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Foreign & Commonwealth
Office
20
Fele
28 Janaury 1992
JP McIntyre Esq HM Treasury Parliament Street LONDON
SW1P 3AG
HWB Loill
London SW1A 2AH
Telephone: 071-
Dear Paul,
HONG KONG GOVERNMENT BOND ISSUES
in
1. Thank you for your letter of 10 January asking for our legal advisers to give a view on whether these bond issues could have any potential liability for HMG.
2.
We have now consulted a departmental Legal Adviser who has advised that there is no legal obligation on the UK Government to bail out the Hong Kong Government. The two Governments are constitutionally different entities; the Crown in right of Hong Kong is different from and separable from the Crown in right of the United Kingdom. The debts of the Hong Kong Government are an internal matter for Hong Kong, and the UK Government is not responsible for those debts.
3.
I take your point that, should bonds of two to three year maturity continue to be issued, a time would come when they would have post-1997 implications. My point was that, even if there had been a problem with this particular issue, it would not have had any post-1997 significance. But this is clearly an area on which our successors will need to keep an
eye.
Yours sincerely,
Nigel.
N J Cox
Hong Kong Department
CHAAGL
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