CA
CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 180
OF 140755Z JANUARY 88
INFO IMMEDIATE PEKING
8+/102/3
16
CONFIDENTIAL
2/1
MKC 102
RECEIVED IN REGISTRY
14 JAN 1988
145065
MDHIAN 3448
TOP COPY Q DIST ?
DESK OFFICER
REGISTRY
INDEX
PA
Action Taken
YOUR TELNO 3343: MULTILATERAL INVESTMENT GUARANTEE AGENCY
Q 1
THE DRAFT Q AND A FOR PEKING ARE AS FOLLOWS :
GIVEN THE PROVISIONS ON INVESTMENT PROTECTION SET OUT IN THE JOINT DECLARATION, WHY DOES HONG KONG NEED THE PROTECTION OF MIGA?
A 1 : WERE HONG KONG DESIGNATED AS A QUOTE DEVELOPING MEMBER
COUNTRY UNQUOTE OF MIGA, FOREIGN INVESTORS COULD SEEK PROTECTION
AGAINST NON-COMMERCIAL RISKS FOR THEIR INVESTMENTS IN HONG KONG BY
ENTERING INTO INSURANCE SCHEMES OF MIGA. IN PRACTICE, IT IS NOT EXPECTED THAT MANY FOREIGN INVESTORS WILL SEEK THIS KIND OF
PROTECTION, ALTHOUGH IN A NUMBER OF CASES PROSEPCTIVE INVESTORS ARE BEGINNING TO SEEK ASSURANCES REGARDING THE SECURITY OF THEIR
INTENDED INVESTMENTS IN HONG KONG. HOWEVER HAVING THIS OPTION
AVAILABLE MAY ENHANCE SOME INVESTORS' CONFIDENCE IN HONG KONG.
Q 2
: WHICH COUNTRIES HAVE RATIFIED THE CONVENTION?
A 2
AS AT 22 DECEMBER 1987, 5 DEVELOPED AND 16 DEVELOPING COUNT-
RIES HAVE RATIFIED THE CONVENTION. THEY ARE CANADA, DENMARK, FRG. JAPAN, NETHERLANDS, BAHRAIN BANGLADESH, BARBADOS, CYPRUS, ECUADOR EGYPT, INDONESIA, JORDAN, REPUBLIC OF KOREA KUWAIT, LESOTHO,
KUWAIT, MALAWI, PAKISTAN, SAUDI ARABIA, SENEGAL AND EASTERN SAMOA. (FCO TO UPDATE.)
Q3
IF THE PRC ALSO BECAME A PART TO THE CONVENTION IN THE FUTURE, WOULD INVESTORS FROM HONG KONG BE ELIGIBLE FOR PROTECTION BY MIGA'S
INSURANCE SCEMES IN RESPECT OF THEIR INVESTMENTS IN THE PRC?
A3 : NO. INVESTMENT.
THE CONVENTION IS DESIGNED TO PROTECT FOREIGN
Q4 : IF THE CHINESE SIDE DOES NOT CONSIDER IT APPROPRIATE FOR HONG
KONG TO BE DESIGNATED AS A QUOTE DEVELOPING MEMBER COUNTRY UNQUOTE
WHAT IS THE VIEW OF THE BRITISH SIDE?
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