The United States Is Going After China's Banks may be dangerous overreach.

[bronxiteforever]

Foreign Policy
Using the financial 'death penalty' may be dangerous overreach.

BY BEAU BARNES, S. NATHAN PARK, WADE WEEMS | JULY 21, 2019, 8:12 AM

... a federal court in Washington ordered Chinese financial giant Shanghai Pudong Development (SPD) Bank and two other Chinese banks to comply with a subpoena issued under the USA Patriot Act, and hand over to U.S. authorities bank records of a Hong Kong company linked to violations of U.S. sanctions on...in June, the court found the banks in contempt for refusing to comply. The contempt order empowers the U.S. treasury ...pursuant to Section 319 of the Patriot Act, to end SPD Bank’s ability to conduct U.S. dollar-denominated transactions. In a global financial system still dominated by the almighty U.S. dollar, that sanction is known as a financial “death penalty.”

...But this easier application of the financial “death penalty” comes with a significant risk: Chinese financial institutions could choose to opt out of the U.S. financial system. That end result is not far-fetched; a version of it is currently unfolding in Europe. Frustrated by U.S. efforts to reimpose Iranian sanctions by using the long reach of U.S. jurisdiction, European countries are in the process of establishing a separate entity to sidestep SWIFT, the longstanding Belgian-based but U.S.-influenced financial clearinghouse.

...The “death penalty” may yet be imposed on SPD Bank, but the imposition of that sentence could well spark further reconsideration of the role of the U.S. dollar in the global financial system. Given the risk, the financial “death penalty” must be applied judiciously and in a disciplined manner. Unfortunately, restraint has not been the calling card of the Trump administration. If U.S. officials are too zealous in using this new tool... the world may come to see the use of the “death penalty” as an unjust political tool, and another example of U.S. jurisdictional overreach. Other nations may move to distance themselves from the U.S. financial system—and in the process, weaken the place of the United States in the world.

https://foreignpolicy.com/2019/07/21/the-united-states-is-going-after-chinas-banks/

[soryang]

1. Like a child playing with a gun

The application of extraterritorial "remedies" comes at a geopolitical price. The whole notion of application of such remedies reminds the objects of such overreaching policies of the period when the power of various western empires dwarfed that of the undeveloped colonies and foreign lands they dominated.

Today, the US and China are routinely referred to as "peer rivals" in defense policy related documents, yet the international civil remedies are based upon a perception of power that is outdated and frankly chauvinistic. In the almost two decades since the Patriot Act was passed, the relative power of the US has declined, but the actions of Washington often fail to take that into account.

[MarcA]

2. National Suicide or Intentional Homicide by oligarchs and their agents

who love wealth but hate America and democracy.

[soryang]

3. Appropriate remarks from John McLaughlin former CIA

Although taken from an article on defense issues with China, the comments from the former CIA official strike an appropriate tone:

China is United States’ top security threat, defence official tells Aspen forum
SCMP by Keegan Elmer July 21

“There’s a kind of China fever rising in Washington,” said John McLaughlin, a former deputy director of the CIA.

“It’s important that we recognise it as a serious competitor and challenger, and that we not be complacent about its chances of overtaking us in the world, but we don’t really know yet whether the right term is competitor, [or] adversary. Do we have to rule out partner yet?”

Due to the size of their economies, the US had a responsibility to the world to properly manage its relationship with China, McLaughlin said.

“[Relations between the two sides] are complicated,” he said. “We want to maintain our pre-eminence, but we really don’t want to go to war.”

https://www.scmp.com/news/china/politics/article/3019487/china-united-states-top-security-threat-defence-official-tells

[Ghost Dog]

4. K&r