TNAG-2794-FCO40-4034-Relations-between-Hong-Kong-and-Taiwan-1993 — Page 132

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TAIWAN: ARMS SALES

Problem

1.

Anders Ran

2/3

28 February 1992

Sir J Coles

Mr Smith, NPDD

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RECEIVED IN REC

·6 MAR 1992

DESK OFFICER

INDEX

REGISTRY

Action Tax

In following our current guidelines on arms-sales to Taiwan, the UK is falling behind some other EC countries in exporting military equipment to Taiwan. The issue has been brought to a head

by BAe SEMA's interest in the Taiwan market. In addition, the basis

for our position on military sales to Taiwan is considered to be out

of date, and does not reflect the true reasoning behind our policy. Sir John Coles suggested, on 13 February, that we revise our policy.

Recommendation

2.

I recommend that we revise our current guidelines and their

justification along the lines shown in Annex A. NPDD and the

the Embassy in Peking are in agreement, and Annex takes account of their

vi ews.

Background and Argument

3.

Our previous guidelines date from 1987. The main difference

between those and the proposed new guidelines, with the exception of

the justification for our policy, is that the new guidelines would

allow the export to third countries of parts which would be used in defence-related equipment, manufactured in a third country, for

export to Taiwan. This relaxation in policy would apply only in

cases where the arrangement with a third country manufacturer was

part of a wider commercial deal and not Taiwan-specific.

/4.

CH2AIF

CONFIDENTIAL