US businesses have urged the Hong Kong government to ensure the free flow of information and internet access in the territory to maintain its status as an international business center.

“One of the key attributes of Hong Kong is that you can go on to Google, you can go on to Facebook and any other platform you want versus what you can do in mainland China,” Tara Joseph, president of the American Chamber of Commerce in Hong Kong, said in an interview with Bloomberg Television.

“So I do think it’s important for the government to recognize that and to be open and say we’re going to maintain that free flow of information,” she said.

Last Friday, the US State Department issued a business advisory for Hong Kong-based American firms and set out four kinds of risk, namely the risk for businesses following the imposition of the National Security Law, data privacy risks, risks regarding transparency and access to critical business information, and risks for businesses with exposure to sanctioned Hong Kong or China entities or individuals.

The National Security Law empowers Hong Kong law enforcement to conduct searches, including of electronic devices, and requires internet service providers (ISPs) to provide or delete data and other information relevant to national security cases, both without judicial oversight, according to the business advisory.

Businesses and individuals should be aware that the law authorizes the Office for Safeguarding National Security, which is staffed by Chinese security services, to collect data in Hong Kong, it said.

On July 14, the Hong Kong government said it had decided to push forward with an amendment of the Personal Data (Privacy) Ordinance to criminalize doxxing acts on the internet with an extra-territorial effect. The Legislative Council will hold a first reading and commencement of the second reading debate on Wednesday.

According to the amendment bill, the Privacy Commissioner will be empowered to order ISPs to block access to overseas websites with doxxing content if necessary.

A supporter holds a poster showing some of the 47 pro-democracy activists on trial in Hong Kong on July 8 on charges under the National Security Law for taking part in unauthorized pro-democracy primaries in July 2020. Photo: AFP / Anthony Wallace

The commissioner can also apply for a warrant to enter and search premises and seize material for the purposes of a specified investigation in doxxing-related cases. In urgent circumstances where it is not reasonably practicable to obtain such a warrant, the commissioner may access an electronic device without one.

On June 26, the Asia Internet Coalition (AIC), a Singapore-based industry association with members including Facebook, Google and Twitter, raised concerns about the proposed amendment and requested a meeting with the Privacy Commissioner. However, the AIC told Asia Times that it had no comments on Biden’s US business advisory.

“It’s unusual for the US government to put out a business advisory, so something like that has shaken awake anyone who wasn’t aware of the changes or the new normal that we’re experiencing in Hong Kong,” Joseph said.

She said the business advisory didn’t contain much that was surprising to US firms operating in Hong Kong, but it still served as a wake-up call to businesses about the increased risks.

She added that the National Security Law did not tap away at any other aspect of law that would affect companies, such as commercial law, but people had started questioning this.

AmCham’s new office

Founded in 1968, Hong Kong’s AmCham has 1,400 members from business sectors ranging from financial services to law to logistics to real estate.

After the US issued the business advisory last Friday, AmCham said in a statement on the same day that it was well aware of an increasingly complicated geopolitical environment and its risks, particularly those that have evolved in recent years. It said the environment had become more complex and challenging. 

AmCham also said it had recently purchased a new site in Central Hong Kong to foster dialogue, allow businesses to network, share ideas and espouse the values of transparency, free flow of information, rule of law and good governance.

“We are here to support our members to navigate those challenges and risks while also capturing the opportunities of doing business in this region,” said the AmCham statement. “Hong Kong remains a critical and vibrant facilitator of trade and financial flow between the East and West.”

A Hong Kong protestor appeals to US President Donald Trump in a 2019 file photo. Image: Twitter

Sing Tao Daily reported on May 5 that AmCham sold its site at the Bank of America Tower, a Grade A office building, for HK$140 million (US$18 million) last October due to “financial difficulty.” In April this year, it purchased a new site at the Hong Kong Diamond Exchange Building, a Grade B office building, for HK$85.88 million. The size of the new office, measuring 2,750 square feet, is about half of the old one. 

Financial Secretary Paul Chan said Biden’s “so-called” business advisory was totally ridiculous and unfounded. He said the National Security Law had reinforced, not diminished, Hong Kong’s position as an international financial center.

Commerce chief Edward Yau said the US warning was biased and self-serving, while adding that Hong Kong had always offered a rules-based, open and competitive trading environment to all.

George Leung, chief executive of the Hong Kong General Chamber of Commerce, said the chamber’s members had not seen any substantial new risks in their Hong Kong operations and they would not reduce their investments in the territory.

Leung said Hong Kong’s business community had different methods to monitor and evaluate their own operational risks, including checking the real business environment and warnings issued by governments.

Freedom of movement

In the business advisory, the US also raised concerns about the amendment to immigration laws, which will be effective on August 1. It said the law could potentially allow Hong Kong authorities to place exit bans on individuals seeking to leave the country, including non-residents.

Prior to this, Hong Kong authorities have arrested foreign nationals under the National Security Law, including one US citizen.

In February, the government said it would make regulations to implement an advanced passenger information (API) system under the proposed provision in the Immigration (Amendment) Bill 2020. It said more than 90 countries already had the API system in place, including member states of the European Union, the United States, Canada and Australia.

However, the Hong Kong Bar Association (HKBA) warned that the proposed amendment would authorize the Immigration Director to prohibit any person, including Hong Kong residents, from leaving Hong Kong.

Hong Kong Financial Secretary Paul Chan said the US advisory was unfounded. Photo: HK Govt

It said the proposed legislation did not set out the grounds on which the director would be permitted to exercise this extraordinary power, nor did it provide any safeguards against abuse. The HKBA said Hong Kong residents should have freedom to travel and to enter or leave the special administrative region.

John Lee, the then-security secretary and the incumbent Chief Secretary, said on April 28 that the API would only target incoming travelers and would not affect Hong Kong residents’ freedom of movement. Lee condemned the rumors spread by some groups, which intentionally distorted the meaning of the amendment bill passed by the LegCo on the same day.

On Monday, the government said the amended Immigration Ordinance would take effect from August 1 but the API system would be rolled out later. It said it would consult the LegCo on the relevant subsidiary legislation and apply for funding to develop the required system.

Read: HK ‘doxxing’ law has tech giants up in arms