Last week, finance ministers and senior officials from across the region gathered in Hong Kong for the Asia-Pacific Economic Cooperation Finance Ministers’ Meeting. The venue was troubling as Hong Kong has become the world’s capital of sanctions evasion that supports the regimes in Russia, Iran and North Korea. A new report from the Committee for Freedom in Hong Kong (CFHK) Foundation, where I serve as U.S. director, reveals just how fully the city has embraced that role.
Released on Oct. 19 and timed to the APEC talks, “” picks up where our 2024 study, “Beneath the Harbor,” left off. The conclusion is stark. In the two years since, the pattern we identified has not abated; it has intensified and become more brazen. Hong Kong is now the connective tissue between Western suppliers and three of the world’s most heavily sanctioned regimes, supplying the finance, technology and weapons components that keep their militaries running.
The numbers are hard to dismiss. Of the roughly $9 billion in potential Iranian shadow-banking activity that the U.S. Treasury’s Financial Crimes Enforcement Network identified in U.S. correspondent accounts in 2024, more than half — $4.8 billion — involved Hong Kong-based companies, roughly 81% of it through nonresident accounts at China-based banks. Leaked files from A7, a Kremlin-backed payments network that moved at least $6.9 billion through global banks, show around $1.1 billion flowing to accounts at Standard Chartered in Hong Kong and reference at least 87 Hong Kong front companies.
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