TNAG-1561-FCO40-2125-Future-of-Hong-Kong-nationality-and-passports-Hong-Kong-(Br-1986 — Page 59

1.

Bell - Mar Sund

From: THE PRIVATE SECRETARY for:

Personal.

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HOME OFFICE

QUEEN ANNE'S GATE

LONDON SWIH 9AT

Sir W Handing

Dr Wibon B March 1986

Dear Charles

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You sent us a copy of your letter of 21 January to Len Appleyard following a meeting between the Prime Minister and Mr Sandberg, the Chairman of the Hong Kong and Shanghai Bank. This followed Mr Sandberg's meeting with the Home Secretary the previous day, when, as he told the Prime Minister, he had asked whether a few very wealthy Hong Kong Chinese could obtain British citizen passports. They wished to continue to live in Hong Kong and manage their investments there, but were prepared to invest very substantial sums (£15 million has been mentioned) in this country.

I am sorry not to have responded before this, but the Home Secretary, recognising the value of investments from Hong Kong,, wanted to examine the position carefully to see whether he could agree to Mr Sandberg's proposal. He has had to conclude that it would not be right to do so. Mr Sandberg's proposal does not involve, as he implied to the Prime Minister, merely overcoming some technicalities; the Home Secretary has to use the powers given him by statute in a consistent and defensible way.

We cannot, of course, issue a British citizen passport to someone who is not a British citizen and, as the Prime Minister will recall from earlier correspondence about Sir Yehudi Menuhin, there is no provision for conferring British citizenship as a gift or an honour. All applications for citizenship must be considered under the provisions of the British Nationality Act 1981.

It seems likely that the people to whom Mr Sandberg referred are at present British Dependent Territories citizens. If so, under the 1981 Act they have an entitlement to register as British citizens if they have lived in this country for five years and if they are not subject to any restrict- ons on their stay, which means in effect that they are settled here under the Immigration Rules. (Settlement is usually granted to businessmen after four years in this country, and may be granted even though they have spent only part of each year in the United Kingdom with the rest on business abroad).

Provided someone was in this country on the date five years before the date of his application for British citizenship, and on the same date was free of immigration restrictions, the Home Secretary has discretion to make exceptions to the requirement in the 1981 Act that the person should have been free of immigration restrictions for twelve months before the Hate of application and that he should not have been absent from the country for more than 450 days in the five years before that date. But Ministers made clear when explaining this provision to Parliament in 1981 that they would expect people acquiring British citizenship in this way to have the genuine and strong links with this country which were shown by the five years residence requirement and that they had made their home in the United Kingdom.

HKH 04014

RECEIVED

REGISTRY

19 MAR 1986

FICER

PA

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Timi