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ANNEX I
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Elaboration by the government of the People's Republic of China of its basic policies regarding Hong Kong
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| The Government of the People's Republic of China elaborates the basic
policies of the People's Republic of China regarding Hong Kong as set out
in paragraph 3 of the Joint Declaration of the Government of the United
Kingdom of Great Britain and Northern Ireland and the Government of the
People's Republic of China on the Question of Hong Kong as follows: |
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Establishment of the Hong Kong S.A.R. The Basic Law
The Constitution of the People's Republic of China stipulates in Article
31 that the state may establish special administrative regions when necessary.
The systems to be instituted in special administrative regions shall be
prescribed by laws enacted by the National People's Congress in the light
of the specific conditions.* In accordance with this Article, the People's
Republic of China shall, upon the resumption of the exercise of sovereignty
over Hong Kong on 1 July 1997, establish the Hong Kong Special Administrative
Region of the People's Republic of China. The National People's Congress
of the People's Republic of China shall enact and promulgate a Basic Law
of the Hong Kong Special Administrative Region of the People's Republic
of China (hereinafter referred to as the Basic Law) in accordance with the
Constitution of the People's Republic of China, stipulating that after the
establishment of the Hong Kong Special Administrative Region the socialist
system and socialist policies shall not be practised in the Hong Kong Special
Administrative Region and that Hong Kong's previous capitalist system and
life-style shall remain unchanged for 50 years.
The Hong Kong Special Administrative Region shall be directly under
the authority of the Central People's Government of the People's Republic
of China and shall enjoy a high degree of autonomy. Except for foreign
and defence affairs which are the responsibilities of the Central People's
Government, the Hong Kong Special Administrative Region shall be vested
with executive, legislative and independent judicial power, including
that of final adjudication. The Central People's Government shall authorise
the Hong Kong Special Administrative Region to conduct on its own those
external affairs specified in Section XI of this Annex.
Chief Executive. Principal Officials. The Legislature
The government and legislature of the Hong Kong Special Administrative Region
shall be composed of local inhabitants. The chief executive of the Hong
Kong Special Administrative Region shall be selected by election or through
consultations held locally and be appointed by the Central People's Government.
Principal officials (equivalent to Secretaries) shall be nominated by the
chief executive of the Hong Kong Special Administrative Region and appointed
by the Central People's Government. The legislature of the Hong Kong Special
Administrative Region shall be constituted by elections. The executive authorities
shall abide by the law and shall be accountable to the legislature.
Language
In addition to Chinese, English may also be used in organs of government
and in the courts in the Hong Kong Special Administrative Region.
Regional flag and emblem
Apart from displaying the national flag and national emblem of the People's
Republic of China, the Hong Kong Special Administrative Region may use a
regional flag and emblem of its own.
II. LEGAL SYSTEM
Laws previously in force
After the establishment of the Hong Kong Special Administrative Region,
the laws previously in force in Hong Kong (i.e. the common law, rules of
equity, ordinances, subordinate legislation and customary law) shall be
maintained, save for any that contravene the Basic Law and subject to any
amendment by the Hong Kong Special Administrative Region legislature.
Legislative power
The legislative power of the Hong Kong Special Administrative Region shall
be vested in the legislature of the Hong Kong Special Administrative Region.
The legislature may on its own authority enact laws in accordance with the
provisions of the Basic Law and legal procedures, and report them to the
Standing Committee of the National People's Congress for the record. Laws
enacted by the legislature which are in accordance with the Basic Law and
legal procedures shall be regarded as valid.
Laws of the SAR
The laws of the Hong Kong Special Administrative Region shall be the Basic
Law, and the laws previously in force in Hong Kong and laws enacted by the
Hong Kong Special Administrative Region legislature as above.
III. JUDICIAL SYSTEM
Previus judicial system
After the establishment of the Hong Kong Special Administrative Region,
the judicial system previously practised in Hong Kong shall be maintained
except for those changes consequent upon the vesting in the courts of the
Hong Kong Special Administrative Region of the power of final adjudication.
Judicial power; Precedents
Judicial power in the Hong Kong Special Administrative Region shall be vested
in the courts of the Hong Kong Special Administrative Region. The courts
shall exercise judicial power independently and free from any interference.
Members of the judiciary shall be immune from legal action in respect of
their judicial functions. The courts shall decide cases in accordance with
the laws of the Hong Kong Special Administrative Region and may refer to
precedents in other common law jurisdictions.
Appointment and removal of judges
Judges of the Hong Kong Special Administrative Region courts shall be appointed
by the chief executive of the Hong Kong Special Administrative Region acting
in accordance with the recommendation of an independent commission composed
of local judges, persons from the legal profession and other eminent persons.
Judges shall be chosen by reference to their judicial qualities and may
be recruited from other common law jurisdictions. A judge may only be removed
for inability to discharge the functions of his office, or for misbehaviour,
by the chief executive of the Hong Kong Special Administrative Region acting
in accordance with the recommendation of a tribunal appointed by the chief
judge of the court of final appeal, consisting of not fewer than three local
judges. Additionally, the appointment or removal of principal judges (i.e.
those of the highest rank) shall be made by the chief executive with the
endorsement of the Hong Kong Special Administrative Region legislature and
reported to the Standing Committee of the National People's Congress for
the record. The system of appointment and removal of judicial officers other
than judges shall be maintained.
Power of final judgment
The power of final judgment of the Hong Kong Special Administrative Region
shall be vested in the court of final appeal in the Hong Kong Special Administrative
Region, which may as required invite judges from other common law jurisdictions
to sit on the court of final appeal.
Prosecutions
A prosecuting authority of the Hong Kong Special Administrative Region shall
control criminal prosecutions free from any interference.
Legal practitioners
On the basis of the system previously operating in Hong Kong, the Hong Kong
Special Administrative Region Government shall on its own make provision
for local lawyers and lawyers from outside the Hong Kong Special Administrative
Region to work and practise in the Hong Kong Special Administrative Region.
Reciprocal juridical assistance
The Central People's Government shall assist or authorise the Hong Kong
Special Administrative Region Government to make appropriate arrangements
for reciprocal juridical assistance with foreign states.
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IV. PUBLIC SERVICE
Public servants and members of judiciary previously serving in H.K.
After the establishment of the Hong Kong Special Administrative Region,
public servants previously serving in Hong Kong in all government departments,
including the police department, and members of the judiciary may all remain
in employment and continue their service with pay, allowances, benefits
and conditions of service no less favourable than before. The Hong Kong
Special Administrative Region Government shall pay to such persons who retire
or complete their contracts, as well as to those who have retired before
1 July 1997, or to their dependants, all pensions, gratuities, allowances
and benefits due to them on terms no less favourable than before, and irrespective
of their nationality or place of residence.
Foreign nationals in public service
The Hong Kong Special Administrative Region Government may employ British
and other foreign nationals previously serving in the public service in
Hong Kong, and may recruit British and other foreign nationals holding permanent
identity cards of the Hong Kong Special Administrative Region to serve as
public servants at all levels, except as heads of major government departments
(corresponding to branches or departments at Secretary level) including
the police department, and as deputy heads of some of those departments.
The Hong Kong Special Administrative Region Government may also employ British
and other foreign nationals as advisers to government departments and, when
there is a need, may recruit qualified candidates from outside the Hong
Kong Special Administrative Region to professional and technical posts in
government departments. The above shall be employed only in their individual
capacities and, like other public servants, shall be responsible to the
Hong Kong Special Administrative Region Government.
Appointment and promotion of public servants
The appointment and promotion of public servants shall be on the basis of
qualifications, experience and ability. Hong Kong's previous system of recruitment,
employment, assessment, discipline, training and management for the public
service (including special bodies for appointment, pay and conditions of
service) shall, save for any provisions providing privileged treatment for
foreign nationals, be maintained.
V. FINANCE
Budget
The Hong Kong Special Administrative Region shall deal on its own with financial
matters, including disposing of its financial resources and drawing up its
budgets and its final accounts. The Hong Kong Special Administrative Region
shall report its budgets and final accounts to the Central People's Government
for the record.
Taxation and public expenditure
The Central People's Government shall not levy taxes on the Hong Kong Special
Administrative Region. The Hong Kong Special Administrative Region shall
use its financial revenues exclusively for its own purposes and they shall
not be handed over to the Central People's Government. The systems by which
taxation and public expenditure must be approved by the legislature, and
by which there is accountability to the legislature for all public expenditure,
and the system for auditing public accounts shall be maintained.
VI. ECONOMIC SYSTEM
Economic and trade system.
Ownership of property
The Hong Kong Special Administrative Region shall maintain the capitalist
economic and trade systems previously practised in Hong Kong. The Hong Kong
Special Administrative Region Government shall decide its economic and trade
policies on its own. Rights concerning the ownership of property, including
those relating to acquisition, use, disposal, inheritance and compensation
for lawful deprivation (corresponding to the real value of the property
concerned, freely convertible and paid without undue delay) shall continue
to be protected by law.
Free port and free trade policy
The Hong Kong Special Administrative Region shall retain the status of a
free port and continue a free trade policy, including the free movement
of goods and capital. The Hong Kong Special Administrative Region may on
its own maintain and develop economic and trade relations with all states
and regions.
Customs territory.
GATT
The Hong Kong Special Administrative Region shall be a separate customs
territory. It may participate in relevant international organisations and
international trade agreements (including preferential trade arrangements),
such as the General Agreement on Tariffs and Trade and arrangements regarding
international trade in textiles. Export quotas, tariff preferences and other
similar arrangements obtained by the Hong Kong Special Administrative Region
shall be enjoyed exclusively by the Hong Kong Special Administrative Region.
The Hong Kong Special Administrative Region shall have authority to issue
its own certificates of origin for products manufactured locally, in accordance
with prevailing rules of origin.
Trade missions
The Hong Kong Special Administrative Region may, as necessary, establish
official and semi-official economic and trade missions in foreign countries,
reporting the establishment of such missions to the Central People's Government
for the record.
VII. MONETARY SYSTEM
Previous monetary and financial systems
The Hong Kong Special Administrative Region shall retain the status of an
international financial centre. The monetary and financial systems previously
practised in Hong Kong, including the systems of regulation and supervision
of deposit taking institutions and financial markets, shall be maintained.
Monetary and financial policies
The Hong Kong Special Administrative Region Government may decide its monetary
and financial policies on its own. It shall safeguard the free operation
of financial business and the free flow of capital within, into and out
of the Hong Kong Special Administrative Region. No exchange control policy
shall be applied in the Hong Kong Special Administrative Region. Markets
for foreign exchange, gold, securities and futures shall continue.
Hong Kong dollar
The Hong Kong dollar, as the local legal tender, shall continue to circulate
and remain freely convertible. The authority to issue Hong Kong currency
shall be vested in the Hong Kong Special Administrative Region Government.
The Hong Kong Special Administrative Region Government may authorise designated
banks to issue or continue to issue Hong Kong currency under statutory authority,
after satisfying itself that any issue of currency will be soundly based
and that the arrangements for such issue are consistent with the object
of maintaining the stability of the currency. Hong Kong currency bearing
references inappropriate to the status of Hong Kong as a Special Administrative
Region of the People's Republic of China shall be progressively replaced
and withdrawn from circulation.
Exchange Fund
The Exchange Fund shall be managed and controlled by the Hong Kong Special
Administrative Region Government, primarily for regulating the exchange
value of the Hong Kong dollar.
VIII. SHIPPING
Previous systems of shipping management and regulation
The Hong Kong Special Administrative Region shall maintain Hong Kong's previous
systems of shipping management and shipping regulation, including the system
for regulating conditions of seamen. The specific functions and responsibilities
of the Hong Kong Special Administrative Region Government in the field of
shipping shall be defined by the Hong Kong Special Administrative Region
Government on its own. Private shipping businesses and shipping-related
businesses and private container terminals in Hong Kong may continue to
operate freely.
Shipping registers and issue of certificates
The Hong Kong Special Administrative Region shall be authorised by the Central
People's Government to continue to maintain a shipping register and issue
related certificates under its own legislation in the name of 'Hong Kong,
China'.
Access to HKSAR ports
With the exception of foreign warships, access for which requires the permission
of the Central People's Government, ships shall enjoy access to the ports
of the Hong Kong Special Administrative Region in accordance with the laws
of the Hong Kong Special Administrative Region.
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