XN000022-1995-05-23 — Page 3

- 2 -

"The PWC Sub-group also suggested that the extension of the term of a CFA judge should be determined by the Chief Executive in accordance with the recommendation of the Chief Justice. This would make the Chief Justice, rather than the independent commission, responsible for making recommendations on the extension of the terms of any other CFA judges.

"As extension of the term of an office is an appointment matter, the PWC Sub- group's suggestion will, in our view, restrict the commission's power under the Joint Declaration and the Basic Law. It will also not deal with the situation in which the Chief Justice's term of office was being extended.

"The CFA Bill is designed to provide the legislative framework for setting up the CFA in Hong Kong before July 1, 1997, as agreed by the Chinese side at the JLG in 1991. It states that the CFA shall have no jurisdiction over 'acts of state', as is the case for other existing courts in Hong Kong. The common law meaning of the term 'acts of state' is clearly understood. In our views, the definition of 'acts of state' should be left for the courts to determine.

"We drafted the CFA Bill on the basis of the 1991 JLG agreement. In the past 12 months since we handed the draft Bill to the Chinese side, we have answered fully and promptly all the questions that they have raised. We have also amended the draft Bill to take into account comments made by them.

"We shall now amend the draft Bill further to take into account the PWC Sub- group's suggestions. We hope that this gesture of sincerity and co-operation will ensure that rapid progress will be made at the next expert meeting that the two sides have agreed to hold this month and that the Chinese side will then confirm that they are content with the draft Bill.

"It is important that the Bill should be introduced into the Legislative Council within the current session, as appeals to the Privy Council can take up to a year to be heard, and the Judiciary need at least a year to put the practical arrangements in place after the enactment of the Bill.

"The purpose of the 1991 JLG agreement was specifically to establish the CFA before 1997 and the two governments have an obligation to implement this agreement."

End/Tuesday, May 23, 1995