Country Reports on Terrorism 2016 - China (Hong Kong and Macau)

Overview: In 2016, China's government continued to list terrorism as one of "three evils" – along with religious extremism and separatism, which threaten domestic stability. China's counterterrorism efforts focused primarily on the East Turkistan Islamic Movement (ETIM), an organization that advocates independence for the Uighurs, China's largest Muslim ethnic minority. In the past year, Chinese authorities have escalated security and surveillance in the Xinjiang Uighur Autonomous Region (XUAR). China's first comprehensive counterterrorism law came into effect on January 1, 2016. This law explicitly endorses China's longstanding counterterrorism efforts, which are sometimes difficult to distinguish from suppression of individuals and groups, most often ethnic Uighurs, who the Chinese Communist Party deems politically subversive.

There were also indications that ISIS was beginning to pose a threat to China in 2016. An ISIS song published in Mandarin called for Chinese Muslims to take up arms against China because of its religious suppression. The Chinese government reported that some Chinese citizens have joined ISIS and other terrorist organizations in the Middle East, and are concerned these foreign terrorist fighters could return to China with increased skills. As a result, China has attempted to prevent some of its citizens from traveling to Syria, Iraq, and Central Asia.

Counterterrorism cooperation between China and the United States remained limited. In 2016, the United States hosted the third bilateral Counterterrorism Dialogue with China and the second expert-level exchange on Countering Improvised Explosive Devices. Chinese law enforcement agencies generally remained reluctant to conduct joint investigations or share specific threat information with U.S. law enforcement partners. Chinese law enforcement officials also did not respond to requests for information about state media-reported arrests and operations. This lack of transparency complicated efforts to verify details of terrorism and other violent acts inside China.

2016 Terrorist Incidents: The Chinese government reported a drop in terrorist incidents in XUAR in 2016, although it continued to allege that ETIM attempted to carry out attacks in China or direct violence through its online propaganda. The lack of transparency and detailed information provided by China about alleged terrorist incidents in China greatly complicated efforts to confirm the nature of the alleged incidents. In addition, requests by U.S. law enforcement officials for information on terrorist incidents from Chinese officials went largely ignored. Violent incidents labeled as terrorist attacks in China and against Chinese interests in 2016 included:

• In August, a car driven by suicide bombers exploded after ramming the gates of the Chinese Embassy in Bishkek, The Kyrgyz Republic, injuring three locally employed staff, but no Chinese nationals.

• In September, a local police chief was killed and other officers injured during a home raid when explosives were detonated in Hotan, Xinjiang, according to Western and Hong Kong media.

• In December, four terrorists detonated explosives at a government building in Xinjiang, killing one and injuring three others, according to Western and Hong Kong media.

Legislation, Law Enforcement, and Border Security: Counterterrorism measures enacted in 2015 that intensified enforcement, surveillance, and security throughout the country continued in 2016. These measures increased inspections at all main transportation hubs, including bus and train stations, railways, airports, and ports. The measures also included an enhanced and expanded video and data surveillance network. Chinese law enforcement and security forces in Xinjiang conducted violent raids and unannounced house searches, and carried out body searches and mobile phone searches in public venues, according to international and Chinese state media sources.

In addition to these counterterrorism measures, the National People's Congress passed the country's first counterterrorism law on December 28, 2015, to "provide legal support for counterterrorism activities, as well as collaboration with the international community." The law, which took effect on January 1, 2016, broadened China's definition of terrorism beyond internationally accepted definitions and intensified the scope of its counterterrorism measures. The law further made provisions to establish a counterterrorism intelligence center to better coordinate terrorism response and information sharing across government agencies.

The law also required foreign firms to provide technical and decryption assistance to Chinese authorities as part of terrorism-related investigations. The legislation stipulated measures on internet security management, inspection of dangerous materials, prevention of terrorist financing, and border controls. Other provisions under the new law include: the Central Military Commission's ability to authorize the People's Liberation Army to perform counterterrorism operations abroad; punishment of news media that report counterterrorism operations without approval from government authorities; greater cooperation with international counterterrorism bodies; protection for overseas Chinese citizens; deletion of terrorism-related audio and video material from the internet; strengthened border controls; and edicts to eliminate "religious extremism," including the "education and transformation" of terrorist offenders using "authentic" religious teachings.

In July, XUAR became the only provincial-level government to pass specific implementing measures for the counterterrorism law. These XUAR implementing measures banned "instigating, encouraging, or enticing a minor to participate in religious activities," proscribed the wearing of clothing that "advocate's extremism," and prohibited the "distortion of the concept of halal" or "distorting sensitive cases." The XUAR's regional law-making body also threatened fines up to US $72,700 for spreading news or information through social media or websites that could harm "stability" or "religious harmony" more broadly. We refer you to the State Department's Country Reports on Human Rights Practices for further information.

In December, the XUAR People's Congress adopted amendments to its border management regulations, tightening rules for individuals crossing to and from neighboring countries and granting local authorities the power to close border crossings to address "defense management, counterterrorism, and stability maintenance needs."

Countering the Financing of Terrorism: China is a member of the Financial Action Task Force (FATF), the Asia/Pacific Group on Money Laundering, and the Eurasian Group on Combating Money Laundering and Terrorist Financing. The Chinese government has strengthened preventive measures to counter terrorist financing, such as making suspicious transaction reports more comprehensive. Based on current law enforcement investigations, the United States is concerned that China does not adequately control terrorist financing. Chinese law enforcement claims to have limited ability to freeze funds and investigate banking transactions. Additional concerns include: a lack of guidance for designated non-financial businesses and professions; underdeveloped procedures for individuals and groups who seek to be delisted from domestic sanctions; and inadequate regulations defining the rights of bona fide third parties in seizure and confiscation actions.

For further information on money laundering and financial crimes, see the 2017 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/.

Countering Violent Extremism: China does not have an official strategy or program explicitly designed to counter violent extremism. China has stated, however, that policies that promote economic growth and increased official presence in rural communities would help address the drivers of terrorism in the XUAR. The government implemented a number of other programs aimed at "stability maintenance," many of which promote cultural assimilation in the XUAR and place restrictions on the practice of Islam. For further information, please see the Department of State's 2016 Report on International Religious Freedom.

Regional and International Cooperation: China continues to promote the United Nations and the UN Security Council as the primary international fora for counterterrorism while continuing to engage in other multilateral bodies, including the Asia Pacific Economic Cooperation Counter-Terrorism Working Group and the Global Counterterrorism Forum. China also held bilateral counterterrorism dialogues with Egypt, India, Indonesia, Russia, the United Kingdom, and the United States. Additionally, Chinese Vice-Minister of Security Meng Hongwei was elected president of INTERPOL for a four-year term during the November 2016 INTERPOL General Assembly.

China remains engaged in counterterrorism efforts in Central Asia, conducting bilateral and multilateral joint exercises with regional neighbors and through frameworks, such as the Shanghai Cooperative Organization, comprising China, Kazakhstan, The Kyrgyz Republic, Russia, Tajikistan, and Uzbekistan. In July, the militaries of China and Russia held joint counterterrorism exercises in Moscow, according to Chinese official media. In October, China and Tajikistan held four days of counterterrorism exercises involving a mobile company of Chinese soldiers in Tajikistan. In September, China announced plans to assist in strengthening the Tajikistan-Afghanistan border to bolster counterterrorism efforts. In August, China held the inaugural meeting of the Quadrilateral Cooperation and Coordination Mechanism in Counterterrorism with Afghanistan, Pakistan, and Tajikistan.

Hong Kong

Hong Kong continued its effective security and law enforcement partnership with the United States through the Hong Kong Customs and Excise Department's successful joint implementation of the Container Security Initiative, participation in U.S. government-sponsored training in port and border security, and engagement with U.S. counterterrorism agencies.

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 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.

Hong Kong is a member of the FATF and the Asia/Pacific Group on Money Laundering, a FATF-style regional body. Hong Kong's Joint Financial Intelligence Unit is a member of 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 UN Security Council (UNSC) 1267/1989 ISIL (Da'esh) and al-Qa'ida and 1988 (Taliban) Sanctions Committees' lists. Hong Kong was in the process of making legislative amendments to its United Nations (Anti-Terrorism Measures) Ordinance (UNATMO) to adequately comply with UN Security Council resolution (UNSCR) 1373 and UNSCR 2178. Filing suspicious transactions reports irrespective of transaction amounts is obligatory, but Hong Kong does not require mandatory reporting requirements for cross-border currency movements.

For further information on money laundering and financial crimes, see the 2017 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

Hong Kong's strategic trade regime complements U.S. efforts to restrict commodities, software, and technology transfers to terrorist organizations or individuals. Hong Kong law enforcement officers attended U.S. government-sponsored capacity-building training at the International Law Enforcement Academy on advanced post-blast investigations, personnel and facility security, law enforcement techniques to counterterrorism, and financial investigations. Select Hong Kong police officers also attended Asia-Pacific Center for Security Studies courses and Department of Defense-sponsored conferences.

Macau

Macau's counterterrorism cooperation with the United States included information exchange, as well as capacity building through participation in U.S. government-sponsored training. 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 improvised explosive device deactivation. UTIP's Special Operations Group's mission is counterterrorism operations. Macau law enforcement officers have attended U.S. government-sponsored capacity-building training at the International Law Enforcement Academy on personnel and facility security, financial and crime scene investigations, countering terrorism, computer investigations, and evidence protection.

Macau is a member of the Asia/Pacific Group on Money Laundering, a FATF-style regional body. Macau's Financial Intelligence Office is a member of the Egmont Group of Financial Intelligence Units. In response to FATF recommendations, the Macau government has introduced a bill on the cross-boundary transportation of large quantities of currency and bearer negotiable instruments to the Legislative Assembly (LA). In November, the Macau government introduced to the LA an amendments bill to existing anti-money laundering and countering the financing of terrorism laws.

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 ISIL (Da'esh) and al-Qa'ida and 1988 (Taliban) Sanctions Committees' lists. Filing suspicious transactions reports irrespective of transaction amounts is obligatory, but Macau does not currently require mandatory reporting requirements for cross-border currency movements. Regarding the amendments to existing countering the financing of terrorism laws mentioned above, the Macau government has proposed widening the scope of identifiable criminal offenses, extending the definition of terrorist financing to include any type of economic resources, assets and property, and products or rights that can be converted into funds to finance terrorism. Macau's first asset-freezing law, which complies with the UNSCR on fighting terrorism and the proliferation of weapons of mass destruction, became effective on August 30, 2016.

For further information on money laundering and financial crimes, see the 2017 International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes: http://www.state.gov/j/inl/rls/nrcrpt/index.htm.

Macau cooperated internationally on counterterrorism efforts through INTERPOL and other security-focused organizations.