TNAG-2815-FCO40-4061-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 153

From:

Miss S Brooks

Legal Counsellor

Date: 15 October 1993

Mr Blythe, TSols Mr Kalen, Treasury

Mr Chamberlain, Deputy

Legal Adviser

HKC 031/10

CC:

Mr Whitney HKD

1 DEC 1993

62

HONG KONG:

1.

IMF/IBRD 1997 ANNUAL MEETING

I

If

Mr Blythe and I discussed this matter by telephone. explained that the Hong Kong Government is not a member of the IMF or IBRD; nor is it a party to the agreements establishing the two organisations. I expressed the view that this matter would not involve treaty obligations into which the Hong Kong Government would have entered. It was instead akin to a contract entered into by the Hong Kong Government although it would, in fact, be expressed in an "implementation plan" drawn up between the Hong Kong Government and the IMF/IBRD. (Obviously we will need to have a close look at the plan). the Hong Kong Government were to default on its financial obligations under the implementation plan, this would not attract contingent liability for HMG any more than any other The Hong contract entered into by the Hong Kong Government. Kong Government has financial autonomy and HMG would certainly look to the Hong Kong Government to carry out its financial obligations. In short, I think that although there is a remote possibility of contingent liability being attracted in this case, it is remote.

2.

Mr Blythe and I were agreed that the letter from the Hong Kong Government should provide the Hong Kong Government's assurances to the IMF/IBRD. The UK should merely act as a post

Incidentally, I would like to amend the second line of the second paragraph of the draft letter from the Hong Kong Government to the IMF/IBRD to read "the assurances of the Hong

I would Kong Government that it will do all in its power ...". much prefer the letter from the Hong Kong Government containing the financial assurances to be issued direct to the IMF/IBRD

Unless there rather than for the letter to be issued to HMG. were proper back-to-back assurances of HMG and the Hong Kong Governments, a letter standing by itself from the Hong Kong Government to HMG containing financial assurances would carry the clear implication that HMG was ultimately liable for defaults by the Hong Kong Government.

Shelagh Brooks.

Shelagh Brooks