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to avoid any disruption in Hong Kong.

Hong Kong will have geared

itself to full application of the Harmonised System well before

1997. It is clearly desirable that there should be a smooth

transition beyond that date.

5. All this suggests that we should proceed on the basis that the

UK will ratify on its own account, and deal separately with extension to dependent territories once the Hong Kong problems are sorted out. I should be grateful if Miss Shepherd could now set

in hand the drafting of Instrument of Ratification on this basis

(following our conversation this afternoon). Customs and Excise tell me that we shall be coming under very strong pressure to

agree to ratification in late June at the CCC session in Ottawa.

6. The Chairman of Customs and Excise will shortly be writing to the Secretary General of the CCC to clarify the problem Hong Kong's partial application of the HS, and the modalities for Hong Kong representation at the HS Committee. You may wish to see

the draft letter (please ignore its para 3). The CCC Secretariat do not have the necessary international legal expertise to answer these points authoratively and have to rely on the Belgian Foreign

Ministry. It may therefore be some weeks before we receive a

reply. In view of HKD's wish to consult the Chinese, we shall

then have to set the necessary procedures in train in Peking.

is unlikely that this Hong Kong angle will be sorted out in time

for Hong Kong and the other relevant dependent territories (eg

Turks and Caicos) to be included in the UK Instrument of

Ratification.

It

7. I should be grateful for your urgent comments on the first two

paragraphs of the draft Customs and Excise letter to the CCC, and for any more general observations.

A34AAU

Robert Sand

RA E Gordon

European Community Department

(External)

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