John Han, Evelyn Sheehan and Wade Weems on the Risks of Wealthy Hong Kong Individuals’ Moving Assets Abroad
September 18, 2020
Publication: Law.com International
China’s enactment of the Hong Kong national security law, as well as the U.S. response, have caused many Hong Kong-based ultra-high-net-worth individuals (UHNWIs) and family offices to consider moving assets out of the region. Kobre & Kim’s John Han, Evelyn Sheehan and Wade Weems analyzed the relevant risks and offered some advice in an article for Law.com International.
The dual legal regimes of the recent national security law and U.S. sanctions have upended Hong Kong, with both China and the U.S. imposing more scrutiny on many Hong Kong individuals and entities. When moving wealth abroad, risks arise from subjecting funds and clients to multiple compliance regimes. Wealth professionals are also at risk, potentially running afoul of complicated and inconsistent due diligence and compliance requirements; in fact, rising U.S. enforcement actions are already happening in other parts of the world, such as Latin America.
Han, Sheehan and Weems advise wealth professionals and institutions to remain vigilant and take preemptive measures: These measures include seeking experienced counsel to help spot and prevent pitfalls when moving wealth across borders, and proactively conducting analyses and stress tests on assets to understand and manage any related risks.