Hong Kong dismisses U.S. sanctions on Russian-owned superyacht

Hong Kong leader John Lee said Tuesday that he will implement only United Nations sanctions, not U.S. ones, after a superyacht allegedly connected to a Russian tycoon docked in the city.

Lee’s statement came days after the U.S. warned that Hong Kong’s status as a financial center could be affected if it acts as a haven for sanctioned individuals.

The yacht’s alleged owner, Alexey Mordashov, is believed to have close ties to Russian President Vladimir Putin and was sanctioned by the U.S., Britain and the European Union in February after Russia’s invasion of Ukraine. Hong Kong authorities have said that they do not implement sanctions imposed by other governments.

“We cannot do anything that has no legal basis,” Lee told reporters. “We will comply with United Nations sanctions — that is our system, that is our rule of law.”

A U.S. State Department spokesperson said in a statement Monday that “the possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment.”

The spokesperson also said that the city’s reputation as a financial center “depends on its adherence to international laws and standards” and that U.S. companies “increasingly view Hong Kong’s business environment with wariness” because of an erosion of the city’s once-high degree of autonomy and freedoms.

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The $500-million superyacht Nord moored in Hong Kong’s harbor Wednesday following a weeklong journey from the Russian city of Vladivostok.

Mordashov is one of Russia’s richest men, with an estimated wealth of about $18 billion. He also is the main shareholder and chairman of Severstal, Russia’s largest steel and mining company. Mordashov has tried to challenge the sanctions against him in European courts.

U.S. and European authorities have seized more than a dozen yachts belonging to sanctioned Russian tycoons to prevent them from sailing to ports where the sanctions are not recognized or enforced. Russian oligarchs have begun docking their yachts at ports in countries such as Turkey, which has maintained diplomatic ties with Russia since the war began.

The Nord measures 465 feet and has two helipads, a swimming pool and 20 cabins. It is operating under a Russian flag.

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Beijing sets foreign policy for Hong Kong and has demurred from participating in sanctions against Russia for its attack on Ukraine.

Britain handed control over its colony Hong Kong to China in 1997, promising to respect its semi-autonomous status as a separate economic and customs territory. The city’s status as an international business hub and financial center has suffered in recent years, particularly after Beijing imposed a tough national security law on the city, aimed primarily at stamping out dissent following months of anti-government protests in 2019

Following passage of the law in 2020, the U.S. sanctioned Lee, then-Hong Kong Chief Executive Carrie Lam and other Hong Kong and mainland Chinese government officials for “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly.”

Lee blasted the ban on personal and official travel to the U.S. and access to the American financial system.

He was asked whether he is paid in cash as Hong Kong’s leader, as was the case for Lam, since the U.S. sanctions limit their ability to transfer funds across national boundaries or convert them into different currencies.

“It is a very barbaric act,” Lee said, referring to the sanctions. “Officials in Hong Kong do what is right to protect the interests of the country, and the interests of Hong Kong, so we will just laugh off the so-called sanctions.”