CONFIDENTIAL

REGISTER OF SHIPPING

1. At meetings held by DTI with Hong Kong officials at the

end of August agreement was reached on a "Draft Heads of

Agreement in Principle between the UK and Hong Kong Governments."

2. This draft met all the Hong Kong points and especially

their request that only Masters of ships on the Hong Kong

register needed to be British. Mr Heseltine is, however,

concerned that whilst all Hong Kong's points have been met, even

on points which he considers will create quite notable

difficulties with the United Kingdom shipowners and unions, that

Hong Kong shipowners are still not prepared to give assurances

on the tonnage they would commit to the Hong Kong register. He

is not disposed to conclude the Draft Heads until there are firm

assurances on this point.

3.

Mr Heseltine has asked the Governor to call on him. This

has been arranged for 12 September at 11.45 am.

Hong Kong and Indian Ocean Department

7 September 1973

CONFIDENTIAL

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