TNAG-1233-FCO40-1546-Future-of-Hong-Kong-1983 — Page 83

CONFIDENTIAL

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3.

The treaties do not refer to the currency to be used in the Canal Area. In fact throughout Panama US currency is used interchangeably with local coinage (as was the case in the Canal Zone before the treaties came into force).

4. A Protocol to the Neutrality Treaty open to accession by all states of the world (signed by Britain in November 1982) provided that the signatory states agreed to observe the permanent neutrality of the canal, in peace and war, and to ensure that vessels of their ships observed "the applicable rules".

5.

There are of course many obvious dissimilarities between the Panama Canal Zone and Hong Kong. However, we agree that some aspects of the Canal Treaty (eg the articles dealing with flags and with policing and legal arrangements during the transition period) are worth studying for their possible relevance to Hong Kong.

CONFIDENTIAL