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EXCLUSIVE-Hong Kong police obtain financial records of arrested democracy activists

Tue 26th January, 2021 5:00am
By Jessie Pang, Alun John and Sumeet Chatterjee
    HONG KONG, Jan 26 (Reuters) - Hong Kong authorities are
scrutinizing the financial records of pro-democracy activists as
they crack down on political opposition, according to some
activists and a senior bank executive.
    Six pro-democracy activists told Reuters that Hong Kong
police obtained some of their bank records without their consent
and questioned them about certain transactions after they were
arrested earlier this month on suspicion of subversion under the
territory’s national security law. 
    The number of requests for customers’ financial records by
Hong Kong police has more than doubled over the past six months
or so, an executive at a major retail bank in Hong Kong with
direct knowledge of the matter told Reuters. The executive said
the number of people affected likely remains in double figures
overall. The person said the increase was due to requests for
information about pro-democracy activists. 
    The increasing use of bank records in questioning activists,
which has not previously been reported, shows police in the
Chinese-run city are using the full extent of their powers to
investigate people suspected of breaking the stringent national
security law which was introduced on June 30, according to the
six activists.
    Some of the banks involved include HSBC Holdings Plc
 HSBA.L  and its Hang Seng Bank Ltd  0011.HK  subsidiary,
Citigroup Inc  C.N  unit Citibank and Standard Chartered Plc
 STAN.L . Representatives of those banks declined to comment on
individual accounts. 
    Banks in Hong Kong have little choice but to comply with
police requests, the senior bank executive told Reuters: "The
aggrieved party can go to the court if they think their accounts
were frozen or their transaction details were shared for wrong
reasons, but there's very little we can do here." 
    A Hong Kong police representative declined to comment on why
officers were seeking activists’ financial records, saying the
department would not disclose details of its operations or
investigations. The Hong Kong government did not respond to a
request for comment on how or why police sought the bank
information of arrested suspects. 
    Police in Hong Kong, as in most places in the world, have
long been able to request customer information from banks as
part of criminal investigations. Reuters could not determine
whether the national security law has made it easier for police
to get hold of individuals’ bank records. 
    The law does not mention access to bank information. It does
give authorities the power to seize funds they believe are the
proceeds of, or are intended to be used for, breaking the
national security law. Authorities have not announced the
seizure of any funds under that provision. 
    A spokeswoman for the Hong Kong Monetary Authority, which
regulates the banking sector, said: "Financial institutions are
expected to cooperate with (law enforcement agencies) on
investigations and law enforcement actions."
    
    CROWDFUNDING CAMPAIGN FOR VOTE 
    Ninety-four people have been arrested under the national
security law, which punishes anything authorities regard as
secession, subversion, terrorism or collusion with foreign
forces with up to life in prison. 
    China’s parliament imposed the law on Hong Kong in response
to sometimes violent protests in 2019. The protests were
prompted by fears that Beijing was stifling the city’s freedoms,
guaranteed by the “one country, two systems” formula agreed when
Hong Kong returned to Chinese rule in 1997. Authorities in
Beijing and Hong Kong say the law is only aimed at a few
“troublemakers” and not wider rights that underpin the city’s
role as a gateway for capital flows in to and out of China.  
    The six activists who spoke to Reuters were among 53
arrested in a dawn sweep on Jan. 6. They were questioned about
their roles in a July vote organized by pro-democracy parties to
choose candidates for a legislative council election that was
scheduled for September. The legislative council election was
later postponed. The Hong Kong government has described the
pro-democracy vote as part of an attempt to overthrow the
government. None of the arrested activists have been charged and
all have been released on bail.
    One of the arrested activists, Owen Chow, told Reuters that
police obtained his financial records from Citibank, Hang Seng
Bank and PayMe, a phone payment app operated by HSBC, and asked
him about the source of funds of up to HK$100,000 ($13,000) paid
into the three accounts. He said police confiscated his debit
and credit cards issued by Citibank and Hang Seng Bank. 
    Another activist, Ventus Lau, told Reuters that police
showed him paper copies of statements from his Hang Seng Bank
account and questioned him regarding a "few dozen" transactions
that took place in the run-up to the vote. Lau told Reuters he
used the account to receive money from a crowdfunding campaign
to finance the unofficial election.
    Four other arrested activists, who asked not to be named,
told Reuters police produced copies of their bank records during
questioning. Two of those activists said police showed them
copies of their bank statements from Standard Chartered Bank.
The other two declined to say which banks were involved. 
    Police requests for customer data are a further headache for
international banks caught in the crossfire between China and
the United States over Hong Kong, according to three executives
at foreign banks in Hong Kong who spoke to Reuters. Tension
between the two countries has escalated since the introduction
of the national security law, which Beijing said was necessary
to restore stability, but Washington characterized as an assault
on democracy. 
    Shortly after the passage of the law, the U.S. government
barred American companies and people from doing business with
Chief Executive Carrie Lam and 10 other Hong Kong and Chinese
officials. International banks including HSBC, Hong Kong’s
largest bank, have complied with the U.S. sanctions.
 urn:newsml:reuters.com:*:nL4N2FC0L6
    Hong Kong authorities have compelled banks to freeze the
accounts of several pro-democracy activists, including media
tycoon Jimmy Lai, who was charged in December under the national
security law and is now in prison in Hong Kong awaiting a bail
hearing. HSBC froze Lai’s account last year, according to Mark
Simon, an associate of Lai. HSBC declined to comment.  
    Banks "are between a rock and a hard place," said Steve
Tsang, director of the China Institute at the School of Oriental
and African Studies, part of the University of London in
Britain. "When the police come and ask for whatever, as long as
it is in accordance with the laws of Hong Kong, they have to
comply," he said. "This can conflict with the expectations
people have of their multinationals back in their home country."

 (Reporting by Jessie Pang, Alun John, Sumeet Chatterjee in Hong
Kong
Additional reporting by Sharon Tam in Hong Kong
Editing by Anne Marie Roantree and Bill Rigby)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))
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