Krishnamoorthi, Moolenaar Urge Treasury to Limit Money Laundering through Hong Kong

WASHINGTON – Ranking Member Raja Krishnamoorthi (D-IL) and Chairman John Moolenaar (R-MI) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) sent a bipartisan letter to Treasury Secretary Scott Bessent regarding how a Primary Money Laundering Concern (PMLC) designation could address money laundering involving Hong Kong entities. The lawmakers warned that Hong Kong has become a hub for adversaries to evade U.S. sanctions, facilitated by entities tied to the CCP.

“Since 2020, the territory has increasingly been exploited by the PRC as a platform for financial crimes that directly threaten U.S. and allied national security interests, while advancing the goals of our adversaries,” wrote Krishnamoorthi and Moolenaar.

The letter cites multiple examples of Hong Kong front companies and shell corporations being used to ship Western drone parts to Iran despite sanctions, funnel export-controlled semiconductors to Russia in support of its invasion of Ukraine, and facilitate the illegal conversion of stolen cryptocurrency on behalf of North Korea.

“Unchecked evasion of sanctions facilitates access to resources and technology that advances illegal and destructive activities,” the lawmakers wrote. “Hong Kong’s erosion of regulatory standards under Beijing’s control has made it a global epicenter for illicit finance—and without swift action, U.S. companies, allies, and our national security will continue to pay the price.”

The lawmakers also noted that of 117 PRC entities sanctioned by the U.S. government, 79 remain tradable on the Hong Kong Stock Exchange, including those linked to the PRC military and implicated in forced labor and human rights abuses. In their letter, the Members cite the Treasury Department’s authorities to call out money laundering entities and require additional transparency measures.

“These actions are critical to prevent the continued violation of U.S. sanctions by the Chinese Communist Party and to ensure U.S. businesses and stakeholders are protected from this illicit financial activity,” wrote Krishnamoorthi and Moolenaar.

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