`The Dependent Territories are a source of pride to Britain. We are proud, because we have ties of history that stretch back hundreds of years The following is the full text of yesterday's speech to the Dependent Territories Association by British Foreign Secretary Robin Cook A NEW PARTNERSHIP In my first months as Foreign Secretary I set in hand a review of our stewardship of the Dependent Territories. Today, six months, on, I am delighted to be here setting out our thinking about the future relationship with the Territories. The speed with which we have moved is an indication of the priority we attach to the Dependent Territories. In a week's time I will become the first Foreign Secretary to visit a Caribbean Dependent Territory.

In my speech I will be announcing for the first time an FCO Minister for all the Dependent Territories. We are determined to create a stronger, better partnership with you. We want a modernised contract between Britain and the Dependent Territories.

The Dependent Territories are a source of pride to Britain. We are proud, because we have ties of history that stretch back hundreds of years, from 1609 when Bermuda became a British territory, or from the turn of the Eighteenth Century when Gibraltar became British. We are proud, because there is a family bond between the Dependent Territories and Britain that is unique, and matters to both sides. And we are proud, because Britain's relationship with the Dependent Territories is a clear example of how a modern and effective partnership can be forged on the basis of these historical and family ties.

That is why one of my first acts on becoming Foreign Secretary was to launch a review of our relations with the Dependent Territories. I wanted us to take a fresh look, and to make sure that we had got the relationship in the best possible shape. Since then we have consulted with governments, with opposition leaders, and with the Governors. We have given the maximum possible weight to their views on how we should develop our partnership. I am delighted to have the chance to set out to you today, thanks to this conference organised by your Association, our thinking and the broad conclusions of the review.

I have read with great interest the report published yesterday by the House of Commons Foreign Affairs Committee on the future of the Dependent Territories.

It is a helpful analysis, and as you will see from my speech, they share many of our conclusions.

The Principles of a Modern Partnership We need to be quite clear about the principles on which our partnership is based. Clear and explicit principles are the best possible foundation for a successful, modern relationship: First, the right of self-determination is paramount. Britain has willingly granted independence where it has been requested. Equally, Britain remains committed to those sovereign territories which wish to retain the British connection. That is why we have asked the governments of the Dependent Territories whether you want to see any fundamental changes in the constitutional relationship. And I believe it says much about our partnership that the answer that came back was unanimous -- that the Dependent Territories are happy to retain the link with Britain.

Second, for the territories that wish to retain the British connection, the British Government will not shirk its responsibilities. Those responsibilities create duties for both sides. The British government has a duty to defend the Dependent Territories, to look after your fundamental interests, to ensure that you are democratic and politically stable, and to promote good government and prosperity. You have demonstrated your loyalty to Britain in peace and war, and in the observance by your societies of the highest standards in their human rights practices and international obligations. The Falklands War showed how seriously we take our commitment to the people of the Dependent Territories. It was also a reminder of how the Dependent Territories can rally round Britain at times of need. Our commitment to each other is as strong today as it was then.

Third, within this framework Britain would like to see the Dependent Territories running their own affairs as much as possible. We are proud of your record in holding free and fair elections, most recently for a new Legislative Council in the Falklands. Your democratically-elected governments of the Dependent Territories have the right to govern, to be consulted by Britain on any constitutional changes affecting you, and to propose changes of your own. Just as we respect the wishes of the people of the Dependent Territories to decide on whether you wish to remain British, so we also respect your wishes to elect your own governments and be represented by them.

Across a vast range of activity you have shown an immense capacity to run your own affairs successfully and responsibility. You have made great strides in diversifying your economies, developing your tourism industries like Anguilla and the Turks and Caicos Islands, and becoming major players in financial services like the Cayman Islands and Bermuda. Gibraltar has coped impressively with the rundown of the British military presence by nurturing numerous new enterprises and industries. But the achievements of the Dependent Territories are not just on the commercial front. The British Virgin Islands have played an important role in the fight against drugs -- in 1996 they seized over 1800 kilos of cocaine. The Falkland Islanders have been so effective in their management that they are now economically self-sufficient. The Dependent Territories have a record of achievement which we acknowledge and applaud.

Fourth, Britain should provide assistance to those of her Dependent Territories which need it, both to help them achieve economic development, and to meet the needs of emergencies. That is why we have spent over 200 million in development assistance to the Dependent Territories since 1990.

And that is why the new government's White Paper on Development made it clear that the reasonable needs of the Dependent Territories will continue to have the first call on the Development budget. The Dependent Territories have an excellent record of promoting economic development.

Only two now receive budgetary aid, in both cases because of special circumstances -- the volcano in Montserrat, and the extreme isolation of St.

Helena. In both cases, the people of these islands show great fortitude and determination in the face of adversity. In both cases, we are determined to help. We are helping to resolve the employment problems of St. Helena by creating the St. Helena Business Forum, by opening up recruitment to the Armed Forces and by expanding training opportunities in Britain. We now intend to open Ascension Island to civilian flights, to the benefit of both Ascension itself at St. Helena. We have committed over 50 million to the people of Montserrat since the start of the present volcanic crisis in 1995. Next week I will be going to Montserrat for myself, to talk to the people of Montserrat directly about their concerns.

A New Partnership -- the Review It is against the background of our four principles that we have come to the conclusions of the review. We hope that the reforms we are proposing will be a true expression of these principles, and put in place a secure and lasting partnership, a modern contract with the Dependent Territories. As Dr. Johnson once said, a wise man keeps his friendships in constant repair. Each Dependent Territory is a special case. Each one has its own concerns, and a unique relationship with Britain. But the focus of this review has been on issues of general concern. There are five key such issues which we believe merit attention: the framework for partnership, citizenship, financial regulation, human rights, and the name.

i. Framework for Partnership If we are to have a genuine partnership, and a genuine dialogue, then we need to get the mechanics of the partnership right. At the moment responsibility for the Dependent Territories is split between several departments within the Foreign and Commonwealth Office. We want to bring together that responsibility, and all the expertise that goes with it, so that there is a single focus for the Dependent Territories. We also want to ensure the most effective possible delivery of aid to the Dependent Territories. That is why I am working with Clare Short on the details of a package to set up a joint FCO/DfID department to handle the Dependent Territories. This was one of the key recommendations of the Foreign Affairs Committee. Because Gibraltar is the only Dependent Territory in the EU, it will be represented in the new department but the bulk of the work will continue to be handled by the European departments.

The department will be a direct point of contact between the Dependent Territories and the British government. It will give the Dependent Territories a clearer voice in government, and we will ensure that we also give them an effective point of contact in Brussels. The Dependent Territories should know that the office of the UK Permanent Representative in Brussels is their office too, committed to the pursuit of their interests.

In the FCO Baroness Symons will become the Minister for the Dependent Territories, and will be working hard following up the review to make sure that the modernisation happens, and that it works. One of her key tasks will be to create a stronger, more structured dialogue between Britain and the Dependent territories, at all levels. She will convene an annual Dependent Territories Council, which will provide a forum for the Chief Ministers and Councillors to raise their concerns directly with the Minister. One year in two we will hold the Council before the Commonwealth Heads of Government Meeting. We will help you get the most out of the UK's voice in the Commonwealth this way, and in other ways which we are already examining with the Commonwealth Secretariat.

ii. Citizenship My colleagues and I are deeply aware of the unhappiness in the Territories caused by the loss in 1962 of the right of abode in the United Kingdom, and the fact that not all became British citizens in 1983 when the present British Nationality act came into force. The people of St. Helena, for example, have clearly shown their strength of feeling on the issue, and I am conscious that many of the other Territories share that feeling, that sense of injustice. At times it has got in the way of us enjoying the open and genuine relationship we should have had. That is why I am exploring with my colleagues the possibility of granting British citizenship to all the citizens of those Dependent Territories who do not already have it. Such a move would give all these citizens the right to live and work in the UK. There are complex issues involved in deciding the best approach. We are looking at the matter sympathetically and urgently but we have not yet reached a decision. We will announce our final view to Parliament, but in the meantime I would welcome your reaction.

iii. Financial regulation Part of our joint task is to promote the economic prosperity of the Dependent Territories. Many of you have shown enormous energy, enterprise and initiative in developing offshore financial services industries. Some of you are world leaders in the field, and have been financially self-supporting for many years. It has been achieved largely through your own efforts, together with the guarantee of honest administration and a sound legal system that comes with the link with Britain.

With the reputation, size and success of our offshore centres come obligations to abide by internationally accepted rules and enforce the highest international standards of financial regulation in all our overseas territories. All must play by the same rules, and those rules must be strict if we are to avoid the risk of territories becoming channels for money laundering or for the concealment of the profits of crime. Criminal money will always find the weakest link and we must therefore constantly update our defences.

You have made a lot of progress on this issue. All the Dependent Territories are putting in place better legislation and regulatory regimes. Some, including the Cayman Islands, the British Virgin Islands, and other, have put in place up-to-date money laundering legislation and are finding that it does not detract from their success in attracting investment. They do not want to attract dirty money. They know the benefits of being more attractive to clean money. The government of Gibraltar, for example, has recently introduced money laundering legislation to UK and EC standards. This has transformed Gibraltar's international reputation. The highest standards of regulation are the best guarantee for financial success, and the biggest draw to investors.

But in the fast-changing world of international finance, the task of staying one step ahead of the money launderers is one which requires constant vigilance. We want all the Dependent Territories with financial sectors to put in place measures that will give them the highest standards of regulations, the strongest possible guarantees that these measures will be effective, and the structures to allow the Dependent Territories themselves to make them work. There are two key measures, which I believe will be to the benefit of all sides, and which I hope can be put in place with the agreement of all sides: First, I would like to see all those Dependent Territories have in place a comprehensive set of financial legislation to the highest international standards. We have a check-list of regulatory measures that we believe are needed. Many of the Territory governments are already working on these as a matter of priority. My hope is that every Dependent Territory will complete the check-list and have all the measures in place by the end of 1999. That check-list includes: 1: A package of regulatory legislation which fully meets recognised international standards, such as those set up by expert bodies like the Financial Action Task Force and the Basle Group of Banking Supervisors.

2: Comprehensive measures to combat money laundering, which extend to all financial institutions, and are sufficiently thorough to allow checks to be made on companies incorporated in the Dependent Territory but based elsewhere.

3: Legislation to allow the Dependent Territories to cooperate fully with overseas investigations.

4: Licensing and regulatory regimes for all financial activity that create a level playing field between the Dependent Territories.

LOOKING TO THE FUTURE -- UK Foreign Secretary, Robin Cook, beginning his speech to representatives of Britain's Dependent Territories