CO537-6035 — Page 72

COPY

SAVINGRAM

SECRETARIAT 14/2321/50

To the Secretary of State for the Colonies.

From the Governor Hong Kong.

Date 22nd December, 1950.

(R)Comm. Gen. Singapore No. 230

No. 184

SECRET

c.c. MR. TREVOR, KOWLOON-CANTON

RAILWAY.

Your telegram No. 1753.

Kowloon-Canton Railway.

I have had under consideration the question whether arrangements proposed for Chinese Maritime Customs examination of through goods at Kowloon (see paragraphs 2 and 4 of my telegram 1277) would be likely to prejudice our position under the 1948 Customs Agreement, in particular as regards Article 10, which provides that during the continuance of the Agreement the person appointed to the office of Customs Commissioner in Hong Kong shall be of british nationality and acceptable to the Hong Kong Government.

2.

It will be recalled that in the latter months of 1949 consideration was given to the desirability of denouncing the 1948 Agreement in consequence of the impending withdrawal of the British Commissioner of Customs in Hong Kong. At that time I was advised that a branch of Article 10 could not be held as being in itself a ground for regarding the Agreement as being at an end. It was however eventually decided (see your telegram 1825 of the 14th December, 1949) to consider it as being in suspense and that the Chinese Maritime Customs Organisation in the Colony I should be allowed to remain on a caretaker basis.

3.

I am now advised that notwithstanding non-compliance with Article 10, Article 2 of the Agreement allows the establishment within Hong Kong of centres at which Chinese Customs duties may be paid or assessed in advance in respect of commodities about to be exported to China, and allows of all the facilities specified in that article and in Article 3,4,5,6, and 8 being afforded, should the Chinese authorities wish to claim them.

4.

In these circumstances it is clearly necessary to proceed with caution in regard to facilities now proposed in connection with through goods traffic. Article 9 of the 1948 Agreement however provides that Customs arrangements in respect of goods being transported on the Kowloon Canton Railway shall as hertofore be the subject of agreement between the Government of Hong Kong and the Ministry of Communications of the Republic of China, the reference being to the previous arrangements made first under Schedule D of the Railway Working Agreement of 1911 and later in Schedule C of the subsequent working Agreement of 1934, which lapsed in 1938 upon the Japanese occupation of Canton. We are therefore in a position to maintain if necessary that railway arrangements have always been and should now be the subject of separate ad hoc agreements and that facilities now contemplated at Kowloon do not in consequence involve any of the provisions of the 1948 Customs Agreement.

5.

I feel therefore that we can adhere to the previous decision to continue negotiations for a Working Agreement relating to through goods traffic on the lines already proposed. Text of the relevant passage in the draft which is being put to the Chinese Railway Authorities is as follows:-

"Facilities will be afforded by the British Section at Kowloon

Station for C.M.C. Officers to carry out Customs examination of goods consigned to Canton by through goods trains, adequate office and godown accommodation being made available for this purpose. The C.M.G. officers allotted to this work will normally travel daily between Lo Wu and Kowloon in order to carry out these duties. Arrangements may however be made by the C.M.C. for their temporary accommodation in Kowloon should circumstances make it necessary on occasion for them to remain overnight."