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of a non-Convention country which voluntarily countervailed the bounties on imported raw Sugar.
At the same time it would be difficult to contest the claim of a country to prohibit the importation of Sugar refined in Hong Kong from bounty-fed raw Sugar, notwithstanding the fact that the bounty had been countervailed in the Colony, and the action of French Indo-China in prohibiting the importation of all Sugar from Hong Kong could only perhaps be successfully disputed so far as that portion of the Sugar which was not originally bounty-fed is concerned.
In the Board's opinion the simplest solution of the difficulties would appear to lie in the formal adherence of the Crown Colonies to the Convention, but if, for other reasons, that course is not advisable, they are disposed to agree with the Secretary of State that effect might most easily be given in Hong Kong to Article VIII of the Convention by prohibiting the importation of all foreign bounty-fed Sugar into that Colony.
With reference to paragraph 2 of Mr. Lucas' letter, the Board direct me to observe that they see some objection to refunding the Duty paid on bounty-fed Sugar, whether exported in its original state or after being refined. The Convention never contemplated the admission of bounty-fed Sugar except in transit (within Customs control), and there would be an infraction of its rules in returning the special import Duty after the Sugar had once been admitted into "free circulation" in that Colony.
Furthermore,