Human rights groups have condemned the arrest of relatives of Anna Kwok, an exiled pro-democracy activist who is wanted by the Hong Kong police, in the first example of the city’s national security law being used to target the family members of an activist living overseas.

Kwok, 28, is the executive director of the Washington-based Hong Kong Democracy Council, and is one of 19 overseas activists wanted by the national security police, who are offering bounties of HK$1m (£97,000) for information leading to arrest.

Kwok’s father, 68, and her brother, 35, were arrested on 30 April on suspicion of “attempting to deal with directly or indirectly, any funds or other financial assets or economic resources belonging to, or owned or controlled by, a relevant absconder”. The police said the men were suspected of helping Kwok to change the details of a life insurance policy and withdraw its remaining value. Kwok’s father was charged and detained while her brother was released on bail pending further investigations.

Yalkun Uluyol, China researcher at Human Rights Watch, said: “The Chinese government has increased its appalling use of collective punishment against family members of peaceful activists from Hong Kong. The Hong Kong authorities should immediately and unconditionally release Anna Kwok’s father and cease harassing families of Hong Kong activists.”

ChinaAid, a US-based human rights group, said: “This represents a deeply unsettling and significant escalation of the ongoing retaliatory actions against the families of exiled activists … this is a blatant attempt to silence overseas dissidents by targeting their family members at home, a tactic that brazenly disregards fundamental human rights and the rule of law.”

Police in Hong Kong have repeatedly questioned the relatives of exiled activists. In recent months relatives of Tony Chung, Frances Hui and Carmen Lau, overseas pro-democracy activists who are also wanted by the Hong Kong police, have been questioned. Chung and Lau, who are in the UK, have both had threatening letters sent to their neighbours offering rewards for information leading to their capture.

The arrests in Kwok’s case mark the first time that relatives have been criminally charged. Kwok’s father faces a sentence of up to seven years in prison if convicted. He has been denied bail with the case adjourned to 13 June, according to Reuters.

The Hong Kong police and the Hong Kong Democracy Council did not immediately respond to requests for comment. Kwok could not be reached for comment.