CONFIDENTIAL

21. Many people have also expressed concern about nationality. This was without question one of the most

difficult subjects to negotiate. Each side had conflicting

interests that were not easy to reconcile. Nevertheless the

Government believes that the solution eventually achieved

goes a long way to meeting the needs of the people of Hong

Kong.

22.

Arrangements on nationality are set out in a draft exchange of memoranda associated with the agreement. The

terms of these memoranda have been agreed between the two

sides and they were initialled at the same time as the

agreement itself. The UK memorandum provides that those who were on 30 June 1997 British Dependent Territories citizens

by virtue of a connection with Hong Kong will be able to

retain,

if they wish, a status, which will be a form of British nationality, after 1997 and for the rest of their

lives. This status will enable them to continue to use a

British passport and to avail themselves of consular protection when in third countries.

CONFIDENTIAL

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