TNAG-2880-FCO40-4152-Agreements-between-the-Hong-Kong-Special-Administrative-Regi-1993 — Page 25

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Foreign & Commonwealth

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: O DEC 1993

GISTRY

17 December 1993

Miss E Whatmore

International Aviation Directorate Department of Transport INDEX

2 Marsham Street

LONDON SW1P 3EB

Den Elizabeth Dear

UK/HONG KONG ASA

1.

2.

attached,

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I refer to your letter of 13 December.

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To note 'x', do the HK Delegating need mamping to

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j29/12

do this, and If so should we forupt? Spoke 30/12- I said HM del. ure. likely to raise This

Unprompted

With respect to your general query, I understand that the status of Hong Kong in relation to the Chicago Convention after 30 June 1997 has still not been finally decided; and that while there is little doubt that the Convention will govern Hong Kong's aviation relationship with the rest of the world, there are remaining sensitivities about Hong Kong's participation in ICAO. Hong Kong's model ASA assumes that the Convention will apply in Hong Kong, though carefully avoids implying that Hong Kong will actually be a party to the Convention, or that Hong Kong has any special status at ICAO.

3.

Bearing this in mind, your reformulation of the references to Hong Kong in Articles 1 and 2 of your proposed draft ASA are just as consistent with this approach as are the existing references in the Hong Kong model text, and in principle should be acceptable. Presumably the Hong Kong delegation will say whether there are any Chinese sensitivities (here or, indeed, elsewhere) which mean that they need to stick to their own model wording.

4. I note the changes you are proposing for Articles 4 and 5 in relation to ownership and incorporation. In the ASA context we usually prefer the "substantial ownership and effective control" test, as we regard that test as providing a more effective safeguard against the designation of airlines from third States than the "incorporation and principal place of business" test. While Hong Kong have to use a different test for their own airlines, it is not obvious to me why we should now depart from the usual criteria for determining what may be a UK designated airline.

5. In your draft of Article 7 there is an inconsistency between "the aeronautical authorities of both countries" (paragraph (2)), "the aeronautical authorities of both Contracting Parties" (paragraph (3) - chapeau) and "the

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