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"With regard to Sugar prepared in "non-contracting States, the certificate must

"state, in addition, that it is derived from a "factory which does not work Sugar coming from *a State to which a special duty or prohibition

"is applied".

In the absence of a proper Fiscal Authority, in the country of origin or despatch, the Board see no objection to Hong Kong accepting Certificates signed and issued by British Consular Officers, as provided for in Section 3 of the proposed Regulations.

The proposed "Regulations for Sugar in transit" appear to be satisfactory so far as landed Sugars are concerned, and the Board do not think that any objection need be raised to the proposal of the Governor (Paragraph 5 of Despatch) to simplify them by approving the Warehouse of a particular Company for the warehousing of Sugar in transit if that course is found more convenient.

A

It would be well to make clear in these Regulations that Sugar in transit need not necessarily be landed, but may be transhipped from vessel to vessel, or may remain on board the importing vessel for subsequent exportation, under official supervision.

This latter point is referred to in paragraph 5 of Sir. M. Nathan's despatch but is not dealt with in the proposed Regulations for Sugar in transit.

I

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