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Moreover, as I said in my minute of 22 March, I think it unlikely

that the Chinese would object to such an approach provided that the persons concerned clearly had connections with another dependent

territory. It seems to me however that Hong Kong's proposals would be in breach of the terms of the UK Memorandum, since they do not involve a change in the law before 1997 and would consequently not affect the position of such BDTCs "immediately before" 1 July 1997. If this is so and the solution to the problem which I suggested in

my minute of 19 March would indeed be ultra vires. The Hong Kong Act (which I still find difficult to understand: Mr Burrows' minute

of 21 March), I should be grateful to know if you can think of any other way of resolving this problem. Whatever the immediately obvious legal constraints it would be equitable to find a satisfactory way. of doing so.

5. On para 3(b) above I cannot see any obvious drawbacks to Hong Kong's various proposals. However, I should welcome your views

particularly on:

(i) Hong Kong's suggested redraft of Article 2 (I) (A)(III) and

2(I) (B); (para 1 (D) of Hong Kong telno 681)

(ii)

an appropriate amendment to Article 6(2) to provide for the

stateless grandchildren of Hong Kong BDTC's to be registered

as BOC's. I believe the Home Office have the drafting of this in hand; (Para 2(Q) of Hong Kong telno 681).

(iii) The need for the schedule to the order to refer specifically

to the Hijacking Act 1971 (Overseas Territories) Order 1971

and the Protection of Aircraft Act 1973 (Overseas Territories)

Order 1973. (Para 3 of Hong Kong telno 681).

6.

I have looked at Hong Kong's suggestions in the light of Mr

Grainger's further redraft of Articles 1 - 5 of the order. The only

additional points which I should like to draw to your attention as

result are that:

(a)

Somewhat suprisingly Hong Kong have not objected in their

telegram to the reference in Article 4(i) to the acquisition of

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