[Mayflower Analysis] Carrie Lam and Her Piles of Cash, Thanks to the Sanctions

Mayflower Writer Team | Reporter: Amy Q | Editor & Publish: Jamie   

On August 7, 2020, in Washington DC, the Department of the U.S. Treasury announced imposing sanctions on 11 Hong Kong officials. These sanctions were the response to the national security law imposed by People’s Republic of China about two months earlier on June 30. The Hong Kong national security law’s official name is Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region. The Treasury defined the national security law “fundamentally undermined Hong Kong’s autonomy and democratic processes.”

As explained by BBC, the 11 sanctioned officials would have all their property seized and their financial assets frozen in the U.S. On the top of this list is the name of the Chief Executive of Hong Kong Special Administrative Region (HKSAR) – Carrie Lam. In the Treasury’s statement announcing the sanctions, Carrie Lam is “directly responsible for implementing Beijing’s policies of suppression of freedom and democratic processes.”

About four months later, on November 27, Lam told Hong Kong International Business Channel (HKIBC), an English-language news channel based in the city: “Sitting in front of you is a chief executive of the Hong Kong SAR who has no banking services made available to her.” Compared to her statement in early August, that the sanctions on her were only a minor inconvenience, Lam’s attitudes towards these sanctions haven’t been quite the same.

Since Lam’s use of her credit card was hampered, “I’m using cash for all the things, I have piles of cash at home,” she continued, “the government is paying me cash for my salary because I don’t have a bank account.” Confirmed by Agence France-Press, the Reuters along with Big Name media like the Washington Post, Carrie Lam earns an annual salary of approximately $670,000, and that makes her one of the highest paid leaders in the world. Think about how many piles of cash that would be.

Though Lam herself claimed that “To be so unjustifiably sanctioned by the U.S. government, it’s an honor,” the sanctions have obviously worked. As the UK activist Luke de Pulford commented about the sanctions in his tweet: “Note to those who don’t believe Magnitsky sanctions work. The best 56 seconds of this week,” attaching the video of Lam speaking on HKIBC.

Bloomberg’s August 12th report in 2020 suggested that, the sanctions couldn’t be as effective as they were planned without China’s “help”: many China’s largest state-run banks operating in Hong Kong had started taking steps to comply with the sanctions, in order to secure the way they obtain dollar funding and overseas networks. Bank of China Ltd., China Construction Bank Corp., and China Merchants Bank Co. were being cautious about opening new accounts for the 11 sanctioned officials, since all those banks have operations in the U.S.

The sanctions could somehow remind people of the Panama Papers. Based on International Consortium of Investigative Journalists’ introduction, Panama Papers are leaked documents that contain personal financial information about wealthy individuals and public officials that had previously been kept private. The Panama Papers also revealed the sneaky ways that these people move money across the border.

The Guardian has illustrated all material facts about the papers in its report in April 2016. Readers could also learn from its powerful graphics, that China and Russia are on the top of the hidden owners list, while Hong Kong is one of the largest offshore facilitators.

Guardian graphic | Data obtained by Sudddeutsche Zeitung and distributed by the ICIJ

Carrie Lam’s example has proved that the sanctions are effective. And Panama Papers also indicated the possibility of officials in China and Russia being sanctioned in the future. The U.S. government will certainly not let this opportunity slip away. In fact, on December 7, 2020, the Trump administration has announced new sanctions against 14 members of China’s National People’s Congress over Hong Kong issues.

Earlier on November 12, 2020, then President Donald Trump signed an Executive Order to address the Threat From Securities Investments That Finance Communist Chinese Military Companies. An article posted on Harvard Law School Forum on Corporate Governance analyzed that, this new Executive Order would ban investment in 31 Chinese companies.


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