TNAG-0778-FCO40-982-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 83

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Action Taken

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TO ROUTINE HONG KONG (GOVERNOR) TELNO 337 OF 27 APRIL

INFO WASHINGTON

HONG KONG/US AIR FARE: CURRENCY PROBLEMS

534

MIPT: FOLLOWING IS TEXT OF ATWOOD'S REPLY OF 14 APRIL:

QUO TE

I AM WRITING IN REFERENCE TO THE CURRENCY PROBLEM IN HONG KONG, WHICH YOU MENTIONED IN YOUR LETTER OF FEBRUARY 14, 1978.

WE HAVE EXAMINED THE US CARRIERS' OFFICIAL TARIFFS, AND FIND THAT, FOR HONG KONG-UNITED STATES TRAVEL, PASSENGERS ARE TO PAY THE LOCAL PRICE IN HONG KONG DOLLARS: HOWEVER, IF PAYMENT IS MADE IN US DOLLARS, CONVERSION FROM THE HONG KONG DOLLAR LEVEL IS TO TAKE PLACE AT THE CURRENT LOCAL MARKET RATE OF EXCHANGE. (THE TARIFFS ARE CONSISTENT WITH A CONDITION IMPOSED BY THE US CIVIL AERONAUTICS BOARD ON IATA AGREEMENTS THAT REQUIRES THAT FARE QUOTATIONS BE CONVERTED TO DOLLARS AT CURRENT BANKERS' RATES RATHER THAN USING THE HIGHER OF EITHER THE IATA SPECIFIED CONVERSION RATES OR THE BANKERS' RATES.) THEREFORE, UNDER THE CARRIERS' TARIFFS ON FILE WITH THIS GOVERNMENT THERE SHOULD BE NO DISCRIMINATION AGAINST PASSENGERS PAYING IN THE LOCAL CURRENCY AS COMPARED WITH PASSENGERS

PAYING IN US DOLLARS.

WE WOULD, OF COURSE, APPRECIATE LEARNING IF THE FACTS I HAVE STATED IN THIS LETTER ARE INACCURATE.

UNQUOTE

OWEN FILES

MAED HKJGD

NAMD

MR BURROWS

MR MURRAY

TO CADIDOT]

[COPIES SENT TO.

RESTRICTED

COPIES TO MR.R.MORROW.

EPL CAA. SPACE HOUSE