TNAG-2498-FCO40-3636-Relations-between-Hong-Kong-and-Taiwan-1992 — Page 146

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92 tonne) fast patrol boats under licence in the USA for sale to the Taiwan coastguard, but that we should not permit a direct sale from the UK or manufacture under licence in Taiwan. that time Mr Davies also recommended that we should draw a distinction between small unarmed vessels and larger boats capable of carrying significantly heavier armament when considering such applications. Lord Caithness agreed to these recommendations but thought we were being over cautious, to the detriment of British commercial interests.

4. FBM Marine now advise us that manufacture under licence in the United States is no longer a realistic option. They wish to build two boats at their yard in Cowes, Isle of Wight, and a further ten in Taiwan. They are in competition with several US firms. In the meantime, Vosper Thornycroft have applied for clearance to promote and supply similar (unarmed) vessels to the Taiwan Marine Police.

5. There has been some confusion in Taiwan as to which agency is to take on coastguard duties. The Taiwan authorities had planned to set up a civilian coastguard under the authority of the "Ministry of Finance". Recently, however, they announced that coastguard duties would be performed by the Navy. This has led to a considerable degree of confusion on the part of potential suppliers of equipment. It now seems clear however that the potential customer in each of these cases

is the Marine Police authority, a civilian agency under the authority of the "Ministry of the Interior".

The

6. In the meantime, there have been a number of reports that the French government may have given approval for the sale of six Lafayette class frigates, an order worth around 11 bn francs. French government have neither confirmed or denied these stories. If the deal is completed, the Chinese are certain to respond with criticism in the strongest terms; we shal! monitor closely what (if any) substantive retaliation they take against French interests. Other press reports,

also unconfirmed, indicate that the Germans may

be planning to sell mine sweepers to the Taiwan navy.