Executive Order 13936 Explained

Longtitle:The President’s Executive Order on Hong Kong Normalization
Executiveorder:13936
Executive Order 13936
Depiction:President Trump Signs an Executive Order (50119222336).jpg
Depictionalt:Donald Trump signing the order with Steven Mnuchin and Mike Pence
Depictioncaption: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)
Type:executive order
Signedpresident:Donald Trump
Documentcitation:85 FR 43413
Documentnumber:2020-15646
Summary:Suspends or eliminates different and preferential treatment for Hong Kong

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. 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 U.S. response to the imposition of a controversial 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.

According to Trump, he 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.[1] 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 (HKPA), last amended by the Hong Kong Human Rights and Democracy Act of 2019, is the groundwork for U.S. 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. While existing U.S. 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 U.S. president to issue an executive order to suspend such treatments if he determines that Hong Kong "is not sufficiently autonomous to justify treatment" different from that accorded China under U.S. 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 U.S. Congress that Hong Kong was no longer autonomous.[2] Following the enactment of the Hong Kong national security law by Standing Committee of the National People's Congress in June 2020, the U.S. Congress promptly and unanimously passed the Hong Kong Autonomy Act.

Provisions

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

Implementations

Sanctions

On August 7, 2020, pursuant to the order, the U.S. Department of the Treasury imposed sanctions on 11 officials for "undermining Hong Kong's autonomy and restricting the freedom of expression or assembly", including:[4]

On 9 November 2020, four more individuals who were responsible for National Security were sanctioned:[5]

On December 7, 2020, pursuant to the order, the U.S. Department of the Treasury imposed sanctions on the entire 14 Vice Chairpersons of the National People's Congress of China, for "undermining Hong Kong's autonomy and restricting the freedom of expression or assembly", including:[6]

On 15 January 2021, 6 more individuals were sanctioned, including:[7]

On 16 July 2021, all 7 deputy directors of the Hong Kong Liaison Office were sanctioned for their role in reducing Hong Kong's autonomy, pursuant to the 2020 Hong Kong Autonomy Act:[8] [9]

As a result of their inclusion in the Specially Designated Nationals List, all of the property and interests in property in the United States are blocked for the sanctioned and must be reported to the Office of Foreign Assets Control. All United States citizens 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

The executive order suspended the application of section 201(a) of HKPA to section 304 of the Tariff Act of 1930 (19 U.S. Code § 1304),[10] which stipulates that every article of foreign origin shall be marked the English name of the country of origin. On August 11, 2020, U.S. 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.[11] This reversed the practice announced by the then-U.S. Customs Service in June 1997, which determined that goods from Hong Kong should continue to indicate their origin as "Hong Kong" after July 1, 1997.[12]

This change does not affect the reporting for purposes of assessing duties under the Harmonized Tariff Schedule of the United States.[13]

Suspension or termination of three bilateral agreements

On August 18, 2020, the Consulate General of the United States in Hong Kong notified the government of Hong Kong that the United States had suspended or terminated three bilateral agreements: for the surrender of fugitive offenders, for the transfer of sentenced persons and for reciprocal tax exemptions on income derived from the international operation of ships. The U.S. Department of State referred to this as part of the implementation measures set forth in the executive order.[14] [15]

Responses

Signing of the executive order

China's ministry of foreign affairs criticized the United States for interfering in "purely China’s internal affairs", namely the implementation of a law that safeguards the country's national security. The spokesperson urged the United States to "correct its mistakes", otherwise China will give "firm response" and impose sanctions on relevant U.S. persons.[16]

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 United States 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 United States under the rules of the World Trade Organization (WTO).[17]

Countersanctions

On August 11, 2020, China imposed sanctions without specification on eleven U.S. 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). The spokesman of the foreign ministry said the sanctioned "behaved badly" on Hong Kong-related issues. Rubio, Cruz and Smith had been put on a travel ban by China.[18]

Criticism by the Hong Kong government

The Hong Kong government denounced the executive order as having "[politicized] juridical co-operation." As a result, the Hong Kong government announced that it had, at the central government's instruction, notified the U.S. Consulate General of the suspension of the agreements of surrender of fugitive offenders and of mutual legal assistance on criminal matters.

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.[19]

Extensions

U.S. President Joe Biden extended the executive order for another year on 7 July 2021, 11 July 2022, 11 July 2023, and 12 July 2024.[20] [21] [22] [23]

Notes and References

  1. News: Jeff. Mason. Steve. Holland. China vows retaliation after Trump ends preferential status for Hong Kong. Reuters. July 15, 2020. August 5, 2020. https://web.archive.org/web/20200805084521/https://www.reuters.com/article/us-hongkong-security-trump/china-vows-retaliation-after-trump-ends-preferential-status-for-hong-kong-idUSKCN24F2KQ. live.
  2. News: . Hong Kong 'no longer autonomous from China' – Pompeo. BBC. May 27, 2020. May 27, 2020. https://web.archive.org/web/20200527232138/https://www.bbc.com/news/world-us-canada-52824839. live.
  3. Web site: Executive Order Eliminates Differential Treatment for Hong Kong. July 21, 2020. Cleary Gottlieb Steen & Hamilton LLP. September 30, 2020. https://web.archive.org/web/20200930064310/https://www.clearygottlieb.com/-/media/files/alert-memos-2020/executive-order-eliminates-differential-treatment-for-hong-kong.pdf. live.
  4. News: Treasury Sanctions Individuals for Undermining Hong Kong's Autonomy. U.S. Department of the Treasury. August 7, 2020. August 7, 2020. https://web.archive.org/web/20200807234822/https://home.treasury.gov/news/press-releases/sm1088. live.
  5. Web site: 2020-11-09. Designations of Four PRC and HK Officials Threatening the Peace, Security, and Autonomy of HK. 2021-01-16. U.S. Consulate General Hong Kong & Macau. en-US. January 26, 2021. https://web.archive.org/web/20210126195108/https://hk.usconsulate.gov/n-2020110901/. live.
  6. News: SPECIALLY DESIGNATED NATIONALS LIST UPDATE. 7 December 2020. 7 December 2020. December 7, 2020. https://web.archive.org/web/20201207162753/https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201207. live.
  7. Web site: 2021-01-16. Designating PRC and Hong Kong Officials after Widespread Pro-Democracy Arrests in Hong Kong. 2021-01-16. U.S. Consulate General Hong Kong & Macau. en-US. January 28, 2021. https://web.archive.org/web/20210128232451/https://hk.usconsulate.gov/n-2021011501/. live.
  8. Web site: Publication of Hong Kong Business Advisory; Hong Kong-related Designations. 2021-07-16. U.S. Department of the Treasury. en.
  9. News: US warns companies about doing business in Hong Kong. en-US. Washington Post. 2021-07-16. 0190-8286. November 10, 2021. https://web.archive.org/web/20211110015617/https://www.washingtonpost.com/. dead.
  10. Web site: US CBP issues notice requiring goods produced in Hong Kong to be marked as products of China Knowledge Norton Rose Fulbright . Norton Rose Fulbright (11 August 2020) . 24 August 2020 . December 10, 2020 . https://web.archive.org/web/20201210152119/https://www.nortonrosefulbright.com/en-us/knowledge/publications/6311b07d/us-cbp-issues-notice-requiring-goods-produced-in-hong-kong-to-be-marked-as-products-of-china . live .
  11. News: Country of Origin Marking of Products of Hong Kong. U.S. Customs and Border Protection. August 11, 2020. September 1, 2020. https://web.archive.org/web/20200901191000/https://www.federalregister.gov/documents/2020/08/11/2020-17599/country-of-origin-marking-of-products-of-hong-kong. live.
  12. News: Country of Origin Marking of Products of Hong Kong. U.S. Customs Service. Jun 5, 1997. December 10, 2020. https://web.archive.org/web/20201210152118/https://www.federalregister.gov/documents/1997/06/05/97-14662/country-of-origin-marking-of-products-of-hong-kong. live.
  13. Web site: Frequently Asked Questions - Guidance on Marking of Goods of Hong Kong – Executive Order 13936. U.S. Customs and Border Protection. 14 August 2020. September 10, 2020. https://web.archive.org/web/20200910233739/https://www.cbp.gov/trade/rulings/frequently-asked-questions-guidance-marking-goods-hong-kong-executive-order-13936. live.
  14. Web site: Suspension or Termination of Three Bilateral Agreements With Hong Kong. August 19, 2020. U.S. Department of State. 20 August 2020. August 20, 2020. https://web.archive.org/web/20200820192936/https://www.state.gov/suspension-or-termination-of-three-bilateral-agreements-with-hong-kong/. live.
  15. News: August 20, 2020. Suspension of agreement on surrender of fugitive offenders and agreement on mutual legal assistance in criminal matters between Hong Kong and the US. Government of Hong Kong. August 23, 2020. https://web.archive.org/web/20200823041122/https://www.info.gov.hk/gia/general/202008/20/P2020082000769.htm. live.
  16. News: Davidson . Helen . July 15, 2020 . China promises 'firm response' to Trump's order ending Hong Kong's special status . The Guardian . August 7, 2020 . https://web.archive.org/web/20200807081254/https://www.theguardian.com/world/2020/jul/15/trump-targets-china-with-executive-order-ending-hong-kongs-special-status . live .
  17. News: July 15, 2020. HKSARG firmly opposes the Hong Kong Autonomy Act becoming US law. Government of Hong Kong. August 3, 2020. https://web.archive.org/web/20200803092509/https://www.info.gov.hk/gia/general/202007/15/P2020071500926.htm. live.
  18. News: August 10, 2020. China sanctions 11 US politicians, including Cruz and Rubio, and heads of pro-democracy organizations. The Associated Press. USAToday. August 15, 2020. https://web.archive.org/web/20200815060530/https://www.usatoday.com/story/news/politics/2020/08/10/china-sanctions-ted-cruz-marco-rubio-9-others-over-hong-kong-dispute/3333337001/. live.
  19. News: August 13, 2020. 'Mandating China label like forcing HK firms to lie'. Radio Television Hong Kong. live. https://web.archive.org/web/20201210152133/https://news.rthk.hk/rthk/en/component/k2/1543565-20200813.htm?share=facebook. December 10, 2020.
  20. Web site: Continuation of the National Emergency With Respect to Hong Kong . Federal Register . July 9, 2021.
  21. Web site: Continuation of the National Emergency With Respect to Hong Kong . Federal Register . July 13, 2022.
  22. Web site: Continuation of the National Emergency With Respect to Hong Kong . Federal Register . July 12, 2023.
  23. Web site: Continuation of the National Emergency With Respect to Hong Kong . Federal Register . July 12, 2024.

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