TNAG-2027-FCO40-2889-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 60

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HONG KONG: FREEZING OF KUWAITI/IRAQI ASSETS:

MR HENRY KESWICK

1.

Mr Henry Keswick telephoned last night to complain that

the Hong Kong Government had not taken immediate action to

freeze Kuwaiti assets. He claimed that as a result of this

delay, the Iraqi Government had been able to dispose of

Kuwaiti assets in Hong Kong with the result that share

prices there had fallen more sharply than in other markets.

Mr Keswick said that local financial institutions had been

uncertain what to do because the advice given to them by the

Acting Financial Secretary had been to use their commercial

judgement. Mr Keswick asked why the Hong Kong Government

had been so slow to act when Kuwaiti assets had been frozen

in the United States and the UK on 2 August. I explained that urgent consideration had been given to this problem both in London and Hong Kong and that an Order in Council freezing Kuwaiti and Iraqi assets in virtually all the

dependent territories had come into force on 6 August.

Mr Keswick went on to complain that despite the sharp

fall in Hong Kong share prices, to which he implied the Hong

Kong Government had contributed, they had shown no

2.

flexibility over the question of extra-territoriality.

BAYABI/1

CONFIDENTIAL

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