ENG-1992 — Page 58

IMPLEMENTATION OF THE SINO-BRITISH JOINT DECLARATION

Under the terms of paragraph 6 of Annex III to the Joint Declaration, premium income obtained by the Hong Kong Government from land transactions is, after the deduction of the cost of land production, to be shared equally between the Hong Kong Government and the future Hong Kong Special Administrative Region Government. The average cost of land production is adjusted by the commission annually, and for the 1992-3 financial year the agreed figure was $3,950 per square metre. The Hong Kong Government's share of premium income is put into the Capital Works Reserve Fund for financing public works and land development. The future SAR Government's share is held in a trust fund, called the Hong Kong Special Administrative Region Government Land Fund, established by the Chinese side of the Land Commission. The fund is managed under the direction and advice of an investment committee, which includes prominent bankers in Hong Kong, as well as a monetary expert from the Hong Kong Government. Over $34,223 million, representing the future SAR Government's share of premium income for the period May 27, 1985 to September 30, 1992, has been transferred to the fund.

The Basic Law

The Joint Declaration provides that the basic policies of the People's Republic of China regarding Hong Kong will be stipulated in a Basic Law of the Hong Kong Special Administrative Region (HKSAR) by the National People's Congress (NPC) of the People's Republic of China. After deliberation and consultation extending over five years, the Basic Law was promulgated in April 1990 by the NPC, together with the designs for the flag and emblem of the HKSAR. The Basic Law will come into effect on July 1, 1997. It prescribes the systems to be practised in the HKSAR, and provides that the HKSAR will enjoy a high degree of autonomy.

Adaptation of Laws

Article 8 of the Basic Law, which reflects paragraph 7 of Annex I to the Joint Declaration, provides that after the establishment of the HKSAR, the laws previously in force in Hong Kong shall be maintained, except for any that contravene the Basic Law, and subject to any amendment by the legislature of the HKSAR. The laws of Hong Kong therefore need to be reviewed and if necessary amended to ensure their compatibility with the Basic Law, so that they can continue to be in force in the HKSAR from July 1, 1997. Agreement on principles for consultation relating to the adaptation of laws was reached at the 17th meeting of the JLG (December 1990) and work on the review is now in progress.

39