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12. But the budget for new Commission offices overseas is severely stretched: although physical preparations are far advanced, the Commission may pull out and allocate the funding elsewhere.

13.

As for the situation post-1997, Hong Kong say that they can give no guarantees and are unwilling to raise the issue with the Chinese at this stage. The outcome of this is unpredictable, but could run contrary to the original objective of establishing an office which would retain its position as a concrete reminder of Hong Kong's economic autonomy.

14.

The establishment of the Office would have a real symbolic value, in addition to the practical trade arguments in favour of the EC being represented. The UK has been the driving force all along. Having pushed matters to this stage, it would be worth encouraging Hong Kong to make a last attempt to agree such administrative measures as they can to approximate the privileges and immunities requested by the Commission.

15.

Delors

Negotiating via letters between the Governor and M. is not the most effective way to cut a deal. The chances of success would be higher if negotiations were conducted face to face by lower profile representatives empowered to take decisions. Hong Kong are trying to put together a delegation to visit Brussels before the Commission shuts down for August. should not press them to bow to the Commission's more unreasonable demands nor to accept any requirement for legislation (which is patently unrealistic), but with maximum flexibility on both sides agreement may prove possible.

Anneli Conroy

We

ASIA-PACIFIC/1207.HKsub

Anneli Conroy

4

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1.

2.

I saw this submission in draft, and agree with it.

The files indicate that this is the first time when this

I therefore issue has been brought to Ministerial attention. asked Miss Conroy to spell out more of the history than would be normal in such a submission.

3.

There are advantages in having an EC office in Hong Kong, both because the territory is a major regional economic centre (and a better investment of Commission time eg than their office already set up in Manila) and because it is useful that the EC should have direct experience of the blend of British-sensitive economic, commercial and political factors at play as Hong Kong moves up to and beyond 1997.

4. The UK has acted as marriage broker over the five years during which the Commission has been considering the question. The recommendation is that we should continue to play this role

This and should urge both sides to seek realistic common ground. means that the Commission will have to drop their more extravagant requests for privileges and immunities for their personnel. We have just learned that a delegation from Hong Kong would be ready to meet the Commission in Brussels on 29/30 July, so there is clearly interest in progress on the HK side.

J M Macgregor

Privileges and immunities

the Commission and to be granted requested by

the office of the Commission in Hong Kong, its staff and their family members

to

COMMISSION LIST

Legal personality of the EC

on the

territory of Hong Kong

Capacity to conclude contracts, acquire and dipose of immovable and movable property

office premises, Of Inviolability inviolability of residents

archives

and

documents

and

Exemption

Izom taxation of office

premises and residences

Freedom of movement

Freedom of communication,

including use of diplomatic pouch

Protection and personal inviolability.

Immunity from jurisdiction

Exemption from registration

of aliens, residence and work permits

Exemption from social

security

Exemption from texation, customs

duties and inspection

Exemption from personal services and contributions

Determination of beginning and end

of privileges

and immunities

of

Recognition of the laisser-passer and use of flag and emblan

the EC

Exemption from duty to give evidence

61stuFe concerning

mamber of his/her

the estate of a member family.

of the office

ox of a

Determination

of

permanent residents

privileges of Hong

2nd

Kong

of immunities

employed by

nationals

OF

the

Commission

office:

TOTAL P.06

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