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TOP SECRET
ANNEX IT
ACTION IN THE EVENT OF A DECISION TO BLOCK STERLING BALANCES IN THE CONTEXT OF A FORCED EVACUATION
Control over the assets of residents outside the
U.K. can be exercise either under the Exchange Control
Act 1947 or under Section 2 of the Emergency Laws
(Re-enactments and Repeals) Act 1964.
2. of the two methods, the Exchange Control Act provides
for exercise of the fullest control but has to be
reinforced in respect of the disposal of Treasury Bills,
The and gold by Bection 2 of the Emergency Laws Act.
Exchange Control Act can in general be used only if the
assets are those of residents outside the Scheduled
Territory,
A necessary preliminary to its use in respect
of Hong Kong assets would be the exclusion of Hong Kong
from the scheduled Territories, with control exercised
under the Exchange Control Act supported by an Order under
Beation 2 for Treasury Bills and gold.
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in the
3. Secton 2 of the Emergency Laws can be applied to the
assets of any non-resident of the United Kingdom
irrespective of whether he is resident in the Scheduled
Territories or outside them. It is a condition that actio
to the detriment of the economic position of the United
Kingdom is being, or is likely to be, taken by the
government or residents of the territory concerned;
circumstances envisaged this condition would be fulfilled i
respect of residents of Hong Kong. An Order under this
Bection operates only on assets which are already owned by
residents of the territory concerned; that is, on payments
from sterling balances and the disposal of securities, etc.
it does not operate on credits to sterling accounts or on transfer of securities to residents of the territory concer
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