US Pulls Out Of Three Bilateral Deals With HK

The US State Department said it had notified Hong Kong on Wednesday that Washington had suspended or terminated three bilateral agreements with the SAR following Beijing's imposition of a new National Security Law.

The deals include an agreement on the surrender of fugitives and a separate pact on the transfer of sentenced persons. The third agreement covers reciprocal tax exemptions on income derived from the international operation of ships.

It's not clear how the changes will affect the SAR's shipping industry, but according to the website of the Hong Kong Maritime and Port Board, the agreement with the United States "relieves ship owners of the burden of double tax".

Hong Kong promotes its low and simple taxes as a benefit for ship owners, and has bilateral double taxation relief arrangement with more than 50 jurisdictions.

According to PwC, ship owners in Hong Kong control about 8 percent of total tonnage worldwide.

In a Tweet, US Secretary of State Mike Pompeo said: "The Chinese Communist Party chose to crush the freedoms and autonomy of the people of Hong Kong. Because of the CCP’s actions, we are terminating or suspending three of our bilateral agreements with the territory."

"These steps underscore our deep concern regarding Beijing's decision to impose the National Security Law, which has crushed the freedoms of the people of Hong Kong," State Department Spokeswoman Morgan Ortagus said.

The ending of the agreements follows US President Donald Trump's order last month to end Hong Kong’s special status under US law.

Trump signed an executive order last month that he said would end the preferential economic treatment for the SAR following the imposition of the new National Security Law. (RTHK/Reuters)

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