TNAG-1415-FCO40-1896-Public-finance-in-Hong-Kong-1985 — Page 274

CODE 18-77

Miss Archer

Archer

Mr Thomas

Не

Reference

We spike. He Wallace's comments are contained below

HONG KONG FINANCIAL ADMINISTRATION

1.

2.

Mr Area 4.7.85

Mr Alleyne's letter of 3 June refers.

Reg.

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Pre attach of Chap VIII of the

ed Regs. 55/7

For two reasons, I am reluctant to go along with Hong Kong's proposals. Firstly, before we could agree that the whole of Chapter VIII of Colonial Regulations no longer applies to Hong Kong, we should properly be satisfied that the 43 sections of the Public Finance Ordinance 1983 (and the Audit Ordinance) provide for all the MANY matters dealt with in the 111 Regulations in Chapter VIII of Colonial Regulations. I for one have neither the legal nor financial expertise to advise on this. Secondly, most, if not all, dependent territories have in recent years made legislative provision for financial and audit matters. To be consistent, we should consider a footnote in Colonial Regulations stating that Chapter VIII does not apply to any territory (not only Hong Kong) which has made the necessary parallel legislative provision. But each territory's legislation probably varies in some respect or the other and it would be impossible to cater for each and every variation. In addition, we have had at least one case in such a territory where we had to advise the Governor that Colonial Regulation 285 (relating to financial returns) was still extant and, because of the territory's shaky financial situation, we required him to make certain returns. Obviously, in a case of a territory still in grant-in-aid- or recently emerged - we should still be seen to have the necessary authority.

3.

In any case, Colonial Regulations are interpreted in the light of local law; and if there is doubt or conflict, then local law prevails. While I fully understand that there may be "a degree of uncertainty" among public officers in Hong Kong, I would have thought that all that was required locally was an instruction to the effect that in matters of financial administration, etc, officers are bound to observe in full the provisions of the Public Finance Ordinance 1983, and that these provisions take precedence over Chapter VIII of Colonial Regulations.

4. I appreciate that, as Hong Kong says, there is a precedent in that a special variation of Colonial Regulations 54-66 (dealing with discipline) applies to Hong Kong only.

I doubt, however, whether this is an exact precedent. Although, on the face of it, the Secretary of State gave up any responsibility for the disciplining of locally- appointed public officers, there remained a right of petition under Colonial Regulation 169. If we were to agree that Chapter VIII should no longer apply to Hong Kong, then the Secretary of State would have no standing at all

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