TNAG-2566-FCO40-3751-Agreements-between-the-Hong-Kong-Special-Administrative-Regi-1992 — Page 28

CODE 18-77

4KC 370/9

Reference

8

ketts

Mr Ricketts

CONFIDENTIAL

см

AGREEMENTS BETWEEN UK/SAR

1.

Ar Marlain Amended difl follows

for comment

I attach a draft of the meeting you held yesterday morning to consider David Edwards's correspondence on this subject.

2.

Since the meeting, I have spoken further with Shelagh Brooks (Legal Councellor). She made two points:

3.

(a) on ASAs: airlines could continue to operate

without an ASA but under an Operating Permit which may contain conditions on capacity and routes. Were the UK to have a MOU with HK, an exchange of letters (at departmental level, possibly) would ensure the continuation of air services;

(b) on IPPAS: Perhaps the best way to proceed would

be for Hong Kong to pass legislation (an Ordinance) to protect investments including provisions to prohibit expropriation or means towards that. Nothing referring to the UK need be explicitly stated. Such a move would increase investor confidence and it would be very difficult for the Chinese to object.

Particularly regarding (b) above, we would be clearly using such a ploy as a means to avoid having to negotiate with the Chinese (or seek their approval for) an IPPA. As it would not be in our interests for the Chinese to know about such a ploy, Miss Brooks thinks we ought to be cautious about revealing to HKG at this stage our possible strategy - Hong Kong having a reputation for leaks. Consequently, perhaps it would be wiser for the time being not to discuss this with Hong Kong until a broad strategy has been worked out.

1977

S.d. Han

Dr S D Harkin

Hong Kong Department

270 3287

WH 305

15 July 1992

CONFIDENTIAL