FO371-31667 — Page 168

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We Compliments of the

Under-Secretary of State for Danition

INDEXED

OUTWARD TELEGRAM

F5755/885

1.7 SEP 1942

WT.75/8

CYPHER (TYPEX)

M*

FROM:

TO:

(Sent 6.0 p.3.

D.d.5 SEP 1942

#

GANADA

AUSTRALIA

NEW ZEALAND

SOUTH AFRICA

NEWFOUNDLAND

(GOVT.)

SOUTHERN RHODESIA

##

13th Sept. 1942.)

L.D.

0. No, 101.

His Majesty's Minister Berne recently transmitted report from the Swiss Chargé d'Affaires Shanghai that, from beginning of our hostilities with Japan, Jap authorities in occupied China ordered the liquidation of the principal banks and certain British private trading firma, despite their previous assurances to respect private property. Resultant funds have been blocked and British subjects interested the enterprises affected have been unable to settle their affairs before repatriation. In addition, Japanese authorities have undertaken the exploitation of important businesses without appointing an Administrator of Enemy Property to check the administration and receive the profits realised.

2*

His Majesty's Minister was therefore requested to inform the Swiss Chargé d'Affaires to following effect

(1) policy of His Majesty's Government in the United Kingdom is to preserve enemy property whether in occupied territory (e.g. Italian Somaliland) or in the United Kingdom, in contemplation of arrangements to be made on the conclusion of peace, and a Custodian of Enemy Property has been appointed for this purpose.

(2) United Kingdom law requires moneys payable to persons in Japan to be paid to the United Kingdom Custodian, and property held for such persons to be reported to him, to enable steps to be taken to preserve both.

(3) it is not our practice to wind up enemy businesses which are solvent and can carry on,although assets of insolvent businesses or those unable to carry on are, in general, transferred to the Custodian.

ย

(4) there is an exception to this, namely procedure under Section 3A of the Trading with the Enemy Act, by which branches of ` Japanese banks in the United Kingdom are being wound up. Their assets will be distributed firstly to non-enemy creditora including Japanese residents here, and the balance preserved against enemy claims.

(5) there are no restrictions on withdrawals from United Kingdom banks by Japanese residents, since enemy subjects resident in United Kingdon are not enemies for purpose of above Act.

3.

Swiss Chargé d'Affaires was requested to ask for Japanese Government to give reciprocal treatment to British persons and

BB 1919

property/

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