Sanctions from the United States against Hong Kong and mainland Chinese officials over a national security law could affect future deals between U.S. entities and the city’s government, a lawmaker said after new details emerged about the policy on Friday.

U.S. citizens are prohibited from directly or indirectly engaging in transactions or dealing with sanctioned individuals, in a warning issued by the Department of the Treasury in Washington under its website’s frequently asked questions section.

Those sanctioned individuals, in the context of China, cover 11 Hong Kong and mainland Chinese officials named on Aug. 7, including Chief Executive Carrie Lam and Commissioner of Police Chris Tang. Washington’s move penalizes the 11 for “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of the citizens of Hong Kong” over their involvement in measures such as the national security law, which prohibits acts of secession, subversion, terrorism and collusion with foreign forces.

Without permission from the Office of Foreign Assets Control, Americans are not allowed to enter into contracts signed by the sanctioned officials, take part in negotiations with them, or process transactions directly or indirectly on behalf of them, the department says.

They are also forbidden to deal in the property or interests in property of those officials, including any entities in which they have 50% or more ownership.

The order does not ban U.S. citizens from entering into government contracts signed by other officials to whom the Hong Kong government has delegated authority.

Democratic Party lawmaker James To said the sanctions could restrict the Hong Kong police from buying equipment or gear from the U.S. as Tang was on the sanctioned list.

If the police chief was responsible for signing off contracts on purchases of equipment from the U.S., he would no longer be able to represent the force in those deals or authorize others to sign those contracts for him, To said.

The pan-democratic lawmaker feared that it would become increasingly difficult for sanctioned officials to appear at international events, because it was hard to gauge or interpret the extent of what the U.S. treasury meant by “dealings.” That might in turn affect Hong Kong’s status as an international city in the long run, To added.

Pro-democracy activist Joshua Wong said the sanctions could affect future negotiations aimed at easing travel restrictions between Hong Kong and the U.S., as well as the buying and selling of vaccines to protect against COVID-19. He felt that the sanctions could also have a domino effect on European countries, given the close ties between the U.S and the European Union.

Regina Ip, lawmaker of the pro-Beijing New People’s Party, believed any potential impact to be limited because the sanctions mainly targeted the officials on a “personal level” and were not aimed at individual government departments. As long as there was no direct or indirect participation of those sanctioned, ongoing contact and deals with government departments would be business as usual, she said.

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