CONFIDENTIAL
PANAMA, ETC.). HE CLAIMS THAT HE IS FORCED INTO THIS POSITION AND THAT HE WOULD REALLY PREFER SAILING UNDER THE HONG KONG FLAG".
"INSERT THERE IS, OF COURSE, NO HONG KONG FLAG, IN THIS SENSE ALL VESSELS REGISTERED IN HONG KONG ARE, IN EFFECT, PART OF THE BRITISH REGISTER,
4. THE CREATION OF A SEPARATE HONG KONG REGISTER THROUGH LOCAL LEGISLATION IS BEING PROCESSED BUT THIS WOULD NOT IN ITSELF MAKE ANY REAL DIFFERENCE TO THE REQUIREMENTS FOR REGISTRATION WHICH MUST CONTINUE TO COMPLY WITH THE VARIOUS INTERNATIONAL CONVENTIONS ON THE SAFETY OF LIFE AT SEA. HONG KONG REGISTERED VESSELS WOULD, MOREOVER, CONTINUE TO BE BRITISH SHIPS FOR THE PURPOSES OF THE
MERCHANT SHIPPING ACTS.
5. THERE ARE TWO REQUIREMENTS FOR THE REGISTRATION OF BRITISH SHIPS WHICH HAVE PARTICULARLY WORRIED MR. PAO. THE FIRST AND LESS DIFFICULT IS THE DETAILED SPECIFICATIONS OF CERTAIN MATERIALS AND EQUIPMENT REQUIRED BY BRITISH VESSELS. MOST OF MR. PAO'S VESSELS ARE BUILT IN JAPAN AND HE HAS CLAIMED THAT MEETING BRITISH STANDARD SPECIFICATIONS CAN CAUSE INCONVENIENCE AND DELAY IN CONSTRUCTION. IT HAS BEEN POINTED OUT TO HIM, HOWEVER, THAT JAPANESE YARDS DO READILY MEET BRITISH REQUIREMENTS IN THESE RESPECTS WHEN CALLED UPON TO DO SO AND IT WOULD APPEAR THAT HE
IS NOW SATISFIED ON THIS POINT.
6. THE MORE DIFFICULT PROBLEM IS THAT OF OFFICER MANNING. IN THIS RESPECT HONG KONG LAW FOLLOWS BRITISH LAW, WHICH APPLIES. TO ALL BRITISH SHIPS REGISTERED THROUGHOUT THE COMMONWEALTH. THE REQUIREMENT IS THAT THE MASTER, 1ST MATE, 2ND MATE, CHIEF ENGINEER, 2ND ENGINEER AND RADIO OFFICER SHOULD BE BRITISH QUALIFIED 1.E. QUALIFIED BY EXAMINATION AT EXAMINATION CENTRES APPROVED BY THE U.K. GOVERNMENT AND THE RULES LAY DOWN THAT CANDIDATES FOR MOST OF THESE EXAMINATIONS MUST BE BRITISH SUBJECTS.
7. PAO INSISTS THAT IT IS ESSENTIALLY THIS REQUIREMENT THAT FORCES HIM TO REGISTER HIS SHIPS UNDER FLAGS OF CONVENIENCE, BECAUSE BRITISH QUALIFIED OFFICERS ARE IN SHORT SUPPLY. ALTHOUGH HE RECOGNISES THAT THE HONG KONG DIRECTOR OF MARINE POSSESSES
-2- NFIDENTIAL
/POWERS