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separately and later - c.f. paragraph 2 of Hong Kong telno 630). However, there are matters in the implementation of the legislation which we may wish Hong Kong to delay. Mr Lindley refers to items 6 and 8 of Hong Kong telno 631. It is not clear to me at this stage whether Mr Lindley would envisage Hong Kong acting under its legislation in respect of ASAS negotiated specifically for Hong Kong and for us to continue acting in respect of ASAS in which Hong Kong is included as part of the United Kingdom and its dependent territories, or whether some form of delegation might be adopted with regard to the latter. Obviously this is something we need to go into detail with with the Hong Kong authorities. There are also the questions of implementation which have an effect on external powers.

c) External affairs: the United Kingdom will remain responsible for Hong Kong's external affairs until

30 June 1997. In so far as Hong Kong legislates to affect external affairs (in relation to the implementation of the Chicago Conventions) or implements its legislation in a way that has effect externally, the United Kingdom will remain responsible vis-a-vis a third state. We would therefore wish to ensure that the legislation and the administration are such as can be defended and, to the extent that any international liability might arise, Hong Kong would take action so as to remove any default and compensate, either directly or through the United Kingdom, any injured party.

Adding these points together I suggest we can come to the following conclusions (these are not necessarily the only conclusions):-

5.

a) So far as the United Kingdom legislative process is concerned, there is every advantage in giving the Hong Kong Legislature the necessary powers (by order under paragraph 3 of the Hong Kong Act) in one go, not in instalments;

b)

so far as the Hong Kong legislative process is concerned there is every advantage in providing a single or combined piece of legislation of as comprehensive a nature as possible;

c) so far as the application of the Hong Kong legislation is concerned:-

(i)

it may be necessary to come to understandings that certain provisions will only be implemented (and subsidiary legislation or orders on particular topics may only be made) with the agreement of the United Kingdom;

(ii) so far as concerns the continuing responsibility of the United Kingdom, it will be necessary to obtain undertakings from the Hong Kong Government; and

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