TNAG-1655-FCO40-2303-Hong-Kong-and-the-Customs-Co-operation-Council-(CCC)-1987 — Page 119

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c) This might create problems for Hong Kong's intention only partially to apply the Harmonised System. Partial application under Article 4 of the HS Convention is, on a strictly literal

interpretation, open only for "developing country Contracting

Parties."

3. I have discussed with Mr Hill, HKD whether the Chinese might support a more lenient interpretation of Article 11 if we wish to argue the case for Hong Kong's eligibility for full Contracting Party status. This would certainly make life easier not only as regards partial application of the HS but also for the mechanics of Hong Kong's attendance at the HS Committee. HKD consider that the Chinese are likely to take a very restrictive view: they are

sensitive to any suggestion that Hong Kong might be

internationally recognised as a separate state. So this does not

seem to be a viable option.

4. Two further questions then arise:

(i) Should the (partial) extension of the HS Convention to Hong

Kong be handled at the same time as the UK deposits its instrument

of ratification? (see para 3(b) of Julia King's minute under

reference)

(ii) Should we consult the Chinese under the "40 day rule" before

formally notifying the Secretary General of the CCC of our

decision to extend the HS Convention to Hong Kong?

A strict reading of Article 14 of the HS Convention suggests that

we are entitled to notify the Secretary General at any time of our

decision to extend the HS Convention to Hong Kong. Article 14.2

makes it clear that the Convention shall cease to have effect for

Hong Kong as soon as the UK ceases to be responsible for Hong Kong's international relations. It could therefore be argued that

we are under no formal obligation to consult the Chinese; but Hong Kong Department see advantage in broaching this matter with the Chinese. They consider it would be useful to obtain some prior

commitment that the Chinese will carry out the necessary notification procedures at the time of the transfer of sovereignty

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