Hong Kong's leader John Lee said he "laughs off" United States sanctions amid calls to seize a superyacht linked to Russian billionaire Alexey Mordashov.

The superyacht Nord, allegedly owned by Mordashov, arrived in the Asian port last Wednesday.

On Tuesday, Lee said Hong Kong is compliant with United Nations sanctions.

But targeted measures from the likes of the US, the United Kingdom or the European Union — which each sanctioned Mordashov after Russia's invasion of Ukraine in February — don't apply in Hong Kong, he said.

"We cannot do anything that has no legal basis," Lee told reporters. "We will comply with United Nations sanctions, that is our system, that is our rule of law."

Hong Kong's reputation in jeopardy, US says

Lee's comments come a day after the US State Department said that "the possible use of Hong Kong as a safe haven by individuals evading sanctions from multiple jurisdictions further calls into question the transparency of the business environment."

"Hong Kong's reputation as a financial center depends on its adherence to international laws and standards," the State Department added.

Lee himself is one of several Chinese officials who were sanctioned by the US in 2020 for their roles in cracking down on political freedoms in the city.

When asked by journalists on Tuesday whether the sanctions mean he has to be paid in cash, as his predecessor Carrie Lam was, Lee dodged the question by once again calling the move "barbaric."

"We will just laugh off the so-called sanctions," the Hong Kong chief executive added.

Why is this superyacht controversial?

Nord is a $500 million (€516 million) superyacht that's allegedly owned by Mordashov.

The 141.6 meter-long (464.6 feet) ship has 20 cabins and features a swimming pool and two helipads.

One of Russia's richest men, Mordashov's wealth is estimated at $18 billion. He is the main shareholder and chairperson of Severstal, Russia's largest steel and mining company, and is believed to have close ties to President Vladimir Putin.

Earlier in the year, US and European authorities seized more than a dozen superyachts belonging to sanctioned Russian billionaires. However, some of these individuals have managed to evade sanctions by docking their ships in places like Turkey or the United Arab Emirates.