GR 600
CONFIDENTIAL
DESKBY
FCO 200900Z
DESKBY
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PEKING 200830 Z
FM HONG KONG 200750Z MAR
CONFIDENTIAL
тор
TO IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NUMBER 309 OF 20 MARCH, 1981
INFO IMMEDIATE PEKING.
сору
Hick
ра
349/1
Y MO. 51
RECOVE
2 4 MAR 198!
INDEX
SEE
нки 349/3
53
1480
b
YOUR TELNO 260: VISA OFFICE.
feelin
13
1. FURTHER STUDY OF THE CHINESE DRAFT IN PEKING TELNO 119 TO YOU
CONFIRMS THAT THEIR PROPOSALS TAKE US NO FURTHER FORWARD IN THE
OBJECTIVE OF PROVIDING ADEQUATE ARRANGEMENTS FOR THE VISA OFFICE
TO WORK EFFECTIVELY WITHOUT SPECIAL LEGISLATION OR ORDERS BY THE
GOVERNOR IN COUNCIL WHICH HAVE TO BE GAZETTED.
2. ON SPECIFIC POINTS:
(1) 2(A) TO (D) OF THE CHINESE DRAFT MEMORANDUM ARE AS IN THE
BRITISH DRAFT OF 18 DECEMBER. NO PROBLEM.
(11) IMMUNITY FROM SEARCH AND ARREST, 2(E) AND (F) OF THE CHINESE
DRAFT OMIT THE LIMITING CAVEATS CONTAINED IN PARAS 2 TO 4 OF THE
BRITISH DRAFT. THESE ARE ESSENTIAL. AS THE CHINESE HAVE ALREADY
BEEN TOLD WE CANNOT PROVIDE THE UNFETTERED IMMUNITIES
THEY SEEK WITHOUT SPECIAL LEGISLATION. THE ONLY MOVE OPEN
TO US ON THIS ISSUE IS TO COVER THE CAVEATS IN A SEPARATE EXCHANGE
OF NOTES. BUT THE POSITION WOULD HAVE TO BE MADE CLEAR. (111) REAL ESTATE TAXES. NO FORMAL EXEMPTION FROM TAXATION ON
A BUILDING OWNED BY THE VISA OFFICE IS POSSIBLE WITHOUT A GAZETTED
ORDER FOR THE REASON SET OUT IN PARA 4 OF MY TELNO 1593 OF 1980. AS EXPLAINED THERE, THIS IS NOT A REAL PROBLEM SINCE, ALTHOUGH THE NCNA (WHERE THE VISA OFFICE WAS GOING TO BE SET UP) PAY RATES, THEY DO NOT PAY PROPERTY TAX AS THEIR BUILDING IS OWNED NOT BY THEMSELVES BUT AN INVESTMENT COMPANY. NO OBJECTION TO THESE POINTS BEING EXPLAINED TO THE CHINESE.
(IV) EXEMPTION FROM TAXES ON IMPORTED GOODS. THE CHINESE ''CONCESSION'' IN 2(H) OF THEIR MEMORANDUM IS MEANINGLESS IN LIMITING EXEMPTION TO GOODS FOR THE USE OF THE OFFICE. ALL GOODS COULD BE SO DESCRIBED (MRS. XU SPOKE OF TOBACCO AND COSMETICS). THE IMPORTANT POINT HOWEVER IS THAT EVEN EXPEMPTION
FOR OFFICE GOODS CANNOT BE GRANTED BY ADMINSTRATIVE ACTION, LEGISLATION WOULD BE REQUIRED. IN PRACTICE THE TAX BURDEN IS INSIGNIFICANT (E.G. DUTY ON CHINESE SPIRITS IS UNDER HK DOLLÁRS 10
PER GALLON, AND ON PETROL 50 CENTS PER LITRE).
(V) SEMANTICS. ALTHOUGH NOT MUCH LIKING THE CHINESE INSISTENCE
ON REFERRING TO ''CHINA'S MAINLAND AND HONG KONG'' (PEKING TELNO
118 PARA 5) WE COULD LIVE WITH IT. BETTER HOWEVER, SO AS NOT TO GIVE AWAY ANY TRICKS, TO OMIT THE PHRASE ALTOGETHER.
Pay ~413
7
land (d)!
Hick 349/3
(50) 1980
. CONFIDENTIAL
/(V1) REFERENCE