Ottawa must warn Canadian business about risks of operating in Hong Kong, MPs told

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The legal team behind jailed Hong Kong publisher Jimmy Lai is urging Canada to warn Canadian businesses explicitly about the risks of operating in the former British colony, now subject to a harsh national-security law imposed by Beijing.

This recommendation, made before the Commons subcommittee on international human rights on Tuesday, came alongside calls from an advocacy group for Ottawa to place sanctions on Hong Kong officials who own property in Canada.

Caoilfhionn Gallagher, a British lawyer with Doughty Street Chambers who represents Mr. Lai, told the committee that it is incumbent on Canada to alert Canadian companies to the dangers they could face if an employee runs afoul of the security law, passed in 2020. Critics say the legislation effectively criminalizes dissent and opposition.

“There are over 200 Canadian companies in Hong Kong currently, and Jimmy Lai’s case is a cautionary tale,” Ms. Gallagher told the committee. “Because what we’ve seen is essentially state-sponsored theft of a business – a hugely successful business, a hugely successful media company – shut down by order of the executive.”

Mr. Lai, a British citizen and publisher of Hong Kong’s pro-democracy Apple Daily newspaper, was arrested and charged in December, 2020, under the national-security law. Apple Daily was shuttered permanently six months later, and other top executives were also arrested.

Mr. Lai has been imprisoned since his arrest and is currently on trial in Hong Kong. He has pleaded not guilty to two charges of conspiracy to collude with foreign forces and a lesser charge of conspiracy to publish seditious material.

Ostensibly intended to target secession, subversion and terrorism, the national-security law contains vaguely defined offences that Amnesty International has said mean “virtually anything could be deemed a threat.” Authorities are proposing even more legislation that could expand Hong Kong’s ability to prosecute residents for offences.

“Every single Canadian company that is operating in Hong Kong, with the current national-security law, and with sedition laws in place, is risking action like that being taken against them, if any of their employees like a tweet that the authorities don’t like, speak out of turn, or stand up to the authorities,” Ms. Gallagher said, referring to what happened to Mr. Lai’s business. “And that is something which is of grave concern for all Canadian businesses, and all Canadian people who are currently in Hong Kong.”

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An estimated 300,000 Canadian citizens live in Hong Kong, which was handed over to the People’s Republic of China in 1997 by Britain. A crackdown on civil rights in Hong Kong has steadily eroded the territory’s political and social freedoms, which were unique in China – a legacy of Hong Kong’s years under British control.

Katherine Leung, a representative of Hong Kong Watch, an advocacy group set up to promote human rights and the rule of law in the Asian city, recommended to MPs at the committee that Canada place sanctions on Hong Kong officials who are directly involved in either enacting or supporting the national-security law.

Ms. Leung told MPs that Eliza Chan, a member of Hong Kong’s governing Executive Council, has filed disclosure statements that indicate she owns two rental apartments in Toronto. In addition, she noted that Hong Kong legislators Kennedy Wong Ying-ho and Andrew Lam Siu-lo’s disclosure statements also say they own property in Canada.

In an interview Wednesday, Ms. Leung said Canada needs to take action. “Canada should adopt a Hong Kong officials-specific sanctions list and cut off their access to Canadian properties and bank accounts by freezing their assets,” she said.

The United States issued a blanket warning to American businesses in 2021, saying “the policies the Chinese government and the government of Hong Kong have implemented undermine the legal and regulatory environment that is critical for individuals and businesses to operate freely and with legal certainty in Hong Kong.”

Gloria Fung, president of Canada-Hong Kong Link, said Mr. Lai’s trial is the most high-profile prosecution in China’s crackdown on independent media.

“Without independent sources of information, it has been extremely difficult for Canadian diplomats and businesses to accurately assess the risks and opportunities there,” she said.

Ms. Fung said the fact that Mr. Lai faces the prospect of life imprisonment on the “trumped-up charge of colluding with foreign powers” is just one of many red flags warning Canadian businesses that Hong Kong is no longer a safe place to operate. “Such severe penalties for vaguely defined offences under the National Security Law have created a white terror in Hong Kong, where an estimated 500,000 Canadians live,” she said.

Canada’s travel advisory for individuals visiting Hong Kong does warn about the national-security law. It says “activities considered as national security violations are broadly and vaguely defined” and could include activities not considered illegal in Canada. “If you are suspected of endangering national security, you may be subject to questioning,” it says. “You risk being arbitrarily detained on national security grounds, even while you are transiting through Hong Kong. You could be subject to transfer to mainland China for prosecution. Penalties are severe and include life imprisonment.”

A Canadian government business webpage on the former British colony, however, talks about taking “your business to the next level” in the Asian city. “Explore opportunities to grow your footprint in Hong Kong, SAR with the help of our Trade Commissioner Service,” it says.

Asked why it hasn’t warned businesses about the risks of operating in Hong Kong, Department of Global Affairs spokesman Grantly Franklin said “Canada has expressed on a number of occasions its concern with the National Security Law and its negative impact on the rights of all individuals and organizations located in Hong Kong.” To this end, he said, Canada has issued ministerial statements and travel advisories on the risks the NSL can pose to residents, tourists and persons in transit.”

With a report from Reuters