TNAG-2028-FCO40-2890-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 134

CONFIDENTIAL

CONFIDENTIAL

FM HAMILTON

CORRECTED VERSION (TELNO AND PARA 4 (A))

TO DESKBY 14133OZ FCO

TELNO 131

OF 14130OZ AUGUST 90

HKB 020 126

RECEIVED IN REGISTRY

20 AUG 1995

DESK OFFICER

INDEX

Ffir

061761

MDHIAN 3130

64

FOR WIAD

(AS)

YOUR TELNO 122 TO ANGUILLA: UN EMBARGO AGAINST IRAQ

1.

COOPERATION FROM MINISTRY OF FINANCE IN IMPLEMENTING THE ORDERS FREEZING KUWAITI (AND LATER IRAQI) ASSETS HAS BEEN EXCELLENT WITH THE MINISTER TAKING AN ACTIVE INTEREST IN ENSURING THE REQUESTS

PUT TO HIM HAVE BEEN COMPLIED WITH.

2.

THE BERMUDA MONETARY AUTHORITY (BMA) ISSUED A NOTICE TO BANKS AND FINANCIAL INSTITUTIONS ON 6 AUGUST REGARDING KUWAITI ASSETS AND ON 13 AUGUST EXTENDED THIS TO COVER IRAQI ASSETS. LOCAL BANKS INDICATE NEGLIGIBLE HOLDINGS OF FUNDS FOR EITHER COUNTRY IN BERMUDA THOUGH THERE ARE A QUOTE FEW UNQUOTE KUWAITI COMPANIES HERE.

3.

THE BMA ACTED ON THE ADVICE OF THE MINISTER OF FINANCE UNDER THE BMA ACT SECTION 21. THE ATTORNEY GENERAL HAS ADVISED THAT THIS ACT IS NOT AN APPROPRIATE LEGAL AUTHORITY AND HAS RECOMMEMDED THAT

THE UK ORDER IN COUNCIL ON THE FREEZING OF ASSETS IN THE FIVE CARIBBEAN DEPENDENT TERRITORIES (SENT UNDER COVER OF ROBIN GORHAM'S LETTER OF 6 AUGUST) SHOULD BE EXTENDED TO BERMUDA. THE ACTING PREMIER HAS NOW REQUESTED THAT THE EXISTING ORDER IN COUNCIL APPLYING TO THE CARIBBEAN DEPENDENT TERRITORIES BE EXTENDED TO INCLUDE BERMUDA OR THAT A SEPARATE UK ORDER IN COUNCIL COVERING BERMUDA BE BROUGHT

INTO FORCE AS SOON AS POSSIBLE. THE ACTING PREMIER IS CONCERNED THAT THE BERMUDA GOVERNMENT MIGHT FIND ITSELF LIABLE FOR ACTING WITHOUT PROPER LEGAL AUTHORITY INSTRUCTING THE BANKS AND INSTITUTIONS TO FREEZE KUWAITI ASSETS. I HAVE NOT YET SEEN AG'S ADVICE TO THE MINISTER BUT THIS IS BEING FAXED TO ME TOGETHER WITH THE REQUEST FROM THE ACTING PREMIER. THIS WILL BE FAXED ON TO WIAD AS SOON AS

THIS IS RECEIVED.

4.

REGARDLESS OF THE AG'S VIEWS ON THE VALIDITY OF THE BMA ACT THE BANKS AND INSTITUTIONS HAVE ACCEPTED THE BMA INSTRUCTION TO

FREEZE ASSETS. SECTIONS 20 AND 21 OF THE BMA ACT READ:

QUOTE 20. (1)

THE AUTHORITY

1

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CONFIDENTIAL