Foreign and Commonwealth Office London SW1

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Telephone 01-

His Excellency Sir Murray MacLehose

KCMG OBE

Governor

HONG KONG

Your reference

Our reference

7 June 1973

Date

EVEN Sis Bara),

REGISTER OF SHIPPING

Y K Pao came to see the PUS on 5 June, and also talked to Mr Royle at the Marlborough House dinner in his honour the same night.

1.

2. In his talks with the PUS he rehearsed his reasons for wanting to transfer shipping to a Hong Kong register, but said he was still unhappy about the manning concessions offered to him. He implied that it would be difficult to decide exactly how much tonnage he was prepared to transfer until all this had been sorted out. In talking to Mr Royle, however, he implied that he might be willing to accept the restrictions on Masters, First Officers and Chief Engineers proposed in the DTI consulta- tive document.

3. Since both these conversations the commentary by your Director of Marine has arrived in the DTI. I have not seen this, but I understand it implies that unless concessions on all Masters, First Officers and Chief Engineers are offered, the amount of tonnage likely to be transferred to the Hong Kong register is minimal.

4. There is therefore an element of mystery. In an attempt to clear this up we have spoken to Lee, Y K Pao's representative in this country. He says he thinks Y K Pao will indeed accept the requirement for British Masters and that there might be some flexibility on the other officers. DTI are therefore working, at official level, on the proposition that, while Masters would have to be British and hold British certificates, the Master's deputy, ie the First Officer, could be a Hong Kong resident of long standing whose acceptable foreign certificate was endorsed by inspectors visiting Hong Kong. Other officers, including Chief Engineers, would have the concessions already offered to lower grades.

/5.

CONFIDENTIAL

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