TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 263

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ORVELL

TO ROUTINE GOVERNOR HONGKONG TELEGRAM NO. 133 OF 5 FEBRUARY, 1973

YOUR TELNO 129: STERLING AGREEMENT.

1. AS EXPLAINED IN PARAGRAPH 8 OF MY TELEGRAM NUMBER 1047 OF 22 NOVEMBER, THE SUSPENSE ACCOUNT ARRANGEMENTS ARE OFFERED TO MEET LEGAL DR ACCOUNTING DIFFICULTIES WHICH SOME COUNTRIES MIGHT HAVE IN MAKING PAYMENTS TO THE UK. UNDER THE SUSPENSE ACCOUNT VARIANT, ANY PAYMENTS DUE TO THE UK UNDER OUR PROPOSALS WOULD BE MADE WHOLLY FROM THE SUSPENSE ACCOUNT AND WOULD NOT INVOLVE A DIRECT PAYMENT BY HONGKONG. IT FOLLOWS THAT THE NET SUM ON THE SUSPENSE ACCOUNT WOULD NEED TO BE RETAINED FOR SO LONG AS THE POSSIBILITY REMAINED OF PAYMENTS TO THE UK. ACCORDINGLY, ALTERNATIVE PARAGRAPH 7 (D) OF OUR PROPOSALS (MY TELNO-1945), WHILE NOT EXCLUDING COME OTHER ARRANGEMENT BY MUTUAL AGREEMENT, ENVISAGES THAT THE FUNDS WILL REMAIN ON THE SPECIAL ACCOUNT UNTIL 24 SEPTEMBER 1973,

2. THE RATE OFFERED IN ALTERNATIVE PARAGRAPH 7 (B) WOULD BE AT LEAST ONE QUARTER OF ONE PER CENT ABOVE THE MONEY EMPLOYED RATE.

3. ON THE POINT IN PARA 2 OF YOUR T.U.K. COMPENSATION PAYMENTS, WIETHER MADE DIRECTLY OR INTO A SUSPENSE ACCOUNT, WILL, SUBJECT TO THE TERMS OF THE AGREEMENT, COUNT AS PART OF T.O.E.R.

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