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Some rather important questions have been raised in this correspondence, which it may be convenient to take this opportunity of stating with their probable solution.
Is French Indo-China justified under the Convention in excluding sugar from non-conventional countries which do not give bounties? And if so may it exclude such sugar after being refined in Hong Kong?
If Hong Kong adopted countervailing duties could such duties be refunded on the re-exportation of such sugar either after being refined or in its original state? (a) To any State? (b) To a non-contracting State?
1. (2) This appears to be a clear breach of the Convention and, though possibly of little practical consequence, I have called Sir H. Bergne's attention to it and submit a draft to the Foreign Office on the subject, in case it may be found desirable at any time to question it. This would furnish an answer to any contention which may be raised that such sugar may be excluded after being refined in Hong Kong.
We informed the Officer Administering the Government by telegraph that such duties could be refunded in case (b) (assuming of course that due precautions were taken against fraud). The Board of Customs, in discussing cases (a) and (b) together express doubts as to the possibility of preventing fraud unless refining...