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ANNEX II
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 exercised 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
and gold by Section 2 of the Emergency Laws Act. The
Exchange Control Act can in general be used only if the
assets are those of residents outside the 8cheduled
Territory,
A necessary preliminary to its use in respect
of Hong Kong assets would be the exclusion of Hong Kong
from the 8cheduled Territories, with control exercised
under the Exchange Control Act supported by an Order under
Section 2 for Treasury Bills and gold.
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 actior
to the detriment of the economic position of the United
Kdngdom is being, or is likely to be, taken by the
government or residents of the territory concerned;
circumstances envisaged this condition would be fulfilled ir
respect of residents of Hong Kong. An Order under this
Section 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 concert
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