TNAG-2311-FCO40-3355-Air-services-between-Hong-Kong-and-Indonesia-1991 — Page 97

RESTRICTED

FM JAKARTA

TO PRIORITY FCO

TELNO 380

OF 1406OOZ JUNE 91

HKCI81/22

RESTRICTED

zi

151233

MDLIAN 8848

Mr Glass DiP √(via AMD fax)

д

ра

HK/ und meris, ASA

C

18/6

INFO PRIORITY HONG KONG, DTI, INLAND REVENUE

UK/INDONESIA BILATERAL AGREEMENTS: TERRITORIAL CLAUSES

SUMMARY

1.

SLOW PROGRESS IN NEGOTIATING TERRITORIAL CLAUSES DIRECT WITH DFA. INSTRUCTIONS REQUIRED. TERRITORIAL CLAUSE FOR HK/INDONESIA ASA WILL NOT BE AGREED IN BALI ON 20/21 JUNE, BUT WORTH GOING OVER THE GROUND THEN.

DETAIL

2. AS YOU KNOW, SIGNATURE OF A REVISED UK/INDONESIA DOUBLE TAXATION AGREEMENT (DTA) AND A NEW COPYRIGHT AGREEMENT HAVE BEEN HELD UP FOR SEVERAL YEARS (SINCE 1986 AND 1990 RESPECTIVELY) BECAUSE OF LACK OF AGREEMENT ON THE TERRITORIAL APPLICATION CLAUSES. THERE IS STRONG DANGER THAT SEPARATED UK/INDONESIA AND HK/INDONESIA AIR SERVICES AGREEMENTS (ASAS) WILL SUFFER THE SAME FATE. THE FIRST ROUND OF UK/HK/INDONESIA NEGOTIATIONS ARE TAKING PLACE HERE ON 20/21 JUNE.

3. WE HAVE FOR SOME MONTHS BEEN TRYING TO UNBLOCK THE DTA AND COPYRIGHT AGREEMENT BY TALKING DIRECTLY TO WIJAKSANA, DIRECTOR, INTERNATIONAL AGREEMENTS, DFA. IT WILL BE THE FOREIGN MINISTER, ALATAS, WHO TAKES THE FINAL DECISION ON TERRITORIAL CLAUSES. WE HAVE MADE CLEAR TO THE INDONESIANS THAT THESE ARE ALL TECHNICAL AGREEMENTS, WANTED BY BOTH SIDES. WE DO NOT BELIEVE THIS IS THE PLACE FOR POLITICAL POINTS SCORING ON EITHER SIDE, BUT FOR CONSTRUCTIVE COMPROMISE TO ALLOW THE AGREEMENTS TO BE FINALISED, WHILE PRESERVING OUR RESPECTIVE POSITIONS ON THE UNDERLYING POLITICAL SSUES. THE INDONESIANS PROFESS TO AGREE, BUT PROGRESS HAS BEEN FRUSTRATINGLY

SLOW.

4. WE AGREED TO CONCENTRATE INITIALLY ON THE DTA. FROM OUR SIDE, OUR NEGOTIATING POSITION IS STRONGER HERE, AND WE HAVE A GOOD SERIES OF FALL BACK POSITIONS (PARKER, LEGAL ADVISERS, MINUTE OF 20 JULY 1990). BOTH SIDES EXPECT ANY AGREEMENT ON THEDTA TO FLOW THROUGH TO THE

1

PAGE RESTRICTED