Thursday, July 25, 2019

Media Appearance: "The United States is Going After China's Banks" on Foreign Policy

I promise we will soon return to our regularly scheduled programming about litigating Asia-related cases before US courts! But with so much of Asia being in the news all the time, there is a constant demand for media articles. 

At any rate, here is a very important article that I wrote with my colleagues Wade Weems and Beau Barnes.
[T]he all-tools approach provides new angles of attack by blurring the distinction between different functions of the government: National security is trade is technology controls is financial regulation is law enforcement. . . . The recent Washington court ruling opens a more direct and expedient path and dramatically increases the breadth, reach and potential frequency of using this tool. Under Section 319 of the Patriot Act, it is not necessary to show the company knew it was violating sanctions; any foreign bank could lose its access to U.S. dollar end transactions when its only transgression is refusal to comply with a subpoena.

Two things are worth thinking about:

1. What would be the global financial implications when China's largest banks are cut off from dollar-denominated transactions? Can we even imagine all the secondary consequences falling out from such a measure?

2. What additional "tools" would the US government add? One big item I'm expecting to see is immigration laws--that is, restricting entry or exit of key Chinese nationals. China has been imposing an "exit ban" on several US citizens, and it is entirely possible for US to retaliate in kind.

Neither is a pleasant thing to think about, but such is the world we live in.

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