TNAG-2029-FCO40-2891-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 197

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OR, ON ITS BEHALF, THE BANK BEFORE A UK PERSON CAN CARRY OUT ANY ORDER FROM THE KIO INVOLVING THE MOVEMENT OF FINANCIAL ASSETS.

HMG'S APPROACH HAS BEEN TO SEEK TO MINIMISE THE ECONOMIC COST OF THE FREEZE TO LEGITIMATE KUWAITI INSTITUTIONS, CONSISTENT WITH THE UN RESOLUTION. THE TREASURY AND THE BANK HAVE THEREFORE SOUGHT TO ESTABLISH ARRANGEMENTS WHICH WOULD ENABLE THE KIO TO CARRY OUT ITS ACTIVITIES IN THE LONDON FINANCIAL MARKETS IN AS NORMAL A FASHION AS POSSIBLE, WHILE ENSURING THAT THE ASSETS WERE PROPERLY PROTECTED. ARRANGEMENTS HAVE NOW BEEN MADE TO LET THE KIO BUY, SELL AND LEND STERLING EQUITIES, BY, SELL AND LEND GILTS AND BUY AND SELL BEARER SECURITIES PROVIDED SETTLEMENT IS EFFECTED THROUGH THEIR NORMAL SETTLEMENT AGENTS FOR THESE TYPES OF SECURITIES. THIS IN PRACTICE MEANS THE BANK OF ENGLAND SECURITIES OFFICE AND THE NATIONAL BANK OF KUWAIT FOR EQUITY TRANSACTIONS. SPECIFIC PERMISSION HAS BEEN GIVEN TO THESE INSTITUTIONS TO ENABLE THEM TO SETTLE SUCH STERLING TRANSACTIONS. THE PLACING AND REPAYMENT WITH INTEREST OF DEPOSITS MADE IN THE INTER-BANK MARKET MAY ALSO BE EFFECTED IN ACCORDANCE WITH A PERMISSION GIVEN BY THE BANK PROVIDED THE PAYMENT IS BETWEEN TWO UK BASED QUOTE KUWAITI ACCOUNTS UNQUOTE. THE ARRANGEMENTS IN PLACE SHOULD KEEP THE TRANSACTIONS WITHIN UK JURISDICTION, AND PREVENT ANY LEAKS OF ASSETS. ENDS

2. HM TREASURY ARE HAPPY FOR YOU TO USE THIS MATERIAL WITH HOST GOVERNMENTS. THE LINE THEY ARE TAKING WITH THE PRESS IS THAT THE BANK OF ENGLAND GUIDANCE ON THE FREEZING OF ASSETS MAKES CLEAR THAT THE KIO IS RESIDENT IN KUWAIT AND THAT THIS MEANS THAT THE KIO NEEDS PERMISSION TO CARRY OUT TRANSACTIONS. HM TREASURY ARE MAKING IT PLAIN THAT IT IS THEIR INTENTION TO BE HELPFUL TO THE LEGITIMATE GOVERNMENT OF KUWAIT, AND THAT REQUESTS ARE BEING LOOKED AT IN THAT LIGHT. THEY ARE NOT GOING INTO FURTHER

DETAILS.

ENDS

HURD

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