China (Hong Kong and Macau)
Overview: The counterterrorism efforts of the People’s Republic of China continued to target almost exclusively ethnic Uyghur and other Turkic Muslim alleged extremists, whom Beijing labels as the East Turkistan Islamic Movement (ETIM), a group Beijing considers the primary source of terrorism in Xinjiang. However, the United States has not seen clear and convincing evidence of ETIM’s existence. In July and August, as the United States was withdrawing forces from Afghanistan, Chinese Foreign Minister Wang Yi called on the Taliban to “re-impose the ban on Xinjiang’s Uyghur militant group, ETIM,” and to “resolutely and effectively combat” the organization. Further, People’s Republic of China officials stated that Beijing would strengthen ties with the Taliban to ensure “ETIM do[es] not function from Afghanistan’s soil targeting Xinjiang.”
The Government of the People’s Republic of China’s measures, which it describes as counterterrorism, have included holding more than one million people in detainment camps. NGO data have identified more than 12,000 of these detainees who were sentenced to prison terms, in most cases for five to 20 or more years. When questioned, the People’s Republic of China claimed that the camps are vocational education and training centers. The People’s Republic of China denies that its Xinjiang policies involve human rights abuses, claiming its system of “reeducation” camps exist to “combat separatism and Islamist militancy in the region” and are a crucial part of the “war on terror.” China continued to expand law enforcement tools and enhance its military and counterterrorism capacities to justify and improve its ability to carry out this repressive campaign, respond to threats because of China’s increasing global economic footprint, and garner international support for its counterterrorism-related policies.
2021 Terrorist Incidents: People’s Republic of Chinese officials claimed that no violent terrorist incidents occurred in the country; however, Chinese authorities continued to use counterterrorism as a pretext to prosecute ethnic Uyghurs, who are predominantly Muslim, and members of other ethnic and religious minorities, on terrorism charges. In April, Shirzat Bawudun, former head of Xinjiang’s Department of Justice, and Sattar Sawut, former head of Xinjiang’s Department of Education, were sentenced to death on terrorism and extremism charges; five others were given lesser sentences.
International terrorist-related incidents associated with Chinese citizens continued in 2021, including a targeted gun assault by a Sindhi separatist group in Karachi, Pakistan, that wounded a People’s Republic of China national; a Tehrik-e Taliban Pakistan (TTP) attack on China’s ambassador to Pakistan, during which four others died; a Balochistan Liberation Front (BLA) attack on two People’s Republic of China nationals in Karachi; a BLA suicide bombing attempt against Chinese interests in Gwadar, Pakistan; and the deaths of nine Chinese workers by suicide bomb in Pakistan’s Khyber Pakhtunkhwa province, which China attributed to ETIM with TTP’s assistance.
Legislation, Law Enforcement, and Border Security: The People’s Republic of China continued to advance and defend its counterterrorism policies, including reeducation camps in Xinjiang. On June 1, the People’s Bank of China issued a revised draft anti-money laundering law for public comment, with the stated goal of preventing and curbing money laundering and terrorist financing as well as safeguarding national security. As of this report’s publication, the legislation has not been passed. Under the pretext of securing the border against ETIM members, the People’s Republic of China placed politically motivated INTERPOL red notices against Uyghurs.
Countering the Financing of Terrorism: China is a member of the Financial Action Task Force, the Asia/Pacific Group on Money Laundering, and the Eurasian Group on Combating Money Laundering and Terrorist Financing. China’s Financial Intelligence Unit is not a member of the Egmont Group and lacks capacity or political will to effectively share financial intelligence.
Based on current law enforcement investigations, the People’s Republic of China does not adequately control terrorist financing. Chinese law enforcement claimed to have limited ability to freeze funds and investigate banking transactions, and no corporate transparency regulations exist. China piloted a central bank-backed digital currency known as the eCNY, or eCNY Digital Currency Electronic Payment, to deter use of other virtual currencies, among other objectives. The People’s Republic of China also increased regulatory scrutiny of the financial sector by making improvements to the anti-money laundering framework. However, serious shortcomings persisted in effective implementation and ensuring transparency, particularly in the context of international cooperation.
Countering Violent Extremism: The People’s Republic of China continued to implement broad repressive campaigns in Xinjiang under the guise of countering what the Chinese government calls “extremism.” China’s repressive measures include mass “reeducation” and “vocational training” of predominantly Muslim Uyghurs and members of other ethnic and religious minority groups. Despite the United States’ 2021 determination that People’s Republic of China authorities in Xinjiang have committed genocide and crimes against humanity and strong condemnations from many other countries, China continued to defend its policies in Xinjiang and obstructed access to the region by international observers. In October, Xinjiang Uyghur Autonomous Region Spokesperson Xu Guixiang stated: “The so-called Xinjiang-related issues are not ethnic, religious, or human rights issues at all, but antiviolence, antiterrorism, anti infiltration, antiseparation, and anti-interference issues.” Under the pretext of counterterrorism efforts, the People’s Republic of China used existing domestic laws to actively screen, monitor, and censor its citizens on the internet.
The People’s Armed Police is increasingly focused on internal security and joint operations with the People’s Liberation Army and is developing capabilities for rapid response, mobility, and counterterrorism operations, which included “counterterrorism in Xinjiang and Tibet.” In December, the People’s Liberation Army conducted emergency drills and joint law enforcement drills in a nationwide campaign. A 2021 Department of Defense report noted that the People’s Republic of China continued to develop military and law enforcement capabilities and further coordination between Chinese military and counterterrorism apparatuses, stating: “Xi Jinping and the [Chinese Communist Party] leadership tasked the [People’s Armed Police] with integrating themselves into the [People’s Liberation Army’s] joint operation system.”
International and Regional Cooperation: The People’s Republic of China engaged in multilateral, regional, and bilateral fora, seeking to present itself as a global leader on counterterrorism. China continued to promote the UN as the primary international forum for counterterrorism, where it actively advances a repressive approach to counterterrorism.
On July 28, Wang Yi met with Mullah Abdul Ghani Baradar, then the political chief of Afghanistan’s Taliban, urging the Taliban to “make a clean break with all terrorist organizations, including ETIM.” In response, the Taliban leader said it “will never allow any force to use Afghan territory to engage in acts detrimental to China.”
In August the People’s Republic of China conducted antiterrorism drills with Tajikistan, citing concerns about terrorist elements from Afghanistan spilling over the border. In September, troops from China and Pakistan conducted a joint exercise as part of the Shanghai Cooperation Organization’s (SCO’s) Regional Antiterrorism Structure. In September, President Xi presented a five-point proposal underscoring SCO’s important efforts over the past 20 years. On December 22, the China Institute of International Studies, which is affiliated with the MFA, organized the second International Seminar on Counterterrorism, focused on new threats and joint response measures to counter terrorism, particularly in Afghanistan, in which 17 countries participated.
The People’s Republic of China is a member of the following organizations:
- The ASEAN Regional Forum
- The Asia Pacific Economic Cooperation
- The East Asia Summit
- The Global Counter Terrorism Forum
- The SCO Regional Anti-Terrorism Structure
Hong Kong
Overview: Historically, Hong Kong has been neither a hub nor a target for international terrorist groups or extremists and has long maintained highly efficient security forces. Strict travel restrictions put in place by the Government of Hong Kong, because of the COVID-19 pandemic, have further reduced the likelihood of foreign terrorist threats to the city. Consequently, Hong Kong law enforcement has not been a close partner on counterterrorism matters, including intelligence sharing.
However, Hong Kong remains an important financial center and is geographically close to countries with known domestic and foreign terrorism issues — including Indonesia and the Philippines — providing a potential nexus for terrorist financing flows and a possible location for terrorist activities when international travel returns to normal.
Hong Kong continued security and law enforcement cooperation with the United States through the Hong Kong Customs and Excise Department’s joint implementation of the Container Security Initiative. Hong Kong cooperated internationally on counterterrorism efforts through INTERPOL and other security-focused organizations. Despite these efforts, the Government of Hong Kong and its law enforcement apparatus could be a stronger partner on counterterrorism and other security challenges, such as providing more information related to terrorism financing and associated activities.
2021 Terrorist Incidents: The Hong Kong Police reported an incident on July 1, which it described as a lone-wolf-style domestic terrorist attack, involving a man using a knife to wound a male police officer and then killing himself.
Legislation, Law Enforcement, and Border Security: Counterterrorism remained an operational priority for the Hong Kong Police Force (HKPF). The Police Counterterrorism Response Unit provides a strong deterrent presence, assisting police districts with counterterrorism strategy implementation and complementing the tactical and professional support of existing police specialist units, such as the Explosive Ordnance Disposal Bureau, the Special Duties Unit, the Airport Security Unit, and the VIP Protection Unit.
In 2018 the Government of Hong Kong set up the Interdepartmental Counter-Terrorism Unit (ICTU) to strengthen overall counterterrorism efforts by monitoring global trends, reviewing and improving counterterrorism strategies in Hong Kong, developing specialized counterterrorism training, and optimizing emergency response plans. The ICTU held its most recent counterterrorism exercise in November.
Countering the Financing of Terrorism: Hong Kong is a member of the Financial Action Task Force and the Asia Pacific Group on Money Laundering (APG). Hong Kong’s Joint Financial Intelligence Unit is a member of the Egmont Group.
In May the Government of Hong Kong concluded a three-month consultation on legislative proposals to enhance Hong Kong’s Anti-Money Laundering and Counter-Financing of Terrorism (AML/CTF) regime through the introduction of a licensing requirement for virtual asset services providers and a registration system for dealers in precious metals and stones. As of December, the government had not yet introduced a bill into the Legislative Council.
The Hong Kong Monetary Authority (HKMA) supervises financial institutions’ risk management systems and takes disciplinary actions for those failing to comply with AML/CFT measures. In 2021, disciplinary actions were taken against three Chinese banks and a Hong Kong-based online payment provider. To improve the efficiency and effectiveness of AML/CFT measures, HKMA in November launched AML Regtech Lab, or AMLab, to allow experimentation with technologies and data analytics for preventing and detecting financial crimes.
In September the Securities and Futures Commission published its revised AML/CFT guidelines, which include additional guidance to facilitate the adoption of a risk-based approach to AML/CFT measures by securities industry participants. The revised guidelines require financial institutions to apply additional due diligence and risk mitigation measures for cross border correspondent relationships in the securities sector, such as determining through publicly available information whether the respondent institution has been subject to targeted financial sanctions or regulatory actions and obtaining senior management’s approval before establishing cross-border correspondent relationships. The guidelines also prohibit financial institutions from establishing or continuing a cross-border correspondent relationship with a shell financial institution.
Countering Violent Extremism: There were no changes to Hong Kong’s CVE programming in 2021.
International and Regional Cooperation: In 2020, the President’s executive order on Hong Kong normalization directed agencies to take action to end the provision of training to members of the Hong Kong Police Force or other Hong Kong security services at the Department of State’s International Law Enforcement Academies.
A Greater Bay Area (GBA) Anti-Money Laundering Summit was organized in October to enhance exchange and cooperation on AML among mainland China, Hong Kong, and Macau. The GBA refers to mainland China’s development plan to promote economic and social integration between and among Hong Kong, Macau, and nine cities in Guangdong province. Hong Kong is also an APEC economy.
During July 27-31, the Cyber Security and Technology Crime Bureau conducted the first Guangdong-Hong Kong-Macau tripartite counter-cyber-and-physical-terrorism exercise with the Cyber Criminal Investigation Department of the Guangdong Provincial Public Security Department and the Macau Judiciary Police. The exercise simulated a terrorist group planning to launch a terrorist attack in Hong Kong.
Macau
Overview: Historically, Macau has not been a proactive partner on counterterrorism matters, including intelligence sharing. Macau is neither a hub nor a target for international terrorist groups or extremists and maintains highly efficient security services. The stringent travel restrictions put in place by the Macau government because of the COVID-19 pandemic further reduced the likelihood of foreign terrorist threats to the city. Macau is one of the most successful and popular destinations for gambling globally and is geographically close to countries with known domestic and foreign terrorism issues, such as Indonesia and the Philippines. When international travel returns to normal levels, the city will potentially be a nexus for facilitating terrorism financing or location for terrorist activities. The Police Intervention Tactical Unit (UTIP) branch of the Macau Public Security Police Force is responsible for CT issues. UTIP’s responsibilities include protecting important installations and dignitaries and IED deactivation. Macau cooperated internationally on counterterrorism efforts through INTERPOL and other security-focused organizations. Despite these efforts, Macau and its law enforcement apparatus could be a stronger partner on counterterrorism and other security challenges, including providing more information related to terrorism financing and associated activities.
2021 Terrorist Incidents: No terrorist incidents were reported in Macau in 2021. Legislation, Law Enforcement, and Border Security: There are no updates for 2021.
Countering the Financing of Terrorism: Macau is a member of the APG. Macau’s Financial Intelligence Unit, the Financial Intelligence Office (GIF), is a member of the Egmont Group. The GIF’s functions include freezing assets, introducing the AML/CFT assessment standards of international organizations, and sharing international organizations’ recommendations for law enforcement authorities to step up AML/CFT efforts.
The GIF’s director was appointed by FATF in 2020 as co-chair of the Asia/Pacific Joint Group (APJG), a financial action task force subgroup responsible for establishing sanction and monitoring lists. The GIF director chaired or participated in more than 20 virtual APJG meetings in 2021. The GIF provided AML/CFT training sessions to more than 900 practitioners from the financial and gaming sectors in 2021.
Macau’s interdepartmental AML/CFT working group, which was established in 2002 and currently consists of 15 government agencies, held one AML/CFT plenary meeting in May to prioritize project items listed in the Five-Year Strategic Plan for Anti-Money Laundering (2021- 2025). The working group is responsible for tracking the development of AML/CFT international standards and best practices, and formulating overall policies against money laundering, terrorism financing, and the financing of proliferation of weapons of mass destruction.
Countering Violent Extremism: There were no changes in 2021.
International and Regional Cooperation: In April the GIF signed an MOU with the New Zealand Financial Intelligence Unit on the exchange of AML/CFT intelligence.
In July, Macau’s Judiciary Police conducted the first Guangdong-Hong Kong-Macau tripartite counter-cyber-and-physical-terrorism drill with the Guangdong Provincial Public Security Department and the HKPF to prepare for a large-scale bomb attack and a hostage-taking crisis.
The 2020-21 tripartite online meeting among Macau authorities and those on the mainland and in Hong Kong to foster cooperation on AML/CFT took place in October, in a virtual format, with a focus on facilitating a cross-border intelligence-sharing mechanism.