The UK Government has announced that it is extending the UK's arms embargo on China to Hong Kong, following China's imposition of new national security laws on the former British colony, and will also suspend its extradition treaty with Hong Kong "immediately and indefinitely".

What has happened?

On 20 July 2020, UK Foreign Secretary Dominic Raab announced (through a statement to the House of Commons) that as part of the UK's response to China’s imposition of new national security laws on Hong Kong, the UK's arms embargo on China will be extended to Hong Kong: "Given the role China has now assumed for the internal security of Hong Kong and the authority it is exerting over law enforcement, the UK will extend to Hong Kong the arms embargo that we have applied to mainland China since 1999."

This means that there will be a prohibition on exports from the UK to Hong Kong of potentially lethal weapons, their components or ammunition, as well as any equipment which might be used for internal repression. Further, UK open general licences (OGELs) that include Hong Kong will be changed or amended to bring them in line with the restrictions on China.

The change was confirmed by the UK ECJU (its Notice to Exporters on the extension of the China arms embargo to Hong Kong is available here).

The scope of the arms embargo includes:

• lethal weapons, such as machine guns, large-calibre weapons, bombs, torpedoes, rockets and missiles;
• specially designed components of the above and ammunition;
• military aircraft and helicopters, vessels of war, armoured fighting vehicles and other weapons platforms; and
• any equipment which might be used for internal repression.

By way of background, the 27 EU Member States and the UK currently operate an arms embargo on China (adopted by a Declaration of the European Council made in Madrid in June 1989, following the 1989 Tiananmen Square massacre), but this embargo had always excluded Hong Kong. The UK is the first European country to extend the existing China arms embargo to Hong Kong.

In addition, it was announced that the UK will suspend its extradition treaty with Hong Kong "immediately and indefinitely". Raab told the House of Commons that the UK "will not consider reactivating those arrangements unless and until there are clear and robust safeguards which are able to prevent extradition from the UK being misused under the new national security legislation".

What does this mean?

Despite the UK taking a harder line on China, the Foreign Secretary insisted that the UK sought to have a positive, constructive and reciprocal relationship with China, and stopped short of announcing Magnitsky human rights sanctions against Chinese officials. However, the UK Government is coming under increasing pressure to use its new human rights sanctions regime (please see our client alert on the new UK sanctions regime) to designate Chinese officials responsible for the crackdown on liberties in Hong Kong and the oppression of the Uighur people in Xinjiang. The Foreign Secretary informed the House of Commons that this would be kept under review, warning Beijing that "the United Kingdom is watching. And the whole world is watching."

China’s ambassador to the UK, Liu Xiaoming, has said that any measures to sanction Chinese officials would be met with a resolute response from China. It has been suggested that Beijing could respond by placing economic sanctions on UK companies which operate in China, implying that UK companies could face the same fate as how the UK Government treated Huawei.

The escalation in tensions came as U.S. Secretary of State Mike Pompeo visited the UK on Tuesday to discuss issues including how to counter China's growing economic and diplomatic power. The Secretary of State noted the U.S. Government hopes to "build out a coalition that understands this threat and will work collectively to convince the Chinese Communist Party it’s not in its best interests to engage in these kinds of behaviours."

The Foreign Secretary indicated the UK was on board but only to a degree, as forming strong business ties with China has been a major focus of the UK in the post-Brexit era. However, given that the UK is simultaneously trying to secure a free trade deal with the U.S., it will instead have to strike a delicate balance between its own economic interests on China and the push for a more combative approach against China from Washington.

[View source.]