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ε.
Arrangements would thon have to bo mado to onablo cortain typos of
payments to be made from the blocked accounts (sco paragraphs 6 to 8 of
Appendix II). The criteria to dotormino pornissible paymonts would
have to bo worked out subsequent to blocking action in the light of the
circumstances of tho timo. Anong the questions to bo considorod would bo:-
(1) whother rofugoos holding claims in Hong Kong dollars could bo
9.
allowed on humanitarian rounds to convert those wholly or
partially into sterling by roloasos from the blockod balances;
(2) whether any such concossion should bo oxtondod to rofugcos
other than citizons of the United Kingdom who had returned
to the United Kingdon (and would thoroforo be subject to
United Kingdom oxchange control);
(3) how far it was desirable to maintain the balances at naxinun
lovol as possiblo bargaining countors against tho physical
assots which the Chinos would havo takon ovor.
In duo course it would almost cortainly bo dosirablo to excludo
Hong Kong from the Sterling Aroa and apply full oxchange control. But
this could be dono lator in the light of the provailing circumstances.
Subsequent considoration would also bo noodod of whother in the light of
circumstancos Hong Kong's assots should be brought under the "custody"
of Hor Majesty's Government. For swift omorgoncy action, however,
blocking under the Emorgoncy Laws Act as proposod is appropriato and adoquato.
Trado
10. The disruption croated by a forced evacuation could bo expectod to
provont now trading transactions botwoon the United Kingdom and Hong Kong
in the short run. Tho blocking of Hong Kong accounts would, morcovor, mako
such now transactions difficult and unattractivo, if not impossiblo. It
would be noccssary to docido what policy to adopt in rolation to imports
from Hong Kong. It would not be essential to tako action at onco to remove
Hong Kong from the Commonwealth proference arca and to imposo import
liconsing, bocause goods shipped from Hong Kong tako upwards of four wooks
to reach the United Kingdom. But it would be possiblo, and in the circum-
stances assumod it might well bo dosirablo, to tako such action at onco,
while providing safoguards for the import of goods bolonging to ovacuoos
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