TNAG-2513-FCO40-3666-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1992 — Page 55

CONFIDENTIAL

Kingdom

ratified

the Fund Convention

Protocol on 2 April 1976 and 31 January 1980

9.

The

United

and the 1976

respectively.

Both

ratifications included Hong

Kong

(reference at Annex C). They were given legal effect in

Hong Kong

through

United

Kingdom

enactments.

After

consultation with the Chinese side in accordance with the

Agreed Consultation Principles on

Localisation

of Law,

these

enactments

have

been

replaced by

the

Merchant

Shipping

(Liability

and

Compensation

for

Oil Pollution)

Ordinance 1990 which came into effect on 15 January 1991.

Benefits

10.

the

Liability

The Fund Convention supplements

Convention which provides clearly for the allocation and

the extent of liabilities in the event of oil spills, thus providing certainty to shipowners and insurers about their maximum potential civil liabilities if they engage in the

oil carrying trade, and reducing the risk of their being

exposed to potentially

civil claims for oil

unlimited

damage compensation

under

pollution damage

certainty

net

common law.

Such

is of great significance to Hong Kong, which is a

importer of over 8 million tons of oil per year and

operates a large shipping register.

CONFIDENTIAL