US sanctions Hong Kong companies for alleged support of Russia’s ‘war economy’ News
Don-vip, CC BY-SA 3.0, via Wikimedia Commons
US sanctions Hong Kong companies for alleged support of Russia’s ‘war economy’

The US Department of Treasury sanctioned Hong Kong companies under Executive Order (EO) 14024 on Wednesday in response to the companies’ alleged support of Russia’s economy amid the War in Ukraine. This comes after the US unveiled nearly 300 sanctions on May 1, including sanctions that target entities in Hong Kong for their support of Russia.

Wednesday’s sanctions were imposed on Hong Kong-based companies including GBL International Logistics Co Ltd (GBL), Tavit Hong Kong Co Limited (Tavit), Holden International Trading Limited (Holden), Taube Precious HK Limited (Taube) and VPower Finance Security Hong Kong Limited (VPower). GBL and Tavit were designated for operating in Russia’s manufacturing and technology sectors of Russia’s economy, respectively. Tavit’s director is a Russian national. Holden, Taube and VPower were designated for operating in Russia’s metals and mining sector. The Treasury stated that Holden and Taube were used in a laundering scheme by a US-designated Russian gold producer and his Hong Kong-based associate “to route payments related to gold sales through foreign financial institutions back into the Russian financial system,” and VPower was used to transport gold which originated from Russia. All property of designated individuals located, controlled or possessed by the US are blocked.

According to the Treasury, the sanctions target individuals and entities in and outside Russia that allow Russia “to sustain its war effort and evade sanctions.” The Treasury also stated that “foreign financial institutions that support Russia’s war economy face greater risk of sanctions.”

Treasury Secretary Janet L. Yellen said:

Russia’s war economy is deeply isolated from the international financial system, leaving the Kremlin’s military desperate for access to the outside world … Today’s actions strike at their remaining avenues for international materials and equipment, including their reliance on critical supplies from third countries. We are increasing the risk for financial institutions dealing with Russia’s war economy and eliminating paths for evasion, and diminishing Russia’s ability to benefit from access to foreign technology, equipment, software [] and IT services.

Previously, on May 23, Russian President Vladimir Putin signed Decree No. 422, allowing Russia to seize US assets to compensate for damages resulting from Russian assets seized in the US. This was a response to the US’s enactment of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, which came into force on April 24 and vests the US president with the power to “seize, confiscate, transfer [] or vest” any Russian state sovereign asset in the US. On May 17, the US Treasury sanctioned two Russian individuals and three Russian companies over the transfer of weapons between Russia and North Korea, including ballistic missiles for use in Ukraine. This was a continuation of the previous action taken by the Treasury and Department of State against the transfer and testing of ballistic missiles used in Ukraine.