TNAG-2378-FCO40-3457-Hong-Kong-nationality-British-Nationality-(Hong-Kong)-Act-19-1991 — Page 234

To:

COVERING

CONFIDENTIAL

Reference....

HKP 340/5

RECEIVED REGISTRY

PS/Minister for Trade 2 & JAN 1991

From:

Wayne Lewis

OT2/2d

V/S 306

215 5412

DES:

INDEX

Dar bagi A

Jetur Paul. Ms. Doterry

cc Mr Meadway OT2

PA

Acton

LKUT

Mr Love OT2/2

Mr Paul FCO Mr Morris FCO

F.i.

+fa.

✓

И

18 January 1991

CODE 18-77

BRITISH NATIONALITY (HONG KONG) ACT 1990 : LIST OF BRITISH UNDERTAKINGS

In

David Love's absence I am responding to your minute of 21 December with the Minister's comments on Mr Love's submission of 17 December ( a further copy of which is attached for ease of reference). The Minister had three substantive comments.

2 As regards point (i), the companies which the Committee are not accepting as British undertakings are subsidiaries of large groups with no predominant British shareholding (ie of substantially lower than 50%) and in which there is no significant element of British management or trade with the

UK.

3

related to franchises and

subsidiaries of UK

Point (ii), companies who are in turn subsidiaries of companies based elsewhere, is also something on which the FCO Legal Advisers have focused their attention. Their advice is that the Committee has no discretion to stray outside the existing criteria when considering applications. However, they add that if undertakings can demonstrate, to the satisfaction of the Committee, a comparable close connection with the UK which is not covered by those criteria then we must be prepared to extend the criteria accordingly to accommodate them. The proviso is that, where additional criteria are used, they must enable objective judgements to be made about qualification or, if a subjective judgement needs to be made, it must be a defensible one. Arbitrary decisions must be avoided.

4 This category of company highlighted by the Minister does of course raise the problem of how to deal with the question of "perceptions" of Britishness. FCO legal advice is that perceptions may not be defensible as an objective or subjective basis

on which to make a judgement on qualification. It would be difficult to include undertakings which run franchises merely on the grounds that they are "perceived" to be British. This would not necessarily rule out the adoption of further criteria (as described in para 3 above), an element of which would be the exploitation of British goods or know-how, but this would need to be agreed in advance with DTI and FCO.

5 In the case of companies not "perceived" to be British the legal advice is that it would not be defensible to rule them out on the basis of that perception if they met the

agreed