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Wider Implications

1.

The immediate problem for Hong Kong is the likelihood that Benelux, Italy and Greece will shortly require visas for

BDTCs and BN (0)s. We identified in our last submission the

longer term problems of further limitations on access to Europe once the Treaty on European Union comes into force and a CVL established which would be imposed by Qualified Majority Voting from 1 January 1996 (the non SC countries could not block a vote by SC bloc). Hong Kong BDTCs and

BN (0)s would then need visas for all EC member states.

8.

On the face of it we would be faced in 1996 with

imposing visas on our own British nationals visiting the UK

whether or not they would normally require pre-entry

clearance. (The situation gets even more complicated once

the External Frontiers Convention comes into force).

9.

We are still considering the way forward; this is a complex field. Our Legal Counsellor is examining the

possibility of arguing before 1 July 1997 that Hong Kong is

not covered by the terms of Maastricht Article 100c which

allows for a common visa list. The relevant Article lays down that the Council of Ministers, acting on a proposal from

the Commission and after consulting the European Parliament,

"shall determine the third countries whose nationals must be

in possession of a visa when crossing the external borders of

the member states." There may well be room for an argument that before 1 July 1997 Hong Kong is not a third country for the purposes of Article 100C. that Hong Kong BDTCs and

BN (0)s do not fall under the Maastricht definition.

The Governor

10.

The Governor is following this matter closely and has said that he will want to discuss developments when he talks to officials on 29 July. We are briefing Sir J Coles to

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