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TO PRIORITY HONG KONG
TELNO MISC 143
OF 180836Z DECEMBER 92
INFO ROUTINE FCO, PEKING, UKREP JLG HONG KONG
FROM EDWARDS (LAW OFFICER, HONG KONG GOVERNMENT)
IPPA: HONG KONG/ITALIAN NEGOTIATIONS 14-18 DECEMBER 1992
1. WE HAVE INITIALLED AN AGREEMENT. THE TEXT IS VERY CLOSE TO THE HONG KONG MODEL. THE MAIN DEPARTURES ARE:
(A)
THE ADDITION OF A SUBROGATION CLAUSE AS PROPOSED BY US:
(B) PERIOD OF DURATION OF AGREEMENT IS FOR A TERM CERTAIN OF 15 YEARS, WITH AUTOMATIC 10 YEAR EXTENSIONS UNLESS ONE OF THE CONTRACTING PARTIES BRINGS IT TO AN END ON ONE YEAR'S NOTICE:
(C)
THE ADDITION OF A 'GRANDFATHER' CLAUSE TO GIVE CONTINUED PROTECTION UNDER THE AGREEMENT FOR 15 YEARS TO INVESTMENTS MADE BEFORE TERMINATION.
2 =
WE WERE ABLE TO PERSUADE THE ITALIANS TO DROP A PROPOSAL THAT WOULD HAVE ENTITLED AN INVESTOR TO REPURCHASE HIS EXPROPRIATED INVESTMENT IN CIRCUMSTANCES WHERE THE EXPROPRIATING GOVERNMENT HAD NOT, IN THE EVENT, PROCEEDED TO UTILISE THE INVESTMENT FOR THE PURPOSES STATED AT THE TIME OF EXPROPRIATION. THE ITALIANS, WHOSE MOST RECENT IPPAS INCLUDE SUCH A PROVISION, ACCEPTED THAT, IN OUR PARTICULAR CIRCUMSTANCES, THE ADDITION OF SUCH A PROVISION WOULD HAVE CAUSED SERIOUS COMPLICATIONS WITH THE CHINESE SIDE.
3.
TEXT OF THE INITIALLED AGREEMENT WILL FOLLOW BY BAG TO HKD, FCO.
IN ACCORDANCE WITH THE NORMAL PROCEDURES, WE WILL NOW REPORT THE AGREEMENT TO EXCO AND THEREAFTER PASS IT TO THE CHINESE SIDE UNDER COVER OF A SUITABLE EXPLANATORY PAPER.
FAIRWEATHER
YYYY
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