TNAG-2028-FCO40-2890-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 58

H Keswick Esq

Matheson & Co Ltd

3 Lombard Street

LONDON EC3V 9AQ

I understand you have expressed concern that the

Hong Kong Government did not act quickly enough to freeze

Kuwaiti and Iraqi assets.

The problem was that the Hong Kong Government does not have equivalent statutory powers to those which we

were able to exercise in the UK. Other Dependent Territories also faced problems about taking swift action

locally . We therefore took immediate action to freeze

Kuwaiti and Iraqi assets in Hong Kong by means of a prerogative Order in Council which came into effect on

6 August. Similar action was taken at the same time for the other Dependent Territories.

You also suggest that the fall in share prices in Hong Kong on 6 August was in some way related to our inability to take action sooner. But the fall (7.4%) was

not all that out of line with that in several other

markets eg Zurich (7.3%), Singapore (6.35%) and Frankfurt

(5.4%). The fact that Hong Kong share prices fell more sharply than in some of the bigger centres is not surprising given the relatively high level of Hong Kong

MATAAE