TNAG-2162-FCO40-3093-Legal-matters-between-Hong-Kong-and-China-1990 — Page 8

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AND TO PRIORITY UKREP JLG HONG KONG, PEKING 19/12

RECIPROCAL JUDICIAL ASSISTANCE IN CIVIL AND COMMERCIAL MATTERS: ARRANGEMENTS BETWEEN HONG KONG AND CHINA

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1 YOU WILL RECALL OUR EXCHANGE OF TELEGRAMS (RESTING WITH FCO TELNO 61 TO UKREP JLG) WHICH AROSE FROM A HONG KONG PRESS REPORT THAT THE CHINESE GOVERNMENT WERE/LOOKING AT THE QUESTION OF JUDICIAL LINKS (YOUR TELNO 1772 PARAGRAPH 9). THE PRESS REPORT SEEMED TO CONCERN ONLY CRIMINAL MATTERS (IT MENTIONED THE HANDLING OF DISSIDENTS). WE CAN UNDERSTAND WHY THAT ASPECT IS CONSIDERED SENSITIVE AND AGREE THAT THE WHOLE ISSUE OF RECIPROCAL JUDICIAL ASSISTANCE WITH CHINA ON CRIMINAL MATTERS AND RENDITION SHOULD NOT/NOT YET BE PURSUED FURTHER.

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IN FOLLOWING UP THIS PRESS REPORT IN INFORMAL ENQUIRIES, HOWEVER, PERRY KELLER (THEN OF THE ATTORNEY GENERAL'S CHAMBERS) PRODUCED A USEFUL PAPER CADDRESSED TO POLITICAL ADVISER, DATED 10 AUGUST) FOCUSSING ENTIRELY ON CIVIL JUDGEMENTS. THE PAPER PROVIDED A USEFUL UNDERSTANDING ON THE WAY IN WHICH THE CHINESE PROCEDURE LAW OPERATES IN THIS FIELD. IT ALSO RECOMMENDED THAT HKG SHOULD RESPOND POSITIVELY (THOUGH WITH CAUTION) TO A SUPREME PEOPLE'S COURT PROPOSAL FOR DIALOGUE ON THIS SUBJECT WITH THE HONG KONG SUPREME COURT OR THE ATTORNEY GENERAL'S CHAMBERS. A MINUTE FROM DPA DATED 21 AUGUST REJECTED THIS RECOMMENDATION ON THREE GROUNDS: THAT DIALOGUE COULD ESCALATE INTO PRESSURE FOR FORMAL NEGOTIATIONS: THAT EXCO WOULD NEED TO BE CONSULTED IN LINE WITH THEIR DIRECTIVE FOLLOWING THE 1988 AGREEMENT WITH GUANGDONG: AND THAT THE GUANGDONG AGREEMENT IS UNDER-UTILISED AND IT WOULD THEREFORE BE POINTLESS TO SEEK A WIDER AGREEMENT.

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3. WE WONDER WHETHER IT IS NOW TIME TO THINK AGAIN ABOUT THE USEFULNESS OF PURSUING A DIALOGUE AS RECOMMENDED BY KELLER. ON THE DPA'S THREE POINTS ABOVE, WE BELIEVE KELLER HAS ALREADY ADDRESSED THE FIRST: HE MADE CLEAR THAT A DIALOGUE WOULD BE RESTRICTED TO CIVIL MATTERS AND COULD CONTINUE FOR A VERY LONG TIME BEFORE IT WAS NECESSARY TO ARRANGE FORMAL TALKS ON THE

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CONTENT OF ANY AGREEMENT. ON THE SECOND POINT, WE APPRECIATE THAT THERE WERE DIFFICULTIES PRECEDING THE 1988 EXCHANGE OF LETTERS WITH GUANGDONG, BUT DO NOT SEE WHY THIS SHOULD PREVENT US FROM TACKLING THE SUBJECT AGAIN IN A MORE ORDERED WAY AND PUTTING A CASE FOR THIS TO EXCO. ON THE THIRD POINT, THE GUANGDONG ARRANGEMENT COVERS ONLY SERVICE OF COURT DOCUMENTS, NOT ENFORCEMENT OF JUDGEMENTS. WE BELIEVE THERE IS EVIDENCE THAT A WIDER AGREEMENT (BOTH IN SUBJECT MATTER AND GEOGRAPHICAL SCOPE) WOULD BENEFIT HONG KONG IN PRACTICAL TERMS.

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WE HAVE NOTED, FOR EXAMPLE, A SOUTH CHINA MORNING POST REPORT OF 12 OCTOBER ABOUT HONG KONG BANK'S DIFFICULTIES IN TAKING LEGAL ACTION IN CHINA TO RECOVER SOME OF ITS MAINLAND DEBTS. AND AN EXCHANGE OF CORRESPONDENCE EARLIER THIS YEAR, RESTING WITH PIGOTT'S LETTER TO MAJOR (COPIED TO WONG, CAB) OF 21 JUNE, WOULD SEEM TO INDICATE A NEED FOR CLEAR AND EFFECTIVE PRACTICAL ARRANGEMENTS. THE STATUS QUO IN FACT GIVES CHINESE BUSINESSES ADVANTAGE OVER THEIR HONG KONG COUNTERPARTS: CHINESE PARTIES CAN OBTAIN INDIRECT ENFORCEMENT OF CHINESE JUDGEMENTS IN HONG KONG COURTS BECAUSE THE COMMON LAW IS MORE GENEROUS TO FOREIGNERS THAN CHINESE LAW IN THIS RESPECT. WE ALSO NEED TO CONSIDER THE ADVANTAGE OF GETTING IN PLACE NOW EFFECTIVE AND FAIR ARRANGEMENTS WHICH COULD CONTINUE AFTER 1997 RATHER THAN LEAVING THIS AS A MATTER TO BE REGULATED BETWEEN CHINA AND THE

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5. WE SHOULD BE GRATEFUL FOR YOUR THOUGHTS ON ALL OF THE ABOVE. WE ARE NOT SUGGESTING THAT WE NEED TO RUSH AHEAD. IN THE FIRST INSTANCE, WE WOULD SUGGEST FURTHER RESEARCH BY KELLER'S SUCCESSOR TO IDENTIFY AREAS IN WHICH COOPERATION MIGHT USEFULLY BE DEVELOPED AND PITFALLS TO BE AVOIDED. IN THE MEANTIME, THE INFORMAL DIALOGUE WITH THE SUPREME PEOPLE'S COURT BEGUN BY MR KELLER COULD BE CONTINUED, PERHAPS INCLUDING ARRANGEMENTS FOR INFORMATION EXCHANGE.

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MR FIFOOT, LEGAL ADVISERS MS BARRETT, LEGAL ADVISERS MR MCLEOD, LEGAL ADVISERS

MR REGAN, C7 DIV HOME OFFICE MS NICHOLSON, C7 DIV H/OFFICE MS EDWARDS H O LEGAL ADVISERS

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