During the past 2 years, the US government has intensified its economic sanctions against China. These sanctions have been enacted & imposed by several government branches and executive departments, including Congress, President, Commerce, Treasury, Defense, & Justice, and were based primarily on the following federal statutes:

• International Emergency Powers Act of 1977
• National Emergencies Act of 1976
• Export Administration Act of 1979
• Export Control Reform Act of 2018
• Global Magnitsky Human Rights Accountability Act of 2012
• United States-Hong Kong Policy Act of 1992
• Hong Kong Human Rights and Democracy Act of 2019
• Hong Kong Autonomy Act of 2020
• Section 1237 of the National Defense Authorization Act for Fiscal Year 1999
• Defense Production Act of 1950
• Holding Foreign Companies Accountable Act of 2020
• Section 307 of the Tariff Act of 1930

It has been questioned whether prior economic sanctions were effective against smaller authoritarian regimes such as Iraq, Iran, or N Korea. (See, eg, here & here.) The effectiveness of these sanctions against China, the second largest economy in the world, can be even more uncertain, particularly considering the potential counter measures by China. (See, eg, here & here.)

Moreover, sanctions may be subject to changes in politics and enforcement variations. For example, on 5/16/2019, the Commerce Department added Huawei and its subsidiaries to the export blacklist, but a few days later granted a temporary general license to the sanctioned entities for more than a year, until 8/17/20, when the temporary general license was replaced by more limited but permanent authorizations. Additionally, many of the sanctions imposed by the Trump administration are expected to be modified by the upcoming Biden administration.

Regardless of their level of effectiveness, these sanctions do minimally provide certain information contents – those actions & actors that have been determined by the US government (Congress, President, & executive agencies) to “constitute an unusual and extraordinary threat […] to the national security, foreign policy, or economy of the United States”. (§1701(a) of the International Emergency Powers Act.) Such information may be valuable in risk assessments, for example with respect to business transactions, even if not for compliance purposes.

Below is an incomplete list of some of the sanctions against China imposed by US in the past 2 years, grouped into 6 categories: Technology (Huawei), Xinjiang, Hong Kong, Defense, Technology, & Investment. The citations of the sanction statutes, orders, & rules (in Pub L or Federal Register), if available, are included, so one can readily find more info, such as the identities of the sanctioned entities.

On June 30, 2020, the Chinese government enacted Hong Kong’s National Security Law (Chinese | English), which was not officially published until the same time when it became effective, at 11 pm local time, foreclosing any meaningful public input (at least from the HK public) to the new law. Within hours after the publication of the law, several commentators have made an effort to dissect and analyze the new law, such as the note by Professor Donald Clarke, and the videoconferencing sessions organized by Hong Kong Democracy Council. More analyses should become available as the international communities scrutinize and analyze the new law in greater scope and depth.

At a quick glance, the new law imposes several measures that severely restrict or eradicate the autonomy and civil rights previously vested in HK. Without going into great details, and not meant to be complete, I have summarized these measures below.

Inevitably, the new law will have significant international ramifications, not limited to HK only, evidenced by the sanction legislation passed promptly by US Congress in response to the new law. Notably, the new law is applicable to ANY person on the earth, a/k/a extraterritorial application. (Article 38. See the table above.) That means, for example, a foreigner non-HK resident may be found to have violated the new law by posting on twitter the words, “Fight for Freedom! Stand with Hong Kong!” In such cases, the person may be prosecuted under the new law if he/she is present in HK or China. Or, in a worst-case scenario, if the person resides in a country having an extradition treaty with China, he/she may face the specter of having to defend an extradition request from China.

What is more, the law creates the Office for Safeguarding Nation Security (“OSNS”), which is an agency of the Chinese government, but stationed within HK. This agency has tremendous powers, including “collecting and analyzing intelligence and information concerning national security” (Article 49(3)) and “handling cases concerning offence endangering national security” (Article 49(4)). It can take over jurisdiction from local HK government (Article 55) and send the case to China for prosecution and sentencing according to Chinese laws (Articles 56 & 57). Moreover, any person, be it an institution, organization, or individual must “comply with measures taken by” OSNS (Article 57). And yet, despite the tremendous powers OSNS wields, it is not subject to HK jurisdiction or law enforcement (Article 60). According to Professor Clarke, OSNS is not subject to Chinese law either. No wonder Professor Clarke lamented that the OSNS was “untouchable” and “Gestapol-level stuff”!

Considering its vague and broad scope, the extraterritorial application, the creation of such an unaccountable yet powerful agency as OSNS, and other authoritarian aspects of the new law, the business risks for international communities doing business with HK and China have increased substantially. It is unclear at this point how the new law will be enforced. Also, potential economic gains from the China markets and trades will likely remain an important factor in business risk assessments, which is itself a complicated undertaking. If we have learned anything about global risk assessments from recent events, however, it is that underestimating the risks in the early stage may prove to be unforgiving!

All human lives matter!

Civil liberties matter!

Political rights matter!

Democracy matters!

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Abraham Lincoln

It is still a long way to go before the words “all men” uttered by President Lincoln more than 150 years ago can truly mean “all humans”!!!

IN MEMORY OF THE TIANANMEN SQUARE MASSACRE, JUNE 4, 1989.

Just laws of a nation must limit the powers of the government against the people.

“The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very definition of tyranny.”

James Madison

The road to just laws of a nation can be long and arduous. The fight for civil liberties and political rights for the people in UK & US started no later than 800 years ago, and is still ongoing.

“It is rather for us to be here dedicated to the great task remaining before us – […] that government of the people, by the people, for the people, shall not perish from the earth.”

Abraham Lincoln

The current COVID-19 pandemic is a powerful reminder that our world is riddled with abundant uncertainties and risks.

In an uncertain world, without the help of hindsight (or a clairvoyant crystal ball), our policy decisions can at best be based on our assessments of the risks. That means probabilities, averages, variations, distributions, ranges, etc. By definition, risk assessments carry uncertainties themselves. So, we will never know for sure whether our decisions made according to the risk assessments are the right ones. But, that’s the best we can do!

For global risk events, such as virus outbreaks, climate changes, or even financial crises, which can have far-reaching global ramifications, risk assessments on a global scale are necessary for optimal policy decisions and responses. Assessments limited to local perspectives will not be enough. This can be clearly seen in the COVID-19 pandemic.

As of today (4/14/2020), US has reported over 600k infections nationwide, and more than 25k lives lost. We will never know for sure whether we could have responded to the virus outbreak better, or worse. It has become clear, however, that information and data about the virus from other regions, countries, states, and cities can greatly help to improve our own risk assessments and responses. Be it the virus genome codes, strain variations, mortality rates, spreading rates, spreading mechanisms, human-to-human transmission paths, incubation periods, asymptomatic transmission, known effective treatments, known effective policies, potential vaccines, supply chain managements, governmental coordination, economic preparations, …, etc. All these information and data have proven instrumental, if not critical, in assessing the risks associated with the virus. Because the virus spreads without regard to political boarders (nations, territories, states, provinces, prefectures, counties, cities, towns, …), collecting the information and data globally can help to maximize the data collected and minimize the time required.

This need for global risk assessments, i.e., assessing the risks by examining global data, not limited to local data, similarly applies to climate changes. The weather or temperature patterns in New York or Texas or California, for example, will most likely be insufficient to assess the risks associated with global climate changes. – I have made the mistake numerous times of concluding it was global warming / cooling because of an abnormally warm / cool day in New York. (To be critical, one photo of a skinny polar bear on a floating ice may not be conclusive either, by itself.)

Even with real-time access to extensive global data, it may still be difficult to assess the risks and determine the responses. Rather, different people can assess the risks differently, sometimes substantially, and reach different decisions. (Witness the spars between New York governor, New York City mayor, and US president on re-opening of the economies, even after months of global data exchanges and collections on the COVID-19 virus.) Additionally, in reality, it is unlikely decision-makers will have at their disposal a complete set of global risk data at any particular time.

Therefore, given the complexities of the earth’s weather systems, I do not expect a uniform policy response to climate change in the foreseeable future, unless imminent dangers due to climate changes becomes clear and present, such as the case for the COVID-19 virus.

The stakes associated with climate change, or other global risk events, however, can be high, and the potential losses of lives, properties, or welfare can be tremendous. Recognizing the potential shortfalls and uncertainties in the risk assessments of global risk events, we should strive to make sure our best scientists and professionals, trained to objectively study and analyze risk events, receive the fullest attention possible in the public discourse and debates of such global risk events, undisturbed by politics and other subjective factors. That way, even if there are uncertainties associated with the risk assessments, we can claim to have done our best.

It is my hope that the need for global open information sharing regarding global risk events will lead to greater opening of authoritarian regimes, particularly those who desire to further integrate themselves into the global economy. If the global economy slows, however, I am also wary of the possibility that these authoritarian regimes may instead resort to even harsher surveillance and oppression to retain domestic control and powers, and inflame populist nationalism in and conflicts with foreign players. Even in more open societies, surveillance and centralized control may also intensify, in the name of public security and safety. But, that’s another story!

As US-China trade wars escalate, residents in Hong Kong have waged fierce battles against a proposed extradition law, which poses the horrendous specter of any person physically present in Hong Kong being seized and extradited to China and subject to its “capricious legal system” on trumped-up charges, without meaningful legislative or judicial reviews. (See, eg, here.) The battles in Hong Kong, however, may turn out to be more than merely domestic politics, but rather far-reaching extensions of the US-China trade war battlegrounds.

To circumvent the rising tariffs imposed on Chinese goods, one strategy for Chinese manufacturers and exporters is to label the Chinese goods as made in another country/region that is not subject to the high tariffs. One such country/region is Hong Kong. (See, eg, here.) Under the US-HK Policy Act of 1992 (22 USC §5701 et seq), Hong Kong is treated by US as a region “autonomous” from China with regard to commerce, among others, even after UK returned HK to Chinese control in 1997. Specifically, the Act provides:

“The United States should continue to […] treat Hong Kong as a territory which is fully autonomous from the People’s Republic of China with respect to economic and trade matters.”

22 USC 5713(3)

Therefore, currently, goods designated as made in Hong Kong are not subject to the increased tariffs imposed on Chinese goods. If Chinese goods are first shipped to HK and then re-labeled (if necessary) and re-shipped to US, potentially these goods could evade the higher tariffs. – As long as the US laws continue to grant HK the special treatment as an autonomous region.

That special treatment, however, may be subject to change, and may be used as a weapon and an extended battleground in the trade wars. Specifically, the Act allows the President of US to suspend the special treatment, in consultation with the Congress, if the President determines that HK is “not sufficiently autonomous”. (22 USC 5722(a)) Additionally, the Congress may enact new laws affecting adversely or eliminating altogether the special treatment.

Judging from recent news headlines (eg, “U.S. warns extradition law changes may jeopardize Hong Kong’s special status”, Reuters, 6/10/2019; “McConnell: Protesters in Hong Kong Should be Heard”, Youtube Senate Majority Leader Mitch McConnell Channel, 6/11/2019; “Pelosi Vows to Review Hong Kong Trade Ties Over Extradition Bill”, Bloomberg, 6/12/2019), the battle of Hong Kong might have begun!

Reasoning is the main service (some may argue the ONLY service) that a lawyer has to offer. It is tough to do, and requires a lot of work. But it is a worthy life-time work!

RAAS is the new tagline I am using for this new site using the WordPress app.