TNAG-2404-FCO40-3491-Hong-Kong-defence-and-public-order-1992 — Page 39

CONSULATE GENERAL OF THE

UNITED STATES OF AMERICA

Hong Kong

August 24, 1992

Billy C. L. Lam

Director of Government Supplies Government Supplies Department

12, Oil Street

North Point

Hong Kong

Dear Mr. Lam;

I have further information to impart relating to our early July conversation concerning possible elimination of recoupment fees on defense equipment exported for non-military use, i.e., two Blackhawk helicopters being purchased by the Hong Kong Government.

Please refer to the enclosed materials. The first is a State Department summary of a White House press announcement of June 19, 1992 regarding proposed Defense Procurement Reforms. The second is the White House press release itself. The third is the complete Federal Register entry referred to in the White House announcement.

Summing up our reading of this information, the Department of Defense will by administrative action abolish recoupment fees on all products other than "major defense equipment" (MDE) exported for military uses. The policy eliminates recoupment on military products that are unclassified as MDE or exported for non-military purposes.

The action will eliminate recoupment under new non-MDE contracts and, to the extent permitted by law, existing non-MDE contracts.

The public comment on the proposed rule expired on August 3 so we would expect that the change will become effective soon after that.

Since I suppose that the helicopter purchase begun early this year would come under the category of an existing non-MDE contracts, I would suggest that you stay in communication with the vendor to determine the exact applicability of the rule change to this case.