CONFIDENTIAL

THE LEGAL SYSTEM OF HONG KONG

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1. For the confidence that businessmen worldwide share in Hong Kong to be maintained, it is essential that the present legal system be continued. This English system, based on countless past legal cases reaching far back into history, accommodates all of the personal freedom and fair treatment in the courts on an 'innocent until parc

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guilty' basis and the right to protection of property essential in a capitalist society for which English with common law is well known. As with common law, statute law in Hong Kong is founded upon statute law in the United Kingdom but is held in the form of Hong Kong Ordinances. The customary law used in Hong Kong is largely based

upon Chinese customary law.

2. International mercantile law has its roots in English common law especially concerning all business and trade with which Hong Kong

concerns itslef. English mercantile law has, over a long period of time, been tried, trusted and accepted and has been very important

in Hong Kong's coming to be the third largest financial centre in

the world which it is today. The predictability and consistency of these laws has inspired businessmen worldwide with the knowledge

that all of their dealings in Hong Kong will be protected by a combination of Hong Kong's own lawyers and many from overseas. Private individuals involved in a court case can be sure that the

Hong Kong lawyers will defend their interests and money is available from funds for those who wish to be represented by lawyers who would otherwise be unable to do so

3.

The Legislative Council, headed by the Governor-in Council of

Hong Kong has the power to adapt English law to make them more applicable to Hong Kong. The Hong Kong Police, in combination with

other administrative and law enforcement agencies, have the sole right to implement the laws of Hong Kong. After the Courts of Hong Kong, one may appeal to the Privy Council in England. The judges

who have the power to interpret and enforcé Hong Kong law are independant and are not responsible to the Government. Such a legal system, and the confidence in it, are vital to the continued

CONFIDENTIAL

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