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CYPHER
TO IMMEDIATE HONG KONG GOVT LONDON TELNO 661 OF 9 DECEMBER
CONFIDENTIAL
FOR HADDON-CAVE FROM ROBERTS.
DEFENCE COSTS.
YOUR TELNOS 634 AND 949 OF 8 DECEMBER AND 945 OF 7 DEC.
1.
THE MOU AND ITS THREE ANNEXES WERE CONSIDERED IN
JOINT SESSION OF EXECUTIVE COUNCIL AND FINANCE COMMITTEE THIS
MORNING. THE JOINT ADVICE OF THESE TWO GROUPS WAS SUBSEQUENTLY
CONFIRMED IN EXECUTIVE COUNCIL AS FOLLOWS:
2.
A.
THE TERMS OF THE MOU AND ITS ANNEXES ARE ACCEPTABLE
TO EXECUTIVE COUNCIL (SUBJECT TO SOME PROPOSALS FOR MINOR AMENDMENTS
CLARIFY
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B. SEE PARA D).
THE GOVERNOR SHOULD. NOT
DESIGNED TO
CONCLUDE THE DEFENCE AGREEMENT UNTIL HE IS SATISFIED (I) THAT
RESTRICTIONS ON HONG KONG IMPORTS INTO THE UNITED KINGDOM ARE NOT
TO BE IMPOSED BY HMG IN THE NEAR FUTURE: OR (II) THAT THERE WILL
BE A SUBSTANTIAL INTERVAL BETWEEN ANY ANNOUNCEMENT OF SUCH
RESTRICTIONS AND ANY ANNOUNCEMENT OF A NEW DEFENCE COSTS AGREEMENT.
C. IN VIEW OF THE LACK OF INFORMATION ABOUT THE POSSIBILITY OF
FURTHER IMPORT RESTRICTIONS BEING IMPOSED BY HMG, THE COUNCIL FELT
UNABLE TO ADVISE THE GOVERNOR FURTHER THAN IN PARAGRAPH B ON THE
TIMING OF THE CONCLUSION OF THE AGREEMENT OR OF ITS ANNOUNCEMENT.
D. THE FOLLOWING AMENDMENTS SHOULD BE MADE TO THE MOU FOR PURPOSES
OF CLARIFICATION (I) IN THE PREAMBLE "WILL" TO BE SUBSTITUTED
FOR "CAN". (II) PARA 2 SHOULD MAKE IT CLEAR THAT DURING THE PERIOD
OF ANY DELAY (DUE TO UK GOVERNMENT'S "FAULT") BEYOND THE AGREED
DATES FOR THE RELEASE OF KAI TAK AND VICTORIA BARRACKS, HONG KONG
WOULD PAY ONLY AT FIFTY PERCENT OR SIXTYTWO AND A HALF PER CENT
ISNTEAD OF SIXTYTWO AND A HALF PERCENT AND SEVENTYFIVE PER CENT
(III) IN PARA THREE "FROM 1ST APRIL 1976" TO BE ADDED
AFTER "FOR A PERIOD OF SEVEN YEARS”.
RESPECTIVELY:
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