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ε.
Arrangements would thon have to bo mado to onablo cortain types of
payments to be mado from the blocked accounts (soc paragraphs 6 to 8 of
Appendix II), The criteria to determino pormissible paymonts would
have to bo worked out subsoquent to blocking action in the light of tho
circumstances of tho timo. Among the questions to be considorod would bo:-
(1) whother rofugcos holding claims in Hong Kong dollars could bo
9.
allowed on humanitarian grounds to convert those wholly or
partially into storling by roloases from the blockod balances;
(2) whether any such concession should be extended to rofugoos
other than citizons of the United Kingdom who had returnod
to the United Kingdom (and would thorofore he subject to
United Kingdom exchange control);
(3) how far it was dosirable to maintain the balancos at maximum
lovel as possiblo bargaining counters against the physical
assots which tho Chinos, would havo takon ovor.
In duo course it would almost cortainly bo dosirablo to oxcludo
Hong Kong from the Storling Arca and apply full exchange control. But
this could be dono lator in the light of the prevailing circumstancos.
Subsequent considoration would also bo noodod of whether in the light of
circumstancos Hong Kong's assots should be brought under the "custody"
of Hor Majesty's Government. For swift omorgency action, howover,
blocking under the Emoryroney Laws Act as proposed is appropriato and adoquato.
Trade
10. Tho disruption croatod by a forced evacuation could be expected to
provont now trading transactions botwoon the Unitod Kingdom and Hong Kong
in the short run. The blocking of Hong Kong accounts would, moreover, mako
such now transactions difficult and unattractivo, if not impossible. It
would be necessary to decide what policy to adopt in rolation to imports
from Hong Kong. It would not be essential to take action at onco to romovo
Hong Kong from the Commonwealth proforonco arca and to imposo import
licensing, because goods shippod from Hong Kong tako upwards of four wooks
to roach the United Kingdom. But it would bo possiblo, and in the circum-
stances assumod it might well be desirablo, to teko such action at once,
while providing safeguards for the import of goods belonging to evacucos
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