W(B)L 51-7433
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Registry No.
SECURITY CLASSIFICATION
Top Secret.
Secret.
Confidential.
Restricted.
Unclassified.
PRIVACY MARKING
..In Confidence
DRAFT
NOTE
Type 1 +
To:-
From
H. H. Stewart
12
Telephone No. & Ext.
Department
Visit of Mr. J. Saunders, General Manager
Hong Kong, Shanghai Bank
We have had no notice that Mr. Saunders intends to
talk about the Import Deposit Scheme, but the Hong Kong
Government Office have heard from "The Times" that
Saunders has told their Financial Correspondent that this
is one of the matters he will be raising in London.
Assuming there are no substantial changes in the
scheme as a result of the committee stage of the Customs
Import Deposits) Bill, the Import Deposits scheme imposes
with retrospective effect from 27 November, a system of
Customs deposits, for periods of six months, by importers,
2
of sums equivalent to 50% of the value of the imported
goods. Apart from the fact that the cost of goods
imported from Hong Kong will rise by the cost of
financing these deposits (an increase of about 2.5% only)
the scheme is not likely to affect Hong Kong's trade
with the United Kingdom to any great extent, so long as
Hong Kong is in a position to finance these deposits by
one means or another from funds in the Colony.
happens that the banks were in a highly liquid state when
the scheme was introduced, possibly because the banks
were proposing to put as much sterling as they could
under the umbrella of the Colony's official reserves, So
It so
as to admit those funds to the benefit of the sterling
guarantees. It has since been decided that there is
nothing against the use of the official reserves to
finance customs deposits without their ceasing to be
/eligible
CONFIDENTIAL
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