical meaning” to complete the process.

On Friday, the Council of Chairmen of the NPC standing committee decided not to put the motion to a vote. All the 14 vice chairmen in the Council were sanctioned by the US last December for undermining Hong Kong’s freedoms and democracy, though NPC chairman Li Zhanshu was not.

Meanwhile, Arthur Li Kwok-cheung, deputy chairman of the Bank of East Asia and chairman of the Council of The University of Hong Kong, was added to the Basic Law Committee on Friday.

The Hong Kong government said Friday that all Beijing’s decision on Hong Kong were for the territory’s benefit.

Tian Feilong, an associate professor at Beihang University’s Law School in Beijing and a director of the Chinese Association of Hong Kong and Macau Studies, said Friday that more details should be discussed about how Hong Kong-based companies could make commercial decisions and apply for exemptions when they faced foreign sanctions and China’s counter-measures.

Tian said as there were many US businesses in Hong Kong, the central government had to evaluate the risks of the potential decoupling between Hong Kong and the US. He said Beijing also had to consider how to react to continuous US challenges to Hong Kong’s economic and trade status.

Chinese Foreign Minister Wang Yi spoke to his US counterpart about Afghanistan and China-US relations. Photo: AFP / Anadolu Agency

He added that as the anti-sanctions law was new, it had to be implemented in Hong Kong after deep discussions based on the “one-country two systems” principle. He said its impact on Hong Kong’s markets had to be minimized as much as possible.

Tian said it was hard to say whether the standing committee would discuss the matter at the next meeting in October but any new US sanctions against Hong Kong could speed up the process.

Last month, Tian said there was an urgent need to put the anti-sanction law into Annex III of the Basic Law.

Ronny Tong, a Hong Kong Senior Counsel and a member of the Executive Council, said according to his understanding, the Hong Kong government was exchanging views with the central government about how to draft the Hong Kong version of the anti-sanctions law. Tong said there would be a clearer direction when the NPC standing committee met in October.

Paul Tse Wai-chun, a pro-Beijing lawmaker in Hong Kong, said the US had recently begun talks with China over the Afghanistan issues and might halt its sanctions against Hong Kong and China for some time. Tse said the easing tensions between the US and China provided Beijing with some space to delay the launch of the anti-sanctions law in Hong Kong.

On Monday, a chaotic situation was seen at the Kabul international airport as hundreds of Afghans ran alongside a US military aircraft, which attempted to take off. Western countries have raised concerns about whether local people, particularly women, will be persecuted by the Taliban regime after US forces leave in late August.

On the same day, Beijing said China’s Foreign Minister Wang Yi had a phone conversation with US Secretary of State Antony Blinken. It said both sides mainly exchanged views on the situation in Afghanistan and China-US relations.

Read: HK banks sweat fast execution of anti-sanctions law