TNAG-1872-FCO40-2660-Relations-between-Hong-Kong-and-China-1989 — Page 122

Direct line

Our ref

Alan Drury Esq

COMED FCO

01-215 2609

dti

HKB 020/6

рарг Се Cε 24/4.

53

Department of Trade and Industry

Kingsgate House 66-74 Victoria Street London SW1E 6SW

Switchboard 01-215 7877

Telex 936069 DTIKH G

Fax 01-931 0397

Your ref

Date

MTC 087/6

20 April 1989

Dear Flan

PRC DISTRIBUTION LICENCES

1.

Thank you for your letter of 17 April.

2. You will by now have seen the Record of Discussion of the last China ad-hoc meeting, in COCOM Doc CH (89) 6 (= COCOM DOC PROC CH (88) 13.12) and the final text of the PRC Distribution Licence agreement in the Annex to COCOM Doc. PROC CH (88) 13.13. I append a copy of the latter, the text of which is near to that circulated as an Appendix to my 3 April letter. You will note that the agreed implementation date was 31 March 1989.

I

3. I must admit that neither is it entirely clear to me how we should best approach this issue and a meeting to identify the way forward is in order. I believe that the US approach is simply to look on the PRC Distributor in the same way as the 'end-user' for the purpose of issuing a MOFERT certificate. think that they already do this in the context of the 'bulk licensing' Note 20 to IL 1565. They will probably invoke their standard Distribution Licence procedures as laid out in their Export Administration Regulations para 773.3, which of course include a number of safeguards, including inspection of records and audits. You will note that the 'on-site review' clause in the COCOM agreed text is phrased as an option.

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