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850. How does the Treasury Department determine whether a transaction is “significant” for purposes of section 5(b) of the Hong Kong Autonomy Act (HKAA)?


For purposes of implementing section 5(b) of the HKAA, the Secretary of the Treasury may consider the totality of the facts and circumstances when determining whether transactions are “significant.”  As a general matter, the Treasury Department may consider some or all of the following factors in determining whether a transaction is “significant”:  (1) the size, number, and frequency of the transaction(s); (2) the nature of the transaction(s); (3) the level of awareness of management and whether the transaction(s) are part of a pattern of conduct; (4) the nexus between the transaction(s) and a foreign person identified in a report submitted by the Secretary of State under section 5(a) of the HKAA or in updates to that report; (5) the impact of the transaction(s) on statutory objectives, including whether the transaction(s) (A) have a significant and lasting negative effect that contravenes the obligations of China under the Joint Declaration and the Basic Law, (B) are likely to be repeated in the future, and (C) have been reversed or otherwise mitigated through positive countermeasures taken by that FFI; (6) whether the transaction(s) involve deceptive practices; and (7) such other factors that the Secretary of the Treasury deems relevant on a case-by-case basis.  For purposes of section 5(b) of HKAA, a transaction will not be considered significant if a U.S. person would not require a specific license from OFAC to conduct or participate in the transaction.

Date Released
October 14, 2020