CONFIDENTIAL
CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 179
OF 140745Z JANUARY 88
INFO IMMEDIATE PEKING
HKC 1021 TOP COPY
RECEIVED IN REGIST!
14 JAN 1988
Q DIST ?
MIPT
MIGA
DESK OFFICER
INDEX
PA
4
145011
MDHIAN 3438
THE DRAFT SPEAKING NOTE FOR PEKING IS AS FOLLOWS
1
THE MULTILATERAL INVESTMENT GUARANTEE AGENCY, WHICH IS PROPOSED TO BE SET UP UNDER THE AUSPICES OF THE INTERNATIONAL BANK FOR
RECONSTRUCTION AND DEVELOPMENT (THE ''WORLD BANK > AIMS AT
PROMOTING FOREIGN INVESTMENT IN DEVELOPING COUNTRIES. THE UNITED
KINGDOM BECAME A SIGNATORY TO THE CONVENTION ESTABLISHING THE
AGENCY ON 9 APRIL 1986 BUT HAS YET TO RATIFY. THE UNITED
KINGDOM EXPECTS TO RATIFY THE CONVENTION IN OR SHORTLY AFTER MARCH
1988. ARTICLE 66 OF THE CONVENTION PROVIDES THAT THE CONVENTION
SHALL APPLY TO ALL TERRITORIES UNDER THE JURISDICTION OF A MEMBER
INCLUDING TERRITORIES FOR WHOSE INTERNATIONAL RELATIONS A MEMBER
IS RESPONSIBLE, UNLESS EXCLUDED BY THE MEMBER IT IS THE BRITISH SIDE'S INTENTION TO APPLY THE CONVENTION TO HONG KONG, AND IN OUR VIEW IT WOULD BE APPROPRIATE FOR THE CONVENTION TO CONTINUE TO APPLY
TO THE SAR AFTER 1997.
2. THE APPLICATION OF THE CONVENTION TO HONG KONG WOULD ALLOW
INVESTMENTS BY HONG KONG INVESTORS IN DEVELOPING COUNTRIES TO BE GUARANTEED BY THE AGENCY. HONG KONG WOULD ALSO SEEK TO TAKE
ADVANTAGE OF SECTION 3. PARA 1.21 OF THE OPERATIONAL REGULATKONS
OF THE AGENCY. THIS PROIVDES THAT A DEPENDENT TERRITORY FOR WHOSE
INTERNATIONAL RELATIONS A MEMBER IS RESPONSIBLE MAY BE DESIGNATED
BY THE BOARD OF DIRECTORS AS A DEVELOPING MEMBER COUNTRY FOR THE
PURPOSES OF ARTICLE 14 OF THE CONVENTION IF THE MEMBER SO REQUESTS. ARTICLE 14 STATES THAT ONLY THOSE INVESTMENTS MADE IN THE TERRITORY
OF A DEVELOPING MEMBER COUNTRY CAN BE GUARANTEED UNDER CHAPTER
III OF THE CONVENTION. THE TERMS OF PARA 1.21 OF THE OPERATIONAL
REGULATIONS MAKE IT CLEAR THAT THE WORD COUNTRY! IS USED THERE IN A SPECIAL SENSE WHICH DOES NOT INDICATE A STATE. A DEPENDENT TERRITORY WOULD MERELY BE DESIGNATED UNDER THAT PARAGRAPH IN ORDER TO SATISFY ARTICLE 14, AND FOR NO OTHER PURPOSES. THE DESIGNATION WOULD ALLOW FOREIGN INVESTMENTS IN HONG KONG TO BE GUARANTEED UNDER
THE CONVENTION. THE CONFIDENCE OF FOREIGN INVESTORS IN HONG KONG
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CONFIDENTIAL