12/01/92
16:07
☎202 898 4224
COMMERCIAL WASH
004/004
BRITISH DEFENCE STAFF WASHINGTON
British Embassy, 3100 Massachusetts Avenue NW, Washington DC 20008
Telephone: (202) 808-4397
From: Mr R M Philip, Deputy Director of Procurement
Ms V Life
DPO/1/0823
Our Ref:
First Secretary (Trade Policy)
23 October 92
Room 334
British Embassy
Dear Ms Life,
PURCHASE BY HONG KONG GOVERNMENT OF TWO 870A (BLĄCKHAWK) HELICOPTERS: RECOVERY OF US GOVERNMENT NON-RECURRING COST
RECOUPMENT LEVIES
Thank you for your note of 15 October. I am sorry that you did not receive a reply to your earlier note, but I assumed, wrongly, that it had been actioned in my absence.
I have looked at the papers you provided in the context of the change in USG recoupment policy and consulted the Defense Security Assistance Agency (DSAA), the DOD authority on the waiver of NRCS for foreign customers. As I suspected, there appears to be no chance of a retrospective waiver of NRCS in respect of the current purchase by Hong Kong. Contrary to Sikorsky's view, the Blackhawk is considered to be a Major Defense equipment (MDE). Therefore, that part of the President's initiate which permits the application of the new regulations to existing non-MDE contracts is irrelevant as far as Hong Kong's Blackhawks are concerned. The DSAA confirmed that a retrospective waiver would not be considered.
The Hong Kong Government should have requested a waiver prior to signing the contract and made acceptance of the contract conditional on consideration of a waiver request.
For the future, despite the new regulations, it would be wise for Hong Kong to assume that NRCS will not be automatically waived, and to ensure that waivers are sought in advance of placing contracts. Better to be safe than out of pocket.
Усов
Yours sincerely
AH0225
R
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