The bipartisan US Select Committee on the Chinese Communist Party called Monday on outgoing President Joe Biden's treasury secretary to reevaluate Hong Kong's unique trade privileges, which treat the financial hub as distinct from the rest of China.

Since Beijing imposed a sweeping national security law on the semi-autonomous Chinese city in 2020, "Hong Kong has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis of the People's Republic of China (PRC), Iran, Russia, and North Korea," the committee said in a letter to Janet Yellen.

The security law -- put in place after huge democracy protests roiled the city -- "effectively subjects Hong Kong to PRC control," the lawmakers said.

"We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate," the letter said.

According to the committee, Hong Kong has become a leading player in shifting banned Western technology to Russia, creating front companies for purchasing barred Iranian oil, facilitating the trade of Russian-sourced gold and managing "ghost ships" that engage in illegal trade with North Korea.

It cited "recent research" estimating that "nearly 40 percent of goods shipped from Hong Kong to Russia in 2023" were on US and EU lists of banned goods, including semiconductors and other technology Moscow needs for its war in Ukraine.

Hong Kong authorities on Tuesday said the letter had no factual basis and defended the city's financial institutions and rights protections.

"(The Hong Kong) government strongly disapproves of and firmly rejects malicious slander of Hong Kong's reputation as an international financial centre in the letter," a spokesman said.

"The letter is a crude and reprehensible attempt to spread lies and misinformation about Hong Kong for personal political gain."

The city has been enforcing sanctions imposed by the United Nations Security Council but does not enforce unilateral sanctions, the spokesman added.

After the British handover of Hong Kong to China in 1997, the city was promised semi-autonomy, including judicial independence, for 50 years under the "One Country, Two Systems" agreement.

But Washington has repeatedly warned the national security law -- as well as a subsequent security law known as Article 23 -- eroded that firewall, effectively silencing dissent in the city and curtailing the freedoms that allowed it to operate as a global financial center.

In September, the US State Department issued an advisory warning about "new and heightened risks" for businesses operating in Hong Kong because of Article 23.

China and Hong Kong have, however, maintained the laws were needed to restore order and protect the financial hub's economy after the massive and at times violent democracy protests in 2019.