TNAG-2892-FCO40-4165-Transfer-of-assets-from-the-Hong-Kong-Government-to-the-Spec-1993 — Page 17

CONFIDENTIAL

FM HONG KONG

TO ROUTINE FCO

TELNO 1233

OF 26104OZ JULY 1993

CONFIDENTIAL

RECE

370/23

DESK C

TEX

1993

INFO ROUTINE PEKING, UKREP JLG HONG KONG

FCO PERSONAL FOR MORRIS, HKD

ISTRY

"GISTRY

on Taken

105524

MDLIAN 7400

OP COPY

pa

(en fee)

PEKING PERSONAL FOR AMBASSADOR

YOUR TELNO 708: TRANSFER OF ASSETS FROM HKG TO SARG

WE HAVE CONSIDERED YOUR PAPER FAXED TO US ON 24 JULY. OUR CONCLUSION IS THAT THE TRANSFER OF ASSETS QUESTION IS ONE THAT SHOULD BE BEST PUT OFF UNTIL MUCH LATER, AND CERTAINLY UNTIL AFTER THE CONSTITUTIONAL TALKS AND THE AIRPORT NEGOTIATIONS ARE OUT OF THE WAY. INDEED IT IS QUITE POSSIBLE THAT THE CHINESE WILL AT SOME STAGE TAKE THE INITIATIVE TO RAISE THE ISSUE WITH US. IN RELATION TO PARA 5 OF THE PAPER, WE DO NOT AT PRESENT HAVE ANY STRONG REASON TO BELIEVE THAT THE SARG WOULD NOT IN PRACTICE INHERIT HKG'S ASSETS.

2. ON THE POINT ABOUT THE PRECISE TIMING OF THE ESTABLISHMENT OF THE SAR, THE CHINESE TEXT OF THE JD IS, AS YOU POINTED OUT, EXPLICIT, AND THE RELEVANT NPC DECISION CONTAINS A CLEAR REQUIREMENT THAT THAT SAR SHALL BE ESTABLISHED ON 1 JULY 1997. THERE IS THUS LITTLE ADVANTAGE IN OUR TAKING THE POSITION THAT THERE IS AMBIGUITY AS TO WHETHER THE PRC IS OBLIGATED TO ESTABLISH THE SAR ON 1 JULY 1997. WE ARE NOT/NOT CONVINCED THAT THIS ESOTERIC AND TEXTUAL POINT NEED BE RAISED WITH THE CHINESE AT ALL.

3. UKREP JLG CONCURS.

PATTEN

YYYY

PAGE 1 CONFIDENTIAL

2