Sir

NST

I have the honour to refer to the provisions of the International Telecommunication Convention dealing with special arrangements (as

currently contained in Article 31 of the text of the Convention

established in Nairobi in 1982, or as may be contained in any

subsequent text of the Convention which may be applied to Hong

Kong), and to the proposal of the Hong Kong Government to enter into

negotiations with the telecommunications administration of other

territories with a view to concluding, in accordance with those

provisions, special arrangements which do not concern Members in

general, in particular in the field of International Value Added

Network Services. The United Kingdom Government hereby formally entrusts you with authority to conduct external relations on behalf

of Hong Kong as follows, namely to negotiate, conclude and implement

special arrangements on behalf of Hong Kong, for the establishment, operation and use of special \telecommunications networks, systems and services in accordance with those provisions, with states and

telecommunications administrations.

I am,

Sir

Yours Faithfully

So David Wilan KCMG

The Governor of Hong Kong

Douglas Hurd

PINAAQ

CHRABJ

HKC 193/2

RECEIVE

-2 MAY 1990

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FROM

DATE.

PA Major (Ms)

Hong Kong Department

02 May 1990

CC:

Mr McLaren

Mr Slater

Miss Spencer

Mr Wetton, SEND

Mr McQuade NTD

Mr Fifoot, Legal Advisers

PS/Mr Maude

Private Secretary

HONG KONG: INTERNATIONAL VALUE ADDED NETWORK SERVICES (IVANS): INSTRUMENT OF ENTRUSTMENT

Problem

2. Hong Kong wishes to negotiate and conclude its own bilateral special arrangements concerning international telecommunications. In order to proceed the Governor of Hong Kong requires an entrustment from the Secretary of State.

Recommendation

2.

I recommend that the Secretary of State sends a despatch to the Governor constituting the necessary authority. I submit a draft. Legal Advisers and DTI have been consulted and are content.

Background and Argument

3. The Hong Kong Government have been approached by the Japanese with a view to concluding bilateral special

arrangements on International Value Added Network Services (IVANS). These are arrangements for the leasing of telephone lines to private companies who then provide a value added service such as electronic mail, point of sale fund transfer facilities etc Until recently these value added network services have been confined to

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national networks.

But the burgeoning of international telecommunications in recent years has led to a need for special bilateral arrangements. For example, the US may also wish to enter into such arrangements with Hong Kong. (The UK currently has in place similar arrangements with both the US and Japan). The Hong Kong Government is keen to be covered by such arrangements, in line with their policy of encouraging competition in services such as IVANS which fall outside the scope of current exclusive telecommunications franchises.

4. Article 31 of the International Telecommunications Convention (Nairobi 1982) deals with special arrangements of this kind. It provides for members to authorise "other

agencies" to enter into such arrangements which do not

concern members in general. Section 9.1 of the International

Telecommunications Regulations contained in the Final Acts of the 1988 World Administrative Telephone and Telegraph Conference, pursuant to Article 31, will implement this provision in detail. These Regulations do not come into force until 1 July 1990 but in

the meantime, Article 31 provides an appropriate framework for the UK to designate Hong Kong as such an agency.

5. Hong Kong already enjoys considerable autonomy in the field of

international telecommunications. Accordingly, the draft entrustment is framed in such a way that it enables the Hong Kong' Government not only to conclude the arrangements with Japan but to conclude any further special arrangements, within the meaning of Article 31 (or the subsequent Regulations), for example a similar arrangement with the US.

6. The terms of the entrustment also reflect the provisions of the Joint Declaration (JD 134) which specifically provide for Hong Kong to conclude and implement international agreements on communications

after 1997.

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