Executive Order 13936

Executive Order 13936, entitled "The President’s Executive Order on Hong Kong Normalization", is an executive order signed by U.S. President Donald Trump on July 14, 2020.[1] On the same day Trump had signed into law Hong Kong Autonomy Act, one of the laws from which the order derives authority. The act and the executive order are the US's response to the imposition of a national security law in Hong Kong by the Standing Committee of the National People's Congress of China on June 30, 2020, which was described as "an unusual and extraordinary threat [...] to the national security, foreign policy, and economy of the United States" in the preamble.

Executive Order 13936
The President’s Executive Order on Hong Kong Normalization
President Donald Trump signing the order at the Resolute desk, with Secretary of the Treasury Steven Mnuchin (left) and Secretary of State Mike Pompeo (right)
TypeExecutive order
Executive Order number13936
Signed byDonald Trump on July 14, 2020 (2020-07-14)
Federal Register details
Federal Register document number2020-15646
Publication dateJuly 17, 2020 (2020-07-17)
Document citation85 FR 43413
Summary
Suspends or eliminates different and preferential treatment for Hong Kong

Trump said the executive order was to "hold China accountable for its aggressive actions against the people of Hong Kong", and Hong Kong would be treated the same as China.[2] The order directs government agencies to eliminate preferential treatments given to Hong Kong as compared to Mainland China.

Background
See also: Hong Kong Autonomy Act

The Hong Kong Policy Act of 1992, last amended by the Hong Kong Human Rights and Democracy Act of 2019, is the groundwork for the US policies that maintain relations with Hong Kong as separate from Mainland China, to the extent consistent with the 1984 Sino-British Joint Declaration, after the transfer of sovereignty over Hong Kong.[3]While existing US laws and certain international agreements continue to apply to the Hong Kong Special Administrative Region after July 1997, section 202 of the act allows the US president to issue an executive order to suspend such treatments if he determines that Hong Kong is "is not sufficiently autonomous to justify treatment" different from that accorded China under US laws.

In May 2020, after the Chinese National People's Congress decision on Hong Kong national security legislation was adopted, Secretary of State Mike Pompeo reported to the US Congress that Hong Kong was no longer autonomous.[4] Following the enactment of the Hong Kong national security law by Standing Committee of the National People's Congress in June 2020, the US Congress promptly and unanimously passed the Hong Kong Autonomy Act.

Provisions

The measures introduced in the executive order include:[3]

  • Export control
  • Sanctions
    The Secretary of the Treasury or the Secretary of State can impose sanctions on foreign persons who are :
    • engaged in developing, adopting, or implementing the Hong Kong national security law
    • engaged in undermining the democracy, threatening the autonomy, imposing censorship or committing serious human rights abuse in Hong Kong
    • leaders or officials of a government or private entities engaged in the above activities
  • Law Enforcement
    Notice of intent is given to:
  • Travel and Immigration
    Hong Kong is no longer treated as separate from China:
  • Other provisions
    • Hong Kong is to be treated as the same as China by the Committee on Foreign Investment in the United States in its annual reporting
    • A notice of intent is to be given to terminate a 1989 bilateral agreement granting reciprocal exemption of income tax
    • The Fulbright exchange program with Hong Kong and China is to be terminated
    • The cooperation between the U.S. Geological Survey and the Chinese University of Hong Kong's Institute of Space and Earth Information Science is discontinued

Implementations

Sanctions

On August 7, 2020, pursuant to the order, the US Department of the Treasury imposed sanctions on 11 individuals for "undermining Hong Kong's autonomy and restricting the freedom of expression or assembly", including[5]:

Also subject to sanctions on the same day, corresponding with an action by the United Nations Security Council, is Bi Sidi Souleymane from the Central African Republic. The militia group Return, Reclamation, Rehabilitation (3R), is responsible for the killing, torture, rape, or displacement of thousands since 2015 under his leadership.[6]

As a result of their inclusion in the Specially Designated Nationals List, all of their property and interests in property in the US are blocked and must be reported to the Office of Foreign Assets Control. All US persons are prohibited from transactions — including the contribution or provision of funds, goods or services — involving the property or interest of the eleven sanctioned persons.

Country of origin marking of products

On August 11, 2020, US Customs and Border Protection (USCBP) announced that the imported goods produced in Hong Kong could no longer indicate themselves as "Made in Hong Kong" after September 25, but must indicate "China" as the country of origin instead.[7] This reversed the practice announced by the then-US Customs Service in June 1997, which determined that that goods from Hong Kong should continue to indicate their origin as "Hong Kong" after July 1, 1997.[8] Section 304 of the Tariff Act of 1930 stipulates that every article of foreign origin shall be marked the English name of the country of origin.

This change does not affect the reporting for purposes of assessing duties under the Harmonized Tariff Schedule of the United States.[9]

Responses
Signing of the executive order

China's ministry of foreign affairs criticized the US for interfering in "purely China’s internal affairs", namely the implementation of a law that safeguards the country's national security. The spokesperson urged to US to "correct its mistakes", otherwise China will give "firm response" and impose sanctions on relevant US persons.[10]

The HKSAR government, in addition to reiterating the necessity of the national security law, said the SAR's special status as a separate customs territory, under the "One Country, Two Systems" principle, is conferred by the PRC Constitution and the Hong Kong Basic Law. It warned the US that unliteral measures that limit normal business activities would affect its own interests, and stressed that the measures imposed under Hong Kong Autonomy Act and the executive order "do not have any legal effect" on Hong Kong's financial institutions. It might also consider taking actions against the US under the rules of the World Trade Organization (WTO).[11]

Sanctions

On August 11, 2020, China imposed sanctions without specification on eleven US individuals, namely Senators Marco Rubio, Ted Cruz, Josh Hawley, Tom Cotton and Pat Toomey, Representative Chris Smith, Carl Gershman (president of the National Endowment for Democracy), Derek Mitchell (president of the National Democratic Institute), Daniel Twining (president of the International Republican Institute), Kenneth Roth (executive director of the Human Rights Watch) and Michael Abramowitz (president of Freedom House). Rubio, Cruz and Smith had been put on a travel ban by China. The spokesman of the foreign ministry said the sanctioned "behaved badly" on Hong Kong-related issues.[12]

Marking of country of origin

Hong Kong's commerce secretary Edward Yau condemned USCBP's measures, saying labelling a product from Hong Kong as "made in some other place" was "calling white black". He added that this practice did not comply with WTO rules, as it undermined Hong Kong's status as a separate customs territory.[13]

References
  1. The White House, Office of the Press Secretary (July 14, 2020), The President's Executive Order on Hong Kong Normalization
  2. Mason, Jeff; Holland, Steve (July 15, 2020). "China vows retaliation after Trump ends preferential status for Hong Kong". Reuters.
  3. "Executive Order Eliminates Differential Treatment for Hong Kong" (PDF). Cleary Gottlieb Steen & Hamilton LLP. July 21, 2020.
  4. "Hong Kong 'no longer autonomous from China' – Pompeo". BBC. May 27, 2020.
  5. "Treasury Sanctions Individuals for Undermining Hong Kong's Autonomy". US Department of the Treasury. August 7, 2020.
  6. https://home.treasury.gov/news/press-releases/sm1087
  7. "Country of Origin Marking of Products of Hong Kong". US Customs and Border Protection. August 11, 2020.
  8. "Country of Origin Marking of Products of Hong Kong". US Customs Service. June 5, 1997.
  9. "Frequently Asked Questions - Guidance on Marking of Goods of Hong Kong – Executive Order 13936". U.S. Customs and Border Protection. Retrieved August 14, 2020.
  10. Davidson, Helen (July 15, 2020). "China promises 'firm response' to Trump's order ending Hong Kong's special status". The Guardian.
  11. "HKSARG firmly opposes the Hong Kong Autonomy Act becoming US law". Government of Hong Kong. July 15, 2020.
  12. "China sanctions 11 US politicians, including Cruz and Rubio, and heads of pro-democracy organizations". The Associated Press. August 10, 2020 – via USAToday.
  13. "'Mandating China label like forcing HK firms to lie'". Radio Television Hong Kong. August 13, 2020.
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