TNAG-2815-FCO40-4061-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 154

Ms Brooks

LAKE 031/10

1-LU 1993

Reference......................

61

HONG KONG:

IMF/IBRD 1997 ANNUAL MEETING

Thank you for the advice set out in your minute of 1 September.

1.

2.

The IMF/IBRD have taken on board our concerns and have now agreed that it would be sufficient for Hong Kong alone to sign a detailed implementation plan (which would replace the proposed MOU). As regards the issue of contingent liability, the institutions have proposed that the HKG should give financial assurances to HMG for the work involved along the lines of the attached draft (which will need some amendment to remove references to the MOU), and that HKG should transmit this letter to the IMF/IBRD.

3.

The Treasury's solicitor is still concerned that this arrangement may not absolve the UK of any contingent liability, and has asked me to obtain your views. It seems to me that the best way of removing any doubt over this matter is for UKDEL IMF/IBRD to agree with the institutions that the letter from HMG should make clear that in the event of HKG failing to live up to its assurances, HMG will not be liable.

I have been asked by the Treasury for a reply today if that is possible.

4.

min. imf ADMIN

JEB

CODE 18-77

N Whitney

Hong Kong Department WH304 telno 270.2651

15 October 1993