CODE 18-77
CONFIDENTIAL
нис
702/1
From:
}
Mr Hill
Hong Kong Department
Reference.........................................................................................
John Grainger
Legal Advisers W 44/3
270 3068
Date:
18 January 1988
CC:
Mr Birrell, IFID, ODA
18
MULTILATERAL INVESTMENT GUARANTEE AGENCY
1.
3
S
In your note/of 14/ January/you ask for comments on Hong Kong Telnos 178, 179 and 180 of 14 January. I have various points to make (below), but I suggest that, if you have not already done so, you also copy these papers to, and seek the views of, Walter Birrell of IFID/ODA. IFID are the lead department on MIGA and will be able to comment on the policy aspects of these telegrams, as well as on many detailed points relating to MIGA.
2.
My main comment is that I simply do not agree with the view stated in paragraph 2 of Hong Kong Telno 178, namely that if Hong Kong is to participate in MIGA it must do so from the outset. My understanding is that Article 66 enables the UK to exclude Dependent Territories from the outset, but then withdraw that exclusion in whole or in part at any time or times in the future. I believe that this procedure was adopted in relation to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (TS.25 of 1967). We are currently checking with the authorities of the World Bank that our understanding in this regard is correct. Subject to what they may say, my view is that the opinions expressed in paragraph 2 of Telno 178, paragraph 3 of Telno 179 and paragraph A6 of Telno 180 are not correct.
✓
As regards paragraph 3 of Telno 178, there is as yet no draft Order in Council. This will be prepared, and forwarded to the authorities of the Dependent Territories, in due course.
3.
the
In paragraph 2 of Telno 179, the reference should be to the draft Operational Regulations, Part I, (Guarantee Operations), Chapter One, Section III, paragrpah 1.21.
4.
5. As regards Telno 180, I find the answer to question Q3 difficult to understand. If the PRC ratifies the MIGA Convention it will be a "developing member country" for the purposes of Article 14. A Hong Kong investor would then be eligible for a MIGA guarantee in respect of investments in the PRC, provided he satisfied the eligibility criteria of Artick 13.
Broadly,
/these
CONFIDENTIAL