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Foreign and Commonwealth Office London S.W.1
UNCLASSIFIED
SAVING DES PATCH
HKK 6/548/6
From the Secretary of State for Foreign and Commonwealth Affairs
To the Officer Administering the Government of HONG KONG.
29 November, 1968
No. 673
I am sending you copies of the Customs (Import Deposits) Bill which was given its first reading in the House and ordered to be printed on 26 November: it was published yesterday. Section I of the Act will have effect as from 27 November and the Bill is being debated today, 28 November.
2. For self evident reasons the Import Deposit scheme which, as you are aware, was announced by the Chancellor of the Exchequer in the course of his statement about the international monetary situation on 22 November, immediately after his return from the meeting at Bonn, had to be introduced without delay. The measures were therefore brought into as near immediate effect as possible by a Ways and Means Resolution on 25 November; a copy of the relevant Order Paper is enclosed. This Resolution provided the necessary authority to collect import deposits as from 27 November.
3. There is room for misunderstanding in the fact that it has been necessary for technical reasons, arising from the wording of the Frovisional Collection of Taxes Act, 1968, to refer to these deposits as "Duties of Customs" which of course they are not. This was alluded to in paragraph 2 of F.C.0. Telegram No.403 to Algiers, which you have seen. In the same telegram we referred to the likelihood that we should be challenged in GATT with having acted contrary to cur international obligations and you will since have learned that our measures are, in fact, to be examined by GATT and reported on to the Council in the New Year. It is essential to preserve our inter- pretation of these measures as a monetary restriction devised for the limited and transitional purpose which the Chancellor has made clear.
I have spent some time on explanation of the unusual series of steps by which these measures were introduced, not only to clarify the position to you but also to demonstrate why I am only now able to Eive you some information about the scheme. Of course, your London Office, besides receiving copies of the Customs Notice which took administrative effect after the Ways and Means Resolution, was also Furnished by ourselves with a copy of the Resolution itself, together ith its Table of exempted goods. It is my hope that this, closely corresponding as it does to the schedules to the Finance (No. 2) Act 1964, will have been of assistance over the inevitably confused period of the first days after the announcement of these economic measures. It is unavoidable that problems to individual traders should be
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