TNAG-0419-FCO40-465-Registration-of-merchant-shipping-in-Hong-Kong-1973 — Page 188

MR ARCHER MAR

CONFIDENTIAL

се

て

Secretary A & S

Mr Hubback Dep Sec

Mr Manson

Mar 3G

Mr Standen Mar 1

Mr Madigan Mar 4

Mr Willott

SP2

Mr Andrew Stewart FCO

HONG KONG REGISTER

Thank you for your minute of 1 January. I suggest the following amendments to the draft.

At the end of paragraph 7 delete fullstop and insert "rather than under flags of convenienco".

At the beginning of paragraph 8 I think one might put in "as you know" after the first comma.

In paragraph 10 after the second sentence I would suggest one might point up the argument a little by inserting the following now sentences.

"For example apart from additional registration fees how

would Hong Kong benefit if those Hong Kong residents who are at present the beneficial owners of ships registered in Liberia or Panama or elsewhere outside the Commonwealth were persuaded by the relaxations mentioned earlier in this letter to close down their subsidiaries in Monrovia and Panama City and transfer their ships to Hong Kong registry and direct ownership by a Hong Kong company. We had thought that a change of this kind might have fiscal benefits for Hong Kong but when we asked Mr Pao 11 taxation was one of the reasons why he kept his ships under flag of convenience registry he said that this was not so."

I think it would be useful to clarify this point with Hong Kong.

GR W Brigstocke

SP Department of Trade and industry

Adelphi

Ext. 1840

R.464

2 January 1973

1

CONFIDENTIAL