TNAG-0056-FCO40-92-Evacuation-plan-1967 — Page 138

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The balances could be blocked within 24 hours by administrative

action under an existing Order which is in force under Section 2 of the

Emergency Laws (Re-enactments and Repeals) Act 1964. Any payment from

a Hong Kong account would thereafter require the specific consent of

*

the Treasury This would apply not only to money already on Hong Kong

accounts, but to any money subsequently finding its way there. It would

also apply to Treasury Bills and securities in the U.K. standing in

the name of Hong Kong residents. (Details of the balances and of the

relevant legal powers are in Annexes I and II).

9.

Arrangements would then have to be made to enable certain types of payments to be made from the blocked accounts (see paragraphs 6 to

8 of Annex II). The criteria to determine permissible payments would have to be worked out subsequent to blocking action in the light of the circumstances of the time. Among the questions to be considered would

be:-

(1) whether refugees holding claims in Hong Kong dollars

could be allowed on humanitarian grounds to convert these

wholly or partially into sterling by releases from the

blocked balances;

(2) whether any such concession should be extended to refugees

other than citizens of the U.K. who had returned to the

U.K. (and would therefore be subject to U.K. exchange

control);

(3) how far it was desirable to maintain the balances at

maximum level as possible bargaining counters against the

physical assets which the Chinese would have taken over.

10. In due course it would almost certainly be desirable to

exclude Hong Kong from the Sterling Area and apply full exchange

control. But this could be done later in the light of the

prevailing circumstances.

Subsequent consideration would also be

needed of whether in le light of circumstances Hong Kong's assets

should be brought under the "custody" of H.M.G. For swift emergency action, however, blocking under the Emergency Laws Act as proposed

is appropriate and adequate.

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