MR HUBBACK Dep Sec
CONFIDENTIAL
Reference..
се
Secretary A & S Mr Archer MAR
Mr Frost SP1
Mr Manson MAR 3G
Mr Standen MAR 1
Mr Madigan
MAR 4
Mr Andrew Stuart
FCO
CODE I877}
HONG KONG REGISTER
I refer to Mr Archer's minute to you of 12 February enclosing a drait telegram to Eong Kong and Mr Archer's earlier minute of 9 February on the same subject, on both of which he has invited my comment.
2. I agree generally with what Mr Archer says in his minute of 9 February. I have had a word with Mr Frost about the suggestion. that the Chamber of Shipping mentioned in paragraph 4(b) of his minute that there might be a flight from the UK to the Hong Kong register. Mr Frost's point was not so much that the movement by UK owners to re-register their ships in the Bahamas and Bermude was halted when the system of investment grants for UK registered ships was introduced, but that the abolition of the investment grants scheme over two years ago has not been followed by any resurgence of moves to re-register in the Bahamas or Bermuda despite the lower standards required in those territories which Mr Archer mentions in paragraph 3(b) of his minute. This fact leads one to wonder whether the Chamber are right in forecasting a flight to the Hong Kong register. It is also perhaps relevant that so far as I know there is nothing to prevent a UK owner registering his ship in Singapore at the moment, since Singapore is a Commonwealth country and as a flag of convenience does not confine its register to ships of any particular ownership. It may be however that a certain amount of odium attaches to Singapore registry which has prevented such transfer.
3. With regard to Mr Archer's draft telegram we have wondered whether question (a) is really an appropriate question to ask the Governor in its present form. I would like to suggest the following redraft.
"The Chamber of Shipping foresee a flight from the UK to the Hong
Kong register il your proposals were adopted. Would your proposals allow UK based shipowners to establish companies in Hong Kong to take advantage of the new arrangements?".
4.
I should also like to suggest two further questions as follows:
(x)
(y)
hurs.
Would your proposals require the principal place of business of companies owning ships on the Hong Kong register to be in Hong Kong (cf Section 1 of the Merchant Shipping Act 1894)?
We are not clear why a simple change of registry of a ship say from Liberia to Hong Kong should have any effect on her employment or place of management. If it did not would the "spin-off" benefits described in your paragraph 11 (apart from survey work) arise?".
GR W Brigstocke
SP
Adelphi R.464 Ext.1840
15 February 1975
CONFIDENTIAL