TNAG-2016-FCO40-2871-Relations-between-Hong-Kong-and-Japan-1990 — Page 33

ATTACHED

A

#

B

CODE 18-77

Mr

stone 16/11

Ms Marsde

Marsden

RESTRICTED

Reference...

Mr Furness

the draft suggested

dryt w

aj

Grarful if you could clear

Legd Adviser R1 = 911

HONG KONG: JAPANESE REPARATIONS

1.

MKB 020/2

m

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My apologies for delaying these papers. FED have passed

us a draft reply to the Hong Kong Reparation Associations letter to Lord Caithness (Flag #). There is also an

outstanding reply due to the Association's similar letter to the Prime Minister dated 2 July 1990 (Flag B) (which has mysteriously re-appeared in our papers after I passed it

back to FED for action).

2. FED's draft covers the major points which the Association raises concerning compensation for the Japanese war currency drawing on investigations carried out by

Research Department. No evidence has been found by Research

Department to support the statement by the Association that

some countries entered into bilateral agreements with Japan

for compensation (para 9 of the Association's letter). FED

LIA! tell me that it is highly likely that such agreements have been concluded and escaped the attention of our researchers.

FED's draft takes no account of the possibility that the

Japanese Government (who had little capacity to make

reparation at the end of the war) might

to be persuaded that a "moral" obligation exists to make

compensation for the currency. FED are of the view that,

although this is a possibility it is one for the

7

allow themselves

Reparation Association to take up direct with the Government

of Japan.

3. There is an unresolved question relating to a letter

dated February 1989 from Austin Mitchell MP and the

possibility of the Bank of Japan honouring its own war time

notes (as opposed to military currency). FED cannot trace

ATPABY/1

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J