U.S. Department of State, "Country Reports on Terrorism 2013," April 2014

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CHINA (HONG KONG AND MACAU)

Overview: China's cooperation with the United States on counterterrorism issues remained marginal, with little reciprocity in information exchanges. China expanded cooperation with countries in the region, however, and conducted joint counterterrorism training exercises with Belarus, India, Indonesia, Kazakhstan, Kyrgyzstan, and Russia. China's domestic counterterrorism efforts were primarily focused on the East Turkestan Islamic Movement (ETIM), which China alleges maintains a presence in the Xinjiang Uighur Autonomous Region (XUAR) of northwest China. China has criticized the U.S. response to acts China characterizes as terrorism, alleging that U.S. expressions of concern over the treatment of China's ethnic minorities and deficiencies in rule of law represent a “double standard” on terrorism. China frequently refers to Uighur activists abroad – including those in the United States – as complicit in supporting "terrorist" activity, but it has not provided credible evidence to support those claims.

2013 Terrorist Incidents: Chinese authorities labeled several incidents of violence involving members of the Uighur minority as acts of terrorism. In general, Chinese authorities did not provide detailed evidence of terrorist involvement, and restricted the ability of journalists and international observers to independently verify official media accounts.

On October 28, a vehicle carrying three members of a Uighur family careened into an ornamental bridge on Tiananmen Square and exploded, killing two tourists, the vehicle's occupants, and injuring 38 others. The Chinese government announced that the incident was an ETIM plot to create instability in the lead-up to a major Chinese Communist Party political meeting. While an internet video by purported ETIM members mentioned the incident, there was no independent evidence to suggest ETIM involvement.

Chinese authorities characterized several other incidents that took place in the XUAR as terrorist attacks. On June 26, 37 individuals were killed – including several police officers – in a reported attack on a police station in Lukqun township, Turpan prefecture, XUAR, that Chinese authorities called a "violent terrorist attack."

Legislation, Law Enforcement, and Border Security: China's National People's Congress amended the national criminal procedure law to include measures that provide protection for witnesses, victims, and relatives whose personal safety is at risk because of their testimony in cases involving, among other things, terrorist acts. The new legislation, which came into effect in January, includes controversial measures that strengthen Chinese authorities' ability to arrest and detain individuals suspected of "endangering state security or crimes of terrorism." This legislation has been used to detain dissidents, human rights activists, and religious practitioners.

Although China continued to stress the importance of international counterterrorism cooperation, Chinese law enforcement agencies were reluctant to conduct joint investigations with U.S. law enforcement agencies or provide assistance in cases involving suspected terrorists.

Countering the Financing of Terrorism: China is a member of the Financial Action Task Force (FATF), as well as the Asia/Pacific Group on Money Laundering (APG) and the Eurasian Group on Combating Money Laundering and Terrorist Financing (EAG) – both of which are FATF-style regional bodies.

In May, the Chinese government announced draft measures for freezing assets associated with terrorist activities, putting into practice the legal framework established by the Chinese government in October 2011 for enforcing UN designations listings. This authority provides the legal basis for the establishment of a national interagency terrorist asset freezing body that, if robustly implemented, should strengthen China's implementation of UNSCRs 1267/1989 (1999), 1988 (2011), and 1373. Additional issues remain to be addressed, including guidance for designated non-financial businesses and professions; delisting and unfreezing procedures; and defining the rights of bona fide third parties in seizure/confiscation actions.

The Chinese government has strengthened its preventive measures to counter terrorist finance, with an emphasis on requiring financial institutions to collect and maintain beneficial ownership information and making Suspicious Transaction Reports more comprehensive. In early 2013, the People's Bank of China published new regulations which require Chinese banks to rate clients' risks based on a variety of factors, including a client's location or nature of business.

For further information on money laundering and financial crimes, see the 2014 International Narcotics Control Strategy Report (INCSR), Volume 2, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

Regional and International Cooperation: Throughout the year, China publicly affirmed its commitment to working with international partners to counter terrorism. China continued to voice support for three UNSC committees – the 1267/1989 (al-Qa’ida) Sanctions Committee, the Counter-Terrorism Committee, and the 1540 Committee. China is a founding member of the Global Counterterrorism Forum (GCTF), and in September announced it would increase its involvement in the GCTF's Sahel and Horn of Africa Working Groups. China also participated in the third APEC workshop on counterterrorist finance and the non-profit organization sector in January.

China cooperated with other nations on counterterrorism efforts through military exercises and assistance. In August, China and Russia held joint border security exercises (Peace Mission 2013) within the framework of the Shanghai Cooperation Organization. In September, China and 18 South East Asian countries participated in a counterterrorism exercise co-chaired by Indonesia and the United States. For the first time in five years, India and China conducted joint exercises in Chengdu (Hand-in-Hand 2013) in November. Also in November, China and Indonesia held their third round of counterterrorism exercises in Indonesia (Sharp Knife 2013).

Hong Kong

Hong Kong largely continued its effective security and law enforcement partnership with the United States, including through the Hong Kong Customs and Excise Department’s successful joint operation of the Container Security Initiative and through participation in U.S.-sponsored training programs.

In ratifying UN Conventions on terrorism, the People’s Republic of China has specified that the treaties would also apply to the Hong Kong Special Administrative Region, which has subsequently implemented the Conventions through local law.

Counterterrorism remained an operational priority for the Hong Kong Police Force, as demonstrated by existing policies on prevention, protection, and preparedness. The Police Security Wing coordinates potential terrorist threat information with relevant counterterrorism units. The Police Counter Terrorist Response Unit provides a strong deterrent presence, assisting police districts with counterterrorist strategy implementation and complementing the tactical and professional support of existing police specialist units, such as the Explosive Ordnance Disposal Bureau, Special Duties Unit, and VIP Protection Unit.

Hong Kong’s strategic trade regime buttresses U.S. efforts to restrict the transfer of commodities, software, and technology to terrorist organizations or individuals. Hong Kong law enforcement officers attended U.S.-sponsored capacity building training at the International Law Enforcement Academy on border control, cargo targeting and interdiction, personnel and facility security, and post-blast investigations.

Hong Kong is a member of the Financial Action Task Force (FATF), the Asia-Pacific Group (APG) on Money Laundering—a FATF-style regional body—and the Egmont Group of Financial Intelligence Units. Terrorist financing is a criminal offense in Hong Kong, and financial institutions are required to continuously search for terrorist financing networks and screen accounts using designations lists provided by the United States under relevant authorities, as well as the UNSC 1267/1989 (al-Qa’ida) Sanctions Committee’s consolidated lists. Filing suspicious transactions reports irrespective of transaction amounts is obligatory, and at year’s end Hong Kong was considering mandatory reporting requirements for cross-border currency movements.

Hong Kong emphasized efforts to engage overseas law enforcement and counterterrorism counterparts bilaterally to ensure effective cross-border action against terrorism and terrorist financing, as well as capacity building. Multilaterally, Hong Kong was a regular and active participant in counterterrorism efforts through the FATF, APG, APEC, Interpol, and other security-focused organizations.

Macau

Macau’s counterterrorism cooperation with the United States included information exchange and regular capacity building through participation in U.S.-sponsored training programs. In ratifying UN Conventions on terrorism, the People’s Republic of China specified that the treaties would also apply to the Macau Special Administrative Region. The Police Intervention Tactical Unit (UTIP), which falls under the Macau Public Security Police Force, is responsible for protecting important installations and dignitaries, and for conducting high-risk missions, such as deactivation of explosive devices. UTIP’s Special Operations Group’s mission is counterterrorism operations. Macau law enforcement officers attended U.S.-sponsored capacity building training at ILEA on border control, cargo targeting and interdiction, personnel and facility security, and post-blast investigations.

Macau is a member of the Asia-Pacific Group (APG) on Money Laundering – a Financial Action Task Force (FATF)-style regional body – and the Egmont Group of Financial Intelligence Units (FIUs). Terrorist financing is a criminal offense in Macau, and banks and other financial institutions are required to continuously search for terrorist financing networks and screen accounts using designations lists provided by the United States under relevant authorities, as well as the UNSC 1267/1989 Sanctions Committee’s consolidated lists. Filing suspicious transactions reports irrespective of transaction amounts is obligatory, and at year’s end Macau was considering establishing mandatory reporting requirements for cross-border currency movements. Macau’s $45 billion-per-year casino industry presents significant risks for the movement of illicit funds.

Macau cooperated internationally in counterterrorism efforts through Interpol and other security-focused organizations, including through FATF and APG. Macau’s Financial Intelligence Office pursued Memoranda of Understanding in 2013 to formalize cooperation with other FIUs, including the U.S. Financial Crimes Enforcement Network.