CONFIDENTIAL

Order in Council procedure would achieve nothing useful, and

could give rise to great difficulties now.

[If the wording of Clause One is questioned]

The wording of Clause One is based on the precedent of

of the

Cyprus Act 1960.

The reference to

sovereignty and

Our I aw

is

the termination of

jurisdiction is included because SO far as

concerned we will be terminating sovereignty over the ceded

areas, and terminating jurisdiction over the New Territories,

which are held on an international lease. The Chinese view of

the legal position is of course different.

CONFIDENTIAL

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