Rights Before Economic Repression: getting banks to push back against economic transnational
Executive Summary
Much of the pre-existing reporting and literature on transnational repression (TNR) focuses on criminal and extreme elements which include violence, intimidation, and often clear breaches of existing laws. There is a notable absence of below-legal-thredshold tactics, such as the financial levers regimes use to coerce dissidents overseas. For instance, this financial element was notably missing in the recent G7 leaders’ statement on TNR.
In the authors’ view, economic TNR should be defined as ‘measures taken by a foreign government to target individuals overseas and their families through economic coercion’. The measures considered as part of economic TNR are those that make an individual and their family materially worse off either because they are unable to access financial services, their savings, or the loss of their professional qualifications means they are unable to find adequate work and continue to gain an income. These measures should include:
The freezing and closing of an individual’s bank account for politically motivated reasons.
Pension funds or other savings funds being blocked from being withdrawn and transferred outside of a jurisdiction.
An individual being investigated or arrested for transferring money to support an individual overseas or handling money of an individual overseas.
The arbitrary revocation of professional qualification on which individuals’ livelihood relies.
Individuals overseas being pursued for vexatious tax bills or other penalties.
This report notes 17 cases of economic TNR orchestrated by the People’s Republic of China (PRC) against the PRC, Hong Kong, Tibetan, and Uyghur communities.
A growing number of financial institutions face competing obligations to uphold Chinese domestic security laws which are applied extraterritorially and legal obligations in Germany, the UK, and other jurisdictions where they are headquartered and operate.
Both the UK and Germany as part of their respective financial dialogues with China have recently signed agreements with the PRC to set up working groups to cooperate on tackling money-laundering. While there are a growing number of legitimate cases of money-laundering that rightly require authorities to work with their counterparts in the PRC, there is a risk that these working groups will also be used as a forum by the PRC to further false claims of money-laundering that seek to target dissidents overseas as part of economic transnational repression.
The challenge of economic TNR from the PRC is likely to increase as the PRC’s influence over global finance increases through the growing use of its alternative payments system, the increased role of the BRICS and other multilateral institutions play in reforming existing multilateral financial institutions, and more broadly the attractiveness of the Hong Kong and Shanghai stock exchanges as Chinese companies continue to compete for global leadership in emerging technology. This will allow the PRC more levers and leverage to pressure financial institutions to follow its direction and freeze the assets of dissidents overseas.
The PRC is not alone in using economic transnational repression as a tool to silence its critics and police diasporas overseas. Since Russia’s invasion of Ukraine in the Spring of 2022, Russia’s financial watchdog at the direction of the Federal Security Service of the Russian Federation has designated thousands of individuals and organisations on its “terrorists and extremists” list which has allowed the authorities to freeze their bank accounts and assets . Belarus has adopted a similar blacklist following anti-government protests in 2020 and Turkey has operated a secret blacklist since 2018. Similarly, in the past the regime in Tehran has used this method to target journalists who report unfavourable coverage.
Key Recommendations
UK and German policymakers should ensure that economic transnational repression is defined in primary legislation and is incorporated into any official definitions of transnational repression adopted by the UK and German Governments.
UK and German policymakers should encourage financial institutions in their respective countries to adopt internal processes to respond to economic transnational repression. These processes should be easily crafted in-line with existing internal policies regarding de-banking and politically exposed individuals which ensures that banks undertake further checks and asks further questions and for additional information before freezing the bank accounts of political dissidents. Under these processes financial institutions should offer a substantive explanation for the freezing of bank accounts within a week to the customer, offering the rationale, and providing original documentation.
Professional bodies in the UK and Germany should consider introducing a bespoke route for individuals who are facing transnational repression and have had their professional qualifications revoked, which would allow them to transfer their qualifications to the UK or Germany.
G7 countries should increase information and best practice sharing regarding countering financial transnational repression and agree on a coordinated response. It should be included on the G7 agenda in Évian-les-Bain in 2026.