CODE 18-77
ктырг
Brz1/4.
Mr Whi
Whitney
o/r
Miss Paris
CONFIDENTIAL
Reference
HICC 3701 23
RECEIVED INESK
2. APR 1993
DESK C
can we dising what to
Thanks for the note. Pls do with the paper. A_16/4
TRANSFER OF ASSETS: MEETING WITH MR EDWARDS
REGIST:
Action Tak
(OD)
1. I attended a meeting with David Edwards at which the issue of the transfer of assets was discussed in your absence. Mr Ricketts, Mr Bunten, Miss Brooks, Ms Barrett and
Ms Chok were also present. See (10
2. The main discussion centred around the way in which this problem could be dealt with. Miss Brooks had already suggested that one solution might be an internationally binding agreement between HMG, HKG and the CPG. Mr Edwards suggested that an alternative would be to consider making a transitional Order in Council which would come into effect at midnight on 30 June 1997. This would have to be discussed and agreed with the Chinese in draft. Mr Fifoot had suggested that the c.1979 Zimbabwean transitional order (SI 1600/1979) might have useful material. Mr Edwards thought that it would be very difficult to negotiate an agreement with the Chinese.
3. Miss Brooks still felt that an agreement would be preferable because a Hong Kong order would not be binding in international law. Also because the SARG will not exist until the CPG creates it, a Hong Kong order might not be binding after 30 June 1997. The difference with Zimbabwe was that there was a direct succession. Mr Edwards thought that paragraph 2 of Article 160 of the Basic Law should cover this point.
4.
Ms Barrett raised the idea of a binding agreement in the JLG for the Hong Kong legislation which Mr Edwards had suggested (ie a combination of the two options). Miss Brooks said that it would have to be a written treaty for it to be a binding agreement. Mr Ricketts asked whether we could make use of Article 160 in any legislation. Miss Brooks thought that this might be difficult, given that if the Chinese attacked article 160, then the agreement would go with it as well.
5.
Mr Ricketts said that the Chinese were bound to start to worry about this problem closer to 1997, although there were no indications that they were thinking about it yet. Ministers would also start to take an interest in this issue nearer the time, particularly in the Treasury. There will need to be some sort of agreement eventually, especially to ensure that none of HKG's liabilities stick to HMG after 1 July 1997. Mr Edwards raised the question of the difficulty of actually defining HKG's assets. Miss Brooks thought that a general descriptive clause would be best. The Zimbabwe order might provide a useful example.
1
CONFIDENTIAL