TNAG-2674-FCO40-3871-Hong-Kong-garrison-withdrawal-plan-1993 — Page 42

Payment of Interest

16

Annex G

At the FPC meeting on 8 February 1993, the British representatives gave notice that if the 4th Quarter payment were not settled in Full on the due date, the British Government would impose interest on the amount unpaid up to the date of full payment. The Hong Kong Government noted the British position, but without commitment.

The Hong Kong Government does not accept that interest is payable. Past practice has been that adjustments under the DCA have not attracted interest. We do not think in the interests of either Government to seek to exact payments, particularly having regard to all administrative

it is

interest on DCA

the additional

costs that would be incurred.

However, is the British Government insists that interest should be

payable in this case, then the subject should be raised for discussion at the next DCA Review meeting in May. The Hong Kong Government's position will be that if the concept of interest is to be introduced into the DCA then it must apply to all payments. For example, in August 1992 the side credited Hong Kong with some £ 3 million representing Hong Kong's due

the housing contribution paid by service

personnel in the period since been credited to Hong Kong

A very rough

British

1988.

This sum should have

share

progressively throughout the period.

of

calculation suggests that interest owed to Hong Kong would be of the order of £0.6 million.

(S342 p.3}