MR CUNLIFFE
FROM:
M BLYTHE (T.SOLS)
DATE:
21 October 1993
EXTN:
210 3049
FAX:
210 3385
CC
Mr Kalen HMT
Miss S Brooks FCO
म.
\HONG KONG AND THE IMF: THE 1997 ANNUAL MEETINGS
We have spoken about the documentation regarding the 1997 annual meetings of the IMF and the World Bank in Hong Kong. You asked me to record the gist of my advice in writing.
2. From the Treasury's point of view the key issue is whether the documents prepared by the IMF will give rise to any contingent liability, or the like, on the part of HMG which would have to be reported to Parliament in accordance with the principles set out in Chapter 26 of Government Accounting.
3. I would be content to advise that the documentation gives rise to no such contingent liability if it were confined to the draft exchange of letters I saw at the outset. These letters are drawn on the basis that HMG will act as a conduit or post box, passing on to the IMF assurances given by the Hong Kong authorities. Those letters, taken by themselves, seem to me to involve HMG in assuming no separate obligations towards the IMF in respect of the 1997 meetings. The assurances given by the Hong Kong authorities, on this analysis, would fall to be treated as contractual in nature; HMG assumes no responsibility for the contracts of Hong Kong, as opposed to external obligations assumed by Hong Kong under treaties.
4. The full range of documents drafted by the IMF, however, goes further than this. It includes a separate MOU to which HMG would be expressed to be a party. Although the MOU probably does not have treaty status, it embodies a number of stipulations for which it would be difficult for the UK to avoid responsibility, as a
political not a legal matter, were the Hong Kong authorities to fail to deliver performance of the stipulations prior to 1 July 1997. This advice is not, to my mind, significantly affected by the express statement of responsibility on the part of the UK in paragraph 2 or the corresponding provision in paragraph 7 that until
1 July 1997 the Hong Kong Monetary Authority will perform the provisions regarding services and facilities for the meetings. On this analysis the MOU provides for "obligations" on the part of HMG which are contingent on
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