hum14.4legal/MINS
CONFIDENTIAL
UK was left at a disadvantage in dealing with the SAR vis-a-vis other economic partners because we had not been able to put in place the necessary bilateral agreements. We therefore believe that, for all the difficulties, the right way forward will be to negotiate agreements based as closely as possible on the model texts which Hong Kong has been using to negotiate their agreements with third parties. We would then choose a moment between now and 1997 to put these to the Chinese and suggest that the Chief Executive of the SAR should be authorised to sign the agreements with the UK after 1 July 1997.
8. If the Chinese refused to proceed in that way, other options would be to turn the draft agreements into MOUS or proceed by way of reciprocal legislation (that would of course by vulnerable to overturning at the Hong Kong end after 1997).
9. Since this is an area in which we can make progress while other aspects of JLG work are stalled, we propose that Mr Edwards should bring over an HKG team in September to negotiate with us draft agreements on extradition, investment promotion and protection, air services, mutual legal assistance, reciprocal enforcement of judgements and visa abolition. We would
collect views from other government departments beforehand. Our negotiating team would probably be headed by an FCO Legal Adviser. This is work which will need to be done whether we decide to go down the road of agreements or MOUS.
Transfer of Assets
10. We also broached with Mr Edwards the question of how to ensure that Hong Kong's assets and liabilities are passed on to the SAR on 1 July 1997, without any of the assets sticking to Chinese fingers, or liabilities remaining with HMG. The difficulty here is that the Chinese insist that we return sovereignty to them, and they then create the SAR. The hiatus between the two creates much opportunity for mischief. We have a good deal more work to do before we are in a position to put clear options to Ministers. Mr Edwards gave us some useful pointers, for example to legislation in the Rhodesia context which may provide some useful material. We will be preparing a paper for further discussion with Hong Kong and Peking.
Blechatt
PF Ricketts
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