FUNDS INVEST IN COMPANY ACCUSED OF CYBER-SURVEILLANCE IN THE CONTEXT OF CRIMES AGAINST HUMANITY AGAINST THE TURKIC MUSLIM MINORITY IN CHINA

Luxembourg ranks second in the world behind the United States in terms of assets under management in investment funds. With a diversified offering and great expertise, the country has managed to attract a large number of international promoters. However, either as a victim of its rapid success, or by neglecting the responsibility that comes with this success, the government, through its regulator CSSF, has no overview of the respect of human rights in the investment policies of the thousands of funds domiciled in Luxembourg.

The Luxembourg mutual fund (FCP) BPSA FONDS LUX, managed by Gerifonds (Luxembourg) SA, and the Luxembourg mutual fund NEF, are examples of how the pursuit of profit takes precedence over the respect for human rights. In its 2020 annual report, the BPSA FONDS LUX includes, for the BPSA Bonds sub-fund, a position valued at 1,100,290 USD (0.92% of the fund portfolio) invested in the company Tencent Holdings Ltd, a Chinese technology giant. [1] As for the NEF fund, it holds assets worth 18,787,147.66 € in Tencent Holdings Ltd (5.73% of the NEF Emerging Market Equity fund’s portfolio) according to its report of 30 June 2021. [2]

According to the Chinese Ministry of Commerce, in 2019, Luxembourg-domiciled funds represented 79.6% of European assets invested in China and 32.4% of global investment funds in China. [3]

The Chinese company Tencent has been accused of playing an important role in the implementation of cyber-surveillance and censorship by the Chinese government within China, but also internationally. [4] According to media articles and reports from civil society organisations, its instant messaging application WeChat has contributed to the cyber- surveillance of the Turkic Muslim minority in the province of Xinjang in China, which also includes the Uyghur community. [5] This cyber-surveillance is used among others in the context of the large-scale repression of the Turkic Muslim community in China, which the human rights organisation Human Rights Watch considers as a crime against humanity:

“As many as a million people have been arbitrarily detained in 300 to 400 facilities, which include “political education” camps, pretrial detention centers, and prisons. Courts have handed down harsh prison sentences without due process, sentencing Turkic Muslims to years in prison merely for sending an Islamic religious recording to a family member or downloading e-books in Uyghur. Detainees and prisoners are subjected to torture and other ill-treatment, cultural and political indoctrination, and forced labor. The oppression continues outside the detention facilities: the Chinese authorities impose on Turkic Muslims a pervasive system of mass surveillance, controls on movement, arbitrary arrest and enforced disappearance, cultural and religious erasure, and family separation.” [6]

In May 2021, the European Union suspended the ratification of an investment pact with China over human rights abuses against Uyghurs in Xinjiang.

The organisation Ranking Digital Rights publishes the Corporate Accountability Index, which evaluates and ranks the 26 most powerful digital platforms and telecommunication companies in the world according to their disclosed policies and practices that affect people’s rights to freedom of expression and privacy. In the 2020 ranking, Tencent obtained a score of 22% and ranked 13th out of 14 digital platforms. [7] Tencent did not respond to the ranking.

77 investors representing over 5.9 trillion USD in assets under management responded to the Corporate Accountability Index by publishing a statement about their deep concern with “the weak governance of digital rights risks and the lack of transparency and accountability in the information and communications technology sector, affecting people’s rights to privacy and freedom of expression, including a lack of users’ control over their own information and how it is used”. [8] The above-mentioned investment funds are not among the signatories.

[1] Gérifonds: Rapport annuel incluant les états financiers audités au 31 décembre 2020, BPSA FONDS LUX (Fonds commun de placement (FCP) de droit luxembourgeois à compartiments multiples) (www.gerifonds.lu/sites/default/files/2021-04/ral_fr_589_ bpsa_1220_0.pdf ). [2] NEF Fonds Commun de Placement. Unaudited semi-annual report as at 30/06/21 (https://neam.lu/document/semi-annual- report-2019/). [3] Paperjam (12.01.2021): New China-EU investment deal – possible implications for Luxembourg (https://paperjam.lu/article/new- china-eu-investment-deal-p). [4] Miles Kenyon / The Citizen Lab (07.05.2020): WeChat Surveillance Explained (https://citizenlab.ca/2020/05/wechat-surveillance- explained/). [5] Freedom House (29.03.2019): Worried about Huawei? Take a closer look at Tencent (https://freedomhouse.org/article/worried- about-huawei-take-closer-look-tencent), Alecci, Scilla / International Consortium of Investigative Journalists (24.11.2019): How China Targets Uighurs ‘One by One’ for Using a Mobile App (https://www.icij.org/investigations/china-cables/how-china-targets-uighurs- one-by-one-for-using-a- mobile-app/). [6] Human Rights Watch (19.04.2021): “Break Their Lineage, Break Their Roots”. China’s Crimes against Humanity Targeting Uyghurs and Other Turkic Muslims (www.hrw.org/report/2021/04/19/break-their-lineage-break-their- roots/chinas-crimes-against-humanity- targeting). [7] Ranking Digital Rights (2020): Corporate Accountability Index (https://rankingdigitalrights.org/index2020/). [8] Ranking Digital Rights (18.10.2021): Investors with $6T in assets press the tech sector to commit to RDR’s human rights standards (https://rankingdigitalrights.org/2021/10/18/investors-with-6t-in-assets-press-the-tech- sector-to-commit-to-rdrs-human-rights- standards/).