CONFIDENTIAL

The Government of the United Kingdom may similarly give directives in relation to the exercise by Hong Kong, with extra-territorial effect, of legislative powers conferred upon it under the Hong Kong Act 1985, and in the event that the exercise of such powers gives rise to international responsibility the two governments would likewise co-operate in taking remedial action.

It has not in practice been necessary to have

This is resort to measures such as those stated above. because of the close degree of practical co-operation and consultation which has always existed between the two governments. Thus, except in the field of external commercial relations where, as a matter of policy, successive British governments have allowed Hong Kong to manage its own affairs, the two governments regularly keep each other informed of proposed action in external affairs which may affect them both. Potential conflicts can thus be discussed and consensus reached.

I shall be grateful if you would confirm that I have correctly recorded our joint conclusions.

Can't Lively,

Ein Greeting

John Freeland

Legal Adviser

CONFIDENTIAL

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