TNAG-2957-FCO40-4236-Future-of-Hong-Kong-British-Consulate-General-Colvin-House--1993 — Page 53

Speeing

A

RESTRICTED

(by

case of the Colvin House site, the LC had to approve an ExCo's decision to grant the land at nominal cost.

eventually given during

the

Since then

Since Chinese

Biglings

+

approval was forthcoming (at the time of the Prime Minister's

Peking (to sign the Airport Mou) visit to Hong Kong in September 1991).we have been negotiating

Buildings and Lands with the BLB over terms of PTG. The British Trade Commission, negotiating on our behalf, consider that they are unlikely to

Buildings and Lands any further with the BLD. We maintain that the BLDS latest

draft (copy attached) fails to provide what we would see as- adequate protection for an important and costly development in

nowhere else in the world the event of expropriation. Indeed OED advises that we have

EL never, apart from recently in China) on

on a much smaller

It is worth noting that -investment had to accept such provisions, anywhere else in the world, one of our proportion in Glate in Pekking, which had recently been expensively modernised by OED, was

have we

residen

4. Our main sticking point is a reference to "the depreciated current replacement cost" as the basis for awarding compensation and the fact that the Director of the BLD would have sole discretion to define this sum. (We also challenge the formula put forward for assessing compensation for site formation and infrastructure judged separately from the actual building - and we consider notice of 12 calendar months for vacation of the premises totally inadequate.)

5.

We have obtained Hong Kong's agreement to comply with relevant international obligations (their draft reflects this). The Vienna Convention on Consular Relations, 1963, makes provision for "prompt, adequate and effective compensation" in the event of expropriation. (Should the Chinese fail to recognise the application to Hong Kong after 1997 of the Vienna Convention, customary international law would afford us similar protection). The Joint Declaration and the Basic Law also make provisions for compensation in the event of expropriation

SP the basis of the "real value" of the property. For practical purposes, the interpretation we need to see placed on these guarantees is one that allows us to resume operations in

on

RESTRICTED