Hong Kong chief has ‘piles of cash’ at home after US sanctions

Hong Kong’s leader has said she is being forced to receive her salary in cash because of US sanctions, saying she has no access to banking services despite the prevalence of mainland Chinese institutions in the city.

Carrie Lam, who the US sanctioned alongside 14 other Chinese and Hong Kong officials over Beijing’s imposition of a national security law on the territory in June, said she was sitting on “piles of cash” at home.

As part of the measures, the US has threatened secondary sanctions against financial institutions that continue to deal with the individuals, a potentially crippling prospect even for mainland Chinese banks because of their need to deal in dollars.

“Sitting in front of you is a chief executive of [Hong Kong] who has no banking services made available to her. I’m using cash everyday, for all the things,” Ms Lam said in a television interview on Hong Kong International Business Channel.

“I have piles of cash at home, the government is paying me cash for my salary because I don’t have a bank account.”

When the sanctions were first announced, both international and Chinese state-owned banks in Hong Kong feared they could fall foul of a clause in the national security law that bans “colluding” with a foreign government to impose sanctions on Hong Kong.

But given the primacy of the US dollar in the Swift global cross-border financial transaction system, analysts said institutions were forced to comply with Washington’s sanctions.

Ms Lam said it was “an honour” to be “unjustifiably sanctioned by the US government”.

Ms Lam’s office was contacted for comment on whether she had also been refused accounts by Chinese state-owned banks. Her position entitles her to an annual salary of HK$5.2m (US$672,000).

Bernard Chan, one of Ms Lam’s top advisors, told the Financial Times in July an unnamed bank closed one of his accounts before the law was introduced as he was a “politically exposed person”, and that it was becoming harder for Hong Kong officials to open accounts.

Companies operating in Hong Kong have also complained that the local authorities have given them answers with insufficient details on how to avoid prosecution under the national security law.

A government survey taken between June and September registered for the first time in 11 years a reduction in the number of foreign businesses operating in Hong Kong. The survey found 9,025 companies had offices in Hong Kong compared with 9,040 the previous year.

Only 15 per cent of the companies said they had plans to expand in the city in 2020, whereas last year 23 per cent expected an expansion.

Business has also been spooked by anti-government protests in Hong Kong and the pandemic, which for many has halted their access to their mainland Chinese operations.

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