EMBASSY
OF THE
UNITED STATES OF AMERICA
London, W.1.
March 17, 1967
Lord Dunrossil
Deputy Head
General Department
Foreign Office
Downing Street, S.W.1.
Dear John:
Further to our telephone conversation today, I would like to inform you that it is under consideration that the nuclear ship SAVANNAH should visit the port of Hong Kong on about June 27, 1967. The U.S. Consul General in Hong Kong is likewise informing the Hong Kong Government authorities of the same considerations involved in this letter.
In the first phase of the SAVANNAH's operations, wherein she was operated directly by the U.S. Government, the matter of liability arising from a nuclear incident involving the SAVANNAH was covered by a series of bilateral agreements. One of these was concluded on June 19, 1964 between the U.S. Government and the U.K. Government. This agreement could, under its terms, be extended to cover Hong Kong.
However, under the second phase of the SAVANNAH's operations, now current, the SAVANNAH is operated not directly by the U.S. Government, but under bare boat charter by a private operator, FAST. The U.S. Government, through the Atomic Energy Commission, has extended nuclear liability coverage to FAST as the licensed operator of the SAVANNAH. It is considered by the U.S. Government that in view of the private operation, the 1964 Agreement is inapplicable, being for the time dormant. In order to establish an acceptable pattern for future com- mercial operation of nuclear-powered merchant vessels, it is hoped that governments will accept the U.S. Government indemnity through the conduit of FAST, without further formalities.
Nevertheless, the U.S. Government is willing, if it is deemed necessary by the U.K. Government in connection with a visit of the SAVANNAH to Hong Kong, to make a new agreement extending essentially the same lia- bility coverage of the 1964 Agreement taking into account the changed circumstances of operation. Copies of a draft Note to this effect are enclosed, it being proposed that an exchange of Notes would form the new Agreement. Similar agreements have been entered into by the U.S.
Government/