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transfer of sovereignty so as to maintain continuity and stability in the Territory before and after midnight on 30 June 1997. One way HMG chose towards this aim was to register recently as British citizens the heads of 50,000 families with their dependents; the thinking behind this apparent paradox was that by offering British Citizenship now to certain people who were valuable to the Colony they would be dissuaded from leaving in order to set up residence qualifications, and ultimately nationality, elsewhere; and on the assumption that Hong Kongers would prefer to be in Hong Kong than anywhere else, so long as they could get out in an emergency if they had to. I do not know whether the strategy has worked. But you will be aware that because "BDTCs Gibraltar" can acquire British Citizenship by right, for Gibraltar to offer residence and nationality to a couple of hundred Hong Kongers would potentially run contary to HMG's policy on Hong Kong both on numbers of those granted British Citizenship and on keeping people in Hong Kong unless the Governor's full powers were exercised (ie to promise eventual naturalisation without the normally required physical residence).
5. The Gibraltar Government's efforts to attract Hong Kong people here have not worked because the GIB Hong Kong hand-out material has hitherto been necessarily vague on how far people could count on getting a passport at the end of their period of residence. We should therefore like to be able to confirm to the GOG that their material could be revised (we would clear in draft) to state quite clearly that once the residence requirement has been fulfilled British nationality through a connection with Gibraltar is on offer. Further we think they should be able to say that in certain circumstances (eg high value investment in Gibraltar) the physical residence requirements leading to naturalisation can be waived (which is no more than a statement of fact). In other words although the 5 year "residence" period would in theory remain, the requirement for an applicant to spend the 5 years physically residing in Gibraltar would be waived by the Governor under his delegated powers described in Section 6 of Schedule 1 of BNA 81. This combined approach could well attract wealthy Hong Kongers to invest in Gibraltar as they would not necessarily want to come and live here for the five years it would normally require to qualify to apply for naturalisation. In addition, although the numbers of potential British citizens would be breached (but not by much as we would ensure that the GOG stuck to their limit of about 200 wealthy individuals, although their dependants would have to be added), HMG's policy of trying to keep Hong Kong people in Hong Kong would not be compromised. I should be grateful for your views on this approach.
6. You may think this all sounds rather complicated and if you need any advice on BNA 81 I am sure Al Harrington in NTCD will be able to provide it. But there are a couple of factors which I think are important in all this. First, political clearance has it seems to me already been given for what Gibraltar wants to do see paragraph 18 of the record of the meeting in London on 22 June 1989 between Joe Bossano and Lynda Chalker at which the latter confirmed that HMG "would have no objection" if Gibraltar took in about 200 entrepreneurial Hong Kongers; and secondly a small increase in the potential numbers of Hong Kong BDTCs who could eventually become British
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