TNAG-1166-FCO40-1446-Future-of-Hong-Kong-1982 — Page 69

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HICK 040/1 (64)

1978.

Governor was concentrating on the problem of leases in the New Territories (his letter of 6 July 1978 refers); he added the problem of continuing the administration of the New Territories after 30 June 1997 as an afterthought towards the end of 1978. Recently we have been concentrating on the problem of continuing the administration but as 30 June 1982 draws near, I wonder whether the particular problem of the leases again warrants separate consideration.

7. It would be a simple matter to draft an amendment to Article XIII of the Hong Kong Letters Patent ("Disposal of lands") that would demonstrate that the Governor had power to grant leases in the New Territories for terms of years within a prescribed maximum, whatever the date of the grant. If desired, we could hold up the draft amending Letters Patent now on the stocks to amend Article XVIA ("Terms of office of

judge") so as to include the amendment to Article XIII also or of course the latter could be effected separately.

8.

The 64,000 yuan question is of course, what would the PRC think if HMG made such an amendment to Article XIII? Would the Chinese be content if HMG simply notified them in advance of their intention to effect a technical clarification under UK law of the Governor's power in relation to New Territories leases? Alternatively, would HMG feel obliged to ask for the prior agreement of the PRC, bearing in mind that a second refusal after the Chinese rejection of the (wider) proposal made in 1979 might greatly restrict HMG's freedom of action thereafter? In any case, if HMG went ahead on the problem of leases in the New Territories, would that make it easier, or more difficult, to deal with the question of administering the New Territories after 30 June 1997?

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9. Appropriate legal mechanisms can easily be devised to solve the problem of leases in the New Territories but will the Year of the Dog provide a political context in which they can safely be constructed, thus giving more time in which to solve the question of the administration of the New Territories?

A.R.R.

A R Rushford Deputy Legal Adviser

26 January 1982

PS

I attach a copy of Article XIII of the Hong Kong Letters Patent for ease of reference.

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