CONFIDENTIAL
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international law. The latter option would give certainty but would be very unlikely to be acceptable to the Chinese. A third option would be for agreement to be reached but its implementation to be delayed until 1997. Present legal advice is that, if agreement were reached now, yielding sovereignty over the maritime areas would probably only require two orders in council. Legislation would also be required in Hong Kong. but such legislation would be controversial in the absence of a treaty or other recognition that the boundaries agreed would be those of the SAR, as HKG would be seen to be giving away land with no guarantee from the PRC that the agreement would be implemented.
4.
Hong Kong prefer agreement to be recorded in an MOU and seem now to be persuaded, at official level, that they should amend Hong Kong law as regards the definition of Hong Kong (their telno 659 attached) to parallel the situation in UK Law. An MOU alone without legislation would result in considerable jurisdictional problems since the old legal boundary would remain and exist alongside the boundary established by the MOU.
5. If the Hong Kong Government sign an MOU with the Guangdong authorities on the new boundaries, there is nothing to stop the PRC from choosing different boundaries for the SAR eg by including Shenzhen into the SAR. But it would give the Guangdong side what it wants, ie a realigned border which permits river straightening up to the town of Shenzhen, half paid for by HKG, and the transfer of valuable land near the town of Shenzhen (the Chinese have however already made it clear that they would continue to use land which passes to Hong Kong). We have therefore been probing the Hong Kong Government on what is really achieved by agreeing an 'administrative boundary'. It has the serious drawback that we would still have sovereignty over some areas, particularly at sea, in which we had given up by administrative agreement the right to enter and enforce our jurisdiction. The implications (eg for counter-smuggling operations) are self-evident. We therefore believe that we should continue to seek to have any agreement endorsed by the CPG, perhaps in the JLG so that it can become the legal boundary. As a fallback we might have to consider the third Hong Kong option of agreeing with the Guangdong side that implementation would be delayed until 1 July 1997, although it is most unlikely that the Chinese would agree this since it implies that HKG can speak for the future SARG.
6.
The next step is for Hong Kong, once they have come to a firm view of the legal implications, to seek Exco's approval for this approach. After Ministers had been consulted, and assuming they were content both with the MOU option, Hong Kong would then be able to resume negotiations with the Guangdong authorities. Assuming that agreement was then reached, we would have to choose whether to proceed only with legislation in Hong
update.sub/BOUNDARIES
CONFIDENTIAL
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