【明報專訊】AFTER conflicts over trade and technology, a financial war between China and the US seems to be on the horizon. A US judge has found three large Chinese banks in "contempt of court" for refusing to comply with subpoenas in an investigation into "North Korean sanction violations". One cannot rule out the possibility that Washington will play the same old trick it used in banning Huawei and take aim at the Chinese banks involved. The worst scenario is the cutting off of the banks' access to the US financial system, meaning they cannot undertake transactions in US dollars anymore. In the past, the US has never invoked the laws concerned in handling similar disputes. The latest case marks Washington's attempt to use legal tools in a more aggressive manner to target Chinese banks and companies, which will inevitably accelerate the "disengagement" between the two economies.
The latest controversy is related to a civil action taken by Washington two years ago, in which the US Justice Department alleged that China's Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank (SPDB) had laundered, in violation of US sanctions, more than US$100 million for North Korea's Foreign Trade Bank. However, the three banks emphasised they had always complied with UN resolutions on sanctions against North Korea. According to an exclusive report by the Washington Post, a US court ruled last month that the three Chinese banks involved are in contempt of court for "refusing to comply with subpoenas in an investigation into North Korean sanction violations". The ruling specifically pointed out that one of the banks violated an administrative subpoena issued under the USA Patriot Act, pointing the finger at SPDB.
The latest ruling means the US Justice Department and Treasury Department can for the first time invoke the related laws to cut off SPDB from the US financial system, forbidding it from operating any US dollar accounts or doing US dollar transactions. Some experts from the US say if Washington really invokes the related laws of sanctions, it will be tantamount to imposing a "financial death penalty". It will be an attempt to bring down the bank concerned. Even a "fatal attack" though it might not be, it will certainly be sufficient to hurt the bank seriously.
There have been numerous examples of the US unilaterally imposing sanctions by domestic legislation against adversaries like Cuba, Iran or Sudan. Washington has also from time to time "fined" European banks citing their "violation of US sanction orders". However, seldom has it threatened to bring a foreign bank down.
The USA Patriot Act, which was rushed through Congress in the aftermath of the September 11 attacks, has over the years repeatedly sparked controversies over infringing human rights and been criticised as an "unjust law". Now that the US has turned to such kind of law to take down the Chinese banks with the gloves off, it is obviously acting with full malice and not simply out of concern over sanctions against North Korea. Even some US legal experts also think the incident shows that Washington is prepared to "bring its most aggressive legal authorities" against Chinese banks and companies. This kind of "law‑enforcement" action may become the norm in the future.
Ever since the establishment of foreign relations between the two countries in the 1970s, the relations between China and the US have so far been developing in the general direction of strategic cooperation. However, at this moment their relations are already moving away from "engagement" to "disengagement". This trend is evident in the trade war, the tech conflict as well as the looming financial war.
invoke : to mention or use a law, rule, etc. as a reason for doing sth
adversary : a person that sb is opposed to and competing with in an argument or a battle
malice : a feeling of hatred for sb that causes a desire to harm them