}
D
261/71/17)
Your ref: 1/4/5641/47
PRIORITY
SAVING
COLONIAL
OFFICE
Copen
From the Secretary of State for the Colonies.
To the Officer Administering the Government of HONG KONG.
Date 1st December, 1951.
No.1235 Saving.
CONFIDENTIAL
Your savingram No. 1214 of 1st November.
Japanese assets.
Under Article 14(a) 2(1) of the Peace Treaty with Japan each of the Allied Powers has the right to seize etc. Or dispose of Japanese assets "which on the coming into force of the present Treaty, were subject to its jurisdiction..." In the circumstances Japanese assets cannot be disposed of until the Peace Treaty comes into force and the consequent United Kingdom Enabling legislation is enacted. Japan is understood to be about to ratify the Treaty and His Majesty's Government is likely to be in a position to do so next month.
Under Article 23(b) the Treaty should therefore come into force at the latest by August 1952, though it might come inte force under Article 23(a) in, say, February 1952 if a majority of States, including the United States of America, ratify it by then. I will inform you in due course of the United Kingdom legislation (and its extension to Colonial territories) giving effect to the Peace Treaty. It will be appreciated that the Custodian of Japanese Enemy Property cannot release to Government any former enemy property under his control before the enactment of suitable legislation.
2.
I am,
however, in general agreement with the methods of disposal of Japanese land and buildings proposed in your paragraph 5 (b) and (c). As regards your paragraph 5(a), it will be necessary to consult the Service Departments, and this I propose to do immediately. The presumption in paragraph 6 of your savingram that shares held by the Custodian should be sold is correct although it might be as well to wait for guidance as to what action will be taken by the United Kingdom Custodian in similar circumstances. The balance of $1,152,504 in the Reparations Share Account referred to in your paragraph ? should, in my opinion, be included amongst Japanese assets and should not, I suggest, go to revenue. Although the arrangements in Circular despatch of the 22nd December, 1947, have been superseded (by those outlined in my predecessor's telegram No. 891 of the 26th July), the new arrangements like the old are intended to apply to all Japanese assets whether received, like those in the Reparations Share Account, as advance reparations or note The balance of these latter should there- fore remain, I suggest, in the Reparations Share Account. You may wish, indeed, to ocasider whether in due course it would not be appropriate to utilise this account as a depository in which to place, pending disposal, the proceeds of all liquid Japanese assets,
/3.
5
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