CONFIDENTIAL

3. The next question is whether the Bill should itself provide for termination of UK sovereignty, or should enable an Order in Council to be made for that purpose. The issue was canvassed in the Foreign & Commonwealth Secretary's minute of 5 November (paper B) and

Ministers have now decided to opt for the former course. There is

no constitutional impediment to Parliament terminating sovereignty in that way, with effect only from 1 July 1997, and the Attorney

General prefers that option. Since however the Joint Declaration will only enter into force if and when ratifications are exchanged

(on a date before 30 June 1985 which has yet to be agreed), this

provision in the Bill should only enter into force on the date, to

be notified in the Gazette, on which the Joint Declaration enters

into force.

Privileges & Immunities

4. The second prerequisite for ratification of the Joint Declaration will be provision for privileges and immunities for the members of the Sino-British Joint Liaison Group. The Group will be

set up in accordance with Annex II to the Joint Declaration, and it

will begin to meet for short periods in London, Peking and Hong Kong

as soon as the Joint Declaration enters into force. It will meet at

least once in each location in each year. Until 1 July 1988 it will

be entirely peripatetic: thereafter it will have its principal base in Hong Kong. Each side (United Kingdom and China) will designate 5 members for the Group (paragraph 7 of Annex II), and may send up to 20 supporting staff. Paragraph 10 of the Annex provides that members of the Group shall enjoy diplomatic privileges and

immunities as appropriate when in the three locations. There is

nothing in the Joint Declaration or its Annexes to confer any

privileges or immunities on the supporting staff, or on any experts who may assist in the work of the Group in accordance with

paragraph 11 of the Annex.

5.

Hong Kong will take the necessary action to ensure that

appropriate privileges and immunities are enjoyed by the 5 Chinese members of the Group while they are in Hong Kong. The only clause required in the Bill is one which provides for members of the Sino-British Joint Liaison Group nominated by the People's Republic

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