OFAC Issues Guidance on Hong Kong Sanctions, Renews GL for XPCC

The Office of Foreign Assets Control on Sept. 25 issued guidance on sanctions against Hong Kong officials and renewed a general license authorizing certain transactions with the Xinjiang Production and Construction Corps (see 2007310028).

OFAC clarified that sanctions against Hong Kong officials (see 2008070039) do not also sanction the Hong Kong government. OFAC said “routine” interactions “with an agency in which a [Specially Designated National] is an official, but which does not involve the SDN directly or indirectly, is not prohibited.” U.S. people and companies may, for example, agree to contracts with the Hong Kong government signed by an official who is not on OFAC’s SDN list.

But OFAC stressed that U.S. people and companies are blocked from dealing with designated Hong Kong officials, including any company they own by 50% or more. “U.S. persons should be cautious in dealings with [Hong Kong] government agencies in which an SDN is an official to ensure that they are not engaged in transactions or dealings, directly or indirectly, with an SDN,” the agency said.

OFAC also issued General License No. 2A, which extended until Nov. 30 the expiration date for the wind-down of “transactions and activities” with entities having XPCC ownership of 50% or more. OFAC also updated frequently asked questions to reflect the change. The license was scheduled to expire Sept. 30.